What changed in this filing

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Item 1. Financial Statements

2020-08-06 compared with 2020-05-08 · 354 added, 204 removed, 385 unchanged (59% of the section changed)

2 unchanged sentences

Consolidated Statements of Financial Position

(in millions)

(in millions) June 30,

2020 December 31,

Current assets:

8 unchanged sentences

Property and equipment, net (Note 4) 657.8 666.2

Goodwill 2,082.1 2,083.1

Intangible assets (Note 5) 559.3 550.9

1 unchanged sentence

Prepaid MTA equipment deployment costs (Notes 5 and 18) 195.7 116.1

Other assets 52.2 73.2

Total assets $ 5,887.1 $ 5,382.3

Current liabilities:

16 unchanged sentences

Commitments and contingencies (Note 18)

Preferred stock (2020 - 50.0 shares authorized, and 0.4 shares of Series A Preferred Stock issued and

2019 - 50.0 shares authorized, and no shares issued and outstanding) (Note 10) 383.4 —

Stockholders’ equity (Note 10):

7 unchanged sentences

Non-controlling interests 27.2 32.6

Total equity 1,386.7 1,126.4

Total liabilities and equity $ 5,887.1 $ 5,382.3

2 unchanged sentences

Consolidated Statements of Operations

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions, except per share amounts) 2020 2019 2020 2019

Billboard $ 188.5 $ 305.8 $ 459.4 $ 556.8

Transit and other 44.4 154.1 158.8 274.8

Total revenues 232.9 459.9 618.2 831.6

Operating 154.0 240.3 378.8 457.2

Selling, general and administrative 62.4 81.5 141.9 154.8

Restructuring charges 4.7 — 4.7 0.3

Net gain on dispositions

Net (gain) loss on dispositions ( 5.2 ) 0.4 ( 5.3 ) ( 1.1 )

Depreciation 21.2 21.4 42.2 42.5

Amortization 21.7 27.6 48.0 52.3

Total expenses 258.8 371.2 610.3 706.0

Operating income

Operating income (loss) ( 25.9 ) 88.7 7.9 125.6

Interest expense, net ( 33.3 ) ( 33.9 ) ( 63.1 ) ( 66.6 )

Other income, net — — 0.2 0.1

Income before benefit for income taxes and equity in earnings of investee companies

Benefit for income taxes

Income (loss) before benefit (provision) for income taxes and equity in earnings of investee companies

( 59.2 ) 54.8 ( 55.0 ) 59.1

Benefit (provision) for income taxes 1.5 ( 6.2 ) 3.2 ( 5.2 )

Equity in earnings of investee companies, net of tax ( 0.3 ) 1.7 0.1 2.5

Net income before allocation to non-controlling interests

Net income attributable to non-controlling interests

Net income attributable to OUTFRONT Media Inc.

Net income per common share:

Net income (loss) before allocation to non-controlling interests

( 58.0 ) 50.3 ( 51.7 ) 56.4

Net income (loss) attributable to non-controlling interests

( 0.1 ) — 0.1 —

Net income (loss) attributable to OUTFRONT Media Inc.

$ ( 57.9 ) $ 50.3 $ ( 51.8 ) $ 56.4

Net income (loss) per common share:

Basic $ ( 0.44 ) $ 0.35 $ ( 0.40 ) $ 0.39

Diluted $ ( 0.44 ) $ 0.35 $ ( 0.40 ) $ 0.39

Weighted average shares outstanding:

Basic 144.4 142.3 144.1 141.5

Diluted 144.4 142.9 144.1 142.0

See accompanying notes to unaudited consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2020 2019 2020 2019

Net income before allocation to non-controlling interests

Net income attributable to non-controlling interests

Net income attributable to OUTFRONT Media Inc.

Net income (loss) before allocation to non-controlling interests

$ ( 58.0 ) $ 50.3 $ ( 51.7 ) $ 56.4

Net income (loss) attributable to non-controlling interests

( 0.1 ) — 0.1 —

Net income (loss) attributable to OUTFRONT Media Inc.

( 57.9 ) 50.3 ( 51.8 ) 56.4

Other comprehensive income (loss), net of tax:

Cumulative translation adjustments 4.4 4.6 ( 6.1 ) 7.2

Net actuarial gain

Net actuarial gain (loss) ( 0.2 ) ( 0.1 ) 0.5 ( 0.1 )

Change in fair value of interest rate swap agreements 0.7 ( 2.0 ) ( 3.6 ) ( 2.8 )

4 unchanged sentences

Consolidated Statements of Equity

(in millions, except per share amounts)

Shares of Common Stock

Common Stock ($0.01 per share par value)

Additional Paid-In Capital

Distribution in Excess of Earnings

Accumulated Other Comprehensive Loss

Total Stockholders’ Equity

Non-Controlling Interests

Balance as of

December 31, 2018

Stockholders’ Equity

(in millions, except per share amounts) Shares of Series A Preferred Stock Series A Preferred Stock ($0.01 per share par value) Shares of Common Stock Common Stock ($0.01 per share par value) Additional Paid-In Capital Distribution in Excess of Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity Non-Controlling Interests Total Equity

Balance as of March 31, 2019

141.6 $ 1.4 $ 2,012.0 $ ( 941.9 ) $ ( 20.2 ) $ 1,051.3 $ 40.6 $ 1,091.9

Net income — — — 50.3 — 50.3 — 50.3

Other comprehensive income

— — — — 2.5 2.5 — 2.5

Stock-based payments:

Amortization — — 5.5 — — 5.5 — 5.5

Class A equity interest redemptions

0.3 — 6.1 — — 6.1 ( 6.1 ) —

Shares issued under the ATM Program

1.4 — 34.3 — — 34.3 — 34.3

Dividends ($0.36 per share)

— — — ( 52.3 ) — ( 52.3 ) — ( 52.3 )

— — — — — — 2.7 2.7

Balance as of June 30, 2019

143.3 $ 1.4 $ 2,057.9 $ ( 943.9 ) $ ( 17.7 ) $ 1,097.7 $ 37.2 $ 1,134.9

Balance as of March 31, 2020

— $ — 144.4 $ 1.4 $ 2,072.8 $ ( 1,013.8 ) $ ( 31.8 ) $ 1,028.6 $ 28.4 $ 1,057.0

Net loss — — — — — ( 57.9 ) — ( 57.9 ) ( 0.1 ) ( 58.0 )

Other comprehensive income

— — — — — — 4.9 4.9 — 4.9

Stock-based payments:

Amortization — — — — 6.1 — — 6.1 — 6.1

Shares paid for tax withholding for stock-based payments

— — — — ( 0.1 ) — — ( 0.1 ) — ( 0.1 )

New share issues

0.4 383.4 — — — — — — — 383.4

Series A Preferred Stock dividends (7%)

— — — — — ( 5.5 ) — ( 5.5 ) — ( 5.5 )

— — — — — — — — ( 1.1 ) ( 1.1 )

Balance as of June 30, 2020

0.4 $ 383.4 144.4 $ 1.4 $ 2,078.8 $ ( 1,077.2 ) $ ( 26.9 ) $ 976.1 $ 27.2 $ 1,386.7

OUTFRONT Media Inc.

Consolidated Statements of Equity (Continued)

Stockholders’ Equity

(in millions, except per share amounts) Shares of Common Stock Common Stock ($0.01 per share par value) Additional Paid-In Capital Distribution in Excess of Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity Non-Controlling Interests Total Equity

Balance as of December 31, 2018 140.2 $ 1.4 $ 1,995.0 $ ( 871.6 ) $ ( 22.0 ) $ 1,102.8 $ 42.5 $ 1,145.3

Cumulative effect of a new accounting standard — — — ( 24.8 ) — ( 24.8 ) — ( 24.8 )

Other comprehensive loss

Net income — — — 56.4 — 56.4 — 56.4

Other comprehensive income

— — — — 4.3 4.3 — 4.3

Stock-based payments:

Vested 0.9 — — — — — — —

Amortization — — 10.8 — — 10.8 — 10.8

Shares paid for tax withholding for stock-based payments

( 0.4 ) — ( 7.7 ) — — ( 7.7 ) — ( 7.7 )

Class A equity interest redemptions

0.4 — 8.9 — — 8.9 ( 8.9 ) —

Shares issued under the ATM Program

2.2 — 50.8 — — 50.8 — 50.8

Dividends ($0.72 per share)

Balance as of

March 31, 2019

Balance as of

December 31, 2019

Other comprehensive income

— — — ( 103.9 ) — ( 103.9 ) — ( 103.9 )

— — 0.1 — — 0.1 3.6 3.7

Balance as of June 30, 2019 143.3 $ 1.4 $ 2,057.9 $ ( 943.9 ) $ ( 17.7 ) $ 1,097.7 $ 37.2 $ 1,134.9

Stockholders’ Equity

Balance as of December 31, 2019

— $ — 143.6 $ 1.4 $ 2,074.7 $ ( 964.6 ) $ ( 17.7 ) $ 1,093.8 $ 32.6 $ 1,126.4

Net income (loss) — — — — — ( 51.8 ) — ( 51.8 ) 0.1 ( 51.7 )

Other comprehensive loss

— — — — — — ( 9.2 ) ( 9.2 ) — ( 9.2 )

Stock-based payments:

— — 1.0 — — — — — — —

Amortization — — — — 11.9 — — 11.9 — 11.9

Shares paid for tax withholding for stock-based payments

— — ( 0.4 ) — ( 12.2 ) — — ( 12.2 ) — ( 12.2 )

New share issues

0.4 383.4 — — — — — — — 383.4

Class A equity interest redemptions

— — 0.2 — 4.4 — — 4.4 ( 4.4 ) —

Series A Preferred Stock dividends (7%)

— — — — — ( 5.5 ) — ( 5.5 ) — ( 5.5 )

Dividends ($0.38 per share)

Balance as of

March 31, 2020

— — — — — ( 55.3 ) — ( 55.3 ) — ( 55.3 )

— — — — — — — — ( 1.1 ) ( 1.1 )

Balance as of June 30, 2020

0.4 $ 383.4 144.4 $ 1.4 $ 2,078.8 $ ( 1,077.2 ) $ ( 26.9 ) $ 976.1 $ 27.2 $ 1,386.7

See accompanying notes to unaudited consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

Three Months Ended

Six Months Ended

(in millions) 2020 2019

Operating activities:

Net income attributable to OUTFRONT Media Inc.

Net income (loss) attributable to OUTFRONT Media Inc.

$ ( 51.8 ) $ 56.4

Adjustments to reconcile net income to net cash flow provided by operating activities:

Net income attributable to non-controlling interests

Net loss attributable to non-controlling interests 0.1 —

Depreciation and amortization 90.2 94.8

Deferred tax benefit

Deferred tax (benefit) provision ( 5.2 ) 3.4

Stock-based compensation 11.9 10.8

7 unchanged sentences

Change in assets and liabilities, net of investing and financing activities:

Decrease in receivables

(Increase) decrease in receivables 77.9 ( 15.5 )

Increase in prepaid MTA equipment deployment costs ( 28.3 ) ( 46.2 )

4 unchanged sentences

Decrease in income taxes ( 0.1 ) ( 3.5 )

Other, net 5.9 2.0

Net cash flow provided by operating activities

1 unchanged sentence

Capital expenditures ( 31.9 ) ( 39.6 )

Acquisitions ( 13.6 ) ( 34.4 )

MTA franchise rights ( 7.3 ) ( 10.7 )

2 unchanged sentences

Net cash flow used for investing activities

( 49.3 ) ( 82.5 )

Financing activities:

Proceeds from long-term debt borrowings 895.0 705.0

Repayments of long-term debt borrowings ( 495.0 ) ( 55.0 )

Proceeds from borrowings under short-term debt facilities 15.0 30.0

1 unchanged sentence

Payments of deferred financing costs ( 7.5 ) ( 8.6 )

Proceeds from Series A Preferred Stock issuances 383.9 —

Proceeds from shares issued under the ATM Program — 50.9

Taxes withheld for stock-based compensation ( 12.0 ) ( 7.7 )

Net cash flow provided by (used for) financing activities

Dividends ( 61.1 ) ( 103.9 )

Net cash flow provided by financing activities

OUTFRONT Media Inc.

Consolidated Statements of Cash Flows (Continued)

Three Months Ended

Six Months Ended

(in millions) 2020 2019

3 unchanged sentences

Cash, cash equivalents and restricted cash at end of period

$ 649.6 $ 476.2

Supplemental disclosure of cash flow information:

29 unchanged sentences

In order to preserve financial flexibility and increase liquidity in light of the current uncertainty in the global economy and our business resulting from the COVID-19 pandemic, we undertook the following actions, among others:

borrowed nearly all of the remaining available amount under the Revolving Credit Facility (as defined below) and amended the Credit Agreement (as defined below) to modify the calculation of the Company’s financial maintenance covenant ratio (see Note 9.

borrowed nearly all of the remaining available amount under the Revolving Credit Facility (as defined below), which was repaid in full as of June 30, 2020, using the net proceeds from the offering of the Notes (as defined below) and cash on hand, and amended the Credit Agreement (as defined below) to modify the calculation of the Company’s financial maintenance covenant ratio (see Note 9.

Debt to the Consolidated Financial Statements), completed the Private Placement (as defined below) (see Note 10.

Subsequent Event to the Consolidated Financial Statements) and reduced or deferred capital expenditures and expenses through cost savings initiatives.

Equity to the Consolidated Financial Statements) and reduced capital expenditures and expenses through cost savings initiatives.

Given the uncertainty around the severity and duration of the COVID-19 pandemic and the measures taken, or may be taken, in response to the COVID-19 pandemic, the Company cannot reasonably estimate the full impact of the COVID-19 pandemic on our business, financial condition and results of operations at this time, which may be material.

8 unchanged sentences

The provision for doubtful accounts is estimated based on historical bad debt experience, the aging of accounts receivable, industry trends and economic indicators, recent payment history for specific customers and expected future trends.

We have recorded a Provision for doubtful accounts of $ 8.1 million for all receivables during the first quarter of 2020, which includes an impact from the COVID-19 pandemic on future collections.

We have recorded a Provision for doubtful accounts of $ 3.2 million in the three months ended June 30, 2020, and $ 11.3 million in the six months ended June 30, 2020, for all receivables, which includes an estimate of the impact from the COVID-19 pandemic on future collections.

Recent Pronouncements

4 unchanged sentences

We have an escrow agreement in connection with one of our transit franchise contracts, which requires us to deposit funds into an escrow account to fund capital expenditures over the term of the transit franchise contract.

As of March 31, 2020 , we have $ 1.8 million of restricted cash deposited in the escrow account.

(in millions)

March 31, 2020

March 31, 2019

As of June 30, 2020, we have $ 1.8 million of restricted cash deposited in the escrow account.

(in millions) June 30,

2020 June 30,

2019 December 31, 2019

4 unchanged sentences

The table below presents the balances of major classes of assets and accumulated depreciation.

(in millions)

Estimated Useful Lives

20 to 40 years

Advertising structures

5 to 20 years

Furniture, equipment and other

3 to 10 years

(in millions) Estimated Useful Lives June 30,

2020 December 31,

Land $ 98.1 $ 98.8

Buildings 20 to 40 years 47.6 50.4

Advertising structures 5 to 20 years 1,869.9 1,866.1

Furniture, equipment and other 3 to 10 years 162.3 153.1

Construction in progress 30.2 25.4

2,208.1 2,193.8

Accumulated depreciation 1,550.3 1,527.6

Property and equipment, net $ 657.8 $ 666.2

Depreciation expense was $ 21.0 million in the three months ended March 31, 2020 , and $ 21.1 million in the three months ended March 31, 2019 .

Depreciation expense was $ 21.2 million in the three months ended June 30, 2020, $ 21.4 million in the three months ended June 30, 2019, $ 42.2 million in the six months ended June 30, 2020, and $ 42.5 million in the six months ended June 30, 2019.

Long-Lived Assets

6 unchanged sentences

As a result of the analysis performed, we determined that it was not “more likely than not” that the carrying value of any of our reporting units exceeded their fair value and no further evaluation of goodwill was necessary.

We did not identify a triggering event in the second quarter of 2020.

Intangible Assets

2 unchanged sentences

Our identifiable intangible assets consist of the following:

(in millions)

Accumulated Amortization

As of March 31, 2020:

(in millions) Gross Accumulated Amortization Net

As of June 30, 2020:

Permits and leasehold agreements $ 1,185.4 $ ( 755.7 ) $ 429.7

8 unchanged sentences

All of our intangible assets, except goodwill, are subject to amortization.

Amortization expense was $ 26.3 million in the three months ended March 31, 2020 , and $ 24.7 million in the three months ended March 31, 2019 , which includes the amortization of direct lease acquisition costs of $ 11.3 million in the three months ended March 31, 2020 , and $ 10.3 million in the three months ended March 31, 2019 .

Amortization expense was $ 21.7 million in the three months ended June 30, 2020, and $ 27.6 million in the three months ended June 30, 2019, which includes the amortization of direct lease acquisition costs of $ 6.3 million in the three months ended June 30, 2020, and $ 13.0 million in the three months ended June 30, 2019.

Amortization expense was $ 48.0 million in the six months ended June 30, 2020, and $ 52.3 million in the six months ended June 30, 2019, which includes the amortization of direct lease acquisition costs of $ 17.6 million in the six months ended June 30, 2020, and $ 23.3 million in the six months ended June 30, 2019.

Direct lease acquisition costs are amortized on a straight-line basis over the related customer lease term, which generally ranges from four weeks to one year.

New York Metropolitan Transportation Authority (the “MTA”) Agreement

We have identified the COVID-19 pandemic as a trigger for an impairment review of our Prepaid MTA equipment deployment costs and related intangible assets.

In the first quarter of 2020, we identified the COVID-19 pandemic as a trigger for an impairment review of our Prepaid MTA equipment deployment costs and related intangible assets.

After updating our projections to reflect related declines in revenues in 2020 and delays in our anticipated deployment schedule as a result of the impact of the COVID-19 pandemic, among other things, no impairment was identified.

However, since we may not recoup any costs in 2020, we have reclassified amounts previously included in current Prepaid MTA equipment deployment costs to non-current Prepaid MTA equipment deployment costs on the Consolidated Statement of Financial Position.

As of March 31, 2020 , we have operating lease assets of $1.5 billion , short-term operating lease liabilities of $ 180.8 million and non-current operating lease liabilities of $1.3 billion .

As of December 31, 2019 , we had operating lease assets of $1.5 billion ,

In the second quarter of 2020, we updated our projections in connection with the amendment to the MTA agreement (see Note 18.

Commitments and Contingencies to the Consolidated Financial Statements) and did not identify a triggering event for an impairment review of our Prepaid MTA equipment deployment costs.

It’s unlikely we will recoup any costs in 2020, and as of June 30, 2020, we have reclassified almost all amounts previously included in current Prepaid MTA equipment deployment costs to non-current Prepaid MTA equipment deployment costs on the Consolidated Statement of Financial Position.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

short-term operating lease liabilities of $ 168.3 million and non-current operating lease liabilities of $1.3 billion .

As of March 31, 2020 , the weighted-average remaining lease term was 10.3 years and the weighted-average discount rate was 5.7 % .

For the three months ended March 31, 2020 , we recorded operating lease costs of $ 102.5 million in Operating expenses and $ 2.2 million in Selling, general and administrative expenses.

For the three months ended March 31, 2020 , these costs include $ 22.1 million of variable operating lease costs.

For the three months ended March 31, 2019 , we recorded operating lease costs of $ 94.4 million in Operating expenses and $ 2.1 million in Selling, general and administrative expenses.

For the three months ended March 31, 2019 , these costs include $ 19.5 million of variable operating lease costs.

For both the three months ended March 31, 2020 and 2019, sublease income was immaterial.

For the three months ended March 31, 2020 , cash paid for operating leases was $ 108.6 million and leased assets obtained in exchange for new operating lease liabilities was $ 77.2 million .

For the three months ended March 31, 2019 , cash paid for operating leases was $ 94.2 million and leased assets obtained in exchange for new operating lease liabilities was $ 147.6 million .

We recorded rental income of $ 262.3 million for the three months ended March 31, 2020 , and $ 242.0 million for the three months ended March 31, 2019 , in Revenues on our Consolidated Statement of Operations.

As of June 30, 2020, we have operating lease assets of $1.5 billion, short-term operating lease liabilities of $ 182.2 million and non-current operating lease liabilities of $1.3 billion.

As of December 31, 2019, we had operating lease assets of $1.5 billion, short-term operating lease liabilities of $ 168.3 million and non-current operating lease liabilities of $1.3 billion.

As of June 30, 2020, the weighted-average remaining lease term was 10.2 years and the weighted-average discount rate was 5.7 %.

For the three months ended June 30, 2020, we recorded operating lease costs of $ 93.3 million in Operating expenses and $ 2.1 million in Selling, general and administrative expenses.

For the three months ended June 30, 2020, these costs include $ 14.6 million of variable operating lease costs.

For the three months ended June 30, 2019, we recorded operating lease costs of $ 102.6 million in Operating expenses and $ 2.3 million in Selling, general and administrative expenses.

For the three months ended June 30, 2019, these costs include $ 20.4 million of variable operating lease costs.

For the six months ended June 30, 2020, we recorded operating lease costs of $ 195.8 million in Operating expenses and $ 4.3 million in Selling, general and administrative expenses.

For the six months ended June 30, 2020, these costs include $ 36.7 million of variable operating lease costs.

For the six months ended June 30, 2019, we recorded operating lease costs of $ 197.0 million in Operating expenses and $ 4.4 million in Selling, general and administrative expenses.

For the six months ended June 30, 2019, these costs include $ 39.9 million of variable operating lease costs.

For each of the three and six months ended June 30, 2020 and 2019, sublease income was immaterial.

For the six months ended June 30, 2020, cash paid for operating leases was $ 199.0 million and leased assets obtained in exchange for new operating lease liabilities was $ 116.4 million.

For the six months ended June 30, 2019, cash paid for operating leases was $ 195.5 million and leased assets obtained in exchange for new operating lease liabilities was $ 252.5 million.

We recorded rental income of $ 182.0 million for the three months ended June 30, 2020, $ 296.1 million for the three months ended June 30, 2019, $ 444.3 million on for the six months ended June 30, 2020, and $ 538.1 million for the six months ended June 30, 2019, in Revenues on our Consolidated Statement of Operations.

Asset Retirement Obligation

5 unchanged sentences

Accretion expense 1.3

Additions 0.2

Liabilities settled ( 1.2 )

Foreign currency translation adjustments ( 0.2 )

As of March 31, 2020

Related Party Transactions

We have a 50 % ownership interest in two joint ventures that operate transit shelters in the greater Los Angeles area and Vancouver, and five joint ventures which currently operate a total of 11 billboard displays in New York and Boston.

All of these joint ventures are accounted for as equity investments.

These investments totaled $ 13.8 million as of March 31, 2020 , and $ 15.4 million as of December 31, 2019 , and are included in Other assets on the Consolidated Statements of Financial Position.

We provided sales and management services to these joint ventures and recorded management fees in Revenues on the Consolidated Statement of Operations of $ 1.5 million in the three months ended March 31, 2020 and $ 1.7 million in the three months ended March 31, 2019 .

As of June 30, 2020 $ 35.2

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

Related Party Transactions

We have a 50 % ownership interest in two joint ventures that operate transit shelters in the greater Los Angeles area and Vancouver, and four joint ventures which currently operate a total of 9 billboard displays in New York and Boston.

All of these joint ventures are accounted for as equity investments.

These investments totaled $ 12.6 million as of June 30, 2020, and $ 15.4 million as of December 31, 2019, and are included in Other assets on the Consolidated Statements of Financial Position.

We provided sales and management services to these joint ventures and recorded management fees in Revenues on the Consolidated Statement of Operations of $ 1.0 million in the three months ended June 30, 2020, $ 2.2 million in the three months ended June 30, 2019, $ 2.5 million in the six months ended June 30, 2020, and $ 3.9 million in the six months ended June 30, 2019.

Debt, net, consists of the following:

(in millions, except percentages)

(in millions, except percentages) June 30,

2020 December 31,

Short-term debt:

AR Facility $ — $ 105.0

Repurchase Facility 80.0 90.0

1 unchanged sentence

Long-term debt:

Revolving credit facility

Term loan, due 2026 597.7 597.5

3 unchanged sentences

5.000% senior unsecured notes, due 2027 650.0 650.0

4.625% senior unsecured notes, due 2030 500.0 500.0

Total senior unsecured notes 2,051.5 1,651.7

3 unchanged sentences

Weighted average cost of debt 4.5 % 4.5 %

The interest rate on the term loan due in 2026 (the “Term Loan”) was 2.5 % per annum as of March 31, 2020 .

As of March 31, 2020 , a discount of $ 2.5 million on the Term Loan remains unamortized.

The interest rate on the term loan due in 2026 (the “Term Loan”) was 1.9 % per annum as of June 30, 2020.

As of June 30, 2020, a discount of $ 2.3 million on the Term Loan remains unamortized.

The discount is being amortized through Interest expense, net , on the Consolidated Statement of Operations.

1 unchanged sentence

We also have a $ 500.0 million revolving credit facility, which matures in 2024 (the “Revolving Credit Facility,” together with the Term Loan, the “Senior Credit Facilities”).

On March 25, 2020, we borrowed $ 470.0 million on our revolving credit facility, which represents nearly all of the remaining available amount under the Revolving Credit Facility.

As of March 31, 2020 , there were $ 495.0 million of outstanding borrowings under the Revolving Credit Facility, at a borrowing rate of approximately 2.7 % .

The commitment fee based on the amount of unused commitments under the Revolving Credit Facility was $ 0.3 million in the three months ended March 31, 2020 , and $ 0.4 million in the three months ended March 31, 2019 .

As of March 31, 2020 , we had issued letters of credit totaling approximately $ 1.5 million against the letter of credit facility sublimit under the Revolving Credit Facility.

As of June 30, 2020, there were no outstanding borrowings under the Revolving Credit Facility.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

The commitment fee based on the amount of unused commitments under the Revolving Credit Facility was $ 0.3 million in the three months ended June 30, 2020, $ 0.3 million in the three months ended June 30, 2019, $ 0.6 million in the six months ended June 30, 2020, and $ 0.7 million in the six months ended June 30, 2019.

As of June 30, 2020, we had issued letters of credit totaling approximately $ 1.6 million against the letter of credit facility sublimit under the Revolving Credit Facility.

Standalone Letter of Credit Facilities

As of March 31, 2020 , we had issued letters of credit totaling approximately $ 71.0 million under our aggregate $ 78.0 million standalone letter of credit facilities.

The total fees under the letter of credit facilities were immaterial in each of the three months ended March 31, 2020 and 2019 .

As of June 30, 2020, we had issued letters of credit totaling approximately $ 71.0 million under our aggregate $ 78.0 million standalone letter of credit facilities.

The total fees under the letter of credit facilities were immaterial in each of the three and six months ended June 30, 2020 and 2019.

Accounts Receivable Securitization Facilities

As of March 31, 2020 , we have a $ 125.0 million revolving accounts receivable securitization facility (the “AR Facility”), which terminates in June 2022, unless further extended, and a 364-day uncommitted $ 90.0 million structured repurchase facility (the “Repurchase Facility” and together with the AR Facility, the “AR Securitization Facilities”), which terminates in June 2020, unless further extended.

As of June 30, 2020, we have a revolving accounts receivable securitization facility (the “AR Facility”), which terminates in June 2022, unless further extended, and a 364-day uncommitted structured repurchase facility (the “Repurchase Facility” and together with the AR Facility, the “AR Securitization Facilities”), which now terminates in June 2021, as described below, unless further extended.

On June 18, 2020, the Company, certain subsidiaries of the Company and MUFG Bank, Ltd.

(“MUFG”) entered into amendments to certain of the agreements governing the Repurchase Facility, pursuant to which the Company, among other things, (i) decreased the maximum borrowing capacity under the Repurchase Facility from $ 90.0 million to $ 80.0 million;

and (ii) extended the term of the Repurchase Facility so that it will now terminate on June 29, 2021 , unless further extended.

In connection with the AR Securitization Facilities, Outfront Media LLC and Outfront Media Outernet Inc., each a wholly-owned subsidiary of the Company, and certain of the Company’s taxable REIT subsidiaries (“TRSs”) (the “Originators”), will sell and/or contribute their respective existing and future accounts receivable and certain related assets to either Outfront Media Receivables LLC, a special purpose vehicle and wholly-owned subsidiary of the Company relating to the Company’s qualified REIT subsidiary accounts receivable assets (the “QRS SPV”) or Outfront Media Receivables TRS, LLC a special purpose vehicle and wholly-owned subsidiary of the Company relating to the Company’s TRS accounts receivable assets (the “TRS SPV” and together with the QRS SPV, the “SPVs”).

The SPVs will transfer undivided interests in their respective accounts receivable assets to certain purchasers from time to time (the “Purchasers”).

The SPVs may transfer undivided interests in their respective accounts receivable assets to certain purchasers from time to time (the “Purchasers”).

The SPVs are separate legal entities with their own separate creditors who will be entitled to access the SPVs’ assets before the assets become available to the Company.

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In connection with the Repurchase Facility, the Originators may borrow funds collateralized by subordinated notes (the “Subordinated Notes”) issued by the SPVs in favor of their respective Originators and representing a portion of the outstanding balance of the accounts receivable assets sold by the Originators to the SPVs under the AR Facility.

The Subordinated Notes will be transferred to MUFG Bank, Ltd.

(“MUFG”), as repurchase buyer, on an uncommitted basis, and subject to repurchase by the applicable Originators on termination of the Repurchase Facility.

The Subordinated Notes will be transferred to MUFG, as repurchase buyer, on an uncommitted basis, and subject to repurchase by the applicable Originators on termination of the Repurchase Facility.

The Originators have granted MUFG a security interest in the Subordinated Notes to secure their obligations under the agreements governing the Repurchase Facility, and the Company has agreed to guarantee the Originators’ obligations under the agreements governing the Repurchase Facility.

As of March 31, 2020 , there were $ 120.0 million of outstanding borrowings under the AR Facility, at a borrowing rate of approximately 2.5 % , and $ 90.0 million of outstanding borrowings under the Repurchase Facility, at a borrowing rate of approximately 2.0 % .

As of March 31, 2020 , there was no borrowing capacity remaining under the AR Facility based on approximately $ 304.5 million of accounts receivable used as collateral for the AR Securitization Facilities, and there was no borrowing capacity remaining under the Repurchase Facility, in accordance with the agreements governing the AR Securitization Facilities.

The commitment fee based on the amount of unused commitments under the AR Facility was immaterial for each of the three months ended March 31, 2020 and 2019 .

On April 17, 2020, MUFG required us to reduce our borrowing capacity under the Repurchase Facility to $ 80.0 million and repay $ 10.0 million of borrowings under the Repurchase Facility as a result of MUFG reducing its uncommitted repurchase facility credit exposure to companies with a similar issuer credit rating as the Company.

As of May 7, 2020 , there were $ 118.0 million of outstanding borrowings under the AR Facility, at a borrowing rate of approximately 2.0 % , and $ 80.0 million of outstanding borrowings under the Repurchase Facility, at a borrowing rate of approximately 2.5 % .

As of June 30, 2020, there were no outstanding borrowings under the AR Facility and $ 80.0 million of outstanding borrowings under the Repurchase Facility, at a borrowing rate of approximately 1.9 %.

As of June 30, 2020, there was no borrowing capacity remaining under the AR Facility based on approximately $ 237.9 million of accounts receivable used as collateral for the AR Securitization Facilities and a related voluntary temporary suspension of the AR Facility, and there was no borrowing capacity remaining under the Repurchase Facility, in accordance with the agreements governing the AR Securitization Facilities.

The commitment fee based on the amount of unused commitments under the AR Facility was immaterial for each of the three and six months ended June 30, 2020 and 2019.

OUTFRONT Media Inc.

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Senior Unsecured Notes

As of March 31, 2020 , a premium of $ 1.6 million on $ 100.0 million aggregate principal amount of the 5.625 % Senior Unsecured Notes due 2024, remains unamortized.

On May 15, 2020, two of our wholly-owned subsidiaries, Outfront Media Capital LLC (“Finance LLC”) and Outfront Media Capital Corporation (“Finance Corp” and, together with Finance LLC, the “Borrowers”), issued $ 400.0 million aggregate principal amount of 6.250 % Senior Unsecured Notes due 2025 (the “Notes”) in a private placement.

The Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Company and each of its direct and indirect domestic subsidiaries that guarantee the Senior Credit Facilities.

Interest on the Notes is payable on June 15 and December 15 of each year, beginning on December 15, 2020 .

On or after June 15, 2022, the Borrowers may redeem at any time, or from time to time, some or all of the Notes.

Prior to such date, the Borrowers may redeem up to 40 % of the aggregate principal amount of the aggregate principal amount with the net proceeds of certain equity offerings, provided that at least 50 % of the aggregate principal amount of the Notes remain outstanding after the redemption.

In May 2020, we used the net proceeds from the Notes, together with cash on hand, to repay $ 400.0 million of outstanding borrowings under our Revolving Credit Facility and to pay fees and expenses in connection with the offering of the Notes.

As of June 30, 2020, a premium of $ 1.5 million on $ 100.0 million aggregate principal amount of the 5.625 % Senior Unsecured Notes due 2024, remains unamortized.

The premium is being amortized through Interest expense, net , on the Consolidated Statement of Operations.

Debt Covenants

Our credit agreement, dated as of January 31, 2014 (as amended, supplemented or otherwise modified, the “Credit Agreement”), governing the Senior Credit Facilities, the agreements governing the AR Securitization Facilities, and the indentures governing our senior unsecured notes contain customary affirmative and negative covenants, subject to certain exceptions, including but not limited to those that limit the Company’s and our subsidiaries’ abilities to (i) pay dividends on, repurchase or make distributions in respect to the Company’s or its wholly-owned subsidiary, Outfront Media Capital LLC’s (“Finance LLC’s”) capital stock or make other restricted payments other than dividends or distributions necessary for us to maintain our REIT status, subject to certain conditions and exceptions, and (ii) enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany or third-party transfers.

Our credit agreement, dated as of January 31, 2014 (as amended, supplemented or otherwise modified, the “Credit Agreement”), governing the Senior Credit Facilities, the agreements governing the AR Securitization Facilities, and the indentures governing our senior unsecured notes contain customary affirmative and negative covenants, subject to certain exceptions, including but not limited to those that restrict the Company’s and its subsidiaries’ abilities to (i) pay dividends on, repurchase or make distributions in respect to the Company’s or its wholly-owned subsidiary, Outfront Media Capital LLC’s (“Finance LLC’s”) capital stock or make other restricted payments other than dividends or distributions necessary for us to maintain our REIT status, subject to certain conditions and exceptions, (ii) enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany or third-party transfers, and (iii) incur additional indebtedness.

One of the exceptions to the restriction on our ability to incur additional indebtedness is satisfaction of a Consolidated Total Leverage Ratio, which is the ratio of our consolidated total debt to our Consolidated EBITDA (as defined in the Credit Agreement) for the trailing four consecutive quarters, of no greater than 6.0 to 1.0.

As of June 30, 2020, our Consolidated Total Leverage Ratio was 6.7 to 1.0 in accordance with the Credit Agreement.

The terms of the Credit Agreement (and under certain circumstances, the agreements governing the AR Securitization Facilities) require that we maintain a Consolidated Net Secured Leverage Ratio, which is the ratio of (i) our consolidated secured debt (less up to $150.0 million of unrestricted cash) to (ii) our Consolidated EBITDA (as defined in the Credit Agreement) for the trailing four consecutive quarters, of no greater than 4.5 to 1.0.

As of March 31, 2020 , our Consolidated Net Secured Leverage Ratio was 2.0 to 1.0 in accordance with the Credit Agreement.

The Credit Agreement also requires that, in connection with the incurrence of certain indebtedness, we maintain a Consolidated Total Leverage Ratio, which is the ratio of our consolidated total debt to our Consolidated EBITDA for the trailing four consecutive quarters, of no greater than 6.0 to 1.0.

As of March 31, 2020 , our Consolidated Total Leverage Ratio was 5.4 to 1.0 in accordance with the Credit Agreement.

As of March 31, 2020 , we are in compliance with our debt covenants.

On April 15, 2020, the Company, along with its wholly-owned subsidiaries, Finance LLC and Outfront Media Capital Corporation (together with Finance LLC, the “Borrowers”), and other guarantor subsidiaries party thereto, entered into an amendment (the “Amendment”) to the Credit Agreement.

As of June 30, 2020, our Consolidated Net Secured Leverage Ratio was 1.0 to 1.0 in accordance with the Credit Agreement.

As of June 30, 2020, we are in compliance with our debt covenants.

On April 15, 2020, the Company, along with the Borrowers, and other guarantor subsidiaries party thereto, entered into an amendment (the “Amendment”) to the Credit Agreement.

The Amendment provides that for the period from April 15, 2020 through September 30, 2021 (i) the Company’s Consolidated Net Secured Leverage Ratio shall be calculated by substituting the Company’s Consolidated EBITDA for each of the quarterly periods ended June 30, 2020 and September 30, 2020, included in any last twelve month compliance testing period, with the Company’s historical Consolidated EBITDA for each of the quarterly periods ended June 30, 2019 and September 30, 2019, respectively;

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Equity to the Consolidated Financial Statements).

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

Deferred Financing Costs

As of March 31, 2020 , we had deferred $ 30.7 million in fees and expenses associated with the Term Loan, Revolving Credit Facility, AR Securitization Facilities and our senior unsecured notes.

As of June 30, 2020, we had deferred $ 36.1 million in fees and expenses associated with the Term Loan, Revolving Credit Facility, AR Securitization Facilities and our senior unsecured notes.

We are amortizing the deferred fees through Interest expense, net, on our Consolidated Statement of Operations over the respective terms of the Term Loan, Revolving Credit Facility, AR Securitization Facilities and our senior unsecured notes.

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We have several interest rate cash flow swap agreements to effectively convert a portion of our LIBOR-based variable rate debt to a fixed rate and hedge our interest rate risk related to such variable rate debt.

The fair value of these swap positions was a net liability of approximately $ 8.9 million as of March 31, 2020 , and $ 4.6 million as of December 31, 2019 , and is included in Other liabilities on our Consolidated Statement of Financial Position.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

As of March 31, 2020 , under the terms of the agreements, we will pay interest based on an aggregate notional amount of $ 200.0 million , under a weighted-average fixed interest rate of 2.7 % , with a receive rate of one-month LIBOR and which mature at various dates until June 30, 2022 .

The one-month LIBOR rate was approximately 1.0 % as of March 31, 2020 .

The fair value of these swap positions was a net liability of approximately $ 8.3 million as of June 30, 2020, and $ 4.6 million as of December 31, 2019, and is included in Other liabilities on our Consolidated Statement of Financial Position.

As of June 30, 2020, under the terms of the agreements, we will pay interest based on an aggregate notional amount of $ 200.0 million, under a weighted-average fixed interest rate of 2.7 %, with a receive rate of one-month LIBOR and which mature at various dates until June 30, 2022 .

The one-month LIBOR rate was approximately 0.2 % as of June 30, 2020.

Under the fair value hierarchy, observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities are defined as Level 1;

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and unobservable inputs for the asset or liability are defined as Level 3.

The aggregate fair value of our debt, which is estimated based on quoted market prices of similar liabilities, was approximately $ 2.8 billion as of March 31, 2020 , and $ 2.5 billion as of December 31, 2019 .

The fair value of our debt as of both March 31, 2020 , and December 31, 2019 , is classified as Level 2.

The aggregate fair value loss associated with our interest rate cash flow swap agreements was approximately $ 8.9 million as of March 31, 2020 , and $ 4.6 million as of December 31, 2019 .

The aggregate fair value of our interest rate cash flow swap agreements as of both March 31, 2020 and December 31, 2019 , is classified as Level 2.

As of March 31, 2020 , 450,000,000 shares of our common stock, par value $ 0.01 per share, were authorized;

The aggregate fair value of our debt, which is estimated based on quoted market prices of similar liabilities, was approximately $ 2.6 billion as of June 30, 2020, and $ 2.5 billion as of December 31, 2019.

The fair value of our debt as of both June 30, 2020, and December 31, 2019, is classified as Level 2.

The aggregate fair value loss associated with our interest rate cash flow swap agreements was approximately $ 8.3 million as of June 30, 2020, and $ 4.6 million as of December 31, 2019.

The aggregate fair value of our interest rate cash flow swap agreements as of both June 30, 2020 and December 31, 2019, is classified as Level 2.

As of June 30, 2020, 450,000,000 shares of our common stock, par value $ 0.01 per share, were authorized;

144,408,052 shares were issued and outstanding;

and 50,000,000 shares of our preferred stock, par value $ 0.01 per share, were authorized with no shares issued and outstanding.

and 50,000,000 shares of our preferred stock, par value $ 0.01 per share, were authorized with 400,000 shares of our Series A Convertible Perpetual Preferred Stock (the “Series A Preferred Stock”) issued and outstanding.

On April 20 2020 (the “Closing Date”), the Company issued and sold an aggregate of 400,000 shares of Series A Preferred Stock, par value $ 0.01 per share, at a purchase price of $ 1,000 per share, for an aggregate purchase price of $ 400.0 million (the “Private Placement”) to certain affiliates of Providence Equity Partners LLC (collectively, the “Providence Purchasers”) and ASOF Holdings L.L.P.

and Ares Capital Corporation (collectively, the “Ares Purchasers” and, together with the Providence Purchasers, the “Purchasers”).

The Series A Preferred Stock ranks senior to the shares of the Company’s common stock, par value $ 0.01 per share, with respect to dividend and distribution rights.

Holders of the Series A Preferred Stock are entitled to a cumulative dividend accruing at the initial rate of 7.0 % per year, payable quarterly in arrears.

The dividend rate will increase by an additional 0.75 % annually following the eighth anniversary of the Closing Date and is subject to increases under certain other circumstances as set forth in the Articles Supplementary, effective as of April 20, 2020 (the “Articles”).

Dividends may, at the option of the Company, be paid in cash, in-kind, through the issuance of additional shares of Series A Preferred Stock or a combination of cash and in-kind, until the eighth anniversary of the Closing Date, after which time dividends will be payable solely in cash.

So long as any shares of Series A Preferred Stock remain outstanding, the Company may not declare a dividend on, or make any distributions relating to, capital stock that ranks junior to, or on a parity basis with, the Series A Preferred Stock, subject to certain exceptions, including but not limited to (i) any dividend or distribution in cash or capital stock of the Company on or in respect of the capital stock of the Company to the extent that such dividend or distribution is necessary to maintain the Company’s status as a REIT;

and (ii) any dividend or distribution in cash in respect of our common stock that, together with the dividends or distributions during the 12 -month period immediately preceding such dividend or distribution, is not in excess of 5 % of the aggregate dividends or distributions paid by the Company necessary to maintain its REIT status during such 12 -

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

month period.

Following the one-year anniversary of the Closing Date, if all or any portion of the dividends or distributions is paid in respect of the shares of our common stock in cash, the shares of Series A Preferred Stock will participate in such dividends or distributions on an as-converted basis up to the amount of their accrued dividend on the Series A Preferred Stock for such quarter, which amounts will reduce the dividends payable on the shares of Series A Preferred Stock dollar-for-dollar for such quarter.

The Series A Preferred Stock is convertible at the option of any holder at any time into shares of our common stock at an initial conversion price of $ 16.00 per share and an initial conversion rate of 62.50 shares of our common stock per share of Series A Preferred Stock, subject to certain anti-dilution adjustments.

The issuance of shares of our common stock upon the conversion of Series A Preferred Stock is subject to a cap equal to 28,856,239 shares of our common stock (the “Share Cap”), unless and until the Company obtains stockholder approval to the extent required for the issuance of additional shares.

Any amounts owed above the Share Cap must be paid in cash.

Subject to certain conditions, at the Company’s option, (i) after the third anniversary of the Closing Date, all of the Series A Preferred Stock may be converted into shares of our common stock, and (ii) after the seventh anniversary of the Closing Date, all of the Series A Preferred Stock may be redeemed for cash at a redemption price equal to 100 % of the liquidation preference of the Series A Preferred Stock, plus any accrued and unpaid dividends.

Subject to certain conditions, each holder of the Series A Preferred Stock, after a Change of Control (as defined in the Articles) may (i) require the Company to purchase any or all of their shares of Series A Preferred Stock at a redemption price payable in cash equal to 105 % of the liquidation preference of the Series A Preferred Stock, plus any accrued and unpaid dividends, or (ii) convert any or all of their shares of Series A Preferred Stock into the number of shares of our common stock equal to the liquidation preference (including accrued and unpaid dividends) divided by the then-applicable conversion price.

During the three months ended June 30, 2020, we paid cash dividends of $ 5.5 million on the Series A Preferred Stock.

As of June 30, 2020, the maximum number of shares of common stock that could be required to be issued on conversion of the outstanding shares of Series A Preferred Stock was 25.0 million shares.

In connection with the acquisition of outdoor advertising assets in Canada in June 2017, the Company issued 1,953,407 shares of Class A equity interests of a subsidiary of the Company that controls its Canadian business (“Outfront Canada”).

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The Company is also subject to limitations on its ability to sell or otherwise dispose of the assets acquired in Canada until June 2022, unless it pays holders of the Class A equity interests in Outfront Canada an amount intended to approximate their resulting tax liability, plus a tax gross-up.

During the three months ended March 31, 2020 , we made distributions of $ 0.4 million to holders of the Class A equity interests, which are recorded in Dividends on our Consolidated Statements of Equity and Consolidated Statements of Cash Flows.

As of March 31, 2020 , 1,026,727 Class A equity interests have been redeemed for shares of the Company’s common stock.

During the six months ended June 30, 2020, we made distributions of $ 0.4 million to holders of the Class A equity interests, which are recorded in Dividends on our Consolidated Statements of Equity and Consolidated Statements of Cash Flows.

As of June 30, 2020, 1,026,727 Class A equity interests have been redeemed for shares of the Company’s common stock.

We have a sales agreement in connection with an “at-the-market” equity offering program (the “ATM Program”), under which we may, from time to time, issue and sell shares of our common stock up to an aggregate offering price of $ 300.0 million.

We have no obligation to sell any of our common stock under the sales agreement and may at any time suspend solicitations and offers under the sales agreement.

No shares were sold under the ATM Program during the three months ended March 31, 2020 .

As of March 31, 2020 , we had approximately $ 232.5 million of capacity remaining under the ATM Program.

No shares were sold under the ATM Program during both the three and six months ended June 30, 2020.

As of June 30, 2020, we had approximately $ 232.5 million of capacity remaining under the ATM Program.

OUTFRONT Media Inc.

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The following table summarizes revenues by source:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2020 2019 2020 2019

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Digital displays 31.3 66.2 91.7 113.2

Other 7.7 10.5 17.1 20.2

Billboard revenues 188.5 305.8 459.4 556.8

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Digital displays 6.6 28.4 34.3 45.0

Other 3.4 12.9 10.8 21.7

Total transit revenues 32.9 138.4 133.1 242.8

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Total revenues $ 232.9 $ 459.9 $ 618.2 $ 831.6

Rental income was $ 262.3 million in the three months ended March 31, 2020 , and $ 242.0 million in the three months ended March 31, 2019 , and is recorded in Billboard revenues on the Consolidated Statement of Operations.

Rental income was $ 182.0 million in the three months ended June 30, 2020, $ 296.1 million in the three months ended June 30, 2019, $ 444.3 million in the six months ended June 30, 2020, and $ 538.1 million in the six months ended June 30, 2019, and is recorded in Billboard revenues on the Consolidated Statement of Operations.

The following table summarizes revenues by geography:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2020 2019 2020 2019

United States:

Billboard $ 181.4 $ 285.1 $ 437.9 $ 521.3

Transit and other 32.1 134.5 130.3 236.7

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Total United States revenues 225.0 435.3 593.9 790.0

Canada 7.9 24.6 24.3 41.6

Total revenues $ 232.9 $ 459.9 $ 618.2 $ 831.6

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Restructuring Charges

As of March 31, 2020 , $ 0.4 million in restructuring reserves remain outstanding and is included in Other current liabilities on the Consolidated Statement of Financial Position.

For the three months ended March 31, 2019 , we recorded restructuring charges of $ 0.3 million associated with the elimination of a corporate management position.

In order to preserve financial flexibility, increase liquidity and reduce expenses in light of the current uncertainty in the global economy and our business as a result of the COVID-19 pandemic, on May 5, 2020 , we announced a workforce reduction and notified approximately 70 employees of their termination and furloughed approximately 150 employees.

and notified approximately 70 employees of their termination.

On June 15, 2020, we announced a workforce reduction in Canada and notified approximately 20 employees of their termination.

As of June 30, 2020, $ 3.2 million in restructuring reserves remain outstanding and is included in Other current liabilities on the Consolidated Statement of Financial Position.

For the three and six months ended June 30, 2020, we recorded restructuring charges of $ 4.7 million, of which $ 3.0 million was recorded in our U.S.

Media segment, $ 0.7 million was recorded in Other ,

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

anticipate incurring severance-based restructuring charges of approximately $ 4.2 million , which will be recognized in the second quarter of 2020.

We completed several asset acquisitions for a total purchase price of approximately $ 6.6 million in the three months ended March 31, 2020 , and $ 2.5 million in the three months ended March 31, 2019 .

and $ 1.0 million was recorded in Corporate.

Restructuring charges were composed of severance charges associated with the workforce reductions, including $ 0.9 million for stock-based compensation.

For the six months ended June 30, 2019, we recorded restructuring charges of $ 0.3 million associated with the elimination of a corporate management position.

We completed several asset acquisitions for a total purchase price of approximately $ 13.6 million in the six months ended June 30, 2020, and $ 29.4 million in the six months ended June 30, 2019.

In the second quarter of 2018, we entered into an agreement to acquire 14 digital and seven static billboard displays in California for a total estimated purchase price of $ 35.4 million.

As of March 31, 2020 , we have completed this acquisition except with respect to four digital displays, which we expect to acquire in 2021 for an estimated purchase price of $ 9.2 million , subject to customary closing conditions and the timing of site development.

In the second quarter of 2019, we completed this acquisition except with respect to four digital displays, which we expect to acquire in 2022 for an estimated purchase price of $ 9.2 million, subject to customary closing conditions and the timing of site development.

In the first quarter of 2019, we entered into an agreement to acquire eight digital billboard displays in Atlanta, Georgia, for an aggregate purchase price of $ 24.0 million.

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Stock-Based Compensation

The following table summarizes our stock-based compensation expense for the three months ended March 31, 2020 and 2019 .

Three Months Ended

The following table summarizes our stock-based compensation expense for the three and six months ended June 30, 2020 and 2019.

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2020 2019 2020 2019

Stock-based compensation expenses (restricted share units (“RSUs”) and performance-based RSUs (“PRSUs”)), before income taxes

$ 6.1 $ 5.5 $ 11.9 $ 10.8

Tax benefit ( 0.3 ) ( 0.4 ) ( 0.7 ) ( 0.7 )

Stock-based compensation expense, net of tax $ 5.8 $ 5.1 $ 11.2 $ 10.1

As of March 31, 2020 , total unrecognized compensation cost related to non-vested RSUs and PRSUs was $ 47.8 million , which is expected to be recognized over a weighted average period of 2.4 years .

RSUs and PRSUs

The following table summarizes activity for the three months ended March 31, 2020 , of RSUs and PRSUs issued to our employees.

Weighted Average Per Share Grant Date Fair Market Value

Non-vested as of December 31, 2019

Non-vested as of March 31, 2020

As of June 30, 2020, total unrecognized compensation cost related to non-vested RSUs and PRSUs was $ 35.3 million, which is expected to be recognized over a weighted average period of 2.1 years.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

RSUs and PRSUs

The following table summarizes activity for the six months ended June 30, 2020, of RSUs and PRSUs issued to our employees.

Activity Weighted Average Per Share Grant Date Fair Market Value

Non-vested as of December 31, 2019 2,024,768 $ 22.09

RSUs 751,308 29.91

PRSUs 323,771 29.60

RSUs ( 653,685 ) 22.88

PRSUs ( 298,824 ) 22.53

RSUs ( 18,026 ) 24.87

PRSUs ( 1,958 ) 30.63

Non-vested as of June 30, 2020 2,127,354 25.66

Stock Options

The following table summarizes activity for the three months ended March 31, 2020 , of stock options issued to our employees.

Weighted Average Exercise Price

The following table summarizes activity for the six months ended June 30, 2020, of stock options issued to our employees.

Activity Weighted Average Exercise Price

Outstanding as of December 31, 2019 126,528 $ 24.57

Outstanding as of March 31, 2020

Exercisable as of March 31, 2020

As of March 31, 2020, all exercisable stock options issued to our employees were out-of-the-money based on the closing stock price of our common stock of $ 13.48 .

Exercised ( 23,115 ) 16.43

Outstanding as of June 30, 2020 103,413 26.39

Exercisable as of June 30, 2020 103,413 26.39

As of June 30, 2020, all exercisable stock options issued to our employees were out-of-the-money based on the closing stock price of our common stock of $ 14.17 .

Retirement Benefits

The following table presents the components of net periodic pension cost and amounts recognized in other comprehensive income (loss) for our pension plans:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2020 2019 2020 2019

Components of net periodic pension cost:

Service cost $ 0.3 $ 0.4 $ 0.7 $ 0.9

Interest cost 0.6 0.5 1.3 1.0

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Amortization of net actuarial losses (a)

0.2 0.1 0.5 0.3

Net periodic pension cost $ 0.2 $ 0.4 $ 0.5 $ 0.9

Reflects amounts reclassified from accumulated other comprehensive income to net income.

In the three months ended March 31, 2020 , we contributed $ 0.4 million to our pension plans.

(a) Reflects amounts reclassified from accumulated other comprehensive income to net income.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

In the six months ended June 30, 2020, we contributed $ 0.7 million to our pension plans.

In 2020, we expect to contribute approximately $ 1.4 million to our pension plans.

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Our effective income tax rate represents a combined annual effective tax rate for federal, state, local and foreign taxes applied to interim operating results.

In the three months ended March 31, 2020 and 2019 , our effective tax rate differed from the U.S.

In the six months ended June 30, 2020 and 2019, our effective tax rate differed from the U.S.

federal statutory income tax rate primarily due to our REIT status, including the dividends paid deduction, the impact of state and local taxes, and the effect of foreign operations.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

Earnings Per Share (“EPS”)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2020 2019 2020 2019

Net income available for common stockholders

Net income (loss) available for common stockholders

$ ( 57.9 ) $ 50.3 $ ( 51.8 ) $ 56.4

Distributions to holders of Series A Preferred Stock

Distributions to holders of Class A equity interests of a subsidiary

Net income available for common stockholders, basic and diluted

— 0.5 0.4 1.1

Undistributed earnings allocable to Class A equity interests of a subsidiary

Net income (loss) available for common stockholders, basic and diluted

$ ( 63.4 ) $ 49.7 $ ( 57.7 ) $ 55.3

Weighted average shares for basic EPS 144.4 142.3 144.1 141.5

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Weighted average shares for diluted EPS 144.4 142.9 144.1 142.0

The potential impact of an aggregate 0.5 million granted RSUs, PRSUs and stock options in the three months ended March 31, 2020 , and 0.1 million granted RSUs, PRSUs and stock options in the three months ended March 31, 2019 , were antidilutive.

The potential impact of 1.1 million of Class A equity interests of Outfront Canada in the three months ended March 31, 2020 , and 1.7 million of Class A equity interests of Outfront Canada in the three months ended March 31, 2019 , was antidilutive.

(a) The potential impact of an aggregate 1.8 million granted RSUs, PRSUs and stock options in the three months ended June 30, 2020, 0.1 million granted RSUs, PRSUs and stock options in the three months ended June 30, 2019, 1.0 million granted RSUs, PRSUs and stock options in the six months ended June 30, 2020, and 0.1 million granted RSUs, PRSUs and stock options in the six months ended June 30, 2019, were antidilutive.

(b) The potential impact of 19.8 million shares of our common stock issuable upon conversion of our Series A Preferred Stock in the three months ended June 30, 2020, and 9.9 million shares of our common stock issuable upon conversion of our Series A Preferred Stock in the six months ended June 30, 2020, was antidilutive.

(c) The potential impact of 0.9 million of Class A equity interests of Outfront Canada in the three months ended June 30, 2020, 1.5 million of Class A equity interests of Outfront Canada in the three months ended June 30, 2019, 1.0 million of Class A equity interests of Outfront Canada in the six months ended June 30, 2020, and 1.6 million of Class A equity interests of Outfront Canada in the six months ended June 30, 2019, was antidilutive.

(See Note 10.

Equity to the Consolidated Financial Statements.)

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

Commitments and Contingencies

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Incremental revenues that exceed an annual base revenue amount will be retained by us for the cost of deploying advertising and communications displays throughout the transit system.

As presented in the table below, MTA equipment deployment costs are being recorded as Prepaid MTA equipment deployment costs and Intangible assets on our Consolidated Statement of Financial Position, and as these costs are recouped from incremental revenues that the MTA would otherwise be entitled to receive, Prepaid MTA equipment deployment costs will be reduced.

If incremental revenues generated over the term of the agreement are not sufficient to cover all or a portion of the equipment deployment costs, the costs will not be recouped, which could have an adverse effect on our business, financial condition and results of operation.

As a result of the impact of the COVID-19 pandemic, we suspended our deployment of advertising and communications displays throughout the transit system at this time.

In addition, we did not recoup any equipment deployment costs in the three months ended March 31, 2020, and may not recoup equipment deployment costs in 2020.

We have identified the COVID-19 pandemic as a trigger for impairment review of our Prepaid MTA equipment deployment costs and related intangible assets, and after performing an analysis, no impairment was identified.

As presented in the table below, recoupable MTA equipment deployment costs are recorded as Prepaid MTA equipment deployment costs and Intangible assets on our Consolidated Statement of Financial Position, and as these costs are recouped from incremental revenues that the MTA would otherwise be entitled to receive, Prepaid MTA equipment deployment costs will be reduced.

We did not recoup any equipment deployment costs in the six months ended June 30, 2020, and it’s unlikely we will recoup equipment deployment costs in 2020.

In June 2020, we entered into an amendment to the MTA agreement, pursuant to which (i) for up to $ 143.0 million of MTA equipment deployment costs to be incurred under the MTA agreement after June 2020, the MTA and the Company will directly pay 70 % and 30 % of the costs, respectively, instead of the costs being recoupable from incremental revenues generated under the agreement, and (ii) any guaranteed minimum annual payment amounts that would have been paid for the period from April 1, 2020 through December 31, 2020 (less any revenue share amounts actually paid during this period using an increased revenue share percentage of 65 %) will instead be added in equal increments to the guaranteed minimum annual payment amounts owed for the period from January 1, 2022, through December 31, 2026.

In connection with the amendment to the MTA Agreement and in coordination with the MTA, after suspending our deployment of advertising and communications displays throughout the transit system in March 2020 as a result of the impact of the COVID-19 pandemic, we recommenced deployment in the third quarter of 2020.

In addition, in the first quarter of 2020, we identified the COVID-19 pandemic as a trigger for impairment review of our Prepaid MTA equipment deployment costs and related intangible assets, and after performing an analysis, no impairment was identified.

In the second quarter of 2020, we updated our projections in connection with the amendment to the MTA agreement, and did not identify a triggering event for an impairment review of our Prepaid MTA equipment deployment costs .

Long-Lived Assets :

MTA Agreement to the Consolidated Financial Statements.) As of

MTA Agreement to the Consolidated Financial Statements.) As of June 30, 2020, 5,350 digital displays had been installed, of which 97 installations occurred in the three months ended June 30, 2020, for a total of 773 installations in the six months ended June 30, 2020.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

March 31, 2020 , 5,253 digital displays had been installed, of which 676 installations occurred in the three months ended March 31, 2020 .

(in millions)

Beginning Balance

Deployment Costs Incurred

Ending Balance

Three months ended March 31, 2020:

(in millions) Beginning Balance Deployment Costs Incurred Recoupment Amortization Ending Balance

Six months ended June 30, 2020:

Prepaid MTA equipment deployment costs

$ 171.5 $ 28.3 $ — $ — $ 199.8

Intangible assets (franchise agreements)

38.3 6.0 — ( 2.7 ) 41.6

Total $ 209.8 $ 34.3 $ — $ ( 2.7 ) $ 241.4

Year ended December 31, 2019:

Prepaid MTA equipment deployment costs

$ 79.5 $ 124.2 $ ( 32.2 ) $ — $ 171.5

Intangible assets (franchise agreements)

14.8 26.6 — ( 3.1 ) 38.3

Total $ 94.3 $ 150.8 $ ( 32.2 ) $ ( 3.1 ) $ 209.8

Letters of Credit

We have indemnification obligations with respect to letters of credit and surety bonds primarily used as security against non-performance in the normal course of business.

As of March 31, 2020 , the outstanding letters of credit were approximately $ 72.5 million and outstanding surety bonds were approximately $ 162.1 million , and were not recorded on the Consolidated Statements of Financial Position.

As of June 30, 2020, the outstanding letters of credit were approximately $ 72.6 million and outstanding surety bonds were approximately $ 161.5 million, and were not recorded on the Consolidated Statements of Financial Position.

Legal Matters

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The following tables set forth our financial performance by segment.

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2020 2019 2020 2019

Media $ 213.5 $ 419.6 $ 568.2 $ 758.0

Other 19.4 40.3 50.0 73.6

Total revenues $ 232.9 $ 459.9 $ 618.2 $ 831.6

We present Operating income before Depreciation , Amortization , Net gain on dispositions, Stock-based compensation and Restructuring charges (“Adjusted OIBDA”) as the primary measure of profit and loss for our operating segments.

We present Operating income (loss) before Depreciation , Amortization , Net (gain) loss on dispositions, Stock-based compensation and Restructuring charges (“Adjusted OIBDA”) as the primary measure of profit and loss for our operating segments.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2020 2019 2020 2019

Net income before allocation to non-controlling interests

Benefit for income taxes

Net income (loss) before allocation to non-controlling interests

$ ( 58.0 ) $ 50.3 $ ( 51.7 ) $ 56.4

(Benefit) provision for income taxes ( 1.5 ) 6.2 ( 3.2 ) 5.2

Equity in earnings of investee companies, net of tax 0.3 ( 1.7 ) ( 0.1 ) ( 2.5 )

Interest expense, net 33.3 33.9 63.1 66.6

Other income, net

Operating income

Other loss, net — — ( 0.2 ) ( 0.1 )

Operating income (loss) ( 25.9 ) 88.7 7.9 125.6

Restructuring charges 4.7 — 4.7 0.3

Net gain on dispositions

Net (gain) loss on dispositions ( 5.2 ) 0.4 ( 5.3 ) ( 1.1 )

Depreciation and amortization 42.9 49.0 90.2 94.8

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Adjusted OIBDA:

Media $ 37.4 $ 145.8 $ 128.2 $ 240.4

Other ( 5.4 ) 8.8 ( 4.9 ) 10.0

Corporate ( 10.3 ) ( 11.0 ) ( 14.8 ) ( 20.0 )

Total Adjusted OIBDA $ 21.7 $ 143.6 $ 108.5 $ 230.4

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2020 2019 2020 2019

Operating income (loss):

Total operating income

Net gain on dispositions:

Total gain on dispositions

Media $ ( 3.9 ) $ 101.9 $ 43.5 $ 157.4

Other ( 5.5 ) 3.3 ( 8.8 ) ( 0.7 )

Corporate ( 16.5 ) ( 16.5 ) ( 26.8 ) ( 31.1 )

Total operating income (loss) $ ( 25.9 ) $ 88.7 $ 7.9 $ 125.6

Net (gain) loss on dispositions:

Media $ ( 1.1 ) $ 0.2 $ ( 1.2 ) $ ( 1.3 )

Other ( 4.1 ) 0.2 ( 4.1 ) 0.2

Total (gain) loss on dispositions $ ( 5.2 ) $ 0.4 $ ( 5.3 ) $ ( 1.1 )

Depreciation and amortization:

Media $ 39.4 $ 43.7 $ 82.9 $ 84.3

Other 3.5 5.3 7.3 10.5

Total depreciation and amortization $ 42.9 $ 49.0 $ 90.2 $ 94.8

Capital expenditures:

Media $ 13.6 $ 21.0 $ 30.9 $ 38.3

Other 0.1 0.5 1.0 1.3

Total capital expenditures $ 13.7 $ 21.5 $ 31.9 $ 39.6

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Notes to Consolidated Financial Statements

(in millions)

March 31, 2020

(in millions) June 30,

2020 December 31, 2019

Subsequent Event

On April 20 2020 (the “Closing Date”), the Company issued and sold an aggregate of 400,000 shares of the Company’s newly created Series A Convertible Perpetual Preferred Stock, par value $ 0.01 per share (the “Series A Preferred Stock”) at a purchase price of $ 1,000 per share, for an aggregate purchase price of $ 400.0 million (the “Private Placement”) to certain affiliates of Providence Equity Partners LLC (collectively, the “Providence Purchasers”) and ASOF Holdings L.L.P.

and Ares Capital Corporation (collectively, the “Ares Purchasers” and, together with the Providence Purchasers, the “Purchasers”).

The Series A Preferred Stock ranks senior to the shares of the Company’s common stock, par value $ 0.01 per share, with respect to dividend and distribution rights.

Holders of the Series A Preferred Stock are entitled to a cumulative dividend accruing at the initial rate of 7.0 % per year, payable quarterly in arrears.

Any amounts owed above the Share Cap must be paid in cash.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

The holders of the Series A Preferred Stock have the right to vote on matters submitted to a vote of the holders of our common stock on an as-converted basis, except as otherwise prohibited by the terms of the Articles.

Further, certain matters will require the approval of the holders of at least a majority of the shares of Series A Preferred Stock outstanding, including, among others, the issuance of any class or series of senior or parity equity securities by the Company and the incurrence of any additional indebtedness by the Company not otherwise permitted under the Company’s indebtedness agreements.

Changes to any provision of the Company’s Charter (including the Articles) that adversely changes the rights of the holders of the Series A Preferred Stock requires the approval of holders of at least 75 % of the shares of Series A Preferred Stock outstanding so long as the Ares Purchasers, together with their affiliates, own 90 % of the number of shares of our common stock (on an as-converted basis or otherwise) owned by the Ares Purchasers on the Closing Date, with a majority of the outstanding shares of Series A Preferred Stock required at all other times.

Subject to certain conditions, the Company has also agreed to increase the size of its board of directors in order to elect one individual designated by the Providence Purchasers to the board of directors.

Subject to certain conditions and exceptions, the Providence Purchasers and the Ares Purchasers are each entitled to preemptive rights with respect to a new issue of our common stock or securities with rights to acquire our common stock.

The Providence Purchasers and the Ares Purchasers are restricted from acquiring additional securities of the Company, subject to certain exceptions and conditions provided that the Providence Purchasers and the Ares Purchasers may acquire a number of additional shares of our common stock that does not exceed 3.44 % and 1.56 % , respectively, of our outstanding shares of common stock as of April 16, 2020.

Media $ 5,021.3 $ 5,077.1

Other 258.4 284.0

Corporate 607.4 21.2

Total assets $ 5,887.1 $ 5,382.3

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements