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 any distributions to stockholders and the impacts and effects of the COVID-19 pandemic on the company's business, financial conditions and results of operations. 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 and the company's third quarter 2021 earnings release and its most recent annual report on Form 10-K. Lamar refers you to those documents. Lamar's third quarter 2021 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, and welcome to Lamar's Q3 2021 Earnings Call. I am happy to report that the recovery in the ad market continues to exceed our expectations. Advertisers clearly are embracing out of home as a cost-effective, impactful way to reach their audiences as we all are returning to our work, school and entertainment routines. As you recall, our business was in a great place when COVID struck in the spring of 2020. And in many ways, it feels if we have now picked up right where we left off. In other words, our recovery is not only complete, we are surpassing 2019 across virtually every metric, top line, bottom line margins and AFFO. Given how Q3 unfolded and what we see in our book, we now expect full year AFFO per share will land between $6.35 and $6.50 per share. Recall that our initial AFFO guidance for this year was $5.20 to $5.50 per share, and that the AFFO guidance we issued for 2020 before COVID hit was for $6.20 per share on the top end. So by that measure, we are back and then some. Thanks to the rapid recovery in demand, last year's expense cuts and the good work that Jay and his team did in 2020 reshaping the balance sheet, our results have been stellar on that metric. Let's review the third quarter. On a consolidated basis, our billboard billing was up more than 6% from the third quarter of 2019. The strength was across the footprint. All 7 of our billboard regions billed more in the third quarter of 2021 than they did in the same quarter 2 years ago. Once again, digital led the way. In absolute dollars, our digital billing was up 20% from the third quarter of 2019. And…

Thanks, Sean. Good morning, everyone, and thank you for joining us. I will begin with brief comments on the quarter, then review our balance sheet and conclude with a discussion of our current financial position, including a little more detail around this morning's revised guidance. Once again, we are extremely pleased with our quarterly results, which exceeded internal expectations as well as consensus estimates for revenue, adjusted EBITDA and AFFO. The company achieved AFFO growth for the fourth consecutive quarter improving 43.9% to $1.90 per share on a fully diluted basis versus Q3 2020. In the third quarter, acquisition-adjusted revenue increased 23.3% from the same period last year, demonstrating the resilience of our business and the benefits of our operating model with a portfolio heavily concentrated in billboards. Q3 acquisition-adjusted revenue and adjusted EBITDA both exceeded the third quarter of 2019. Despite our airport and transit operations recovering slower than the rest of the business, each of July, August and September improved over 2019 on the top line as well as EBITDA. As you may recall, in response to COVID-19, we implemented several cost reduction initiatives during 2020. With the second and third quarters returning to more normal levels, acquisition adjusted operating expenses increased 14.8% in the third quarter, driven primarily by variable expenses tied to revenue. We reduced operating expenses by approximately $80 million in 2020 and anticipate about half of those expenses or $40 million would return as revenue rebound. With revenue performance exceeding our expectations from the beginning of the year, we now forecast $50 million to $55 million of operating expenses will return in 2021, with full year expenses coming in around $945 million to $950 million. Despite this acceleration in expenses, the company still expects to maintain strong adjusted EBITDA margins for the full year.…

Thanks, Jay. Just a few quick comments before we open it up for questions. And the theme is really about resiliency and the incredibly resilient business model that Lamar has, and I'm going to illustrate that with a couple of statistics. And again, it's about getting knocked down but getting back up. And when you look at regional performance, pro forma growth, it's now increasingly clear that the harder regions got hit in 2020, the stronger they recovered. For example, our Western region, which as you all know, was the hardest hit by COVID, grew in Q3 this year over last year, 30%, as did the Northeast region, which was equally hit hard by COVID. And in terms of EBITDA, their EBITDA was up, this quarter this year over same quarter last year, north of 50%. So they got hit hard, but they're recovering stronger and got back up. I think as Jay pointed out, the same holds for our local and national business. Q3 2021 over last year local is up about 18%. But you take Q3 2021 national and programmatic and it's up a whopping 40% over last year. So again, resilient, get knocked down but get back up. And I finally would point to one vertical that hasn't gotten completely off the mat yet, which is amusements and entertainment. As I mentioned, it's about -- still about 40% down from pre-pandemic levels. And it constitutes about 4% of our book. We expect that to grow back to 7% of our book. We think we have upside there. And so it's just very gratifying for all of us here at Lamar to have turned in the kind of results that we did in Q3. It's just, again, very illustrative of a resilient business model. With that, Olivia, we will open it up for questions.

[Operator Instructions] Our first question comes from Ben Swinburne with Morgan Stanley.

I guess a couple of questions. Sean, inflation is a big topic out there, both in advertising and just generally. And I'm wondering if you could give us your sort of two cents on kind of the revenue side of that equation, whether that's helping or hurting or both in how you look at it. And then also on the rent side, I think a lot of investors are excited to own your stock because of the sort of potential for ad rates to outpace rent growth. And I'm just curious if you could update us on that because inflation seems like a bigger topic than usual. And then I'd love just if you could talk a little bit about programmatic and whether that you think as we look into next year becomes like a real channel with bigger revenue? I know it's growing, but it's still pretty small. And then I just had one for Jay. Just Jay, any help on thinking about OpEx growth in the fourth quarter since I know there's been some acquisitions, and I'm sure your bonus accruals are probably in the right place for the employees. So just any help there would be great.

Great. Thanks, Ben. So historically, and I'm looking back 30 years, Ben, inflation has been our friend. If you look at the largest expense that we have, as you know, it's our ground leases, the majority of those are fixed in inflationary times and noninflationary times, the growth of that expense base tends to be around 1%. So it's a relatively fixed expense. The next expense for us is labor, wages, employees. On the front side of the shop, a lot of that comp is flexed to revenues, sales commissions and the like. So that's going to grow with the top line. In the back of the shop, there's a little bit of wage inflation back there, but it's not enough of a base to really move the needle in terms of our total expenses. So I would say the news is good on the expense side. We're relatively insulated from inflation. On the revenue side, I'm going to compare us to other REITs because the story there is good as well. Our contracts tend to be far shorter than most REITs, right? So we have the opportunity to reprice our space virtually every 3 months as opposed to having a 5- or 10-year lease on a commercial office building or something like that. So on the top line, the last time we had inflation we would reprint rate cards several times during the year. So if -- again, if history is our guide, inflation is our friend. On programmatic, the story there is really, really good. Keeping in mind that in the spring of 2020 programmatic went to 0. And again, I guess, on that theme of the harder it falls, the quicker it recovers, but that certainly holds true for programmatic. We set a record in October for our programmatic platform, and we're really excited about the future. I think we set a goal of something around $25 million to $30 million this year, and I think we're going to exceed that in terms of programmatic billing. And again, that's from a standing 0 start, basically. So that all feels good.

And then, Ben, from an OpEx perspective for Q4, with revenue continue to outperform, we'll see growth again; versus 2020, that's probably going to be low double digits, call it, 13%. And then to put that into perspective against 2019, probably flat against 2019 and Q4.

[Operator Instructions] Our next question comes from Alexia Quadrani with JPMorgan.

On the -- you've had such great momentum in the advertising, revenues continue to come in better than you had anticipated all year. I'm just curious how much visibility you have going into '22 next year? Given you do -- you obviously have some commitments early on. And also, particularly taking into account, you do have certain categories, like you mentioned, have not fully recovered. With some improvements there, I guess I would just love to hear your thoughts about sort of early thoughts into next year. And then just a clarification, I know you touched on potentially presenting to the Board the potential for a special dividend. Did you mention the timing of that? I know it's still hypothetical, but I'm curious what the timing was?

Sure. Alexia, so kind of peering into next year, it is a little early, but we have laid down some bookings for next year. I can say this, our bookings for 2022 at this moment in time in 2021 and are running ahead of the same moment in time in 2019 for 2020. So sort of comping to pre-pandemic it looks good and strong. And I feel like the setup for 2022 is as good as I've ever seen in my career here at Lamar. We've got an awful lot of momentum in terms of our core base business, and we also have a political year. So we should, in 2022 have, all things good on the macro front, we should have a great setup going into next year. And then thinking about the special dividend, I'm going to let Jay touch on that after I basically say, this is driven by our REIT status, right? And if you look at the kind of net income we're going to generate and the NOLs that we have, we're going to sort of moderate that special dividend around the use of NOLs and what we see going into 2022. But again, as a REIT, we have a distribution requirement. I wouldn't necessarily call it a "special dividend", I would call it a sort of "mandatory" on us. But I'll let Jay speak to it because the REIT rules can get very complicated.

Sure. Alexia, obviously, as we mentioned, our goal is to get back to $4 a share as quickly as possible. In terms of timing, the way the cadence will work, and this is obviously subject to Board approval, is that we would seek approval from the Board for the special dividend in December. We would anticipate that would be $0.50 per share, and then it would actually be paid out early next year in January.

Thank you. With no further questions, I will turn the conference back to Mr. Reilly for closing remarks.

Well, great. Thanks, everybody, for listening. We look forward to finishing the year strong and visiting with you again in February of 2022.

Thank you, ladies and gentlemen. This concludes today's conference. You may now disconnect.