<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                                   FORM 10-Q

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

                         For the quarterly period ended
                               September 30, 1996
                                        
                 ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP
             (Exact name of registrant as specified in its charter)

                         Commission File No. 333-3338

                 MINNESOTA                         41-1540241
     (State or other jurisdiction of           (I.R.S. Employer
     incorporation or organization)           Identification No.)

                              ____________________

                        ADAMS OUTDOOR ADVERTISING, INC.
             (Exact name of registrant as specified in its charter)

                        Commission File No. 333-3338-01

                MINNESOTA                         41-154024
     (State or other jurisdiction of           (I.R.S. Employer
     incorporation or organization)           Identification No.)

                        1380 West Paces Ferry Road, N.W.
                             Suite 170, South Wing
                               Atlanta, GA  30327
                    (Address of principal executive offices)

                                 (404) 233-1366
              (Registrant's telephone number, including area code)

          Securities Registered Pursuant to Section 12(b) of the Act:
                                     None.

          Securities Registered Pursuant to Section 12(g) of the Act:
                         10 3/4% Senior Notes Due 2006

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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.  (Applicable only to Adams
Outdoor Advertising, Inc.)

Class                 Outstanding as of November 11, 1996
-----                 -----------------------------------
Common Stock,
$.001 par value       10,000
<PAGE>
 
                 ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP
                        ADAMS OUTDOOR ADVERTISING, INC.

                  Securities and Exchange Commission Form 10-Q
                for the Second Quarter Ended September 30, 1996

                                     INDEX
                                                                     Page Number
                                                                     -----------

PART I.  FINANCIAL INFORMATION

     Item 1.  Financial Statements

              Balance Sheets of Adams Outdoor
              Advertising Limited Partnership as of
              September 30, 1996 and December 31, 1995
              (unaudited)..........................................          1

              Statements of Operations of
              Adams Outdoor Advertising Limited Partnership
              for the quarters and nine months ended September 30, 
              1996 and September 30, 1995 (unaudited)..............          2

              Statements of Cash Flows of
              Adams Outdoor Advertising Limited Partnership
              for the nine months ended September 30, 1996
              and September 30, 1995 (unaudited)...................          3

              Notes to Interim Financial Statements of
              Adams Outdoor Advertising Limited Partnership
              (unaudited)..........................................          4

              Balance Sheets of Adams Outdoor
              Advertising, Inc. as of September 30, 1996 and
              December 31, 1995 (unaudited)........................          6

              Statements of Operations of
              Adams Outdoor Advertising, Inc. for the quarters
              and nine months ended September 30, 1996 and
              September 30, 1995 (unaudited).......................          7

              Statements of Cash Flows of
              Adams Outdoor Advertising, Inc. for the
              nine months ended September 30, 1996 and
              September 30, 1995 (unaudited).......................          8

              Notes to Interim Financial Statements of
              Adams Outdoor Advertising, Inc.
              (unaudited)..........................................          9

     Item 2.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations..................         10
<PAGE>
 
PART II.  OTHER INFORMATION

     Item 1.  Legal Proceedings....................................         14
     Item 2.  Changes in Securities................................         14
     Item 3.  Defaults Upon Senior Securities......................         14
     Item 4.  Submission of Matters to a Vote of Security
              Holders..............................................         14
     Item 5.  Other Information....................................         14
     Item 6.  Exhibits and Reports on Form 8-K.....................         14

SIGNATURES.........................................................         15
<PAGE>


                 ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP
                                BALANCE SHEETS
                                  (Unaudited)
                            (Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                  September 30,    December 31,
                                                                      1996             1995
                                                                  -------------    ------------
<S>                                                               <C>              <C>

                           ASSETS
                          ------
Current assets:
   Cash and cash equivalents                                           $4,067           $2,131
   Accounts receivable, less allowance for doubtful accounts of
     $738,659 and $546,123 at September 30, 1996 and
     December 31, 1995, respectively                                    6,434            5,324
   Accounts receivable from related parties                               196              172
   Accounts receivable from employees                                      43              160
   Inventories                                                            203              208
   Prepaid rent                                                         1,814            1,535
   Other prepaid expenses                                                 837            1,284
                                                                       ------           ------
     Total current assets                                              13,594           10,814

Property, plant and equipment, net                                     30,416           31,371
Intangible assets, net                                                  9,803            5,950
Other assets                                                               71               76
                                                                       ------           ------
                                                                      $53,884          $48,211
                                                                      =======          =======

                           LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
                           -----------------------------------------
Current liabilities:
   Accounts payable                                                       407              226
   Interest payable                                                       540              680
   Interest payable to related parties                                     48              340
   Accrued expenses and other                                           1,549            1,499
   Current installments of long term debt                                 231            2,125
   Deferred compensation                                                1,699                -
                                                                        -----            -----
     Total current liabilities                                          4,474            4,870

Long term debt, less current installments                             113,839           90,598
Long term debt - related parties                                            -           14,719
Other liabilities                                                          29              123
Deferred compensation                                                   2,354            4,730
                                                                      -------          -------
     Total liabilities                                                120,696          115,040

Partners' equity (deficit):
   General partners' deficit                                          (67,812)         (67,829)
   Limited partners' equity                                             1,000            1,000
                                                                       ------           ------
     Total partners' deficit                                          (66,812)         (66,829)

Commitments and contingencies
                                                                      -------          -------
                                                                      $53,884          $48,211
                                                                      =======          =======
</TABLE>

See accompanying notes to unaudited interim financial statements.

<PAGE>

                 ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP
                           STATEMENTS OF OPERATIONS
                                  (Unaudited)
                          (Dollars in Thousands)
<TABLE>
<CAPTION>

                                                                Quarter Ended                              Nine Months Ended       
                                                                 September 30,                               September 30,      
                                                          1996                    1995                 1996                1995  
                                                        -------                 -------              -------              ------ 
<S>                                                     <C>                     <C>                  <C>                  <C> 
Gross Revenues                                          $13,590                 $12,506              $38,671              $35,692 
   Less agency commissions                                1,426                   1,289                3,864                3,555
                                                        -------                 -------              -------              ------- 
     Net outdoor advertising revenue                     12,164                  11,217               34,807               32,137
Operating expenses:
   Direct advertising expenses                            5,320                   5,105               16,297               15,616
    Corporate general and administrative                    375                     298                1,320                  839
    Depreciation and amortization                         1,448                   1,388                4,339                4,165
    Deferred compensation                                   150                     364                  550                1,880
                                                        -------                 -------              -------              ------- 
      Total operating expenses                            7,293                   7,155               22,506               22,500
                                                        -------                 -------              -------              ------- 
     Operating income                                     4,871                   4,062               12,301                9,637
                                                        -------                 -------              -------              ------- 
Other expenses (income):                                                                                                         
   Interest expense                                       3,026                   2,261                8,835                7,639
   Interest expense - related parties                        22                     455                  344                  982
   Other expenses (income), net                               3                      51                  (10)                  31 
   Gain disposals of property, plant                                                                                              
     and equipment, net                                     (12)                    (20)                 (19)                 (28)
                                                         ------                 -------              -------              ------- 
     Total other expenses                                 3,039                   2,747                9,150                8,624
                                                         ------                --------              -------              ------- 
     Net income                                          $1,832                  $1,315               $3,151               $1,013 
                                                         ======                  ======               ======               ======
</TABLE>

See accompanying notes to unaudited interim financial statements.

                                       2

<PAGE>

                 ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP
                           STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                            (Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                               Nine Months Ended
                                                                                  September 30,
                                                                            1996               1995
                                                                          ---------          --------
<S>                                                                       <C>                <C>
Cash flows from operating activities:
   Net Income                                                             $   3,151          $  1,013
   Adjustments to reconcile net income to cash
     provided by operating activities:
       Depreciation                                                           4,159             3,991
       Amortization of intangible assets                                        645               526
       Deferred compensation expense                                            550             1,880
       Net barter loss                                                           93                65
       (Gain) loss on disposals of property, plant and
         equipment, net                                                         (19)              (28)

       Changes in assets and liabilities:
         Increase in accounts receivable, net                                (1,205)          (1,398)
         Decrease (increase) in inventories                                      61               (7)
         (Increase) decrease in prepaid rent and other prepaid expenses         168             (318)
         Decrease (increase) in other assets                                      5             (290)
         Increase (decrease) in accounts payable and accrued expenses           231             (253)
         Decrease in interest payable                                          (432)             (44)
         Decrease in other liabilities                                          (94)            (119)
                                                                          ---------          -------
           Net cash provided by operating activities                          7,313            5,018

Cash flows from investing activities:
         Additions to property, plant and equipment                          (3,184)          (1,650)
         Proceeds from sale of property, plant
            and equipment                                                        38               53
                                                                          ---------          -------
         Net cash used in investing activities                               (3,146)          (1,597)

Cash flows from financing activities:
         Debt financing costs                                                (4,498)            (158)
         Proceeds from Senior Notes                                         105,000                -
         Payments on long-term debt, net                                   (107,211)          (3,237)
         Advances on revolving line of credit                                 8,839                -
         Payments of deferred compensation                                   (1,227)            (250)
         Distribution to investor                                            (3,134)               -
                                                                          ---------          -------
           Net cash used in financing activities                             (2,231)          (3,645)
                                                                          ---------          -------
            Net decrease in cash and cash equivalents                         1,936             (224)


Cash and cash equivalents at beginning of period                              2,131            1,722
                                                                          ---------          -------
Cash and cash equivalents at end of period                                $   4,067          $ 1,498
                                                                          =========          =======
</TABLE>

See accompanying notes to unaudited interim financial statements.


                                       3
<PAGE>
 
                 ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP

                     NOTES TO INTERIM FINANCIAL STATEMENTS

                              SEPTEMBER 30, 1996

                                  (UNAUDITED)

(1) BASIS OF PRESENTATION

   The accompanying unaudited financial statements included herein have been
prepared by Adams Outdoor Advertising Limited Partnership (the "Company") in
accordance with the instructions for Form 10-Q and therefore, do not include all
information and footnotes necessary for a fair presentation of financial
position, results of operations, and cash flows in conformity with generally
accepted accounting principles.  All adjustments consist of normal recurring
accruals, which are necessary for a fair presentation of the information for the
periods described.  Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been considered or omitted pursuant to such rules and
regulations.  Although the Company believes that the disclosures are adequate to
make the information presented not misleading, it is suggested that these
financial statements be read in conjunction with the Company's 1995 audited
financial statements and notes thereto.


(2)  DEFERRED COMPENSATION

   On March 31, 1995, the Chief Executive Officer and the Company mutually
terminated his participation in deferred compensation benefits under his phantom
stock agreement by agreeing to pay him $2,000,000 upon the refinancing of all of
the Company's outstanding debt obligations.  The Company expensed $787,550 as
deferred compensation expense related to this transaction for the quarter ended
March 31, 1995.  The Chief Executive Officer received $1,000,000 as a deferred
compensation payout in June, 1996.  As a result, deferred compensation payable
at September 30, 1996 and December 31, 1995 includes $1,000,000 and $2,000,000,
respectively, related to this arrangement.


(3)  REFINANCING

   On March 12, 1996, the Company refinanced (the "Refinancing") its debt
structure by issuing $105 million of 10 3/4%, Senior Notes due 2006 ("Senior
Notes") under an Indenture (the "Indenture"), and entered into a $15 million
revolving line of credit (the "New Credit Facility").  Substantially all of the
assets of the Company are pledged to secure indebtedness of up to $15.0 million
(of which approximately $8.8 million was outstanding as of September 30, 1996)
under the New Credit Facility and, accordingly, the lenders

                                       4
<PAGE>
 
 (3) REFINANCING (CONTINUED)


thereunder will have a prior claim on those assets.  Permitted borrowings under
the New Credit Facility are subject to various conditions.  In addition, the
availability of borrowings are subject to compliance with certain financial
covenants.  Scheduled reductions in the banks' commitments under the New Credit
Facility will commence in 1997.  The agreement governing the New Credit Facility
contains a number of covenants that are more restrictive than those contained in
the Indenture, including covenants requiring the Company to maintain certain
financial ratios that become more restrictive over time.  Adverse operating
results could cause noncompliance with one or more of these covenants, reducing
the Company's borrowing availability, and, in certain circumstances, entitling
the lenders to accelerate the maturity of outstanding borrowings.


(4)  ACQUISITION

   On November 7, 1996 the Company acquired all of the Northeast Pennsylvania
assets of the Matthew Outdoor Advertising network for $8.25 million in cash.
The transaction will be accounted for using the purchase method of accounting
during the fourth quarter of 1996.

                                       5
<PAGE>
 
                        ADAMS OUTDOOR ADVERTISING, INC.

                                BALANCE SHEETS
                                 (UNAUDITED)
<TABLE> 
<CAPTION> 
                                                                               September 30,   December 31,
                                                                                    1996           1995
                        ASSETS                                                 --------------  ------------
                        ------
<S>                                                                            <C>             <C>
Investment...................................................................    $  40          $   40
                                                                                 =====           =====
                 STOCKHOLDER'S EQUITY
                 --------------------
Preferred stock, $0.001 par value
       Authorized 800,000 shares; no shares issued and outstanding.........       $ --           $  --
Common stock, $0.001 par value
      Authorized 200,000 shares; 10,000 shares issued and outstanding........      100             100
Additional paid-in capital...................................................      900             900
Common stock subscribed......................................................     <960>           <960>
                                                                                 -----           -----
                                                                                 $  40           $  40
                                                                                 =====           =====
 
 
</TABLE>

See accompanying notes to unaudited interim financial statements

                                       6
<PAGE>
 
                        ADAMS OUTDOOR ADVERTISING, INC.

                           STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                  Quarter Ended     Nine Months Ended 
                                  September 30,       September 30,   
                                 --------------     ----------------- 
                                 1996      1995       1996    1995    
                                 ----      ----     -------  -------- 
<S>                              <C>       <C>                        
Revenues.......................  $ --      $ --      $ --      $ --   
Expenses.......................    --        --        --        --   
                                 ----      ----      ----      ----
Net income (loss)..............  $ --      $ --      $ --      $ --   
                                 ====      ====      ====      ====    
 
</TABLE>
See accompanying notes to unaudited interim financial statements

                                       7
<PAGE>
 
                        ADAMS OUTDOOR ADVERTISING, INC.
 
                           STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
 

                                        NINE MONTHS ENDED
                                           SEPTEMBER 30,
                                        -----------------
                                         1996         1995
                                        ------       ------
Cash flows from operating activities..  $ --          $ --
Cash flows from investing activities..
Cash flows from financing activities..    --            --
                                        ----          ----

      Net change in cash..............    --            --
Cash at beginning of period...........    --            --
                                        ----          ----

Cash at end of period.................  $ --          $ --
                                        ====          ====
 
 

See accompanying notes to unaudited interim financial statements

                                       8
<PAGE>
 
                     NOTES TO INTERIM FINANCIAL STATEMENTS
                              SEPTEMBER 30, 1996
                                  (UNAUDITED)

(1) BASIS OF PRESENTATION

The accompanying unaudited financial statements included herein have been
prepared by Adams Outdoor Advertising, Inc.  ("AOAI") in accordance with the
instructions for Form 10-Q and, therefore, do not include all information and
footnotes necessary for a fair presentation of financial position, results of
operations, and cash flow in conformity with generally accepted accounting
principles. All adjustments consist of normal recurring accruals, which are
necessary for a fair presentation of the information for the periods described.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been considered or omitted pursuant to such rules and regulations.
Although AOAI believes that the disclosures are adequate to make the information
presented not misleading, it is suggested that these financial statements be
read in conjunction with AOAI's 1995 audited financial statements and notes
thereto.

                                       9
<PAGE>
 
ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS

Except for its interests and activities as managing general partner of Adams
Outdoor Advertising Limited Partnership (the "Company"), Adams Outdoor
Advertising, Inc. ("AOAI") has nominal assets and does not conduct any
operations. Accordingly, the following "Management's Discussion and Analysis of
Financial Condition and Results of Operations" relate to the Company and the
financial statements of the Company included in this filing.

RESULTS OF OPERATIONS

Quarter Ended September 30, 1996 Compared With Quarter Ended September 30, 1995
-------------------------------------------------------------------------------

Net revenues (gross revenues net of agency commissions) for the quarter ended
September 30, 1996 of $12.2 million increased by 8.4% from $11.2 million for the
comparable period in 1995.  This increase resulted from higher advertising rates
and an increase in the number of displays sold.

Direct advertising expenses for the quarter ended September 30, 1996 of $5.3
million increased by 4.2% from $5.1 million for the comparable period in 1995.
The increase was attributable to direct costs associated with increased sales
from new displays and an increase in sales commissions due to higher average
rates.

Corporate, general and administrative expenses for the quarter ended September
30, 1996 of $375,000 increased by 25.8% from $298,000 for the comparable period
in 1995.  This increase was attributable to increased compensation, directors'
fees and travel expenses.

Depreciation and amortization for the quarter ended September 30, 1996 of $1.4
million increased by 4.3% from $1.4 million for the comparable period in 1995.
The depreciation increased as a result of additions to property, plant and
equipment during 1995 and early 1996.

Deferred compensation expense for the quarter ended September 30, 1996 of
$150,000 decreased significantly from $364,000 for the comparable period in 1995
primarily due to the termination in March of 1995 of a deferred compensation
plan made with the Chief Executive Officer of the Company, by the terms of which
the Company agreed to pay a total of $2.0 million following consummation of the
refinancing of the Company's then outstanding long-term debt.

Interest expense for the quarter ended September 30, 1996 of $3.0 million
increased 12.2% from $2.7 million for the comparable period in 1995.  This
increase was due to a higher effective interest rate, which was only partially
offset by a lower level of outstanding debt.  For the quarters ended September
30, 1996 and September 30, 1995, the effective interest rates were 10.6% and
9.4%, respectively, on average outstanding balances of $110.5 million and $111.2
million, respectively.

Net income for the quarter ended September 30, 1996 increased to $1.8 million
from $1.3 million for the comparable period in 1995 as a result of the items
discussed above.

                                       10
<PAGE>
 
Nine months Ended September 30, 1996 Compared With Nine months Ended September
------------------------------------------------------------------------------
30, 1995
--------

Net revenues (gross revenues net of agency commissions) for the nine months
ended September 30, 1996 of $34.8 million increased by 8.3% from $32.1 million
for the comparable period in 1995.  This increase resulted from higher
advertising rates and an increase in the number of displays sold.

Direct advertising expenses for the nine months ended September 30, 1996 of
$16.3 million increased by 4.4% from $15.6 million for the comparable period in
1995.  The increase was attributable to direct costs associated with increased
sales from new displays and an increase in sales commissions due to higher
average rates.

Corporate, general and administrative expenses for the nine months ended
September 30, 1996 of $1.3 million increased by 57.3% from $839,000 for the
comparable period in 1995.  This increase was attributable to increased
compensation, directors' fees and travel expenses.

Depreciation and amortization for the nine months ended September 30, 1996 of
$4.3 million increased by 4.2% from $4.2 million for the comparable period in
1995 primarily as a result of additions to property, plant and equipment during
1995 and early 1996.

Deferred compensation expense for the nine months ended September 30, 1996 of
$550,000 decreased significantly from $1.9 million for the comparable period in
1995 primarily due to the termination in March of 1995 of a deferred
compensation plan made with the Chief Executive Officer of the Company, by the
terms of which the Company agreed to pay a total of $2.0 million following
consummation of the refinancing of the Company's then outstanding long-term
debt.

Interest expense for the nine months ended September 30, 1996 of $9.2 million
increased by 6.5% from $8.6 million for the comparable period in 1995.  This
increase was due to a higher effective interest rate, which was only partially
offset by a lower level of outstanding debt.  For the nine months ended
September 30, 1996 and September 30, 1995, the effective interest rates were
10.2% and 9.4%, respectively, on average outstanding balances of $110.7 million
and $112.8 million, respectively.  In addition, amortization of loan costs are
included in interest expense.

Net income for the nine months ended September 30, 1996 increased to $3.2
million from $1.0 million for the comparable period in 1995 primarily as a
result of the items discussed above.

Operating Cash Flow is defined as operating income (loss) before (i)
depreciation and amortization expenses and (ii) deferred compensation expense.
As a partnership the Company is not subject to federal corporate income tax.
Operating Cash Flow is not intended to represent net cash provided by operating
activities as defined by generally accepted accounting principles and should not
be considered as an alternative to net income or loss as an indicator of the
Company's operating performance or to net cash provided by operating, investing
and financing activities as a measure of liquidity or ability to meet cash
needs.  The Company believes Operating Cash Flow is a measure commonly reported
and widely used by analysts, investors and other interested parties in the media

                                       11
<PAGE>
 
industry.  Accordingly, this information is disclosed herein to permit a more
complete comparative analysis of the Company's performance relative to other
companies in the media industry.  Operating Cash Flow for the nine months ended
September 30, 1996 of $17.2 million increased by 9.6% from $15.7 million for the
comparable period in 1995.  For the quarter ended September 30, 1996, Operating
Cash Flow of $6.5 million increased 11.3% from $5.8 million for the comparable
period in 1995. These increases were directly attributable to the aforementioned
increases in net revenues coupled with only modest increases in total operating
expenses.

LIQUIDITY AND CAPITAL RESOURCES

On March 12, 1996 the Company, together with its managing general partner, AOAI
privately placed $105,000,000 of their 10 3/4% Senior Notes due 2006 issued
under an indenture (the "Indenture") and entered into a new credit facility (the
"New Credit Facility") pursuant to which it may borrow up to $15 million on a
revolving basis (the "Refinancing").

The Company incurred substantial debt in connection with the acquisition of its
outdoor advertising businesses from 1983 to 1988.  The acquisition debt was
restructured in 1992 to reduce interest rates, extend maturities and modify
financial covenants.  As part of the Refinancing, substantially all of the
Company's outstanding debt was refinanced.  As a result of the Refinancing, the
average maturities of the Company's debt at December 31, 1995 (without the
extension of the existing debt) were extended from one year to approximately
nine years.

Historically, the Company's cash needs have arisen from operating expenses
(primarily direct advertising expenses and corporate general and administrative
expenses), debt service, capital expenditures and deferred compensation payments
under phantom stock agreements.  As a result of the Refinancing, the Company's
interest expense will increase due to the higher weighted average interest rate.

The Company's primary sources of cash are net cash generated from operating
activities and borrowings under the New Credit Facility.  The Company's net cash
provided from operations increased by 45.7% to $7.3 million for the nine months
ended September 30, 1996 from $5.0 million for the nine months ended September
30, 1995.

Under the Company's  previous credit agreement which was repaid as part of the
Refinancing, excess cash (as defined) was required to be applied to reduce the
Company's indebtedness and capital expenditures were limited. The Company
reduced its debt by $5.8 million in 1995.  The Company also made capital
expenditures, primarily for new billboard construction in existing markets, of
$2.3 million in 1995.  The Company expects that its capital expenditures during
1996 will be approximately $3.7 million and will be primarily for new billboard
construction, the upgrading of existing displays and the research and
development of new advertising media.  The Company made capital expenditures of
$3.2 million during the nine months ended September 30, 1996 compared to $1.7
million during the nine months ended September 30, 1995.

At December 31, 1995, the Company's accrued liability for deferred compensation
payable under phantom stock agreements with key employees was $4.7 million in
the aggregate.  The Company's previous debt agreements limited payments of
deferred compensation to no more than $250,000 per year.  The New Credit
Facility and the Indenture permit the payment of the deferred compensation which

                                       12
<PAGE>
 
was accrued at December 31, 1995.  Such payments are scheduled to be paid during
the 1996 through 2002 period.  During the nine months ended September 30, 1996,
payments of deferred compensation totaled $1.2 million.


The New Credit Facility is a revolving credit facility of up to $15.0 million.
At September 30, 1996, the outstanding borrowings under the New Credit Facility
were $8.8 million.  Substantially all of the assets of the Company are pledged
to secure indebtedness under the New Credit Facility.  Permitted borrowings
under the New Credit Facility are subject to various conditions, including the
attainment of certain performance measures by the Company.  Scheduled reductions
in the lenders' commitments under the New Credit Facility will commence in 1997.
The agreement governing the New Credit Facility contains a number of covenants
that are more restrictive than those contained in the Indenture, including
covenants requiring the Company to maintain certain financial ratios that become
more restrictive over time.  Adverse operating results could cause noncompliance
with one or more of these covenants, reducing the Company's borrowing
availability and, in certain circumstances, entitling the lenders to accelerate
the maturity of outstanding borrowings.

The Company believes that net cash provided from operations and available credit
under the New Credit Facility will be sufficient to meet its cash needs for its
current operations, required debt payments, anticipated capital expenditures and
the deferred compensation payments for the next twelve months.

IMPACT OF INFLATION

Through increases in operating costs could adversely affect the Company's
operations, management does not believe that inflation has had a material effect
on operating profit during the past several years.

SEASONALITY

Although revenues during the first and fourth quarters are slightly lower than
the other quarters, management does not believe that seasonality has a
significant impact on the operations or cash flow of the Company.

Information contained in this 10-Q including, without limitation, in the
foregoing Management's Discussion and Analysis of Financial Condition and
Results of Operations may contain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, which can be
identified by the use of forward-looking terminology as "may," "will," "would,"
"expect," "anticipate," "estimate," or "continue" or the negative thereof or
other variations thereon or comparable terminology.  Certain factors, including
financial leverage, government regulation with respect to zoning and
restrictions on outdoor advertising by the tobacco industry, competition and
general economic condition could cause actual results to differ materially from
those in such forward-looking statements.

                                       13
<PAGE>
 
                          PART II.  OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

     None.

ITEM 2.  CHANGES IN SECURITIES

     During the period covered by this Report, the constituent instruments
defining the rights of the holders of registered securities were not materially
modified, nor were the rights evidenced by the registered securities limited or
qualified by the issuance or modification of any other class of securities.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     During the period covered by this Report, there has been no material
default with respect to any indebtedness of the Registrants.

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

      None.

ITEM 5.  OTHER INFORMATION

      None.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

      (a)  The following exhibits are included herein:

           (27)     Financial data schedule

      (b)  No reports on Form 8-K have been filed during the quarter for which
the report is filed.

                                       14
<PAGE>
 
                                   SIGNATURES


Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrants have duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:  November 11, 1996          ADAMS OUTDOOR ADVERTISING
                                  LIMITED PARTNERSHIP

                                  By Adams Outdoor Advertising, Inc.           
                                   Its General Partner                         
                                                                               
                                                                               
                                  By  /s/ J. Kevin Gleason                
                                     --------------------------                
                                     J. Kevin Gleason   
                                     President and Chief Executive Officer    
                                                                               
                                                                               
                                  By  /s/ Abe Levine                         
                                     -------------------------- 
                                     Abe Levine   
                                     Chief Financial Officer 
                                     (Principal Financial and 
                                     Accounting Officer)
                                                                               
                                                                               
                                  ADAMS OUTDOOR ADVERTISING, INC.              
                                                                               
                                                                               
                                                                               
                                  By  /s/ J. Kevin Gleason                
                                     --------------------------                
                                     J. Kevin Gleason                           
                                     President and Chief Executive Officer      
                                                                               
                                                                               
                                  By  /s/ Abe Levine                         
                                     --------------------------      
                                     Abe Levine                            
                                     Chief Financial Officer            
                                     (Principal Financial and 
                                     Accounting Officer) 

                                       15