##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2006
 o
    
    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.
  Delaware 
Delaware
(State or other jurisdiction of incorporation or organization 
5551 Corporate Blvd., Baton Rouge, LA
(Address of principal executive offices)
    
    72-1449411
72-1205791
I.R.S. Employer Identification No.)
70808
(Zip Code)
  SECURITIES OF LAMAR ADVERTISING COMPANY
REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
  SECURITIES OF LAMAR ADVERTISING COMPANY
REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
  SECURITIES OF LAMAR MEDIA CORP.
REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
  SECURITIES OF LAMAR MEDIA CORP.
REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
  þ o
 o þ
 o þ
 o þ
 þ o
 þ
  þ o o
  o o þ
 o þ
    Class
    
    Outstanding at February 23, 2007Lamar Advertising Company Class A common
 stock, $0.001 par value per share
    
    84,337,579 sharesLamar Advertising Company Class B common
 stock, $0.001 par value per share
    
    15,397,865 sharesLamar Media Corp. common stock, $0.001 par
 value per share
    
    100 shares
 DOCUMENTS INCORPORATED BY REFERENCE
 Document
    
    Parts Into Which IncorporatedProxy Statement for the Annual Meeting of Stockholders to be held on May 24, 2007
    
    Part III(Proxy Statement)
 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.




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TABLE OF CONTENTS  PART IITEM 1. BUSINESSITEM 1A. RISK FACTORSITEM 1B. UNRESOLVED STAFF COMMENTSITEM 2. PROPERTIESITEM 3. LEGAL PROCEEDINGSITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSPART IIITEM 5. MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERSITEM 6. SELECTED FINANCIAL DATAITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 8. FINANCIAL STATEMENTS (following on next page)ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREITEM 9A. CONTROLS AND PROCEDURESITEM 9B. OTHER INFORMATIONPART IIIITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTITEM 11. EXECUTIVE COMPENSATIONITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESPART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULESSIGNATURESINDEX TO EXHIBITS 10-K2000 Employee Stock Purchase PlanStatement re Computation of Per Share Earnings for the CompanyStatement re Computation of Earnings to Fixed Charges for the CompanyStatement re Computation of Earnings to Fixed Charges for Lamar MediaSubsidiariesConsent of KPMG LLPCertification of the CEO Pursuant to Section 302Certification of the CFO Pursuant to Section 302Certification Pursuant to Section 906    Table of Contents  NOTE REGARDING FORWARD-LOOKING STATEMENTS
  
    
    the Companys future financial performance and condition;
    
    the Companys business plans, objectives, prospects, growth and operating strategies;
    
    market opportunities and competitive positions;
    
    estimated risks; and
    
    stock price.
  
    
    national and local economic conditions that may affect the markets in which the Company operates;
    
    the levels of expenditures on advertising in general and outdoor advertising in particular;
    
    increased competition within the outdoor advertising industry;
    
    the regulation of the outdoor advertising industry;
    
    the Companys need for, and ability to obtain, additional funding for acquisitions and operations;
    
    risks and uncertainties relating to the Companys significant indebtedness;
    
    the Companys ability to renew expiring contracts at favorable rates;
    
    the integration of businesses that the Company acquires and its ability to recognize
cost savings and operating efficiencies as a result of these acquisitions;
    
    the Companys ability to successfully implement its digital deployment strategy; and
    
    changes in accounting principles, policies or guidelines.
  INDUSTRY AND MARKET DATA
  2




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PART I
 
 ITEM 1. BUSINESS
 General
  The Companys Business
  Billboards
 
    
    Bulletinsare generally large, illuminated advertising structures that
are located on major highways and target vehicular traffic.
    
    Postersare generally smaller advertising structures that are located
on major traffic arteries and city streets and target vehicular and pedestrian
traffic.
  Logo signs
 
    
    Logo signsgenerally advertise nearby gas, food, camping, lodging and
other attractions.
  Transit advertising displays
 Corporate History
   Where you can find more information
  3




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Operating Strategies
  Continuing to provide high quality local sales and service.
 Continuing a centralized control and decentralized management structure.
 Continuing to focus on internal growth.
  Continuing to pursue strategic acquisitions.
 Continuing to pursue other outdoor advertising opportunities.
 COMPANY OPERATIONS
 Billboard Advertising
  Bulletins
 4




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Posters
  .
    Logo Sign Advertising
   Colorado
    
    Kentucky
    
    Missouri (1)
    
    OklahomaDelaware
    
    Maine
    
    Nebraska
    
    South CarolinaFlorida
    
    Michigan
    
    Nevada
    
    UtahGeorgia
    
    Minnesota
    
    New Jersey
    
    VirginiaKansas
    
    Mississippi
    
    Ohio
 
 (1)
    
    The logo sign contract in Missouri is operated by a 66 2/3% owned
partnership.  5




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##### Table of Contents



.
   Transit Advertising
    COMPETITION
   
    
    Larger outdoor advertising providers, such as (i) Clear Channel Outdoor
Holdings, Inc., which operates billboards, street furniture displays, transit displays and
other out-of-home advertising displays in North America and worldwide and (ii) CBS Outdoor,
a division of CBS Corporation, which operates traditional outdoor, street
furniture and transit advertising properties in North America and worldwide. Clear Channel
Outdoor and CBS Outdoor each have corporate relationships with large media conglomerates
and may have greater total resources, product offerings and opportunities for cross-selling
than we do.
    
    Other forms of media, such as broadcast and cable television, radio, print
media, direct mail marketing, telephone directories and the Internet.
    
    An increasing variety of out-of-home advertising media, such as advertising
displays in shopping centers, malls, airports, stadiums, movie theaters and supermarkets
and advertising displays on taxis, trains and buses.
 6




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CUSTOMERS
  Percentage of Net BillboardCategories
    
    Advertising RevenuesRestaurants
    
    
    10
    %Retailers
    
    
    10
    %Automotive
    
    
    9
    %Real Estate Companies
    
    
    9
    %Health Care
    
    
    7
    %Hotels and Motels
    
    
    6
    %Service
    
    
    6
    %Gaming
    
    
    6
    %Financial  Banks/Credit Unions
    
    
    5
    %Amusement  Entertainment/Sports
    
    
    5
    %73
    %
 REGULATION
     7




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EMPLOYEES
   INFLATION
  SEASONALITY
  8




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##### Table of Contents



ITEM 1A. RISK FACTORS
 The Companys substantial debt may adversely affect its business, financial condition and financial
results.
   
    
    limit the cash flow available to fund the Companys working capital, capital
expenditure or other general corporate requirements;
    
    limit the Companys ability to obtain additional financing to fund future
working capital, capital expenditure or other general corporate requirements;
    
    inhibit the Companys ability to fund or finance an appropriate level of
acquisition activity, which has traditionally been a significant component of the Companys
year-to-year revenue growth;
    
    place the Company at a competitive disadvantage relative to those of its
competitors that have less debt;
    
    make it more difficult for the Company to comply with the financial covenants
in its bank credit facility, which could result in a default and an acceleration of all
amounts outstanding under the facility;
    
    force the Company to seek and obtain alternate or additional sources of
funding, which may be unavailable, or may be on less favorable terms, or may require the
Company to obtain the consent of lenders under its bank credit facility or the holders of
its other debt;
    
    limit the Companys flexibility in planning for, or reacting to, changes in its business and industry;
    
    affect the Companys ability to complete its previously announced stock repurchase programs, and;
    
    increase the Companys vulnerability to general adverse economic and industry conditions.
  Restrictions in the Companys and Lamar Medias debt agreements reduce operating flexibility and
contain covenants and restrictions that create the potential for defaults, which could adversely
affect the Companys business, financial condition and financial results.
  
    
    incur or repay debt;
    
    dispose of assets;
    
    create liens;
    
    make investments;
    
    enter into affiliate transactions; and
    
    pay dividends and make inter-company distributions.
 Managements Discussion and Analysis of Financial Condition
and Results of Operations  Liquidity and Capital Resources
  9




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##### Table of Contents



The Companys revenues are sensitive to general economic conditions and other external events
beyond the Companys control.
  
    
    a decline in general economic conditions, which could reduce national
advertising spending disproportionately;
    
    a decline in economic conditions in specific geographical markets, which could
reduce local advertising spending in those particular markets disproportionately;
    
    a widespread reallocation of advertising expenditures to other available media
by significant users of the Companys displays;
    
    a decline in the amount spent on advertising in general or outdoor advertising
in particular; and
    
    increased regulation of the subject matter, location or operation of outdoor
advertising displays and taxation on outdoor advertising.
 The Companys continued growth through acquisitions may become more difficult, which could
adversely affect the Companys future financial performance.
   
    
    the pool of suitable acquisition candidates is dwindling, and the Company may
have a more difficult time negotiating acquisitions on favorable terms;
    
    the Company may face increased competition for acquisition candidates from
other outdoor advertising companies, some of which have greater financial resources than
the Company, which may result in higher prices for those businesses and assets;
    
    the Company may not have access to the capital needed to finance potential
acquisitions and may be unable to obtain any required consents from its current lenders to
obtain alternate financing;
    
    the Company may be unable to integrate acquired businesses and assets
effectively with its existing operations and systems as a result of unforeseen difficulties
that could divert significant time, attention and effort from management that could
otherwise be directed at developing existing business;
    
    the Company may be unable to retain key personnel of acquired businesses;
    
    the Company may not realize the benefits and cost savings anticipated in its acquisitions; and
    
    as the industry consolidates further, larger mergers and acquisitions may face substantial scrutiny under antitrust laws.
  The Company faces competition from larger and more diversified outdoor advertisers and other forms
of advertising that could hurt its performance.
   10




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We currently have two primary suppliers of the LED digital displays for our digital billboards. If
they cannot meet our requirements for these displays in the future, it could adversely affect our
digital deployment.
  Federal, state and local regulation impact the Companys operations, financial condition and
financial results.
      The Companys logo sign contracts are subject to state award and renewal.
  11




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The Company is controlled by significant stockholders who have the power to determine the outcome
of all matters submitted to the stockholders for approval and whose interest in the Company may be
different than yours.
  
    
    elect the Companys entire board of directors;
    
    control the Companys management and policies; and
    
    determine the outcome of any corporate transaction or other matter requiring
stockholder approval, including charter amendments, mergers, consolidations and asset
sales.
  If the Companys contingency plans relating to hurricanes fail, the resulting losses could hurt the
Companys business.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
   
 ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  12




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##### Table of Contents



PART II
 
 ITEM 5. MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 Lamar Class A Common Stock
   High
    
    LowYear ended December 31, 2005:First Quarter
    
    $
    43.98
    
    
    $
    37.62Second Quarter
    
    
    43.25
    
    
    
    36.63Third Quarter
    
    
    45.97
    
    
    
    39.24Fourth Quarter
    
    
    48.15
    
    
    
    42.80Year ended December 31, 2006:First Quarter
    
    $
    54.20
    
    
    $
    44.99Second Quarter
    
    
    59.83
    
    
    
    49.90Third Quarter
    
    
    54.91
    
    
    
    46.91Fourth Quarter
    
    
    66.42
    
    
    
    51.46
   Issuer Purchases of Equity Securities
   (d)(c)
    
    
    Approximate DollarTotal No. of Shares
    
    
    Value of Shares that(a)
    
    
    (b)
    
    
    Purchased as Part of
    
    
    May Yet Be PurchasedTotal No. of Shares
    
    
    Average Price Paid per
    
    
    Publicly Announced
    
    
    Under the Plans orPeriod
    
    Purchased
    
    
    Share
    
    
    Plans or Programs
    
    
    ProgramsOctober 1 through
    
    
    305,696
    
    
    $
    53.83
    
    
    
    305,696
    
    
    $
    214,303,395October 31, 2006November 1 through
    
    
    1,940,650
    
    
    $
    58.48
    
    
    
    1,940,650
    
    
    $
    100,823,134November 30, 2006December 1 through
    
    
    2,500
    
    
    $
    59.53
    
    
    
    2,500
    
    
    $
    100,674,309December 31, 2006
 
 (1)
    
    On September 28, 2006, the Company entered into a written repurchase plan with its broker under Rule 10b5-1 of the Exchange Act.
This plan allowed the Company to repurchase shares (as set forth in the plan) under the repurchase program during the
Companys self-imposed blackout period. 13




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ITEM 6. SELECTED FINANCIAL DATA
 Lamar Advertising Company
 
 2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002Net revenues
    
    $
    1,120,091
    
    
    $
    1,021,656
    
    
    $
    883,510
    
    
    $
    810,139
    
    
    $
    775,682Operating expenses:Direct advertising expenses
    
    
    390,561
    
    
    
    353,139
    
    
    
    302,157
    
    
    
    292,017
    
    
    
    274,772General and administrative expenses
    
    
    248,937
    
    
    
    212,727
    
    
    
    188,320
    
    
    
    171,520
    
    
    
    167,182Depreciation and amortization
    
    
    301,685
    
    
    
    290,089
    
    
    
    294,056
    
    
    
    284,947
    
    
    
    271,832Gain on disposition of assets
    
    
    (10,862
    )
    
    
    (1,119
    )
    
    
    (1,067
    )
    
    
    (1,946
    )
    
    
    (336
    )Total operating expenses
    
    
    930,321
    
    
    
    854,836
    
    
    
    783,466
    
    
    
    746,538
    
    
    
    713,450Operating income
    
    
    189,770
    
    
    
    166,820
    
    
    
    100,044
    
    
    
    63,601
    
    
    
    62,232Other expense (income):Loss on extinguishment of debt
    
    
    
    
    
    
    3,982
    
    
    
    
    
    
    
    33,644
    
    
    
    5,850Interest income
    
    
    (1,311
    )
    
    
    (1,511
    )
    
    
    (495
    )
    
    
    (502
    )
    
    
    (929
    )Interest expense
    
    
    112,955
    
    
    
    90,671
    
    
    
    76,079
    
    
    
    93,787
    
    
    
    113,333Total other expense
    
    
    111,644
    
    
    
    93,142
    
    
    
    75,584
    
    
    
    126,929
    
    
    
    118,254Income (loss) before income taxes and cumulative
effect of a change in accounting principle
    
    
    78,126
    
    
    
    73,678
    
    
    
    24,460
    
    
    
    (63,328
    )
    
    
    (56,022
    )Income tax expense (benefit)
    
    
    34,227
    
    
    
    31,899
    
    
    
    11,305
    
    
    
    (23,573
    )
    
    
    (19,694
    )Income (loss) before cumulative effect of a change in
change in accounting principle
    
    
    43,899
    
    
    
    41,779
    
    
    
    13,155
    
    
    
    (39,755
    )
    
    
    (36,328
    )Cumulative effect of a change in accounting
principle, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,240
    
    
    
    Net income (loss)
    
    
    43,899
    
    
    
    41,779
    
    
    
    13,155
    
    
    
    (79,995
    )
    
    
    (36,328
    )Preferred stock dividends
    
    
    365
    
    
    
    365
    
    
    
    365
    
    
    
    365
    
    
    
    365Net income (loss) applicable to common stock
    
    $
    43,534
    
    
    $
    41,414
    
    
    $
    12,790
    
    
    $
    (80,360
    )
    
    $
    (36,693
    )Income (loss) per common share  basic
and diluted:Income (loss) before cumulative effect of a change
in accounting principle
    
    $
    0.42
    
    
    $
    0.39
    
    
    $
    0.12
    
    
    $
    (0.39
    )
    
    $
    (0.36
    )Cumulative effect of a change in accounting
principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.39
    )
    
    
    Net income (loss)
    
    $
    0.42
    
    
    $
    0.39
    
    
    $
    0.12
    
    
    $
    (0.78
    )
    
    $
    (0.36
    )Statement of Cash Flow Data:Cash flows provided by operating activities (1)
    
    $
    364,517
    
    
    $
    347,257
    
    
    $
    323,164
    
    
    $
    260,075
    
    
    $
    240,443Cash flows used in investing activities (1)
    
    $
    438,896
    
    
    $
    267,970
    
    
    $
    263,747
    
    
    $
    210,041
    
    
    $
    155,763Cash flows provided by (used in) financing
activities (1)
    
    $
    66,973
    
    
    $
    (104,069
    )
    
    $
    (23,013
    )
    
    $
    (57,847
    )
    
    $
    (81,955
    )Balance Sheet Data(1) (2)Cash and cash equivalents
    
    $
    11,796
    
    
    $
    19,419
    
    
    $
    44,201
    
    
    $
    7,797
    
    
    $
    15,610Cash deposit for debt extinguishment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    266,657Working capital
    
    
    119,791
    
    
    
    93,816
    
    
    
    34,476
    
    
    
    69,902
    
    
    
    95,922Total assets
    
    
    3,924,228
    
    
    
    3,741,234
    
    
    
    3,692,282
    
    
    
    3,669,514
    
    
    
    3,888,168Total debt (including current maturities)
    
    
    1,990,468
    
    
    
    1,576,326
    
    
    
    1,659,934
    
    
    
    1,704,863
    
    
    
    1,994,433Total long-term obligations
    
    
    2,274,716
    
    
    
    1,826,138
    
    
    
    1,805,021
    
    
    
    1,905,497
    
    
    
    1,856,372Stockholders equity
    
    
    1,538,533
    
    
    
    1,817,482
    
    
    
    1,736,347
    
    
    
    1,689,661
    
    
    
    1,709,173
 
 (1)
    
    As of the end of the period.(2)
    
    Certain balance sheet reclassifications were made in order to be comparable to the current year
presentation. 14




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 This report contains forward-looking statements. These statements are subject to risks and
uncertainties including those described in Item 1A under the heading Risk Factors, and elsewhere
in this report, that could cause actual results to differ materially from those projected in these
forward-looking statements. The Company cautions investors not to place undue reliance on the
forward-looking statements contained in this document. These statements speak only as of the date
of this document, and the Company undertakes no obligation to update or revise the statements,
except as may be required by law.
 Lamar Advertising Company
  OVERVIEW
    In Thousands2006
    
    
    2005
    
    
    2004Billboard  Traditional
    
    $
    75,501
    
    
    $
    85,886
    
    
    $
    53,216Billboard  Digital
    
    
    81,270
    
    
    
    2,607
    
    
    
    3,979Logos
    
    
    8,978
    
    
    
    7,249
    
    
    
    6,320Transit
    
    
    1,119
    
    
    
    1,057
    
    
    
    1,190Land and buildings
    
    
    34,384
    
    
    
    13,966
    
    
    
    10,896PP&E
    
    
    22,098
    
    
    
    10,352
    
    
    
    6,430Total capital expenditures
    
    $
    223,350
    
    
    $
    121,117
    
    
    $
    82,031
  15




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RESULTS OF OPERATIONS
  Year ended December 31,2006
    
    
    2005
    
    
    2004Net revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Operating expenses:Direct advertising expenses
    
    
    34.9
    
    
    
    34.6
    
    
    
    34.2General and administrative expenses
    
    
    17.7
    
    
    
    17.2
    
    
    
    17.9Corporate expenses
    
    
    4.5
    
    
    
    3.6
    
    
    
    3.4Depreciation and amortization
    
    
    26.9
    
    
    
    28.4
    
    
    
    33.3Operating income
    
    
    16.9
    
    
    
    16.3
    
    
    
    11.3Interest expense
    
    
    10.1
    
    
    
    8.9
    
    
    
    8.6Net income
    
    
    3.9
    
    
    
    4.1
    
    
    
    1.5
 Year ended December 31, 2006 compared to Year ended December 31, 2005
           16




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Reconciliations:
    Comparison of 2006 Net Revenue to 2005 Acquisition-Adjusted Net Revenue
 Year endedDecember 31,2006
    
    
    2005(in thousands)Reported net revenue
    
    $
    1,120,091
    
    
    $
    1,021,656Acquisition net revenue
    
    
    
    
    
    
    18,490Adjusted totals
    
    $
    1,120,091
    
    
    $
    1,040,146
 17




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##### Table of Contents



Year ended December 31, 2005 compared to Year ended December 31, 2004
           Reconciliations:
   18




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Reconciliation of Reported Net Revenue to Acquisition-Adjusted Net Revenue
 Year endedDecember 31,2004(in thousands)Reported net revenue
    
    $
    883,510Acquisition net revenue, excluding the Obie markets
    
    
    32,120Acquisition-adjusted net revenue
    
    $
    915,630
 Reconciliation of Reported Net Revenue to Net Revenue (excluding revenues from the Obie
markets)
 Year endedDecember 31,2005(in thousands)Reported net revenue
    
    $
    1,021,656Less net revenue  Obie markets
    
    
    (46,261
    )Net revenue (excluding the Obie markets)
    
    $
    975,395
 Comparison of 2005 Net Revenue (excluding revenues from the Obie markets) to 2004
Acquisition-Adjusted Net Revenue
 Year endedDecember 31,2005
    
    
    2004(in thousands)Reported net revenue
    
    $
    1,021,656
    
    
    $
    883,510Acquisition net revenue, excluding the Obie markets
    
    
    
    
    
    
    32,120Less net revenue  Obie markets
    
    
    (46,261
    )
    
    
    Adjusted totals
    
    $
    975,395
    
    
    $
    915,630
 19




---



##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
 Overview
  Sources of Cash
 Total Liquidity at December 31, 2006
 Cash Generated by Operations
 Credit Facilities
    Proceeds from the Sale of Debt and Equity Securities
   20




---



##### Table of Contents



Factors Affecting Sources of Liquidity
 Internally Generated Funds.
 Restrictions Under Credit Facilities and Other Debt Securities.
 
    
    up to $1.3 billion of indebtedness under its bank credit facility;
    
    currently outstanding indebtedness or debt incurred to refinance outstanding debt;
    
    inter-company debt between Lamar Media and its subsidiaries or between subsidiaries;
    
    certain purchase money indebtedness and capitalized lease obligations to acquire or lease
property in the ordinary course of business that cannot exceed the greater of $20 million or
5% of Lamar Medias net tangible assets; and
    
    additional debt not to exceed $40 million.
   
    
    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 September 30, 2007 and 5.75 to 1 from October 1, 2007 and after; and
    
    a senior debt ratio, defined as total consolidated senior debt to EBITDA (as defined below) for
the most recent four fiscal
quarters, of 3.25 to 1.
  
    
    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
    
    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 plus (2) capital expenditures made during such period plus (3) income and
franchise tax payments made during such period, of at least 1.05 to 1.
   21




---



##### Table of Contents



Uses of Cash
 Capital Expenditures.
 Acquisitions.
 Stock Repurchase Program.
  Special
Cash Dividend.
 Debt Service and Contractual Obligations.
 Payments Due by Period(in millions)Less than 1Contractual Obligations
    
    Total
    
    
    Year
    
    
    1  3 Years
    
    
    4  5 Years
    
    
    After 5 YearsLong-Term Debt
    
    
    1,990.5
    
    
    
    8.6
    
    
    
    77.7
    
    
    
    539.2
    
    
    
    1,365.0Interest
obligations on long term debt (1)
    
    
    834.8
    
    
    
    127.8
    
    
    
    256.9
    
    
    
    227.9
    
    
    
    222.2Billboard site and other operating leases
    
    
    1,143.1
    
    
    
    146.8
    
    
    
    234.1
    
    
    
    177.4
    
    
    
    584.8Total payments due
    
    
    3,968.4
    
    
    
    283.2
    
    
    
    568.7
    
    
    
    944.5
    
    
    
    2,172.0
 
 (1)
    
    Interest rates on our variable rate instruments are assuming
rates at the December 2006
levels. Amount of Expiration Per Period(in millions)Total Amount
    
    
    Less than 1Other Commercial Commitments
    
    Committed
    
    
    Year
    
    
    1  3 Years
    
    
    4  5 Years
    
    
    After 5 YearsRevolving Bank Facility(2)
    
    
    400.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    400.0Standby Letters of Credit (3)
    
    
    11.5
    
    
    
    0.5
    
    
    
    11.0
    
    
    
    
    
    
    
    
 
 (2)
    
    Lamar Media had $100 million outstanding at
December 31, 2006.(3)
    
    The standby letters of credit are issued under Lamar Medias revolving bank facility
and reduce the availability of the facility by the same amount. 22




---



##### Table of Contents



Cash Flows
    CRITICAL ACCOUNTING ESTIMATES
  Long-Lived Asset Recovery.
 Intangible Assets.
 Goodwill Impairment.
 Deferred Taxes.
 23




---



##### Table of Contents



Asset Retirement Obligations. Accounting for Asset Retirement
Obligations
  Stock-based
Compensation.
 Allowance for Doubtful Accounts.
 NEW ACCOUNTING PRONOUNCEMENTS
 Fair Value
Measurements
 Considering the
Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements,
 Accounting for Uncertainty in Income
Taxesan interpretation of FASB Statement No. 109 Accounting for Income Taxes
 24




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##### Table of Contents



Lamar Media Corp.
  RESULTS OF OPERATIONS
  Year ended December 31,2006
    
    2005
    
    2004Net revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Operating expenses:Direct advertising expenses
    
    
    34.9
    
    
    
    34.6
    
    
    
    34.2General and administrative expenses
    
    
    17.7
    
    
    
    17.2
    
    
    
    17.9Corporate expenses
    
    
    4.4
    
    
    
    3.5
    
    
    
    3.4Depreciation and amortization
    
    
    26.9
    
    
    
    28.4
    
    
    
    33.3Operating income
    
    
    17.0
    
    
    
    16.4
    
    
    
    11.4Interest expense
    
    
    9.9
    
    
    
    8.0
    
    
    
    7.3Net income (loss)
    
    
    4.0
    
    
    
    4.6
    
    
    
    2.7
 Year ended December 31, 2006 compared to Year ended December 31, 2005
           26




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##### Table of Contents



Reconciliations:
    Comparison of 2006 Net Revenue to 2005 Acquisition-Adjusted Net Revenue
 Year endedDecember 31,2006
    
    
    2005(in thousands)Reported net revenue
    
    $
    1,120,091
    
    
    $
    1,021,656Acquisition net revenue
    
    
    
    
    
    
    18,490Adjusted totals
    
    $
    1,120,091
    
    
    $
    1,040,146
 Year ended December 31, 2005 compared to Year ended December 31, 2004
         27




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##### Table of Contents



Reconciliations:
    Reconciliation of Reported Net Revenue to Acquisition-Adjusted Net Revenue
 Year endedDecember 31,2004(in thousands)Reported net revenue
    
    $
    883,510Acquisition net revenue, excluding the Obie markets
    
    
    32,120Acquisition-adjusted net revenue
    
    $
    915,630
 Reconciliation of Reported Net Revenue to Net Revenue (excluding revenues from the Obie markets)
 Year endedDecember 31,2005(in thousands)Reported net revenue
    
    $
    1,021,656Less net revenue  Obie markets
    
    
    (46,261
    )Net revenue (excluding the Obie markets)
    
    $
    975,395
 Comparison of 2005 Net Revenue (excluding revenues from the Obie markets) to 2004
Acquisition-Adjusted Net Revenue
 Year endedDecember 31,2005
    
    
    2004(in thousands)Reported net revenue
    
    $
    1,021,656
    
    
    $
    883,510Acquisition net revenue, excluding the Obie markets
    
    
    
    
    
    
    32,120Less net revenue  Obie markets
    
    
    (46,261
    )
    
    
    Adjusted totals
    
    $
    975,395
    
    
    $
    915,630
 28




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##### Table of Contents



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Lamar Advertising Company and Lamar Media Corp.
     
 ITEM 8. FINANCIAL STATEMENTS (following on next page)
 29




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##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
 Managements Report on Internal Control over Financial Reporting
    
    
    31Report of
Independent Registered Public Accounting Firm  Internal Control over Financial Reporting
    
    
    32Report of
Independent Registered Public Accounting Firm  Consolidated Financial Statements
    
    
    33Consolidated Balance Sheets as of December 31, 2006 and 2005
    
    
    34Consolidated Statements of Operations for the years ended December 31, 2006, 2005 and 2004
    
    
    35Consolidated
Statements of Stockholders Equity and Comprehensive Income for the years ended December 31, 2006, 2005 and
2004
    
    
    36Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004
    
    
    37Notes to Consolidated Financial Statements
    
    
    38  56Schedule 2  Valuation and Qualifying Accounts for the years ended December 31, 2006, 2005 and 2004
    
    
    57
 30




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##### Table of Contents



Managements Report on Internal Control Over Financial Reporting
    31




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
 .
    . .
  /s/
KPMG LLP

KPMG LLPNew Orleans, LouisianaFebruary 28, 2007
 32




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
    Share-Based Payment.
 .
 /s/ KPMG LLP

KPMG LLPNew Orleans, Louisiana
February 28, 2007
 33




---



##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2006 and 2005
 2006
    
    
    2005ASSETSCurrent assets:Cash and cash equivalents
    
    $
    11,796
    
    
    $
    19,419Receivables, net of allowance for doubtful accounts of $6,400 and $6,000 in 2006 and 2005
    
    
    127,552
    
    
    
    114,733Prepaid expenses
    
    
    38,215
    
    
    
    35,763Deferred income tax assets (note 11)
    
    
    34,224
    
    
    
    7,128Other current assets
    
    
    18,983
    
    
    
    14,387Total current assets
    
    
    230,770
    
    
    
    191,430Property, plant and equipment (note 4)
    
    
    2,432,977
    
    
    
    2,191,443Less accumulated depreciation and amortization
    
    
    (1,027,029
    )
    
    
    (902,138
    )Net property, plant and equipment
    
    
    1,405,948
    
    
    
    1,289,305Goodwill (note 5)
    
    
    1,357,706
    
    
    
    1,295,050Intangible assets (note 5)
    
    
    860,850
    
    
    
    896,943Deferred financing costs net of accumulated amortization of $27,143 and $22,350
at 2006 and 2005, respectively
    
    
    25,990
    
    
    
    26,549Other assets
    
    
    42,964
    
    
    
    41,957Total assets
    
    $
    3,924,228
    
    
    $
    3,741,234LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Trade accounts payable
    
    $
    14,567
    
    
    $
    13,730Current maturities of long-term debt (note 8)
    
    
    8,648
    
    
    
    2,788Accrued expenses (note 7)
    
    
    69,940
    
    
    
    66,151Deferred income
    
    
    17,824
    
    
    
    14,945Total current liabilities
    
    
    110,979
    
    
    
    97,614Long-term debt (note 8)
    
    
    1,981,820
    
    
    
    1,573,538Deferred income tax liabilities (note 11)
    
    
    140,019
    
    
    
    107,696Asset retirement obligation (note 9)
    
    
    141,503
    
    
    
    135,538Other liabilities
    
    
    11,374
    
    
    
    9,366Total liabilities
    
    
    2,385,695
    
    
    
    1,923,752Stockholders equity (note 13):Series AA preferred stock, par value $.001, $63.80 cumulative dividends,
authorized 5,720 shares; 5,720 shares issued and outstanding at 2006 and 2005
    
    
    
    
    
    
    Class A preferred stock, par value $638, $63.80 cumulative dividends, 10,000
shares authorized, 0 shares issued and outstanding at 2006 and 2005
    
    
    
    
    
    
    Class A common stock, par value $.001, 175,000,000 shares authorized,
91,796,429 and 90,409,282 shares issued and outstanding at 2006 and 2005, respectively
    
    
    92
    
    
    
    90Class B common stock, par value $.001, 37,500,000 shares
 authorized, 15,397,865 and 15,672,527 are
issued and outstanding at 2006 and 2005, respectively
    
    
    15
    
    
    
    16Additional paid-in-capital
    
    
    2,250,716
    
    
    
    2,196,691Accumulated comprehensive income
    
    
    2,253
    
    
    
    Accumulated deficit
    
    
    (315,072
    )
    
    
    (353,793
    )Cost of shares held in treasury, 7,460,750 shares and 544,770 shares in 2006 and 2005, respectively
    
    
    (399,471
    )
    
    
    (25,522
    )Stockholders equity
    
    
    1,538,533
    
    
    
    1,817,482Total liabilities and stockholders equity
    
    $
    3,924,228
    
    
    $
    3,741,234
  34




---



##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Consolidated Statements of Operations
Years Ended December 31, 2006, 2005 and 2004
 2006
    
    
    2005
    
    
    2004Net revenues
    
    $
    1,120,091
    
    
    $
    1,021,656
    
    
    $
    883,510Operating expenses (income):Direct advertising expenses (exclusive of depreciation and amortization)
    
    
    390,561
    
    
    
    353,139
    
    
    
    302,157General and
administrative expenses (exclusive of depreciation and amortization)
    
    
    198,187
    
    
    
    176,099
    
    
    
    158,161Corporate expenses (exclusive of depreciation and amortization)
    
    
    50,750
    
    
    
    36,628
    
    
    
    30,159Depreciation and amortization (Note 10)
    
    
    301,685
    
    
    
    290,089
    
    
    
    294,056Gain on disposition of assets
    
    
    (10,862
    )
    
    
    (1,119
    )
    
    
    (1,067
    )930,321
    
    
    
    854,836
    
    
    
    783,466Operating income
    
    
    189,770
    
    
    
    166,820
    
    
    
    100,044Other expense (income):Loss on extinguishment of debt
    
    
    
    
    
    
    3,982
    
    
    
    Interest income
    
    
    (1,311
    )
    
    
    (1,511
    )
    
    
    (495
    )Interest expense
    
    
    112,955
    
    
    
    90,671
    
    
    
    76,079111,644
    
    
    
    93,142
    
    
    
    75,584Income before income tax expense
    
    
    78,126
    
    
    
    73,678
    
    
    
    24,460Income tax expense (note 11)
    
    
    34,227
    
    
    
    31,899
    
    
    
    11,305Net income
    
    
    43,899
    
    
    
    41,779
    
    
    
    13,155Preferred stock dividends
    
    
    365
    
    
    
    365
    
    
    
    365Net income applicable to common stock
    
    $
    43,534
    
    
    $
    41,414
    
    
    $
    12,790Earnings per share:Basic earnings per share
    
    $
    0.42
    
    
    $
    0.39
    
    
    $
    0.12Diluted earnings per share
    
    $
    0.42
    
    
    $
    0.39
    
    
    $
    0.12Weighted average common shares outstanding
    
    
    102,720,744
    
    
    
    105,605,873
    
    
    
    104,041,030Incremental common shares from dilutive stock options
    
    
    774,778
    
    
    
    483,884
    
    
    
    530,453Incremental common shares from convertible debt
    
    
    
    
    
    
    
    
    
    
    Weighted average common shares assuming dilution
    
    
    103,495,522
    
    
    
    106,089,757
    
    
    
    104,571,483
  35




---



##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Consolidated Statements of Stockholders Equity and
Comprehensive Income
Years Ended December 31, 2006, 2005 and 2004
 SERIES AA
    
    
    CLASS A
    
    
    CLASS A
    
    
    CLASS B
    
    
    
    
    
    
    ADDL
    
    
    ACCUMULATEDPREF
    
    
    PREF
    
    
    CMN
    
    
    CMN
    
    
    TREASURY
    
    
    PAID IN
    
    
    COMPREHENSIVE
    
    
    ACCUMULATEDSTOCK
    
    
    STOCK
    
    
    STOCK
    
    
    STOCK
    
    
    STOCK
    
    
    CAPITAL
    
    
    INCOME
    
    
    DEFICIT
    
    
    TOTALBalance, December 31, 2003
    
    $
    
    
    
    
    
    
    
    
    87
    
    
    
    16
    
    
    
    
    
    
    
    2,097,555
    
    
    
    
    
    
    
    (407,997
    )
    
    
    1,689,661Issuance of 68,986 shares of
common stock in acquisitions
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    4,271
    
    
    
    
    
    
    
    
    
    
    
    4,272Exercise of 865,443 shares of
stock options
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    27,369
    
    
    
    
    
    
    
    
    
    
    
    27,370Conversion of 474,546 shares
of Class B common stock
to Class A stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of 66,692 shares of
common stock through
employee purchase plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,254
    
    
    
    
    
    
    
    
    
    
    
    2,254Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,155
    
    
    
    13,155Dividends ($63.80 per
preferred share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (365
    )
    
    
    (365
    )Balance, December 31, 2004
    
    $
    
    
    
    
    
    
    
    
    89
    
    
    
    16
    
    
    
    
    
    
    
    2,131,449
    
    
    
    
    
    
    
    (395,207
    )
    
    
    1,736,347Issuance of 1,026,413 shares
of common stock in
acquisitions
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    43,313
    
    
    
    
    
    
    
    
    
    
    
    43,314Exercise of 552,781 shares of
stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,151
    
    
    
    
    
    
    
    
    
    
    
    19,151Issuance of 78,194 shares of
common stock through
employee purchase plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,778
    
    
    
    
    
    
    
    
    
    
    
    2,778Purchase of 544,770 shares
of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25,522
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25,522
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,779
    
    
    
    41,779Dividends ($63.80 per
preferred share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (365
    )
    
    
    (365
    )Balance, December 31, 2005
    
    $
    
    
    
    
    
    
    
    
    90
    
    
    
    16
    
    
    
    (25,522
    )
    
    
    2,196,691
    
    
    
    
    
    
    
    (353,793
    )
    
    
    1,817,482Cumulative effect due to
adoption of SAB108
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,813
    )
    
    
    (4,813
    )Non-cash compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,906
    
    
    
    
    
    
    
    
    
    
    
    17,906Exercise of 1,033,596 shares
of stock options
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    32,806
    
    
    
    
    
    
    
    
    
    
    
    32,807Issuance of 78,889 shares of
common stock through
employee purchase plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,313
    
    
    
    
    
    
    
    
    
    
    
    3,313Conversion of 274,662
shares of Class B common
stock to Class A common
stock
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchase of 6,915,980 shares
of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (373,949
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (373,949
    )Comprehensive
income:Foreign
currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,253
    
    
    
    
    
    
    
    2,253Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,899
    
    
    
   43,899Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46,152Dividends ($63.80 per
preferred share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (365
    )
    
    
    (365
    )Balance, December 31, 2006
    
    $
    
    
    
    
    
    
    
    
    92
    
    
    
    15
    
    
    
    (399,471
    )
    
    
    2,250,716
    
    
    
    2,253
    
    
    
    (315,072
    )
    
    
    1,538,533
  36




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##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years Ended December 31, 2006, 2005 and 2004
 2006
    
    
    2005
    
    
    2004Cash flows from operating activities:Net income
    
    $
    43,899
    
    
    $
    41,779
    
    
    $
    13,155Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    301,685
    
    
    
    287,212
    
    
    
    294,056Non-cash compensation
    
    
    17,906
    
    
    
    
    
    
    
    Amortization included in interest expense
    
    
    4,793
    
    
    
    5,335
    
    
    
    5,330Gain on disposition of assets
    
    
    (10,862
    )
    
    
    (1,119
    )
    
    
    (1,067
    )Loss on extinguishment of debt
    
    
    
    
    
    
    3,982
    
    
    
    Deferred income tax expenses
    
    
    6,364
    
    
    
    23,852
    
    
    
    7,748Provision for doubtful accounts
    
    
    6,287
    
    
    
    6,674
    
    
    
    7,772Changes in operating assets and liabilities:(Increase) decrease in:Receivables
    
    
    (17,583
    )
    
    
    (24,915
    )
    
    
    (4,824
    )Prepaid expenses
    
    
    (4,780
    )
    
    
    (448
    )
    
    
    (2,509
    )Other assets
    
    
    2,145
    
    
    
    (7,408
    )
    
    
    (3,556
    )Increase (decrease) in:Trade accounts payable
    
    
    837
    
    
    
    3,318
    
    
    
    1,600Accrued expenses
    
    
    11,004
    
    
    
    10,155
    
    
    
    5,693Other liabilities
    
    
    2,822
    
    
    
    (1,160
    )
    
    
    (234
    )Cash flows provided by operating activities
    
    
    364,517
    
    
    
    347,257
    
    
    
    323,164Cash flows from investing activities:Capital expenditures
    
    
    (223,350
    )
    
    
    (121,117
    )
    
    
    (82,031
    )Acquisitions
    
    
    (227,649
    )
    
    
    (145,228
    )
    
    
    (189,540
    )Increase in notes receivable
    
    
    (1,331
    )
    
    
    (7,175
    )
    
    
    Proceeds from sale of property and equipment
    
    
    13,434
    
    
    
    5,550
    
    
    
    7,824Cash flows used in investing activities
    
    
    (438,896
    )
    
    
    (267,970
    )
    
    
    (263,747
    )Cash flows from financing activities:Net proceeds from issuance of common stock
    
    
    35,236
    
    
    
    18,672
    
    
    
    23,806Cash used for purchase of treasury shares
    
    
    (373,949
    )
    
    
    (25,522
    )
    
    
    Principle payments on long-term debt
    
    
    (2,303
    )
    
    
    (485,539
    )
    
    
    (44,928
    )Debt issuance costs
    
    
    (4,328
    )
    
    
    (5,315
    )
    
    
    (1,526
    )Net proceeds from note offerings and new notes payable
    
    
    412,682
    
    
    
    394,000
    
    
    
    Dividends
    
    
    (365
    )
    
    
    (365
    )
    
    
    (365
    )Cash flows provided by (used in) financing activities
    
    
    66,973
    
    
    
    (104,069
    )
    
    
    (23,013
    )Effect of exchange rate changes in cash and cash equivalents
    
    
    (217
    )
    
    
    
    
    
    
    Net (decrease) increase in cash and cash equivalents
    
    
    (7,623
    )
    
    
    (24,782
    )
    
    
    36,404Cash and cash equivalents at beginning of period
    
    
    19,419
    
    
    
    44,201
    
    
    
    7,797Cash and cash equivalents at end of period
    
    $
    11,796
    
    
    $
    19,419
    
    
    $
    44,201Supplemental disclosures of cash flow information:Cash paid for interest
    
    $
    97,711
    
    
    $
    78,097
    
    
    $
    69,922Cash paid for state and federal income taxes
    
    $
    28,471
    
    
    $
    3,365
    
    
    $
    1,946Common stock issuance related to acquisitions
    
    $
    
    
    
    $
    43,314
    
    
    $
    4,270
  37




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##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
  (a)
    
    Nature of BusinessLamar Advertising Company (the Company)
is engaged in the outdoor advertising
business operating approximately
151,000 billboard advertising displays
in 44 states, Canada and Puerto Rico.
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 19 states
throughout the United States and Canada
and a transit advertising business in
73 markets. 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. The Company
provides transit advertising on bus
shelters, benches and buses in the
markets it serves.(b)
    
    Principles of ConsolidationThe 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 EquipmentProperty, 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 AssetsUnder Statement of Financial Accounting
Standards (SFAS) No. 142, (SFAS No. 142) Goodwill and
Other Intangibles
Goodwill is subject to an annual
impairment test. The Company
designated December 31 as the date of
its annual goodwill impairment test.
If an event occurs or circumstances
change that would more likely than not
reduce the fair value of a reporting
unit below its carrying value, an
interim impairment test would be
performed between annual tests. In
accordance with the standard, the
Company is 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. The Company is
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 exceeds 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 its annual impairment test
dates on December 31, 2006 and December
31, 2005 therefore the Company was not
required to recognize an impairment
loss.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.(e)
    
    Impairment of Long-Lived AssetsLong-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.
 38




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##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 (f)
    
    Deferred IncomeDeferred 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 RecognitionThe Company recognizes outdoor advertising revenue, net of agency
commissions, if any, on an accrual basis ratably over the term of the
contracts, as services are provided. Production revenue and the
related expense for the advertising copy are recognized upon
completion of the sale.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 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:
 2006
    
    2005
    
    2004Net revenues
    
    $
    5,461
    
    
    
    5,766
    
    
    
    5,490Direct advertising expenses
    
    
    2,802
    
    
    
    2,972
    
    
    
    3,124General and administrative expenses
    
    
    2,645
    
    
    
    2,521
    
    
    
    2,002
 (h)
    
    Income TaxesThe 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 ShareEarnings 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
5,581,755 for the years ended December 31, 2006 and 2005 and
2004.(j)
    
    Stock Option PlanEffective January 1, 2006, we adopted the provisions of
Statement of Financial Accounting Standards No. 123(R),
Share-Based Payment,and related interpretations, or SFAS
123(R), to account for stock-based compensation using the
modified prospective transition method and therefore will not
restate our prior period results. SFAS 123(R) supersedes
Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees, or APB No. 25, and revises
guidance in SFAS 123, Accounting for Stock-Based
Compensation. Among other things, SFAS 123(R) requires that
compensation expense be recognized in the financial
statements for share-based awards based on the grant date
fair value of those awards. The modified prospective
transition method applies to (a) unvested stock options under
our 1996 Equity Incentive Plan (1996 Plan) at December 31,
2005 and issuances under our Employee Stock Purchase Plan
(ESPP) outstanding based on the grant date fair value
estimated in accordance with the pro forma provisions of SFAS
123, and (b) any new share-based awards granted subsequent to
December 31, 2005, based on the grant-date fair value
estimated in accordance with the provisions of SFAS 123(R).
Additionally, stock-based compensation expense includes an
estimate for pre-vesting forfeitures and is recognized over
the requisite service periods of the awards on a
straight-line basis, which is generally commensurate with the
vesting term. Non-cash compensation expense recognized during
the year ended December 31, 2006 is $17,906 which consists of
$7,561 resulting from the Companys adoption of SFAS 123(R)
and $10,345 related to stock grants, which were made under
the Companys performance-based stock incentive program in
2006. See Note 14 for information on the assumptions we used
to calculate the fair value of stock-based compensation.
 39




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##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 (j)
    
    Stock Option Plan (continued)Prior to January 1, 2006, we accounted for these stock-based
compensation plans in accordance with APB No. 25 and related
interpretations. Accordingly, compensation expense for a stock option
grant was recognized only if the exercise price was less than the
market value of our Class A common stock on the grant date.
Compensation expense was not recognized under our ESPP as the purchase
price of the stock issued thereunder was not less than 85% of the
lower of the fair market value of our common stock at the beginning of
each offering period or at the end of each purchase period under the
plan. Prior to our adoption of SFAS 123(R), as required under the
disclosure provisions of SFAS 123, as amended, we provided pro forma
net income (loss) and earnings (loss) per common share for each period
as if we had applied the fair value method to measure stock-based
compensation expense.The table below summarizes the impact on our results of operations for
the year ended December 31, 2006 of outstanding stock options and
stock grants under our 1996 Plan and issuances under
our ESPP recognized under the provisions of SFAS 123(R):
 Year EndedDecember 31, 2006Stock-based compensation expense:Issuances under employee stock purchase
plan
    
    $
    728Employee stock options
    
    
    6,833Performance-based stock awards
    
    
    10,345Income tax benefit
    
    
    (4,531
    )Net decrease in net income
    
    $
    13,375Decrease in earnings per common share:Basic
    
    $
    0.13Diluted
    
    $
    0.13
  Year ended
    
    
    Year endedDecember 31,
    
    
    December 31,2005
    
    
    2004Net income applicable to common stock, as reported
    
    $
    41,414
    
    
    $
    12,790Deduct: Total stock-based employee compensation expense
determined under fair value based method for all awards,
net of related tax effects
    
    
    (5,013
    )
    
    
    (8,834
    )Pro forma net income applicable to common stock
    
    
    36,401
    
    
    
    3,956Net income per common share  basic and dilutedNet income
per share, as reported
    
    $
    0.39
    
    
    $
    0.12Net income
per share, pro forma
    
    $
    0.34
    
    
    $
    0.04
 40




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##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 (k)
    
    Cash and Cash EquivalentsThe Company considers all highly-liquid investments with original
maturities of three months or less to be cash equivalents.(l)
    
    Reclassification of Prior Year AmountsCertain 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
income (loss).(m)
    
    Asset Retirement ObligationsStatement of Financial Accounting Standards No. 143,
Accounting for
Asset Retirement Obligations (SFAS 143). SFAS 143 requires
companies to record the present value of obligations associated with
the retirement of tangible long-lived assets in the period in which it
is incurred. The liability is capitalized as part of the related
long-lived assets carrying amount. Over time, accretion of the
liability is recognized as an operating expense and the capitalized
cost is depreciated over the expected useful life of the related
asset. The Companys asset retirement obligations relate primarily to
the dismantlement, removal, site reclamation and similar activities of
its properties.(n)
    
    Use of EstimatesThe 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
    TotalCurrent assets
    
    $
    6,141Property, plant and equipment
    
    
    77,433Goodwill
    
    
    62,656Site locations
    
    
    66,944Non-competition agreements
    
    
    661Customer lists and contracts
    
    
    18,428Other assets
    
    
    2,200Current liabilities
    
    
    (1,479
    )Long term liabilities
    
    
    (5,335
    )$
    227,649
 41




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##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
   2006
    
    2005Net revenues
    
    $
    1,128,697
    
    
    
    1,048,689Net income applicable to common stock
    
    
    41,649
    
    
    
    37,630Net income per common share  basic
    
    $
    0.41
    
    
    
    0.36Net income
per common share  diluted
    
    $
    0.40
    
    
    
    0.35
    TotalCurrent assets
    
    $
    10,374Property, plant and equipment
    
    
    59,846Goodwill
    
    
    29,944Site locations
    
    
    87,263Non-competition agreements
    
    
    1,439Customer lists and contracts
    
    
    15,372Other assets
    
    
    548Current liabilities
    
    
    (3,852
    )Long term liabilities
    
    
    (12,392
    )$
    188,542
    TotalCurrent assets
    
    $
    2,846Property, plant and equipment
    
    
    64,917Goodwill
    
    
    24,831Site locations
    
    
    87,281Non-competition agreements
    
    
    515Customer lists and contracts
    
    
    21,577Current liabilities
    
    
    (1,477
    )$
    200,490
 42




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##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
   2006
    
    2005
    
    2004Issuance of Class A common stock in acquisitions
    
    $
    
    
    
    
    43,314
    
    
    
    4,270
   Estimated Life(Years)

    
    2006
    
    
    2005Land
    
    
    
    
    
    $
    178,942
    
    
    
    115,449Building and improvements
    
    
    10  39
    
    
    
    90,627
    
    
    
    72,718Advertising structures
    
    
    5  15
    
    
    
    2,055,236
    
    
    
    1,911,429Automotive and other equipment
    
    
    3  7
    
    
    
    108,172
    
    
    
    91,847$
    2,432,977
    
    
    
    2,191,443
   Estimated
    
    
    2006
    
    
    2005Life
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    Gross Carrying
    
    
    Accumulated(Years)
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationAmortizable Intangible Assets:Customer lists and contracts
    
    
    7  10
    
    
    $
    444,167
    
    
    $
    380,374
    
    
    $
    425,739
    
    
    $
    344,125Non-competition agreements
    
    
    3  15
    
    
    
    60,279
    
    
    
    55,466
    
    
    
    59,618
    
    
    
    53,437Site locations
    
    
    15
    
    
    
    1,262,525
    
    
    
    474,151
    
    
    
    1,195,581
    
    
    
    391,926Other
    
    
    5  15
    
    
    
    13,537
    
    
    
    9,667
    
    
    
    13,600
    
    
    
    8,1071,780,508
    
    
    
    919,658
    
    
    
    1,694,538
    
    
    
    797,595Unamortizable Intangible Assets:Goodwill
    
    
    
    
    
    $
    1,611,341
    
    
    $
    253,635
    
    
    $
    1,548,685
    
    
    $
    253,635
  Balance as of December 31, 2005
    
    $
    1,548,685Goodwill acquired during the year
    
    
    62,656Impairment losses
    
    
    Balance as of December 31, 2006
    
    $
    1,611,341
  Year ended December 31, 2007
    
    $
    48,036Year ended December 31, 2008
    
    $
    42,078Year ended December 31, 2009
    
    $
    39,553Year ended December 31, 2010
    
    $
    37,480Year ended December 31, 2011
    
    $
    35,285
 43




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##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
   2007
    
    $
    146,7662008
    
    
    123,9052009
    
    
    110,2322010
    
    
    95,4942011
    
    
    81,931Thereafter
    
    
    584,744
    2006
    
    
    2005Payroll
    
    $
    12,692
    
    
    
    11,888Interest
    
    
    35,845
    
    
    
    25,840Insurance benefits
    
    
    9,169
    
    
    
    9,337Other
    
    
    12,234
    
    
    
    19,086$
    69,940
    
    
    
    66,151
   2006
    
    
    2005Bank Credit Agreement
    
    $
    707,000
    
    
    $
    495,0002 7/8% Convertible notes
    
    
    287,500
    
    
    
    287,5008% Unsecured subordinated notes
    
    
    
    
    
    
    1,3337 1/4% Senior subordinated notes
    
    
    388,208
    
    
    
    388,6286 5/8% Senior Subordinated notes
    
    
    400,000
    
    
    
    400,0006 5/8% Senior Subordinated Notes  Series B
    
    
    200,922
    
    
    
    Other notes with various rates and terms
    
    
    6,838
    
    
    
    3,8651,990,468
    
    
    
    1,576,326Less current maturities
    
    
    (8,648
    )
    
    
    (2,788
    )Long-term debt, excluding current maturities
    
    $
    1,981,820
    
    
    $
    1,573,538
  2007
    
    $
    8,6482008
    
    
    31,3592009
    
    
    46,3702010
    
    
    379,2462011
    
    
    159,996Later years
    
    
    1,364,849
 44




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##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
 1 4
           TermDecember 31, 2007  September 30, 2009
    
    $
    7,587.5December 31, 2009  September 30, 2011
    
    
    22,762.5December 31, 2011  September 30, 2012
    
    
    91,050.0
  45




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##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
  
    
    dispose of assets;
    
    incur or repay debt;
    
    create liens;
    
    make investments; and
    
    pay dividends.
  
    
    interest coverage;
    
    fixed charges ratios;
    
    senior debt ratios; and
    
    total debt ratios.
    Balance at December 31, 2003
    
    $
    123,217Additions to asset retirement obligations
    
    
    3,687Accretion expense
    
    
    10,204Liabilities settled
    
    
    (4,408
    )Balance at December 31, 2004
    
    $
    132,700Additions to asset retirement obligations
    
    
    1,612Accretion expense
    
    
    7,039Liabilities settled
    
    
    (5,813
    )Balance at December 31, 2005
    
    $
    135,538Additions to asset retirement obligations
    
    
    1,332Accretion expense
    
    
    8,561Liabilities settled
    
    
    (3,928
    )Balance at December 31, 2006
    
    $
    141,503
 46




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##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
   Year ended December 31,2006
    
    
    2005
    
    
    2004Direct expenses
    
    $
    286,041
    
    
    
    276,977
    
    
    
    279,735General and administrative expenses
    
    
    6,902
    
    
    
    6,870
    
    
    
    8,403Corporate expenses
    
    
    8,742
    
    
    
    6,242
    
    
    
    5,918$
    301,685
    
    
    
    290,089
    
    
    
    294,056
   Current
    
    
    Deferred
    
    
    TotalYear ended December 31, 2006:U.S. federal
    
    $
    22,492
    
    
    
    6,973
    
    
    
    29,465State and local
    
    
    4,637
    
    
    
    (664
    )
    
    
    3,973Foreign
    
    
    734
    
    
    
    55
    
    
    
    789$
    27,863
    
    
    
    6,364
    
    
    
    34,227Year ended December 31, 2005:U.S. federal
    
    $
    2,500
    
    
    
    22,504
    
    
    
    25,004State and local
    
    
    2,530
    
    
    
    1,221
    
    
    
    3,751Foreign
    
    
    3,017
    
    
    
    127
    
    
    
    3,144$
    8,047
    
    
    
    23,852
    
    
    
    31,899Year ended December 31, 2004:U.S. federal
    
    $
    
    
    
    
    5,621
    
    
    
    5,621State and local
    
    
    3,557
    
    
    
    1,339
    
    
    
    4,896Foreign
    
    
    
    
    
    
    788
    
    
    
    788$
    3,557
    
    
    
    7,748
    
    
    
    11,305
  2006
    
    
    2005
    
    
    2004Computed expected tax expense
    
    $
    27,344
    
    
    
    25,787
    
    
    
    8,316Increase (reduction) in income taxes resulting from:Book expenses not deductible for tax purposes
    
    
    4,078
    
    
    
    4,012
    
    
    
    825Amortization of non-deductible goodwill
    
    
    27
    
    
    
    26
    
    
    
    2State and local income taxes, net of federal
income tax benefit
    
    
    2,583
    
    
    
    2,438
    
    
    
    3,231Other differences, net
    
    
    195
    
    
    
    (364
    )
    
    
    (1,069
    )$
    34,227
    
    
    
    31,899
    
    
    
    11,305
 47




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##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
  2006
    
    
    2005Current deferred tax assets:Receivables, principally due to allowance for doubtful accounts
    
    $
    4,761
    
    
    
    2,316Accrued liabilities not deducted for tax purposes
    
    
    1,508
    
    
    
    1,609Net operating loss carryforward
    
    
    10,210
    
    
    
    Tax credits
    
    
    17,369
    
    
    
    Other
    
    
    376
    
    
    
    3,203Net current deferred tax asset
    
    
    $34,224
    
    
    
    7,128Non-current deferred tax liabilities:Plant and equipment, principally due to differences in depreciation
    
    $
    (6,849
    )
    
    
    (10,893
    )Intangibles, due to differences in amortizable lives
    
    
    (243,145
    )
    
    
    (244,712
    )Undistributed earnings of foreign subsidiaries
    
    
    (159
    )
    
    
    Investments in partnerships
    
    
    (394
    )
    
    
    (250,547
    )
    
    
    (255,605
    )Non-current deferred tax assets:Plant and equipment, due to basis differences on acquisitions and costs
capitalized for tax purposes
    
    
    29,812
    
    
    
    34,080Investment in affiliates and plant and equipment, due to gains recognized
for tax purposes and deferred for financial reporting purposes
    
    
    2,302
    
    
    
    931Accrued liabilities not deducted for tax purposes
    
    
    13,754
    
    
    
    3,232Net operating loss carryforward
    
    
    15,138
    
    
    
    69,955Asset retirement obligation
    
    
    40,799
    
    
    
    35,289Tax credits
    
    
    8,688
    
    
    
    3,319Other, net
    
    
    35
    
    
    
    1,103Non-current deferred tax assets
    
    
    110,528
    
    
    
    147,909Net non-current deferred tax liability
    
    $
    (140,019
    )
    
    
    (107,696
    )
      48




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##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
        49




---



##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
     Equity Incentive Plan.
     50




---



##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
   Grant Year
    
    Dividend Yield
    
    Expected Volatility
    
    Risk Free Interest Rate
    
    Expected Lives2006
    
    
    0
    %
    
    
    30
    %
    
    
    5
    %
    
    
    72005
    
    
    0
    %
    
    
    43
    %
    
    
    4
    %
    
    
    72004
    
    
    0
    %
    
    
    46
    %
    
    
    4
    %
    
    
    6
  Weighted
    
    
    WeightedAverage
    
    
    AverageExercise
    
    
    ContractualShares
    
    
    Price
    
    
    LifeOutstanding, beginning of year
    
    
    3,937,782
    
    
    $
    34.72Granted
    
    
    90,500
    
    
    
    51.45Exercised
    
    
    (1,033,596
    )
    
    
    31.71Canceled
    
    
    (30,000
    )
    
    
    41.58Outstanding, end of year
    
    
    2,964,686
    
    
    $
    36.21
    
    
    
    5.25Exercisable at end of year
    
    
    1,995,386
    
    
    $
    34.93
    
    
    
    4.31
    51




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##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
  Weighted AverageGrant DateShares
    
    
    Fair ValueNonvested stock options at the beginning of the period
    
    
    1,289,966
    
    
    $
    17.59Granted
    
    
    90,500

    
    
    
    22.61Vested
    
    
    (381,166
    )

    
    
    19.84Canceled
    
    
    (30,000
    )
    
    
    23.71Nonvested stock options at the end of the period
    
    
    969,300
    
    
    $
    18.48
 Stock Purchase Plan.
  SharesAvailable for future purchases, January 1, 2006
    
    
    548,560Purchases
    
    
    (78,889
    )Available for future purchases, December 31, 2006
    
    
    469,671
 Performance-based compensation.
   Review of Logo Sign Depreciation Policies
  52




---



##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
   LogosDepreciationPractices
    
    
    TotalAccumulated depreciation and amortization
    
    $
    7,839
    
    
    $
    7,839Deferred income tax liabilities
    
    
    (3,026
    )
    
    
    (3,026
    )Accumulated deficit
    
    
    (4,813
    )
    
    
    (4,813
    )$
    
    
    
    
    
     53




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##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
           2006
    
    2005Carrying
    
    Estimated
    
    Carrying
    
    EstimatedAmount
    
    Fair Value
    
    Amount
    
    Fair ValueLong-term debt
    
    $
    1,981,820
    
    
    $
    2,079,602
    
    
    $
    1,573,538
    
    
    $
    1,606,726
 54




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##### Table of Contents



LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
  
    
    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.
    7 8
  Year 2006 QuartersMarch 31
    
    June 30
    
    September 30
    
    December 31Net revenues
    
    $
    253,333
    
    
    $
    287,577
    
    
    $
    292,038
    
    
    $
    287,143Net revenues less direct advertising expenses
    
    
    158,124
    
    
    
    191,162
    
    
    
    193,488
    
    
    
    186,756Net income applicable to common stock
    
    
    1,449
    
    
    
    18,281
    
    
    
    16,748
    
    
    
    7,056Net income per common share basic
    
    
    0.01
    
    
    
    0.18
    
    
    
    0.16
    
    
    
    0.07Net income per common share  diluted
    
    
    0.01
    
    
    
    0.18
    
    
    
    0.16
    
    
    
    0.07
 Year 2005 QuartersMarch 31
    
    June 30
    
    September 30
    
    December 31Net revenues
    
    $
    232,829
    
    
    $
    264,743
    
    
    $
    265,594
    
    
    $
    258,490Net revenues less direct advertising expenses
    
    
    148,353
    
    
    
    177,999
    
    
    
    175,669
    
    
    
    166,496Net income applicable to common stock
    
    
    4,944
    
    
    
    18,653
    
    
    
    11,990
    
    
    
    5,827Net income per common share basic
    
    
    0.05
    
    
    
    0.18
    
    
    
    0.11
    
    
    
    0.06Net income per common share  diluted
    
    
    0.05
    
    
    
    0.18
    
    
    
    0.11
    
    
    
    0.05
   55




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##### Table of Contents



Considering the
Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements,
 Accounting for Uncertainty in Income
Taxesan interpretation of FASB Statement No. 109 Accounting for Income Taxes
 56




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##### Table of Contents



SCHEDULE 2
 
 Balance at
    
    Charged to
    
    
    
    
    
    Balance atBeginning
    
    Costs and
    
    
    
    
    
    End ofof Period
    
    Expenses
    
    Deductions
    
    PeriodYear ended December 31, 2006Deducted in balance
sheet from trade
accounts receivable: Allowance for
doubtful accounts
    
    $
    6,000
    
    
    
    6,287
    
    
    
    5,887
    
    
    
    6,400Deducted in balance
sheet from
intangible assets: Amortization of
intangible assets
    
    $
    1,051,230
    
    
    
    122,063
    
    
    
    
    
    
    
    1,173,293Year ended December 31, 2005Deducted in balance
sheet from trade
accounts
receivable: Allowance for
doubtful accounts
    
    $
    5,000
    
    
    
    7,674
    
    
    
    6,674
    
    
    
    6,000Deducted in balance
sheet from
intangible assets: Amortization of
intangible assets
    
    $
    923,944
    
    
    
    136,383
    
    
    
    9,097
    
    
    
    1,051,230Year ended December 31, 2004Deducted in balance
sheet from trade
accounts
receivable: Allowance for
doubtful accounts
    
    $
    4,914
    
    
    
    7,772
    
    
    
    7,686
    
    
    
    5,000Deducted in balance
sheet from
intangible assets: Amortization of
intangible assets
    
    $
    800,062
    
    
    
    123,882
    
    
    
    
    
    
    
    923,944
 57




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##### Table of Contents



LAMAR MEDIA CORP.
AND SUBSIDIARIES
 Managements Report on Internal Control Over Financial Reporting
    
    
    59Report of
Independent Registered Public Accounting Firm  Internal Control over Financial Reporting
    
    
    60Report of
Independent Registered Public Accounting Firm  Consolidated Financial Statements
    
    
    61Consolidated Balance Sheets as of December 31, 2006 and 2005
    
    
    62Consolidated Statements of Operations for the years ended December 31, 2006, 2005 and 2004
    
    
    63Consolidated
Statements of Stockholders Equity and Comprehensive Income for the years ended December 31, 2006, 2005 and 2004
    
    
    64Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004
    
    
    65Notes to Consolidated Financial Statements
    
    
    66-69Schedule 2  Valuation and Qualifying Accounts for the years ended December 31, 2006, 2005 and 2004
    
    
    70
 58




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##### Table of Contents



Managements Report on Internal Control Over Financial Reporting
    59




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
 .
    . .
  /s/ KPMG LLP

KPMG LLPNew Orleans, Louisiana
February 28, 2007
 60




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
    Share-Based Payment.
 .
 /s/ KPMG LLP

KPMG LLPNew Orleans, LouisianaFebruary 28, 2007
 61




---



##### Table of Contents



LAMAR MEDIA CORP.
AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2006 and 2005
 2006
    
    
    2005ASSETSCurrent assets:Cash and cash equivalents
    
    $
    11,796
    
    
    $
    19,419Receivables, net of allowance for doubtful accounts of $6,400 and $6,000 in
2006 and 2005
    
    
    127,552
    
    
    
    114,733Prepaid expenses
    
    
    38,215
    
    
    
    35,763Deferred income tax assets (note 6)
    
    
    26,884
    
    
    
    7,128Other current assets
    
    
    18,095
    
    
    
    14,344Total current assets
    
    
    222,542
    
    
    
    191,387Property, plant and equipment
    
    
    2,432,977
    
    
    
    2,191,443Less accumulated depreciation and amortization
    
    
    (1,027,029
    )
    
    
    (902,138
    )Net property, plant and equipment
    
    
    1,405,948
    
    
    
    1,289,305Goodwill (note 3)
    
    
    1,347,775
    
    
    
    1,285,807Intangible assets (note 3)
    
    
    860,237
    
    
    
    896,328Deferred financing costs net of accumulated amortization of $15,744 and $7,923 as of 2006
and 2005 respectively
    
    
    20,186
    
    
    
    17,977Other assets
    
    
    39,299
    
    
    
    36,251Total assets
    
    $
    3,895,987
    
    
    $
    3,717,055LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Trade accounts payable
    
    $
    14,567
    
    
    $
    13,730Current maturities of long-term debt (note 5)
    
    
    8,648
    
    
    
    2,788Accrued expenses (note 4)
    
    
    77,612
    
    
    
    56,814Deferred income
    
    
    17,824
    
    
    
    14,945Total current liabilities
    
    
    118,651
    
    
    
    88,277Long-term debt (note 5)
    
    
    1,981,820
    
    
    
    1,573,538Deferred income tax liabilities (note 6)
    
    
    148,310
    
    
    
    138,642Asset retirement obligation
    
    
    141,503
    
    
    
    135,538Other liabilities
    
    
    13,236
    
    
    
    11,344Total liabilities
    
    
    2,403,520
    
    
    
    1,947,339Stockholders equity:Common stock, $.01 par value, authorized 3,000 shares; 100 shares issued and
outstanding
at 2006 and 2005
    
    
    
    
    
    
    Additional paid-in-capital
    
    
    2,444,485
    
    
    
    2,390,458Accumulated comprehensive income
    
    
    2,253
    
    
    
    Accumulated deficit
    
    
    (954,271
    )
    
    
    (620,742
    )Stockholders equity
    
    
    1,492,467
    
    
    
    1,769,716Total liabilities and stockholders equity
    
    $
    3,895,987
    
    
    $
    3,717,055
  62




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##### Table of Contents



LAMAR MEDIA CORP.
AND SUBSIDIARIES
Consolidated Statements of Operations
Years Ended December 31, 2006, 2005 and 2004
 2006
    
    
    2005
    
    
    2004Net revenues
    
    $
    1,120,091
    
    
    $
    1,021,656
    
    
    $
    883,510Operating expenses (income):Direct advertising expenses (exclusive of depreciation and
amortization)
    
    
    390,561
    
    
    
    353,139
    
    
    
    302,157General and administrative expenses (exclusive of depreciation and
amortization)
    
    
    198,187
    
    
    
    176,099
    
    
    
    158,161Corporate expenses (exclusive of depreciation and amortization)
    
    
    49,729
    
    
    
    36,163
    
    
    
    29,795Depreciation and amortization
    
    
    301,685
    
    
    
    290,089
    
    
    
    294,056Gain on disposition of assets
    
    
    (10,862
    )
    
    
    (1,119
    )
    
    
    (1,067
    )929,300
    
    
    
    854,371
    
    
    
    783,102Operating income
    
    
    190,791
    
    
    
    167,285
    
    
    
    100,408Other expense (income):Loss on extinguishment of debt
    
    
    
    
    
    
    3,982
    
    
    
    Interest income
    
    
    (1,311
    )
    
    
    (1,511
    )
    
    
    (495
    )Interest expense
    
    
    111,117
    
    
    
    81,856
    
    
    
    64,920109,806
    
    
    
    84,327
    
    
    
    64,425Income before income tax expense
    
    
    80,985
    
    
    
    82,958
    
    
    
    35,983Income tax expense (note 6)
    
    
    35,753
    
    
    
    35,488
    
    
    
    11,764Net income
    
    $
    45,232
    
    
    $
    47,470
    
    
    $
    24,219
  63




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##### Table of Contents



LAMAR MEDIA CORP.
AND SUBSIDIARIES
Consolidated Statements of Stockholders Equity and
Comprehensive Income
Years Ended December 31, 2006, 2005 and 2004
 Additional
    
    
    AccumulatedCommon
    
    
    Paid-In
    
    
    Comprehensive
    
    
    AccumulatedStock
    
    
    Capital
    
    
    Income
    
    
    Deficit
    
    
    TotalBalance, December 31, 2003
    
    $
    
    
    
    
    2,333,951
    
    
    
    
    
    
    
    (379,409
    )
    
    
    1,954,542Contribution from parent
    
    
    
    
    
    
    9,978
    
    
    
    
    
    
    
    
    
    
    
    9,978Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,219
    
    
    
    24,219Balance, December 31, 2004
    
    
    
    
    
    
    2,343,929
    
    
    
    
    
    
    
    (355,190
    )
    
    
    1,988,739Contribution to parent
    
    
    
    
    
    
    46,529
    
    
    
    
    
    
    
    
    
    
    
    46,529Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47,470
    
    
    
    47,470Dividend to parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (313,022
    )
    
    
    (313,022
    )Balance, December 31, 2005
    
    
    
    
    
    
    2,390,458
    
    
    
    
    
    
    
    (620,742
    )
    
    
    1,769,716Cumulative effect due to adoption of SAB 108
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,813
    )
    
    
    (4,813
    )Contribution
from parent
    
    
    
    
    
    
    54,027
    
    
    
    
    
    
    
    
    
    
    
    54,027Comprehensive income:Foreign
currency translations
    
    
    
    
    
    
    
    
    
    
    2,253
    
    
    
    
    
    
    
    2,253Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,232
    
    
    
    45,232Net comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47,535Dividend to parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (373,948
    )
    
    
    (373,948
    )Balance, December 31, 2006
    
    
    
    
    
    
    2,444,485
    
    
    
    2,253
    
    
    
    (954,271
    )
    
    
    1,492,467
  64




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##### Table of Contents



LAMAR MEDIA CORP.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years Ended December 31, 2006, 2005 and 2004
 2006
    
    
    2005
    
    
    2004Cash flows from operating activities:Net income
    
    $
    45,232
    
    
    $
    47,470
    
    
    $
    24,219Adjustments to reconcile net income (loss) to net cash provided by
operating activities:Depreciation and amortization
    
    
    301,685
    
    
    
    287,212
    
    
    
    294,056Non-cash compensation
    
    
    17,906
    
    
    
    
    
    
    
    Amortization included in interest expense
    
    
    2,955
    
    
    
    2,719
    
    
    
    2,437Gain on disposition of assets
    
    
    (10,862
    )
    
    
    (1,119
    )
    
    
    (1,067
    )Loss on extinguishment of debt
    
    
    
    
    
    
    3,982
    
    
    
    Deferred income tax expenses (benefit)
    
    
    (8,951
    )
    
    
    27,440
    
    
    
    8,207Provision for doubtful accounts
    
    
    6,287
    
    
    
    6,674
    
    
    
    7,772Changes in operating assets and liabilities:(Increase) decrease in:Receivables
    
    
    (17,583
    )
    
    
    (24,915
    )
    
    
    (4,824
    )Prepaid expenses
    
    
    (4,780
    )
    
    
    (448
    )
    
    
    (2,509
    )Other assets
    
    
    6,696
    
    
    
    (426
    )
    
    
    11,731Increase (decrease) in:Trade accounts payable
    
    
    837
    
    
    
    3,318
    
    
    
    1,600Accrued expenses
    
    
    27,846
    
    
    
    4,452
    
    
    
    4,351Other liabilities
    
    
    (21,908
    )
    
    
    8,202
    
    
    
    (234
    )Cash flows provided by operating activities
    
    
    345,360
    
    
    
    364,561
    
    
    
    345,739Cash flows from investing activities:Capital expenditures
    
    
    (223,350
    )
    
    
    (120,114
    )
    
    
    (81,165
    )Acquisitions
    
    
    (227,649
    )
    
    
    (145,228
    )
    
    
    (189,540
    )Increase in notes receivable
    
    
    (1,331
    )
    
    
    (7,175
    )
    
    
    Proceeds from sale of property and equipment
    
    
    13,434
    
    
    
    5,550
    
    
    
    7,824Cash flows used in investing activities
    
    
    (438,896
    )
    
    
    (266,967
    )
    
    
    (262,881
    )Cash flows from financing activities:Increase in notes payable
    
    
    
    
    
    
    287,500
    
    
    
    Principal payments on long-term debt
    
    
    (2,303
    )
    
    
    (485,539
    )
    
    
    (44,928
    )Debt issuance costs
    
    
    (4,328
    )
    
    
    (5,315
    )
    
    
    (1,526
    )Net proceeds from note offerings and new notes payable
    
    
    412,682
    
    
    
    394,000
    
    
    
    Dividends to parent
    
    
    (373,948
    )
    
    
    (313,022
    )
    
    
    Contributions
from parent
    
    
    54,027
    
    
    
    
    
    
    
    Cash flows provided by (used in) financing activities
    
    
    86,130
    
    
    
    (122,376
    )
    
    
    (46,454
    )Effect of
exchange rate changes in cash and cash equivalents
    
    
    (217
    )
    
    
    
    
    
    
    Net (decrease) increase in cash and cash equivalents
    
    
    (7,623
    )
    
    
    (24,782
    )
    
    
    36,404Cash and cash equivalents at beginning of period
    
    
    19,419
    
    
    
    44,201
    
    
    
    7,797Cash and cash equivalents at end of period
    
    $
    11,796
    
    
    $
    19,419
    
    
    $
    44,201Supplemental disclosures of cash flow information:Cash paid for interest
    
    $
    97,711
    
    
    $
    71,898
    
    
    $
    65,747Cash paid for state and federal income taxes
    
    $
    28,471
    
    
    $
    3,365
    
    
    $
    1,946
  65




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##### Table of Contents



LAMAR MEDIA CORP.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
          2006
    
    2005
    
    2004Parent company stock contributed for acquisitions
    
    $
    
    
    
    
    43,314
    
    
    
    4,270
   Estimated
    
    
    2006
    
    
    2005Life
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    Gross Carrying
    
    
    Accumulated(Years)
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationAmortizable Intangible Assets:Customer lists and contracts
    
    
    7  10
    
    
    
    444,167
    
    
    
    380,374
    
    
    
    425,739
    
    
    
    344,125Non-competition agreements
    
    
    3  15
    
    
    
    60,279
    
    
    
    55,466
    
    
    
    59,618
    
    
    
    53,437Site locations
    
    
    15
    
    
    
    1,262,525
    
    
    
    474,151
    
    
    
    1,195,581
    
    
    
    391,926Other
    
    
    5  15
    
    
    
    12,941
    
    
    
    9,684
    
    
    
    13,002
    
    
    
    8,1241,779,912
    
    
    
    919,675
    
    
    
    1,693,940
    
    
    
    797,612Unamortizable Intangible
Assets:Goodwill
    
    
    
    
    
    $
    1,600,541
    
    
    $
    252,766
    
    
    $
    1,538,573
    
    
    $
    252,766
 66




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##### Table of Contents



LAMAR MEDIA CORP.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
  Balance as of December 31, 2005
    
    $
    1,538,573Goodwill acquired during the year
    
    
    61,968Impairment losses
    
    
    Balance as of December 31, 2006
    
    $
    1,600,541
   2006
    
    
    2005Payroll
    
    $
    12,692
    
    
    
    11,889Interest
    
    
    35,845
    
    
    
    25,840Other
    
    
    29,075
    
    
    
    19,085$
    77,612
    
    
    
    56,814
   2006
    
    
    20057 1/4% Senior subordinated notes
    
    $
    388,208
    
    
    
    388,628Mirror note to parent
    
    
    287,500
    
    
    
    287,500Bank Credit Agreement
    
    
    707,000
    
    
    
    495,0008% Unsecured subordinated notes
    
    
    
    
    
    
    1,3336 5/8% Senior subordinated notes
    
    
    400,000
    
    
    
    400,0006 5/8% Senior subordinated notes  Series B
    
    
    200,922
    
    
    
    Other notes with various rates and terms
    
    
    6,838
    
    
    
    3,8651,990,468
    
    
    
    1,576,326Less current maturities
    
    
    (8,648
    )
    
    
    (2,788
    )Long-term debt excluding current maturities
    
    $
    1,981,820
    
    
    
    1,573,538
  2007
    
    $
    8,6482008
    
    
    31,3592009
    
    
    46,3702010
    
    
    379,2462011
    
    
    159,996Later years
    
    
    1,364,849
   Current
    
    
    Deferred
    
    
    TotalYear ended December 31, 2006:U.S. federal
    
    $
    39,333
    
    
    
    (8,338
    )
    
    
    30,995State and local
    
    
    4,637
    
    
    
    (667
    )
    
    
    3,970Foreign
    
    
    734
    
    
    
    54
    
    
    
    788$
    44,704
    
    
    
    (8,951
    )
    
    
    35,753Year ended December 31, 2005:U.S. federal
    
    $
    2,500
    
    
    
    26,111
    
    
    
    28,611State and local
    
    
    2,530
    
    
    
    1,203
    
    
    
    3,733Foreign
    
    
    3,017
    
    
    
    127
    
    
    
    3,144$
    8,047
    
    
    
    27,441
    
    
    
    35,488Year ended December 31, 2004:U.S. federal
    
    $
    
    
    
    
    11,314
    
    
    
    11,314State and local
    
    
    3,557
    
    
    
    (3,895
    )
    
    
    (338
    )Foreign
    
    
    
    
    
    
    788
    
    
    
    788$
    3,557
    
    
    
    8,207
    
    
    
    11,764
 67




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##### Table of Contents



LAMAR MEDIA CORP.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
  2006
    
    
    2005
    
    
    2004Computed expected tax expense
    
    $
    28,345
    
    
    
    29,035
    
    
    
    12,234Increase (reduction) in income taxes resulting from:Book expenses not deductible for tax purposes
    
    
    4,119
    
    
    
    4,012
    
    
    
    825Amortization of non-deductible goodwill
    
    
    24
    
    
    
    24
    
    
    
    (3
    )State and local income taxes, net of federal income tax benefit
    
    
    2,581
    
    
    
    2,427
    
    
    
    (223
    )Other differences, net
    
    
    684
    
    
    
    (10
    )
    
    
    (1,069
    )$
    35,753
    
    
    
    35,488
    
    
    
    11,764
  2006
    
    
    2005Current deferred tax assets:Receivables, principally due to allowance for doubtful accounts
    
    $
    4,445
    
    
    $
    2,316Tax credits
    
    
    20,238
    
    
    
    Accrued liabilities not deducted for tax purposes
    
    
    1,508
    
    
    
    1,609Other
    
    
    693
    
    
    
    3,203Net current deferred tax asset
    
    
    26,884
    
    
    
    7,128Non-current deferred tax liabilities:Plant and equipment, principally due to differences in depreciation
    
    
    (6,850
    )
    
    
    (10,893
    )Intangibles, due to differences in amortizable lives
    
    
    (242,531
    )
    
    
    (244,127
    )Undistributed earnings of foreign subsidiary
    
    
    (159
    )
    
    
    Investment in partnership
    
    
    (394
    )
    
    
    (249,934
    )
    
    
    (255,020
    )Non-current deferred tax assets:Plant and equipment, due to basis differences on acquisitions and
costs capitalized for tax purposes
    
    
    29,812
    
    
    
    34,080Investment in affiliates and plant and equipment, due to gains
recognized for tax purposes and deferred for financial reporting
purposes
    
    
    2,301
    
    
    
    931Accrued liabilities not deducted for tax purposes
    
    
    13,754
    
    
    
    3,232Net operating loss carryforward
    
    
    13,857
    
    
    
    38,424Asset retirement obligation
    
    
    40,798
    
    
    
    35,289Tax credits
    
    
    1,065
    
    
    
    Other, net
    
    
    37
    
    
    
    4,422101,624
    
    
    
    116,378Net non-current deferred tax liability
    
    $
    (148,310
    )
    
    $
    (138,642
    )
 68




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##### Table of Contents



LAMAR MEDIA CORP.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
         Year 2006 QuartersMarch 31
    
    June 30
    
    September 30
    
    December 31Net revenues
    
    $
    253,333
    
    
    $
    287,577
    
    
    $
    292,038
    
    
    $
    287,143Net revenues less direct advertising expenses
    
    
    158,124
    
    
    
    191,162
    
    
    
    193,488
    
    
    
    186,756Net income
    
    
    1,905
    
    
    
    18,831
    
    
    
    17,290
    
    
    
    7,206
 Year 2005 QuartersMarch 31
    
    June 30
    
    September 30
    
    December 31Net revenues
    
    $
    232,829
    
    
    $
    264,743
    
    
    $
    265,594
    
    
    $
    258,490Net revenues less direct advertising expenses
    
    
    148,353
    
    
    
    177,999
    
    
    
    175,669
    
    
    
    166,496Net income
    
    
    6,843
    
    
    
    20,734
    
    
    
    13,916
    
    
    
    5,977
 69




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##### Table of Contents



SCHEDULE 2
 
 Balance at
    
    
    Charged to
    
    
    
    
    
    
    BalanceBeginning of
    
    
    Costs and
    
    
    
    
    
    
    at endPeriod
    
    
    Expenses
    
    
    Deductions
    
    
    of PeriodYear Ended December 31, 2006Deducted in balance
sheet from trade
accounts
receivable: Allowance for
doubtful accounts
    
    $
    6,000
    
    
    
    6,287
    
    
    
    5,887
    
    
    
    6,400Deducted in balance
sheet from
intangible assets: Amortization of
intangible assets
    
    $
    1,050,378
    
    
    
    122,063
    
    
    
    
    
    
    
    1,172,441Year Ended December 31, 2005Deducted in balance
sheet from trade
accounts
receivable: Allowance for
doubtful accounts
    
    $
    5,000
    
    
    
    7,674
    
    
    
    6,674
    
    
    
    6,000Deducted in balance
sheet from
intangible assets: Amortization of
intangible assets
    
    $
    923,075
    
    
    
    133,519
    
    
    
    6,216
    
    
    
    1,050,378Year Ended December 31, 2004Deducted in balance
sheet from trade
accounts
receivable: Allowance for
doubtful accounts
    
    $
    4,914
    
    
    
    7,772
    
    
    
    7,686
    
    
    
    5,000Deducted in balance
sheet from
intangible assets: Amortization of
intangible assets
    
    $
    799,176
    
    
    
    123,899
    
    
    
    
    
    
    
    923,075
 70




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##### Table of Contents



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 Lamar Advertising Company
 Lamar Media Corp.
 
 ITEM 9A. CONTROLS AND PROCEDURES
 Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
  Managements Report on Internal Control Over Financial Reporting
 Lamar Advertising Company
   Lamar Media Corp.
   Changes in Internal Control Over Financial Reporting
  
 ITEM 9B. OTHER INFORMATION
 Lamar Advertising Company
 Lamar Media Corp.
 71




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
   
 ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  
 PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
        72




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##### Table of Contents



SIGNATURES
  LAMAR ADVERTISING COMPANYFebruary 28,
2007
    By:
    /s/ Kevin P. Reilly, Jr.Kevin P. Reilly, Jr.President and Chief Executive Officer  Signature
    
    Title
    
    Date/s/ Kevin P. Reilly, Jr.

Kevin P. Reilly, Jr.
    
    President, Chief Executive Officer and Director
 (Principal
Executive Officer)
    
    2/28/07/s/ Keith A. Istre

Keith A. Istre
    
    Chief Financial Officer 
(Principal
Financial and Accounting Officer)
    
    2/28/07/s/ Wendell S. Reilly

Wendell S. Reilly
    
    Director
    
    2/28/07/s/ Stephen P. Mumblow

Stephen P. Mumblow
    
    Director
    
    2/28/07/s/ John Maxwell Hamilton

John Maxwell Hamilton
    
    Director
    
    2/28/07/s/ Thomas Reifenheiser

Thomas Reifenheiser
    
    Director
    
    2/28/07/s/ Anna Reilly

Anna Reilly
    
    Director
    
    2/28/07/s/ Robert M. Jelenic

Robert M. Jelenic
    
    Director
    
    2/28/07
 73




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##### Table of Contents



SIGNATURES
  LAMAR MEDIA CORP.February 28,
2007
    By:
    /s/ Kevin P. Reilly, Jr.Kevin P. Reilly, Jr.President and Chief Executive Officer  Signature
    
    Title
    
    Date/s/ Kevin P. Reilly, Jr.

Kevin P. Reilly, Jr.
    
    Chief Executive Officer and Director (Principal
Executive Officer)
    
    2/28/07/s/ Sean E. Reilly

Sean E. Reilly
    
    Chief Operating Officer, Vice President and
Director
    
    2/28/07/s/ Keith A. Istre

Keith A. Istre
    
    Chief Financial and Accounting Officer and
Director
(Principal Financial and Accounting Officer)
    
    2/28/07/s/ T. Everett Stewart, Jr.

T. Everett Stewart, Jr.
    
    Director
    
    2/28/07
 74




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##### Table of Contents



INDEX TO EXHIBITS
 EXHIBITNUMBER
    
    DESCRIPTION
    
    METHOD OF FILING3(a)
    
    Restated Certificate of Incorporation of the
Company.
    
    Previously filed as
Exhibit 3.1 to the
Companys Annual
Report on Form 10-K
(File No. 0-30242)
filed on February
22, 2006 and
incorporated herein
by reference.3(b)
    
    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(c)(1)
    
    Amended and Restated Certificate of
Incorporation of Lamar Media.
    
    Previously filed as
Exhibit 3.1 to
Lamar Medias
Registration
Statement on Form
S-1/A (File No.
333-05479) filed on
July 31, 1996, and
incorporated herein
by reference.3(c)(2)
    
    Certificate of Amendment to the Amended and
Restated Certificate of Incorporation of
Lamar Media.
    
    Previously filed as
Exhibit 3.2 to
Lamar Medias
Annual Report on
Form 10-K for
fiscal year ended
December 31, 1997
(File No. 1-12407)
filed on March 30,
1998, and
incorporated herein
by reference.3(c)(3)
    
    Amendment to Amended and Restated
Certificate of Incorporation of Lamar Media,
as set forth in the 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(d)
    
    Amended and Restated Bylaws of Lamar Media.
    
    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(a)
    
    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(b)
    
    Indenture dated as of September 24, 1986
relating to the Companys 8% Unsecured
Subordinated Debentures, including the form of Note.
    
    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(c)(1)
    
    Indenture dated May 15, 1993 relating to the
Companys 11% Senior Secured Notes due May
15, 2003, including the form of Subordinated Note.
    
    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(c)(2)
    
    Form of Subordinated Note.
    
    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(c)(3)
    
    First Supplemental Indenture dated as of
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.
 75




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##### Table of Contents



EXHIBITNUMBER
    
    DESCRIPTION
    
    METHOD OF FILING4(c)(4)
    
    Form of Second Supplemental Indenture in the
form of an Amended and Restated Indenture
dated as of 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
(File No. 1-12407)
filed on November
15, 1996, and
incorporated herein
by reference.4(c)(5)
    
    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
(File No. 1-12407)
filed on November
15, 1996, and
incorporated herein
by reference.4(d)(1)
    
    Indenture dated as of December 23, 2002
between Lamar Media, certain subsidiaries of
Lamar Media, as guarantors and Wachovia Bank
of Delaware, National, as trustee for the 7 1/4% Notes due 2013,
including the form of 7 1/4% Note.
    
    Previously filed as
Exhibit 4.1 to
Lamar Medias
Current Report on
Form 8-K (File No.
0-20833) filed on
December 27, 2002,
and incorporated
herein by
reference.4(d)(2)
    
    Supplemental Indenture to the Indenture
dated as of December 23, 2002 among Lamar
Media, certain of its subsidiaries and
Wachovia Bank of Delaware, National
Association, as Trustee, dated as of June 9,
2003.
    
    Previously filed as
Exhibit 4.31 to
Lamar Medias
Registration
Statement on Form
S-4 (File No.
333-107427) filed
on July 29, 2003,
and incorporated
herein by
reference.4(d)(3)
    
    Supplemental Indenture to the Indenture
dated December 23, 2002 among Lamar Media,
certain of its subsidiaries and Wachovia
Bank of Delaware, National Association, as
Trustee, dated October 7, 2003.
    
    Previously filed as
Exhibit 4.1 to
Lamar Medias
Quarterly Report on
Form 10-Q for the
period ended
September 30, 2003
(File No. 1-12407)
filed on November
5, 2003, and
incorporated herein
by reference.4(d)(4)
    
    Supplemental Indenture to the Indenture
dated as of December 23, 2002 among Lamar
Media, Lamar Canadian Outdoor Company and
Wachovia Bank of Delaware, National
Association, as Trustee, dated as of April
5, 2004.
    
    Previously filed as
Exhibit 4.1 to the
Companys Quarterly
Report on Form 10-Q
for the period
ended June 30, 2004
(File No. 0-30242)
filed on August 6,
2004, and
incorporated herein
by reference.4(d)(5)
    
    Supplemental Indenture to Indenture dated as
of December 23, 2002 among Lamar Media,
certain of its subsidiaries and Wachovia
Bank of Delaware, National Association, as
Trustee, dated as of January 19, 2005.
    
    Previously filed as
Exhibit 4.1 to the
Companys Quarterly
Report on Form 10-Q
for the period
ended March 31,
2005 (File No.
0-30242) filed on
May 6, 2005, and
incorporated herein
by reference.4(d)(6)
    
    Release of Guaranty under the Indenture
dated as of December 23, 2002 between Lamar
Media, certain of its subsidiaries named
therein, and Wachovia Bank of Delaware,
National Association, as Trustee, by the
Trustee, dated as of December 30, 2005.
    
    Previously filed as
Exhibit 4.19 to
Lamar Medias
Annual Report on
Form 10-K for
fiscal year ended
December 31, 2005
(File No. 1-12407)
filed on March 15,
2006, and
incorporated herein
by reference.4(e)(1)
    
    Indenture dated as of June 16, 2003 between
the Company and Wachovia Bank of Delaware,
National Association, as Trustee.
    
    Previously filed as
Exhibit 4.4 to the
Companys Quarterly
Report on Form 10-Q
for the period
ended June 30, 2003
(File No. 0-30242)
filed on August 13,
2003, and
incorporated herein
by reference.
 76




---



##### Table of Contents



EXHIBITNUMBER
    
    DESCRIPTION
    
    METHOD OF FILING4(e)(2)
    
    First Supplemental Indenture to the
Indenture dated as of June 16, 2003 between
the Company and Wachovia Bank of Delaware,
National Association, as Trustee, dated as
of June 16, 2003.
    
    Previously filed as
Exhibit 4.5 to the
Companys Quarterly
Report on Form 10-Q
for the period
ended June 30, 2003
(File No. 0-30242)
filed on August 13,
2003, and
incorporated herein
by reference.4(f)(1)
    
    Indenture dated as of August 16, 2005
between Lamar Media, the guarantors named
therein, and The Bank of New York Trust
Company, N.A., as trustee for the 6 5/8% Senior Subordinated Note Due
2015, including the form of Note.
    
    Previously filed as
Exhibit 4.1 to the
Companys Current
Report on Form 8-K
(File No. 0-30242)
filed on August 18,
2005, and
incorporated herein
by reference.4(f)(2)
    
    Release of Guaranty under the Indenture
dated as of August 16, 2005 between Lamar
Media, the guarantors named therein, and The
Bank of New York Trust Company, N.A., as
Trustee, by the Trustee, dated as of
December 30, 2005.
    
    Previously filed as
Exhibit 4.20 to
Lamar Medias
Annual Report on
Form 10-K for
fiscal year ended
December 31, 2005
(File No. 1-12407)
filed on March 15,
2006, and
incorporated herein
by reference.4(f)(3)
    
    First Supplemental Indenture to the
Indenture dated as of August 16, 2005, among
Lamar Media Corp., the Guarantors named
therein and The Bank of New York Trust
Company, N.A., as Trustee, dated as of
December 11, 2006.
    
    Previously filed as
Exhibit 99.2 to the
Companys Current
Report on Form 8-K
(file No. 0-30242)
filed on December
14, 2006, and
incorporated herein
by reference.4(g)(1)
    
    Indenture, dated as of
August 17, 2006, between Lamar Media, the Guarantors named
therein and The Bank of New York Trust Company, N.A., as trustee,
related to the 6 5/8% Senior Subordinated Notes due
2015-Series B, including the form of Note.
    
    Previously filed as
Exhibit 4.1 to the
Companys Current
Report on Form 8-K
(File No. 0-30242)
filed on August 18,
2006, and
incorporated herein
by reference.10(a)(1)*
    
    Lamar 1996 Equity Incentive Plan, as
amended, as adopted by the Board of
Directors on February 23, 2006.
    
    Previously filed as
Exhibit 10.1 to the
Companys Current
Report on Form 8-K
(File No. 0-30242)
filed on February
28, 2006, and
incorporated herein
by reference.10(a)(2)*
    
    Form of Stock Option Agreement under the
1996 Equity Incentive Plan, as amended.
    
    Previously filed as
Exhibit 10.14 to
the Companys
Annual Report on
Form 10-K for the
year ended December
31, 2004 (File No.
0-30242) filed on
March 10, 2005, and
incorporated herein
by reference.10(b)*
    
    2000 Employee Stock Purchase Plan.
    
    Filed herewith.10(c)*
    
    Lamar Advertising Company Non-Management
Director Compensation Plan.
    
    Previously filed as
Exhibit 10.3 to the
Companys Quarterly
Report on Form 10-Q
for the period
ended March 31,
2005 (File No.
0-30242) filed on
May 6, 2005, and
incorporated herein
by reference.10(d)(1)*
    
    Lamar Deferred Compensation Plan, as adopted
on December 8, 2005.
    
    Previously filed as
Exhibit 10.1 to the
Companys Current
Report on Form 8-K
(File No. 0-30242)
filed on December
14, 2005, and
incorporated herein
by reference.
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##### Table of Contents



EXHIBITNUMBER
    
    DESCRIPTION
    
    METHOD OF FILING10(d)(2)*
    
    Form of Trust Agreement for the Lamar
Deferred Compensation Plan.
    
    Previously filed as
Exhibit 10.2 to the
Companys Current
Report on Form 8-K
(File No. 0-30242)
filed on December
14, 2005, and
incorporated herein
by reference.10(e)*
    
    Form of Restricted Stock Agreement.
    
    Previously filed as
Exhibit 10.16 of
the Companys on
Form 10-K for the
year ended December
31, 2005 (File No.
0-30242) filed on
March 15, 2006, and
incorporated herein
by reference.10(f)*
    
    Summary of Compensatory Arrangements.
    
    Previously filed on
the Current Report
on Form 8-K/A (File
No. 0-30242) filed
on February 22,
2006, and
incorporated herein
by reference.10(g)(1)
    
    Credit Agreement dated as of March 7, 2003
between Lamar Media and the Subsidiary
Guarantors party thereto, the Lenders party
thereto, and JPMorgan Chase Bank, as
Administrative Agent.
    
    Previously filed as
Exhibit 10.38 to
Lamar Medias
Registration
Statement on Form
S-4/A (File No.
333-102634) filed
on March 18, 2003,
and incorporated
herein by
reference.10(g)(2)
    
    Amendment No. 1 dated as of January 28, 2004
to the Credit Agreement dated as of March 7,
2003 between Lamar Media, the Subsidiary
Guarantors a party thereto and JPMorgan
Chase Bank, as administrative agent for the
lenders.
    
    Previously filed as
Exhibit 4.1 to the
Companys Quarterly
Report on Form 10-Q
for the period
ended March 31,
2004 (File No.
0-30242) filed on
May 10, 2004, and
incorporated herein
by reference.10(g)(3)
    
    Joinder Agreement dated as of October 7,
2003 to Credit Agreement dated as of March
7, 2003 between Lamar Media and the
Subsidiary Guarantors party thereto, the
Lenders party thereto, and JPMorgan Chase
Bank, as Administrative Agent by Premere
Outdoor, Inc.
    
    Previously filed as
Exhibit 10.1 to
Lamar Medias
Quarterly Report on
Form 10-Q for the
period ended
September 30, 2003
(File No. 1-12407)
filed on November
5, 2003, and
incorporated herein
by reference.10(g)(4)
    
    Joinder Agreement dated as of April 19, 2004
to Credit Agreement dated as of March 7,
2003 between Lamar Media and Lamar Canadian
Outdoor Company, the Lenders party thereto
and JPMorgan Chase 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, 2004
(File No. 0-30242)
filed on August 6,
2004, and
incorporated herein
by reference.10(g)(5)
    
    Joinder Agreement to Credit Agreement dated
as of March 7, 2003 among Lamar Media, the
Subsidiary Guarantors party thereto, the
Lenders party thereto and JPMorgan Chase
Bank, as Administrative Agent, by certain of
Lamar Medias subsidiaries, dated as of
January 19, 2005.
    
    Previously filed as
Exhibit 10.1 to the
Companys Quarterly
Report on Form 10-Q
for the period
ended March 31,
2005 (File No.
0-30242) filed on
May 6, 2005, and
incorporated herein
by reference.10(h)(1)
    
    Credit Agreement dated as of September 30,
2005 between Lamar Media and JPMorgan Chase
Bank, N.A., as Administrative Agent.
    
    Previously filed as
Exhibit 10.1 to the
Companys Current
Report on Form 8-K
(File No. 0-30242)
filed on September
30, 2005, and
incorporated herein
by reference.10(h)(2)
    
    Amendment No. 1 dated as of October 5, 2006
to the Credit Agreement dated as of
September 30, 2005 between Lamar Media, the
Subsidiary Guarantors named therein and
JPMorgan Chase Bank, N.A., as Administrative
Agent.
    
    Previously filed as
Exhibit 10.2 to the
Companys Current
Report on Form 8-K
(File No. 0-30242)
filed on October 6,
2006, and
incorporated herein
by reference.
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##### Table of Contents



EXHIBITNUMBER
    
    DESCRIPTION
    
    METHOD OF FILING10(h)(3)
    
    Amendment No. 2 dated as of December 11,
2006 to the Credit Agreement dated as of
September 30, 2005 between Lamar Media
Corp., the Subsidiary Borrower named
therein, the Subsidiary Guarantors named
therein and JPMorgan Chase Bank, N.A., as
Administrative Agent.
    
    Previously filed as
Exhibit 99.1 to the
Companys Current
Report on Form 8-K
(file No. 0-30242)
filed on December
14, 2006, and
incorporated herein
by reference.10(h)(4)
    
    Joinder Agreement to Credit Agreement dated
as of September 30, 2005 among Lamar Media,
the Subsidiary Guarantors party thereto, the
Lenders parties thereto, and JPMorgan Chase
Bank, as Administrative Agent, by Daum
Advertising Company, Inc., dated as of July
21, 2006.
    
    Previously filed as
Exhibit 10.18 to
Lamar Medias Form
S-4 (File No.
333-138142) filed
on October 23,
2006, and
incorporated herein
by reference.10(i)
    
    Tranche C Term Loan Agreement dated as of
February 6, 2004 between Lamar Media, the
Subsidiary Guarantors a party thereto, the
Tranche C Loan Lenders a party thereto and
JPMorgan Chase Bank, as administrative
agent.
    
    Previously filed as
Exhibit 4.2 to the
Companys Quarterly
Report on Form 10-Q
for the period
ended March 31,
2004 (File No.
0-30242) filed on
May 10, 2004, and
incorporated herein
by reference.10(j)
    
    Tranche D Term Loan Agreement dated August
12, 2004 among Lamar Media, the Subsidiary
Guarantors thereunder, the Lenders party
thereto and JP Morgan Chase Bank, as
Administrative Agent.
    
    Previously filed as
Exhibit 10.1 to the
Companys Quarterly
Report on Form 10-Q
for the period
ended September 30,
2004 (File No.
0-30242) filed on
November 15, 2004,
and incorporated
herein by
reference.10(k)
    
    Series A Incremental Loan Agreement dated as
of February 8, 2006 between Lamar Media, the
Subsidiary Guarantors named therein, the
Series A Incremental Lenders named therein
and JPMorgan Chase Bank, N.A., as
Administrative Agent for the Company.
    
    Previously filed as
Exhibit 10.15 of
the Companys on
Form 10-K for the
year ended December
31, 2005 (File No.
0-30242) filed on
March 15, 2006, and
incorporated herein
by reference.10(l)
    
    Series B Incremental Loan Agreement dated as
of October 5, 2006 between Lamar Media, the
Subsidiary Guarantors named therein, the
Series B Incremental Lenders named therein
and JPMorgan Chase Bank, N.A., as
Administrative Agent for the Company.
    
    Previously filed as
Exhibit 10.1 to the
Companys Current
Report on Form 8-K
(file No. 0-30242)
filed on October 6,
2006, and
incorporated herein
by reference.10(m)
    
    Series C Incremental Loan Agreement dated as
of December 21, 2006 between Lamar Media
Corp., Lamar Transit Advertising Canada
Ltd., the Subsidiary Guarantors named
therein, the Series C Incremental Lenders
and JPMorgan Chase Bank, N.A., as
Administrative Agent and JPMorgan Chase
Bank, N.A., Toronto Branch, acting as
sub-agent of the Administrative Agent.
    
    Previously filed as
Exhibit 99.1 to the
Companys Current
Report on Form 8-K
(file No. 0-30242)
filed on December
22, 2006, and
incorporated herein
by reference.11(a)
    
    Statement regarding computation of per share
earnings for the Company.
    
    Filed herewith.12(a)
    
    Statement regarding computation of earnings
to fixed charges for the Company.
    
    Filed herewith.12(b)
    
    Statement regarding computation of earning
to fixed charges for Lamar Media
    
    Filed herewith.
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##### Table of Contents



EXHIBITNUMBER
    
    DESCRIPTION
    
    METHOD OF FILING14(a)
    
    Lamar Advertising Company Code of Business
Conduct and Ethics.
    
    Previously filed as
Exhibit 14.1 to the Companys Annual Report on
Form 10-K for the period ended December 31, 2003 (File
No. 0-30242) filed on March 10, 2004 and incorporated
herein by reference.21(a)
    
    Subsidiaries of the Company.
    
    Filed herewith.23(a)
    
    Consent of KPMG LLP.
    
    Filed herewith.31(a)
    
    Certification of the Chief Executive Officer
of the Company and Lamar Media pursuant to
Securities Exchange Act Rules 13a-14(a) and
15d-14(a) as adopted pursuant to Section 302
of the Sarbanes- Oxley Act of 2002.
    
    Filed herewith.31(b)
    
    Certification of the Chief Financial Officer
of the Company and Lamar Media pursuant to
Securities Exchange Act Rules 13a-14(a) and
15d-14(a) as adopted pursuant to Section 302
of the Sarbanes- Oxley Act of 2002.
    
    Filed herewith.32(a)
    
    Certification pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
    
    Filed herewith.
 
 *
    
    Denotes management contract or compensatory plan or
arrangement in which the executive officers or directors of
the Company participate. 80