What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-05-05 compared with 2020-11-05 · 244 added, 371 removed, 395 unchanged (61% of the section changed)

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services to our customers, such as pre-campaign category research, consumer insights, print production and post-campaign tracking and analytics.

Media segment generated 12% of its revenues in the New York City metropolitan area in the three months ended September 30, 2020, 22% in the three months ended September 30, 2019, 16% in the nine months ended September 30, 2020 and 23% in the nine months ended September 30, 2019, and generated 15% in the Los Angeles metropolitan area in the three months ended September 30, 2020, 16% in the three months ended September 30, 2019, 15% in the nine months ended September 30, 2020 and 16% in the nine months ended September 30, 2019.

In the three months ended September 30, 2020, our U.S.

Media segment generated $265.8 million of Revenues and $74.2 million of Operating income before Depreciation , Amortization , Net gain on dispositions , Stock-based compensation and Restructuring charges (“Adjusted OIBDA”).

In the three months ended September 30, 2019, our U.S.

Media segment generated $422.7 million of Revenues and $147.3 million of Adjusted OIBDA.

In the nine months ended September 30, 2020, our U.S.

Media segment generated $834.0 million of Revenues and $202.4 million of Adjusted OIBDA.

In the nine months ended September 30, 2019, our U.S.

Media segment generated 12% of its revenues in the New York City metropolitan area in the three months ended March 31, 2021 and 22% in the three months ended March 31, 2020, and generated 15% in the Los Angeles metropolitan area in each of the three months ended March 31, 2021 and 2020.

In the three months ended March 31, 2021, our U.S.

Media segment generated $245.4 million of Revenues and $24.6 million of Operating income before Depreciation , Amortization , Net gain on dispositions and Stock-based compensation (“Adjusted OIBDA”).

In the three months ended March 31, 2020, our U.S.

Media segment generated $354.7 million of Revenues and $80.0 million of Adjusted OIBDA.

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Other (includes International and through June 30, 2020, Sports Marketing).

In the three months ended September 30, 2020, Other generated $16.5 million of Revenues and $3.2 million of Adjusted OIBDA.

In the three months ended September 30, 2019, Other generated $39.8 million of Revenues and $4.3 million of Adjusted OIBDA.

In the nine months ended September 30, 2020, Other generated $66.5 million of Revenues and an Adjusted OIBDA loss of $1.7 million.

In the nine months ended September 30, 2019, Other generated $113.4 million of Revenues and $14.3 million of Adjusted OIBDA.

In the three months ended March 31, 2021, Other generated $13.8 million of Revenues and an Adjusted OIBDA loss of $2.0 million.

In the three months ended March 31, 2020, Other generated $30.6 million of Revenues and Adjusted OIBDA of $0.0 million.

COVID-19 Impact

The novel coronavirus (COVID-19) pandemic and the related preventative measures taken to help curb the spread, including shutdowns and slowdowns of, and restrictions on, businesses, public gatherings, social interactions and travel (including reductions in foot traffic, roadway traffic, transit commuting and overall target audiences) throughout the markets in which we do business have had, and may continue to have, a significant impact on the global economy and our business.

Though generally we remain able to continue to sell and service our displays, our business operates billboard and transit franchise agreements in the top DMAs, such as New York and Los Angeles, where the COVID-19 pandemic has had a particularly significant impact.

The COVID-19 pandemic has (i) delayed our ability to build and deploy advertising structures and sites, including digital displays;

(ii) reduced or curtailed our customers’ advertising expenditures and overall demand for our services through purchase cancellations or otherwise;

(iii) increased the volatility of our customers’ advertising expenditure patterns from period-to-period through short-notice purchases, purchase deferrals or otherwise;

and (iv) extended delays in the collection of earned advertising revenues from our customers, all of which could have a material adverse effect on our business, financial condition and results of operation in 2020.

As a result of the impact of the COVID-19 pandemic on our business and results of operations, we expect our key performance indicators, total revenues and total expenses to be materially lower in 2020 than historical levels, particularly in our U.S.

The novel coronavirus (“COVID-19”) pandemic and the related preventative measures taken to help curb the spread, including shutdowns and slowdowns of, and restrictions on, businesses, public gatherings, social interactions and travel (including reductions in foot traffic, roadway traffic, commuting, transit ridership and overall target audiences) throughout the markets in which we do business have had, and may continue to have, a significant impact on the global economy and our business.

Though generally we remain able to continue to sell and service our displays, governmental restrictions have eased in several of our markets and several of our markets have commenced their economic recoveries, our billboard and transit businesses in many of the top DMAs, such as New York and Los Angeles, are still experiencing the significant impacts of the COVID-19 pandemic.

In 2021, the COVID-19 pandemic may continue to, among other things, (i) reduce or curtail our customers’ advertising expenditures and overall demand for our services through purchase cancellations or otherwise;

(ii) increase the volatility of our customers’ advertising expenditure patterns from period-to-period through short-notice purchases, purchase deferrals or otherwise;

and (iii) extend delays in the collection of certain earned advertising revenues from our customers, all of which could have a material adverse effect on our business, financial condition and results of operation in 2021.

As a result of the impact of the ongoing COVID-19 pandemic on our business and results of operations, we expect our key performance indicators and total revenues to incrementally improve throughout the remainder of 2021 as compared to 2020, but be materially lower in 2021 than pre-COVID-19 pandemic levels, particularly in our U.S.

Media segment and with respect to our transit and other business.

Additionally, we expect transit franchise expenses, billboard property lease expenses and posting, maintenance and other expenses, such as rental expenses and transit franchise payments, to materially increase as a percentage of revenues more than historical levels, as revenues decline in 2020.

We expect the impacts described above to be greatest in the second quarter of 2020, with incremental improvement in the third and fourth quarters of 2020.

Accordingly, results for the three and nine months ended September 30, 2020, are not indicative of the results that may be expected for the fiscal year ending December 31, 2020.

In response to the COVID-19 pandemic, we have prioritized the health and safety of our employees and customers by (i) shifting to a secure remote workforce for all personnel other than operations personnel who service our displays and certain other personnel, (ii) implementing deep cleaning, social distancing and other protective policies and practices in accordance with federal, state and local regulations and guidance across all offices and facilities that are open or in the process of reopening, (iii) restricting non-essential business travel, and (iv) communicating frequently with our employees and customers to address any concerns.

We expect total expenses to increase throughout the remainder of 2021 as compared to 2020, but be materially lower than pre-COVID-19 pandemic levels, particularly in our U.S.

Media segment and with respect to our transit and other business.

Additionally, we expect billboard property lease expenses, such as rental expenses, and posting, maintenance and other expenses, as a percentage of revenues, to decrease throughout the remainder of 2021 as compared to 2020, but be materially higher than pre-COVID-19 pandemic levels.

We expect transit franchise expenses, such as transit franchise payments, as a percentage of revenues, to increase throughout the remainder of 2021 as compared to 2020, and be materially higher than pre-COVID-19 pandemic levels, primarily due to our guaranteed minimum annual payment amounts owed to the MTA, which resumed on January 1, 2021.

The impacts described above with respect to 2020 were greatest in the second quarter of 2020, with incremental improvement in the third and fourth quarters of 2020.

Accordingly, results for the three months ended March 31, 2021, are not indicative of the results that may be expected for the fiscal year ending December 31, 2021.

Throughout the ongoing COVID-19 pandemic, we have prioritized the health and safety of our employees and customers by (i) shifting to a secure remote workforce for personnel other than operations personnel who service our displays and certain other personnel, (ii) implementing deep cleaning, social distancing and other protective policies and practices in accordance with federal, state and local regulations and guidance across all offices and facilities that are open or in the process of reopening, (iii) restricting non-essential business travel, and (iv) communicating frequently with our employees and customers to address any concerns.

None of these actions have caused a significant disruption in our ability to manage the continuity of our business or our internal controls.

In addition, in order to preserve financial flexibility, increase liquidity and reduce expenses in light of the current uncertainty in the global economy and our business, we have modified our business goals and undertaken the following actions, which should be read in conjunction with the “—Analysis of Results of Operations” and “—Liquidity and Capital Resources” sections of this MD&A:

• Repaid in full all borrowings under the Revolving Credit Facility (as defined below) as of June 30, 2020, using the net proceeds from the offering of the Notes (as defined below) and cash on hand;

• Accessed the capital markets and raised $400.0 million, before expenses, in the Private Placement (as defined below) and issued $400.0 million aggregate principal amount of 6.250% Senior Unsecured Notes due 2025 (the “Notes”);

• Amended the Credit Agreement (as defined below) to modify the calculation of the Company’s financial maintenance covenant ratio under the Credit Agreement;

• Amended the agreements governing the AR Securitization Facilities (as defined below) to temporarily suspend the AR Facility (as defined below) and extend the Repurchase Facility (as defined below) to June 2021 with a borrowing capacity of $80.0 million, unless further amended and/or extended;

• Suspended our quarterly dividend payments on our common stock, subject to the minimum annual REIT distribution requirement;

• Suspended or delayed our deployment of digital transit displays to reduce costs that may or may not be recoverable from customer sales or transit franchise partners;

• Reduced maintenance capital expenditures (other than for necessary safety-related projects) and growth capital expenditures for digital billboard display conversions;

• Have taken a highly selective approach to new acquisition activity;

• Reduced our posting, maintenance and other, and SG&A (as defined below) expenses through restrictions on discretionary expenses, a hiring freeze, workforce reductions, employee furloughs and temporary reductions to the base salaries of certain employees and our executive officers (which ended in September 2020), as well as to the cash compensation of our non-employee directors (which ended in October 2020), to offset expected decreases in revenues in 2020.

In addition, we have engaged, and will continue to engage, in constructive conversations with our billboard ground lease landlords and transit franchise partners to mitigate increases as a percentage of revenues in billboard property lease expenses, transit franchise expenses and posting, maintenance and other expenses.

Though we rely on third parties to manufacture and transport our digital displays, and have not experienced any significant supply chain or logistical disruptions, we may experience delays as a result of the COVID-19 pandemic in receiving digital displays as we continue to reinstate our digital billboard display conversions and deployment of digital transit displays.

We continue to monitor the rapidly evolving situation and guidance from federal, state and local public health authorities and may take additional actions based on their recommendations.

When the COVID-19 pandemic subsides, there can be no assurances as to the time it may take to generate revenues at historic levels.

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.

In addition, in order to preserve financial flexibility, increase liquidity and reduce expenses in light of the current uncertainty in the global economy and our business, we modified our business goals and undertook several actions to date, including, among other things, issuing the Series A Preferred Stock (as defined below) and certain senior unsecured notes;

amending the Credit Agreement (as defined below) to modify the calculation of the Company’s financial maintenance covenant ratio under the Credit Agreement;

suspending our quarterly dividend payments on our common stock, subject to the minimum annual REIT distribution requirement (which may be satisfied by making distributions to our common stockholders, our

preferred stockholders (including holders of Series A Preferred Stock) or a combination of our stockholders);

and reducing SG&A (as defined below) and posting, maintenance and other expenses.

We will continue in 2021 to focus on managing costs and expenses to offset any decreases in revenues in 2021 as compared to pre-COVID-19 pandemic levels.

However, we have resumed capital investments in a measured manner, including taking a highly selective approach to new acquisition activity, based on our current financial condition.

In addition, we have engaged, and will continue to engage, in constructive conversations with our billboard ground lease landlords and transit franchise partners to mitigate any increases as a percentage of revenues in billboard property lease expenses, transit franchise expenses and posting, maintenance and other expenses.

We continue to monitor the evolving situation and guidance from federal, state and local public health authorities and may take additional actions based on their recommendations.

When the COVID-19 pandemic subsides, there can be no assurances as to the time it may take to generate revenues at pre-COVID-19 pandemic levels.

There remains 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, which will depend on numerous factors, including, among others, the emergence of new cases of COVID-19 or its variants, hospitalization and mortality rates, and the availability and distribution of safe and effective treatments and vaccines.

Accordingly, 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.

Economic Environment

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The majority of our digital billboard displays were converted from traditional static billboard displays.

In 2017, we commenced deployment of state-of-the-art digital transit displays in connection with several transit franchises and are planning to increase deployments significantly over the coming years.

In 2017, we commenced deployment of state-of-the-art digital transit displays in connection with several transit franchises and are planning to increase deployments over the coming years.

Once the digital transit displays have been deployed at scale, we expect that revenue generated on digital transit displays will be a multiple of the revenue generated on comparable static transit displays.

Subject to the impact of the COVID-19 pandemic, we intend to incur significant equipment deployment costs and capital expenditures in the coming years to continue increasing the number of digital displays in our portfolio.

We have built or converted 47 new digital billboard displays in the United States and 2 in Canada during the nine months ended September 30, 2020.

Additionally, in the nine months ended September 30, 2020, we entered into marketing arrangements to sell advertising on 20 third-party digital billboard displays in the U.S.

and 29 in Canada.

In the nine months ended September 30, 2020, we have built, converted or replaced 1,699 digital transit and other displays in the United States.

As described above, as a result of the COVID-19 pandemic, we reduced our digital billboard display conversions and suspended or delayed our deployment of digital transit displays.

We have built or converted 17 new digital billboard displays in the U.S.

during the three months ended March 31, 2021.

Additionally, in the three months ended March 31, 2021, we entered into marketing arrangements to sell advertising on six third-party digital billboard displays in the U.S.

In the three months ended March 31, 2021, we have built, converted or replaced

271 digital transit and other displays in the U.S.

and three digital transit and other displays in Canada.

The following table sets forth information regarding our digital displays.

Digital Revenues (in millions)

for the Nine Months Ended

September 30, 2020 (a)

for the Three Months Ended

March 31, 2021 (a)

Number of Digital Displays as of

September 30, 2020 (a)

March 31, 2021 (a)

Location Digital Billboard Digital Transit and Other Total Digital Revenues Digital Billboard Displays Digital Transit and Other Displays Total Digital Displays

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We have a diversified base of customers across various industries.

During the three months ended September 30, 2020, our largest categories of advertisers were professional services, healthcare/pharmaceuticals and retail, which represented approximately 11%, 9% and 8% of our total U.S.

During the three months ended March 31, 2021, our largest categories of advertisers were professional services, healthcare/pharmaceuticals and retail, each of which represented approximately 13%, 9% and 8% of our total U.S.

Media segment revenues, respectively.

During the three months ended September 30, 2019, our largest categories of advertisers were financial services, retail and professional services, each of which represented approximately 8% of our total U.S.

Media segment revenues.

During the nine months ended September 30, 2020, our largest categories of advertisers were professional services, healthcare/pharmaceuticals and retail, each of which represented approximately 10%, 9% and 8% of our total U.S.

During the three months ended March 31, 2020, our largest categories of advertisers were professional services, computers/internet and retail, each of which represented approximately 10%, 9% and 9% of our total U.S.

Media segment revenues, respectively.

During the nine months ended September 30, 2019, our largest categories of advertisers were retail, professional services and computers/internet, each of which represented approximately 8% of our total U.S.

Media segment revenues.

Our large-scale portfolio allows our customers to reach a national audience and also provides the flexibility to tailor campaigns to specific regions or markets.

In the three months ended September 30, 2020, we generated approximately 38% of our U.S.

Media segment revenues from national advertising campaigns compared to approximately 46% in the same prior-year period.

In the nine months ended September 30, 2020, we generated approximately 40% of our U.S.

In the three months ended March 31, 2021, we generated approximately 38% of our U.S.

Media segment revenues from national advertising campaigns compared to approximately 43% in the same prior-year period.

Our transit businesses requires us to periodically obtain and renew contracts with municipalities and other governmental entities.

Our transit businesses require us to periodically obtain and renew contracts with municipalities and other governmental entities.

When these contracts expire, we generally must participate in highly competitive bidding processes in order to obtain or renew contracts.

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We believe these non-GAAP performance indicators are meaningful supplemental measures of our operating performance and should not be considered in isolation of, or as a substitute for, their most directly comparable GAAP financial measures.

Three Months Ended Nine Months Ended

September 30, % September 30, %

(in millions, except percentages) 2020 2019 Change 2020 2019 Change

Three Months Ended

(in millions, except percentages) 2021 2020 Change

Revenues $ 259.2 $ 385.3 (33) %

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259.2 372.1 (30)

Operating income 25.1 85.5 (71) 33.0 211.1 (84)

Adjusted OIBDA (b)

68.5 140.3 (51) 177.0 370.7 (52)

Adjusted OIBDA (b) margin

Operating income (loss) (31.0) 33.8 *

Adjusted OIBDA (b)(c)

11.1 75.5 (85)

Adjusted OIBDA (b)(c) margin

Funds from operations (“FFO”) (b) attributable to OUTFRONT Media Inc.

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Net income (loss) attributable to OUTFRONT Media Inc.

(13.5) 38.7 * (65.3) 95.1 *

* Calculation is not meaningful.

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Organic revenues, as we calculate it, may not be comparable to similarly titled measures employed by other companies.

(b) See the “Reconciliation of Non-GAAP Financial Measures” and “Revenues” sections of this MD&A for reconciliations of Operating income to Adjusted OIBDA, Net income (loss) attributable to OUTFRONT Media Inc.

(b) See the “Reconciliation of Non-GAAP Financial Measures” and “Revenues” sections of this MD&A for reconciliations of Operating income (loss) to Adjusted OIBDA, Net income (loss) attributable to OUTFRONT Media Inc.

to FFO attributable to OUTFRONT Media Inc.

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and Revenues to organic revenues.

(c) Consistent with the current year’s presentation, we have reclassified amortization of direct lease acquisition costs of $11.3 million in the three months ended March 31, 2020, from Amortization to Selling, general and administrative expenses, resulting in a corresponding decrease in Adjusted OIBDA.

Adjusted OIBDA

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AFFO also includes cash paid for maintenance capital expenditures since these are routine uses of cash that are necessary for our operations.

In addition, AFFO excludes restructuring charges and losses on extinguishment of debt, as well as certain non-cash items, including non-real estate depreciation and amortization, a gain on disposition of non-real estate assets, stock-based compensation expense, accretion expense, the non-cash effect of straight-line rent, amortization of deferred financing costs and the same adjustments for our non-controlling interests, as well as the non-cash portion of income taxes, and the related income tax effect of adjustments, as applicable.

In addition, AFFO excludes restructuring charges and losses on extinguishment of debt, as well as certain non-cash items, including non-real estate depreciation and amortization, stock-based compensation expense, accretion expense, the non-cash effect of straight-line rent, amortization of deferred financing costs and the same adjustments for our non-controlling interests, as well as the non-cash portion of income taxes, and the related income tax effect of adjustments, as applicable.

We use FFO and AFFO measures for managing our business and for planning and forecasting future periods, and each is an important indicator of our operational strength and business performance, especially compared to other REITs.

Our management believes users of our financial data are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in managing, planning and executing our business strategy.

Our management believes users of our financial data are best served

if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in managing, planning and executing our business strategy.

Our management also believes that the presentations of FFO and AFFO, as supplemental measures, are useful in evaluating our business because adjusting results to reflect items that have more bearing on the operating performance of REITs highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures.

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Reconciliation of Non-GAAP Financial Measures

The following table reconciles Operating income to Adjusted OIBDA, and Net income (loss) attributable to OUTFRONT Media Inc.

The following table reconciles Operating income (loss) to Adjusted OIBDA, and Net income (loss) attributable to OUTFRONT Media Inc.

to FFO attributable to OUTFRONT Media Inc.

and AFFO attributable to OUTFRONT Media Inc.

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions, except per share amounts) 2021 2020

Total revenues $ 259.2 $ 385.3

Operating income $ 25.1 $ 85.5 $ 33.0 $ 211.1

Restructuring charges (a)

0.6 — 5.3 0.3

Operating income (loss) $ (31.0) $ 33.8

Net gain on dispositions (0.3) (0.1)

Depreciation 20.0 21.0

Amortization 24.4 28.7 72.4 81.0

Amortization (a)

Stock-based compensation 6.0 5.8

Adjusted OIBDA $ 68.5 $ 140.3 $ 177.0 $ 370.7

Adjusted OIBDA margin 24 % 30 % 20 % 29 %

Net income (loss) attributable to OUTFRONT

Adjusted OIBDA (a)

$ 11.1 $ 75.5

Adjusted OIBDA (a) margin

Net income (loss) attributable to OUTFRONT Media Inc.

$ (67.7) $ 6.1

Depreciation of billboard advertising structures 14.1 15.5

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Adjustment related to non-controlling interests (0.1) (0.1)

Adjustment related to equity-based investments — — — 0.1

Income tax effect of adjustments (b)

FFO attributable to OUTFRONT Media Inc.

22.6 79.0 39.4 211.7

Non-cash portion of income taxes (5.2) (2.5)

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Maintenance capital expenditures (3.6) (4.8)

Restructuring charges - severance (a)

0.6 — 4.4 0.3

Other depreciation 5.9 5.5

Other amortization 4.0 3.0

Gain on disposition of non-real estate assets (c)

(7.2) — (7.2) —

Stock-based compensation (a)

5.4 5.6 17.3 16.4

Stock-based compensation 6.0 5.8

Non-cash effect of straight-line rent 2.0 1.3

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Amortization of deferred financing costs

1.8 1.9 4.8 4.9

Loss on extinguishment of debt 6.3 —

Adjustment related to non-controlling interests

Income tax effect of adjustments (d)

AFFO attributable to OUTFRONT Media Inc.

$ (24.5) $ 40.0

(a) In 2020, Restructuring charges relate to severance associated with workforce reductions made in response to the COVID-19 pandemic and includes stock-based compensation expenses of $0.9 million.

(b) Income tax effect related to Net gain on disposition of real estate assets.

(See Note 13.

Acquisitions and Dispositions :

Dispositions to the Consolidated Financial Statements.)

(d) Income tax effect related to Restructuring charges - severance and Gain on disposition of non-real estate assets.

FFO in the three months ended September 30, 2020, of $22.6 million decreased $56.4 million, or 71%, compared to the same prior-year period.

AFFO in the three months ended September 30, 2020, of $27.7 million decreased $64.9 million, or 70%, compared to the same prior-year period.

FFO in the nine months ended September 30, 2020, of $39.4 million decreased $172.3 million, or 81%, compared to the same prior-year period.

AFFO in the nine months ended September 30, 2020, of $46.4 million decreased $181.7 million, or 80%, compared to the same prior-year period.

(a) Consistent with the current year’s presentation, we have reclassified amortization of direct lease acquisition costs of $11.3 million in the three months ended March 31, 2020, from Amortization to Selling, general and administrative expenses, resulting in a corresponding decrease in Adjusted OIBDA.

FFO in the three months ended March 31, 2021, was a deficit of $30.4 million compared to FFO of $44.7 million in the same prior-year period.

AFFO in the three months ended March 31, 2021, was a deficit of $24.5 million compared AFFO of $40.0 million in the same prior-year period.

The decreases were primarily due to the impact of the COVID-19 pandemic on revenues, partially offset by cost reduction measures taken in response to the COVID-19 pandemic.

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Revenues to the Consolidated Financial Statements.)

Three Months Ended Nine Months Ended

September 30, % September 30, %

(in millions, except percentages) 2020 2019 Change 2020 2019 Change

Three Months Ended

(in millions, except percentages) 2021 2020 Change

Billboard $ 223.6 $ 270.9 (17) %

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Non-organic revenues:

— 0.3 * — 1.1 *

Transit and other

— 11.1 * 25.6 40.3 (36)

Total non-organic revenues

— 11.4 * 25.6 41.4 (38)

Total revenues $ 259.2 $ 385.3 (33)

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(a) Organic revenues exclude revenues associated with a disposition and the impact of foreign currency exchange rates (“non-organic revenues”).

Total revenues decreased $180.2 million, or 39%, and organic revenues decreased $168.8 million, or 37%, in the three months ended September 30, 2020, compared to the same prior-year period.

Total revenues decreased by $393.6 million, or 30%, and organic revenues decreased $377.8 million, or 30%, in the nine months ended September 30, 2020, compared to the same prior-year period.

In the nine months ended September 30, 2020, non-organic revenues exclude the impact of the Sports Disposition.

In the three and nine months ended September 30, 2019, non-organic revenues exclude the impact of the Sports Disposition and reflect the impact of foreign currency exchange rates.

Total billboard revenues decreased $72.1 million, or 23%, in the three months ended September 30, 2020, compared to the same prior-year period and decreased $169.5 million, or 20%, in the nine months ended September 30, 2020, compared to the same prior-year period.

The decreases were principally driven by a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services through purchase cancellations or otherwise.

Organic billboard revenues in the three months ended September 30, 2020, decreased $71.8 million, or 23%, compared to the same prior-year period and decreased $168.4 million, or 19%, in the nine months ended September 30, 2020, compared to the

same prior-year period.

Total transit and other revenues decreased $108.1 million, or 72%, in the three months ended September 30, 2020, compared to the same prior-year period and decreased $224.1 million, or 53%, in the nine months ended September 30, 2020, compared to the same prior-year period.

The decreases were driven by a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services through purchase cancellations or otherwise, the impact of the Sports Disposition and a decrease in third-party digital equipment sales.

The decrease in organic transit and other revenues in each of the three and nine months ended September 30, 2020, compared to the same prior-year period, is due to a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services through purchase cancellations or otherwise and a decrease in third-party digital equipment sales.

Three Months Ended Nine Months Ended

September 30, % September 30, %

(in millions, except percentages) 2020 2019 Change 2020 2019 Change

Total revenues decreased by $126.1 million, or 33%, and organic revenues decreased $112.9 million, or 30%, in the three months ended March 31, 2021, compared to the same prior-year period.

In the three months ended March 31, 2020, non-organic revenues exclude the impact of the Sports Disposition and reflect the impact of foreign currency exchange rates.

Total billboard revenues decreased $47.3 million, or 17%, in the three months ended March 31, 2021, compared to the same prior-year period, principally driven by a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services.

Organic billboard revenues decreased $48.1 million, or 18%, in the three months ended March 31, 2021, compared to the same prior-year period, principally driven by a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services.

Total transit and other revenues decreased $78.8 million, or 69%, in the three months ended March 31, 2021, compared to the same prior-year period, principally driven by a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services, and the impact of the Sports Disposition.

Organic transit and other revenues decreased $64.8 million, or 65%, in the three months ended March 31, 2021, compared to the same prior-year period, is due to a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services.

Three Months Ended

(in millions, except percentages) 2021 2020 Change

Operating $ 177.6 $ 224.8 (21) %

Selling, general and administrative

Selling, general and administrative (a)

76.5 90.8 (16)

Restructuring charges 0.6 — * 5.3 0.3 *

Net gain on dispositions (0.3) (0.1) *

Depreciation 20.0 21.0 (5)

Amortization 24.4 28.7 (15) 72.4 81.0 (11)

Amortization (a)

Total expenses $ 290.2 $ 351.5 (17)

* Calculation is not meaningful.

(a) Consistent with the current year’s presentation, we have reclassified amortization of direct lease acquisition costs of $11.3 million in three months ended March 31, 2020, from Amortization to Selling, general and administrative expenses.

Operating Expenses

Three Months Ended Nine Months Ended

September 30, % September 30, %

(in millions, except percentages) 2020 2019 Change 2020 2019 Change

Three Months Ended

(in millions, except percentages) 2021 2020 Change

Operating expenses:

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Total operating expenses $ 177.6 $ 224.8 (21)

Billboard property lease expenses represented 40% of billboard revenues in the three months ended September 30, 2020, 33% in the three months ended September 30, 2019, 42% in the nine months ended September 30, 2020, and 35% in the nine months ended September 30, 2019.

Transit franchise expenses represented 59% of transit display revenues in the three months ended September 30, 2020, 57% in the three months ended September 30, 2019, 62% in the nine months ended September 30, 2020 and 59% in the nine months ended September 30, 2019.

The increase in transit franchise expense as a percentage of revenues is primarily driven by an amendment to our agreement with the New York Metropolitan Transportation Authority (“the MTA”), which resulted in the payment of an increased revenue share percentage instead of guaranteed minimum annual payments for second and third quarters of 2020.

Billboard property lease and transit franchise expenses decreased $58.0 million in the three months ended September 30, 2020, compared to the same prior-year period.

Billboard property lease and transit franchise expenses decreased $114.2 million in the

nine months ended September 30, 2020, compared to the same prior-year period.

The decreases were due primarily to lower billboard and transit revenues resulting from the impact of the COVID-19 pandemic and the impact of agreements with landlords and transit franchise partners to modify our existing minimum lease payments and guaranteed minimum annual payments to revenue share percentages in the second and third quarters of 2020.

Posting, maintenance and other expenses decreased $31.7 million, or 45%, in the three months ended September 30, 2020, compared to the same prior-year period and decreased $53.9 million, or 27%, in the nine months ended September 30, 2020, compared to the same prior-year period.

The decreases were primarily due to the impact of the COVID-19 pandemic and the related restrictions in the top DMAs reducing or curtailing customer advertising expenditures and overall demand for our services through purchase cancellations or otherwise, the impact of the Sports Disposition and lower costs related to third-party digital equipment sales.

Billboard property lease expenses represented 42% of billboard revenues in the three months ended March 31, 2021, and 38% in the three months ended March 31, 2020.

Transit franchise expenses represented 131% of transit display revenues in the three months ended March 31, 2021 and 62% in the three months ended March 31, 2020.

The increase in transit franchise expense as a percentage of revenues is primarily driven by guaranteed minimum annual payments to the New York Metropolitan Transportation Authority (the “MTA”).

Billboard property lease and transit franchise expenses decreased $26.9 million in the three months ended March 31, 2021, compared to the same prior-year period, due primarily to lower billboard and transit revenues resulting from the impact of the COVID-19 pandemic and the impact of agreements with landlords and transit franchise partners to modify our existing minimum lease payments and guaranteed minimum annual payments to revenue share percentages.

Posting, maintenance and other expenses decreased $20.3 million, or 32%, in the three months ended March 31, 2021, compared to the same prior-year period, primarily due to the impact of the COVID-19 pandemic and the related restrictions in the top DMAs reducing or curtailing customer advertising expenditures and overall demand for our services, and the impact of the Sports Disposition.

Selling, General and Administrative Expenses (“SG&A”)

SG&A expenses represented 22% of Revenues in the three months ended September 30, 2020, and 18% in the same prior-year period.

SG&A expenses decreased $18.9 million, or 23%, in the three months ended September 30, 2020, compared to the same prior-year period.

SG&A expenses represented 23% of Revenues in the nine months ended September 30, 2020 and 18% in the same prior-year period.

SG&A expenses decreased $31.8 million, or 13%, in the nine months ended September 30, 2020, compared to the same prior-year period.

The decreases were primarily driven by lower compensation-related costs and lower professional fees, primarily as a result of cost reduction measures taken in response to the COVID-19 pandemic, and lower expenses resulting from the Sports Disposition, partially offset by a higher provision for doubtful allowances.

SG&A expenses represented 30% of Revenues in the three months ended March 31, 2021 and 24% in the same prior-year period.

SG&A expenses decreased $14.3 million, or 16%, in the three months ended March 31, 2021, compared to the same prior-year period, primarily driven by a lower provision for doubtful allowances and lower expenses resulting from the Sports Disposition.

Consistent with the current year’s presentation, we have reclassified amortization of direct lease acquisition costs of $11.3 million in three months ended March 31, 2020 from Amortization to Selling, general and administrative expenses.

Net Gain on Dispositions

Net gain on dispositions was $8.0 million for the three months ended September 30, 2020, compared to $1.9 million for the same prior-year period.

Net gain on dispositions was $13.3 million for the nine months ended September 30, 2020, compared to $3.0 million for the same prior-year period.

The gain for the three and nine months ended September 30, 2020, was primarily related to a gain of $7.2 million related to the Sports Disposition.

For the nine months ended September 30, 2020, the gain also included the sale of an office location in Canada in the second quarter of 2020.

The gains for the nine months ended September 30, 2019, primarily related to the sales of office locations in the U.S.

Depreciation decreased $1.4 million, or 6% in the three months ended September 30, 2020, compared to the same prior-year period and decreased $1.7 million, or 3%, in the nine months ended September 30, 2020, compared to the same prior-year period.

Amortization decreased $4.3 million, or 15%, in the three months ended September 30, 2020, compared to the same prior-year period, principally driven by lower direct lease acquisition costs, partially offset by higher amortization of intangible assets.

Amortization of direct lease acquisition costs was $9.1 million in the three months ended September 30, 2020 and $13.6 million in the same prior-year period.

Amortization decreased $8.6 million, or 11%, in the nine months ended September 30, 2020, compared to the same prior-year period, principally driven by lower direct lease acquisition costs, partially offset by higher amortization of intangible assets.

Amortization of direct lease acquisition costs was $26.7 million in the nine months ended September 30, 2020 and $36.9 million in the same prior-year period.

Net gain on dispositions was $0.3 million for the three months ended March 31, 2021, compared to $0.1 million for the same prior-year period.

Depreciation decreased $1.0 million, or 5%, in the three months ended March 31, 2021, compared to the same prior-year period.

Amortization increased $1.4 million, or 9%, in the three months ended March 31, 2021, compared to the same prior-year period, principally driven by higher amortization of intangible assets.

Interest Expense, Net

Interest expense, net, was $34.2 million (including $1.8 million of deferred financing costs) in the three months ended September 30, 2020, and $33.9 million (including $1.9 million of deferred financing costs) in the same prior-year period.

The increase in Interest expense, net, in the three months ended September 30, 2020, compared to the same prior-year period was due primarily to a higher outstanding average debt balance, partially offset by lower interest rates.

Interest expense, net, was $97.3 million (including $4.8 million of deferred financing costs) in the nine months ended September 30, 2020, and $100.5 million (including $4.9 million of deferred financing costs) in the same prior-year period.

The decrease in Interest expense, net, in the nine months ended September 30, 2020, compared to the same prior-year period was primarily due to lower interest rates, partially offset by a higher outstanding average debt balance.

Provision for Income Taxes

Provision for income taxes of $3.5 million in the three months ended September 30, 2020, increased $0.2 million, or 6%, compared to the same prior-year period, due primarily to a gain related to the Sports Disposition.

Provision for income taxes of $0.3 million in the nine months ended September 30, 2020, decreased $8.2 million, or 96%, compared to the same prior-year period, due primarily to a taxable REIT subsidiary loss in the nine months ended September 30, 2020, partially offset by the gain related to the Sports Disposition.

Interest expense, net, was $34.6 million (including $1.9 million of deferred financing costs) in the three months ended March 31, 2021, and $29.8 million (including $1.3 million of deferred financing costs) in the same prior-year period.

The increase in Interest expense, net, was primarily due to a higher outstanding average debt balance, partially offset by lower interest rates.

Loss on Extinguishment of Debt

In the first quarter of 2021, we recorded a loss on extinguishment of debt of $6.3 million relating to the redemption of our 5.625% Senior Unsecured Notes due 2024.

Benefit for Income Taxes

Benefit for income taxes increased $3.0 million, or 176%, in the three months ended March 31, 2021, compared to the same prior-year period, due primarily to a higher taxable REIT subsidiary loss in the three months ended March 31, 2021 compared to the same prior-year period.

Net Income (Loss)

Net loss before allocation to non-controlling interests was $13.3 million in the three months ended September 30, 2020, compared to Net income before allocation to non-controlling interests of $38.7 million in the same prior-year period, due primarily to a the impact of the COVID-19 pandemic, partially offset by the impact of cost reduction measures taken in response to the COVID-19 pandemic and the gain related to the Sports Disposition.

Net loss before allocation to non-controlling interests was $65.0 million in the nine months ended September 30, 2020, compared Net income before allocation to non-controlling interests of $95.1 million in the same prior-year period, due primarily to the impact of the COVID-19 pandemic, partially offset by the impact of cost reduction measures taken in response, the gain related to the Sports Disposition and lower interest expense.

Net loss before allocation to non-controlling interests was $67.6 million in the three months ended March 31, 2021, compared Net income before allocation to non-controlling interests of $6.3 million in the same prior-year period, due primarily to the impact of the COVID-19 pandemic, partially offset by the impact of cost reduction measures taken in response, and higher interest expense.

Segment Results of Operations

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Media and Other .

The following table presents our Revenues , Adjusted OIBDA and Operating income (loss) by segment in the three and nine months ended September 30, 2020 and 2019.

The following table presents our Revenues , Adjusted OIBDA and Operating income (loss) by segment in the three months ended March 31, 2021 and 2020.

In the third quarter of 2020, we completed the Sports Disposition.

Historical operating results for our Sports Marketing operating segment through June 30, 2020, are included in Other .

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions) 2021 2020

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Total revenues $ 259.2 $ 385.3

Operating income $ 25.1 $ 85.5 $ 33.0 $ 211.1

Restructuring charges 0.6 — 5.3 0.3

Operating income (loss) $ (31.0) $ 33.8

Net gain on dispositions (0.3) (0.1)

Depreciation 20.0 21.0

Amortization 24.4 28.7 72.4 81.0

Stock-based compensation 5.4 5.6 16.4 16.4

Total Adjusted OIBDA $ 68.5 $ 140.3 $ 177.0 $ 370.7

Amortization (a)

Stock-based compensation (b)

Total Adjusted OIBDA (a)

$ 11.1 $ 75.5

Adjusted OIBDA:

Media $ 74.2 $ 147.3 $ 202.4 $ 387.7

Other 3.2 4.3 (1.7) 14.3

$ 24.6 $ 80.0

Corporate (11.5) (4.5)

Total Adjusted OIBDA $ 68.5 $ 140.3 $ 177.0 $ 370.7

Total Adjusted OIBDA (a)

$ 11.1 $ 75.5

Operating income (loss):

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Corporate (17.5) (10.3)

Total operating income $ 25.1 $ 85.5 $ 33.0 $ 211.1

Three Months Ended Nine Months Ended

September 30, % September 30, %

(in millions, except percentages) 2020 2019 Change 2020 2019 Change

Total operating income (loss) $ (31.0) $ 33.8

Media segment and $0.5 million was recorded in Othe r, from Amortization to SG&A expenses, resulting in a corresponding decrease in Adjusted OIBDA.

(b) Stock-based compensation is classified as Corporate expense.

Three Months Ended

(in millions, except percentages) 2021 2020 Change

Billboard $ 212.5 $ 256.5 (17) %

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Operating expenses (166.1) (202.7) (18)

SG&A expenses

SG&A expenses (a)

(54.7) (72.0) (24)

Adjusted OIBDA $ 74.2 $ 147.3 (50) $ 202.4 $ 387.7 (48)

Adjusted OIBDA margin 28 % 35 % 24 % 33 %

Operating income $ 31.9 $ 103.1 (69) $ 75.4 $ 260.5 (71)

Restructuring charges 0.4 — * 3.4 — *

Adjusted OIBDA (a)

$ 24.6 $ 80.0 (69)

Adjusted OIBDA (a) margin

Operating income (loss) $ (8.6) $ 47.4 (118)

Net gain on dispositions (0.3) (0.1) 200

Depreciation and amortization 41.9 46.1 (9) 124.8 130.4 (4)

Adjusted OIBDA $ 74.2 $ 147.3 (50) $ 202.4 $ 387.7 (48)

Depreciation and amortization (a)

Adjusted OIBDA (a)

$ 24.6 $ 80.0 (69)

* Calculation is not meaningful.

Media segment revenues decreased $156.9 million, or 37%, in the three months ended September 30, 2020, compared to the same prior-year period.

In the three months ended September 30, 2020, we generated approximately 38% of our U.S.

Media segment revenues from national advertising campaigns and 46% in the same prior-year period.

Media segment revenues decreased $346.7 million, or 29%, in the nine months ended September 30, 2020, compared to the same prior-year period.

In the nine months ended September 30, 2020, we generated approximately 40% of our U.S.

(a) Consistent with the current year’s presentation, we have reclassified amortization of direct lease acquisition costs of $10.8 million in the three months ended March 31, 2020, in our U.S.

Media segment from Amortization to SG&A expenses, resulting in a corresponding decrease in Adjusted OIBDA.

Media segment revenues decreased $109.3 million, or 31%, in the three months ended March 31, 2021, compared to the same prior-year period, due primarily to a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services.

In the three months ended March 31, 2021, we generated approximately 38% of our U.S.

Media segment revenues from national advertising campaigns and 43% in the same prior-year period.

The decreases in U.S.

Media segment revenues were due primarily to a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services through purchase cancellations or otherwise.

Revenues from U.S.

Media segment billboards decreased $66.8 million, or 23%, in the three months ended September 30, 2020, compared to the same prior-year period.

Revenues from U.S.

Media segment billboards decreased $150.2 million, or 18%, in the nine months ended September 30, 2020, compared to the same prior-year period.

The decreases reflect a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services through purchase cancellations or otherwise.

Media segment billboards decreased $44.0 million, or 17%, in the three months ended March 31, 2021, compared to the same prior-year period, reflecting a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services.

Transit and other revenues in the U.S.

Media segment decreased $90.1 million, or 69%, in the three months ended September 30, 2020, compared to the same prior-year period and decreased $196.5 million, or 54%, in the nine months ended September 30, 2020, compared to the same prior-year period.

Media segment operating expenses decreased $72.2 million, or 33%, in the three months ended September 30, 2020, compared to the same prior-year period.

Media segment SG&A expenses decreased $11.6 million, or 20%, in the three months ended September 30, 2020, compared to the same prior-year period.

Media segment operating expenses decreased $145.2 million, or 23%, in the nine months ended September 30, 2020, compared to the same prior-year period.

Media segment SG&A expenses decreased $16.2 million, or 10%, in the nine months ended September 30, 2020, compared to the same prior-year period.

The decreases in U.S.

Media segment operating expenses were primarily driven by lower billboard and transit revenues resulting from the impact of the COVID-19 pandemic and the impact of agreements with landlords and transit franchise partners to modify our existing minimum lease payments and guaranteed minimum annual payments to revenue share percentages in the second and third quarters of 2020.

The decreases in U.S.

Media segment SG&A expenses were primarily

driven by lower compensation-related costs and lower professional fees, primarily resulting from cost reduction measures taken in response to the COVID-19 pandemic, partially offset by a higher provision for doubtful allowances.

Media segment Adjusted OIBDA decreased $73.1 million, or 50%, in the three months ended September 30, 2020, compared to the same prior-year period.

Adjusted OIBDA margin was 28% in the three months ended September 30, 2020, and 35% in the same prior-year period.

Media segment Adjusted OIBDA decreased $185.3 million, or 48%, in the nine months ended September 30, 2020, compared to the same prior-year period.

Adjusted OIBDA margin was 24% in the nine months ended September 30, 2020, and 33% in the same prior-year period.

Three Months Ended Nine Months Ended

September 30, % September 30, %

(in millions, except percentages) 2020 2019 Change 2020 2019 Change

Media segment decreased $65.3 million, or 66%, in the three months ended March 31, 2021, compared to the same prior-year period, driven by a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services.

Media segment operating expenses decreased $36.6 million, or 18%, in the three months ended March 31, 2021, compared to the same prior-year period, primarily driven by lower billboard and transit revenues resulting from the impact of the COVID-19 pandemic and the impact of agreements with landlords and transit franchise partners to modify our existing minimum lease payments and guaranteed minimum annual payments to revenue share percentages.

Media segment SG&A expenses decreased $17.3 million, or 24%, in the three months ended March 31, 2021, compared to the same prior-year period, primarily driven by a lower provision for doubtful allowances and lower compensation-related costs.

Media segment Adjusted OIBDA decreased $55.4 million, or 69%, in the three months ended March 31, 2021, compared to the same prior-year period.

Adjusted OIBDA margin was 10% in the three months ended March 31, 2021, and 23% in the same prior-year period.

Three Months Ended

(in millions, except percentages) 2021 2020 Change

$ 11.1 $ 14.4 (23) %

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Transit and other

2.6 9.5 (73) 5.5 18.4 (70)

Total organic revenues (a)

1 unchanged sentence

Non-organic revenues:

— 0.3 * — 1.1 *

Transit and other

— 11.1 * 25.6 40.3 (36)

Total non-organic revenues

— 11.4 * 25.6 41.4 (38)

Total revenues 13.8 30.6 (55)

1 unchanged sentence

(11.5) (22.1) (48)

SG&A expenses

(3.4) (8.1) (58) (17.2) (25.2) (32)

Adjusted OIBDA

SG&A expenses (b)

(4.3) (8.5) (49)

Adjusted OIBDA margin

Adjusted OIBDA (b)

$ (2.0) $ — *

Adjusted OIBDA (b) margin

Operating loss

$ (4.9) $ (3.3) 48

Restructuring charges

0.2 — * 0.9 — *

Net (gain) loss on dispositions

(8.0) — * (12.1) 0.2 *

Depreciation and amortization

3.5 5.0 (30) 10.8 15.5 (30)

Adjusted OIBDA

Depreciation and amortization (b)

Adjusted OIBDA (b)

$ (2.0) $ — *

1 unchanged sentence

(a) Organic revenues exclude revenues associated with a disposition and the impact of foreign currency exchange rates (“non-organic revenues”).

(b) Consistent with the current year’s presentation, we have reclassified amortization of direct lease acquisition costs of $0.5 million in the three months ended March 31, 2020, in Other from Amortization to SG&A expenses, resulting in a corresponding decrease in Adjusted OIBDA.

In the third quarter of 2020, we completed the Sports Disposition.

The operating results of our Sports Marketing operating segment through June 30, 2020, are included in our Consolidated Financial Statements.

Total Other revenues decreased $23.3 million, or 59%, in the three months ended September 30, 2020, and decreased $46.9 million, or 41%, in the nine months ended September 30, 2020, compared to the same prior-year periods, reflecting the Sports Disposition, a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services through purchase cancellations or otherwise, as well as the cancellation of spring sports at colleges and universities and a decrease in third-party digital equipment sales.

In the nine months ended September 30, 2020, non-organic revenues exclude the impact of the Sports Disposition.

In the three and nine months ended September 30, 2019, non-organic revenues exclude the impact of the Sports Disposition and reflect the impact of foreign currency exchange rates.

Organic Other revenues decreased $11.9 million, or 42%, in the three months ended September 30, 2020, compared to the same prior-year period, reflecting a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services through purchase cancellations or otherwise, and a decrease in third-party digital equipment sales.

Organic Other revenues decreased $31.1 million, or 43%, in the nine months ended September 30, 2020, compared to the same prior-year period, reflecting a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services through purchase cancellations or otherwise, and a decrease in third-party digital equipment sales.

Other operating expenses decreased $17.5, or 64%, in the three months ended September 30, 2020, compared to the same prior-year period.

Other SG&A expenses decreased $4.7 million, or 58%, in the three months ended September 30, 2020, compared to the prior-year period.

Other operating expenses decreased $22.9 million, or 31%, in the nine months ended September 30, 2020, compared to the same prior-year period.

Other SG&A expenses decreased $8.0 million, or 32%, in the nine months ended September 30, 2020, compared to the prior-year period.

The decreases in Other operating expenses were primarily driven by the impact of the Sports Disposition and lower expenses related to our Sports Marketing operating segment prior to the disposition, lower costs related to third-party digital equipment sales and lower billboard and transit revenues.

The decreases in Other SG&A expenses were primarily driven by the impact of the Sports Disposition and cost reduction measures taken in response to the COVID-19 pandemic.

Other incurred Adjusted OIBDA of $3.2 million in the three months ended September 30, 2020, compared to $4.3 million in the same prior-year period and incurred an Adjusted OIBDA loss of $1.7 million in the nine months ended September 30, 2020, compared to Adjusted OIBDA of $14.3 million in the same prior-year period.

The decreases were due primarily to the Sports Disposition, a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services through purchase cancellations or otherwise, the impact of the Sports Disposition, as well as the cancellation of spring sports at colleges and universities, partially offset by cost reduction measures taken in response to the COVID-19 pandemic.

Total Other revenues decreased $16.8 million, or 55%, in the three months ended March 31, 2021, compared to the same prior-year period, reflecting the Sports Disposition and a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services.

In the three months ended March 31, 2020, non-organic revenues exclude the impact of the Sports Disposition and reflect the impact of foreign currency exchange rates.

Organic Other revenues decreased $3.6 million, or 21%, in the three months ended March 31, 2021, compared to the same prior-year period, reflecting a decline in average revenue per display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services.

Other operating expenses decreased $10.6 million, or 48%, in the three months ended March 31, 2021, compared to the same prior-year period, primarily driven by the impact of the Sports Disposition and lower billboard and transit revenues.

Other SG&A expenses decreased $4.2 million, or 49%, in the three months ended March 31, 2021, compared to the prior-year period, primarily driven by the impact of the Sports Disposition.

Other incurred an Adjusted OIBDA loss of $2.0 million in the three months ended March 31, 2021, compared to Adjusted OIBDA of $0.0 million in the same prior-year period.

The decrease was due primarily to a decline in average revenue per

display (yield) as a result of the impact of the COVID-19 pandemic on customer advertising expenditures and overall demand for our services, and the impact of the Sports Disposition.

Corporate expenses primarily include expenses associated with employees who provide centralized services.

Corporate expenses, excluding stock-based compensation, were $8.9 million in the three months ended September 30, 2020, compared to $11.3 million in the same prior-year period.

Corporate expenses, excluding stock-based compensation, were $23.7 million in the nine months ended September 30, 2020, compared to $31.3 million in the same prior-year period.

The decreases were primarily due to lower compensation-related expenses, including lower costs resulting from cost reduction measures taken in response to the COVID-19 pandemic and the impact of market fluctuations on an equity-linked retirement plan offered by the Company to certain employees.

Corporate expenses, excluding stock-based compensation, were $11.5 million in the three months ended March 31, 2021, compared to $4.5 million in the same prior-year period.

The increase was primarily due to the impact of market fluctuations on an equity-linked retirement plan offered by the Company to certain employees and higher compensation-related expenses.

Liquidity and Capital Resources

(in millions, except percentages) September 30,

(in millions, except percentages) March 31,

2021 December 31, 2020 % Change

3 unchanged sentences

Prepaid lease and transit franchise costs 9.1 5.4 69

Prepaid MTA equipment deployment costs — 55.4 (100)

Other prepaid expenses 13.9 14.4 (3)

11 unchanged sentences

Total current liabilities 432.7 534.9 (19)

Working capital (deficit) $ 411.2 $ (214.2) *

• Calculation is not meaningful.

Working capital $ 344.8 $ 439.8 (22)

We continually project anticipated cash requirements for our operating, investing and financing needs as well as cash flows generated from operating activities available to meet these needs.

5 unchanged sentences

Consistent with this strategy, we regularly evaluate potential acquisitions, ranging from small transactions to larger acquisitions, which transactions could be funded through cash on hand, additional borrowings, equity or other securities, or some combination thereof.

In response to the COVID-19 pandemic, we have taken a highly selective approach to new acquisition activity.

In response to the ongoing COVID-19 pandemic, we have taken a highly selective approach to new acquisition activity.

Our long-term cash needs include principal payments on outstanding indebtedness and commitments related to operating leases and franchise and other agreements, including any related guaranteed minimum annual payments, and equipment deployment costs.

Funding for long-term cash needs will come from our cash on hand, operating cash flows, our ability to issue debt and equity securities, and borrowings under the Revolving Credit Facility or other credit facilities that we may establish, to the extent available.

We expect our short-term and long-term cash needs and related funding capability to be adversely affected by the impact of the COVID-19 pandemic as cash on hand and operating cash flows decrease in 2020, and our ability to issue debt and equity securities and/borrow under our existing or new credit facilities on reasonable pricing terms, or at all, may become uncertain.

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 repaid in full all borrowings under the Revolving Credit Facility as of June 30, 2020, using the net proceeds from the offering of the Notes and cash on hand, raised $400.0 million in the Private Placement (as defined below), before expenses, issued $400.0 million aggregate principal amount of the Notes and amended the Credit Agreement to modify the calculation of the Company’s financial maintenance covenant ratio under the Credit Agreement, among other things.

Although we have taken several actions to date to preserve our financial flexibility and increase our liquidity, our short-term and long-term cash needs and related funding capability may be adversely affected by the impact of the ongoing COVID-19 pandemic if cash on hand and operating cash flows decrease in 2021, and our ability to issue debt and equity securities and/or borrow under our existing or new credit facilities on reasonable pricing terms, or at all, may become uncertain.

(See the “Overview—COVID-19 Impact” section of this MD&A.)

The increase in working capital as of September 30, 2020, compared to a working capital deficit as of December 31, 2019, is primarily driven by the increase in cash as a result of the Private Placement.

The increase in cash is partially offset by a decline in Prepaid MTA deployment costs .

As a result of the impact of the COVID-19 pandemic on our business and our expectations with respect to future revenues under the MTA agreement into the future, we reclassified Prepaid MTA deployment costs to long-term assets.

The decrease in working capital as of March 31, 2021, compared to as of December 31, 2020, is primarily driven by lower cash and receivables, partially offset by lower short-term debt, accounts payable and accrued expenses.

Under the MTA agreement, we are obligated to deploy, over a number of years, (i) 8,565 digital advertising screens on subway and train platforms and entrances, (ii) 37,716 smaller-format digital advertising screens on rolling stock, and (iii) 7,829 MTA communications displays, with such deployment amounts being subject to modification as agreed-upon by us and the MTA.

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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.

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

We did not recoup any equipment deployment costs in the three months ended March 31, 2021, and it is unlikely we will recoup equipment deployment costs in 2021.

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.

Accordingly, for the full year of 2020, we currently expect our MTA equipment deployment costs to be significantly lower than our previously disclosed amount of approximately $175.0 million as we recommence deployment in 2020.

Our payment obligations with respect to guaranteed minimum annual payment amounts owed to the MTA resumed on January 1, 2021, in accordance with the terms of the MTA agreement, as amended.

We have engaged, and will continue to engage, in constructive conversations with the MTA regarding possible modifications to the overall scope and term under the MTA agreement.

While we are engaging in these conversations with the MTA, we have temporarily suspended deployment beginning in the first quarter of 2021.

Accordingly, for the full year of 2021, we expect our MTA equipment deployment costs to be approximately $100.0 million.

We may utilize cash on hand and/or incremental third-party financing to fund equipment deployment costs over the next couple of years.

However, given the uncertainty in the market around the severity and duration of the COVID-19 pandemic, we cannot reasonably estimate the aggregate financing amount, if any, at this time.

As of September 30, 2020, we have issued surety bonds (in place of letters of credit) in favor of the MTA totaling approximately $136.0 million, which amount is subject to change as equipment installations are completed and revenues are generated.

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 and third quarters 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.

(See the “Critical Accounting Polices—MTA Agreement” section of this MD&A.) Further, we expect transit franchise expenses to materially increase as a percentage of revenues more than historical levels, as revenues decline in 2020 as a result of the impact of the COVID-19 pandemic.

(See the “Overview—COVID-19 Impact” section of this MD&A.) As indicated in the table below, we incurred $66.7 million related to MTA equipment deployment costs in the nine months ended September 30, 2020 (which includes equipment deployment costs related to future deployments), for a total of $314.3 million to date, of which $33.9 million had been recouped from incremental revenues to date and as of September 30, 2020, $21.7 million is to be funded by the MTA.

As of September 30, 2020, 6,177 digital displays had been installed, of which 827 installations occurred in the three months ended September 30, 2020, for a total of 1,600 installations in the nine months ended September 30, 2020.

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

Nine months ended September 30, 2020:

As of March 31, 2021, we have issued surety bonds in favor of the MTA totaling approximately $136.0 million, which amount is subject to change as equipment installations are completed and revenues are generated.

We expect transit franchise expenses, as a percentage of revenues, to increase in 2021 as compared to 2020, and be materially higher than pre-COVID-19 pandemic levels.

(See the “Overview—COVID-19 Impact” section of this MD&A.) As indicated in the table below, we incurred $17.4 million related to MTA equipment deployment costs in the three months ended March 31, 2021 (which includes equipment deployment costs related to future deployments), for a total of $368.5 million to date, of which $33.9 million had been recouped from incremental revenues to date and as of March 31, 2021, $53.5 million is to be funded by the MTA.

As of March 31, 2021, 7,645 digital displays had been installed, of which 265 installations occurred in the three months ended March 31, 2021.

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

Three months ended March 31, 2021:

Prepaid MTA equipment deployment costs $ 204.6 $ 3.6 $ — $ — $ 208.2

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Prepaid MTA equipment deployment costs $ 171.5 $ 33.1 $ — $ — $ 204.6

Other current assets — 44.4 (16.4) — 28.0

Intangible assets (franchise agreements) 38.3 26.0 — (5.9) 58.4

Total $ 209.8 $ 103.5 $ (16.4) $ (5.9) $ 291.0

As of September 30, 2020, we had total indebtedness of approximately $2.7 billion, which excluding debt issuance costs of $29.5 million and net unamortized discount and premium of $0.9 million, resulted in Total debt, net, of approximately $2.7 billion.

Debt, net, consists of the following:

(in millions, except percentages) September 30,

(in millions, except percentages) March 31,

2021 December 31,

Short-term debt:

AR Facility $ — $ 105.0

Repurchase Facility $ — $ 80.0

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4.250% senior unsecured notes, due 2029 500.0 —

4.625% senior unsecured notes, due 2030 500.0 500.0

Total senior unsecured notes 2,050.0 2,051.3

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Total $ 3,460.0 $ 115.9 $ 226.8 $ 613.9 $ 2,503.4

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

As of September 30, 2020, a discount of $2.3 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 March 31, 2021.

As of March 31, 2021, a discount of $2.1 million on the Term Loan remains unamortized.

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

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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”).

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

The commitment fee based on the amount of unused commitments under the Revolving Credit Facility was $0.6 million in the three months ended September 30, 2020, $0.4 million in the three months ended September 30, 2019, $1.2 million in the nine months ended September 30, 2020, and $1.1 million in the nine months ended September 30, 2019.

As of September 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.

As of March 31, 2021, there were no outstanding borrowings under the Revolving Credit Facility.

The commitment fee based on the amount of unused commitments under the Revolving Credit Facility was $0.4 million in the three months ended March 31, 2021, and $0.3 million in the three months ended March 31, 2020.

As of March 31, 2021, we had issued letters of credit totaling approximately $2.1 million against the letter of credit facility sublimit under the Revolving Credit Facility.

Standalone Letter of Credit Facilities

As of September 30, 2020, we had issued letters of credit totaling approximately $72.0 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 nine months ended September 30, 2020 and 2019.

As of March 31, 2021, we had issued letters of credit totaling approximately $72.0 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, 2021 and 2020.

Accounts Receivable Securitization Facilities

As of September 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 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 terminate on June 29, 2021, unless further extended.

As of March 31, 2021, 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 terminates in June 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”).

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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, 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 September 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 September 30, 2020, there was no borrowing capacity remaining under the AR Facility based on approximately $231.9 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 nine months ended September 30, 2020 and 2019.

As of March 31, 2021, there were no outstanding borrowings under either the AR Facility or the Repurchase Facility.

As of March 31, 2021, there was no borrowing capacity remaining under the AR Facility based on approximately $207.9 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 $80.0 million of 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, 2021 and 2020.

Senior Unsecured Notes

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 the Notes in a private placement.

On January 19, 2021, 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 $500.0 million aggregate principal amount of 4.250% Senior Unsecured Notes due 2029 (the “2029 Notes”) in a private placement.

The 2029 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 September 30, 2020, a premium of $1.4 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.

Interest on the 2029 Notes is payable on January 15 and July 15 of each year, beginning on July 15, 2021.

On or after January 15, 2024, the Borrowers may redeem at any time, or from time to time, some or all of the 2029 Notes.

Prior to such date, the Borrowers may redeem up to 40% 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 2029 Notes will remain outstanding after the redemption.

On February 16, 2021, we used the net proceeds from the issuance of the 2029 Notes, together with cash on hand, to redeem all of our outstanding 5.625% Senior Unsecured Notes due 2024 (the “2024 Notes”) and to pay accrued and unpaid interest on the 2024 Notes, if any, to, but excluding, the redemption date, and to pay fees and expenses in connection with the 2029 Notes offering and the 2024 Notes redemption.

In the first quarter of 2021, we recorded a Loss on extinguishment of debt of $6.3 million relating to the 2024 Notes on the Consolidated Statement of Operations.

Debt Covenants

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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 September 30, 2020, our Consolidated Total Leverage Ratio was 8.2 to 1.0 in accordance with the Credit Agreement.

As of March 31, 2021, our Consolidated Total Leverage Ratio was 12.7 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 September 30, 2020, our Consolidated Net Secured Leverage Ratio was 1.0 to 1.0 in accordance with the Credit Agreement.

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

As of March 31, 2021, our Consolidated Net Secured Leverage Ratio was 1.1 to 1.0 in accordance with the Credit Agreement.

As of March 31, 2021, 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;

and (ii) the Company will not make any Restricted Payments (as defined in the Credit Agreement) without the consent of the applicable lenders under the Credit Agreement, subject to certain exceptions such as payments necessary to maintain the Company’s REIT status, including any payments on any class of the Company’s capital stock that is required to be made prior to the payment of a dividend or distribution on the Company’s common stock and the Company’s existing payment obligations to holders of the Class A equity interests in Outfront Canada (as defined in Note 10.

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Deferred Financing Costs

As of September 30, 2020, we had deferred $34.4 million in fees and expenses associated with the Term Loan, Revolving Credit Facility, AR Securitization Facilities and our senior unsecured notes.

As of March 31, 2021, we had deferred $35.1 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 $6.9 million as of September 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 September 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 0.1% as of September 30, 2020.

The fair value of these swap positions was a net liability of approximately $4.3 million as of March 31, 2021, and $5.6 million as of December 31, 2020, and is included in Other liabilities on our Consolidated Statement of Financial Position.

As of March 31, 2021, under the terms of these 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 0.1% as of March 31, 2021.

At-the-Market Equity Offering Program

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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 and nine months ended September 30, 2020.

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

No shares were sold under the ATM Program during the three months ended March 31, 2021.

As of March 31, 2021, we had approximately $232.5 million of capacity remaining under the ATM Program.

Series A Preferred Stock Issuance

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.

On April 20, 2020, we issued 400,000 shares of our Series A Convertible Perpetual Preferred Stock (the “Series A Preferred Stock”), par value $0.01 per share.

The Series A Preferred Stock ranks senior to the shares of the Company’s common stock 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, subject to increases 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 April 20, 2028, 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-

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 September 30, 2020, we paid cash dividends of $7.0 million on the Series A Preferred Stock.

As of September 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.

The following table presents our cash flows in the nine months ended September 30, 2020 and 2019.

Nine Months Ended

September 30, %

If any dividends or distributions in respect of the shares of our common stock are paid in cash, the shares of Series A Preferred Stock will participate in the dividends or distributions on an as-converted basis up to the amount of their accrued dividend for such quarter, which amounts will reduce the dividends payable on the shares of Series A Preferred Stock dollar-for-dollar for such quarter.

Subject to certain conditions set forth in the Articles (including a change of control), each of the Company and the holders of the Series A Preferred Stock may convert or redeem the Series A Preferred Stock at the prices set forth in the Articles, plus any accrued and unpaid dividends.

The following table presents our cash flows in the three months ended March 31, 2021 and 2020.

Three Months Ended

(in millions, except percentages) 2021 2020 Change

Cash provided by operating activities $ 86.0 $ 162.1 (47) %

Cash provided by (used for) operating activities $ (10.8) $ 14.9 *

Cash used for investing activities (28.3) (26.7) 6 %

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Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net increase in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

$ (150.4) $ 428.7 *

* Calculation is not meaningful.

Cash provided by operating activities decreased $76.1 million, or 47%, in the nine months ended September 30, 2020, compared to the same prior-year period, driven by the impact of the COVID-19 pandemic, partially offset by the impact of cost reduction measures taken in response to the COVID-19 pandemic.

In the nine months ended September 30, 2020, we paid $51.1 million related to MTA equipment deployment costs and installed 1,600 digital displays.

In the nine months ended September 30, 2019, we paid $83.3 million related to MTA equipment deployment costs.

Cash used for investing activities decreased $103.0 million, or 75%, in the nine months ended September 30, 2020, compared to the same prior-year period, due primarily to higher proceeds from dispositions, including proceeds from the Sports Disposition, lower cash paid for acquisitions, capital expenditures and MTA franchise rights.

The following table presents our capital expenditures in the nine months ended September 30, 2020 and 2019.

Nine Months Ended

September 30, %

Cash used for operating activities was $10.8 million in the three months ended March 31, 2021, compared to Cash provided by operating activities of $14.9 million in the same prior-year period, driven by the impact of the COVID-19 pandemic, partially offset by the impact of cost reduction measures taken in response to the COVID-19 pandemic.

In the three months ended March 31, 2021, we received net cash of $3.5 million related to MTA equipment deployment and installed 265 digital displays.

In the three months ended March 31, 2020, we paid $18.2 million related to MTA equipment deployment costs.

Cash used for investing activities increased $1.6 million, or 6%, in the three months ended March 31, 2021, compared to the same prior-year period, due primarily to higher cash paid for acquisitions and MTA franchise rights, partially offset by lower cash paid for capital expenditures.

The following table presents our capital expenditures in the three months ended March 31, 2021 and 2020.

Three Months Ended

(in millions, except percentages) 2021 2020 Change

Growth $ 5.8 $ 13.4 (57) %

14.0 15.0 (7)

Total capital expenditures $ 9.4 $ 18.2 (48)

Capital expenditures decreased $23.4 million, or 36%, in the nine months ended September 30, 2020, compared to the same prior-year period, primarily due to lower spending on digital billboard and transit display projects and lower spending on installation of the most current LED lighting technology.

In response to the impact of the COVID-19 pandemic, we reduced maintenance capital expenditures (other than for necessary safety-related projects) and growth capital expenditures for digital billboard display conversions.

For the full year of 2020, we expect our capital expenditures to be approximately $55.0 million, which will be used primarily for necessary safety-related maintenance projects and growth in digital displays.

Cash provided by financing activities was $581.0 million in the nine months ended September 30, 2020, compared to Cash used by financing activities of $14.7 million in the same prior-year period.

In the nine months ended September 30, 2020, we received net proceeds of $400.0 million related to the Notes offering and received net proceeds of $383.8 million related to the issuance of the Series A Preferred Stock to enhance our liquidity position in response to the COVID-19 pandemic and made net repayments under the AR Securitization Facilities of $115.0 million and paid total cash dividends on the Series A Preferred Stock and on our common stock of $68.1 million.

In the nine months ended September 30, 2019, we paid cash dividends on our common stock of $156.0 million and made a discretionary payment of $50.0 million on the Term Loan.

In addition, we received net proceeds of $100.0 million related to our 2027 senior unsecured notes offering and repayment of our 2022 senior unsecured notes, received net proceeds of $50.9 million related to the sale of our common stock under the ATM Program, drew net borrowings of $50.0 million on the AR Securitization Facilities and drew $15.0 million on the Revolving Credit Facility.

Cash paid for income taxes was $3.1 million for in the nine months ended September 30, 2020 and $7.9 million in the nine months ended September 30, 2019.

Capital expenditures decreased $8.8 million, or 48%, in the three months ended March 31, 2021, compared to the same prior-year period, primarily due to lower spending on digital billboard and transit display projects, office remodel projects, vehicles and safety, partially offset by higher spending on our technology platform.

For the full year of 2021, we expect our capital expenditures to be approximately $85.0 million, which will be used primarily for growth in digital displays, maintenance and safety-related projects, software and technology, and to renovate certain office facilities.

This estimate does not include equipment deployment costs that will be incurred in connection with the MTA agreement (as described above), which will be recorded as Prepaid MTA equipment deployment costs and Intangible assets on our Consolidated Statement of Financial Position, as applicable.

Cash used by financing activities was $111.6 million in the three months ended March 31, 2021, compared to Cash provided by financing activities of $442.2 million in the same prior-year period.

In the three months ended March 31, 2021, we made a repayment of $80.0 million under the Repurchase Facility and paid total cash dividends of $7.3 million on the Series A Preferred Stock and vested restricted share units granted to employees.

In the three months ended March 31, 2020, we drew net borrowings of $495.0 million on our Revolving Credit Facility to enhance our liquidity position in response to the impact of the COVID-19 pandemic, drew net borrowings of $15.0 million on the AR Securitization Facilities and paid cash dividends of $55.6 million on our common stock.

Cash paid for income taxes was $0.5 million for in the three months ended March 31, 2021 and $0.8 million in the three months ended March 31, 2020.

Off-Balance Sheet Arrangements

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Actual results may differ from these estimates under different assumptions, including the severity and duration of the COVID-19 pandemic.

We consider the following accounting policy to be the most critical as it is significant to our financial condition and results of operations, and requires significant judgment and estimates on the part of management in its application.

For accounting policies we consider to be the most critical as they are significant to our financial condition and results of operations, and require significant judgment and estimates on the part of management in their application, see “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 26, 2021.

For a summary of our significant accounting policies, see Item 8., Note 2.

Summary of Significant Accounting Policies to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 26, 2021.

MTA Agreement

In addition, we are entitled to generate revenue through the sale of advertising on transit advertising displays and incur transit franchise expenses, which are calculated based on contractually stipulated percentages of revenue generated under the contract, subject to a minimum guarantee.

Title of the various digital displays transfers to the MTA on installation, therefore the cost of deploying these screens throughout the transit system does not represent our property and equipment.

The portion of recoupable MTA equipment deployment costs expected to be reimbursed from transit franchise fees that would otherwise be payable to the MTA are recorded as Prepaid MTA equipment deployment costs on the Consolidated Statement of Financial Position and charged to operating expenses as advertising revenue is generated.

The short-term portion of Prepaid MTA equipment deployment costs represents the costs that we expect to recover from the MTA in the next twelve months.

The portion of deployment costs expected to be reimbursed from advertising revenues that would otherwise be retained by us under the contract are recorded as Intangible assets on the Consolidated Statement of Financial Position and charged to amortization expense on a straight line basis over the contract period.

If we do not generate sufficient advertising revenues from the MTA contract, there is a risk that the related Prepaid MTA equipment deployment costs and Intangible assets may not be recoverable.

Management assesses the prepaid MTA equipment deployment costs for recoverability on a quarterly basis.

This assessment requires evaluating qualitative and quantitative factors to determine if there is an indication that the carrying amount may not be recoverable.

Management applies significant judgment in assessing these factors, including evaluating macroeconomic conditions, industry trends, and events specific to the Company, including monitoring the Company’s actual installation of digital displays against the initial deployment schedule.

Additionally, management assesses quantitative factors by comparing revenue projections of the deployed digital displays to actual financial results.

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.

The assumptions and estimates included in our analysis require significant judgment about future events, market conditions and financial performance.

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, actual results may differ from our assumptions and estimates, which may result in impairment charges in the future.

Accounting Standards

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

We have made statements in this Annual Report on Form 10-K that are forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995.

We have made statements in this MD&A and other sections of this Quarterly Report on Form 10-Q that are forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995.

You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “could,” “would,” “may,” “might,” “will,” “should,” “seeks,” “likely,” “intends,” “plans,” “projects,” “predicts,” “estimates,” “forecast” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters.

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The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

• The severity and duration of the novel coronavirus (COVID-19) and any other pandemics, and the impact on our business, financial condition and results of operations;

• Declines in advertising and general economic conditions, including declines caused by the COVID-19 pandemic;

• The severity and duration of the COVID-19 pandemic and any other pandemics, and the impact on our business, financial condition and results of operations;

• Competition;

• Government regulation;

• Our ability to implement our digital display platform and deploy digital advertising displays to our transit franchise partners, including the impact of the COVID-19 pandemic;

• Taxes, fees and registration requirements;

• Our ability to implement our digital display platform and deploy digital advertising displays to our transit franchise partners, including interruptions and reductions in demand caused by the impact of the COVID-19 pandemic;

• Losses and costs resulting from recalls and product liability, warranty and intellectual property claims;

• Our ability to obtain and renew key municipal contracts on favorable terms;

• Taxes, fees and registration requirements;

• Decreased government compensation for the removal of lawful billboards;

• Content-based restrictions on outdoor advertising;

• Environmental, health and safety laws and regulations;

• Seasonal variations;

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• Dependence on our management team and other key employees;

• The ability of our board of directors to cause us to issue additional shares of stock without stockholder approval;

• Certain provisions of Maryland law may limit the ability of a third party to acquire control of us;

• Our rights and the rights of our stockholders to take action against our directors and officers are limited;

• Diverse risks in our Canadian business;

• Experiencing a cybersecurity incident;

• Changes in regulations and consumer concerns regarding privacy, information security and data, or any failure or perceived failure to comply with these regulations or our internal policies;

• Asset impairment charges for our long-lived assets and goodwill;

• Environmental, health and safety laws and regulations;

• Our substantial indebtedness;

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• Hedging transactions;

• Diverse risks in our Canadian business;

• Experiencing a cybersecurity incident;

• Changes in regulations and consumer concerns regarding privacy, information security and data, or any failure or perceived failure to comply with these regulations or our internal policies;

• Asset impairment charges for our long-lived assets and goodwill;

• Our failure to remain qualified to be taxed as a real estate investment trust (“REIT”);

• The ability of our board of directors to cause us to issue additional shares of stock without common stockholder approval;

• Certain provisions of Maryland law may limit the ability of a third party to acquire control of us;

• Our rights and the rights of our stockholders to take action against our directors and officers are limited;

• Our failure to remain qualified to be taxed as a REIT;

• REIT distribution requirements;

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• Complying with REIT requirements may cause us to liquidate investments or forgo otherwise attractive opportunities;

• Our ability to contribute certain contracts to a taxable REIT subsidiary (“TRS”);

• Our ability to contribute certain contracts to a TRS;

• Our planned use of TRSs may cause us to fail to remain qualified to be taxed as a REIT;

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• Failure to meet the REIT income tests as a result of receiving non-qualifying income;

• The Internal Revenue Service (the “IRS”) may deem the gains from sales of our outdoor advertising assets to be subject to a 100% prohibited transaction tax;

• The Internal Revenue Service may deem the gains from sales of our outdoor advertising assets to be subject to a 100% prohibited transaction tax;

• Establishing operating partnerships as part of our REIT structure.

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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 2. Management’s Discussion and Analysis