Lamar Advertising Co Class A Earnings Call Nuggets: September Pullback and REIT Clarification
Douglas Arthur – Evercore Partners: Just from a seasonal point of view, how significant, I guess, it isn’t really – it’s fairly similar month to month to month; but September in media is generally a pretty big month. So that’s a little surprising to see a pullback then. Do you have any clues as to why that happened, and then why it’s just September?
Sean Reilly – CEO: I think what you’re going to see when we close the books on it is that your traditional back-to-school was relatively good for us. Again, this was a sort of unique combination of factors in our national book, the cancellations that I’ve referenced started happening in back half of Q2 and spilled over into Q3, and it was the beer and home improvement. Talking to these national accounts, this wasn’t something that was, again Lamar or billboard specific, it was a general pullback across all media for these two categories or these, really, two customers.
Douglas Arthur – Evercore Partners: So just, Sean, going back to something you said – I kind of missed that. When you said, down 2.1% in Q2, were you speaking about same board digital?
Sean Reilly – CEO: Correct. Yeah, it was down 2.7% in Q1 and 2.1% in Q2.
Douglas Arthur – Evercore Partners: Then, just so finally, on terms of categories, a number of the broadcasters have mentioned that auto has accelerated in the third quarter, you obviously had a pretty big Q2 in auto. Are you seeing that in Q3?
Sean Reilly – CEO: Yeah, I think the auto is going to be there for us in Q3. It was up 12 in Q2 and I’m expecting something in that neighborhood for Q3.
Marci Ryvicker – Wells Fargo: I just want a little bit of clarification on some of the REIT comments, I guess you mentioned that even if you get the private letter ruling in 2014, you can still can elect to convert to a REIT in 2014. Is that’s what you said?
Kevin Reilly, Jr. – President and Chairman: (Yes).
Marci Ryvicker – Wells Fargo: The question is, do you need to wait for a private letter ruling before converting, or can you do something like what you presented earlier this year?
Sean Reilly – CEO: We could but we’re not. Now that they’re reviewing their approach to unconventional PLRs, we think the prudent course is, let the process run and not try to get out ahead of it, because they could make a retroactive ruling.
Marci Ryvicker – Wells Fargo: Have you submitted any filings to the SEC at this point, or is that going to come after the private letter ruling as well?
Sean Reilly – CEO: After the private letter ruling.
Kevin Reilly, Jr. – President and Chairman: Yeah, we’ve not submitted anything. We have an S-4 drafted, but it’s sitting on the shelf.
Marci Ryvicker – Wells Fargo: I’d have one clarification for you Keith. For the expense guidance for the third quarter, are there any REIT related expenses in there, or is that plus 2 a clean, core expense growth number?
Keith Istre – CFO: No, that’s about the same. Our budgeted expenses contain about $1.25 million – about a $1.25 million for the second, third, and fourth quarter of this year.
Sean Reilly – CEO: For REIT.
Keith Istre – CFO: For REIT.
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