Excuse me, everyone, we now have Sean Reilly and Keith Istre 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 and plans, and the amount and timing of any distributions to stockholders. All forward-looking statements, including statements with respect to Lamar's consideration of an election to real estate investment trust status, 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 most recent annual report on Form 10-K, as updated by its quarterly reports on form 10-Q. Lamar refers you to those documents. Lamar's first quarter 2014 earnings release, which contains information required by Regulation G regarding certain non-GAAP financial measures, was furnished to the SEC on a Form 8-K this morning and is available on 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 very much. Good morning, and welcome to Lamar's Q1 2014 conference call, our first since receiving a positive ruling from the IRS on our conversion to a REIT. In recognition of our new status, I'll speak to the 2 most factors to REIT investors. Number one, our distribution policy. And number two, our expected AFFO per share. On number one, we plan pay out $2.50 per share this year in thirds at the end of each of the remaining 3 quarters in 2014. We intend to increase that $2.50 per share distribution by 10% in 2015, payable quarterly. Number two, we provided guidance of $4.03 to $4.13 per share in AFFO after receiving our PLR. We are presently tracking at the upper end of that range, and I don't see any reason why we can't increase our AFFO per share by at least 10% in 2015. As a REIT, we need to introduce ourselves to traditional REIT investors. We need to help them understand the fundamentals of our business, help them understand just how resilient and robust our business model is and most importantly, why the underlying characteristics of our business deserve an AFFO valuation at least as good, if not better, than the real estate businesses at the bottom quartile of the REIT universe. That conversation will begin next week, as we embark on a weeklong roadshow to get in front of REIT investors. I hope to see many of you on this call in New York, Boston and Baltimore next week. Keith?

Good morning, everyone. Just to add a little color on a couple of the operating metrics and a couple other items in the press release. Our pro forma revenue, as you saw, increased 1.9% for the quarter. That's reported on a monthly basis. Just to remind everybody, last quarter we started showing our actual as-reported numbers on a daily basis, but we're still reporting pro forma operating results on a monthly basis, as we always have. On the consolidated expenses, which includes corporate overhead, our pro forma growth there was 2.7% for the quarter. Remember, on the last quarter, we had guided to approximately a 2% to 3% growth in expenses for the year on a pro forma basis. Corporate overhead by itself increased 11% or approximately $1.5 million. Half of that increase was REIT related. And we will continue to have REIT-related expenses going forward for the rest of this year. Not sure which quarters it will hit, but we're looking at probably about another $1.5 million before we're done in 2014. And of course, EBITDA was up slightly for the quarter as well. Next, as you saw in the press release, we have included comparative FFO and AFFO metrics for the first quarter of '14 and '13. I'd like to caution everyone from trying to extrapolate what the full year's number will be by annualizing Q1 of '14 performance. Our business has a seasonal bias to it, as do the other outdoor operators in the industry in general. And the first quarter of each year is always the lowest quarter of the year for revenue and EBITDA performance. Last, just to touch on the refinancing transaction that we summarized in the press release. At the end of April, we called the $400 million high-yield note tranche that's been outstanding since 2010. It carried a coupon of 7 7/8%. We replaced those notes with a new Term A bank loan and a draw on our revolving credit facility. On a net annual basis, this will reduce our interest costs by $23 million. On a pro forma basis, our interest costs would have been approximately $6 million less in the first quarter if the refinancing had taken place January 1. For 2014, we're projecting our total cash interest cost to be approximately $100 million. And for '15, it will be approximately $90 million. To put that in perspective, in 2013, our cash interest cost was $131 million. We had some very -- we issued some high-yield notes in 2012 at very attractive coupons, all in the 5% range, all 10-year money. That is long-term money, fixed and locked in. And we also continued to pay down outstanding debt with our free cash flow in '13. So we've made some really positive strides in knocking down our interest cost, and it should continue to hold going forward. Sean?

Great. Thanks, Keith. And so I'll cover a few of the internal metrics with a little bit of color on the turn of business. Digitals first. At the end of Q1, we had 1,901 digital faces up and in the air, an increase of 40 over the end of the year and last quarter, a very good news internally. Same board digital was up 3.3% in Q1. For those of you that are following know that we have been tracking that very carefully and closely over the last 18 months as it had flattened out. And that appears to have turned around and pacings in digital are very strong as we move forward through the year. Our goal this year is to add approximately 150 new digital units, and we are progressing nicely on that goal. Rate and occupancy. Poster occupancy Q1 '14 versus Q1 '13 was flat at 63%. Bulletin occupancy Q1 '14 was 76% versus 75% Q1 '13, an increase of 1%. On the rate side. Q1 '14 poster rate, $428 average rate per panel. Q1 '13, $418 average rate per panel, an increase of 2.3%. On the Bulletin side, Q1 '14, $1,076 average rate per panel versus Q1 '13, $1,082 average pace per panel, or a decrease of 0.6%. As you recall, on our last call, we mentioned that our bulletin rates towards the tail end of last year were disappointing. We are seeing stabilization after that Q4 '13 decline. So we can really feel good about where bulletin rates are trending. National-local sales mix. National was 20% of our book of business in Q1 '14 versus 21% in Q1 '13. And on growth, national versus local revenue. Our local book of business in Q1 grew 2%. Our national book of business in Q1 grew 2.4%. In terms of strengths and weaknesses in the book of business. We'll start with health care, which was up 9% in Q1 and is now 11% of our book of business. Services were up 11% in Q1. Amusement, entertainment and sports were up 9%. Auto was up 6%. And real estate was up 18% in Q1 and continues to show very strong trends, as real estate recovers across the country. Weaker categories included telecom, down 16%; financial, down 10%; and retail, down 8%. The trends we're seeing in retail are encouraging. It's grown stronger since its biggest decline in December of last year, and through this quarter is tracing down mid- to low-single digits. So we're seeing recovery in our retail book of business. With that, we'd be happy to answer any questions anybody might have.

[Operator Instructions] Our first question will come from Marci Ryvicker, Wells Fargo.

Just really quick. We didn't hear the same board digital because you were muffled. Did you say up 1.3%?

Up 3.3%, Marci. 3.3%, yes, very, very good quarter, very strong. And the pacings look very good through the rest of the year.

Okay. And then when you provided the AFFO guide in your 8-K, some of the questions we got, if we back into the EBITDA guide for the year of $560 million [ph], does that add back FAS-123? And does it add back any of the REIT-related costs?

It does not include the 123 cost, the noncash comp. It's before that. And no, we did not take out any of the REIT-related cost because it really wasn't material. The whole exercise, going back to 2012, the conversion cost will cost us approximately $5 million over the 3-year period that we've been on this endeavor.

Okay. And then another question as it relates to M&A. Now that you've gotten the Private Letter Ruling, are you going to be more aggressive in terms of looking at acquisitions? And could something happen sooner rather than later, I feel like you've been very involved in getting the Private Letter Ruling and doing this reconversion and maybe now your focus could be elsewhere?

Last year, we did, what, approximately $80 million in smallish acquisitions, Marci, that were sort of between the $10 million and $25 million range. Those, we really didn't pause on, and we're going to continue doing those. I would anticipate we'll probably spend in the neighborhood of $75 million to $100 million this year on those types of acquisitions. None of them, in and of themselves, are significant, but at the end of the year, when you add it up, it's a good contributor to AFFO per share. The other ones, you just have to be opportunistic. There are a handful of acquisitions that we think make sense for Lamar operationally and financially. And we feel confident that over the next couple of years, those will break loose. Those are -- tend to be in the range of $250 million to $500 million. And again, there's a handful of those and we'll just see how it develops.

And does your full year AFFO guide of $4.03 to $4.13 include any of those smaller acquisitions?

No.

Our next question will come from Jason Bazinet, Citi.

I was just wondering if you could summarize for us sort of the key differences between what you thought would happen with the digital rollout versus where you are now. Sort of what went better, what went worse and how much further do you think can go down the path of digital conversions?

You mean since we embarked on converting them 5 or 6 years ago?

Correct, correct.

I would say, in general, it's gone as we expected. It's been a very, very good investment for our company and our shareholders. We learned an awful lot going through the downturn and moderating supply to meet demand. And so, as we went through the '09 and '10 downturn, and then came out of it, the economic tailwinds weren't as strong as anybody would have liked. We may have been a little more aggressive in putting them out in that '10, '11, '12 time period. So last year, we took a little bit of a breather and allowed demand to catch up with supply, as it has, given the same-board performance of up 3.3% last quarter. So we're going to continue to manage it that way. We have a unique platform in that regard. We can turn it on and turn it off in response to both local and national demand. So we're going to continue to do that.

And how far do you think you can ultimately go or it's TBD based on the demand?

Yes, that's a hard question to address when you take into account the potential for cannibalization and again, creating oversupply. Every time we put up a digital face, it's actually 6 traditional faces. So we are adding capacity when we do that. We have markets where digital revenues represent 30% to even 40% of their total revenues. And then we have others, where because of regulatory or other issues, it's 5% to 10%. And so what we're doing is focusing on those markets where penetration is lower, where regulatory barriers have come down of late and we can add capacity where there's not as much. And so that's been our focus over the last, let's call it, 12 to 18 months, and will be going forward.

Our next question will come from Ben Swinburne, Morgan Stanley.

I don't know, Sean, if you're willing to give us maybe the 30 seconds preview on what your pitch is going to be next week to the REIT group. How you -- now that you've had enough time to think about it and look at how REITs are valued and how they perform. I know you mentioned you are less cyclical. But I'd love to give you an opportunity to sort of maybe flesh that out for us a little bit more.

Sure. I think there's 2 very important things that we need to help REIT investors to understand. One, which we've had this conversation with our traditional investors over the last 12 months or so, and that's the nature of our CapEx. Our CapEx is far more optional and variable than your traditional REIT. And year in and year out, barring something exceptional, we'll be operating in that $50 million-ish, give or take 10%, band every year. But it's not like we have to spend that every year and it's not like the billboards are going to fall down. So as we sit and chat with traditional REIT investors and help them understand the nature of our CapEx, how optional and variable it is and also how regular it is, it's not -- these aren't big, big buildings with long lead times and big numbers behind them. And I think that's a difference. It makes a difference, when you're thinking about AFFO per share, it's reliability over time and the ability to protect the distribution, which is a very important point for traditional REIT investors. Again, we don't have to spend it and the billboards will not fall down. As a matter of fact, we skinnied our CapEx very, very, very much during the downturn in 2009 and '10. So that's point number one. I think point number two is REIT investors care about resiliency in the business model. And if you look at us over time, we will compare favorably to ebbs and flows of traditional real estate. There are barriers-to-entry that exist in our business that don't exist in other traditional real estate businesses. That lends -- that puts a moat around our business that doesn't exist around others. And again, we're going to be bringing out that as it shows just how resilient and how robust our business model is through the ebb and flow of the business cycle.

Got it. And then just on the business. How are you feeling about the year at this point? Q1 was a tough quarter on weather for all advertising. It doesn't flip on a dime. But I'm wondering how you're feeling about the back half? And your 10% dividend growth comment in '15 obviously implies a view about revenue in '15. So since you put it out there, I thought I'd at least ask you how you're feeling about the business in general.

Yes, sure. So it's been a lumpy first half of the year. We had a little bit of business pushed out of the first into the second. And April and May are actually very strong. June softened up on us. I can't really pin it on any one thing. National seems to be softer in June than the previous 2 months. That being said, we're still pacing above the 2% for the full year. The back half is in the middle of that 2% to 3% range. So we still feel good about where we're going to finish this year. I do believe that, barring some sort of recessionary headwinds, that we should be able to increase our AFFO per share in '15 by at least 10%. The distribution going up 10% is something that is easy to do when you keep in mind that the $2.50 distribution is somewhat artificially depressed because we're using NOLs this year. So it's easy for us to see a path forward to a 10% increase in our distribution really over the next few years until our NOLs run out.

So it could be even better if the revenue were to pick up more?

Yes, sure. I mean, we're not seeing -- again, we're making our projections based on a 2% to 2.5% GDP world.

Our next question will come from David Miller, Topeka Capital Markets.

A couple of questions. Sean, I just want to make sure I understand the Q1 dynamics. Did the miss relative to your guidance on the top line, how much of it was due to make goods with regard to weather? Clearly, weather was just an issue for all advertising-related companies in the quarter. And how much of it was due to budgets maybe getting pushed out, as you alluded to in your previous question? And then also, Keith, I mean, without giving too much away here, I mean, I've got you guys doing upwards of $380 million in free cash flow next year. That's in tandem with sort of the loose guidance that you gave on interest expense. If you take $280 million of that, that equates to like a $3 per share dividend. Is there anything going on in your business dynamically where you wouldn't -- and we appreciate -- by the way, we appreciate you guys raising the divi up to $2.75 versus $2.50, but why not go to $3 per share now? Is there something kind of holding you back from a little bit more of an aggressive increase?

Sure. First, on the first question, I'm not sure I understand it because we guided to up 1% to 2%, and we came in at up 1.9% pro forma. So we came in at the top end of the range of the guidance that we offered. The distribution is something that you're going to have to understand within the context of our NOLs. Again, I see no reason why AFFO won't grow 10%, but it is easy for us to project a distribution going up 10% in '15. And again, even in '16 and '17, because we have NOLs that we are using to have that slow, steady, reliable increase in our distribution until the NOLs run out. And then the distribution will be 100% of our NOI, which you guys can project. The -- I think, as we and our board sat down and thought about our distribution policy, one thing that does is it gives us $125 million to $150 million a year to deploy in accretive acquisitions or pay down debt. So this year, we'll have about $120 million to $140 million in free cash. This is without a draw on our revolver. And our intention is to do accretive acquisitions and pay down debt. Let's say we paid out $100 million in debt, then AFFO in '15 looks even better, right? So we have established a distribution policy that pays a great yield, that is reliable and one that can increase steadily and affords us a significant amount of free cash flow to do accretive acquisitions. That's the game plan going forward.

Just on the first related question, just so we're clear, I mean, you guys did $284.9 million in Q1. The guidance was $290 million to $293 million, I assume that your answer previous was in reference to the new accounting method?

Yes, that's a monthly versus daily thing. So going forward because we've done it for -- ever since we've been public, we're going to do the pro forma same-store growth calcs on a monthly basis, so that they're apples-to-apples. Right. So going forward through the rest of this year, we're going to continue that. Fortunately in, 2015, 2 things are going to change. Number one, we will cycle through all this monthly-daily stuff. And number two, since it will be our first full year as a REIT, we're going to focus really on REIT metrics. And so you can expect on the first quarter call of next year that we'll give you again an AFFO range of AFFO per share that we expect. And then on every quarterly call, rather than talking about pro forma top line revenue growth, we're going to give you an indication of how we're tracking to that most important REIT metric, which is AFFO per share.

Our next question will come from Doug Arthur, Evercore.

Just a clarification and then a follow-up on stock comp. I didn't quite hear the number of total digital boards up. Did you say 1,901? And then the plan for this year is 110 new, is that correct?

You're right on the 1,901, which is an increase of 40 over the end of the year. And our plan for the -- all of 2014 is 150. So yes, that would be 110 more.

Okay. And I can't remember if you give this out in detail. Digital as a percent of total revenue is still in the sort of mid-teens?

What is it approaching now, about 17%?

Yes.

Run rate about 17%.

Okay. And then, finally, stock -- noncash comp was down a lot in the quarter year-over-year. I assume that's not a run rate for the year?

No. For the rest of the year, it'll be around $6 million a quarter, total of about $22 million for the year.

Our next question will come from James Dix, Wedbush Securities.

Just a couple of things. I guess, just a little color on kind of the volatility or lack thereof of your monthly pacings. I know that that's something that kind of crept up over the course of the recession. And I just -- and how that's continuing to change as you go forward into this year? And then secondly, any important differences in advertiser mix that you're seeing now on the digital versus the traditional inventory, especially now that digital is a more sizable portion of your book? And do you see any trends going forward that would cause that advertiser mix to get more different? And then I have more follow-ups.

Sure. So in general, if you step back and take a look at our verticals, our categories of business, you will see the picture of stability. I mean, relative to other businesses and other media outlets, it's very, very stable and predictable. That said, there'd be a little bit of movement up and down. And digital has moved a couple of categories up. I would highlight service, which is sort of a general category of local services that folks avail themselves of our medium for and they use a lot of digital there. Amusement, entertainment and sports, you have a lot of time- and date-sensitive advertising there, and they have gravitated to our medium. In fact, in Q1, amusement, entertainment and sports was up 9%. So I would highlight those 2 that have moved a little bit because of the advent of digital. Other than that, you have some cyclical -- categories that kind of ebb and flow. I would highlight real estate, which obviously crashed and is now building its base back up in our book. So those are ones that are kind of moving around a little bit. But these are small moves in the large -- in the bigger picture. The bigger picture again is a very stable year in and year out, the categories of business, are very much the same and the very much in the same pecking order.

Great. And then one thing. Clear Channel, on their call, talked a little bit in describing that their business this year and then the pace, which was fairly negative in the Americas, about, I think, national advertisers being a little bit more reluctant to commit to longer-term buys for certain parts of their budget. And may be more focused on coordinating their buys for a traditional media like billboards with some of the digital campaign, which they're running. Are you -- I know national is a much smaller portion of your book than it is for them, but have you heard anything like that kind of as we've moved into 2014, that you're getting fewer of those longer-term commitments from national guys and that they're trying to coordinate their buys of you more with other media?

So really it was after the Great Recession, when we saw national begin to buy shorter, i.e. no longer committing to 12-month contracts, but committing to 3-month [ph] contracts and also buying later. More, instead of committing for the full year at the beginning of the year, they would come in with sort spot buys through the year. Now their goals -- you can't really lump them altogether, national advertisers have different goals. Some of them are coordinating their out-of-home buys with their use of social and mobile. And we are participating in that. In fact, we are -- particularly with our digitals, we are encouraging it. And we are actually instigating campaigns that incorporate social and mobile with our digital out-of-home and actually controlling the mobile part, which is kind of interesting. But again, if you step back, James, and think about how national kind of ebbs and flows a little bit, it creates a little bit of lumpiness in our book of business. Again, for example, this quarter that we're in right now, June, is going to be down on the national front. But when it shakes out, that national business oscillates around a very steady local business. And again, in Q1, there wasn't that much difference between national and local. Local was up 2%. National was up 2.4%. So it just tends to even itself out through the course of a year with just a higher beta in the national book.

Our next question will come from Alexia Quadrani, JPMorgan. Alexia S. Quadrani - JP Morgan Chase & Co, Research Division: Could you just remind us, sort of walk through the sort of the next steps post -- I know you said you're going on the road next week, following that in terms of what the next steps are and the timing of getting the actual REIT conversion. I think you said previously sometime in the summer? And then I have another...

Well, on the mechanics of the actual REIT conversion, we'll have a perfunctory board and shareholder vote, which will happen at the end of this month.

Yes, end of this month at the meeting.

Right. From the point of view of the timing, it really doesn't matter because we're effective Jan 1 '14. Because we received the PLR after the end of the first quarter, obviously, it affected the distribution. Rather than being quarterly at the end of each quarter, it's now going to be in thirds at the end of the remaining quarters. Yes, we're very excited to hit the road next week and tell the story of Lamar's REIT, we believe have a compelling one. Again, we believe that the fundamentals of our business, the strength underlying the business model, is one that's going to be well-received by the REIT community. And again, that would -- that conversation starts next week. Alexia S. Quadrani - JP Morgan Chase & Co, Research Division: And then just a follow-up on the softness in the telecom category. Any chance that might improve a bit in the next quarter? Or that's going to be a bit of a headwind for a while?

Well, it's basically a bullet we've already taken. It's basically one of the big telecom carriers, who, they may -- they've indicated they may do a little spot buying through the course of the year. If you look at the other carriers, they are actually up marginally. But this was a bit of a hit that the whole industry took from a substantial customer. But our experience is that customers come and go, categories kind of move around a little bit, but not a whole lot. And we anticipate that, given what is going on in the wireless world, with your T-Mobiles and your Sprints on the move, that we'll do just fine in that category.

Our last question will come from Davis Hebert, Wells Fargo Securities.

Sean, you mentioned some things about M&A, smaller opportunities, maybe some larger opportunities down the road. How do you think about, with you as a REIT now, what kind of multiples you pay? And are these deals cost driven? Is it a digital opportunity? Maybe if you could walk us through some of the items.

Typically, with the smaller acquisitions, they're very easily integrated. We don't typically pick up operating expenses other than lease cost and sales commission, which is our own folks, and illumination. So it's very easy to model, they're very easy to fold in. We have been at this a long time. We've been -- essentially started as a billboard roll-up back in the '80s and '90s and so, we know how to buy through the cycle. We know how to value these companies. And we tend to do that. We tend to buy through cycles and I don't know that the REIT changes that. We still have to make sure that it makes operational sense and make sure that it makes financial sense. And we will. We typically don't buy companies for their digital promise because we understand that business model very well. And to some degree, that has already been realized by sellers. Certainly, we can incorporate their digital platform into ours, and in some cases, it helps. But in general, it's high-quality, traditional out-of-home assets that again, provide us a very predictable outcome and provide our shareholders accretion to pay AFFO per share.

That's helpful. And are you seeing cash flow multiples rise at all through the cycle?

There haven't been a whole lot of transactions other than the smallish ones. And if you add them all up, what we did last year, we're fairly confident we brought that in at a multiple of 10 or less of forward EBITDA contribution. And the last big one we did was NextMedia. And that one, we brought in at, give or take, 9x forward EBITDA contribution. So at those multiples, you're pretty much assured of an accretive transaction to AFFO per share.

And Keith, a question on the balance sheet. You guys have been pretty consistent saying you wanted a longer-term more of a fixed-cost capital structure. And then you did the $300 million term loan. I know it's relatively small, but I was just curious, is idea to have a prepaid payment vehicle with free cash flow?

Yes, and that's what Sean was referring to when he said that based on our dividend distribution model, over the next several years, we'll generate $125 million or so in free cash flow a year. So that allows us to use that to do acquisitions and to prepay that. If all of our debt was fixed in 10-year high yield, because of the newness of the ones we have on the books now, there'd be no way we could prepay debt and continue to reduce our leverage and our interest cost. It would not be...

Okay, got it. And so to the sort of -- to the extent there's no acquisitions available, you would, I guess, repay the term loan on your amortization schedule and then prepay as needed?

That's correct.

Chantelle, is that all the questions?

Yes, sir, that's all the questions.

Well, great. I appreciate everybody's attention. And again, we will be in New York, Boston, and Baltimore next week. I hope many of you on this call can drop-in and pay us a visit. Thanks again.

Thank you very much. Ladies and gentlemen, this conference has now concluded. You may disconnect your phone lines. And have great rest of the week. Thank you for joining us.