Excuse me, everyone. We now have Sean Reilly and Jay Johnson in conference.

[Operator Instructions]In the course of this discussion, Lamar may make forward-looking statements regarding the Company, including statements about its future financial performance, strategic goals, plans and objectives, including with respect to the amount and timing of distributions to stockholders.

All forward-looking statements involve risks, uncertainties and contingencies, many of which are beyond Lamar's control and which may cause actual results to differ materially from anticipated results.

Lamar has identified important factors that could cause actual results to differ materially from those discussed in this call in the Company's fourth quarter 2019 earnings release and in most recent annual report on Form 10-K/A as updated or supplemented by its quarterly reports on Form 10-Q and current reports on Form 10 -- 8-K.

Lamar refers you to those documents.Lamar's fourth quarter 2019 earnings release, which contains information required by Regulation G regarding certain non-GAAP financial measures, was furnished to the SEC on Form 8-K this morning and is available on the Investors section of Lamar's website, www.lamar.com.I would now like to turn the conference over to Sean Reilly.

Mr. Reilly, you may begin..

Thank you, Olivia. Good morning all, and welcome to Lamar's Q4 2019 earnings call. As is our tradition, I will make a few opening remarks, then turn it over to Jay to walk through financial highlights.

Then I will address key metrics and open it up for questions.2019 was a solid year for Lamar as we successfully integrated the Fairway, Ashby Street and Mid-America acquisitions, adding nine new markets across the states of North and South Carolina, Georgia, Arkansas, Kansas, Illinois and Wisconsin to our nationwide footprint.

Our top and bottom line growth came in largely as expected for the year and enabled us to finish near the top of our guidance for full year AFFO per share.Looking forward to 2020, we are off to a fast start. We did a major refinancing at historically low rates, positioning our balance sheet for whatever future opportunities come our way.

Jay will have more to say about that. We believe we will have even stronger acquisition-adjusted growth in 2020, aided by tailwinds from incremental political and programmatic revenues.You saw our AFFO guide per share in the press release. The top end of that guidance represents 3.5% to 4% pro forma sales growth for the year.

The formula for us to once again finish around the top end of our AFFO guidance for 2020 is simple and based on reasonable and doable assumptions. Number one, grow 2019 revenues 3% on a pro forma basis before incremental contributions from political and programmatic.

Number two, layer in an anticipated $15 million in incremental revenues from political and programmatic. The $15 million is derived as follows. Last year, we did $5 million in political. This year, we expect to do at least $13 million for an incremental $8 million. Last year, we did $13 million in programmatic.

This year, we expect to do at least $20 million for an incremental $7 million. Combined, that $15 million, plus growing the core around 3%, gets us to the upper end of the range from a revenue point of view.

Number three, modeling pro forma expense growth at approximately 2%, resulting in an EBITDA number that also gets us to the upper end of the 2020 AFFO per share range.

Those are the building blocks for our 2020 forecast, and we look forward to updating you on our progress toward those goals as we move through the year.Regarding the outlook for Q1, we anticipate getting off to a strong start toward our targets for the full year.

Jay?.

$600 million of eight-year senior notes at 3.75% and $400 million of 10-year senior notes at 4%. The 3.75% rate represented the lowest coupon for an eight-year offering in the high yield market at that time, while the 10-year offering tied a record in the market.

And last, we originated a new seven-year $600 million term loan B at LIBOR plus 150 basis points, the lowest spread in the institutional loan market since prior to the global financial crisis.Proceeds from the offerings were used to redeem all $510 million of our 5.375% senior notes due in 2020, as well as prepay our $400 million term loan A, eliminating $51 million of scheduled amortization in 2020, and finally, to refinance our existing term loan B with a new $600 million term loan B on an interest-only basis, eliminating another $6 million in amortization this year.

Altogether, the refinancings will result in over $60 million of amortization and cash interest savings, which can be redeployed to more accretive activities like acquisitions or converting static billboards to digital.The Company expects to incur an expense in Q1 totaling $18.3 million related to the loss on extinguishment of debt for the refinancings, which will be added back as a non-cash adjustment to net income.

Overall, we are extremely pleased with this capital markets execution. These transactions are a testament to our best-in-class balance sheet, the faith that the capital markets have in our business and management team, and position Lamar well for future growth.

Sean?.

Thank you, Jay. I'll touch on a few of the familiar metrics, and then we'll open it up for questions.On our digital platform, our digital platform continues to perform well and provide good incremental growth. You saw in the release, the same board performance up 4.6% for the full year. I would note that the digital platform same board was up 5.2%.

When you layer in the additional units that we either acquired or built greenfield, the growth was even more substantial.We ended the year with 3,542 digital faces in the air, an increase of approximately 335 faces for the full year. 205 of those were new-builds and 130 were by acquisition.

Our goal for 2020 is to pick up the pace a bit in new-build activity as we are shooting for approximately 250 new-build units in 2020.Regarding national and local sales, the mix in Q4 was 75% local and 24% national/programmatic.

A word on programmatic and how it fits in to our national numbers, programmatic is virtually all national, and so we are lumping them together for purposes of this type of reporting. And with that in mind, Q4 local grew 1.8% and national/programmatic grew 7.7%.

For the full year, if you took local and national, they both grew basically plus 3% and plus 3%.

That, by the way, is a billboard-only number, doesn't include logos, transit and airports.Quickly looking at our verticals, strong verticals for the fourth quarter included service, up 7%; hospitals, up 8%; amusement, entertainment and sports, up 7%; insurance, up 42%; and financial, up 20%. On the not so great vertical front, automotive was down 4%.

We saw that coming. But the one that surprised us was retail.A quick little bit of color on retail, through October of last year, retail was clicking along at approximately up 2.5%. Then, in November and December, it turned to a negative 5%.

That positive to negative swing cost us about $2.5 million and was a major contributor to our slight miss for the quarter. The good news is, January retail is off to a better start as it was up 2.6%.

So we feel like that category is not going to be letting us down in 2020.So Olivia, with that, would you please open it up for questions?.

[Operator Instructions] Our first question is coming from Ben Swinburne with Morgan Stanley. Please go ahead..

Hi, this is Grace Menk on for Ben. You mentioned retail being a major contributor to the growth this quarter -- or to the -- a negative contributor.

Is that impacted at all by having one less week in the holiday season?.

That could have been it. We have literally thousands and thousands of local retail customers. And so, I don't know that I can point to one factor, but we do know that it was a bit of a holiday hiccup, if you will. And as we're looking forward into 2020, again, retail seems to be back to where it was for most of last year.

As I mentioned, going into October, it was clicking along at roughly up 2.5%, and January retail was up 2.6%. So we're hopeful that that was, as I described, the holiday hiccup..

Okay, got you. Thanks. And then, just one quick follow-up. I'm wondering if you could touch on your expectations for D&A in 2020..

Sure. So, what we're looking at on the depreciation and amortization side is a total of approximately $249 million and $250 million..

Thank you.

Were there any additional remarks to that question before we proceed?.

No, thank you..

Thank you. We will now move to our next question coming from Stephan Bisson with Wolfe Research. Please go ahead..

Good morning. Thanks so much for all the color on the 2020 guidance.

I was wondering, Sean, could you put a bit of a finer point on the Q1 revenue expectation?.

So thanks, Stephen. So we feel really good about how we're going to do in Q1. One thing you're going to notice is, we're going to no longer be giving specific Q1 pacings or acquisition-adjusted estimates. So what we're going to do is what most REITs do on the guidance front.

We're going to guide to AFFO with a range per share at the beginning of the year. And then, as we move through the year, we're going to tell you how we're progressing toward that goal. With that said, as I mentioned, we think Q1 is going to get us off to a strong start in terms of hitting the goals that we outlined..

Great, thanks. And then, I don't think that the guidance includes M&A.

Could you confirm that? And what does the M&A pipeline look like at this point?.

Good question. No, the guidance doesn't include M&A. You'll see a very familiar release as we do our first quarter call that will include a backwards look at acquisition-adjusted growth, plus our as-reported numbers. The M&A pipeline is certainly not what happened over the last 15 months.

Over the last 15 months, we had just an awful lot of activity and spent upwards of $700 million on a variety of new markets and fold-ins. So I would categorize it as the pace falling back to what it was sort of prior to all that activity..

Great. Thanks so much..

Thank you. We will go next to our next caller, Anna Lizzul with J.P. Morgan. Please go ahead..

Hi, this is Anna Lizzul on for Alexia. Thank you so much for the question.

Just wondering, in terms of your digital billboard conversions and the acquisition of digital billboards, how much is your percent of revenue from digital now?.

Last year, I believe we did approximately $400 million in digital revenues across the platform. And that was on, as you know, a total revenue base of $1.75 billion.

So approximately, what is that, 22%?.

Great, thank you so much. And then, just one quick follow-up question in terms of the color on retail being a negative contributor during the holiday season.

Do you believe that will turn around in 2020 in the next couple of quarters?.

Our early indications are that retail is going to be fine. As I mentioned, January, we have that in the book, and it was up 2.6%. So it seems to us that that was just a couple of month aberration. And it's -- again, our retail is not what you would describe as sort of big national retailers.

It's thousands and thousands of main street USA retailers, and it's our hope that they'll be healthy and their spend will be stable..

Great, thanks so much..

Thank you, and with no further questions this will conclude today's conference. Ladies and gentlemen thank you for joining, you may now disconnect..

Thank you all and we look forward to visiting in May..

Thank you, have a great day..