Excuse me, everyone. We now have Sean Reilly and Jay Johnson in conference. Please be aware that each of your line is in a listen-only mode. At the conclusion of the company's presentation, we will open the floor for questions. [Operator Instructions] In the course of this discussion, Lamar may make forward-looking statements regarding the company, including financial performance, strategic goals, plans, and objectives, including with respect to the amount and timing of any distribution to stockholders and the impacts and effects on general economic conditions, on the company's business, financial condition, and results of operations. All forward-looking statements require risk, uncertainty, and contingency, 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 can cause actual results to differ materially from those discussed in the call in the company's third quarter 2023 earnings release and its most recent annual report on Form 10-K. Lamar refers you to those documents. Lamar's third quarter 2023 earnings release, which contains information required by the Regulation G regarding certain non-GAAP financial measures, was furnished to the SEC on the Form 8-K this morning and is available on the Investor 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, Katie. Good morning all, and welcome to Lamar's third quarter 2023 earnings call. As we mentioned in the release, the operating environment remained choppy in Q3, with customers continuing to take a cautious approach to their campaigns, particularly on the national side. Despite that, we demonstrated impressive operating leverage in Q3, increasing revenue modestly while decreasing expenses on a year-over-year acquisition-adjusted basis. The expense result is a credit to the disciplined management of our local general managers. Our team is doing a great job of managing to the macro environment. We also benefited from one-time COVID relief payments in the airport business. Operating margins without the one-time airport relief payments in Q3 were 48.3%. Again, that's an operating margin of 48.3% and improvement over last year's Q3 margins of 47.6%. Again, a great performance by our team. Pro forma expenses without the airport payments were essentially flat. We expect a similar combination in Q4, slight pro forma revenue growth coupled with pro forma expenses that are flat to down slightly. Recall that on the revenue side we will have a political headwind that is likely to cost us 100 basis points or so of growth. Nevertheless, as indicated in the release, we are on track to reach or even likely exceed the top end of revised guidance for full year AFFO per share that we provided in August. Q3 categories of particular strength included services and amusements and entertainment while retail education and real estate were weaker. Insurance, which has been a tough category all year, has stabilized and was close to flat in Q3. Political by the way was off about $2 million from Q3 in 2022, which is typical for an off-cycle year. For the quarter, rate was largely unchanged across our analog platform versus the…

Thanks, Sean. Good morning, everyone, and thank you for joining us. We continue to experience modest growth in our portfolio during the third quarter and exceeded internal expectations for both operating expenses and adjusted EBITDA. In the third quarter, acquisition-adjusted revenue increased 1.6% from the same period last year against a difficult comparison in which pro forma revenue growth was 6% in the third quarter of 2022. Our billboard regions grew in the low- to mid-single digits with the exception of the Northeast and Midwest, which contracted year-over-year as a result of their exposure to national advertising. Acquisition-adjusted operating expenses decreased 110 basis points in the third quarter, which was slightly better than anticipated. We now expect operating expense growth for the full year to come in around 1% on an acquisition-adjusted basis. Adjusted EBITDA for the quarter was $265.7 million compared to $251.2 million in 2022, which was an increase of 5.8%. On an acquisition-adjusted basis, adjusted EBITDA increased 4.5%. Adjusted EBITDA margin for the quarter remained strong at 49%, expanding by 140 basis points over Q3 2022. And despite inflationary pressures over the last 24 months, the company's adjusted EBITDA margin remains well above pre-pandemic levels. Adjusted funds from operations totaled $208.8 million in the third quarter compared to $206.4 million last year, an increase of 1.2%. This was despite cash interest increasing by $11.1 million over Q3 2022. And even though cash interest was a headwind of approximately $0.11 per share, diluted AFFO increased to $2.04 versus $2.03 per share in the third quarter of 2022. The slight improvement in AFFO against an $0.11 cash interest headwind underscores the resilience of our business model with a portfolio heavily concentrated in billboards focused on local markets. Local and regional sales grew for the 10th consecutive quarter, increasing 2.3%.…

Thank you, Jay. I'll add a little color and then open it up for questions. As Jay mentioned, regarding relative geographic strength and weakness, it's been tough this year in large markets in the Pacific Northwest and in the Northeast, where those markets have more national exposure. Everywhere else across Lamar's footprint is by and large solid. I mentioned that we have nearly 4,700 large-format digital faces up today and we are still tracking to add a total of a little over 300 this year. On rate and occupancy, I mentioned analog bulletin rate and occupancy were basically flattish, analog poster rate slightly up, occupancy a little down. Jay mentioned the national, regional versus local sales mix. Local regional was 77%. National programmatic was around 23%, similar numbers that you're used to hearing. In terms of revenue growth by quarter, local regional was up 2.3%. National ex-programmatic was down 2.6%. As I mentioned, programmatic has been a drag on national for the first three quarters of the year, but we're seeing good momentum in our programmatic book as we move through the fourth quarter. Services and amusements were particularly strong in Q3, up approximately 16% and 11%, respectively. And they are both, by the way, up a like amount year-to-date. Categories are relatively weakness, as I mentioned, retail down 8%, education down 6% and real estate down 10%. So, with that, Katie, I will open it up for questions.

Thank you. [Operator Instructions] Our first question will come from Cameron McVie with Morgan Stanley. Your line is now open.

Hi, guys. Thanks for taking my questions. It's great to hear there's positive momentum into the holiday season and into December. Just curious how that's trending on a local versus national basis looking forward. And then, I have a follow-up. Thanks.

It's almost exclusively local regional, Cameron. That remains where the strength is.

Got it. Looking ahead into '24, I know you guys gave some color on it, but is it appropriate to assume the implied '24 -- the 4Q '23 organic growth is an appropriate run rate, or are you expecting more of an acceleration into next year?

Are you talking about the 1.6% run rate from Q3 going into next year?

Yeah, that's right.

I would expect something measurably better.

Got it. Okay, great. And just one follow-up. I saw that you guys paid down $70 million in outstanding borrowings under the revolver. You guys have a great-looking balance sheet. Curious, how you're approaching your capital allocation going forward. What's the priority?

Well, I'll let Jay hit it on more particulars on the balance sheet, but as we look into next year, we're going to continue to invest in our digital footprint. It wouldn't surprise me if the M&A activity was a little softer or a little bit less active. That's a combination of the fact that we pulled a lot of M&A activity forward in '21 and '22. And also just sort of where the seller activity seems to be coming out. So, if we do have the opportunity to pay down some more debt, that wouldn't surprise me either, particularly on that term loan A that's out there. Jay?

That's exactly right. So, if we're in a more muted acquisition profile next year, we're going to be pretty aggressive and use our free cash flow to pay down our floating rate debt. That's probably the best investment that we can make at this moment. And we'll be focused on, as Sean mentioned, the term loan A, which is our nearest-term maturity. And if we're in that sort of profile next year, we can see leverage tick down by the end of the year below 3, which would be the best in the history of the company and set us up well for any opportunities.

Great. Thank you, guys.

Katie, are there any more questions?

And we will take our next question from Richard Choe with JPMorgan.

[Technical Difficulty] strong December. There was some confidence in December. Can we see growth accelerate into the fourth quarter? Because it's kind of been trending down through the year, but you have that political headwind of 100 basis points that could kind of mitigate that.

Yeah, I think that's a good way to frame it. October was obviously facing that headwind of political. The way I like to look at it now is November was better than October and December is measurably better than November. So that's the sort of tone as we move through the quarter, and I think it bodes well for how we go into 2024.

Great. And it seems like national, I guess, is continuing to be soft, but there's some hope that next year kind of comes back. Is that fair?

I have to lean on easy comps, but we're going to have awfully easy comps when it comes to national of next year. So, you should see instead of -- in lieu of those negative numbers that you saw as we move through the year, you should see positive numbers.

Great. Thank you.

And I am showing that we have no further questions at this time. I'll turn the call back to our presenters for any additional remarks.

Well, great. Thank you, Katie, and thank you all for listening. I hope you all have a happy and safe holidays, and we will talk again in 2024.