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Item 5. Market for Registrant’s Common Equity

2022-02-24 compared with 2021-02-26 · 2 added, 143 removed, 66 unchanged (69% of the section changed)

1 unchanged sentence

Market Information

Shares of our common stock began trading on the New York Stock Exchange (“NYSE”) on March 28, 2014, under the ticker symbol “CBSO.” On November 20, 2014, in connection with our rebranding, shares of our common stock began trading on the NYSE under the ticker symbol “OUT”.

Prior to March 28, 2014, there was no public market for our common stock.

As of February 23, 2022, we had 172 holders of record of our common stock.

22 unchanged sentences

We expect that our distributions may exceed our net income, due, in part, to noncash expenses included in net income (loss).

In response to the COVID-19 pandemic, we suspended 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).

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—COVID-19 Impact.”

We anticipate that our distributions generally will be taxable as ordinary income to our stockholders, although we may designate a portion of the distributions as qualified dividend income or capital gain dividends or a portion of the distributions may constitute a return of capital or be taxable as capital gain.

We furnish annually to each of our stockholders a statement setting forth distributions paid during the preceding year and their characterization as ordinary income dividends, return of capital, qualified dividends, income or capital gain dividends or non-dividend distributions.

Approximately 86.1% of the dividends we distributed in 2020 should be considered ordinary income by our stockholders for tax purposes, approximately 4.2% should be considered a capital gain, and approximately 9.7% should be considered a return of capital.

The capital gain distribution is subject to certain recapture provisions for both individual and corporate shareholders.

100.0% of the dividends we distributed in 2021 should be considered ordinary income by our stockholders for tax purposes.

Performance Graph

36 unchanged sentences

Total — — — —

Selected Financial Data.

The following table sets forth our selected historical consolidated financial data for the periods presented.

The selected historical consolidated statements of operations and cash flow data for each of the years ended December 31, 2020, 2019 and 2018 and the selected historical consolidated balance sheet data as of December 31, 2020 and 2019, have been derived from our audited consolidated financial statements for such years, which are included in this Annual Report on Form 10-K.

The selected historical consolidated statements of operations and cash flow data for the years ended December 31, 2017 and 2016 and the selected historical consolidated balance sheet information as of December 31, 2018, 2017 and 2016 have been derived from our audited historical consolidated financial statements, which are not included in this Annual Report on Form 10-K.

You should read the following information together with “Item 1A.

Risk Factors,” “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8.

Financial Statements and Supplementary Data.”

Year Ended December 31,

(in millions, except per share amounts) 2020 2019 2018 2017 2016 (a)

Statement of Operations data:

Revenues $ 1,236.3 $ 1,782.2 $ 1,606.2 $ 1,520.5 $ 1,513.9

Adjusted OIBDA (b)(d)

$ 233.3 $ 474.2 $ 436.3 $ 404.1 $ 410.8

Stock-based compensation 22.9 22.3 20.2 20.5 18.0

Restructuring charges 5.8 0.3 2.1 6.4 2.5

Loss on real estate assets held for sale — — — — 1.3

Net gain on dispositions (13.7) (3.8) (5.5) (14.3) (1.9)

Impairment charge (c)

Depreciation 84.5 87.3 85.9 89.7 108.9

Amortization (d)

61.3 59.0 55.9 60.1 77.1

Operating income $ 72.5 $ 309.1 $ 234.8 $ 241.7 $ 204.9

Interest expense, net $ (131.1) $ (134.9) $ (125.7) $ (116.9) $ (113.8)

Loss on extinguishment of debt (e)

— (28.5) — — —

Provision for income taxes $ (1.1) $ (10.9) $ (4.9) $ (4.1) $ (5.4)

Net income (loss) attributable to OUTFRONT Media Inc.

$ (61.0) $ 140.1 $ 107.9 $ 125.8 $ 90.9

Net income (loss) attributable to OUTFRONT Media Inc.

per weighted average shares outstanding:

Basic $ (0.56) $ 0.97 $ 0.76 $ 0.90 $ 0.66

Diluted $ (0.56) $ 0.97 $ 0.75 $ 0.90 $ 0.66

Dividends declared per common share

$ 0.38 $ 1.44 $ 1.44 $ 1.44 $ 1.36

Funds from operations (“FFO”) (f)

attributable to OUTFRONT Media Inc.

$ 82.6 $ 295.3 $ 301.0 $ 277.3 $ 280.4

Adjusted FFO (“AFFO”) (f) attributable to OUTFRONT Media Inc.

$ 96.3 $ 334.1 $ 299.7 $ 277.6 $ 294.5

Balance sheet data (at period end):

Property and equipment, net $ 634.2 $ 666.2 $ 652.9 $ 662.1 $ 665.0

Total assets (g)

$ 5,896.9 $ 5,382.3 $ 3,828.7 $ 3,808.2 $ 3,738.5

Current liabilities $ 534.9 $ 650.0 $ 402.6 $ 299.6 $ 251.5

Long-term debt, net $ 2,620.8 $ 2,222.1 $ 2,149.6 $ 2,145.3 $ 2,136.8

Total stockholders’ equity

$ 973.8 $ 1,093.8 $ 1,102.8 $ 1,181.1 $ 1,232.9

Cash flow data:

Cash flow provided by operating activities

$ 130.6 $ 276.9 $ 214.3 $ 249.3 $ 287.1

Capital expenditures:

Growth $ 35.7 $ 71.8 $ 63.7 $ 50.9 $ 40.9

Maintenance 17.8 18.1 18.6 19.9 18.5

Total capital expenditures

$ 53.5 $ 89.9 $ 82.3 $ 70.8 $ 59.4

(a) On April 1, 2016, we completed the disposition of our outdoor advertising business in Latin America.

(b) Adjusted OIBDA is a non-GAAP financial measure.

For purposes of the above table, we calculate “Adjusted OIBDA” as operating income (loss) before depreciation, amortization, net (gain) loss on dispositions, stock-based compensation, restructuring charges,

impairment charges, and loss on real estate assets held for sale.

Adjusted OIBDA is among the primary measures we use for managing our business, evaluating our operating performance and planning and forecasting future periods, as it is an important indicator of our operational strength and business performance.

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 presentation of Adjusted OIBDA, as a supplemental measure, is useful in evaluating our business because eliminating certain non-comparable items highlight operational trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures.

It is management’s opinion that this supplemental measure provides users of our financial data with an important perspective on our operating performance and also makes it easier for users of our financial data to compare our results with other companies that have different financing and capital structures or tax rates.

Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for further information about Adjusted OIBDA.

(c) As a result of an impairment analysis performed during the second quarter of 2018, we determined that the carrying value of our Canadian reporting unit exceeded its fair value and we recorded an impairment charge of $42.9 million on the Consolidated Statement of Operations.

(d) We have reclassified amortization of direct lease acquisition costs of $48.2 million in 2019, $43.2 million in 2018, $40.0 million in 2017 and $38.2 million in 2016 from Amortizatio n to Selling, general and administrative expenses, resulting in a corresponding decrease in Adjusted OIBDA.

(e) In 2019, we recorded a loss on extinguishment of debt of $28.5 million relating to the redemption of our 5.250% Senior Unsecured Notes due 2022 and our 5.875% Senior Unsecured Notes due 2025.

(f) When used herein, references to “FFO” and “AFFO” mean “FFO attributable to OUTFRONT Media Inc.” and “AFFO attributable to OUTFRONT Media Inc.,” respectively.

We calculate FFO in accordance with the definition established by NAREIT (as defined below).

FFO reflects net income (loss) attributable to OUTFRONT Media Inc.

adjusted to exclude gains and losses from the sale of real estate assets, impairment charges, depreciation and amortization of real estate assets, amortization of direct lease acquisition costs, the non-cash effect of loss on real estate assets held for sale and the same adjustments for our equity-based investments and non-controlling interests, as well as the related income tax effect of adjustments, as applicable.

We calculate AFFO as FFO adjusted to include cash paid for direct lease acquisition costs as such costs are generally amortized over a period ranging from four weeks to one year and therefore are incurred on a regular basis.

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.

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 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.

It is management’s opinion that these supplemental measures provide users of our financial data with an important perspective on our operating performance and also make it easier to compare our results to other companies in our industry, as well as to REITs.

Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for further information about FFO and AFFO.

The following table presents a reconciliation of Net income (loss) to FFO and AFFO:

Year Ended December 31,

(in millions) 2020 2019 2018 2017 2016

Net income (loss) attributable to OUTFRONT Media Inc.

$ (61.0) $ 140.1 $ 107.9 $ 125.8 $ 90.9

Depreciation of billboard advertising structures

61.6 66.0 69.1 76.2 98.2

Amortization of real estate-related intangible assets

48.8 45.0 42.7 48.2 52.9

Amortization of direct lease acquisition costs

38.2 48.2 43.2 40.0 38.2

Loss on real estate assets held for sale

Net gain on disposition of real estate assets (6.5) (3.8) (5.5) (14.3) (1.9)

Impairment charge

Adjustment related to equity-based investments

0.1 0.1 0.2 0.5 0.7

Adjustment related to non-controlling interests

(0.3) (0.3) — — —

Income tax effect of adjustments (1)

1.7 — 0.5 0.9 0.1

FFO attributable to OUTFRONT Media Inc.

82.6 295.3 301.0 277.3 280.4

Non-cash portion of income taxes

(5.9) 0.4 (3.5) (3.6) 4.2

Cash paid for direct lease acquisition costs

(43.1) (47.1) (41.3) (39.2) (37.0)

Maintenance capital expenditures

(17.8) (18.1) (18.6) (19.9) (18.5)

Restructuring charges - severance (2)

4.9 0.3 2.1 6.4 2.5

Other depreciation

22.9 21.3 16.8 13.5 10.7

Other amortization

12.5 14.0 13.2 11.9 24.2

Gain on disposition of non-real estate assets (3)

(7.2) — — — —

Stock-based compensation (2)

23.8 22.3 20.2 20.5 18.0

Non-cash effect of straight-line rent

11.2 6.9 1.9 3.4 1.3

Accretion expense

2.6 2.5 2.4 2.3 2.4

Amortization of deferred financing costs

6.6 7.9 5.7 6.1 6.4

Loss on extinguishment of debt

Adjustment related to non-controlling interests

(0.1) (0.1) — — —

Income tax effect of adjustments (4)

3.3 — (0.2) (1.1) (0.1)

AFFO attributable to OUTFRONT Media Inc.

$ 96.3 $ 334.1 $ 299.7 $ 277.6 $ 294.5

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

(2) 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.

(3) In 2020, gain related to the sale of all of our equity interests in certain of our subsidiaries (the “Sports Disposition”), which held all of the assets of our Sports Marketing operating segment.

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

(g) In 2019, we adopted the Financial Accounting Standards Board’s guidance addressing the recognition, measurement, presentation and disclosure for leases for both lessees and lessors using the modified retrospective transition method.

On January 1, 2019, the adoption of this standard resulted in the recognition of an operating lease liability of $1.2 billion and a right-of-use operating lease asset of the same amount.

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-K

Item 5. Market for Registrant’s Common Equity