So, welcome, everyone, to Citi's 2024 Global Property CEO conference. I'm Jason Bazinet with Citi Research, and pleased to have Lamar with us today. And both Jay Johnson and Sean Reilly are here, CFO and CEO/President, respectively. This session is for Citi clients only. If media or other individuals are on the line, please disconnect. Disclosures are available on the webcast and at the AV desk. For those of you that are in the room or on the webcast, you can go to liveqna.com and enter the code GPC24 for Global Property CEO Conference 2024 to submit a question, and it'll come up here, and I'd be happy to ask it if you want to stay anonymous. And with that, Sean, I'll turn it over to you for a few opening remarks before we go into Q&A. Thanks, Jason. Appreciate it. And hello. Good morning, everyone. Thank you for your interest in Lamar. I'm going to make a few comments updating some developments since our earnings release a couple of weeks ago and speak to a couple of questions that we got after the release, and then we'll open it up for questions. So I mentioned on the call that we're off to a good start for the year. In fact, since we've closed February, the news has gotten a little better on that front. I had mentioned that we were tracking toward the top end of our guidance for AFFO per share. Our guidance, by the way, was $7.67-$7.82. Given the strong February we had, we're now tracking above that range. So we're tracking above the top end of the range as we sit today, which is nice. As you know, we increased our distribution recently. Given how we're tracking and assuming that we do hit our goals, it's safe to assume we're going to have to increase our distribution again. Historically, we've had a variety of tax shelters that we've used, NOLs and the like, that we've used to artificially suppress our net income. We're running out of those shelters, and so you should look for an increase in the distribution in the third quarter and quite possibly a top-up in December as we distribute 100% of our net income. A couple of questions we got on the call. I described that we are doing a slight tactical shift in our capital allocation this year. Historically, we do a lot of acquisitions with our free cash flow, and we announced that we're slowing down on the acquisition front because we want to pay off our Term A indebtedness in our balance sheet, which is due next February. So we're going to use a goodly chunk of our cash flow this year to take down that Term A and then take down the rest of it with our revolver. We think that's a good and prudent use of our capital this year. And when we do that, our leverage will be, by far, in a way, the lowest in the industry. It'll be below 3 x EBITDA. People interpreted that to imply that there's not as much acquisition runway left in our industry, and I want to dispel everybody of that notion. The out-of-home industry is still incredibly fragmented. There are well over a dozen companies with asset valuations between $75 million and over $1 billion. I'm not counting the other two publics. I'm just counting the independents out there. Then if you look at asset values between, let's call it, $5 million and $75 million, there are literally hundreds of independent billboard companies out there that fit that profile. So there's lots of work to be done. It's just not going to be as active in 2024. Then one other, just sort of, we got questions on what we meant by we see national ad spend stabilizing. As you know, we are predominantly local when it comes to our tenant base. 80% of our tenants are local ad companies, and we touch those clients with 1,000 account executives, right? But we do have 20% of our business that's national. Last year, national was a disappointment. Having answered the question how we see it developing this year, we used the word it's stabilized, which to us means while it will be down slightly in Q1, sequentially, we think as we move through the year, it's going to get sequentially better. That's what we mean by stabilized. Jason, those are my early comments. You can fire away, and if anybody else has questions, they can fire away as well. Anyone have any questions? I'll let y'all kick off if you want to. Very good. That gives a sense of how far you want to move digitalization across the portfolio? Great question. So to put a little context around that, we did say that we're slowing down our digital deployment slightly this year as opposed to last year. And again, the reason being we're taking some of that capital and deploying it against the Term A. That said, the digital runway is quite strong as well. To give you an order of magnitude, we have 160,000 billboard faces, and only about 4,800 of them are digital today. Those 4,800, by the way, generate 30% of our revenues. So we are very, very excited to go aggressively against our digital deployment plans as we move through the coming years. Last year, our same board digital was slightly down. Some of that was due to weakness in national and weakness in our programmatic channels. Programmatic has rebounded nicely. It's up over 10% year-to-date. For February, our same board digital was up 7.5% year-over-year. Now, 3.5% of that was because we had an extra day, right, in leap year. But a good solid 4% up was same board to board. So we're feeling good about the direction that digital is going in. What's been the cadence? So if you've got a huge digital initiative, generally, what's the cadence of digitalization? Last year, we did a little over 300 conversions. This year, we're targeting somewhere around between 225 and 250. Any cadence in costs for those boards or anything? No No one really has any? Not really. I mean, we've wrung the costs out of those things dramatically. The diodes are, I mean, fractions of pennies, right? So it's labor and wood, right? So it's no more Moore's Law, really. Any time to political? Sure. So political breaks late. So while we're anticipating it, not much of it is booked yet, right? We should be somewhere it should fall somewhere in the mid-$20s million as opposed to a non-political year, which falls somewhere in the low-$10s million. In past years, when you've had third-party candidates, how has that changed the business model? So in general, most of what we get is hyper-local. So you're talking congressional, governors, judges' races, mayors, that kind of thing. So it really doesn't shift that much in a presidential. It shifts some. It would be nice to have somebody else jump in this thing, but we'll see. What's the level of policy you made about the comparison of the expense and the policy? Do you take staff and knowledge from you guys too? So that is not a needle mover for out-of-home. But what it does do is it crowds some people out who would otherwise be buying television, right, certain local advertisers who don't want to either pay that freight or, quite frankly, don't want to be, particularly in a political year, caught up in the milieu of politics and TV and the tit for tat. So what you'll see is some advertisers will gravitate to us as they just sort of seek a little shelter from the storm. Does that make sense? Yes. May I ask a question about national? Fire away. If I look at the broader sort of advertising ecosystem, there's no doubt that we just continue to see even more extraordinary growth from the digital guys. But it does feel like a lot of the sort of traditional media companies are sort of not seeing sort of anything in terms of the macro strength we're talking about. When you look at the weakness in national that happened over the last year and a half or so, is it as simple as, "Oh, there's this vertical with insurance. Oh, the online sports betting sort of faded"? Or when you strip those sort of known-knowns out, is there still some other underlying weakness on the national side of the book? I think you nailed it when you said a couple of verticals and just a little activity. Keep in mind, it's 20% of our book. So little shifts in how GEICO feels about its world can have an impact on us, right? One question we did get after the call was it seemed that in terms of national, Clear Channel, and OUTFRONT, we're seeing a little more light at the end of the tunnel than Lamar. And there's a reason for that, and it's primarily around the movie business. So they are indexed heavily to New York and L.A., and so they index heavily to that vertical. We've never really gotten much of that. So when they're recovering from the writers' strike and all that stuff, they're having a little bit of a rebound that we're not seeing in terms of that particular vertical. You didn't say this. I heard your answer in terms of why you're going to 225 digital conversions versus 250-300. But is there a line that you could draw to the weakness in national? In other words, if I looked at the 4,600 digital conversions, I would imagine that over-indexes to national. No, it really is roughly the same as our overall platform with one important difference, which is programmatic for us is 100% national. All right? So when we had the weakness in programmatic, that's what spilled over into the weakness for national. And by the way, programmatic, like I said, is pacing up a little north of 10% this year, so we're feeling good about it. But order of magnitude, you're talking about $30 million, right? How does that economic set? You're able to get 1,000 people there in the past year. Does that track with how close that receivable revenue is left? So our internal budgets, which would filter down to their individual AE budgets, imply roughly acquisition-adjusted growth of 3.25% up. We're doing better than that. Turnover in our account executive ranks is in the sort of low-teens% a year. So we have to train account executives and keep them motivated and keep them going. A real change tonight? No. No, it's very, very predictable year in, year out. Can I make one request for those in the room? Make sure you speak into the mic just so those on the webcast can benefit from your intelligent questions. Can I ask a question about margins and costs? You guys had a phenomenal year, right? 46.7%, I think, was your EBITDA margin. Yeah, it was our company record for margins and not the greatest top-line year, right? Yeah, I totally agree. And I would argue maybe even some lingering effects of inflation, right, that are sort of still running through the P&L. So no, no one. There's no inflation running through our P&L. I mean. Okay. Well, not yours, but just if I just sort of look at the macro, it's like. Right. I mean, our largest expense, just to kind of walk through it, is the rent we pay landowners for the right to put our billboards on their property, right? And that runs, give or take, 21% of revenues. And it grows very predictably year in, year out. Even during the great inflation events of 2022, it grows about 1% a year. I mean, you can almost just write that number down. It's a huge portfolio of 60-some-odd thousand leases, right, with every conceivable term you can imagine, month to month to 99 years, right? Very few of them are tied to our revenues. We don't do very many revenue shares. So when our revenues go up and that expense grows only 1%, that's margin-enhancing, to your point, Jason. 18% of our expense base is people. We had some inflation in the people front in 2022, but that's calmed down. Then our next expense, you have to go all the way down to our electrical bill, which is 3%, right? And the rest of it's pennies. So with that picture of our expense base, you should see margin improvement, actually, even from that 46.7%. This year, we do have a couple of headwinds on the expense side that we mentioned on the call. Last year, we had the benefit of some relief from airport minimum guarantees that were related to COVID. And we're also undergoing an enterprise conversion, an ERP. And this year is peak spend for that. Now, again, this is not huge dollars, but don't expect our expense base in whole to grow 1% like it did last year. It'll be more in the 3% because of those two factors. Do you see how much land you own now and how much you spend on the land and what kind of operating? Sure. I guess you prioritize the land within the digital end. We do. We do. So the question was, how much land do we own? So again, 70-some-odd thousand structures, 60-some-odd leases, about 10,000 parcels. We actually own the land under our billboards. And we own the land under, in terms of expressed as revenue, we own the land under a little north of 20% of our revenue and in particular attention to the digital billboards because they're our most valuable. So we purchase a lot of easements under digitals. How does it really move that 20%, right? I think no one should agree with the data. Buster, did I get that order of magnitude right? Yeah. Yeah. A little north of 20% of our revenues. Yeah. Oh, has that changed over the years? Over a long swath of time, yes. Year to year, you wouldn't notice it because, again, it's a huge portfolio. But over time, you'll see that number grow. I have a question from the web here. What is happening with local growth in 2024? Local is very, very strong. Main Street USA was tired of anticipating a recession the last 18 months, and they've put it behind them. I mean, it is very strong. I mean, when you think that national is going to be slightly down in Q1, and I'm hinting that Q1 is going to be real strong for us, it's predominantly, well, local, right? Could you quantify very, very strong for local? Well, I don't want to up my guidance, but. I mean, is it? We're going to have a pleasant release in May, and it's going to be, again, predominantly local-driven. Just on the digital billboards, how do you see kind of just the evolving risks of whether it's distracted driving, light pollution, etc.? How has that evolved in your conversations with the municipalities, and how's that gone? Yeah, so good question. This is sort of what's the landscape of the regulatory environment around digital. And for the most part, and keep in mind, we operate in hundreds and hundreds of jurisdictions, right, and everyone has slightly different rules and regs around this. Most of the time, we sit down with the city leadership, and we kind of come to terms on the rules of the road. Sometimes it involves taking down analog billboards to put up digital billboards. Sometimes it involves, where are you comfortable with them, where are you not comfortable with them. And for the most part, we reach agreement. So in the vast majority of the jurisdictions we operate in, it's very smooth sailing. Now, if you Google Lamar Digital Local Fight, a couple of jurisdictions will pop up, right, Los Angeles being the biggest and most important, right? L.A. has a prohibition. We are actually working with the city as we speak on a plan to put digital units on municipal property. They want to do this because they want to make money, right? Not Lamar-specific. This is the industry. Lamar will benefit from that if we manage to push that across the finish line. That type of negotiation is very typical, very typical. In general, this is one thing you need to know about the out-of-home business, the billboard business. Regulations are our friend. In 80% of our markets, we have over 80% market share, and that's what protects those market shares. It's very hard to build a new billboard in America these days. That's, as Buffett would say, the moat around our business. What is the supply? I'm sorry? What is the supply? So you're saying it's very difficult to build. So do you have any tricks around that? In terms of billboard structures, I'm not talking digital now. There are no net new billboards being built in America, right? So the supply is basically fixed. And I would argue that as a real estate asset class, that's a pretty nice place to be. Now, capacity is growing in the industry because the industry is converting to digital. And every time you convert an analog face to a digital face, you're adding seven new faces because you got eight flips. So that's where the capacity comes in. That's where the additional supply comes in. You guys are being more measured in your digital deployment, but how do you feel about your peers expanding more aggressively into digital? Is it bringing in new customers, or do you sense everyone needs to be measured in their digital because if this gets too far ahead, you do run into constraints on the supply front? Yeah, good question. I'll start with we are by far and away the largest. We have the largest digital platform, I mean, going away. And it's also important to note that in those markets where our market shares are so dominant, oftentimes, we're the only digital provider, right? So we are able to maybe tap the brakes a little bit and not face competitive pressure from that, right? In terms of customers, it skews a little bit more towards call-to-action customers. Think events, concerts, entertainment, amusements. So the digital footprint, again, skews more towards that, a little more towards call-to-action on price because you can change price dynamically up there. But that said, the verticals look remarkably like the overall platform. Just on the digital, can you walk us through where we are in terms of some of the monetization opportunities, whether it's using data on whether it's advertising certain products or, to your point, events during soccer games, Heineken? Where are we in that evolution? This is a good story because for our digital product, we are able to walk into a client, walk into a business, and not sell against their social and internet and digital presence but sell to complement it. So for example, if they have something that's trending in their social media, they can tie it to their digital buy and automatically change the copy so that the copy is relevant and fresh to whatever's trending on whatever they're doing in their social media. And we can go the other way, right? So if we've got a digital unit and a car drives within a certain radius of the board, the ad will ping their phone. I'll use the example. Let's say the customer's Budweiser, right? And the target is males age 23-55 who use ESPN to check their scores, right? If that profile drives within a certain radius of the billboard, the Bud ad is embedded in their ESPN, and when they open it up, they check their scores. They see the same ad. So we're able to, again, complement what our customers are doing in the digital realm, in the digital space, with whatever they want to do with us. And it's an effective sale. I mean, it's a powerful tool. Of your 70,000 boards, you have 4,800 of them digital. What do you think the capacity is for digital? I assume some are non-economic. Yeah, good question. So it's actually 160,000 faces. Oh, sorry. A lot of the structures have two sides, right? So good question. I'll start with the supply side, right, because our capacity to add digital units, even when we're going as fast as we can, is a little over 300 a year, right? So that's a constraint on growth. And then let me go to the demand side. We have customers that don't want digital, right? So think one of our largest customers is Cracker Barrel, right? I mean, we're their primary medium, and they just want a billboard on the interstate that says, "Pancakes, $7. Exit here," right? And oh, by the way, as a tenant, their average length of stay on one of our billboards is about 30 years. So you have that kind of demand customer that isn't seeking a digital unit. Okay, all that said, it's about 30% of our book today, a little north of 30%. In Europe, in England, for example, digital represents well over 50% of out-of-home spend. So you might use that as a barometer. So that's a long-winded way of saying, "I don't know. So what's the capacity constraint? Is it just the drag on earnings while these things ramp up that you don't want to? The capacity is a great question. So when you do a conversion of an analog structure to a digital face, it's a construction project. And so all of the things that you need to do logistically in building something outside comes into play. But the major factor is what we were talking about earlier is regulatory, right? When we sit down with the city and say, "Okay, here's our plan," that can be an eight-month to a year-long conversation, right? And then they come out and they say, "Okay, great, Lamar, we love you. You can do five." I'm thinking in a single DMA, right? And that's the main gating factor is regulatory. Can you step to the economics of the digital spend? Sure. Let me start with the economics from our point of view, and then I'll go to our customer's point of view. So we're taking down something, on average, as an analog face that's probably doing about $3,000 a month, right? We put up a digital face, and it's going to do $15,000-$18,000 a month, right? And it's going to do that because it now has multiple customers. And we usually have an eight-slot model. So there's a potential, if you're sold out, to have seven more customers, right? So be conservative. Write down $15,000 a month, multiply that by 12, put an 85% margin on it. And then you can do all that arithmetic and assume that it costs $220,000 to do the conversion. And then you can back into your ROI, and you can see it's pretty nice. The timing is from the analog being off to digital being up and running days? Days. Cool. Oh, from our customer's point of view, this is important. So the customer was paying $3,000 a month. In absolute dollars, they're still going to be paying about $3,000 a month. However, they don't have to buy the substrate, the vinyl that goes up, the production, right? So they save on that. And it's shared space. What does that mean? On average, about 2.6 cars are going to see a slot as they're going by. So their cost per 1,000 impressions is going to go up, right? So absolute dollars the same. Cost per 1,000 impressions goes up. It's going to go from, give or take, $3-$5 per 1,000 impressions to, give or take, $7-$9 cost per 1,000 impressions. Now, why are they happy paying more? Because it's so dynamic. I mean, they can do so much with it. They can change the copy from their desktop. They can integrate it into their social campaigns. It's just they are willing to pay a little bit more cost per thousand impressions for the dynamism that they're getting. Can I ask about a good long-term? Oh, I want to introduce Marshall. Marshall's one of my board members. So if you think I'm nervous that y'all were asking me questions, thanks for coming in, Marshall. Marshall is the CEO of a REIT who's presenting here as well. We're just down the hallway. Thanks, Sean. So I want to ask about sort of the right algorithm for AFFO growth. So if I go back over a long period of time, I don't know, 2014 to 2022, even with COVID in there and all that stuff, it was sort of a high single-digit CAGR on AFFO, I think. That's right. Okay. So I think last year to the midpoint of your guidance, which you've hinted might not be it might be better than that, but it's more like 2% or 3% or something like that AFFO growth for the year. So as investors are just sort of thinking about their long-term model, what is a right sort of reasonable number over five, seven years? Well, I think, and I'm going to let Jay touch on this. But of course, last year, there were tremendous interest rate headwinds, right? But if you adjust for that, we blew it out of the water, even in a tough year. But Jay, you want to? Yeah. So our guidance this year, Jason, at the top end is about 4.5% AFFO growth. As Sean alluded to, with our floating interest rate, we had a headwind of about $0.45 in 2023. Cash interest was about $46 million above 2022. So if you adjust for that, very, very healthy AFFO growth. And I think going forward on sort of that five to seven-year CAGR, mid-single digits is not out of the realm of possibility in particular as the Fed looks to pause and potentially reduce interest rates going forward. Okay. And so when I think about the comments you made around we're going to pay off that Term Loan A, some of it with our excess cash that we don't dividend, some maybe with your revolver, should investors be thinking, "Oh, Lamar has line of sight on some transformative M&A thing that's going to happen in 2025 or 2026," or is it more back to, "Hey, we just want to not have this interest headwind and want to sort of de-lever"? I think there's a little bit to be said for the, "Let's de-lever a little bit. Let's reduce our floating exposure to floating interest rates." The refinancing environment is better than it was six months ago when we put this plan in place, but it's still not great, right? So we just think it's wise to do it. That said, we believe there's $1 billion worth of opportunities in, let's call it, mid-2025 into 2026. And we've got visibility into that. And again, this slight temporary tactical shift we're undertaking this year will give us $1 billion worth of capacity. Is that just context? Is that unusual for a number that large for you to have visibility into? Yes. I mean, there's really only two players that we're talking about here, and everybody knows who they are, so. Okay. That's great. Thank you. Let me just check, see if there's any questions on the web, and then we can just wrap it up. I think we're all set. Sean, Jay, thank you. Hey. That's great. Thank you, guys.