<PAGE>

                                  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, 2002

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

        For the transition period from                 to
                                       ---------------    ---------------

                         Commission File Number 0-30242
                            LAMAR ADVERTISING COMPANY

                         Commission File Number 1-12407
                                LAMAR MEDIA CORP.
           (Exact name of registrants as specified in their charters)

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

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

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

                     SECURITIES OF LAMAR ADVERTISING COMPANY
                REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<Table>
<Caption>
                                                            Name of each Exchange
  Title of Each Class:                                       On Which Registered:
  --------------------                                      ---------------------
<S>                                                         <C>
        None                                                          N/A
</Table>

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

                      Class A common stock, $.001 par value

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

                                      None

                REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                                      None

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

Indicate by check mark 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 Lamar Advertising Company'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. [X]

Indicate by check mark whether Lamar Advertising Company is an accelerated filer
(as defined in Rule 126-2 under the Securities Exchange Act of 1934). Yes [X] No
[ ]

Indicate by check mark whether Lamar Media Corp. is an accelerated filer (as
defined in Rule 126-2 under the Securities Exchange Act of 1934). Yes [ ] No [X]

The aggregate market value of the voting stock held by nonaffiliates of Lamar
Advertising Company as of June 28, 2002: $2,949,493,181

The number of shares of Lamar Advertising Company's Class A common stock
outstanding as of March 5, 2003: 85,677,059

The number of shares of the Lamar Advertising Company's Class B common stock
outstanding as of March 5, 2003: 16,417,073

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.


                                       1

<PAGE>

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Lamar Advertising Company's proxy statement for the Annual Meeting
of Stockholders to be held on May 22, 2003 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 and Lamar Media's
actual results, performance or achievements or industry results, to differ
materially from any future results, performance or achievements expressed or
implied by these forward-looking statements. These risks, uncertainties and
other important factors include, among others:

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

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

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

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

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

o        the regulation of the outdoor advertising industry.

The forward-looking statements contained in this combined Annual Report on Form
10-K speak only as of the date of this combined Annual Report. Lamar Advertising
Company and Lamar Media Corp. expressly disclaim any obligation or undertaking
to disseminate any updates or revisions to any forward-looking statement
contained in this combined 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.



                                       2

<PAGE>

                                     PART I

ITEM 1. BUSINESS

GENERAL

Lamar Advertising Company, referred to herein as the Company or Lamar
Advertising, is one of the largest outdoor advertising companies in the United
States based on number of displays and has operated under the Lamar name since
1902. As of December 31, 2002, the Company owned and operated approximately
146,000 billboard advertising displays in 44 states, operated over 95,000 logo
advertising displays in 21 states and the province of Ontario, Canada, and
operated approximately 13,000 transit advertising displays in 16 states.

The Company makes its annual reports on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K, and amendments to these reports available
free of charge through its website, www.lamar.com, as soon as reasonably
practicable after filing them with the Securities and Exchange Commission.

The three principal areas that make up the Company's business are:

         o Billboard advertising. The Company offers customers a fully
         integrated service, covering their billboard display requirements from
         ad copy production to placement and maintenance. The Company's
         billboard advertising displays are comprised of bulletins and posters.
         As a result of their greater impact and higher cost, bulletins are
         usually located on major highways. Posters are usually concentrated on
         major traffic arteries or on city streets to target pedestrian traffic.

         o Logo signs. The Company is the largest provider of logo sign services
         in the United States, operating 21 of the 26 privatized state logo sign
         contracts. Logo signs are erected near highway exits to direct motor
         traffic to service and tourist attractions, as well as to advertise
         gas, food, camping and lodging.

         o Transit advertising. The Company provides transit advertising in 41
         transit markets. Transit displays appear on the exterior or interior of
         public transportation vehicles or stations, such as buses, trains,
         commuter rail, subways, platforms and terminals.

The Company's business has grown rapidly through a combination of internal
growth and acquisitions. The Company's growth has been enhanced by strategic
acquisitions that resulted in increased operating efficiencies, greater
geographic diversification and increased market penetration. Historically, focus
has been on small to mid-sized markets where acquisition opportunities have been
pursued in order to establish a leadership position. Since January 1, 1997, the
Company has successfully completed over 450 acquisitions of outdoor advertising
businesses and assets. The Company's acquisitions have expanded its operations
in major markets and it currently has a presence in 35 of the top 50 outdoor
advertising markets in the United States. The Company's large national footprint
gives it the ability to offer cross-market advertising opportunities to both
local and national advertising customers.

The Company has been in operation since 1902 and completed a reorganization on
July 20, 1999 to create a new holding company structure. At that time, Lamar
Advertising Company was renamed Lamar Media Corp. and all its stockholders
became stockholders in a new holding company. The new holding company then took
the Lamar Advertising Company name and Lamar Media Corp. became a wholly owned
subsidiary of Lamar Advertising Company.

STRATEGY

The Company's objective is to be a leading provider of outdoor advertising
services in the markets it serves. The Company's strategy to achieve this goal
includes the following elements:

Continue to provide high quality local sales and service. The Company seeks to
identify and closely monitor the needs of its customers and to provide them with
a full complement of high quality advertising services at a lower cost than
competitive media. Local advertising constituted approximately 86% of its net
revenues for the year ended December 31, 2002, which management believes is
higher than the industry average. The Company believes that the experience of
its regional and local managers has contributed greatly to its success. For
example, the Company's regional managers have been with the Company for an
average of 22 years. In an effort to provide high quality sales service at the
local level, the Company employed 785 local account executives as of December
31, 2002. Local account executives are typically supported by additional local
staff and have the ability to draw upon the resources of the central office, as
well as offices in its other markets, in the event that business opportunities
or customers' needs support such an allocation of resources.

Continue a centralized control and decentralized management structure. The
Company's management believes that for its particular business, centralized
control and a decentralized organization provides for greater economies of scale
and is more



                                       3

<PAGE>

responsive to local market demands. Therefore, the Company maintains centralized
accounting and financial control over its local operations, but the local
managers are responsible for the day-to-day operations in each local market and
are compensated according to that market's financial performance.

Continue to focus on internal growth. Within its existing markets, the Company
seeks to increase its revenue and improve its cash flow by employing highly
targeted local marketing efforts to improve its display occupancy rates and by
increasing advertising rates. This strategy is facilitated through its local
offices, which allows the Company to respond quickly to the demands of its local
customer base. In addition, the Company routinely invests in upgrading its
existing displays and constructing new displays in order to provide high quality
service to its current customers and to attract new advertisers. From January 1,
1997 to December 31, 2002, the Company has invested over $410 million in
improvements to its existing displays and in constructing new displays.

Continue to pursue strategic acquisitions. The Company intends to enhance its
growth by pursuing strategic acquisitions, which it anticipates will result in
increased operating efficiencies, greater geographic diversification and
increased market penetration. In addition to acquiring outdoor advertising
assets in new markets, the Company purchases complimentary outdoor advertising
assets within its existing markets or in contiguous markets. The Company
believes that acquisitions offer opportunities for inter-market cross-selling.
Although the advertising industry is becoming more consolidated, the Company
believes there will be continuing opportunities for implementing its acquisition
strategy given the industry's continued fragmentation among smaller advertising
companies. From January 1, 2002 to December 31, 2002, the Company completed 75
acquisitions of advertising businesses and assets for an aggregate purchase
price of approximately $135 million. Certain of the Company's principal
acquisitions since January 1, 2002 are described below.

         Delite Outdoor of Ohio Holdings, Inc. On January 1, 2002, the Company
         purchased the stock of Delite Outdoor of Ohio Holdings, Inc. for $38
         million. The purchase price consisted of 963,488 shares of Lamar
         Advertising Class A common stock.

         MC Partners On January 8, 2002, the Company purchased the assets of MC
         Partners for a cash purchase price of approximately $15.3 million.

         American Outdoor Advertising, Inc. On May 31, 2002, the Company
         purchased the assets of American Outdoor Advertising, Inc. for $15.7
         million. The purchase price consisted of 349,376 shares of Lamar
         Advertising Class A common stock, as well as approximately $725
         thousand in cash.

Continue to pursue other outdoor advertising opportunities. The Company plans to
pursue additional logo sign contracts. 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 tourist
oriented directional sign programs in both the United States and Canada and also
other motorist information signing programs as opportunities present themselves.
In an effort to maintain market share, the Company has entered the transit
advertising business through the operation of displays on bus shelters, benches
and buses in 41 of its outdoor advertising markets.

COMPANY OPERATIONS

BILLBOARD ADVERTISING

INVENTORY:

The Company operates the following types of billboard 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 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.

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 or on
city streets and target pedestrian traffic.

For the year ended December 31, 2002, approximately 72% of the Company's
billboard advertising net revenues were derived from bulletin sales and 28% from
poster sales.



                                       4

<PAGE>

The physical structures on which the advertising displays are located 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 6 to
12 month periods. Poster space averages between 30 and 90 days.

PRODUCTION:

In the majority of the Company's markets, its local production staffs perform
the full range of activities required to create and install billboard
advertising displays. Production work includes creating the advertising copy
design and layout, 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. 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 customers.

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 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 billboard advertising revenues for year ended December 31,
2002 and the respective percentages of such revenue. These categories accounted
for approximately 71% of the Company's billboard advertising net revenues in the
year ended December 31, 2002. No one advertiser accounted for more than 1% of
the Company's billboard advertising net revenues in that period.


<Table>
<Caption>
                                                   PERCENTAGE NET ADVERTISING
                    CATEGORIES                             REVENUES
<S>                                                <C>
               Restaurants                                     12%
               Retailers                                       10%
               Automotive                                      10%
               Hotels and Motels                                9%
               Gaming                                           6%
               Health Care                                      6%
               Service                                          5%
               Amusement - Entertainment/Sports                 5%
               Financial - Banks/Credit Unions                  4%
               Real Estate Companies                            4%
                                                           ------
                                                               71%
</Table>

LOGO SIGNS

The Company entered the business of logo sign advertising in 1988. The Company
is the largest provider of logo sign services in the United States, operating 21
of the 26 privatized state logo contracts. The Company operates over 28,000 logo
sign structures containing over 95,000 logo advertising displays in the United
States and Canada.



                                       5

<PAGE>


The Company has been awarded contracts to erect and operate logo signs in the
province of Ontario, Canada and the following states:

Colorado           Kentucky               Missouri (1)           Ohio
Delaware           Maine                  Nebraska               Oklahoma
Florida            Michigan               Nevada                 South Carolina
Georgia            Minnesota              New Jersey             Texas
Kansas             Mississippi            New Mexico             Utah
                                                                 Virginia

----------

(1) The logo sign contract in Missouri is operated by a 66 2/3% owned
partnership.

The Company also operates the tourism signing contracts for the states of
Colorado, Kentucky, Michigan, Missouri, Nebraska, Nevada, 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
five to ten years, with additional 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. At the
end of the term of the contract, ownership of the structures is transferred to
the state. Depending on the contract in question, the Company may or may not be
entitled to compensation at the end of the contract term. Of the Company's logo
sign contracts in place at December 31, 2002, three are due to terminate in
2003, one in September and two in December and two are subject to renewal in
2003, one in July and one in September. The Company also designs and produces
logo sign plates for its customers throughout the country, as well as customers
in states which have not yet privatized their logo sign programs.

TRANSIT ADVERTISING

The Company entered into the transit advertising business in 1993. The Company
provides transit advertising on bus shelters, benches and buses in 41 transit
markets. The Company's production staff provides a full range of creative and
installation services to its transit advertising customers.

COMPETITION

BILLBOARD 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 the advertising industry is becoming
more consolidated, according to the Outdoor Advertising Association of America
(OAAA) as of December 31, 2002, there were approximately 600 companies in the
outdoor advertising industry operating approximately 600,000 outdoor displays.
In a number 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 Company) 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. However, certain of the
Company's large competitors with other media assets such as radio and television
have the ability to cross-sell their different advertising products to their
customers.

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
three other 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.



                                       6

<PAGE>

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.

EMPLOYEES

The Company employed approximately 3,000 persons at December 31, 2002. Of these,
approximately 107 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 the total employees, approximately 785 were
direct sales and marketing personnel.

The Company has 14 local offices covered by collective bargaining agreements,
consisting of billposters and construction personnel. The Company believes that
its relations with its employees, including its 124 unionized employees, are
good, and the Company has never experienced a strike or work stoppage.



                                       7

<PAGE>


ITEM 1A. EXECUTIVE OFFICERS OF THE REGISTRANT

<Table>
<Caption>
      NAME                                AGE                     TITLE
      ----                                ---                     -----
<S>                                       <C>       <C>
Kevin P. Reilly, Jr.                      48        Chairman, President and Chief Executive Officer

Keith A. Istre                            50        Chief Financial Officer and Treasurer

Sean E. Reilly                            41        Chief Operating Officer and President of the
                                                    Outdoor 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 and became Treasurer in 1985. 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 has been Chief Operating Officer and President of the Company's
Outdoor Division since November 2001. He has been a director of the Company
since 1999. He began working with the Company as Vice President of Mergers and
Acquisitions in 1987 and served in that capacity until 1994. He also 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 after which he rejoined the Company as Vice President of Mergers and
Acquisitions and President of the Company's real estate division, TLC
Properties, Inc. 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 Baton
Rouge, Louisiana. The Company occupies approximately 90% of the space in this
facility and leases the remaining space. The Company owns 160 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 124 operating facilities at an aggregate lease expense for 2002 of
approximately $3.8 million.

The Company owns approximately 3,300 parcels of property beneath outdoor
structures. As of December 31, 2002, the Company had approximately 75,700 active
outdoor site leases accounting for a total annual lease expense of approximately
$132.3 million. This amount represented 18% of total outdoor advertising net
revenues for that period. 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.

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.



                                       8

<PAGE>


                                     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. As of March 5, 2003, the Class A common stock was held
by 198 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, 2001:
                First Quarter                      $ 49.38           $ 32.13
                Second Quarter                       46.78             34.13
                Third Quarter                        46.12             24.65
                Fourth Quarter                       42.55             28.70

       Fiscal year ended December 31, 2002:
                First Quarter                      $ 43.50           $ 33.35
                Second Quarter                       45.66             32.90
                Third Quarter                        37.72             25.48
                Fourth Quarter                       36.80             27.55
</Table>

The Company's Class B common stock is not publicly traded and is held of record
by members of the Reilly Family and the Reilly Family Limited Partnership.

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
new bank credit facility 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. 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.



                                       9

<PAGE>
STATEMENT OF OPERATIONS DATA:
(Dollars in Thousands)

<Table>
<Caption>
                                                                       For the Years Ended December 31,
                                                    2002             2001             2000             1999             1998
                                                ------------     ------------     ------------     ------------     ------------
<S>                                             <C>              <C>              <C>              <C>              <C>
Net revenues                                    $    775,682     $    729,050     $    687,319     $    444,135     $    288,588
                                                ------------     ------------     ------------     ------------     ------------
Operating expenses:
    Direct advertising expenses                      274,772          251,483          217,465          143,090           92,849
    General and administrative expenses              167,182          151,048          138,072           94,372           60,935
    Depreciation and amortization                    277,893          355,529          318,096          177,138           88,791
    Gain on disposition of assets                       (336)            (923)            (986)          (5,481)          (1,152)
                                                ------------     ------------     ------------     ------------     ------------
      Total operating expenses                       719,511          757,137          672,647          409,119          241,423
                                                ------------     ------------     ------------     ------------     ------------
Operating income (loss)                               56,171          (28,087)          14,672           35,016           47,165
                                                ------------     ------------     ------------     ------------     ------------
Other expense (income):
    Loss on early extinguishment of debt               5,850               --               --              298               --
    Interest income                                     (929)            (640)          (1,715)          (1,421)            (762)
    Interest expense                                 107,272          126,861          147,607           89,619           60,008
                                                ------------     ------------     ------------     ------------     ------------
      Total other expense                            112,193          126,221          145,892           88,496           59,246
                                                ------------     ------------     ------------     ------------     ------------
Loss before income taxes
    and cumulative effect of an accounting           (56,022)        (154,308)        (131,220)         (53,480)         (12,081)
    change
Income tax benefit                                   (19,694)         (45,674)         (37,115)          (9,712)            (191)
                                                ------------     ------------     ------------     ------------     ------------
Loss before cumulative effect of an
    accounting change                                (36,328)        (108,634)         (94,105)         (43,768)         (11,890)
Cumulative effect of an accounting change                 --               --               --             (767)              --
                                                ------------     ------------     ------------     ------------     ------------
Net loss                                             (36,328)        (108,634)         (94,105)         (44,535)         (11,890)
Preferred stock dividends                               (365)            (365)            (365)            (365)            (365)
                                                ------------     ------------     ------------     ------------     ------------
Net loss applicable to common stock             $    (36,693)    $   (108,999)    $    (94,470)    $    (44,900)    $    (12,255)
                                                ============     ============     ============     ============     ============
Loss per common share - basic
    and diluted:
Loss before accounting change                   $      (0.36)    $      (1.11)    $      (1.04)    $      (0.64)    $      (0.24)
Cumulative effect of a change in accounting
    principle                                             --               --               --            (0.01)              --
                                                ------------     ------------     ------------     ------------     ------------
Net loss                                        $      (0.36)    $      (1.11)    $      (1.04)    $      (0.65)    $      (0.24)
                                                ============     ============     ============     ============     ============
Other Data:
Adjusted EBITDA (1)                             $    333,728     $    326,519     $    331,782     $    206,673     $    134,804
Adjusted EBITDA margin(2)                                 43%              45%              48%              47%              47%

Cash flows provided by operating activities (3) $    237,017     $    190,632     $    177,601     $    110,551     $     72,498
Cash flows used in investing activities (3)     $   (155,763)    $   (382,471)    $   (435,595)    $   (950,650)    $   (535,217)
Cash flows (used in) provided by financing
    activities (3)                              $    (78,529)    $    132,384     $    321,933     $    719,903     $    584,070

BALANCE SHEET DATA (4)

Cash and cash equivalents                       $     15,610     $     12,885     $     72,340     $      8,401     $    128,597
Working capital (5)                                   95,922           27,261           72,526           43,112           96,205
Total assets (5)                                   3,888,106        3,671,652        3,642,844        3,209,270        1,415,361

Total debt (including current maturities)          1,994,433        1,811,585        1,738,280        1,615,781          876,532
Total long-term obligations (5)                    1,856,372        1,877,532        1,824,928        1,733,035          859,744
Stockholders' equity                               1,709,173        1,672,221        1,689,455        1,391,529          466,779
</Table>

(1)      Adjusted EBITDA is defined as operating income (loss) before
         depreciation and amortization and gain or loss on disposition of
         assets. Adjusted EBITDA is not a measure of financial performance under
         accounting principles generally accepted in the United States of
         America (GAAP). Adjusted EBITDA should not be considered in isolation
         or as an alternative to net income or cash flows from operating
         activities, which are determined in accordance with GAAP, as an
         indicator of the Company's operating performance or as measure of its
         liquidity. It is, however, a measurement that Company management
         believes is useful to evaluate the Company's operating performance as
         it reflects operating income before the impact of depreciation and
         amortization and gain or loss of disposition of assets, which can vary
         widely depending on non-operating activities. Adjusted EBITDA is also a
         measure that management believes is customarily used by financial
         analysts to evaluate the financial performance of companies in the
         media industry. The calculation of Adjusted EBITDA used by the Company
         may not be comparable to similarly titled measures used by other
         companies. Set forth below is a reconciliation of Adjusted EBITDA to
         operating income (loss):

<Table>
<Caption>
                                                          Years ended December 31,
                                         2002          2001          2000          1999           1998
                                      ----------    ----------    ----------    ----------    ----------
<S>                                   <C>           <C>           <C>           <C>           <C>
Operating income (loss)               $   56,171    $  (28,087)   $   14,672    $   35,016    $   47,165
Depreciation and amortization            277,893       355,529       318,096       177,138        88,791
Gain on disposition of assets               (336)         (923)         (986)       (5,481)       (1,152)
                                      ----------    ----------    ----------    ----------    ----------
Adjusted EBITDA                       $  333,728    $  326,519    $  331,782    $  206,673    $  134,804
                                      ==========    ==========    ==========    ==========    ==========
</Table>

(2)      Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net
         revenues.

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

(4)      As of the end of the period.

(5)      Certain balance sheet reclassifications were made in order to be
         comparable to the current year presentation.


                                       10

<PAGE>

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

This report contains forward-looking statements, including in particular,
statements regarding the Company's anticipated performance for the first quarter
of 2003. These statements are subject to risks and uncertainties that could
cause actual results to differ materially from those projected in these
forward-looking statements. These risks and uncertainties include, among others,
(1) the Company's significant indebtedness; (2) the continued popularity of
outdoor advertising as an advertising medium; (3) the regulation of the outdoor
advertising industry; (4) the Company's need for and ability to obtain
additional funding for acquisitions or operations; (5) the integration of
companies that the Company acquires and its ability to recognize cost savings or
operating efficiencies as a result of these acquisitions; (6) the extent and
length of the current economic downturn generally and the demand for advertising
in particular; and (7) other factors, including those described below under the
heading "Factors Affecting Future Operating Results", and elsewhere in this
Annual Report. The Company cautions investors not to place undue reliance on the
forward-looking statements contained in this document. These statements speak
only as of the date of this document, and the Company undertakes no obligation
to update or revise the statements, except as may be required by law.

LAMAR ADVERTISING COMPANY

The following is a discussion of the consolidated financial condition and
results of operations of the Company for the years ended December 31, 2002, 2001
and 2000. 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.

Since December 31, 2000, the Company has increased the number of outdoor
advertising displays it operates by approximately 11% by completing over 180
strategic acquisitions of outdoor advertising and transit assets for an
aggregate purchase price of approximately $466 million, which included the
issuance of 2,130,464 shares of Lamar Advertising Company Class A common stock
valued at the time of issuance at approximately $85.1 million. The Company has
financed its recent acquisitions and intends to finance its future acquisition
activity from available cash, borrowings under its bank credit agreement and the
issuance of Class A common stock. See "Liquidity and Capital Resources" below.
As a result of acquisitions, the operating performance of individual markets and
of the Company as a whole are not necessarily comparable on a year-to-year
basis.

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

Growth of the Company's business requires expenditures for maintenance and
capitalized costs associated with new billboard displays, logo sign and transit
contracts, and the purchase of real estate and operating equipment. Capitalized
expenditures were $78.4 million in 2002, $85.3 million in 2001 and $78.3 million
in 2000. The following table presents a breakdown of capitalized expenditures
for the past three years:

<Table>
<Caption>
                                                              In Thousands
                                                     2002         2001        2000
                                                   ---------   ---------   ---------
<S>                                                <C>         <C>         <C>
             Billboard                             $  47,424   $  53,486   $  46,412
             Logos                                     6,605       8,222      10,595
             Transit                                   3,949       6,447       5,225
             Land and buildings                       13,761      10,115       9,824
             PP&E                                      6,651       7,050       6,248
                                                   ---------   ---------   ---------
                  Total capital expenditures       $  78,390   $  85,320   $  78,304
                                                   =========   =========   =========
</Table>



                                       11

<PAGE>


CRITICAL ACCOUNTING POLICIES

The Company believes the following critical accounting policies effect its
significant judgments and estimates used in the preparation of its consolidated
financial statements:

Revenue Recognition - As discussed in Note 1 of the Notes to the Consolidated
Financial Statements, the Company recognizes revenues as advertising services
are provided. Advertising revenue is recorded net of agency commissions.

Intangible Assets - The Company has significant intangible assets recorded on
its balance sheet. Intangible assets primarily represent goodwill of $1,178
million, site locations of $761 million and customer relationships of $176
million associated with the Company's acquisitions. The fair values of
intangible assets recorded are determined using discounted cash flow models that
require management to make assumptions related to the future operating results
of each acquisition and the anticipated future economic environment. If actual
results differ from management's assumptions, an impairment of these intangibles
may exist and a charge to income would be made in the period such impairment is
determined.

Accounting Estimates - Management is required to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenues, expenses and
related disclosure of contingent liabilities. The Company bases its estimates on
historical experience, reasonable assumptions and where applicable, established
valuation techniques. Specifically, management has made critical estimates in
the following areas:

         Allowance for Doubtful Accounts - The Company maintains allowances for
         doubtful accounts based on the payment patterns of its customers.
         Management analyzes historical results, the economic environment,
         changes in the credit worthiness of its customers, and other relevant
         factors in determining the adequacy of the Company's allowance. Bad
         debt expense was $9 million, $8 million and $6 million or approximately
         1% of net revenue for the years ended December 31, 2002, 2001 and 2000,
         respectively. If the future economic environment continues to decline,
         the inability of customers to pay may occur and the allowance for
         doubtful accounts may need to be increased, which will result in
         additional bad debt expense in future years.

         Long-Lived Asset Recovery - Long-lived assets, consisting primarily of
         property, plant and equipment and intangibles comprise a significant
         portion of the Company's total assets. Property, plant and equipment of
         $1,284 million and intangible assets of $989 million are reviewed for
         impairment whenever events or changes in circumstances have indicated
         that their carrying amounts may not be recoverable. Recoverability of
         assets is measured by a comparison of the carrying amount of an asset
         to future undiscounted net cash flows expected to be generated by that
         asset before interest expense. These undiscounted cash flow projections
         are based on management assumptions surrounding future operating
         results and anticipated future economic environment. If actual results
         differ from management's assumptions, an impairment of these intangible
         assets may exist and a charge to income would be made in the period
         such impairment is determined.

         Goodwill Impairment - The Company had goodwill of $1,178 million as of
         December 31, 2002 and must perform an annual impairment analysis of
         goodwill or more frequently if events and circumstances indicate that
         the asset might be impaired. This analysis requires management to make
         assumptions as to the implied fair value of goodwill as compared to its
         carrying value. In conducting the impairment analysis, the Company
         determines implied fair value of goodwill utilizing quoted market
         prices of its Class A common stock, as well as discounted cash flow
         models before interest expense. These discounted cash flow models
         require management to make assumptions related to the future operating
         results of the Company and the anticipated future economic environment.
         Based upon the Company's review, no impairment charge was required upon
         the adoption of Statement of Financial Accounting Standard (SFAS) No.
         142, "Goodwill and Other Intangible Assets," in January 2002 or at its
         annual test for impairment on December 31, 2002.

         Deferred Taxes - As of December 31, 2002, the Company has made the
         determination that its deferred tax assets of $146.9 million, the
         primary component of which is the Company's net operating loss
         carryforward, are fully realizable due to the existence of certain
         deferred tax liabilities of approximately $254.8 million that are
         anticipated to reverse during the carryforward period. Accordingly, the
         Company has not recorded a valuation allowance to reduce its deferred
         tax assets. Should the Company determine that it would not be able to
         realize all or part of its net deferred tax assets in the future, an
         adjustment to the deferred tax asset would be charged to income in the
         period such determination was made. For a more detailed description,
         see Note 9 of the Notes to the Consolidated Financial Statements.



                                       12


<PAGE>

RESULTS OF OPERATIONS

The following table presents certain items in the Consolidated Statements of
Operations as a percentage of net revenues for the years ended December 31,
2002, 2001 and 2000:

<Table>
<Caption>
                                                   Year ended December 31,
                                             ----------------------------------
                                               2002         2001         2000
                                             --------     --------     --------
<S>                                          <C>          <C>          <C>
Net revenues                                    100.0%       100.0%       100.0%
Operating expenses:
   Direct advertising expenses                   35.4         34.5         31.6
   General and administrative expenses           21.6         20.7         20.1
Depreciation and amortization                    35.8         48.9         46.3
Operating income (loss)                           7.2         (3.9)         2.1
Interest expense                                 13.8         17.4         21.5
Net loss                                         (4.7)       (14.9)       (13.7)
Adjusted EBITDA                                  43.0         44.8         48.3
</Table>

Adjusted EBITDA is defined as operating income (loss) before depreciation and
amortization and gain or loss on disposition of assets. Adjusted EBITDA is not a
measure of financial performance under accounting principles generally accepted
in the United States of America (GAAP). Adjusted EBITDA should not be considered
in isolation or as an alternative to net income or cash flows from operating
activities, which are determined in accordance with GAAP, as an indicator of the
Company's operating performance or as measure of its liquidity. It is, however,
a measurement that Company management believes is useful to evaluate the
Company's operating performance as it reflects operating income before the
impact of depreciation and amortization and gain or loss of disposition of
assets, which can vary widely depending on non-operating activities. Adjusted
EBITDA is also a measure that management believes is customarily used by
financial analysts to evaluate the financial performance of companies in the
media industry. The calculation of Adjusted EBITDA used by the Company may not
be comparable to similarly titled measures used by other companies. Set forth
below is a reconciliation of Adjusted EBITDA to operating income (loss):

<Table>
<Caption>
                                            Year ended December 31,
                                     --------------------------------------
                                            (dollars in thousands)
                                        2002          2001          2000
                                     ----------    ----------    ----------
<S>                                  <C>           <C>           <C>
Operating income (loss)              $   56,171    $  (28,087)   $   14,672
Depreciation and amortization           277,893       355,529       318,096
Gain on disposition of assets              (336)         (923)         (986)
                                     ----------    ----------    ----------
Adjusted EBITDA                      $  333,728    $  326,519    $  331,782

</Table>

YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

Net revenues increased $46.6 million or 6.4% to $775.7 million for the year
ended December 31, 2002 from $729.1 million for the same period in 2001. This
increase was attributable primarily to (i) an increase in billboard net revenues
of $38.3 million or 5.5%, (ii) a $2.6 million increase in logo sign revenue,
which represents an increase of 7.3% over the prior year, and (iii) a $3.8
million increase in transit revenue, which represents an 81.7% increase over the
prior year.

The increase in billboard net revenues of $38.3 million was significantly due to
acquisition activity. During the two year period ending December 31, 2002, the
Company acquired approximately $466.3 million of outdoor advertising assets
within markets the Company previously operated. The aggregate net revenues of
these acquired assets for the twelve-month period prior to acquisition was
approximately $65 million. The acquisitions were completed at various intervals
during 2001 and 2002 and the actual net revenues were included in the Company's
performance at that time. Because of adverse economic conditions that existed in
2002, the Company's billboard net revenue growth came from acquisitions as
described above.

The increase in logo sign revenue of $2.6 million was significantly due to price
increases negotiated by the Company with the state of Virginia, which generated
an increase in net revenue of $1.3 million as compared to the same period in
2001. The remaining increase of $1.3 million was generated by internal growth
across various markets within the logo sign program.

The increase in transit revenue of $3.8 million was generated by internal growth
resulting from changes in management and sales processes within the transit
program.

Operating expenses, exclusive of depreciation and amortization and gain on sale
of assets, increased $39.5 million or 9.8% to $442.0 million for the year ended
December 31, 2002 from $402.5 million for the same period in 2001. There was a
$36.2 million increase as a result of additional operating expenses related to
the operations of acquired outdoor advertising assets and increases in
personnel, sign site rent, insurance costs and property taxes. The remaining
$3.3 million increase in expenses is a result of increases in logo sign, transit
and corporate overhead expenses.


                                       13

<PAGE>

As a result of the contributing factors discussed above, Adjusted EBITDA
increased $7.2 million to $333.7 million for the year ended December 31, 2002
from $326.5 million for the same period in 2001. The definition of Adjusted
EBITDA and other important information, including a reconciliation to operating
income (loss), are set forth above. See "Results of Operations" on page 13.

Depreciation and amortization expense decreased $77.6 million or 21.8% from
$355.5 million for the year ended December 31, 2001 to $277.9 million for the
year ended December 31, 2002 as a result of the Company's adoption of SFAS No.
142, "Goodwill and Other Intangible Assets", which eliminated the amortization
expense for goodwill.

Due to the above factors, operating income increased $84.3 million to $56.2
million for year ended December 31, 2002 compared to an operating loss of $28.1
million for the same period in 2001.

On October 25, 2002, the Company's wholly-owned subsidiary, Lamar Media Corp.,
redeemed all of its outstanding 9 1/4% Senior Subordinated Notes due 2007 in
aggregate principal amount of approximately $74.1 million for a redemption price
equal to 104.625% of the principal amount thereof plus accrued interest to the
redemption date of approximately $1.3 million. In the fourth quarter of 2002,
the Company recorded approximately $5.9 million as an expense related to the
prepayment of the 9 1/4% Senior Subordinated Notes due 2007.

Interest expense decreased $19.6 million from $126.9 million for the year ended
December 31, 2001 to $107.3 million for the year ended December 31, 2002 as a
result of lower interest rates for the year ended December 31, 2002 as compared
to the same period in 2001.

The increase in operating income and the decrease in interest expense described
above resulted in a $98.3 million decrease in loss before income taxes. The
decrease in loss before income taxes, resulted in a decrease in the income tax
benefit of $26.0 million for the year ended December 31, 2002 over the same
period in 2001. The effective tax rate for the year ended December 31, 2002 is
35.2%.

As a result of the above factors, the Company recognized a net loss for the year
ended December 31, 2002 of $36.3 million, as compared to a net loss of $108.6
million for the same period in 2001.

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

Net revenues increased $41.7 million or 6.1% to $729.1 million for the year
ended December 31, 2001 from $687.3 million for the same period in 2000. This
increase was predominantly attributable to (i) an increase in billboard net
revenues of $43.4 million or 6.7%, which was generated by acquisitions during
2001 and 2000, and (ii) a $2.7 million increase in logo sign revenue, which
represents a 8.2% increase over the prior year, and (iii) offset by at $2.6
million decrease in transit revenue.

The increase in billboard net revenues of $43.4 million was due to acquisition
activity. During the two year period ending December 31, 2001, the Company
acquired approximately $876.8 million of outdoor advertising assets within
markets the Company previously operated. The aggregate net revenues of these
assets for the twelve-month period prior to acquisition was approximately $117
million.

The acquisitions were completed at various intervals during 2000 and 2001 and
the actual net revenues were included in the Company's performance at that time.
Because of adverse economic conditions that existed in 2001, the Company's
billboard net revenue growth came from acquisitions as described above.

The increase in logo sign revenue of $2.7 million was due to both price
increases negotiated by the Company with the state of Texas, which generated an
increase in net revenue of $0.7 million as compared to the same period in 2000,
and additional logo interchanges awarded in the state of Michigan, which
generated an increase in net revenue of $0.5 million as compared to the same
period in 2000. The remaining increase of $1.5 million was generated by internal
growth across various markets within the logo sign program.

The decrease in transit revenue of $2.6 million was primarily caused by a
decrease in net revenue of $2.2 million in the Company's Denver, Colorado
market, as a result of a management problem and other sales processes issues,
which were subsequently addressed by allocating additional management resources
to this market and renegotiating certain contractual obligations to reduce
required fixed payments.

Operating expenses, exclusive of depreciation and amortization and gain on
disposition of assets, increased $47.0 million or 13.2% to $402.5 million for
the year ended December 31, 2001 from $355.5 million for the same period in
2000. This increase is primarily due to additional operating expenses associated
with acquisitions made in 2001 and 2000 and increases in personnel, sign site
rent, materials and overhead.



                                       14

<PAGE>

As a result of these factors, Adjusted EBITDA decreased $5.3 million or 1.6% to
$326.5 million for the year ended December 2001 from $331.8 million for the same
period in 2000. The definition of Adjusted EBITDA and other important
information, including a reconciliation to operating income (loss), are set
forth above. See "Results of Operations" on page 13.

Depreciation and amortization expense increased $37.4 million or 11.8% from
$318.1 million for the year ended December 31, 2000 to $355.5 million for the
year ended December 31, 2001 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 $42.8 million or 291.2%
from $14.7 million for the year ended December 31, 2000 to a $28.1 million
operating loss for the year ended December 31, 2001.

Interest expense decreased $20.7 million from $147.6 million for the year ended
December 31, 2000 to $126.9 million for the year ended December 31, 2001 as a
result of declining interest rates for the year ended December 31, 2001 over the
same period in 2000.

The decrease in operating income offset by the decrease in interest expense
described above resulted in a $23.1 million increase in loss before income
taxes.

The increase in loss before income taxes, resulted in an increase in the income
tax benefit of $8.6 million for the year ended December 31, 2001 over the same
period in 2000. The effective tax rate for the year ended December 31, 2001 is
29.6% which is less than the statutory rates due to permanent difference
resulting from non-deductible amortization of goodwill.

As a result of the foregoing factors, the Company recognized a net loss for the
year ended December 31, 2001 of $108.6 million, as compared to a net loss of
$94.1 million for the same period in 2000.

LIQUIDITY AND CAPITAL RESOURCES

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

The Company's net cash provided by operating activities increased to $237.0
million in fiscal 2002 due primarily to a decrease in net loss of $72.3 million
offset by a decrease in noncash items of $42.6 million, which primarily includes
a decrease in depreciation and amortization of $77.6 million offset by a
decrease in deferred income tax benefit of $30.8 million, the loss on early
extinguishment of debt of $2.4 million and an increase in the provision for
doubtful accounts of $1.2 million as a result of an increase in bad debt expense
of the same amount. In addition as compared to 2001, there was a decrease in
receivables of $5.0 million, an increase in accrued expenses of $11.8 million
and an increase in deferred income of $2.3 million. Net cash used in investing
activities decreased $226.7 million from $382.5 million in 2001 to $155.8
million in 2002 primarily due to the decrease in merger and acquisition activity
by the Company in 2002 of $222.9 million. There was also a $6.9 million decrease
in capital expenditures and a decrease in proceeds from the sale of property and
equipment of $1.5 million. Net cash used in financing activities increased to
$78.5 million in fiscal 2002 due to a $73.6 million increase in principal
payments of long-term debt due primarily to the redemption of the Lamar Media's
9 1/4% Senior Subordinated Notes. In addition, there was a $46.3 million
decrease in proceeds from issuance of the Company's Class A common stock and an
$80 million decrease in borrowings from credit agreements.

During the year ended December 31, 2002, the Company financed its acquisition
activity of approximately $135.2 million with approximately $60.0 million in
borrowings under the Company's old bank credit agreement and the issuance
1,405,464 shares of the Company's Class A common stock. During 2002, the Company
paid off its outstanding revolver balance and made scheduled principal payments
of approximately $66.6 million under the Company's old bank credit agreement. As
of December 31, 2002, the Company had $309.6 million available under the old
revolving bank credit facility.

The Company's wholly-owned subsidiary, Lamar Media Corp., replaced its old bank
credit facility with a new bank credit facility on March 7, 2003. The new bank
credit facility comprised of a $225.0 million revolving bank credit facility and
a $975.0 million term facility. The new bank credit facility also includes a
$500.0 million incremental facility, which permits Lamar Media to request that
its lenders enter into commitments to make additional term loans to it, up to a
maximum aggregate amount of $500.0 million. The lenders have no obligation to
make additional term loans to Lamar Media under the incremental facility, but
may enter into such commitments in their sole discretion.

In the future, Lamar Media has principal reduction obligations and revolver
commitment reductions under its new bank credit agreement. In addition it has
fixed commercial commitments. These commitments are detailed as follows:



                                       15

<PAGE>
<Table>
<Caption>
                                                                        Payments Due by Period
                                                                            (in millions)
                                                              ------------------------------------------
                                              Balance at         Less
             Contractual                     December 31,        than 1          1 - 3           4 - 5          After 5
             Obligations                         2002            Year            Years           Years           Years
----------------------------------------     ------------     ----------      ----------      ----------      ----------
<S>                                          <C>              <C>             <C>             <C>             <C>
Long-Term Debt (1)                            $  1,994.4           259.7            60.8           638.1         1,035.8
Billboard site and building leases            $    783.0           103.0           168.3           127.2           384.5
                                              ----------      ----------      ----------      ----------      ----------
Total Payments due                            $  2,777.4           362.7           229.1           765.3         1,420.3
                                              ==========      ==========      ==========      ==========      ==========
</Table>

<Table>
<Caption>
                                                                      Amount of Commitment
                                                                       Expiration Per Period
                                                              ------------------------------------------
                Other                                           Less
             Commercial                      Total Amount       than 1          1 - 3           4 - 5          After 5
             Commitments                      Committed         Year            Years           Years           Years
----------------------------------------     ------------     ----------      ----------      ----------      ----------
<S>                                          <C>              <C>             <C>             <C>             <C>
Revolving Bank Facility (1) (2)               $    225.0              --              --              --           225.0
                                              ==========      ==========      ==========      ==========      ==========
Standby Letters of Credit                     $      5.4             1.1              --             4.3              --
                                              ==========      ==========      ==========      ==========      ==========
</Table>

(1)      Updated to reflect the terms of the Company's new credit facility,
         effective March 7, 2003.

(2)      Lamar Media had no balance outstanding at December 31, 2002.

On September 25, 2002, the Company's wholly owned subsidiary, Lamar Media Corp.,
called for full redemption on October 25, 2002 of its outstanding 9 1/4% Senior
Subordinated Notes due 2007 in aggregate principal amount of approximately $74.1
million for a redemption price equal to 104.625% of the principal amount thereof
plus accrued interest to the redemption date of approximately $1.3 million.
Lamar Media called the 9 1/4% Senior Subordinated Notes due 2007 pursuant to the
optional redemption provisions of the 9 1/4% Senior Subordinated Notes due 2007
and the related indenture applicable to optional redemptions. Lamar Media used
cash on hand to redeem the 9 1/4% Senior Subordinated Notes due 2007. In the
fourth quarter of 2002, the Company recorded approximately $5.9 million as an
expense related to the prepayment of the 9 1/4% Senior Subordinated Notes due
2007.

On September 25, 1997, Lamar Media issued $200 million aggregate principal
amount of 8 5/8% Senior Subordinated Notes due 2007. These notes are redeemable
at its option at any time at redemption prices with a premium that decreases
annually from approximately 4.3% for a redemption on or after September 15,
2002, to approximately 2.9% on or after September 15, 2003, and further to
approximately 1.5% on or after September 15, 2004, with no premium if the
redemption occurs on or after September 15, 2005. The notes are required to be
repurchased earlier in the event of a change of control. The indenture covering
the notes also includes certain restrictive covenants that limit its ability to
incur additional debt, pay dividends and make other restricted payments,
consummate certain transactions and other matters.

On December 23, 2002, Lamar Media issued $260 million in principal amount of
7 1/4% Senior Subordinated Notes due 2013. These notes are unsecured senior
subordinated obligations of Lamar Media and (i) are subordinated to all of Lamar
Media's existing senior debt, (ii) will be subordinated to any future senior
debt incurred by Lamar Media, (iii) rank equally with all of Lamar Media's
existing and any future senior subordinated debt and (iv) will rank senior to
any future subordinated debt incurred by Lamar Media. The net proceeds from the
issuance and sale of these notes, together with additional cash, were used on
January 22, 2003 to redeem all of Lamar Media's outstanding 9 5/8% Senior
Subordinated Notes due 2006 for a total redemption price of approximately $266.7
million, which consisted of a redemption price equal to 103.208% of the
outstanding $255 million aggregate principal amount and accrued interest thereon
to the date of redemption of approximately $3.5 million. The Company will record
a loss on the extinguishment of debt of approximately $6.8 million in the first
quarter of 2003.

The indentures relating to Lamar Media's outstanding notes restrict its ability
to incur indebtedness other than:

         o        up to $1.3 billion of indebtedness under its bank credit
                  facility;

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

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

         o        certain other debt incurred in the ordinary course of business
                  (provided that all of the above ranks junior in right of
                  payment to the notes that has a maturity or mandatory sinking
                  fund payment prior to the maturity of the notes).

Lamar Media is required to comply with certain covenants and restrictions under
its new bank credit agreement. If the Company fails to comply with these tests,
the payments set forth in the above table may be accelerated. At December 31,
2002 and currently Lamar Media is in compliance with all such tests.



                                       16

<PAGE>
Lamar Media cannot exceed the following financial ratios under its new bank
credit facility:

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

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

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

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

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

As defined under Lamar Media's new bank credit facility, EBITDA is, for any
period, operating income for Lamar Media and its restricted subsidiaries
(determined on a consolidated basis without duplication in accordance with GAAP)
for such period (calculated before taxes, interest expense, depreciation,
amortization and any other non-cash income or charges accrued for such period
and (except to the extent received or paid in cash by Lamar Media or any of its
restricted subsidiaries) income or loss attributable to equity in affiliates for
such period) excluding any extraordinary and unusual gains or losses during such
period and excluding the proceeds of any casualty events whereby insurance or
other proceeds are received and certain dispositions not in the ordinary course.
Any dividend payment made by Lamar Media or any of its restricted subsidiaries
to Lamar Advertising Company during any period to enable Lamar Advertising
Company to pay certain qualified expenses on behalf of Lamar Media and its
subsidiaries, shall be treated as operating expenses of Lamar Media for the
purposes of calculating EBITDA for such period. EBITDA under the new bank credit
agreement is also adjusted to reflect certain acquisitions or dispositions as if
such acquisitions or dispositions were made on the first day of such period.

The Company believes that its current level of cash on hand, availability under
its new bank credit agreement and future cash flows from operations are
sufficient to meet its operating needs through the year 2003. All debt
obligations are on the Company's balance sheet.

NEW ACCOUNTING PRONOUNCEMENTS

In June 2001, Financial Accounting Standards Board (FASB) issued SFAS No. 143,
"Accounting for Asset Retirement Obligations." SFAS No. 143 requires the Company
to record the fair value of an asset retirement obligation as a liability in the
period in which it incurs a legal obligation associated with the retirement of
tangible long-lived assets that result from the acquisition, construction,
development, and/or normal use of the assets. The Company will also record a
corresponding asset that is depreciated over the life of the asset. Subsequent
to the initial measurement of the asset retirement obligation, the obligation
will be adjusted at the end of each period to reflect the passage of time and
changes in the estimated future cash flows underlying the obligation. The
Company is required to adopt SFAS No. 143 on January 1, 2003. The Company has
not yet determined the impact to the consolidated financial statements for the
adoption of SFAS No. 143.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities", ("Statement 146") which addresses financial
accounting and reporting for costs associated with exit or disposal activities.
It nullifies EITF Issue No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring)." The principal difference between Statement
146 and Issue 94-3 relates to the recognition of a liability for a cost
associated with an exit or disposal activity. Statement 146 requires that a
liability be recognized for those costs only when the liability is incurred,
that is, when it meets the definition of a liability in the FASB's conceptual
framework. In contrast, under Issue 94-3, a company recognized a liability for
an exit cost when it committed to an exit plan. Statement 146 also establishes
fair value as the objective for initial measurement of liabilities related to
exit or disposal activities. The Statement is effective for exit or disposal
activities that are initiated after December 31, 2002 and is not expected to
have an impact on the Company's financial statements. The Company adopted the
provisions related to Statement No. 146 as of January 1, 2003.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness to Others, an interpretation of FASB Statements No. 5, 57 and 107
and a rescission of FASB Interpretation No. 34". This Interpretation elaborates
on the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under guarantees issued. The Interpretation
also clarifies that a

                                       17

<PAGE>
guarantor is required to recognize, at inception of a guarantee, a liability for
the fair value of the obligation undertaken. The initial recognition and
measurement provisions of the Interpretation are applicable to guarantees issued
or modified after December 31, 2002 and are not expected to have a material
effect on the Company's financial statements. The disclosure requirements are
effective for financial statements of interim and annual periods ending after
December 15, 2002.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure, an amendment of FASB Statement No.
123." This Statement amends FASB Statement No. 123, "Accounting for Stock-Based
Compensation," to provide alternative methods of transition for a voluntary
change to the fair value method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure requirements of
Statement No. 123 to require prominent disclosures in both annual and interim
financial statements. Certain of the disclosure modifications are required for
fiscal years ending after December 15, 2002 and are included in the notes to
these consolidated financial statements.

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities, an interpretation of ARB No. 51." This
interpretation addresses the consolidation by business enterprises of variable
interest entities as defined in the Interpretation. The Interpretation applies
immediately to variable interests in variable interest entities created after
January 31, 2003, and to variable interests in variable interest entities
obtained after January 31, 2003. The application of the Interpretation is not
expected to have a material effect on the Company's financial statements as the
Company has no variable interest entities. The Interpretation requires certain
disclosures in financial statements issued after January 31, 2003 if it is
reasonably possible that the Company will consolidate or disclose information
about variable interest entities when the Interpretation becomes effective.

LAMAR MEDIA CORP.

The following is a discussion of the consolidated financial condition and
results of operations of Lamar Media for the years ended December 31, 2002, 2001
and 2000. This discussion should be read in conjunction with the consolidated
financial statements of Lamar Media and the related notes.

The following table presents certain items in the Consolidated Statements of
Operations as a percentage of net revenues for Lamar Media Corp. for the years
ended December 31, 2002, 2001 and 2000:

<Table>
<Caption>
                                                                           Year ended December 31,
                                                                   ----------------------------------------
                                                                     2002            2001            2000
                                                                   --------        --------        --------
<S>                                                                <C>             <C>             <C>
             Net revenues                                            100.0%          100.0%          100.0%
             Operating expenses:
                Direct advertising expenses                           35.4            34.5            31.6
                General and administrative expenses                   21.5            20.7            20.0
             Depreciation and amortization                            35.4            48.2            45.9
             Operating income (loss)                                   7.7            (3.3)            2.6
             Interest expense                                         11.9            15.5            21.5
             Net loss                                                 (3.2)          (13.4)          (13.4)
             Adjusted EBITDA                                          43.1            44.8            48.4
</Table>

Adjusted EBITDA is defined as operating income (loss) before depreciation and
amortization and gain or loss on disposition of assets. Adjusted EBITDA is not a
measure of financial performance under accounting principles generally accepted
in the United States of America (GAAP). Adjusted EBITDA should not be considered
in isolation or as an alternative to net income or cash flows from operating
activities, which are determined in accordance with GAAP, as an indicator of
Lamar Media's operating performance or as measure of its liquidity. It is,
however, a measurement that Lamar Media management believes is useful to
evaluate Lamar Media's performance as it reflects operating income before the
impact of depreciation and amortization and gain or loss of disposition of
assets, which can vary widely depending on non-operating activities. Adjusted
EBITDA is also a measure that management believes is customarily used by
financial analysts to evaluate the financial performance of companies in the
media industry. The calculation of Adjusted EBITDA used by Lamar Media may not
be comparable to similarly titled measures used by other companies.

Set forth below is a reconciliation of Adjusted EBTIDA to operating income
(loss):

<Table>
<Caption>
                                                 Year ended December 31,
                                      -----------------------------------------------
                                                 (dollars in thousands)
                                         2002              2001               2000
                                      -----------       -----------       -----------
<S>                                   <C>               <C>               <C>
Operating income (loss)               $    59,707       $   (24,050)      $    18,083
Depreciation and amortization             274,644           351,754           315,465
Gain on disposition of assets                (336)             (923)             (986)
                                      -----------       -----------       -----------
Adjusted EBITDA                       $   334,015       $   326,781       $   332,562

</Table>

                                       18

<PAGE>

YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

Net revenues increased $46.6 million or 6.4% to $775.7 million for the year
ended December 31, 2002 from $729.1 million for the same period in 2001. This
increase was attributable primarily to (i) an increase in billboard net revenues
of $38.3 million or 5.5%, (ii) a $2.6 million increase in logo sign revenue
which represents a 7.3% increase over the prior year, (iii) and a $3.8 million
increase in transit revenue, which represents a 81.7% increase over the prior
year.

The increase in billboard net revenues of $38.3 million was significantly due to
acquisition activity. During the two year period ending December 31, 2002, Lamar
Media acquired approximately $461.6 million of outdoor advertising assets within
markets Lamar Media previously operated. The aggregate net revenues of these
acquired assets for the twelve month period prior to acquisition was
approximately $65.0 million. The acquisitions were completed at various
intervals during 2001 and 2002 and the actual net revenues were included in
Lamar Media's performance at that time. Because of adverse economic conditions
that existed in 2002, Lamar Media's billboard net revenue growth came from
acquisitions as described above.

The increase in logo sign revenue of $2.6 million was significantly due to price
increases negotiated by Lamar Media with the state of Virginia, which generated
an increase in net revenue of $1.3 million as compared to the same period in
2001. The remaining increase of $1.3 million was generated by internal growth
across various markets within the logo sign program.

The increase in transit revenue of $3.8 million was generated by internal growth
resulting from changes in management and sales processes within the transit
program.

Operating expenses, exclusive of depreciation and amortization and gain on sale
of assets, increased $39.4 million or 9.8% to $441.7 million for the year ended
December 31, 2002 from $402.3 million for the same period in 2001. There was a
$36.2 million increase as a result of additional operating expenses related to
the operations of acquired outdoor advertising assets and increases in
personnel, sign site rent, insurance costs and property taxes. The remaining
$3.2 million increase in expenses is a result of increases in logo sign, transit
and overhead expenses.

As a result of the contributing factors discussed above, Adjusted EBITDA
increased $7.2 million to $334.0 million for the year ended December 31, 2002
from $326.8 million for the same period in 2001. The definition of Adjusted
EBITDA and other important information, including a reconciliation to operating
income (loss) are set forth above. See "Results of Operations" on page 18.

Depreciation and amortization expense decreased $77.2 million or 21.9% from
$351.8 million for the year ended December 31, 2001 to $274.6 million for the
year ended December 31, 2002 as a result of Lamar Media's adoption of SFAS No.
142, "Goodwill and Other Intangible Assets", which eliminated the amortization
expense for goodwill.

Due to the above factors, operating income increased $83.8 million to $59.7
million for year ended December 31, 2002 compared to an operating loss of $24.1
million for the same period in 2001.

On October 25, 2002, Lamar Media redeemed all of its outstanding 9 1/4% Senior
Subordinated Notes due 2007 in aggregate principal amount of approximately $74.1
million for a redemption price equal to 104.625% of the principal amount thereof
plus accrued interest to the redemption date of approximately $1.3 million. In
the fourth quarter of 2002, Lamar Media recorded approximately $5.9 million as
an expense related to the prepayment of the 9 1/4% Senior Subordinated Notes due
2007.

Interest expense decreased $20.8 million from $113.0 million for year ended
December 31, 2001 to $92.2 million for the year ended December 31, 2002 as a
result of lower interest rates as compared to the same period in 2001.

The increase in operating income and the decrease in interest expense described
above resulted in a $99.0 million decrease in loss before income taxes. The
decrease in loss before income taxes, resulted in an decrease in the income tax
benefit of $26.4 million for the year ended December 31, 2002 over the same
period in 2001. The effective tax rate for the year ended December 31, 2002 is
33.3%.

As a result of the above factors, Lamar Media recognized a net loss for the year
ended December 31, 2002 of $25.0 million, as compared to a $97.6 million loss in
2001.

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

Net revenues increased $41.8 million or 6.1% to $729.1 million for the year
ended December 31, 2001 from $687.3 million for the same period in 2000. This
increase was predominantly attributable to (i) an increase in billboard net
revenues of $43.4



                                       19

<PAGE>

million or 6.7%, which was generated by acquisitions during 2001 and 2000, and
(ii) a $2.7 million increase in logo sign revenue, which represents a 8.2%
increase over the prior year, and (iii) offset by at $2.6 million decrease in
transit revenue.

The increase in billboard net revenues of $43.4 million was due to acquisition
activity. During the two year period ending December 31, 2001, Lamar Media
acquired approximately $868.7 million of outdoor advertising assets within
markets it previously operated. The aggregate net revenues of these acquired
assets for the twelve month period prior to its acquisition was approximately
$117 million.

The acquisitions were completed at various intervals during 2000 and 2001 and
the actual net revenues were included in Lamar Media's performance at that time.
Because of adverse economic conditions that existed in 2001, Lamar Media's
billboard net revenue growth came from acquisitions as described above.

The increase in logo sign revenue of $2.7 million was due to both price
increases negotiated by Lamar Media with the state of Texas, which generated an
increase in net revenue of $0.7 million as compared to the same period in 2000
and additional logo interchanges awarded in the state of Michigan, which
generated an increase in net revenue of $0.5 million as compared to the same
period in 2000. The remaining increase of $1.5 million was generated by internal
growth across various markets within the logo sign program.

The decrease in transit revenue of $2.6 million was primarily caused by a
decrease in net revenue of $2.2 million in the Company's Denver, Colorado
market, as a result of a management problem and other sales processes issues
which were subsequently addressed by allocating additional management resources
to this market and renegotiating certain contractual obligations to reduce
required fixed payments.

Operating expenses, exclusive of depreciation and amortization and gain on
disposition of assets, increased $47.5 million or 13.4% to $402.3 million for
the year ended December 31, 2001 from $354.8 million for the same period in
2000. This increase is primarily due to additional operating expenses associated
with acquisitions made in 2001 and 2000 and increases in personnel, sign site
rent, materials and overhead.

As a result of these factors, Adjusted EBITDA decreased $5.8 million or 1.7% to
$326.8 million for the year ended December 2001 from $332.6 million for the same
period in 2000. The definition of Adjusted EBITDA and other important
information, including a reconciliation to operating income (loss), as set forth
above. See "Results of Operations" on page 18.

Depreciation and amortization expense increased $36.3 million or 11.5% from
$315.5 million for the year ended December 31, 2000 to $351.8 million for the
year ended December 31, 2001 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 $42.2 million or 233.1%
from $18.1 million for the year ended December 31, 2000 to a $24.1 million
operating loss for the year ended December 31, 2001.

Interest expense decreased $34.6 million from $147.6 million for the year ended
December 31, 2000 to $113.0 million for the year ended December 31, 2001 as a
result of declining interest rates for the twelve months ending December 31,
2001 over the same period in 2000.

The decrease in operating income offset by the decrease in interest expense
described above resulted in a $8.6 million increase in loss before income taxes.

The increase in loss before income taxes, resulted in an increase in the income
tax benefit of $3.0 million for the year ended December 31, 2001 over the same
period in 2000. The effective tax rate for the year ended December 31, 2001 is
28.5% which is less than the statutory rates due to the permanent differences
resulting from nondeductible amortization of goodwill.

As a result of the foregoing factors, Lamar Media recognized a net loss for the
year ended December 31, 2001 of $97.6 million, as compared to a net loss of
$91.9 million for the same period in 2000.

FACTORS AFFECTING FUTURE OPERATING RESULTS

THE COMPANY'S SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT ITS BUSINESS AND
MAY CREATE A NEED TO BORROW ADDITIONAL MONEY IN THE FUTURE TO MAKE THE
SIGNIFICANT FIXED PAYMENTS ON ITS DEBT AND OPERATE ITS BUSINESS.

The Company has borrowed substantial amounts of money in the past and may borrow
more money in the future. At December 31, 2002, Lamar Advertising Company had
approximately $287.5 million of convertible notes outstanding. At December 31,
2002, after giving effect to the redemption of Lamar Media's 9 5/8% Senior
Subordinated Notes due 2006 on January 22, 2003, Lamar Media would have had
approximately $1.5 billion of debt outstanding consisting of approximately
$975.5 million in bank



                                       20

<PAGE>
debt, $1.2 million in senior notes, $459.2 million in various series of senior
subordinated notes and $16.0 million in various other short-term and long-term
debt. In addition, the indentures governing Lamar Media's notes and bank credit
facility allows it to incur substantial additional indebtedness in the future.
As of December 31, 2002, Lamar Media had approximately $309.6 million available
to borrow under its then existing bank credit facility. On March 7, 2003, Lamar
Media replaced the bank credit facility with a new bank credit facility under
which it had $219.6 million of borrowing capacity as of March 7, 2003. The new
bank credit facility also permits Lamar Media to request that its lenders enter
into commitments to make additional term loans to Lamar Media, up to a maximum
aggregate amount of $500.0 million. Lamar Media's lenders have no obligation to
make additional term loans to Lamar Media, but may enter into such commitments
in their sole discretion. The Company's substantial indebtedness and the fact
that a large part of the Company's cash flow from operations must be used to
make principal and interest payments on its debt may have important
consequences, including:

         o        limiting cash flow available to fund the Company's working
                  capital, capital expenditures, potential acquisitions or other
                  general corporate requirements;

         o        increasing the Company's vulnerability to general adverse
                  economic and industry conditions;

         o        limiting the Company's ability to obtain additional financing
                  to fund future working capital, capital expenditures,
                  potential acquisitions or other general corporate
                  requirements;

         o        limiting the Company's flexibility in planning for, or
                  reacting to, changes in its business and industry;

         o        placing the Company at a competitive disadvantage compared to
                  its competitors with less indebtedness; and

         o        making it more difficult for the Company to comply with
                  financial covenants in its bank credit facility.

In addition, if the Company's operations make less money in the future, it may
need to borrow to make principal and interest payments on its debt. The Company
also finances most of its acquisitions through borrowings under Lamar Media's
bank 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. Such additional financing may not 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        incur or repay debt;

         o        dispose of assets;

         o        create liens;

         o        make investments;

         o        enter into affiliate transactions; and

         o        pay dividends.

Lamar Media's ability to make distributions to Lamar Advertising is also
restricted under the terms of these agreements. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources" on page 15. Under Lamar Media's bank credit facility the
Company must maintain specified financial ratios and levels including:

         o        a minimum interest coverage ratio;

         o        a minimum fixed charges ratio;

         o        a maximum senior debt ratio; and

         o        a maximum total debt ratio.

See "Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources" on page 15.

If Lamar Media fails to comply with these tests, the lenders have the right to
cause all amounts outstanding under the bank credit facility to become
immediately due. If this were to occur, and the lenders decide to exercise their
right to accelerate the indebtedness, it would create serious financial problems
for the Company and could lead to an event of default under the indentures
governing its debt. Any of these events could have a material adverse effect on
its business, financial condition and results of operations. 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.



                                     21


<PAGE>

THE COMPANY'S BUSINESS IS DERIVED FROM ADVERTISING AND ADVERTISING IS
PARTICULARLY SENSITIVE TO CHANGES IN ECONOMIC CONDITIONS AND ADVERTISING TRENDS.

The Company sells advertising space to generate revenues. Advertising spending
is particularly sensitive to changes in general economic conditions and
advertising spending typically decreases when economic conditions are tough. A
decrease in demand for advertising space could adversely affect the Company's
business. A reduction in money spent on advertising 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 COMPANY'S OPERATIONS ARE IMPACTED BY THE REGULATION OF OUTDOOR ADVERTISING
BY FEDERAL, STATE AND LOCAL GOVERNMENTS.

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. In addition, four states have enacted
bans on billboard advertising. 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. Some 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.

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

Historically, the Company has substantially increased its inventory of
advertising displays through acquisitions. The Company's growth strategy
involves acquiring outdoor advertising businesses and assets 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        there might not be suitable acquisition candidates,
                  particularly as a result of the consolidation of the outdoor
                  advertising industry, and the Company may have a more
                  difficult time negotiating acquisitions that are favorable to
                  it;

         o        the Company may face increased competition from other outdoor
                  advertising companies, which may have greater financial
                  resources than the Company, for the businesses and assets it
                  wishes to acquire, which may result in higher prices for those
                  businesses and assets;

         o        the Company may not have access to sufficient capital
                  resources on acceptable terms, if at all, to finance its
                  acquisitions and may not be able to obtain required consents
                  from its lenders;

         o        the Company may be unable to effectively integrate acquired
                  businesses and assets with its existing operations as a result
                  of unforeseen difficulties that could require significant time
                  and attention from its management that would otherwise be
                  directed at developing its existing business; and

         o        the Company may not realize the benefits and cost savings that
                  it anticipates from its acquisitions.

THE COMPANY FACES COMPETITION FROM LARGER AND MORE DIVERSIFIED OUTDOOR
ADVERTISERS AND OTHER FORMS OF ADVERTISING THAT COULD HURT ITS PERFORMANCE.

The Company may not be able to compete successfully against the current and
future forms of outdoor advertising and other media. The competitive pressure
that it faces could adversely affect its profitability or financial performance.
Although Lamar Advertising is the largest company focusing exclusively on
outdoor advertising, it faces competition from larger companies with



                                       22

<PAGE>

more diversified operations that also include television, radio and other
broadcast media. In addition, the Company's diversified competitors have the
opportunity to cross-sell their different advertising products to their
customers. The Company also faces competition from other forms of media,
including newspapers, direct mail advertising and the Internet. 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.

IF THE COMPANY'S CONTINGENCY PLANS RELATING TO HURRICANES FAIL, THE RESULTING
LOSSES 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 is possible that these
plans will not work. If these plans fail, significant losses could result.

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

THE COMPANY'S LOGO SIGN CONTRACTS ARE SUBJECT TO STATE AWARD AND RENEWAL.

A portion of the Company's revenues and operating income come from its
state-awarded service contracts for logo signs. For the year ended December 31,
2002, approximately 5% of the Company's net revenues were derived from its logo
sign contracts. The Company cannot predict what remaining states, if any, will
start logo sign programs or convert state-run logo sign programs to privately
operated programs. The Company currently competes with three other logo sign
providers as well as local companies for state-awarded service contracts for
logo signs.

Generally, state-awarded logo sign contracts have a term of five to ten years,
with additional renewal periods. Some states have the right to terminate a
contract early, but in most cases must pay compensation to the logo sign
provider for early termination. At the end of the term of the contract,
ownership of the structures is transferred to the state. Depending on the
contract in question, the logo provider may or may not be entitled to
compensation at the end of the contract term. Of the Company's 21 logo sign
contracts in place at December 31, 2002, two are subject to renewal, one in July
2003 and one in September 2003. Three are scheduled to terminate, one in
September 2003, and two in December 2003. The Company may not 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. If the Company does not continue to have access to
the capital necessary to finance those costs, it will not be able to accept new
contracts.

THE COMPANY IS CONTROLLED BY CERTAIN SIGNIFICANT STOCKHOLDERS WHO ARE ABLE TO
CONTROL THE OUTCOME OF ALL MATTERS SUBMITTED TO ITS STOCKHOLDERS FOR APPROVAL
AND WHOSE INTEREST IN THE COMPANY MAY BE DIFFERENT THAN YOURS.

Certain members of the Reilly family, including Kevin P. Reilly, Jr., the
Company's president and chief executive officer, as of December 31, 2002, own in
the aggregate approximately 16% of Lamar Advertising's common stock, assuming
the conversion of all Class B common stock to Class A common stock. This
represents 66% of Lamar Advertising's outstanding voting stock. By virtue of
such stock ownership, such persons have the power to:

         o        elect the Company's entire board of directors;

         o        control the Company's management and policies; and

         o        determine the outcome of any corporate transaction or other
                  matters required to be submitted to the Company's stockholders
                  for approval, including the amendment of its certificate of
                  incorporation, mergers, consolidation and the sale of all or
                  substantially all of its assets.

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 fall and its lowest in the first quarter
of the calendar year. The Company expects this trend to continue in the future.
Because a significant portion of the Company's expenses is fixed, a reduction in
revenues in any quarter is likely to result in a period to period decline in
operating performance and net earnings.



                                       23

<PAGE>

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 information below summarizes the Company's interest rate risk
associated with its principal variable rate debt instruments outstanding at
December 31, 2002, 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 bank credit agreement bear interest at variable
rates equal to the JPMorgan Chase Prime Rate or LIBOR plus the applicable
margin. Because the JPMorgan Chase Prime Rate or LIBOR may increase or decrease
at any time, the Company is exposed to market risk as a result of the impact
that changes in these base rates may have on the interest rate applicable to
borrowings under the bank credit agreement. Increases in the interest rates
applicable to borrowings under the bank credit agreement would result in
increased interest expense and a reduction in the Company's net income.

At December 31, 2002, there was approximately $975.5 million of aggregate
indebtedness outstanding under the then existing bank credit agreement, or
approximately 56.2% of the Company's outstanding long-term debt on that date,
bearing interest at variable rates. The aggregate interest expense for 2002 with
respect to borrowings under the bank credit agreement was $43.0 million, and the
weighted average interest rate applicable to borrowings under this credit
facility during 2002 was 4.0%. Assuming that the weighted average interest rate
was 200-basis points higher (that is 6.0% rather than 4.0%), then the Company's
2002 interest expense would have been approximately $20.5 million higher
resulting in a $12.5 million increase in the Company's 2002 net loss.

The Company has mitigated the interest rate risk resulting from its variable
interest rate long-term debt instruments by issuing fixed rate long-term debt
instruments and maintaining a balance over time between the amount of the
Company's variable rate and fixed rate indebtedness. In addition, the Company
has and had the capability under the old and 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)



                                       24

<PAGE>

                            LAMAR ADVERTISING COMPANY
                                AND SUBSIDIARIES


<Table>
<S>                                                                              <C>
Independent Auditors' Report ................................................... 26

Consolidated Balance Sheets as of December 31, 2002 and 2001 ................... 27

Consolidated Statements of Operations for the years ended December 31,
     2002, 2001 and 2000 ....................................................... 28

Consolidated Statements of Stockholders' Equity for the years ended
     December 31, 2002, 2001 and 2000 .......................................... 29

Consolidated Statements of Cash Flows for the years ended December 31,
      2002, 2001 and 2000 ...................................................... 30

Notes to Consolidated Financial Statements ..................................... 31-51

Schedule 2 - Valuation and Qualifying Accounts for the years ended
      December 31, 2002, 2001 and 2000 ......................................... 52
</Table>



                                       25

<PAGE>



                          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, 2002 and 2001, and the
related consolidated statements of operations, stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 2002.
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 auditing standards generally
accepted in the United States of America. 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, 2002 and 2001, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 2002, in conformity with accounting
principles generally accepted in the United States of America.

     As discussed in Note 1(d) to the consolidated financial statements,
effective July 1, 2001, the Company adopted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 141, "Business Combinations", and
certain provisions of SFAS No. 142, "Goodwill and Other Intangible Assets", as
required for goodwill and intangible assets resulting from business combinations
consummated after June 30, 2001. The provisions of SFAS No. 142 were fully
adopted on January 1, 2002.


/s/ KPMG LLP

KPMG LLP

New Orleans, Louisiana
February 5, 2003, except as to Note 8 which is as of March 7, 2003



                                       26
<PAGE>

                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                                     DECEMBER 31,
                                                              ---------------------------
                                                                  2002           2001
                                                              ------------   ------------
                                                              (IN THOUSANDS, EXCEPT SHARE
                                                                  AND PER SHARE DATA)
<S>                                                           <C>            <C>
ASSETS
Current assets:
  Cash and cash equivalents.................................   $   15,610     $   12,885
  Cash on deposit for debt extinguishment (note 8)..........      266,657             --
  Receivables, net of allowance for doubtful accounts of
    $4,914 in 2002 and 2001.................................       92,382         95,135
  Prepaid expenses..........................................       30,091         27,176
  Deferred income tax asset.................................        6,428          5,945
  Other current assets......................................        7,315          8,019
                                                               ----------     ----------
Total current assets........................................      418,483        149,160
                                                               ----------     ----------
Property, plant and equipment (note 4)......................    1,850,657      1,777,399
  Less accumulated depreciation and amortization............     (566,889)      (451,686)
                                                               ----------     ----------
Net property, plant and equipment...........................    1,283,768      1,325,713
                                                               ----------     ----------
Goodwill (note 5)...........................................    1,178,428      1,134,760
Intangible assets (note 5)..................................      988,953      1,044,715
Other assets................................................       18,474         17,304
                                                               ----------     ----------
Total assets................................................   $3,888,106     $3,671,652
                                                               ==========     ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Trade accounts payable....................................   $   10,051     $   10,048
  Current maturities of long-term debt (note 8).............        4,687         66,559
  Current maturities related to debt extinguishment (note
    8)......................................................      255,000             --
  Accrued expenses (note 7).................................       38,881         33,674
  Deferred income...........................................       13,942         11,618
                                                               ----------     ----------
Total current liabilities...................................      322,561        121,899
Long-term debt (note 8).....................................    1,734,746      1,745,026
Deferred income taxes (note 9)..............................      114,260        124,782
Other liabilities...........................................        7,366          7,724
                                                               ----------     ----------
Total liabilities...........................................    2,178,933      1,999,431
                                                               ----------     ----------
Stockholders' equity (note 11):
  Series AA preferred stock, par value $.001, $63.80
    cumulative dividends, authorized 5,720 shares; 5,719
    shares issued and outstanding at 2002 and 2001..........           --             --
  Class A preferred stock, par value $638, $63.80 cumulative
    dividends, 10,000 shares authorized, 0 shares issued and
    outstanding at 2002 and 2001............................           --             --
  Class A common stock, par value $.001, 175,000,000 shares
    authorized, 85,077,038 and 82,899,800 shares issued and
    outstanding at 2002 and 2001, respectively..............           85             83
  Class B common stock, par value $.001, 37,500,000 shares
    authorized, 16,417,073 and 16,611,835 shares issued and
    outstanding at 2002 and 2001, respectively..............           16             17
  Additional paid-in capital................................    2,036,709      1,963,065
  Accumulated deficit.......................................     (327,637)      (290,944)
                                                               ----------     ----------
Stockholders' equity........................................    1,709,173      1,672,221
                                                               ----------     ----------
Total liabilities and stockholders' equity..................   $3,888,106     $3,671,652
                                                               ==========     ==========
</Table>

          See accompanying notes to consolidated financial statements.
                                       27

<PAGE>

                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<Table>
<Caption>
                                                                   YEARS ENDED DECEMBER 31,
                                                       -------------------------------------------------
                                                            2002              2001             2000
                                                       ---------------   --------------   --------------
                                                        (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S>                                                    <C>               <C>              <C>
Net revenues:........................................   $    775,682      $   729,050      $   687,319
                                                        ------------      -----------      -----------
Operating expenses:
  Direct advertising expenses........................        274,772          251,483          217,465
  General and administrative expenses................        167,182          151,048          138,072
  Depreciation and amortization......................        277,893          355,529          318,096
  Gain on disposition of assets......................           (336)            (923)            (986)
                                                        ------------      -----------      -----------
                                                             719,511          757,137          672,647
                                                        ------------      -----------      -----------
  Operating income (loss)............................         56,171          (28,087)          14,672
Other expense (income):
  Loss on early extinguishment of debt...............          5,850               --               --
  Interest income....................................           (929)            (640)          (1,715)
  Interest expense...................................        107,272          126,861          147,607
                                                        ------------      -----------      -----------
                                                             112,193          126,221          145,892
                                                        ------------      -----------      -----------
Loss before income taxes.............................        (56,022)        (154,308)        (131,220)
Income tax benefit (note 9)..........................        (19,694)         (45,674)         (37,115)
                                                        ------------      -----------      -----------
Net loss.............................................        (36,328)        (108,634)         (94,105)
Preferred stock dividends............................            365              365              365
                                                        ------------      -----------      -----------
Net loss applicable to common stock..................   $    (36,693)     $  (108,999)     $   (94,470)
                                                        ============      ===========      ===========
Net loss per common share -- basic and diluted.......   $      (0.36)     $     (1.11)     $     (1.04)
                                                        ============      ===========      ===========
Weighted average common shares outstanding...........    101,089,215       98,566,949       91,164,884
Incremental common shares from dilutive stock
  options............................................             --               --               --
Incremental common shares from convertible debt......             --               --               --
                                                        ------------      -----------      -----------
Weighted average common shares assuming dilution.....    101,089,215       98,566,949       91,164,884
                                                        ============      ===========      ===========
</Table>

          See accompanying notes to consolidated financial statements.
                                       28

<PAGE>

                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
              For the years ended December 31, 2002, 2001 and 2000


<Table>
<Caption>
                                   SERIES AA    CLASS A    CLASS A   CLASS B   ADDITIONAL
                                   PREFERRED   PREFERRED   COMMON    COMMON     PAID-IN     ACCUMULATED
                                     STOCK       STOCK      STOCK     STOCK     CAPITAL       DEFICIT       TOTAL
                                   ---------   ---------   -------   -------   ----------   -----------   ----------
                                                         (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                <C>         <C>         <C>       <C>       <C>          <C>           <C>
BALANCE, DECEMBER 31, 1999.......    $  --         --        71         17     1,478,916      (87,475)     1,391,529
  Issuance of 4,238,416 shares of
    common stock in
    acquisitions.................       --         --         4         --       185,599           --        185,603
  Exercise of stock options......       --         --        --         --         7,471           --          7,471
  Conversion of 449,997 shares of
    Class B common stock to
    Class A common stock.........       --         --        --         --            --           --             --
  Issuance of 37,510 shares of
    common stock through employee
    purchase plan................       --         --        --         --         1,261           --          1,261
  Issuance of 4,500,000 shares of
    common stock for cash........       --         --         5         --       198,056           --        198,061
  Net loss.......................       --         --        --         --            --      (94,105)       (94,105)
  Dividends ($63.80 per preferred
    share).......................       --         --        --         --            --         (365)          (365)
                                     -----       ----        --        ---     ---------     --------     ----------
BALANCE, DECEMBER 31, 2000.......    $  --         --        80         17     1,871,303     (181,945)     1,689,455
  Issuance of 725,000 shares of
    common stock in
    acquisitions.................       --         --         1         --        28,999           --         29,000
  Exercise of stock options......       --         --         1         --        12,941           --         12,942
  Conversion of 388,165 shares of
    Class B common stock to
    Class A common stock.........       --         --        --         --            --           --             --
  Issuance of 59,599 shares of
    common stock through employee
    purchase plan................       --         --        --         --         1,823           --          1,823
  Issuance of 1,200,000 shares of
    common stock for cash........       --         --         1         --        47,999           --         48,000
  Net loss.......................       --         --        --         --            --     (108,634)      (108,634)
  Dividends ($63.80 per preferred
    share).......................       --         --        --         --            --         (365)          (365)
                                     -----       ----        --        ---     ---------     --------     ----------
BALANCE, DECEMBER 31, 2001.......    $  --         --        83         17     1,963,065     (290,944)     1,672,221
  Issuance of 1,405,464 shares of
    common stock in
    acquisitions.................       --         --         1         --        56,099           --         56,100
  Exercise of stock options......       --         --        --         --        15,722           --         15,722
  Conversion of 194,762 shares of
    Class B common stock to
    Class A common stock.........       --         --         1         (1)           --           --             --
  Issuance of 61,424 shares of
    common stock through employee
    purchase plan................       --         --        --         --         1,823           --          1,823
  Net loss.......................       --         --        --         --            --      (36,328)       (36,328)
  Dividends ($63.80 per preferred
    share).......................       --         --        --         --            --         (365)          (365)
                                     -----       ----        --        ---     ---------     --------     ----------
BALANCE, DECEMBER 31, 2002.......    $  --         --        85         16     2,036,709     (327,637)     1,709,173
                                     =====       ====        ==        ===     =========     ========     ==========
</Table>

          See accompanying notes to consolidated financial statements.
                                       29

<PAGE>

                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                  YEARS ENDED DECEMBER 31,
                                                              ---------------------------------
                                                                2002        2001        2000
                                                              ---------   ---------   ---------
                                                                       (IN THOUSANDS)
<S>                                                           <C>         <C>         <C>
Cash flows from operating activities:
  Net loss..................................................  $ (36,328)  $(108,634)  $ (94,105)
  Adjustments to reconcile net loss to net cash provided by
    operating activities:
    Depreciation and amortization...........................    277,893     355,529     318,096
    Gain on disposition of assets...........................       (336)       (923)       (986)
    Loss on debt extinguishment.............................      2,424          --          --
    Deferred income tax benefit.............................    (15,584)    (46,387)    (36,974)
    Provision for doubtful accounts.........................      9,036       7,794       5,991
  Changes in operating assets and liabilities:
    (Increase) decrease in:
      Receivables...........................................     (4,359)     (9,413)    (13,232)
      Prepaid expenses......................................     (2,533)     (1,321)     (1,371)
      Other assets..........................................      1,704       2,192         349
    Increase (decrease) in:
      Trade accounts payable................................          3         131      (1,574)
      Accrued expenses......................................      3,551      (8,287)      2,175
      Deferred income.......................................      2,051        (173)       (964)
      Other liabilities.....................................       (505)        124         196
                                                              ---------   ---------   ---------
         Net cash provided by operating activities..........    237,017     190,632     177,601
                                                              ---------   ---------   ---------
Cash flows from investing activities:
  Capital expenditures......................................    (78,390)    (85,320)    (78,304)
  Purchase of new markets...................................    (79,135)   (302,067)   (360,118)
  Increase in notes receivable..............................     (1,650)         --          --
  Proceeds from sale of property and equipment..............      3,412       4,916       2,827
                                                              ---------   ---------   ---------
         Net cash used in investing activities..............   (155,763)   (382,471)   (435,595)
                                                              ---------   ---------   ---------
Cash flows from financing activities:
  Net proceeds from issuance of common stock................     13,976      60,368     205,098
  Proceeds from issuance of long-term debt..................    256,360          --          --
  Deposits for debt extinguishment..........................   (266,657)         --          --
  Principle payments on long-term debt......................   (140,700)    (67,046)     (5,330)
  Debt issuance costs.......................................     (1,183)       (573)     (1,470)
  Increase in notes payable.................................         40          --          --
  Net borrowing under credit agreements.....................     60,000     140,000     124,000
  Dividends.................................................       (365)       (365)       (365)
                                                              ---------   ---------   ---------
         Net cash (used in) provided by financing
           activities.......................................    (78,529)    132,384     321,933
                                                              ---------   ---------   ---------
         Net increase (decrease) in cash and cash
           equivalents......................................      2,725     (59,455)     63,939
  Cash and cash equivalents at beginning of period..........     12,885      72,340       8,401
                                                              ---------   ---------   ---------
  Cash and cash equivalents at end of period................  $  15,610   $  12,885   $  72,340
                                                              =========   =========   =========
Supplemental disclosures of cash flow information:
  Cash paid for interest....................................  $ 104,722   $ 128,434   $ 147,875
                                                              =========   =========   =========
  Cash paid for state and federal income taxes..............  $     745   $   1,189   $   1,936
                                                              =========   =========   =========
</Table>

          See accompanying notes to consolidated financial statements.
                                       30

<PAGE>

                   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 (the Company) is engaged in the outdoor
advertising business operating approximately 146,000 outdoor advertising
displays in 44 states. The Company's operating strategy is to be the leading
provider of outdoor advertising services in the markets it serves.

     In addition, the Company operates a logo sign business in 21 states
throughout the United States and in one 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.

 (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) GOODWILL AND INTANGIBLE ASSETS

     Goodwill represents the excess of costs over fair value of assets of
businesses acquired in accordance with Statement of Financial Accounting
Standards (SFAS) No. 141, "Business Combinations", which was adopted for all
business combinations consummated after June 30, 2001 as well as certain
provisions of SFAS No. 142, "Goodwill and Other Intangible Assets". The Company
fully adopted the provisions of SFAS No. 142, as of January 1, 2002. Goodwill
and other intangible assets acquired in a purchase business combination and
determined to have an indefinite useful life are not amortized, but instead
tested for impairment at least annually in accordance with the provisions of
SFAS No. 142. SFAS No. 142 also requires that intangible assets with estimable
useful lives be amortized over their respective estimated useful lives to their
estimated residual values, and reviewed for impairment in accordance with SFAS
No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets."

     In connection with SFAS No. 142's transitional goodwill impairment
evaluation, SFAS No. 142 required the Company to perform an assessment of
whether there was an indication that goodwill is impaired as of the date of
adoption. To accomplish this, the Company was required to identify its reporting
units and determine the carrying value of each reporting unit by assigning the
assets and liabilities, including the existing goodwill and intangible assets,
to those reporting units as of January 1, 2002. The Company was required to
determine the fair value of each reporting unit and compare it to the carrying
amount of the reporting unit. To the extent the carrying amount of a reporting
unit exceeded the fair value of the reporting unit, the Company would be
required to perform the second step of the impairment test, as this is an
indication that the reporting unit goodwill may be impaired. The fair value of
each reporting unit exceeded its carrying amount at adoption on January 1, 2002
and at its annual impairment test date on December 31, 2002 and the Company was
not required to recognize an impairment loss.

     Prior to the adoption of SFAS No. 142, goodwill was amortized on a
straight-line basis over the expected periods to be benefited, generally 15
years, and assessed for recoverability by determining whether the amortization
of the goodwill balance over its remaining life could be recovered through
undiscounted

                                       31

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

future operating cash flows of the acquired operation before interest expense.
The amount of goodwill and other intangible asset impairment, if any, was
measured based on projected discounted future operating cash flows using a
discount rate reflecting the Company's average cost of funds.

     Intangible assets, consisting primarily of 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.

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

 (e) IMPAIRMENT OF LONG-LIVED ASSETS

     SFAS No. 144 provides a single accounting model for long-lived assets to be
disposed of. SFAS No. 144 also changes the criteria for classifying an asset as
held for sale; and broadens the scope of businesses to be disposed of that
qualify for reporting as discontinued operations and changes the timing of
recognizing losses on such operations. The Company adopted SFAS No. 144 on
January 1, 2002. The adoption of SFAS No. 144 did not affect the Company's
financial statements.

     In accordance with SFAS No. 144, long-lived assets, such as property,
plant, and equipment, and purchased intangibles subject to amortization, are
reviewed for impairment whenever events or changes in circumstances indicate
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 estimated undiscounted future cash flows expected to be generated by
the asset before interest expense. If the carrying amount of an asset exceeds
its estimated future cash flows, an impairment charge is recognized by the
amount by which the carrying amount of the asset exceeds the fair value of the
asset. Assets to be disposed of would be separately presented in the balance
sheet and reported at the lower of the carrying amount or fair value less costs
to sell, and are no longer depreciated. The assets and liabilities of a disposed
group classified as held for sale would be presented separately in the
appropriate asset and liability sections of the balance sheet.

     Prior to the adoption of SFAS No. 144, the Company accounted for long-lived
assets in accordance with SFAS No. 121, "Accounting for Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of."

 (f) 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.

 (g) REVENUE RECOGNITION

     The Company recognizes revenue, net of agency commissions, if any, on an
accrual basis ratably over the term of the contracts, as services are provided.

     The Company engages in barter transactions where the Company trades
advertising space for goods and services. The Company recognizes revenues and
expenses from barter transactions at fair value which is determined based on the
Company's own historical practice of receiving cash for similar advertising

                                       32

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

space from buyers unrelated to the party in the barter transaction. The amount
of revenue and expense recognized for advertising barter transactions is as
follows:

<Table>
<Caption>
                                                              2002    2001    2000
                                                              -----   -----   -----
<S>                                                           <C>     <C>     <C>
Net revenues................................................  3,677   1,315   1,453
Direct advertising expenses.................................    691     500     390
General and administrative expenses.........................  2,557     208     386
</Table>

 (h) 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 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.

 (i) 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. The number
of potentially dilutive shares excluded from the calculation because of their
anti-dilutive effect are 6,762,452 and 6,834,065 and 6,807,708 for the years
ended December 31, 2002, 2001 and 2000, respectively.

 (j) STOCK OPTION PLAN

     The Company accounts for its stock option plan under the intrinsic value
method in accordance with the provisions of Accounting Principles Board (APB)
Opinion No. 25, "Accounting for Stock Issued to Employees", and related
interpretations. As such, compensation expense is recorded on the date of grant
only if the current market price of the underlying stock exceeds the exercise
price. SFAS No. 123, "Accounting for Stock-Based Compensation", 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 following table illustrates
the effect on net loss and net loss per share if the Company had applied the
fair value recognition provisions of FASB Statement No. 123, "Accounting for
Stock-Based Compensation," to stock-based employee compensation.

<Table>
<Caption>
                                                        2002       2001        2000
                                                      --------   ---------   --------
<S>                                                   <C>        <C>         <C>
  Net loss applicable to common stock, as
     reported.......................................  $(36,693)   (108,999)   (94,470)
  Deduct: Total stock-based employee compensation
     expense determined under fair value based
     method for all awards, net of related tax
     effects........................................    (6,614)    (16,552)    (6,407)
                                                      --------   ---------   --------
  Proforma net loss applicable to common stock......  $(43,307)   (125,551)  (100,877)
                                                      ========   =========   ========
</Table>

                                       33

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<Table>
<Caption>
                                                              2002    2001    2000
                                                              -----   -----   -----
<S>                                                           <C>     <C>     <C>
Net loss per common share - as reported (basic and
  diluted)..................................................  (0.36)  (1.11)  (1.04)
                                                              =====   =====   =====
Net loss per common share - pro forma (basic and diluted)...  (0.43)  (1.27)  (1.11)
                                                              =====   =====   =====
</Table>

 (k) CASH AND CASH EQUIVALENTS

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

 (l) 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 loss.

 (m) USE OF ESTIMATES

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.

(2) ACQUISITIONS

 YEAR ENDED DECEMBER 31, 2002

     On January 1, 2002, the Company purchased the stock of Delite Outdoor of
Ohio Holdings, Inc. for $38,000. The purchase price consisted of 963,488 shares
of Lamar Advertising Class A common stock.

     On January 8, 2002, the Company purchased the assets of MC Partners for a
cash purchase price of approximately $15,313.

     On May 31, 2002, the Company purchased the assets of American Outdoor
Advertising, Inc. for $15,725. The purchase price consisted of 349,376 shares of
Lamar Advertising Class A common stock, as well as approximately $725 in cash.

     During the year ended December 31, 2002, the Company completed 72
additional acquisitions of outdoor advertising assets for a cash purchase price
of approximately $63,161 and the issuance of 92,600 shares of Lamar Advertising
Class A common stock valued at $3,100.

     Each of these acquisitions was 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 preliminary allocation of the acquisition costs in the above
transactions.

                                       34

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<Table>
<Caption>
                                           DELITE
                                         OUTDOOR OF
                                            OHIO         MC
                                          HOLDINGS    PARTNERS   AMERICAN   OTHER    TOTAL
                                         ----------   --------   --------   ------   ------
<S>                                      <C>          <C>        <C>        <C>      <C>
Current Assets.........................       961        245        725        790    2,721
Property, Plant & Equipment............     9,807      2,563      8,388     12,449   33,207
Goodwill...............................    12,704      5,523         --     25,441   43,668
Site Locations.........................    17,430      7,310      5,356     25,498   55,594
Non-competition agreements.............       102        330         --        172      604
Customer lists and contracts...........     4,108      1,723      1,256      5,546   12,633
Other Assets...........................        --         --         --         29       29
Current Liabilities....................     1,602         40         --        640    2,282
Long-term Liabilities..................     5,510      2,341         --      3,025   10,876
</Table>

     The aggregate amortization expense related to the 2002 acquisitions for the
year ended December 31, 2002 was approximately $4,303. The following is a
summary of the estimated amortization expense for these acquisitions for the
next five years:

<Table>
<Caption>

<S>                                                           <C>
Year ended December 31, 2003................................  $5,490
Year ended December 31, 2004................................  $5,490
Year ended December 31, 2005................................  $5,484
Year ended December 31, 2006................................  $5,484
Year ended December 31, 2007................................  $5,475
</Table>

     Total acquired intangible assets for the year ended December 31, 2002 was
$112,499, of which $43,668 was assigned to goodwill which is not subject to
amortization. The remaining $68,831 of acquired intangible assets have a
weighted average useful life of approximately 13 years. The intangible assets
include customer lists of $12,633 (7 year weighted average useful life), site
locations of $55,594 (15 year weighted average useful life), and non-competition
agreements of $604 (9 year weighted average useful life). Approximately $32,900
of the $43,668 of goodwill is expected to be fully deductible for tax purposes.

     The following unaudited pro forma financial information for the Company
gives effect to the 2002 and 2001 acquisitions as if they had occurred on
January 1, 2001. 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>
                                                                2002       2001
                                                              --------   --------
<S>                                                           <C>        <C>
Net revenues................................................  $778,745    756,224
                                                              ========   ========
Net loss applicable to common stock.........................   (37,344)  (113,506)
                                                              ========   ========
Net loss per common share (basic and diluted)...............  $  (0.37)     (1.13)
                                                              ========   ========
</Table>

 YEAR ENDED DECEMBER 31, 2001

     On January 1, 2001, the Company purchased the assets of two outdoor
advertising companies, American Outdoor Advertising, LLC and Appalachian Outdoor
Advertising Co., Inc. for a total cash purchase price of approximately $31,500
and $20,000, respectively.

     On February 1, 2001, the Company purchased all of the outstanding common
stock of Bowlin Outdoor Advertising and Travel Centers, Inc. for a total
purchase price of approximately $45,650. The


                                       35

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

purchase price consisted of approximately $16,650 cash and the issuance of
725,000 shares of Lamar Advertising Company Class A common stock valued at
$29,000.

     On April 1, 2001, the Company purchased all of the outstanding common stock
of DeLite Outdoor Advertising, LLC and DeLite Outdoor Advertising, Inc. for a
cash purchase price of approximately $43,000.

     On April 1, 2001, the Company purchased certain assets of PNE Media, LLC
for a cash purchase price of approximately $21,000.

     On August 2, 2001, the Company purchased the assets of Capital Outdoor,
Inc. for a cash purchase price of approximately $30,000.

     During the year ended December 31, 2001, the Company completed 101
additional acquisitions of outdoor advertising and transit assets for an
aggregate cash purchase price of approximately $138,750.

     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>
                           AMERICAN   APPALACHIAN   BOWLIN              DELITE
                           OUTDOOR      OUTDOOR     OUTDOOR    PNE    GROUP, INC.   CAPITAL   OTHER     TOTAL
                           --------   -----------   -------   -----   -----------   -------   ------   -------
<S>                        <C>        <C>           <C>       <C>     <C>           <C>       <C>      <C>
Current Assets...........  $   557         325       1,699      180      1,159         197     2,139     6,256
Property, Plant &
  Equipment..............    1,185       5,822      30,171    4,879     10,864       5,761    34,567    93,249
Goodwill.................   18,662       2,666       2,731    4,500     20,033      12,530    50,674   111,796
Site Locations...........    8,993       9,316      19,333    9,180     15,728       9,476    43,812   115,838
Customer Lists and
  Contracts..............    2,119       2,196       4,557    2,164      3,707       2,233    12,311    29,287
Non-Competition
  Agreements.............       20          --       1,380       --         --          --     1,211     2,611
Other Assets.............       --          --          --       --         --          --       700       700
Current Liabilities......       --         325         563       --        543          87     1,127     2,645
Long-term Liabilities....       --          --      13,663       --      7,968          --     5,537    27,168
</Table>

 YEAR ENDED DECEMBER 31, 2000

     On January 14, 2000, the Company purchased all of the outstanding common
stock of Aztec Group, Inc. for a purchase price of approximately $34,485. The
purchase price consisted of approximately $5,259 cash and the issuance of
481,481 shares of Lamar Advertising Company Class A common stock valued at
approximately $29,226.

     On March 31, 2000, the Company purchased the assets of an outdoor company
in the Company's Northeast Region for a cash purchase price of approximately
$33,605.

     Effective May 1, 2000, the Company purchased all of the outstanding common
stock of Outdoor West, Inc. for a total cash purchase price of approximately
$39,287.

     On May 24, 2000, the Company purchased all of the outstanding common stock
of Advantage Outdoor Company, Inc. for a cash purchase price of approximately
$76,764 and the issuance of 2,300,000 shares of Lamar's Class A common stock
valued at approximately $92,805.

                                       36

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     On July 1, 2000, the Company purchased the stock of Tyler Media Group, Inc.
for a purchase price of approximately $30,937. The purchase price consisted of
approximately $4,478 cash and the issuance of 611,764 shares of Lamar
Advertising Company Class A common stock valued at approximately $26,459.

     On July 21, 2000, the Company purchased the assets of Root Outdoor
Advertising, Inc. for a total cash purchase price of approximately $41,059.

     During the year ended December 31, 2000, the Company completed 97
additional acquisitions of outdoor advertising assets for a total purchase price
of approximately $187,416. The purchase price included the issuance of 845,171
shares of Lamar Advertising Company Class A common stock valued at approximately
$37,113.

     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 preliminary allocation of the acquisition costs in the above
transactions.

<Table>
<Caption>
                              AZTEC       NORTHEAST    OUTDOOR   ADVANTAGE   TYLER MEDIA   ROOT OUTDOOR
                           GROUP, INC.   REGION ACQ.    WEST      OUTDOOR    GROUP, INC.    ADV., INC.    OTHER     TOTAL
                           -----------   -----------   -------   ---------   -----------   ------------   ------   -------
<S>                        <C>           <C>           <C>       <C>         <C>           <C>            <C>      <C>
Current Assets...........    $   500          480       1,131      3,256          378          1,632       2,497     9,874
Property, Plant &
  Equipment..............      8,279        2,604       9,187     65,534       16,241          9,098      56,583   167,526
Goodwill.................     21,879       16,804      21,297     78,846       12,876          8,266      81,303   241,271
Site Locations...........      8,518       11,396      13,937     46,274        9,001         18,688      42,872   150,686
Customer Lists and
  Contracts..............      2,008        2,686       3,285     10,828        2,122          4,404      16,971    42,304
Non-Competition
  Agreements.............         --           20          --      1,340           --             --       1,267     2,627
Current Liabilities......        827          385         675      4,456           --          1,029       1,550     8,922
Long-term Liabilities....      5,872           --       8,875     32,053        9,681             --      12,527    69,008
</Table>

(3) NONCASH FINANCING AND INVESTING ACTIVITIES

     A summary of significant noncash financing and investing activities for the
years ended December 31, 2002, 2001 and 2000 follows:

<Table>
<Caption>
                                                            2002      2001     2000
                                                           -------   ------   -------
<S>                                                        <C>       <C>      <C>
Issuance of Class A common stock in acquisitions.........  $56,100   29,000   185,603
Debt issuance costs......................................    3,640       --        --
</Table>

                                       37

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(4) PROPERTY, PLANT AND EQUIPMENT

     Major categories of property, plant and equipment at December 31, 2002 and
2001 are as follows:

<Table>
<Caption>
                                                  ESTIMATED LIFE
                                                     (YEARS)          2002        2001
                                                  --------------   ----------   ---------
<S>                                               <C>              <C>          <C>
Land............................................      --           $   67,241      60,775
Building and improvements.......................   10 - 39             58,883      53,602
Advertising structures..........................      15            1,652,189   1,594,142
Automotive and other equipment..................    3 - 7              72,344      68,880
                                                                   ----------   ---------
                                                                   $1,850,657   1,777,399
                                                                   ==========   =========
</Table>

(5) GOODWILL AND OTHER INTANGIBLE ASSETS

     The following is a summary of intangible assets at December 31, 2002 and
December 31, 2001.

<Table>
<Caption>
                                                       2002                            2001
                               ESTIMATED   -----------------------------   -----------------------------
                                 LIFE      GROSS CARRYING   ACCUMULATED    GROSS CARRYING   ACCUMULATED
                                (YEARS)        AMOUNT       AMORTIZATION       AMOUNT       AMORTIZATION
                               ---------   --------------   ------------   --------------   ------------
<S>                            <C>         <C>              <C>            <C>              <C>
Amortizable Intangible
  Assets:
  Debt issuance costs and
    fees.....................   7 - 10       $   52,202       $ 27,533       $   47,379       $ 19,048
  Customer lists and
    contracts................   7 - 10          371,787        196,084          359,154        145,180
  Non-competition
    agreements...............   3 - 15           57,023         39,458           56,419         31,841
  Site locations.............       15          937,773        177,016          882,180        115,314
  Other......................   5 - 15           15,997          5,738           15,270          4,304
                                             ----------       --------       ----------       --------
                                              1,434,782        445,829        1,360,402        315,687
Unamortizable Intangible
  Assets:
  Goodwill...................                $1,432,063       $253,635       $1,388,395       $253,635
</Table>

     The changes in the carrying amount of goodwill for the year ended December
31, 2002 are as follows:

<Table>
<Caption>

<S>                                                            <C>
Balance as of December 31, 2001.............................   $1,388,395
Goodwill acquired during the year...........................       43,668
Impairment losses...........................................           --
                                                               ----------
Balance as of December 31, 2002.............................   $1,432,063
                                                               ==========
</Table>

     In accordance with SFAS No. 142, the Company was required to evaluate its
existing intangible assets and goodwill that were acquired in purchase business
combinations, and to make any necessary reclassifications in order to conform
with the new classification criteria in SFAS No. 141 for recognition separate
from goodwill. The Company was required to reassess the useful lives and
residual values of all intangible assets acquired, and make any necessary
amortization period adjustments. If an intangible asset is identified as having
an indefinite useful life, the Company was required to test the intangible asset
for impairment in accordance with the provisions of SFAS No. 142. Impairment of
an intangible asset is measured as the excess of carrying value over the fair
value. Based upon the Company's review, no impairment charge was required upon
the adoption of SFAS No. 142 or at its annual test for impairment on December
31, 2002.

                                       38

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following table illustrates the effect of the adoption of SFAS No. 142
on prior periods and its effect on the Company's earnings per share:

<Table>
<Caption>
                                                         YEARS ENDED DECEMBER 31,
                                                      -------------------------------
                                                        2002       2001        2000
                                                      --------   ---------   --------
<S>                                                   <C>        <C>         <C>
Reported net loss applicable to common stock........  $(36,693)  $(108,999)  $(94,470)
Add: goodwill amortization, net of tax..............        --      70,463     60,752
                                                      --------   ---------   --------
Adjusted net loss applicable to common stock........  $(36,693)  $ (38,536)  $(33,718)
                                                      ========   =========   ========
Earnings per common share -- basic and diluted
Reported net loss per common share..................  $  (0.36)  $   (1.11)  $  (1.04)
Add: goodwill amortization per share, net of tax....        --        0.72       0.67
                                                      --------   ---------   --------
Adjusted net loss per common share..................  $  (0.36)  $   (0.39)  $  (0.37)
                                                      ========   =========   ========
</Table>

(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>
2003........................................................  $103,025
2004........................................................    89,847
2005........................................................    78,432
2006........................................................    67,749
2007........................................................    59,420
Thereafter..................................................   384,560
</Table>

     Rental expense related to the Company's operating leases was $136,013,
$124,734 and $105,661 for the years ended December 31, 2002, 2001 and 2000,
respectively.

(7) ACCRUED EXPENSES

     The following is a summary of accrued expenses at December 31, 2002 and
2001:

<Table>
<Caption>
                                                               2002      2001
                                                              -------   ------
<S>                                                           <C>       <C>
Payroll.....................................................  $ 7,686    4,982
Interest....................................................   13,020   15,571
Insurance benefits..........................................    8,297    6,802
Other.......................................................    9,878    6,319
                                                              -------   ------
                                                              $38,881   33,674
                                                              =======   ======
</Table>

                                       39

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(8) LONG-TERM DEBT

     Long-term debt consists of the following at December 31, 2002 and 2001:

<Table>
<Caption>
                                                                 2002        2001
                                                              ----------   ---------
<S>                                                           <C>          <C>
9 5/8% Senior subordinated notes (1996 Notes)...............  $  255,000     255,000
8 5/8% Senior subordinated notes (1997 Notes)...............     199,230     199,104
Bank Credit Agreement.......................................     975,500     978,500
5 1/4% Convertible notes....................................     287,500     287,500
9 1/4% Senior subordinated notes............................          --      74,073
8% Unsecured subordinated notes.............................       7,333       9,333
7 1/4% Senior subordinated notes............................     260,000          --
Other notes with various rates and terms....................       9,870       8,075
                                                              ----------   ---------
                                                               1,994,433   1,811,585
Less current maturities.....................................    (259,687)    (66,559)
                                                              ----------   ---------
Long-term debt, excluding current maturities................  $1,734,746   1,745,026
                                                              ==========   =========
</Table>

     Long-term debt matures as follows:

<Table>
<S>                                                           <C>
2003........................................................  $  259,687
2004........................................................       4,336
2005........................................................      56,545
2006........................................................     356,124
2007........................................................     281,978
Later years.................................................   1,035,763
</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.

     On August 10, 1999, Lamar Advertising 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. The
Notes are convertible, into shares of Lamar Advertising Company Class A common
stock at any time prior to their maturity or redemption by Lamar Advertising
Company. The conversion rate is 21.6216 shares per $1 in principle amount of
notes.

                                       40

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     On October 25, 2002, Lamar Media Corp. redeemed all of the outstanding
9 1/4% Senior Subordinated Notes due 2007 in aggregate principle amount of
$74,073 for a redemption price equal to 104.625% of the principle amount thereof
plus accrued interest to the redemption date of approximately $1,300. In the
fourth quarter of 2002, the Company recorded $5,850 as an expense related to the
prepayment of those notes. In accordance with SFAS No. 145, "Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections", the extinguishment of this debt has not been reflected in the
Statement of Operations as an extraordinary item.

     On December 23, 2002, Lamar Media Corp. completed an offering of $260,000
7 1/4% Senior Subordinated Notes due 2013. These notes are unsecured senior
subordinated obligations and will be subordinated to all of Lamar Media's
existing and future senior debt, rank equally with all of Lamar Media's existing
and future senior subordinated debt and rank senior to any future subordinated
debt of Lamar Media. The net proceeds from the issuance and sale of these notes,
together with additional cash, was used to redeem all of the outstanding
$255,000 principal amount of Lamar Media's 9 5/8% Senior Subordinated Notes due
2006 on January 22, 2003 at a redemption price equal to 103.208% of the
aggregate principal amount thereof plus accrued interest to the redemption date
of approximately $3,500 for a total redemption price of approximately $266,657.
The Company will record a loss on the extinguishment of debt of $6,816 in the
first quarter of 2003.

     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.

     Lamar Media Corp.'s existing bank credit facility, for which JPMorgan Chase
Bank serves as administrative agent, consists of (1) a $350,000 revolving bank
credit facility, (2) a $650,000 term facility with two tranches, a $450,000 Term
A facility and a $200,000 Term B facility, and (3) a $750,000 incremental
facility of which $450,000 has been funded in four tranches, a $20,000 Series
A-1 facility, a $130,000 Series A-2 facility, a $100,000 B-1 facility, and a
$200,000 Series C facility.

     Beginning on March 31, 2002, the amount available for borrowing under the
then existing revolving bank credit facility began to be reduced quarterly in
annual increments of 10%, 10%, 30% and 35% of the original commitment with a
final payment of 15% on March 31, 2006. The Term A loans, the Term B loans and
the Series A-1, A-2 and B-1 began amortizing on September 30, 2001. The Series C
loans would have begun amortizing on March 31, 2003. The revolving bank credit
facility under our new bank credit facility, effective as of March 7, 2003, is
not subject to commitment reduction.

     On March 7, 2003, the Company's wholly owned subsidiary Lamar Media
replaced its existing bank credit facility. The new bank credit facility, for
which JPMorgan Chase Bank acts as administrative agent, is comprised of a
$225,000 revolving bank credit facility and $975,000 term facility with two
tranches, a $300,000 Tranche A term facility and a $675,000 Tranche B term
facility. The new bank credit facility also includes a $500,000 incremental
facility which permits Lamar Media to request that its lenders enter into
commitments to make additional term loans to it, up to a maximum aggregate
amount of $500,000. The lenders have no obligation to make additional term loans
to Lamar Media under the incremental facility, but may enter into such
commitments in their sole discretion. The new credit agreement modified the
repayment terms to extend the maturities of the debt. The balance sheet as of
December 31, 2002 has been adjusted to reflect the terms of the new credit
agreement.

                                       41

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Availability of the line under the Revolving Credit Facility terminates on
June 30, 2009. As of December 31, 2002 and March 7, 2003, the Company had no
balance outstanding under the revolving line of credit.

     The new Term Facility amortizes quarterly in the following quarterly
amounts:

<Table>
<Caption>
                                                              TRANCHE A   TRANCHE B
                                                              ---------   ---------
<S>                                                           <C>         <C>
March 31, 2005 -- December 31, 2005.........................   $11,250    $1,687.5
March 31, 2006 -- December 31, 2006.........................    15,000     1,687.5
March 31, 2007 -- December 31, 2008.........................    18,750     1,687.5
March 31, 2009 -- June 30, 2009.............................    22,500     1,687.5
September 30, 2009 -- December 31, 2009.....................        --     1,687.5
March 31, 2010 -- June 30, 2010.............................        --     320,625
</Table>

     Revolving credit loans may be requested under the Revolving Credit Facility
at any time prior to maturity. The loans bear interest, at the Company's option,
at the LIBOR Rate or JPMorgan 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:

     - dispose of assets;

     - incur or repay debt;

     - create liens;

     - make investments; and

     - 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:

     - interest coverage;

     - fixed charges ratios;

     - senior debt ratios; and

     - total debt ratios.

     Lamar Advertising and Lamar Media were in compliance with all of the terms
of all of the indentures and the bank credit agreement during the periods
presented.

                                       42

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(9)INCOME TAXES

     Income tax expense (benefit) for the years ended December 31, 2002, 2001
and 2000, consists of:

<Table>
<Caption>
                                                          CURRENT   DEFERRED    TOTAL
                                                          -------   --------   -------
<S>                                                       <C>       <C>        <C>
Year ended December 31, 2002:
  U.S. federal..........................................  $(5,068)  (12,951)   (18,019)
  State and local.......................................      869    (3,084)    (2,215)
  Foreign...............................................       89       451        540
                                                          -------   -------    -------
                                                          $(4,110)  (15,584)   (19,694)
                                                          =======   =======    =======
Year ended December 31, 2001:
  U.S. federal..........................................  $    --   (37,102)   (37,102)
  State and local.......................................      713    (8,834)    (8,121)
  Foreign...............................................       --      (451)      (451)
                                                          -------   -------    -------
                                                          $   713   (46,387)   (45,674)
                                                          =======   =======    =======
Year ended December 31, 2000:
  U.S. federal..........................................  $    --   (29,864)   (29,864)
  State and local.......................................     (141)   (7,110)    (7,251)
                                                          -------   -------    -------
                                                          $  (141)  (36,974)   (37,115)
                                                          =======   =======    =======
</Table>

     Income tax benefit attributable to continuing operations for the years
ended December 31, 2002, 2001 and 2000, differs from the amounts computed by
applying the U.S. federal income tax rate of 34 percent to loss before income
taxes as follows:

<Table>
<Caption>
                                                           2002      2001      2000
                                                         --------   -------   -------
<S>                                                      <C>        <C>       <C>
Computed expected tax benefit..........................  $(19,048)  (52,465)  (44,615)
Increase (reduction) in income taxes resulting from:
  Book expenses not deductible for tax purposes........       689       590       754
  Amortization of non-deductible goodwill..............       (26)   13,546    11,926
  State and local income taxes, net of federal income
     tax benefit.......................................    (1,490)   (5,360)   (4,786)
  Other differences, net...............................       181    (1,985)     (394)
                                                         --------   -------   -------
                                                         $(19,694)  (45,674)  (37,115)
                                                         ========   =======   =======
</Table>

                                       43

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at December 31,
2002 and 2001 are presented below:

<Table>
<Caption>
                                                                2002        2001
                                                              ---------   --------
<S>                                                           <C>         <C>
Current deferred tax assets:
  Receivables, principally due to allowance for doubtful
     accounts...............................................  $   1,916      1,916
  Accrued liabilities not deducted for tax purposes.........      2,142      1,578
  Net operating loss carryforward...........................         --        451
  Other.....................................................      2,370      2,000
                                                              ---------   --------
  Net current deferred tax asset............................      6,428      5,945
                                                              =========   ========
Non-current deferred tax liabilities:
  Plant and equipment, principally due to differences in
     depreciation...........................................  $ (10,821)    (3,550)
  Intangibles, due to differences in amortizable lives......   (243,971)  (245,790)
                                                              ---------   --------
                                                               (254,792)  (249,340)
Non-current deferred tax assets:
  Plant and equipment, due to basis differences on
     acquisitions...........................................     47,492     57,349
  Plant and equipment, due to basis differences on
     acquisitions and costs capitalized for tax purposes....      4,288      4,305
  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.........      3,062      2,861
  Net operating loss carryforward...........................     84,119     58,078
  Minimum tax credit........................................         --        331
  Other, net................................................        630        693
                                                              ---------   --------
     Non-current deferred tax assets........................    140,532    124,558
                                                              ---------   --------
Net non-current deferred tax liability......................  $(114,260)  (124,782)
                                                              =========   ========
</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.

(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.

     In October 1995 and in March 1996, the Company repurchased 3.6% and 12.9%,
respectively, of its then outstanding Class A common stock (1,220,500 and
3,617,884 shares, respectively) from certain of its

                                       44

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

existing stockholders, directors and employees for an aggregate purchase price
of approximately $4,000. The term of the March 1996 repurchase entitled the
selling stockholders to receive additional consideration from the Company in the
event that the Company consummated a public offering of its Class A 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 offering the Company
paid the selling stockholders an aggregate of $5,000 in cash from the proceeds
and issued them $20,000 aggregate principal amount of ten year subordinated
notes. As of December 31, 2002 and 2001 the outstanding balance of the ten year
subordinated notes was $7,333 and $9,333, respectively. The Company's current
executive officers do not hold any of the ten year subordinated notes described
above. Interest expense during the years ended December 31, 2002, 2001 and 2000
related to the ten year subordinated notes and the Company's debentures that
were paid off during the year ended December 31, 2001, was $673, $855 and
$1,080, respectively.

     Prior to 1996, the Company entered into various related party transactions
for the purchase and sale of advertising structures whereby any resulting gains
were deferred at that date. As of December 31, 2002 and 2001, the deferred gains
related to these transactions were $1,001 and are included in deferred income on
the balance sheets. No gains related to these transactions have been realized in
the Statement of Operations for the years ended December 31, 2002, 2001 and
2000.

     In addition, the Company had receivables from employees of $400 and $494 at
December 31, 2002 and 2001, respectively. These receivables are primarily
relocation loans for employees. The Company does not have any receivables from
its current executive officers.

     The Company purchased approximately $1,236, $1,842 and $2,407 of highway
signs and transit bus shelters from Interstate Highway Signs Corp., (IHS) which
represented approximately 12%, 13% and 15% of total capitalized expenditures for
its logo sign and transit advertising businesses during the years ended December
31, 2002, 2001 and 2000, respectively. The Company does not use IHS exclusively
for its highway sign and transit bus shelter purchases. IHS is a wholly-owned
subsidiary of Sign Acquisition Corp. Kevin P. Reilly, Jr. has voting control
over a majority of the outstanding shares of Sign Acquisition Corp. through a
voting trust.

     Effective July 1, 1996, the Lamar Texas Limited Partnership, one of the
Company's subsidiaries, and Reilly Consulting Company, L.L.C., which Kevin P.
Reilly, Sr. controls, entered into a consulting agreement. This consulting
agreement has a ten year term and provides for a $120 annual consulting fee. The
agreement contains a non-disclosure provision and a non-competition restriction
which extends for two years beyond the termination agreement.

     The Company also has a lease arrangement with Reilly Enterprises, LLC,
which Kevin P. Reilly Sr. controls for the use of an airplane. The Company pays
a monthly fee plus expenses which entitles the Company to 6.67 hours of flight
time, with any unused portion carried over into the next succeeding month. Total
fees paid under this arrangement for fiscal 2002, 2001 and 2000 were
approximately $75, $42 and $46, respectively.

     As of December 31, 2002, the Company had a receivable of $920 for premiums
paid on split-dollar life insurance arrangements for Kevin P. Reilly, Sr. that
were entered into in 1990 and 1995 as a component of his compensation as its
Chief Executive Officer and his continuing retirement benefits thereafter. In
accordance with the terms of the arrangements, the Company will recover all of
the cumulative premiums paid by it upon the termination, surrender or
cancellation of the policies or upon the death of the insured.

     Kevin P. Reilly, Sr. is the father of Kevin P. Reilly, Jr., the Company's
President, Chief Executive Officer and Director, and Sean E. Reilly, Chief
Operating Officer and also one of the Company's directors.

                                       45

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The Company has made two loans to Live Oak Living Centers, LLC. One loan
was for $61 at an interest rate of 7.5% and the second loan was for $112 at an
interest rate of 6%. Kevin P. Reilly, Jr., the Company's President, Chief
Executive Officer and Director, has a 15% ownership interest in the LLC. Sean E.
Reilly, Kevin P. Reilly, Jr.'s brother and also one of the Company's Directors,
has a 7.5% ownership interest in the LLC. Both loans, totaling $208 in
outstanding principal and interest, were repaid in full in September 2002.

     On September 6, 2002, the Company entered into an agreement with Charles W.
Lamar III, its director, to settle Mr. Lamar's obligation to reimburse the
Company for premiums that it had paid under a split-dollar life insurance
policy. These premiums had been paid under an original policy, which was
subsequently surrendered to a new insurer for a new policy. The Company paid no
further premiums under the new policy but the new policy replaced the
surrendered policy as collateral for the $90 in aggregate premiums paid by the
Company under the old policy. In exchange for the right to receive the death
proceeds from the new policy at some indeterminate future date, the Company
accepted stock of the original insurer, which was issued in connection with its
demutualization, and cash with a value of approximately $53 in full satisfaction
of this obligation.

(11) STOCKHOLDERS' EQUITY

     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 and no shares of Class A preferred stock are
currently outstanding. The new Series AA preferred stock and the Class A
preferred stock rank senior to the Class A common stock and Class B common stock
with respect to dividends and upon liquidation. Holders of Series AA preferred
stock and Class A preferred stock are entitled to receive, on a pari pasu basis,
dividends at the rate of $15.95 per share per quarter when, as and if declared
by the Board of Directors. The Series AA preferred stock and the Class A
preferred stock are also entitled to receive, on a pari pasu basis, $638 plus a
further amount equal to any dividend accrued and unpaid to the date of
distribution before any payments are made or assets distributed to the Class A
common stock or Class B stock upon voluntary or involuntary liquidation,
dissolution or winding up of the Company. The liquidation value of the
outstanding Series AA preferred stock at December 31, 2002 was $3,649. The
Series AA preferred stock and the Class A preferred stock are identical, except
that the Series AA preferred stock is entitled to one vote per share and the
Class A preferred stock is not entitled to vote.

     All of the outstanding shares of Common Stock are fully paid and
nonassessable. In the event of the liquidation or dissolution of the Company,
following any required distribution to the holders of outstanding shares of
Preferred Stock, the holders of Common Stock are entitled to share pro rata in
any balance of the corporate assets available for distribution to them. The
Company may pay dividends if, when and as declared by the Board of Directors
from funds legally available therefore, subject to the restrictions set forth in
the Company's Existing Indentures and the Senior Credit Facility. Subject to the
preferential rights of the holders of any class of preferred stock, holders of
shares of Common Stock are entitled to receive such dividends as may be declared
by the Company's Board of Directors out of funds legally available for such
purpose. No dividend may be declared or paid in cash or property on any share of
either class of Common Stock unless simultaneously the same dividend is declared
or paid on each share of the other class of Common Stock, provided that, in the
event of stock dividends, holders of a specific class of Common Stock shall be
entitled to receive only additional shares of such class.

     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

                                       46

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

persons other than permitted transferees (as defined in the Company's
certificate of incorporation, as amended).

     On May 25, 2000, the stockholders approved a resolution to amend the
Company's Restated Certificate of Incorporation to increase the number of
authorized shares of Class A common stock from 125,000,000 shares to 175,000,000
shares which increased the total authorized capital stock from 163,510,000
shares to 213,510,000 shares.

     On May 25, 2000, the stockholders approved the 2000 Employee Stock Purchase
Plan whereby 500,000 shares of the Company's Class A common stock have been
reserved for issuance under the Plan. Under this plan, eligible employees may
purchase stock at 85% of the fair market value of a share on the offering
commencement date or the respective purchase date whichever is lower. Purchases
are limited to ten percent of an employee's total compensation. The initial
offering under the Plan commenced on April 1, 2000 with a single purchase date
on June 30, 2000. Subsequent offerings shall commence each year on July 1 with a
termination date of December 31 and purchase dates on September 30 and December
31; and on January 1 with a termination date on June 30 and purchase dates on
March 31 and June 30.

     On June 7, 2001, the Company issued 1,200,000 shares of its Class A common
stock at a price of $40.00 per share. The equity offering was to cover
over-allotments related to an underwriting agreement between Lamar Advertising
Company, AMFM Operating, Inc. and Deutsche Banc Alex Brown Inc. filed on June 4,
2001. Under the terms of a consent decree with the United States Department of
Justice, AMFM Operating, Inc. had to dispose of its Lamar Advertising Class A
common stock by January 1, 2003. As of December 31, 2001, AMFM Operating, Inc.
had complied with the terms of the consent decree.

(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 unless otherwise authorized by the
Board. As of December 31, 2002, the Company had reserved an aggregate of
8,000,000 shares of Class A common stock for awards under the 1996 Plan.

     In August 2000, the Board of Directors voted to amend the 1996 Plan to (i)
authorize grants to members of the Company's board of directors (ii) provide the
Committee with more flexibility in determining the exercise price of awards made
under the 1996 Plan (iii) allow for grants of unrestricted stock and (iv) set
forth performance criteria that the Committee may establish for the granting of
stock awards. These amendments were approved by the Company's stockholders in
May 2001.

     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>
                                                   DIVIDEND    EXPECTED      RISK FREE     EXPECTED
GRANT YEAR                                          YIELD     VOLATILITY   INTEREST RATE    LIVES
----------                                         --------   ----------   -------------   --------
<S>                                                <C>        <C>          <C>             <C>
2002............................................      0%          51%            5%           4
2001............................................      0%          53%            5%           4
2000............................................      0%          54%            6%           4
</Table>

                                       47

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Information regarding the 1996 Plan for the years ended December 31, 2002,
2001 and 2000, is as follows:

<Table>
<Caption>
                                            2002                    2001                    2000
                                    ---------------------   ---------------------   ---------------------
                                                 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....   4,517,653    $29.11     2,865,647    $30.48     2,757,954    $27.14
Granted...........................     142,000     35.01     2,195,500     27.02       470,500     43.87
Exercised.........................    (515,088)    23.74      (425,243)    24.80      (299,619)    17.75
Canceled..........................     (77,200)    36.36      (118,251)    42.42       (63,188)    39.09
                                    ----------    ------    ----------    ------    ----------    ------
Outstanding, end of year..........   4,067,365    $29.83     4,517,653    $29.08     2,865,647    $30.59
                                    ==========    ======    ==========    ======    ==========    ======
Price for exercised shares........  $    23.74              $    24.80              $    17.75
Shares available for grant, end of
  year............................   1,369,520               1,436,009                 513,258
Weighted average fair value of
  options granted during the
  year............................  $    22.48              $    13.26              $    26.57
</Table>

     The following table summarizes information about fixed-price stock options
outstanding at December 31, 2002:

<Table>
<Caption>
                                            NUMBER        WEIGHTED                    NUMBER
                                         OUTSTANDING       AVERAGE     WEIGHTED    EXERCISABLE     WEIGHTED
                                              AT          REMAINING    AVERAGE          AT         AVERAGE
                                         DECEMBER 31,    CONTRACTUAL   EXERCISE    DECEMBER 31,    EXERCISE
RANGE OF EXERCISE PRICES                     2002           LIFE        PRICE          2002         PRICE
------------------------                --------------   -----------   --------   --------------   --------
<S>                                     <C>              <C>           <C>        <C>              <C>
$10.67 - 26.17........................       506,312        4.01        $13.68         479,312      $12.98
26.42.................................     1,401,553        8.74         26.42       1,120,353       26.42
26.69 - 33.38.........................     1,356,000        6.27         31.25         906,750       31.79
34.16 - 47.75.........................       708,000        7.25         41.26          92,200       37.61
60.63.................................        95,000        7.01         60.63          18,000       60.63
</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. As of December 31, 2002, the Company maintained $3,417 in letters of
credit with a bank to meet requirements of the Company's worker's compensation
and general liability insurance carrier.

     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 for
contributions made prior to January 1, 2002 and three years for contributions
made after January 1, 2002.

                                       48

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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, 2002, 2001, and 2000, the Company contributed $2,709, $2,422 and
$1,671, 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. The
Company'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 the Company. 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 $619, $550 and $456 to the Plan during the years ended December 31,
2002, 2001 and 2000, respectively. Contributions to the Deferred Compensation
Plan are discretionary and are determined by the Board of Directors.

(14) SUMMARIZED FINANCIAL INFORMATION OF SUBSIDIARIES

     Separate financial statements of each of the Company's direct or indirect
wholly-owned subsidiaries that have guaranteed Lamar Media's obligations with
respect to its publicly issued notes (collectively, the Guarantors) are not
included herein because the Company has no independent assets or operations, the
guarantees are full and unconditional and joint and several and the only
subsidiary that is not a guarantor is considered to be minor. Lamar Media's
ability to make distributions to Lamar Advertising is restricted under the terms
of its bank credit facility and the indentures relating to Lamar Media's
outstanding notes.

     As of December 31, 2002 and 2001, the net assets restricted as to transfers
from Lamar Media Corp. to Lamar Advertising Company in the form of cash
dividends, loans or advances were $1,915,035 and $1,896,992, respectively.

(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, 2002 and 2001. 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>
                                                2002                      2001
                                       -----------------------   -----------------------
                                        CARRYING    ESTIMATED     CARRYING    ESTIMATED
                                         AMOUNT     FAIR VALUE     AMOUNT     FAIR VALUE
                                       ----------   ----------   ----------   ----------
<S>                                    <C>          <C>          <C>          <C>
Long-term debt.......................  $1,734,746   $1,758,380   $1,745,026   $1,770,439
</Table>

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

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

     - 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

                                       49

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company might realize in actual market transactions. Estimates of fair value are
subjective in nature and involve uncertainties and matters of significant
judgment and therefore cannot be determined with precision. Changes in
assumptions could significantly affect the estimates.

(16) QUARTERLY FINANCIAL DATA (UNAUDITED)

<Table>
<Caption>
                                                    FISCAL YEAR 2002 QUARTERS
                                         ------------------------------------------------
                                         MARCH 31   JUNE 30    SEPTEMBER 30   DECEMBER 31
                                         --------   --------   ------------   -----------
<S>                                      <C>        <C>        <C>            <C>
Net revenues...........................  $176,538   $202,529     $201,918      $194,697
Net revenues less direct advertising
  expenses.............................   109,311    135,897      130,233       125,469
Net loss applicable to common stock....   (16,254)      (399)      (6,079)      (13,961)
Net loss per common share (basic and
  diluted).............................     (0.16)       (--)       (0.06)        (0.14)
</Table>

<Table>
<Caption>
                                                    FISCAL YEAR 2001 QUARTERS
                                         ------------------------------------------------
                                         MARCH 31   JUNE 30    SEPTEMBER 30   DECEMBER 31
                                         --------   --------   ------------   -----------
<S>                                      <C>        <C>        <C>            <C>
Net revenues...........................  $170,385   $191,788     $188,267      $178,610
Net revenues less direct advertising
  expenses.............................   108,849    130,473      123,674       114,571
Net loss applicable to common stock....   (34,381)   (20,491)     (24,452)      (29,675)
Net loss per common share (basic and
  diluted).............................     (0.35)     (0.21)       (0.25)        (0.30)
</Table>

(17) NEW ACCOUNTING PRONOUNCEMENTS

     In June 2001, Financial Accounting Standards Board (FASB) issued SFAS No.
143, "Accounting for Asset Retirement Obligations." SFAS No. 143 requires the
Company to record the fair value of an asset retirement obligation as a
liability in the period in which it incurs a legal obligation associated with
the retirement of tangible long-lived assets that result from the acquisition,
construction, development, and/or normal use of the assets. The Company will
also record a corresponding asset that is depreciated over the life of the
asset. Subsequent to the initial measurement of the asset retirement obligation,
the obligation will be adjusted at the end of each period to reflect the passage
of time and changes in the estimated future cash flows underlying the
obligation. The Company is required to adopt SFAS No. 143 on January 1, 2003.
The Company has not yet determined the impact to the consolidated financial
statements for the adoption of SFAS No. 143.

     In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." SFAS No. 146 addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullified Emerging Issues Task Force (EITF) Issue 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity." The provisions of this Statement are effective for exit or disposal
activities that are initiated after December 31, 2002, with early application
encouraged. The adoption of SFAS No. 146 is not expected to have a material
effect on the Company's financial statements.

     In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness to Others, an interpretation of FASB Statements No.
5, 57, and 107 and a rescission of FASB Interpretation No. 34." This
Interpretation elaborates on the disclosures to be made by a guarantor in its
interim and annual financial statements about its obligations under guarantees
issued. The Interpretation also clarifies that a guarantor is required to
recognize, at inception of a guarantee, a liability for the fair value of the
obligation undertaken. The initial recognition and measurement provisions of the
Interpretation are applicable to

                                       50

<PAGE>
                   LAMAR ADVERTISING COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

guarantees issued or modified after December 31, 2002 and are not expected to
have a material effect on the Company's financial statements. The disclosure
requirements are effective for financial statements of interim and annual
periods ending after December 15, 2002.

     In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation -- Transition and Disclosure, an amendment of FASB Statement No.
123." This Statement amends FASB Statement No. 123, "Accounting for Stock-Based
Compensation," to provide alternative methods of transition for a voluntary
change to the fair value method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure requirements of
Statement No. 123 to require prominent disclosures in both annual and interim
financial statements. Certain of the disclosure modifications are required for
fiscal years ending after December 15, 2002 and are included in the notes to
these consolidated financial statements.

     In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities, an interpretation of ARB No. 51." This
Interpretation addresses the consolidation by business enterprises of variable
interest entities as defined in the Interpretation. The Interpretation applies
immediately to variable interest in variable interest entities created after
January 31, 2003 and to variable interest entities obtained after January 31,
2003. The application of this Interpretation is not expected to have a material
effect on the Company's financial statements as the Company has no variable
interest entities. The Interpretation requires certain disclosures in financial
statements issued after January 31, 2003, if it is reasonably possible that the
Company will consolidate or disclose information about variable interest
entities when the Interpretation becomes effective.

                                       51

<PAGE>

                                                                      SCHEDULE 2

                           LAMAR ADVERTISING COMPANY

                       VALUATION AND QUALIFYING ACCOUNTS
                  YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

<Table>
<Caption>
                                                  BALANCE AT   CHARGED TO
                                                  BEGINNING    COSTS AND                  BALANCE AT
                                                  OF PERIOD     EXPENSES    DEDUCTIONS   END OF PERIOD
                                                  ----------   ----------   ----------   -------------
                                                                     (IN THOUSANDS)
<S>                                               <C>          <C>          <C>          <C>
Year ended December 31, 2002
  Deducted in balance sheet from trade accounts
     receivable: Allowance for doubtful
     accounts...................................   $  4,914       9,036       9,036           4,914
  Deducted in balance sheet from intangible
     assets: Amortization of intangible
     assets.....................................   $569,322     130,142          --         699,464
Year ended December 31, 2001
  Deducted in balance sheet from trade accounts
     receivable: Allowance for doubtful
     accounts...................................   $  4,914       7,794       7,794           4,914
  Deducted in balance sheet from intangible
     assets: Amortization of intangible
     assets.....................................   $356,725     212,597          --         569,322
Year ended December 31, 2000
  Deducted in balance sheet from trade accounts
     receivable: Allowance for doubtful
     accounts...................................   $  3,928       5,991       5,005           4,914
  Deducted in balance sheet from intangible
     assets: Amortization of intangible
     assets.....................................   $171,316     185,409          --         356,725
</Table>

                                       52

<PAGE>


                                LAMAR MEDIA CORP.
                                AND SUBSIDIARIES


<Table>
<S>                                                                                        <C>
Independent Auditors' Report ...........................................................   54

Consolidated Balance Sheets as of December 31, 2002 and 2001 ...........................   55

Consolidated Statements of Operations for the years ended December 31,
      2002, 2001 and 2000 ..............................................................   56

Consolidated Statements of Stockholder's Equity for the years ended
      December 31, 2002, 2001 and 2000 .................................................   57

Consolidated Statements of Cash Flows for the years ended December 31,
      2002, 2001 and  2000 .............................................................   58

Notes to Consolidated Financial Statements .............................................   59 - 64

Schedule 2 - Valuation and Qualifying Accounts for the years ended December 31,
      2002, 2001 and 2000 ..............................................................   65
</Table>


                                       53



<PAGE>

                          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, 2002 and 2001, and the related
consolidated statements of operations, stockholder's equity and cash flows for
each of the years in the three-year period ended December 31, 2002. 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 auditing standards generally
accepted in the United States of America. 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, 2002 and 2001, and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 2002, in conformity with accounting principles
generally accepted in the United States of America.

     As discussed in Note 1(d) to the consolidated financial statements of Lamar
Advertising Company, effective July 1, 2001, the Company adopted the provisions
of Statement of Financial Accounting Standards (SFAS) No. 141, "Business
Combinations", and certain provisions of SFAS No. 142, "Goodwill and Other
Intangible Assets", as required for goodwill and intangible assets resulting
from business combinations consummated after June 30, 2001. The provisions of
SFAS No. 142 were fully adopted on January 1, 2002.


/s/ KPMG LLP

KPMG LLP

New Orleans, Louisiana
February 5, 2003, except as to Note 5 which is as of March 7, 2003

                                       54

<PAGE>

                       LAMAR MEDIA CORP. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                                     DECEMBER 31,
                                                              ---------------------------
                                                                  2002           2001
                                                              ------------   ------------
                                                              (IN THOUSANDS, EXCEPT SHARE
                                                                  AND PER SHARE DATA)
<S>                                                           <C>            <C>
ASSETS
Current assets:
  Cash and cash equivalents.................................   $   15,610     $   12,885
  Cash on deposit for debt extinguishment...................      266,657             --
  Receivables, net of allowance for doubtful accounts of
     $4,914 in 2002 and 2001................................       92,295         93,043
  Prepaid expenses..........................................       30,091         27,176
  Deferred income tax asset.................................        6,428          5,945
  Other current assets......................................       14,293         17,688
                                                               ----------     ----------
Total current assets........................................      425,374        156,737
                                                               ----------     ----------
Property, plant and equipment...............................    1,850,657      1,777,399
  Less accumulated depreciation and amortization............     (566,889)      (451,686)
                                                               ----------     ----------
Net property, plant and equipment...........................    1,283,768      1,325,713
                                                               ----------     ----------
Goodwill (note 3)...........................................    1,171,595      1,127,426
Intangible assets (note 3)..................................      975,998      1,028,653
Other assets................................................       18,174         16,580
                                                               ----------     ----------
Total assets................................................   $3,874,909     $3,655,109
                                                               ==========     ==========

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
  Trade accounts payable....................................   $   10,051     $   10,048
  Current maturities of long-term debt (note 5).............        4,687         66,559
  Current maturities related to debt extinguishment.........      255,000             --
  Accrued expenses (note 4).................................       25,981         22,362
  Deferred income...........................................       13,942         11,618
                                                               ----------     ----------
Total current liabilities...................................      309,661        110,587
                                                               ----------     ----------
Long-term debt (note 5).....................................    1,447,246      1,457,526
Deferred income taxes (note 6)..............................      129,924        133,186
Other liabilities...........................................        7,366          7,724
                                                               ----------     ----------
Total liabilities...........................................    1,894,197      1,709,023
                                                               ----------     ----------
Stockholder's equity:
  Common stock, $.01 par value, authorized 3,000 shares; 100
     shares issued and outstanding at December 31, 2002 and
     2001...................................................           --             --
  Additional paid-in capital................................    2,281,901      2,222,317
  Accumulated deficit.......................................     (301,189)      (276,231)
                                                               ----------     ----------
Stockholder's equity........................................    1,980,712      1,946,086
                                                               ----------     ----------
Total liabilities and stockholder's equity..................   $3,874,909     $3,655,109
                                                               ==========     ==========
</Table>

          See accompanying notes to consolidated financial statements.
                                       55
<PAGE>

                       LAMAR MEDIA CORP. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<Table>
<Caption>
                                                                 YEARS ENDED DECEMBER 31,
                                                             --------------------------------
                                                               2002       2001        2000
                                                             --------   ---------   ---------
                                                             (IN THOUSANDS, EXCEPT SHARE AND
                                                                     PER SHARE DATA)
<S>                                                          <C>        <C>         <C>
Net revenues...............................................  $775,682   $ 729,050   $ 687,319
                                                             --------   ---------   ---------
Operating expenses:
   Direct advertising expenses.............................   274,772     251,483     217,465
   General and administrative expenses.....................   166,895     150,786     137,292
   Depreciation and amortization...........................   274,644     351,754     315,465
   Gain on disposition of assets...........................      (336)       (923)       (986)
                                                             --------   ---------   ---------
                                                              715,975     753,100     669,236
                                                             --------   ---------   ---------
   Operating income (loss).................................    59,707     (24,050)     18,083
Other expense (income):
   Loss on early extinguishment of debt....................     5,850          --          --
   Interest income.........................................      (929)       (640)     (1,715)
   Interest expense........................................    92,178     113,026     147,607
                                                             --------   ---------   ---------
                                                               97,099     112,386     145,892
                                                             --------   ---------   ---------
Loss before income taxes...................................   (37,392)   (136,436)   (127,809)
Income tax benefit (note 6)................................   (12,434)    (38,870)    (35,879)
                                                             --------   ---------   ---------
Net loss...................................................  $(24,958)  $ (97,566)  $ (91,930)
                                                             ========   =========   =========
</Table>

          See accompanying notes to consolidated financial statements.
                                       56
<PAGE>

                       LAMAR MEDIA CORP. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
              For the years ended December 31, 2002, 2001 and 2000

<Table>
<Caption>
                                                                 ADDITIONAL
                                                       COMMON      PAID-IN     ACCUMULATED
                                                        STOCK      CAPITAL       DEFICIT        TOTAL
                                                       -------   -----------   ------------   ----------
                                                        (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S>                                                    <C>       <C>           <C>            <C>
Balance, December 31, 1999...........................   $  --     1,469,606       (86,735)    1,382,871
   Contribution from parent..........................      --       385,815            --       385,815
   Net loss..........................................      --            --       (91,930)      (91,930)
                                                        -----     ---------      --------     ---------
Balance, December 31, 2000...........................   $  --     1,855,421      (178,665)    1,676,756
   Contribution from parent..........................      --       366,896            --       366,896
   Net loss..........................................      --            --       (97,566)      (97,566)
                                                        -----     ---------      --------     ---------
Balance, December 31, 2001...........................   $  --     2,222,317      (276,231)    1,946,086
   Contribution from parent..........................      --        59,584            --        59,584
   Net loss..........................................      --            --       (24,958)      (24,958)
                                                        -----     ---------      --------     ---------
Balance, December 31, 2002...........................   $  --     2,281,901      (301,189)    1,980,712
                                                        =====     =========      ========     =========
</Table>

          See accompanying notes to consolidated financial statements.
                                       57
<PAGE>

                       LAMAR MEDIA CORP. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                 YEARS ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2002       2001       2000
                                                              --------   --------   --------
                                                                      (IN THOUSANDS)
<S>                                                           <C>        <C>        <C>
Cash flows from operating activities:
  Net loss..................................................  $(24,958)  $(97,566)  $(91,930)
  Adjustments to reconcile net loss to net cash provided by
     operating activities:
     Depreciation and amortization..........................   274,644    351,754    315,465
     Gain on disposition of assets..........................      (336)      (923)      (986)
     Loss on early extinguishment of debt...................     2,424         --         --
     Deferred income tax benefit............................    (8,325)   (39,582)   (35,737)
     Provision for doubtful accounts........................     9,036      7,794      5,991
  Changes in operating assets and liabilities:
     (Increase) decrease in:
       Receivables..........................................    (6,451)    (9,810)   (13,786)
       Prepaid expenses.....................................    (2,533)    (1,322)    (1,371)
       Other assets.........................................     2,804      2,916      4,568
     Increase (decrease) in:
       Trade accounts payable...............................         3        131     (1,574)
       Accrued expenses.....................................     1,965    (14,641)    (1,910)
       Deferred income......................................     2,051       (173)      (964)
       Other liabilities....................................      (505)       124        196
                                                              --------   --------   --------
          Net cash provided by operating activities.........   249,819    198,702    177,962
                                                              --------   --------   --------
Cash flows from investing activities:
  Capital expenditures......................................   (78,390)   (85,320)   (78,304)
  Purchase of new markets...................................   (78,326)  (298,134)  (355,958)
  Increase in notes receivable..............................    (1,650)        --         --
  Proceeds from sale of property and equipment..............     3,412      4,916      2,827
                                                              --------   --------   --------
          Net cash used in investing activities.............  (154,954)  (378,538)  (431,435)
                                                              --------   --------   --------
Cash flows from financing activities:
  Contribution from parent..................................        --     48,000    200,212
  Proceeds from issuance of long-term debt..................   256,360         --         --
  Deposits for debt extinguishment..........................  (266,657)        --         --
  Principal payments on long-term debt......................  (140,700)   (67,046)    (5,330)
  Debt issuance costs.......................................    (1,183)      (573)    (1,470)
  Increase in notes payable.................................        40         --         --
  Net borrowing under credit agreements.....................    60,000    140,000    124,000
                                                              --------   --------   --------
          Net cash (used in) provided by financing
            activities......................................   (92,140)   120,381    317,412
                                                              --------   --------   --------
          Net increase (decrease) in cash and cash
            equivalents.....................................     2,725    (59,455)    63,939
  Cash and cash equivalents at beginning of period..........    12,885     72,340      8,401
                                                              --------   --------   --------
  Cash and cash equivalents at end of period................  $ 15,610   $ 12,885   $ 72,340
                                                              ========   ========   ========
Supplemental disclosures of cash flow information:
  Cash paid for interest....................................  $ 94,729   $119,000   $147,875
                                                              ========   ========   ========
  Cash paid for state and federal income taxes..............  $    745   $  1,189   $  1,936
                                                              ========   ========   ========
</Table>

          See accompanying notes to consolidated financial statements.
                                       58
<PAGE>

                       LAMAR MEDIA CORP. 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 Media Corp. is a wholly-owned subsidiary of Lamar Advertising
Company. Lamar Media Corp. is engaged in the outdoor advertising business
operating approximately 146,000 outdoor advertising displays in 44 states. Lamar
Media's operating strategy is to be the leading provider of outdoor advertising
services in the markets it serves.

     In addition, Lamar Media operates a logo sign business in 21 states
throughout the United States and in one 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 13, 15 and 17 and
portions of notes 1, 8 and 10 to the consolidated financial statements of Lamar
Advertising Company included elsewhere in this Annual Report are 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.

 (B) PRINCIPLES OF CONSOLIDATION

     The accompanying consolidated financial statements include Lamar Media
Corp., its wholly-owned subsidiaries, The Lamar Company, LLC, Lamar Central
Outdoor, Inc., Lamar Oklahoma Holding Co., Inc., Lamar Advertising Southwest,
Inc., Lamar DOA Tennessee Holdings, Inc., and Interstate Logos, LLC. and their
majority-owned subsidiaries. All intercompany transactions and balances have
been eliminated in consolidation.

(2) NONCASH FINANCING AND INVESTING ACTIVITIES

     A summary of significant noncash financing and investing activities for the
years ended December 31, 2002, 2001 and 2000:

<Table>
<Caption>
                                                           2002      2001      2000
                                                          -------   -------   -------
<S>                                                       <C>       <C>       <C>
Parent company stock contributed for acquisitions.......  $56,100    29,000   185,603
Note payable converted to contributed capital...........       --   287,500        --
Debt issuance costs.....................................    3,640        --        --
</Table>

                                       59

<PAGE>
                       LAMAR MEDIA CORP. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(3) GOODWILL AND OTHER INTANGIBLE ASSETS

     The following is a summary of intangible assets at December 31, 2002 and
December 31, 2001:

<Table>
<Caption>
                                                   2002                        2001
                                         -------------------------   -------------------------
                             ESTIMATED     GROSS                       GROSS
                               LIFE       CARRYING    ACCUMULATED     CARRYING    ACCUMULATED
                              (YEARS)      AMOUNT     AMORTIZATION     AMOUNT     AMORTIZATION
                             ---------   ----------   ------------   ----------   ------------
<S>                          <C>         <C>          <C>            <C>          <C>
AMORTIZABLE INTANGIBLE
  ASSETS:
  Debt issuance costs and
     fees..................    7-10      $   29,304     $ 16,992     $   24,625     $ 11,756
  Customer lists and
     contracts.............    7-10         371,787      196,084        359,154      145,180
  Non-competition
     agreements............    3-15          57,023       39,458         56,419       31,841
  Site locations...........      15         937,773      177,016        882,180      115,314
  Other....................    5-15          15,399        5,738         14,605        4,239
                                         ----------     --------     ----------     --------
                                          1,411,286      435,288      1,336,983      308,330
UNAMORTIZABLE INTANGIBLE
  ASSETS:
  Goodwill.................              $1,424,361     $252,766     $1,380,192     $252,766
</Table>

     The changes in the carrying amount of goodwill for the year ended December
31, 2002 are as follows:

<Table>
<S>                                                           <C>
Balance as of December 31, 2001.............................  $1,380,192
Goodwill acquired during the year...........................      44,169
Impairment losses...........................................          --
                                                              ----------
Balance as of December 31, 2002.............................  $1,424,361
                                                              ==========
</Table>

     In accordance with SFAS No. 142, Lamar Media is required to evaluate its
existing intangible assets and goodwill that were acquired in purchase business
combinations, and to make any necessary reclassifications in order to conform
with the new classification criteria in SFAS No. 141 for recognition separate
from goodwill. Lamar Media is required to reassess the useful lives and residual
values of all intangible assets acquired, and make any necessary amortization
period adjustments. If an intangible asset is identified as having an indefinite
useful life, Lamar Media will be required to test the intangible asset for
impairment in accordance with the provisions of SFAS No. 142. Impairment is
measured as the excess of carrying value over the fair value of an intangible
asset with an indefinite life. Based upon it's review, no impairment charge was
required upon the adoption of SFAS No. 142 or at its annual test for impairment
on December 31, 2002.

     The following table illustrates the effect of the adoption of SFAS No. 142
on prior periods:

<Table>
<Caption>
                                                         YEARS ENDED DECEMBER 31,
                                                     --------------------------------
                                                       2002       2001        2000
                                                     --------   ---------   ---------
<S>                                                  <C>        <C>         <C>
Reported net loss applicable to common stock.......  $(24,958)  $ (97,566)  $ (91,930)
Add: goodwill amortization, net of tax.............        --      70,463      60,752
                                                     --------   ---------   ---------
Adjusted net loss applicable to common stock.......  $(24,958)  $ (27,103)  $ (31,178)
                                                     ========   =========   =========
</Table>

                                       60

<PAGE>
                       LAMAR MEDIA CORP. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(4) ACCRUED EXPENSES

     The following is a summary of accrued expenses at December 31, 2002 and
2001:

<Table>
<Caption>
                                                               2002      2001
                                                              -------   ------
<S>                                                           <C>       <C>
Payroll.....................................................  $ 7,686    4,982
Interest....................................................    8,618   11,169
Other.......................................................    9,677    6,211
                                                              -------   ------
                                                              $25,981   22,362
                                                              =======   ======
</Table>

(5) LONG-TERM DEBT

     Long-term debt consists of the following at December 31, 2002 and 2001:

<Table>
<Caption>
                                                                 2002        2001
                                                              ----------   ---------
<S>                                                           <C>          <C>
7 1/4% Senior subordinated notes............................  $  260,000          --
9 5/8% Senior subordinated notes (1996 Notes)...............     255,000     255,000
8 5/8% Senior subordinated notes (1997 Notes)...............     199,230     199,104
Bank Credit Agreement.......................................     975,500     978,500
9 1/4% Senior subordinated notes............................          --      74,073
8% Unsecured subordinated notes.............................       7,333       9,333
Other notes with various rates and terms....................       9,870       8,075
                                                              ----------   ---------
                                                               1,706,933   1,524,085
Less current maturities.....................................    (259,687)    (66,559)
                                                              ----------   ---------
                                                              $1,447,246   1,457,526
                                                              ==========   =========
</Table>

     Long-term debt matures as follows:

<Table>
<S>                                                            <C>
2003........................................................   $  259,687
2004........................................................        4,336
2005........................................................       56,545
2006........................................................       68,624
2007........................................................      281,978
Later years.................................................    1,035,763
</Table>

     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.

     Effective January 30, 2001, Lamar Media Corp. and its subsidiaries entered
into an amendment to its bank credit agreement for the purposes of increasing
"Incremental Loan Commitments" from $400,000 to $1,000,000 and affording Lamar
Media Corp. and Lamar Advertising Company more flexibility in incurring debt.
The "Total Debt Ratio", previously measured at the Lamar Advertising Company
level, is now measured at the Lamar Media Corp. level with the result that the
5 1/4% convertible Notes will be excluded from this ratio. In connection with
these changes, the note receivable and notes payable of equal amounts between
Lamar Advertising and Lamar Media, its wholly-owned subsidiary, were canceled.
The cancellation of the note of $287,500 is treated as capital contributed by
the parent on Lamar Media's balance sheet effective January 30, 2001.

                                       61

<PAGE>
                       LAMAR MEDIA CORP. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The presentation of long-term debt is in accordance with the terms of the
new credit agreement discussed in Note 8 to the consolidated financial
statements of Lamar Advertising Company.

(6) INCOME TAXES

     Income tax benefit for the years ended December 31, 2002, 2001 and 2000,
consists of:

<Table>
<Caption>
                                                          CURRENT   DEFERRED    TOTAL
                                                          -------   --------   -------
<S>                                                       <C>       <C>        <C>
Year ended December 31, 2002:
  U.S. federal..........................................  $(5,068)   (7,090)   (12,158)
  State and local.......................................      870    (1,685)      (815)
  Foreign...............................................       89       450        539
                                                          -------   -------    -------
                                                          $(4,109)   (8,325)   (12,434)
                                                          =======   =======    =======
Year ended December 31, 2001:
  U.S. federal..........................................  $    --   (31,618)   (31,618)
  State and local.......................................      712    (7,513)    (6,801)
  Foreign...............................................       --      (451)      (451)
                                                          -------   -------    -------
                                                          $   712   (39,582)   (38,870)
                                                          =======   =======    =======
Year ended December 31, 2000:
  U.S. federal..........................................  $    --   (28,865)   (28,865)
  State and local.......................................     (142)   (6,872)    (7,014)
                                                          -------   -------    -------
                                                          $  (142)  (35,737)   (35,879)
                                                          =======   =======    =======
</Table>

     Income tax expense (benefit) attributable to continuing operations for the
years ended December 31, 2002, 2001 and 2000, differs from the amounts computed
by applying the U.S. federal income tax rate of 34 percent to loss before income
taxes as follows:

<Table>
<Caption>
                                                         2002       2001       2000
                                                       --------   --------   --------
<S>                                                    <C>        <C>        <C>
Computed expected tax benefit........................  $(12,713)  $(46,388)  $(43,455)
Increase (reduction) in income taxes resulting from:
   Book expenses not deductible for tax purposes.....       689        590        754
   Amortization of non-deductible goodwill...........       (31)    13,402     11,845
   State and local income taxes, net of federal
      income tax benefit.............................      (560)    (4,488)    (4,629)
   Other differences, net............................       181     (1,986)      (394)
                                                       --------   --------   --------
                                                       $(12,434)  $(38,870)  $(35,879)
                                                       ========   ========   ========
</Table>

                                       62

<PAGE>
                       LAMAR MEDIA CORP. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at December 31,
2002 and 2001 are presented below:

<Table>
<Caption>
                                                                2002        2001
                                                              ---------   ---------
<S>                                                           <C>         <C>
Current deferred tax assets:
   Receivables, principally due to allowance for doubtful
      accounts..............................................  $   1,916   $   1,916
   Accrued liabilities not deducted for tax purposes........      2,142       1,578
   Net operating loss carryforward..........................         --         451
   Other....................................................      2,370       2,000
                                                              ---------   ---------
   Net current deferred tax asset...........................  $   6,428   $   5,945
                                                              =========   =========
Non-current deferred tax liabilities:
   Plant and equipment, principally due to differences in
      depreciation..........................................  $ (10,821)  $  (3,550)
   Intangibles, due to differences in amortizable lives.....   (243,680)   (245,587)
                                                              ---------   ---------
                                                               (254,501)   (249,137)
Non-current deferred tax assets:
   Plant and equipment, due to basis differences on
      acquisitions..........................................     47,492      57,349
   Plant and equipment, due to basis differences on
      acquisitions and costs capitalized for tax purposes...      4,288       4,305
   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........      3,062       2,861
   Net operating loss carryforward..........................     68,164      49,470
   Minimum tax credit.......................................         --         331
   Other, net...............................................        630         694
                                                              ---------   ---------
                                                                124,577     115,951
                                                              ---------   ---------
   Net non-current deferred tax liability...................  $(129,924)  $(133,186)
                                                              =========   =========
</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 that Lamar Media 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.

                                      63

<PAGE>
                       LAMAR MEDIA CORP. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     As of December 31, 2002 and 2001, there was a receivable from Lamar
Advertising Company, its parent, in the amount of $6,978 and $9,671,
respectively.

(8) QUARTERLY FINANCIAL DATA (UNAUDITED)

<Table>
<Caption>
                                                    FISCAL YEAR 2002 QUARTERS
                                         ------------------------------------------------
                                         MARCH 31   JUNE 30    SEPTEMBER 30   DECEMBER 31
                                         --------   --------   ------------   -----------
<S>                                      <C>        <C>        <C>            <C>
Net revenues...........................  $176,538   $202,529     $201,918      $194,697
Net revenues less direct advertising
   expenses............................   109,311    135,897      130,233       125,469
Net (loss) income applicable to common
   stock...............................   (13,331)     2,542       (3,145)      (11,024)
</Table>

<Table>
<Caption>
                                                    FISCAL YEAR 2001 QUARTERS
                                         ------------------------------------------------
                                         MARCH 31   JUNE 30    SEPTEMBER 30   DECEMBER 31
                                         --------   --------   ------------   -----------
<S>                                      <C>        <C>        <C>            <C>
Net revenues...........................  $170,385   $191,788     $188,267      $178,610
Net revenues less direct advertising
   expenses............................   108,849    130,473      123,674       114,571
Net loss applicable to common stock....   (32,146)   (17,476)     (21,434)      (26,510)
</Table>

                                       64

<PAGE>

                                                                      SCHEDULE 2

                       LAMAR MEDIA CORP. AND SUBSIDIARIES

                       VALUATION AND QUALIFYING ACCOUNTS
                  YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

<Table>
<Caption>
                                                    BALANCE AT    CHARGED TO                BALANCE AT
                                                   BEGINNING OF   COSTS AND                   END OF
                                                      PERIOD       EXPENSES    DEDUCTIONS     PERIOD
                                                   ------------   ----------   ----------   ----------
                                                                     (IN THOUSANDS)
<S>                                                <C>            <C>          <C>          <C>
Year Ended December 31, 2002
   Deducted in balance sheet from trade accounts
      receivable: Allowance for doubtful
      accounts...................................    $  4,914         9,036       9,036         4,914
   Deducted in balance sheet from intangible
      assets: Amortization of intangible
      assets.....................................    $561,096       126,958          --       688,054
Year Ended December 31, 2001
   Deducted in balance sheet from trade accounts
      receivable: Allowance for doubtful
      accounts...................................    $  4,914         7,794       7,794         4,914
   Deducted in balance sheet from intangible
      assets: Amortization of intangible
      assets.....................................    $352,314       208,782          --       561,096
Year Ended December 31, 2000
   Deducted in balance sheet from trade accounts
      receivable: Allowance for doubtful
      accounts...................................    $  3,928         5,991       5,005         4,914
   Deducted in balance sheet from intangible
      assets: Amortization of intangible
      assets.....................................    $170,410       181,904          --       352,314
</Table>


                                       65


<PAGE>


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 2003
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 2003 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 in part incorporated herein by reference from the
discussion responsive thereto under the caption "Share Ownership" in the
Company's Proxy Statement relating to the 2003 Annual Meeting of Stockholders.

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information as of December 31, 2002 with respect to
shares of our Class A common stock that may be issued under our existing
compensation plans.

<Table>
<Caption>
                                     (a)                                (b)                       (c)
  Plan category                      Number of securities to be         Weighted-average          Number of securities
                                     issued upon exercise of            exercise price of         remaining available for future
                                     outstanding options, warrants      outstanding options,      issuance under equity
                                     and rights                         warrants and rights       compensation plans
                                                                                                  (excluding securities reflected
                                                                                                  in column (a))
<S>                                  <C>                                <C>                       <C>
EQUITY COMPENSATION PLANS APPROVED          4,067,365(2)                   $  29.83                        1,873,988(3)
BY SECURITY HOLDERS(1)

EQUITY COMPENSATION PLANS NOT                     N/A                           N/A                              N/A
APPROVED BY SECURITY HOLDERS

TOTAL                                       4,067,365                      $  29.83                        1,873,988
</Table>

----------

(1) Consists of the 1996 Equity Incentive Plan and 2000 Employee Stock Purchase
Plan.

(2) Does not include purchase rights accruing under the 2000 Employee Stock
Purchase Plan because the purchase price (and therefore the number of shares to
be purchased) will not be determined until the end of the purchase period.

(3) Includes shares available for future issuance under the 2000 Employee Stock
Purchase Plan. Under the evergreen formula of this plan, on the first day of
each fiscal year beginning with 2001, the aggregate number of shares that may be
purchased through the exercise of rights granted under the plan is increased by
the lesser of (a) 500,000 shares, (b) one-tenth of one percent of the total
number of shares of Class A common stock outstanding on the last day of the
preceding fiscal year, and (c) a lesser amount determined by the board of
directors. Pursuant to the evergreen formula, as of December 31, 2002, 163,002
shares have been added to the 2000 Employee Stock Purchase Plan.


                                       66

<PAGE>

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 2003
Annual Meeting of Stockholders.

ITEM 14. CONTROLS AND PROCEDURES

(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Within 90 days prior to the date of this report, the Company and Lamar Media
carried out an evaluation under the supervision and with the participation of
their management, including the Company's and Lamar Media's Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and
operation of the Company's and Lamar Media's disclosure controls and procedures
(as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act
of 1934). Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company's and Lamar Media's disclosure
controls and procedures are effective in timely alerting them to material
information relating to the Company and Lamar Media required to be included in
the Company's and Lamar Media's reports filed with or submitted to the
Securities and Exchange Commission under the Securities Exchange Act of 1934.

(B) CHANGES IN INTERNAL CONTROLS

Since the date of that evaluation, there have been no significant changes in the
Company's or Lamar Media's internal controls or in other factors that could
significantly affect those controls.

PART IV

ITEM 15. 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 filed as part of this report are listed on the Exhibit Index
immediately following the signature page hereto, which Exhibit Index is
incorporated herein by reference.

(B) REPORTS ON FORM 8-K

Reports on Form 8-K were filed with the Commission during the fourth quarter of
2002 to report the following items as of the dates indicated:

On December 13, 2002, Lamar Media Corp. filed a Current Report on 8-K to
announce its intention to offer $260 million in senior subordinated notes in a
private placement, subject to market and other conditions.

On December 23, 2002, Lamar Media Corp. filed a Current Report on Form 8-K in
order to report the sale of $260 million aggregate principal amount of 7 1/4%
Notes due 2013 (the "Notes") to JPMorgan Securities Inc., Wachovia Securities,
Inc., SunTrust Capital Markets, Inc. and BNP Paribas Securities Corp.
(collectively, the "Initial Purchasers") pursuant to an Amended and Restated
Purchase Agreement dated as of December 17, 2002. Lamar Media issued the Notes
pursuant to an Indenture dated as of December 23, 2002 among Lamar Media,
certain of its subsidiaries as guarantors, and Wachovia Bank of Delaware,
National Association, as trustee. The net proceeds of the offering were used,
together with available cash, to redeem all of the outstanding $255 million
principal amount of Lamar Media's 9 5/8% Senior Subordinated Notes due 2006.

On December 23, 2002, Lamar Media also reported that it and certain of its
subsidiaries, as guarantors, entered into a Registration Rights Agreement with
the Initial Purchasers, pursuant to which Lamar Media agreed to file with the
Securities and Exchange Commission a registration statement on an appropriate
form under the Securities Act relating to a registered exchange offer for the
Notes under the Securities Act.


                                       67

<PAGE>

(C) Exhibits required by Item 601 of Regulation S-K are listed on the Exhibit
Index immediately following the signature page hereto.


                                       68

<PAGE>


                                   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 25, 2003               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                 3/25/03
--------------------------------
Kevin P. Reilly, Jr.

 /s/ Sean E. Reilly                         Chief Operating Officer, Vice President              3/25/03
--------------------------------            and Director
Sean E. Reilly

 /s/ Keith A. Istre                         Chief Financial and Accounting Officer               3/25/03
--------------------------------            and Director
Keith A. Istre

 /s/ T. Everett Stewart, Jr.                Director                                             3/25/03
--------------------------------
T. Everett Stewart, Jr.

 /s/ Charles W. Lamar, III                  Director                                             3/25/03
--------------------------------
Charles W. Lamar, III

 /s/ Gerald H. Marchand                     Director                                             3/25/03
--------------------------------
Gerald H. Marchand

 /s/ Stephen P. Mumblow                     Director                                             3/25/03
--------------------------------
Stephen P. Mumblow

/s/ John Maxwell Hamilton                   Director                                             3/25/03
--------------------------------
John Maxwell Hamilton

/s/ Thomas Reifenheiser                     Director                                             3/25/03
--------------------------------
Thomas Reifenheiser

/s/ Anna Reilly Cullinan                    Director                                             3/25/03
--------------------------------
Anna Reilly Cullinan
</Table>



                                       69

<PAGE>

                                   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 25, 2003               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           3/25/03
---------------------------------
Kevin P. Reilly, Jr.

 /s/ Sean E. Reilly                      Chief Operating Officer, Vice President        3/25/03
---------------------------------        and Director
Sean E. Reilly

 /s/ Keith A. Istre                      Chief Financial and Accounting Officer         3/25/03
---------------------------------        and Director
Keith A. Istre

 /s/ T. Everett Stewart, Jr.             Director                                       3/25/03
---------------------------------
T. Everett Stewart, Jr.

 /s/ Gerald H. Marchand                  Director                                       3/25/03
---------------------------------
Gerald H. Marchand
</Table>


                                       70

<PAGE>

CERTIFICATIONS

I, Kevin P. Reilly, Jr., certify that:

1.       I have reviewed this combined annual report on Form 10-K of Lamar
         Advertising Company and Lamar Media Corp.;

2.       Based on my knowledge, this combined annual report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this combined annual report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this combined annual report, fairly present in
         all material respects the financial condition, results of operations
         and cash flows of the registrants as of, and for, the periods presented
         in this combined annual report;

4.       The registrants' other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrants
         and we have:

                  a)       designed such disclosure controls and procedures to
                           ensure that material information relating to the
                           registrants, including their consolidated
                           subsidiaries, is made known to us by others within
                           those entities, particularly during the period in
                           which this combined annual report is being prepared;

                  b)       evaluated the effectiveness of the registrants'
                           disclosure controls and procedures as of a date
                           within 90 days prior to the filing date of this
                           combined annual report (the "Evaluation Date"); and

                  c)       presented in this combined annual report our
                           conclusions about the effectiveness of the disclosure
                           controls and procedures based on our evaluation as of
                           the Evaluation Date;

5.       The registrants' other certifying officer and I have disclosed, based
         on our most recent evaluation, to the registrants' auditors and the
         audit committee of the registrants' board of directors (or persons
         performing the equivalent function):

                  a)       all significant deficiencies in the design or
                           operation of internal controls which could adversely
                           affect the registrants' ability to record, process,
                           summarize and report financial data and have
                           identified for the registrants' auditors any material
                           weaknesses in internal controls; and

                  b)       any fraud, whether or not material, that involves
                           management or other employees who have a significant
                           role in the registrants' internal controls; and

6.       The registrants' other certifying officer and I have indicated in this
         combined annual report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

Date:  March 25, 2003

                             /s/ Kevin P. Reilly, Jr.
                             --------------------------------------------------
                             Kevin P. Reilly, Jr.
                             Chief Executive Officer, Lamar Advertising Company
                             Chief Executive Officer, Lamar Media Corp.



                                       71

<PAGE>


I, Keith A. Istre, certify that:

1.       I have reviewed this combined annual report on Form 10-K of Lamar
         Advertising Company and Lamar Media Corp.;

2.       Based on my knowledge, this combined annual report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this combined annual report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this combined annual report, fairly present in
         all material respects the financial condition, results of operations
         and cash flows of the registrants as of, and for, the periods presented
         in this combined annual report;

4.       The registrants' other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrants
         and we have:

                  a)       designed such disclosure controls and procedures to
                           ensure that material information relating to the
                           registrants, including their consolidated
                           subsidiaries, is made known to us by others within
                           those entities, particularly during the period in
                           which this combined annual report is being prepared;

                  b)       evaluated the effectiveness of the registrants'
                           disclosure controls and procedures as of a date
                           within 90 days prior to the filing date of this
                           combined annual report (the "Evaluation Date"); and

                  c)       presented in this combined annual report our
                           conclusions about the effectiveness of the disclosure
                           controls and procedures based on our evaluation as of
                           the Evaluation Date;

5.       The registrants' other certifying officer and I have disclosed, based
         on our most recent evaluation, to the registrants' auditors and the
         audit committee of the registrants' board of directors (or persons
         performing the equivalent function):

                  a)       all significant deficiencies in the design or
                           operation of internal controls which could adversely
                           affect the registrants' ability to record, process,
                           summarize and report financial data and have
                           identified for the registrants' auditors any material
                           weaknesses in internal controls; and

                  b)       any fraud, whether or not material, that involves
                           management or other employees who have a significant
                           role in the registrants' internal controls; and

6.       The registrants' other certifying officer and I have indicated in this
         combined annual report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

Date: March 25, 2003

                             /s/ Keith A. Istre
                             --------------------------------------------------
                             Keith A. Istre
                             Chief Financial Officer, Lamar Advertising Company
                             Chief Financial Officer, Lamar Media Corp.



                                       72


<PAGE>



                                INDEX TO EXHIBITS

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

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

3.5          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.

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

4.1          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 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.

4.4          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.

4.5          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.

4.6          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.

4.7          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 15, 1996 (File No. 1-12407), and incorporated
             herein by reference.
</Table>



                                       73

<PAGE>
<Table>
<S>          <C>
4.8          Form of Subordinated Note. Previously filed as Exhibit 4.8 to the
             Registration Statement on Form S-1 (File No. 333-05479), and
             incorporated herein by reference.

4.9          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.

4.10         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.

4.11         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.

4.12         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.

4.13         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.

4.14         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.

4.15         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.

4.16         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 as of August 8,
             2000. Previously filed as Exhibit 4.3 to Lamar Advertising
             Company's Quarterly Report on Form 10-Q for the period ended
             September 30, 2000 (File No. 0-30242) filed on November 14, 2000
             and incorporated herein by reference.

4.17         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.
             Previously filed as Exhibit 4.30 to the Company's Annual Report on
             Form 10-K for fiscal year ended December 31, 1999, (File No.
             0-30242), and incorporated herein by reference.

4.18         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 as of August 8,
             2000. 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 14, 2000
             and incorporated herein by reference.

4.19         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 as of June 1,
             2000. Previously filed as Exhibit 4.3 to Lamar Advertising
             Company's Quarterly Report on Form 10-Q for the period ended June
             30, 2000 (File No. 0-30242) filed on August 11, 2000 and
             incorporated herein by reference.

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 as of March 2,
             2000. Previously filed as Exhibit 4.3 to Lamar Advertising
             Company's Quarterly Report on Form 10-Q for the period ended March
             31, 2000 (File No. 0-30242) filed on May 15, 2000 and incorporated
             herein by reference.
</Table>
                                       74

<PAGE>


<Table>
<S>          <C>
4.21         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 as of December 31,
             2000. Previously filed as Exhibit 4.40 to Lamar Advertising
             Company's Annual Report on Form 10-K for the period ended December
             31, 2000 (File No. 0-30242) filed on March 23, 2001 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 as of August 30,
             2001. Previously filed as Exhibit 4.3 to Lamar Advertising
             Company's Quarterly Report on Form 10-Q for the period ended ended
             September 30, 2001 (File No. 0-30242) filed on November 13, 2001
             and incorporated herein by reference.

4.23         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 as of April 9,
             2001. Previously filed as Exhibit 4.3 to Lamar Advertising
             Company's Quarterly Report on Form 10-Q for the period ended June
             30, 2001 (File No. 0-30242) filed on August 13, 2001 and
             incorporated herein by reference.

4.24         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 as of March 15,
             2001. Previously filed as Exhibit 4.3 to Lamar Advertising
             Company's Quarterly Report on Form 10-Q for the period ended March
             31, 2001 (File No. 0-30242) filed on May 14, 2001 and incorporated
             herein by reference.

4.25         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 November 12, 2001.
             Filed as Exhibit 4.3 to Lamar Advertising Company's Quarterly
             Report on Form 10-Q for the period ended March 31, 2002 (File No.
             0-30242) filed on May 9, 2002 and incorporated herein by reference.

4.26         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 August 16, 2002.
             Filed as Exhibit 4.3 to Lamar Advertising Company's Quarterly
             Report on Form 10-Q for the period ended September 30, 2002 (File
             No. 0-30242) filed on November 13, 2002 and incorporated herein by
             reference.

4.27         Indenture dated as of December 23, 2002 among Lamar Media Corp.,
             certain subsidiaries of Lamar Media Corp., as guarantors and
             Wachovia Bank of Delaware, National, as trustee. Filed as Exhibit
             4.1 to Lamar Media's Current Report on Form 8-K filed on December
             27, 2002 (File No. 0-20833) and incorporated herein by reference.

4.28         Form of 7 1/4% Notes Due 2013. Filed as Exhibit 4.2 to Lamar
             Media's Current Report on Form 8-K filed on December 27, 2002 (File
             No. 0-20833) and incorporated herein by reference.

4.29         Registration Rights Agreement dated as of December 23, 2002 among
             Lamar Media Corp., the guarantors listed on Schedule 1 thereto and
             J.P. Morgan Securities Inc., Wachovia Securities, Inc., SunTrust
             Capital Markets, Inc. and BNP Paribas Securities Corp. Filed as
             Exhibit 10.1 to Lamar Media's Current Report on Form 8-K filed on
             December 27, 2002 (File No. 0-20833) and incorporated herein by
             reference.

4.30         Form of Exchange Note. Filed as Exhibit 4.29 to Lamar Media's
             Registration Statement on Form S-4 (File No. 333-102634) and
             incorporated herein by reference.

4.31         Supplemental Indenture to the Indenture dated September 25, 1997
             among Lamar Media Corp., certain of its subsidiaries and the State
             Street Bank and Trust Company, as Trustee, dated as of November 25,
             2002. Filed as Exhibit 4.30 to Lamar Media Corp.'s Registration
             Statement on Form S-4/A (File No. 333-102634) filed on March 18,
             2003 and incorporated herein by reference.

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.

10.3*        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.

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.
</Table>


                                       75

<PAGE>

<Table>
<S>          <C>
10.5*        1996 Equity Incentive Plan. Previously filed as Exhibit 10.2 to the
             Company's Quarterly Report on Form 10-Q (File No. 0-30242), for the
             period ended June 30, 2000 filed on August 11, 2000 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.

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.
</Table>


                                       76

<PAGE>


<Table>
<S>          <C>
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        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.

10.21        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.
             Previously filed as Exhibit 10.23 to the Company's Annual Report on
             Form 10-K for fiscal year ended December 31, 1999, (File No.
             1-12407), and incorporated herein by reference.

10.22*       2000 Employee Stock Purchase Plan. Previously filed as Exhibit 10.3
             to Lamar Advertising Company's Quarterly Report on Form 10-Q for
             the period ended June 30, 2000 (File No. 0-30242) filed on August
             11, 2000 and incorporated herein by reference.

10.23        Series A-1 Incremental Loan Agreement among Lamar Advertising
             Company, Lamar Media Corp. and certain of its subsidiaries, the
             Series A-1 Lenders and the Chase Manhattan Bank, as Administrative
             Agent, dated as of May 31, 2000. Previously filed as exhibit 10.4
             to Lamar Advertising Company's Quarterly Report on Form 10-Q for
             the period ended June 30, 2000 (File No. 0-30242) filed on August
             11, 2000 and incorporated herein by reference.

10.24        Series A-2 and B-1 Incremental Loan Agreement among Lamar
             Advertising Company, Lamar Media Corp. and certain of its
             subsidiaries, the Series A-2 and B-1 Lenders and the Chase
             Manhattan Bank, as Administrative Agent, dated as of June 22, 2000.
             Previously filed as exhibit 10.4 to Lamar Advertising Company's
             Quarterly Report on Form 10-Q for the period ended June 30, 2000
             (File No. 0-30242) filed on August 11, 2000 and incorporated herein
             by reference.

10.25        Amendment No. 1 to Credit Agreement and Guaranty and Pledge
             Agreement dated as of April 10, 2000 in respect of (i) the Credit
             Agreement dated as of August 13, 1999 between Lamar Media Corp.,
             the Subsidiary Guarantors party thereto, the lenders party thereto,
             and The Chase Manhattan Bank, as Administrative Agent, and (ii) the
             Guaranty and Pledge Agreement dated as of September 15, 1999
             between Lamar Advertising Company and The Chase Manhattan Bank.
             Previously filed as Exhibit 10.27 to Lamar Advertising Company's
             Annual Report on Form 10-K for the period ended December 31, 2000
             (File No. 0-30242) filed on March 23, 2001 and incorporated herein
             by reference.

10.26        Amendment No. 2 to Credit Agreement and Guaranty and Pledge
             Agreement dated as of January 30, 2001 in respect of (i) the Credit
             Agreement dated as of August 13, 1999 between Lamar Media Corp.,
             the Subsidiary Guarantors party thereto, the lenders party thereto,
             and The Chase Manhattan Bank, as Administrative Agent, and (ii) the
             Guaranty and Pledge Agreement dated as of September 15, 1999
             between Lamar Advertising Company and The Chase Manhattan Bank.
             Previously filed as Exhibit 10.28 to Lamar Advertising Company's
             Annual Report on Form 10-K for the period ended December 31, 2000
             (File No. 0-30242) filed on March 23, 2001 and incorporated herein
             by reference.

10.27        Joinder Agreement to the Lamar Media Corp. Credit Agreement dated
             August 13, 1999 by Lamar Ohio Outdoor Holding Corp. in favor of The
             Chase Manhattan Bank, as Administrative Agent dated September 13,
             2000. Previously filed as Exhibit 10.1 to the Company's Quarterly
             Report on Form 10-Q for the quarter ended September 30, 2000, (File
             No. 0-30242) filed on November 14, 2000, and incorporated herein by
             reference.

10.28        Joinder Agreement to the Lamar Media Corp. Credit Agreement dated
             August 13, 1999 by Outdoor West, Inc. of Georgia and Outdoor West,
             Inc. of Tennessee in favor of The Chase Manhattan Bank, as
             Administrative Agent dated December 23, 1999. Previously filed as
             Exhibit 10.1 to the Company's Quarterly Report on Form
</Table>



                                       77

<PAGE>
<Table>
<S>          <C>
             10-Q for quarter ended June 30, 2000, (File No. 0-30242) filed on
             August 11, 2000, and incorporated herein by reference.

10.29        Joinder Agreement to the Lamar Media Corp. Credit Agreement dated
             August 13, 1999 by Lamar Advan, Inc. in favor of The Chase
             Manhattan Bank, as Administrative Agent dated March 2, 2000.
             Previously filed as Exhibit 10.1 to the Company's Quarterly Report
             on Form 10-Q for quarter ended March 31, 2000, (File No. 0-30242)
             filed on May 15, 2000, and incorporated herein by reference.

10.30        Joinder Agreement to the Lamar Media Corp. Credit Agreement dated
             August 13, 1999 by Texas Logos, L.P., in favor of The Chase
             Manhattan Bank, as Administrative Agent dated December 31, 2000.
             Previously filed as Exhibit 10.33 to the Company's Annual Report on
             Form 10-K for the year ended December 31, 2000 (File No. 0-30242)
             filed on March 23, 2001 and incorporated herein by reference.

10.31        Amendment No. 3 dated as of December 20, 2001 to the Credit
             Agreement dated as of August 13, 1999 between Lamar Media Corp.,
             the Subsidiary Guarantors party thereto, the lenders party thereto,
             and JPMorgan Chase Bank (formerly known as The Chase Manhattan
             Bank), as Administrative Agent. Filed as Exhibit 10.31 to the
             Company's Annual Report on Form 10-K for the year ended December
             31, 2001 (File No. 0-30242) filed on March 21, 2002 and
             incorporated herein by reference.

10.32        Joinder Agreement to the Lamar Media Corp. Credit Agreement dated
             August 13, 1999 by Maine Logos, L.L.C. in favor of The Chase
             Manhattan Bank, as Administrative Agent dated August 30, 2001.
             Previously filed as Exhibit 10.1 to the Company's Quarterly Report
             on Form 10-Q for the quarter ended September 30, 2001, (File No.
             0-30242) filed on November 13, 2001, and incorporated herein by
             reference.

10.33        Joinder Agreement to the Lamar Media Corp. Credit Agreement dated
             August 13, 1999 by Lamar Bellows Outdoor Advertising, Inc. in favor
             of The Chase Manhattan Bank, as Administrative Agent dated April 9,
             2001. Previously filed as Exhibit 10.1 to the Company's Quarterly
             Report on Form 10-Q for the quarter ended June 30, 2001, (File No.
             0-30242) filed on August 13, 2001, and incorporated herein by
             reference.

10.34        Joinder Agreement to the Lamar Media Corp. Credit Agreement dated
             August 13, 1999 by Lamar Hardy Outdoor Corporation in favor of The
             Chase Manhattan Bank, as Administrative Agent dated March 15, 2001.
             Previously filed as Exhibit 10.1 to the Company's Quarterly Report
             on Form 10-Q for the quarter ended March 31, 2001, (File No.
             0-30242) filed on May 14, 2001, and incorporated herein by
             reference.

10.35        Joinder Agreement dated November 12, 2001 to the Lamar Media Corp.
             Credit Agreement dated August 13, 1999 by Trans West Outdoor
             Advertising, Inc. Filed as Exhibit 10.1 to Lamar Advertising
             Company's Quarterly Report on Form 10-Q for the period ended March
             31, 2002 (File No. 0-30242) filed on May 9, 2002 and incorporated
             herein by reference.

10.36        Series C Incremental Loan Agreement among Lamar Advertising
             Company, Lamar Media Corp. and certain of its subsidiaries, the
             Series C Lenders and JPMorgan Chase Bank, as Administrative Agent,
             dated as of January 8, 2002. Filed as Exhibit 10.2 to Lamar
             Advertising Company's Quarterly Report on Form 10-Q for the period
             ended March 31, 2002 (File No. 0-30242) filed on May 9, 2002 and
             incorporated herein by reference.

10.37        Joinder Agreement dated August 16, 2002 to the Lamar Media Corp.
             Credit Agreement dated August 13, 1999 by Washington Logos L.L.C.
             Filed as Exhibit 10.1 to Lamar Advertising Company's Quarterly
             Report on Form 10-Q for the period ended September 30, 2002 (File
             No. 0-30242) filed on November 13, 2002 and incorporated herein by
             reference.

10.38        Amendment No. 4 dated as of October 23, 2002 in respect of the
             Credit Agreement dated as of August 13, 1999 between Lamar Media
             Corp., the Subsidiary Guarantors party thereto, the Lenders party
             thereto, and JPMorgan Chase Bank (formerly known as The Chase
             Manhattan Bank),as Administrative Agent. Filed as Exhibit 10.2 to
             Lamar Advertising Company's Quarterly Report on Form 10-Q for the
             period ended September 30, 2002 (File No. 0-30242) filed on
             November 13, 2002 and incorporated herein by reference.

10.39        Joinder Agreement dated November 25, 2002 to the Lamar Media Corp.
             Credit Agreement dated August 13, 1999 by Lamar Pinnacle
             Acquisition Co. Filed as Exhibit 10.39 to Lamar Media Corp.'s
             Registration Statement on Form S-4/A (File No. 333-102634) filed on
             March 18, 2003 and incorporated herein by reference.

10.40        Credit Agreement dated as of March 7, 2003 between Lamar Media
             Corp. and the Subsidiary Guarantors party thereto, the Lenders
             party thereto, and JPMorgan Chase Bank, as Administrative Agent.
             Filed as Exhibit 10.38 to Lamar Media Corp.'s Registration
             Statement on Form S-4/A (File No. 333-102634) filed on March 18,
             2003 and incorporated herein by reference.
</Table>
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<PAGE>

<Table>
<S>          <C>
11.1         Statement regarding computation of per share earnings. Filed
             herewith.

12.1         Lamar Advertising Company Computation of Ratio of Earnings
             to Fixed Charges. Filed herewith.

12.2         Lamar Media Corp. Computation of Ratio of Earnings to Fixed
             Charges. Filed herewith.

21.1         Subsidiaries of the Company. Filed herewith.

23.1         Consent of KPMG LLP. Filed herewith.

99.1         Certification pursuant to 18 U.S.C. Section 1350, as adopted
             pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed
             herewith.
</Table>

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



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