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Lamar Advertising Notes - Realize sig savings from...

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Lamar Advertising Notes Digital is a strong investment now, but returns will probably decline going forward as the digital supply decreases—EVERYONE is converting to digital. But on plus side, local juros require removal of traditional boards to put up digi—they are essentially creating a legal cartel for the existing owners. CREATING A LEGAL CARTEL. OWN/LEASE breakdown is important. If the cartel operates on particular plots of land, then monopoly profits wil accrue mostly to whoever owns the land. Compare LAMR to Clear Channel, could be useful. Also lengths of leases. –owns approximately 10% of sites, leases range fomr month-to-month to 10 years. Local juros may hate digital. Do some research, LA was having issues a while ago, see how it turned out. – LA local govt basically folded. Won’t be many digital, but some news ones going up and existing didn’t get torn down.
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Unformatted text preview: Realize sig. savings from refinancing 2008/09-issued debt. Since 05 engaged in 642M in acquisitions (2010 10K) 09-10 cap ex acquisitions totaled 11.2, total cap ex was (38.8+43.4)=82.2-11.2/2 = 35.5 maintenance cap ex per year on average. Probably lower than long term average since certain activities can be put off. Figure out NOLs going forward, dep/am is rapidly decreasing so tax shields will be important. – 285m, expire 2022-2027, 10k From 2q-11 transcript: management suggest they though a stronger economic recovery, part of why costs were up. Assuming they think that recovery is no more (seems to be case), presumably they will cut down on those increased costs (read: employees) going forward, helping margins. 134 new digital units since November. (total 1303). New estimate additional 250 by year end (prior=300) Digital 13% of business (2q-11 call)...
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