What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-02-24 compared with 2021-02-26 · 206 added, 260 removed, 491 unchanged (49% of the section changed)

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In the third quarter of 2020, we sold 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, for a purchase price of approximately $34.6 million in cash, subject to closing and post-closing adjustments.

The Sports Marketing operating segment was the marketing and multimedia rights holder for a variety of colleges, universities and other educational institutions across the United States.

The Sports Marketing operating segment was the marketing and multimedia rights holder for a variety of colleges, universities and other educational institutions across the U.S..

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

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In total, we have displays in all of the 25 largest markets in the U.S.

and 145 markets in the U.S.

and approximately 150 markets in the U.S.

Our top market, high profile location focused portfolio includes sites in and around both Grand Central Station and Times Square in New York, various locations along Sunset Boulevard in Los Angeles, and the Bay Bridge in San Francisco.

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As part of our technology platform, we are developing solutions for enhanced demographic and location targeting, and engaging ways to connect with consumers on-the-go.

Additionally, our OUTFRONT Mobile Network and social influence add-on products allow our customers to further leverage location targeting with interactive mobile advertising and social sharing amplification.

Additionally, our OUTFRONT Mobile Network products allow our customers to further leverage location targeting with interactive mobile advertising.

We believe out-of-home continues to be an attractive form of advertising, as our displays are always viewable and cannot be turned off, skipped, blocked or fast-forwarded.

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In addition to leasing displays, we provide other value-added services to our customers, such as pre-campaign category research, consumer insights, print production and post-campaign tracking and analytics.

Media segment generated 16% of its revenues in the New York City metropolitan area in 2020 and 23% in 2019, and generated 15% in the Los Angeles metropolitan area in 2020 and 16% in 2019.

Media segment generated Revenues of $1,148.9 million in 2020 and $1,628.7 million in 2019, and Operating income before Depreciation , Amortization , Net gain on dispositions , Stock-based compensation and Restructuring charges (“Adjusted OIBDA”) of $268.9 million in 2020 and $501.6 million in 2019.

Media segment generated 17% of its revenues in the New York City metropolitan area in 2021 and 16% in 2020, and generated 15% in the Los Angeles metropolitan area in each of 2021 and 2020.

Media segment generated Revenues of $1,382.0 million in 2021 and $1,148.9 million in 2020, and Operating income before Depreciation , Amortization , Net gain on dispositions , Stock-based compensation , Restructuring charges and an Impairment charge (“Adjusted OIBDA”) of $382.9 million in 2021 and $268.9 million in 2020.

(See the “Segment Results of Operations” section of this MD&A.)

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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, 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, 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 certain 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 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 COVID-19 pandemic on our business and results of operations, we expect our key performance indicators and total revenues to incrementally improve in 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.

We expect total expenses to increase in 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 in 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 in 2021 as compared to 2020, but be materially higher than pre-COVID-19 pandemic levels, primarily due to our guaranteed minimum annual payment amounts owed to the MTA resuming 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 years ended December 31, 2020 and 2019, are not indicative of the results that may be expected for the fiscal year ending December 31, 2021.

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.

The ongoing 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 we remain able to continue to sell and service our displays, governmental restrictions have eased in most of our markets and most 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 2022, the COVID-19 pandemic may, 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) delay 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 2022.

As a result of the impact of the COVID-19 pandemic on our business and results of operations, we expect our key performance indicators and total revenues to incrementally improve in 2022 as compared to 2021, but some key performance indicators will continue to be materially lower in 2022 than pre-COVID-19 pandemic levels.

We expect total revenues in 2022 to approach or potentially surpass pre-COVID-19 pandemic levels based on our current expectation of strong performance in total billboard revenues in our U.S.

Media segment, which exceeded pre-COVID-19 pandemic levels during the second half of 2021.

We expect total transit and other revenues in our U.S.

Media segment to incrementally improve in 2022, but still remain materially below pre-COVID-19 pandemic levels.

We also expect Adjusted OIBDA to incrementally improve in 2022, driven by improvements in our transit and other business, but remain below pre-COVID-19 pandemic levels.

We expect total expenses to increase in 2022 as compared to 2021, and exceed pre-COVID-19 pandemic levels.

In particular, we expect billboard property lease expenses, such as rental expenses, and posting, maintenance and other expenses, as a percentage of revenues, to be consistent with pre-COVID-19 pandemic levels.

We expect transit franchise expenses, such as transit franchise payments, as a percentage of revenues, to decrease in 2022 as compared to 2021, but be higher in 2022 than pre-COVID-19 pandemic levels, primarily due to the guaranteed minimum annual payment amounts owed to the MTA and other transit franchise partners as total transit and other revenues incrementally improve in the future.

In 2022, we will continue to focus on managing costs and expenses to offset any decreases in revenues in 2022 as compared to pre-COVID-19 pandemic levels, including engaging in constructive conversations with our transit franchise partners to mitigate any increases in transit franchise expenses, as a percentage of revenues.

Results for the year ended December 31, 2021, are not indicative of the results that may be expected for the fiscal year ending December 31, 2022.

Throughout the COVID-19 pandemic, we have prioritized the health and safety of our employees and customers by (i) utilizing a secure remote workforce as needed 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, and (iii) communicating frequently with our employees and customers to address any concerns and updates to our policies.

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 modified our business goals and undertook the following actions in 2020, which should be read in conjunction with the “—Analysis of Results of Operations” and “—Liquidity and Capital Resources” sections of this MD&A:

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

• Temporarily suspended or delayed our deployment of certain 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;

• Reduced our posting, maintenance and other, and SG&A (as defined below) expenses through, among other things, restrictions on discretionary expenses, workforce reductions, employee furloughs and certain temporary compensation reductions, to offset decreases in revenues in 2020.

We have in 2020, and will continue in 2021 to, focus on managing costs and expenses, including capital expenditures, to offset any decreases in revenues in 2021 as compared to pre-COVID-19 pandemic levels.

However, we have resumed certain 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.

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 pre-COVID-19 pandemic 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.

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 total revenues, particularly in our U.S.

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

Our revenues and operating results are sensitive to fluctuations in advertising expenditures, general economic conditions and other external events beyond our control, such as the COVID-19 pandemic as described above.

We rely on third parties to manufacture and transport our digital displays.

As a result of the current market-wide supply shortages and logistics disruptions as the economy recovers from the COVID-19 pandemic, we have experienced delays and price increases in 2021 with respect to certain of our digital displays, which will continue in 2022, and could have an adverse effect on our business, financial condition and results of operations.

Business 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 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.

We have 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.

In the future, we expect revenues generated on digital transit displays will be a multiple of the revenues 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 built or converted 60 new digital billboard displays in the United States and 3 in Canada in 2020.

We built or converted 77 new digital billboard displays in the U.S.

and 10 in Canada in 2021.

Additionally, in 2021, we entered into marketing arrangements to sell advertising on 35 third-party digital billboard displays in the U.S.

and 4 in Canada.

In 2020, we built, converted or replaced 2,893 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 temporarily suspended or delayed our deployment of certain digital transit displays.

In 2021, we built, converted or replaced 3,778 digital transit and other displays in the U.S.

and 15 digital transit and other displays in Canada.

The following table sets forth information regarding our digital displays.

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Our revenues and profits may fluctuate due to seasonal advertising patterns and influences on advertising markets.

Typically, our revenues and profits are highest in the fourth quarter, during the holiday shopping season, and lowest in the first quarter, as advertisers adjust their spending following the holiday shopping season.

Typically, our revenues and profits are highest in the fourth quarter, during the holiday shopping season, and lowest in the first quarter, as

advertisers adjust their spending following the holiday shopping season.

As described above, our revenues and profits may also fluctuate due to external events beyond our control, such as the COVID-19 pandemic.

We have a diversified base of customers across various industries.

During 2020, our largest categories of advertisers were professional services, healthcare/pharmaceuticals and retail, which represented 11%, 9%, and 9% of our total U.S.

During 2021, our largest categories of advertisers were entertainment, health/medical and retail, which represented 18%, 10%, and 9% of our total U.S.

Media segment revenues, respectively.

During 2019, our largest categories of advertisers were retail, professional services and computers/internet, which represented 9%, 8% and 8% of our total U.S.

During 2020, our largest categories of advertisers were entertainment, health/medical and retail, which represented 17%, 10% and 9% of our total U.S.

Media segment revenues.

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168.3 72.5 132

Adjusted OIBDA (b)(c)

Adjusted OIBDA (b)

340.3 233.3 46

Adjusted OIBDA (b)(c) margin

Adjusted OIBDA (b) margin

Funds from operations (“FFO”) (b) 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 $48.2 million in 2019 from Amortization to Selling, general and administrative expenses, resulting in a corresponding decrease in Adjusted OIBDA.

Adjusted OIBDA

We calculate Adjusted OIBDA as operating income (loss) before depreciation, amortization, net (gain) loss on dispositions, stock-based compensation and restructuring charges.

We calculate Adjusted OIBDA as operating income (loss) before depreciation, amortization, net (gain) loss on dispositions, stock-based compensation, restructuring charges and an impairment charge.

We calculate Adjusted OIBDA margin by dividing Adjusted OIBDA by total revenues.

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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 Adjusted OIBDA and Adjusted OIBDA margin, as supplemental measures, are 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.

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 for users of our financial data to compare our results with other companies that have different financing and capital structures or tax rates.

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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, a gain on disposition of non-real-estate assets, an impairment charge on 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.

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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Net gain on dispositions (4.5) (13.7)

Impairment charge 2.5 —

Depreciation 79.4 84.5

Amortization (a)

Amortization 66.0 61.3

Stock-based compensation 28.6 22.9

Adjusted OIBDA (a)

$ 233.3 $ 474.2

Adjusted OIBDA (a) margin

Year Ended December 31,

(in millions) 2020 2019

Adjusted OIBDA $ 340.3 $ 233.3

Adjusted OIBDA margin 23 % 19 %

Net income (loss) attributable to OUTFRONT Media Inc.

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Amortization of real estate-related intangible assets 50.9 48.8

Amortization of direct lease acquisition costs (b)

Amortization of direct lease acquisition costs (a)

Net gain on disposition of real estate assets (1.5) (6.5)

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Adjustment related to non-controlling interests (0.3) (0.3)

Income tax effect of adjustments (c)

Income tax effect of adjustments (b)

FFO attributable to OUTFRONT Media Inc.

Non-cash portion of income taxes (5.9) (5.9)

Cash paid for direct lease acquisition costs (b)

Cash paid for direct lease acquisition costs (a)

(48.8) (43.1)

Maintenance capital expenditures (25.3) (17.8)

Restructuring charges - severance (d)

Restructuring charges - severance (c)

Other depreciation 23.4 22.9

Other amortization 15.1 12.5

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

Stock-based compensation (d)

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

Impairment charge on non-real estate assets (e)

Stock-based compensation (c)

Non-cash effect of straight-line rent 6.5 11.2

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$ 205.1 $ 96.3

(a) Consistent with the current year’s presentation, we have reclassified amortization of direct lease acquisition costs of $48.2 million in 2019 from Amortization to Selling, general and administrative expenses, resulting in a corresponding decrease in Adjusted OIBDA.

(b) Variable commissions directly associated with billboard revenues.

(d) 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.

(e) Gain related to the Sports Disposition.

(a) Variable commissions directly associated with billboard revenues.

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

(c) 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.

(d) Gain related to the Sports Disposition.

(See Item 8., Note 14.

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Dispositions to the Consolidated Financial Statements.)

(e) Impairment charge relates to an other-than-temporary decline in fair value of a cost-method investment.

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

FFO attributable to OUTFRONT Media Inc.

in 2020 of $82.6 million decreased $212.7 million, or 72%, compared to 2019.

in 2021 of $195.1 million increased $112.5 million, or 136%, compared to 2020, due primarily to higher operating income, higher amortization of direct lease acquisition costs and lower income taxes.

AFFO attributable to OUTFRONT Media Inc.

in 2020 of $96.3 million decreased $237.8 million, or 71%, compared to 2019.

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.

in 2021 of $205.1 million increased $108.8 million, or 113%, compared to 2020, due primarily to higher operating income, higher amortization of, net of cash paid for, direct lease acquisition costs and lower gains on dispositions.

Analysis of Results of Operations

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Transit and other

25.6 56.0 (54)

Total non-organic revenues

25.6 56.9 (55)

Total revenues $ 1,463.9 $ 1,236.3 18

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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 $545.9 million, or 31%, and organic revenues decreased $514.6 million, or 30%, in 2020 compared to 2019.

In 2020, non-organic revenues exclude the impact of the Sports Disposition.

Total revenues increased $227.6 million, or 18%, and organic revenues increased $249.4 million, or 21%, in 2021 compared to 2020, driven by a 21% increase in billboard revenues, as the billboard market exceeded pre-COVID-19 pandemic levels in the second half of 2021, and a 9% increase in transit and other revenues, primarily due to stronger transit revenues.

While transit revenues have increased, transit revenues remain materially below pre-COVID-19 pandemic levels, as ridership remains materially below pre-COVID-19 pandemic levels.

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

Total billboard revenues decreased $211.3 million, or 18%, in 2020 compared to 2019, primarily 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.

Organic billboard revenues in 2020 decreased $210.4 million, or 18%, in 2020 compared to 2019, 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.

Total transit and other revenues decreased $334.6 million, or 56%, in 2020 compared to 2019, primarily 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.

Organic transit and other revenues in 2020 decreased $304.2 million, or 57%, compared to 2019, primarily 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.

Total billboard revenues increased $203.7 million, or 21%, in 2021 compared to 2020, primarily due to an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services from the COVID-19 pandemic lows in 2020.

Organic billboard revenues in 2020 increased $200.4 million, or 20%, in 2021 compared to 2020, principally driven by an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services from the COVID-19 pandemic lows in 2020.

Total transit and other revenues increased $23.9 million, or 9%, in 2021 compared to 2020, primarily driven by an increase in average revenue per display (yield), as we have experienced increases in overall demand for our services from the COVID-19 pandemic lows in 2020, partially offset by the impact of the Sports Disposition.

Organic transit and other revenues in 2021 increased $49.0 million, or 21%, compared to 2020, primarily driven by an increase in average revenue per display (yield), as we have experienced increases in overall demand for our services from the COVID-19 pandemic lows in 2020.

Year Ended December 31, % Change

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Operating $ 784.0 $ 710.8 10 %

Selling, general and administrative (a)

315.1 371.7 (15)

Selling, general and administrative 368.2 315.1 17

Restructuring charges — 5.8 *

Net gain on dispositions (4.5) (13.7) (67)

Impairment charge 2.5 — *

Depreciation 79.4 84.5 (6)

Amortization (a)

Amortization 66.0 61.3 8

Total expenses $ 1,295.6 $ 1,163.8 11

* Calculation is not meaningful.

Operating Expenses

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Billboard property lease expenses represented 34% of billboard revenues in 2021 and 40% in 2020.

The increase in billboard property lease expenses as a percentage of revenues is primarily due to a decline in billboard revenues.

Billboard property lease expenses as a percentage of billboard revenues in 2021 were comparable to pre-COVID-19 pandemic levels.

The decrease in billboard property lease expenses as a percentage of revenues in 2021 compared to 2020 is primarily due to an increase in billboard revenues and the impact of the COVID-19 pandemic in 2020.

Transit franchise expenses represented 73% of transit display revenues in 2021 and 61% in 2020.

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

Billboard property lease and transit franchise expenses decreased by $176.7 million in 2020 compared to 2019, primarily due to lower billboard and transit revenues resulting from the impact of the COVID-19 pandemic and the impact of agreements with certain landlords and transit franchise partners to modify our existing minimum lease payments and guaranteed minimum annual payments to revenue share percentages in the second, third and fourth quarters of 2020.

The increase in transit franchise expense as a percentage of revenues is primarily driven by guaranteed minimum annual payments to the MTA.

As a result of the COVID-19 pandemic, in the second quarter of 2020, we amended agreements with substantially all of our transit franchise partners to pay based on a fixed percentage of revenue with no minimum annual guarantees.

Substantially all of our franchise partners continued to be paid based on a fixed percentage of revenue throughout 2021, except for the MTA, for which minimum annual guarantee payments resumed at the beginning of 2021.

Billboard property lease and transit franchise expenses increased by $71.7 million in 2021 compared to 2020, primarily due to higher guaranteed minimum annual payments to the MTA and higher billboard and transit revenues.

Posting, maintenance and other expenses as a percentage of Revenues were 13% in 2021 and 16% in 2020.

Posting, maintenance and other expenses decreased $71.1 million, or 27%, in 2020 compared to 2019, 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.

Posting, maintenance and other expenses increased $1.5 million, or 1%, in 2021 compared to 2020, primarily due to increased activity in 2021, resulting in higher compensation-related expenses, posting and rotation costs, maintenance costs and materials costs, as compared to the impact of cost-reduction measures taken in 2020 in response to the COVID-19 pandemic.

These increases are partially offset by the impact of the Sports Disposition.

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

SG&A expenses represented 25% of Revenues in 2020 and 21% in 2019.

SG&A expenses decreased $56.6 million, or 15%, in 2020 compared to 2019, primarily due to lower compensation-related costs and lower professional fees, primarily as a result of cost reduction measures taken in response to the COVID-19 pandemic, lower amortization of direct lease acquisition costs and lower expenses resulting from the Sports Disposition, partially offset by a higher provision for doubtful allowances.

Consistent with the current year’s presentation, we have reclassified amortization of direct lease acquisition costs of $48.2 million in 2019 from Amortization to Selling, general and administrative expenses.

SG&A expenses represented 25% of Revenues in each of 2021 and 2020.

SG&A expenses increased $53.1 million, or 17%, in 2021 compared to 2020, primarily due to higher compensation-related expenses, including commissions, salaries and bonuses which were all significantly impacted in 2020 by the COVID-19 pandemic and actions taken in response to the decline in business activity.

Professional fees were also higher in 2021 and these increases were partially offset by a lower provision for doubtful allowances in 2021 due to provisions recorded in 2020 as a result of the COVID-19 pandemic and the impact of the Sports Disposition.

Restructuring Charges

In 2020, we recorded restructuring charges of $5.8 million for severance charges associated with workforce reductions as a result of the COVID-19 pandemic, including $0.9 million for stock-based compensation.

In 2019, we recorded restructuring charges of $0.3 million for the elimination of a corporate management position.

Net Gain on Dispositions

Net gain on dispositions was $13.7 million in 2020 and $3.8 million in 2019.

Net gain on dispositions decreased $9.2 million, or 67%, in 2021 compared to 2020.

The gain in 2020 was primarily related to a gain of $7.2 million related to the Sports Disposition and also included the sale of an office location in Canada.

The gain in 2019 was primarily related to the sales of office locations in the U.S.

Impairment Charge

In 2021, we recorded $2.5 million in impairment charges related to an other-than-temporary decline in fair value of a cost-method investment.

Depreciation decreased $5.1 million, or 6%, in 2021 compared to 2020.

Amortization increased $2.3 million, or 4%, in 2020 compared to 2019.

Amortization increased $4.7 million, or 8%, in 2021 compared to 2020, principally driven by higher amortization of intangible assets related to the MTA agreement.

Interest Expense

Interest expense, net, was $130.4 million (including $7.1 million of deferred financing costs) in 2021 and $131.1 million (including $6.6 million of deferred financing costs) in 2020.

The decrease in Interest expense, net, in 2020 compared to 2019, was primarily due to lower interest rates, partially offset by a higher outstanding average debt balance.

The decrease in Interest expense, net, in 2021 compared to 2020, was primarily due to lower interest rates, partially offset by a higher outstanding average debt balance and higher amortization of deferred financing costs.

(See the “Liquidity and Capital Resources” section of this MD&A.)

Loss on Extinguishment of Debt

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.

Provision for Income Taxes

The Provision for income taxes was $1.1 million in 2020, decreased $9.8 million, or 90%, due primarily to lower taxable REIT subsidiary (“TRS”) income in 2020, including the gain related to the Sports Disposition.

In 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 (Provision) for Income Taxes

The Benefit for income taxes was $3.4 million in 2021 compared to a Provision for income taxes of $1.1 million in 2020, due primarily to the gain related to the Sports Disposition in 2020.

The effective income tax rate was 10.8% for 2021 and 1.9% for 2020.

Net Income (Loss)

Net loss before allocation to non-controlling interest s was $60.2 million in 2020, compared to Net income before allocation to non-controlling interests of $140.6 million in 2019, 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 income before allocation to non-controlling interests was $36.4 million in 2021 compared to a Net loss before allocation to non-controlling interest s of $60.2 million in 2020, due primarily to higher operating income, as we have experienced increases in customer advertising expenditures and overall demand for our services from the COVID-19 pandemic lows in 2020.

Segment Results of Operations

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Net gain on dispositions (4.5) (13.7)

Impairment charge 2.5 —

Depreciation 79.4 84.5

Amortization (a)

Stock-based compensation ( b)

Total Adjusted OIBDA (a)

$ 233.3 $ 474.2

Amortization 66.0 61.3

Stock-based compensation (a)

Total Adjusted OIBDA $ 340.3 $ 233.3

Adjusted OIBDA:

$ 268.9 $ 501.6

Media $ 382.9 $ 268.9

Other 10.4 0.4

Corporate (53.0) (36.0)

Total Adjusted OIBDA (a)

$ 233.3 $ 474.2

Total Adjusted OIBDA $ 340.3 $ 233.3

Operating income (loss):

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Total operating income $ 168.3 $ 72.5

(a) Consistent with the current year’s presentation, we have reclassified amortization of direct lease acquisition costs of $48.2 million in 2019, of which $44.7 million was recorded in our U.S.

Media segment and $3.5 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.

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

Year Ended December 31, % Change

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(265.9) (232.6) 14

Adjusted OIBDA (a)

$ 268.9 $ 501.6 (46)

Adjusted OIBDA (a) margin

Adjusted OIBDA $ 382.9 $ 268.9 42

Adjusted OIBDA margin 28 % 23 %

Operating income $ 248.5 $ 132.8 87

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Net gain on dispositions (1.5) (1.4) 7

Depreciation and amortization (a)

133.6 129.2 3

Adjusted OIBDA (a)

$ 268.9 $ 501.6 (46)

Impairment charge 2.5 — *

Depreciation and amortization 133.4 133.6 —

Adjusted OIBDA $ 382.9 $ 268.9 42

* Calculation is not meaningful.

(a) Consistent with the current year’s presentation, we have reclassified amortization of direct lease acquisition costs of $44.7 million in 2019 in our U.S.

Media segment from Amortization to Selling, general and administrative expenses, resulting in a corresponding decrease in Adjusted OIBDA.

Total revenues in the U.S.

Media segment decreased $479.8 million, or 29%, in 2020 compared to 2019, 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.

Media segment increased $233.1 million, or 20%, in 2021 compared to 2020, driven by a 20% increase in billboard revenues, as the billboard market exceeded pre-COVID-19 pandemic levels in the second half of 2021, and a 20% increase in transit and other revenues, primarily due to stronger transit revenues.

While transit revenues have increased, transit revenues remain materially below pre-COVID-19 pandemic levels, as ridership remains materially below pre-COVID-19 pandemic levels.

We generated approximately 42% in 2021 and 41% in 2020 of revenues in the U.S.

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Billboard revenues in the U.S.

Media segment decreased $188.4 million, or 17%, in 2020 compared to 2019, 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.

Media segment increased $189.6 million, or 20%, in 2021 compared to 2020, reflecting an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services from the COVID-19 pandemic lows in 2020.

Transit and other revenues in the U.S.

Media segment decreased $291.4 million, or 57%, in 2020 compared to 2019, 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.

Media segment increased $43.5 million, or 20%, in 2021 compared to 2020, driven by an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services from the COVID-19 pandemic lows in 2020.

Operating expenses in the U.S.

Media segment decreased $213.3 million, or 25%, in 2020 compared to 2019, primarily driven by lower billboard and transit revenues resulting from the impact of the COVID-19 pandemic and the impact of agreements with certain landlords and transit franchise partners to modify our existing minimum lease payments and guaranteed minimum annual payments to revenue share percentages in the second, third and fourth quarters of 2020.

Media segment increased $85.8 million, or 13%, in 2021 compared to 2020, primarily driven by higher guaranteed minimum annual payments to the MTA and higher revenues.

Billboard property lease expenses in the U.S.

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SG&A expenses in the U.S.

Media segment decreased $33.8 million, or 13%, in 2020 compared to 2019, 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, and lower amortization of direct lease acquisition costs, partially offset by a higher provision for doubtful allowances.

Media segment increased $33.3 million, or 14%, in 2021 compared to 2020, primarily due to higher compensation-related expenses, including commissions, salaries and bonuses which were all significantly impacted in 2020 by the COVID-19 pandemic and actions taken in response to the decline in business activity, partially offset by a lower provision for doubtful allowances in 2021 due to provisions recorded in 2020 as a result of the COVID-19 pandemic.

Adjusted OIBDA in the U.S.

Media segment decreased $232.7 million, or 46%, in 2020 compared to 2019.

Media segment increased $114.0 million, or 42%, in 2021 compared to 2020.

Adjusted OIBDA margin was 28% in 2021 and 23% in 2020.

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Transit and other

9.7 22.5 (57)

Total organic revenues (a)

61.8 96.6 (36)

Non-organic revenues:

Transit and other

25.6 56.0 (54)

Total non-organic revenues

25.6 56.9 (55)

Total revenues 81.9 87.4 (6)

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(50.8) (63.4) (20)

SG&A expenses (b)

(23.6) (37.0) (36)

Adjusted OIBDA (b)

$ 0.4 $ 18.6 (98)

Adjusted OIBDA (b) margin

SG&A expenses (20.7) (23.6) (12)

Adjusted OIBDA $ 10.4 $ 0.4 *

Adjusted OIBDA margin 13 % — %

Operating income (loss)

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Net (gain) loss on dispositions

Depreciation and amortization (b)

(3.0) (12.3) (76)

Adjusted OIBDA (b)

$ 0.4 $ 18.6 (98)

Depreciation and amortization 12.0 12.2 (2)

Adjusted OIBDA $ 10.4 $ 0.4 *

* Calculation is not meaningful.

(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 $3.5 million in 2019 in Other from Amortization to Selling, general and administrative 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 $66.1 million, or 43%, in 2020 compared to 2019, 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 prior to the Sports Disposition and a decrease in third-party digital equipment sales.

In 2020, non-organic revenues exclude the impact of the Sports Disposition.

Total Other revenues decreased $5.5 million, or 6%, in 2021 compared to 2020, reflecting the Sports Disposition, partially offset by an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services from the COVID-19 pandemic lows in 2020.

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

Organic Other revenues decreased $34.8 million, or 36%, in 2020, compared to 2019, 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 $34.5 million, or 35%, in 2020 compared to 2019, driven by the impact of the Sports Disposition and lower expenses related to our Sports Marketing operating segment prior to the Sports Disposition, lower costs related to third-party digital equipment sales and lower billboard and transit revenues.

Other SG&A expenses decreased $13.4 million, or 36%, in 2020 compared to 2019, primarily driven by the impact of the Sports Disposition and cost reduction measures taken in response to the COVID-19 pandemic.

Other Adjusted OIBDA decreased $18.2 million, or 98%, in 2020 compared to 2019, primarily driven by 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 prior to the Sports Disposition, partially offset by cost reduction measures taken in response to the COVID-19 pandemic.

Organic Other revenues increased $16.3 million, or 25%, in 2021, compared to 2020, driven by an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services from the COVID-19 pandemic lows in 2020.

Other operating expenses decreased $12.6 million, or 20%, in 2021 compared to 2020, driven by the impact of the Sports Disposition, partially offset by higher expenses in Canada.

Other SG&A expenses decreased $2.9 million, or 12%, in 2021 compared to 2020, primarily driven by the impact of the Sports Disposition, partially offset by higher expenses in Canada.

Other Adjusted OIBDA increased $10.0 million in 2021 compared to 2020, primarily driven by an increase in average revenue per display (yield) compared to 2020 as a result of the impact of the COVID-19 pandemic on overall demand for our services.

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

Corporate expenses, excluding stock-based compensation and restructuring charges, were $53.0 million in 2021 and $36.0 million in 2020.

Corporate expenses decreased $10.0 million in 2020 compared to 2019, 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 increased $17.0 million in 2021 compared to 2020, primarily due to higher compensation-related expenses, including salaries and bonuses which were all significantly impacted in 2020 by the COVID-19 pandemic and actions taken in response to the decline in business activity.

Liquidity and Capital Resources

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Prepaid lease and franchise costs 12.5 5.4 131

Prepaid MTA equipment deployment costs — 55.4 (100)

Other prepaid expenses 17.8 14.4 24

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Working capital $ 269.6 $ 439.8 (39)

* Calculation is not meaningful.

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.

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Our short-term cash requirements primarily include payments for operating leases, guaranteed minimum annual payments, interest, capital expenditures, equipment deployment costs and dividends.

Funding for short-term cash needs will come primarily from our cash on hand, operating cash flows, our ability to issue debt and equity securities, and borrowings under the Revolving Credit Facility (as defined below), the AR Securitization Facilities (as defined below) or other credit facilities that we may establish, to the extent available.

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

In addition, as part of our growth strategy, we frequently evaluate strategic opportunities to acquire new businesses, assets or digital technology.

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.

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.

Our short-term and long-term cash needs and related funding capability may be adversely affected by the impact of the 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.

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 raised $400.0 million in the Private Placement (as defined below), before expenses, issued $400.0 million aggregate principal amount of the 2025 Notes and amended the Credit Agreement (as defined below) to modify the calculation of the Company’s financial maintenance covenant ratio under the Credit Agreement, among other things.

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.

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 COVID-19 pandemic if cash on hand and operating cash flows decrease in 2022, 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 December 31, 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 equipment deployment costs to long-term assets.

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.

In addition, we are obligated to pay to the MTA the greater of a percentage of revenues or a guaranteed minimum annual payment.

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

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

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

The decrease in working capital as of December 31, 2021, compared to as of December 31, 2020 is primarily driven by lower cash and other current assets and higher short-term operating lease liabilities, partially offset by higher accounts receivables and lower short-term debt.

Under the MTA agreement, which was amended in June 2020 and July 2021 (as amended, the “MTA Agreement”):

• Deployments .

We must deploy, over a number of years, (i) 5,433 digital advertising screens on subway and train platforms and entrances, (ii) 15,896 smaller-format digital advertising screens on rolling stock, and (iii) 9,283 MTA communications displays, subject to modification as agreed-upon by us and the MTA.

We are also obligated to deploy certain additional digital advertising screens and MTA communications displays in subway and train stations and rolling stock that the MTA may build or acquire in the future (collectively, the “New Inventory”).

After temporarily suspending deployment beginning in the first quarter of 2021, we have resumed deployment.

• Recoupment of Equipment Deployment Costs.

We may retain incremental revenues that exceed an annual base revenue amount for the cost of deploying advertising and communications displays throughout the transit system.

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

If we do not recoup all costs of deploying advertising and communications screens with respect to the New Inventory by the end of the term of the MTA Agreement, the MTA will be obligated to reimburse us for these costs.

Deployment costs in an amount not to exceed $50.7 million, which are deemed authorized before December 31, 2020, will be paid directly by the MTA.

For any deployment costs deemed authorized after December 31, 2020, the MTA and the Company will no longer be obligated to directly pay 70% and 30% of the costs, respectively, and these costs will be subject to recoupment in accordance with the MTA Agreement.

We did not recoup any equipment deployment costs in 2021 and it is unlikely we will recoup equipment deployment costs in 2022.

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.

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.

In connection with the amendment to the MTA Agreement and in coordination with the MTA, after temporarily 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 2021, we expect our MTA equipment deployment costs to be approximately $125.0 to $150.0 million.

For 2022, we expect our MTA equipment deployment costs to be approximately $150.0 million.

We must pay to the MTA the greater of a percentage of revenues or a guaranteed minimum annual payment.

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, and 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.

The MTA Agreement also provides that if prior to April 1, 2028 the balance of unrecovered costs of deploying advertising and communications screens throughout the transit system is equal to or less than zero, then in any year following the year in which such recoupment occurs (the “Recoupment Year”), the MTA is entitled to receive an additional payment equal to 2.5% of the annual base revenue amount for such year calculated in accordance with the MTA Agreement, provided that gross revenues in such year (i) were at least equal to the gross revenues generated in the Recoupment Year, and (ii) did not decline by more than 5% from the prior year.

In July 2021, we extended the initial 10-year term of the MTA Agreement to a 13-year initial term.

We have the option to extend this initial 13-year term for an additional five-year period at the end of the 13-year initial term, subject to satisfying certain quantitative and qualitative conditions.

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

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As of December 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.

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, third and fourth quarters of 2020, we updated our projections 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, 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 $103.5 million related to MTA equipment deployment costs in 2020 (which includes equipment deployment costs related to future deployments), for a total of $351.1 million to date, of which $33.9 million had been recouped from incremental revenues to date and as of December 31, 2020, $44.4 million is to be funded by the MTA.

We expect transit franchise expenses, as a percentage of revenues, to decrease in 2022

as compared to 2021, but be 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 $95.9 million related to MTA equipment deployment costs in 2021 (which includes equipment deployment costs related to future deployments), for a total of $447.0 million to date, of which $33.9 million had been recouped from incremental revenues to date and as of December 31, 2021, $45.4 million has been funded by the MTA.

As of December 31, 2021, 11,092 digital displays had been installed, of which 1,912 installations occurred in the fourth quarter of 2021, for a total of 3,712 installations in 2021.

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$ 171.5 $ 33.1 $ — $ — $ 204.6

Other current assets — 44.4 (16.4) — 28.0

Intangible assets (franchise agreements)

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

On February 23, 2022, we announced that our board of directors approved a quarterly cash dividend of $0.30 per share on our common stock, payable on March 31, 2022, to stockholders of record at the close of business on March 4, 2022.

Debt, net, consists of the following:

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Short-term debt:

AR Facility $ — $ 105.0

Repurchase Facility $ — $ 80.0

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4.250% senior unsecured notes, due 2029

4.625% senior unsecured notes, due 2030

Total senior unsecured notes 2,050.0 2,051.3

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Accounts Receivable Securitization Facilities

As of December 31, 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.

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”).

As of December 31, 2021, we have a revolving accounts receivable securitization facility (the “AR Facility”), which terminates in June 2022, unless further extended.

Our 364-day uncommitted structured repurchase facility (the “Repurchase Facility”) expired on June 29, 2021, and we chose not to extend it.

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

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

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Further, the TRS SPV and the QRS SPV are jointly and severally liable for their respective obligations under the agreements governing the AR Facility.

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 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 December 31, 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 December 31, 2020, there was no borrowing capacity remaining under the AR Facility based on approximately $239.8 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.

As of December 31, 2021, there were no outstanding borrowings under the AR Facility.

As of December 31, 2021, there was no borrowing capacity under the AR Facility due to a voluntary temporary suspension of the AR Facility in accordance with the agreements governing the AR Facility;

however, as of December 31, 2021, we had approximately $332.4 million of accounts receivable that could be used as collateral for the AR Facility.

The commitment fee based on the amount of unused commitments under the AR Facility was immaterial in 2021 and 2020.

As of February 25, 2021, there were no outstanding borrowings under the Repurchase Facility.

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 $400.0 million aggregate principal amount of the 2025 Notes in a private placement.

The 2025 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 2025 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 2025 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 2025 Notes remain outstanding after the redemption.

In May 2020, we used the net proceeds from the 2025 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 2025 Notes.

As of December 31, 2020, a premium of $1.3 million on $100.0 million aggregate principal amount of the 5.625% Senior Unsecured Notes due 2024 (the “2024 Notes”), remains unamortized.

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

On January 19, 2021, the Borrowers issued $500.0 million aggregate principal amount of 4.250% Senior Unsecured Notes due 2029 (the “2029 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.

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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 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.

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

(“Finance LLC’s”) capital stock or make other restricted payments other than dividends or distributions necessary for us to maintain our REIT status, subject to certain conditions and exceptions, (ii) enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany or third-party transfers, and (iii) incur additional indebtedness.

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

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

As of December 31, 2021, our Consolidated Total Leverage Ratio was 6.7 to 1.0 in accordance with the Credit Agreement.

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

The terms of the Credit Agreement (and under certain circumstances, the agreements governing the AR Facility) 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 December 31, 2021, our Consolidated Net Secured Leverage Ratio was 1.1 to 1.0 in accordance with the Credit Agreement.

As of December 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 Item 8., Note 11.

Equity to the Consolidated Financial Statements).

Deferred Financing Costs

As of December 31, 2020, we had deferred $32.6 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.

As of December 31, 2021, we had deferred $30.3 million in fees and expenses associated with the Term Loan, Revolving Credit Facility, AR Facility and our senior unsecured notes.

Interest Rate Swap Agreements

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 $5.6 million as of December 31, 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 December 31, 2020, under the terms of the agreements, we will pay interest based on an aggregate notional amount of $200.0 million, under a weighted-average fixed interest rate of 2.7%, with a receive rate of one-month LIBOR and which mature at various dates until June 30, 2022.

We had 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 and as of December 31, 2021, only one interest rate cash flow swap agreement remains outstanding.

The fair value of the swap positions was a net liability of approximately $0.4 million as of December 31, 2021, which is included in Other current liabilities on our Consolidated Statement of Financial Position, and $5.6 million as of December 31, 2020, which is included in Other liabilities on our Consolidated Statement of Financial Position.

As of December 31, 2021, under the terms of the remaining agreement, we will pay interest based on an aggregate notional amount of $50.0 million, under a weighted-average fixed interest rate of 1.8%, with a receive rate of one-month LIBOR and which matures on June 30, 2022.

The one-month LIBOR rate was approximately 0.1% as of December 31, 2021.

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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 Convertible Perpetual Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), at a purchase price of $1,000 per share, for an aggregate purchase price of $400.0 million (the “Private Placement”) to certain affiliates of Providence Equity Partners LLC (collectively, the “Providence Purchasers”) and ASOF Holdings L.L.P.

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

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

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

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 the Closing Date (the “Articles”).

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

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

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, without the consent of a specified percentage of holders of shares of Series A Preferred Stock, 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.

In 2020, we paid cash dividends of $19.5 million on the Series A Preferred Stock.

As of December 31, 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.

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 sets forth our cash flows in 2021 and 2020.

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

Net increase to cash, cash equivalents and restricted cash

$ 651.1 $ 6.8 *

Net increase (decrease) to cash, cash equivalents and restricted cash $ (287.2) $ 651.1 *

* Calculation is not meaningful.

Cash provided by operating activities decreased $146.3 million, or 53%, in 2020 compared to 2019, 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 2020, we paid $61.1 million related to MTA equipment deployment costs and installed 2,803 digital displays.

Cash provided by operating activities decreased $31.8 million, or 24%, in 2021 compared to 2020, due primarily to an increase in accounts receivables and prepaid MTA equipment deployment costs, partially offset by an increase in accrued expenses, a decrease in prepaid expenses and net income in 2021 compared to a net loss in 2020 due to increases in overall demand for our services.

In 2021, we paid net cash of $52.4 million related to MTA equipment deployment costs and installed 3,712 digital displays.

In 2020, we paid $61.1 million related to MTA equipment deployment costs and installed 2,803 digital displays.

In 2019, we recouped $32.2 million of MTA equipment deployment costs from incremental revenues.

Cash used for investing activities decreased $123.1 million, or 70%, in 2020 compared to 2019, due primarily to lower cash paid for acquisitions, higher proceeds from dispositions, including proceeds from the Sports Disposition, and lower capital expenditures and MTA franchise rights.

Cash used for investing activities increased $170.8 million in 2021 compared to 2020, due primarily to higher cash paid for acquisitions and MTA franchise rights and lower proceeds from dispositions.

The following table presents our capital expenditures in 2021 and 2020.

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Growth $ 48.5 $ 35.7 36 %

17.8 18.1 (2)

Total capital expenditures $ 73.8 $ 53.5 38

Capital expenditures decreased $36.4 million, or 40%, in 2020 compared to 2019, primarily due to lower spending on digital billboard and transit display projects in response to the impact of the COVID-19 pandemic, and lower spending on installation of the most current LED lighting technology.

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, software and technology, and to renovate certain office facilities.

Capital expenditures increased $20.3 million, or 38%, in 2021 compared to 2020, primarily due to growth in digital displays and increased spending on software and technology, partially offset by lower spending on vehicles, office remodel projects and the installation of the most current LED lighting technology.

For the full year of 2022, we expect our capital expenditures to be approximately $85.0 million, which will be used primarily for growth in digital displays, software and technology, the renovation of certain office facilities, safety-related projects and maintenance.

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 provided by financing activities was $573.0 million in 2020 compared to Cash used for financing activities of $94.3 million in 2019.

In 2020, we received net proceeds of $400.0 million related to the 2025 Notes offering and received net proceeds of $383.4 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 $75.1 million.

In 2019, we received net proceeds of $150.0 million in connection with refinancing our 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 $35.0 million on the AR Securitization Facilities, paid cash dividends on our common stock of $208.1 million, made a discretionary payment of $50.0 million on the Term Loan and reduced the principal balance of the Term Loan by $20.0 million.

Cash used by financing activities was $162.2 million in 2021 compared to Cash provided by financing activities of $573.0 million in 2020.

In 2021, we made a repayment of $80.0 million under the Repurchase Facility and paid total cash dividends of $57.5 million on the Series A Preferred Stock, our common stock and vested restricted share units granted to employees.

In 2020, we received net proceeds of $400.0 million related to the offering of our 6.250% Senior Unsecured Notes due 2025, received net proceeds of $383.4 million related to the issuance of the Series A Preferred Stock to enhance our liquidity position in response to the COVID-19 pandemic, made net total repayments of $115.0 million on the AR Facility and the Repurchase Facility, and paid total cash dividends on the Series A Preferred Stock and on our common stock of $75.1 million.

Cash paid for income taxes was $1.7 million in 2021 and $3.4 million in 2020.

The decrease was due primarily to lower performance from our TRSs driven by the impact of the COVID-19 pandemic and a $3.0 million settlement in 2019 of a 2016 IRS audit, including the related state income taxes and interest.

The decrease was due primarily to the taxable gain related to the Sports Disposition in 2020.

Contractual Obligations

As of December 31, 2020, our significant contractual obligations and payments due by period were as follows:

Payments Due by Period

(in millions) Total 2021 2022-2023 2024-2025 2026 and thereafter

Guaranteed minimum annual payments (a)

$ 1,356.0 $ 195.5 $ 398.4 $ 372.6 $ 389.5

Operating leases (b)

1,966.8 250.7 476.6 350.4 889.1

Long-term debt (c)

2,650.0 — — 900.0 1,750.0

726.2 127.0 241.1 178.9 179.2

Total $ 6,699.0 $ 573.2 $ 1,116.1 $ 1,801.9 $ 3,207.8

(a) We have agreements with municipalities and transit operators which entitle us to operate advertising displays within their transit systems, including on the interior and exterior of rail and subway cars and buses, as well as on benches, transit shelters, street kiosks, and transit platforms.

We have agreements with municipalities and transit operators which entitle us to operate advertising displays within their transit systems, including on the interior and exterior of rail and subway cars and buses, as well as on benches, transit shelters, street kiosks, and transit platforms.

Under most of these franchise agreements, the franchisor is entitled to receive the greater of a percentage of the relevant revenues, net of agency fees, or a specified guaranteed minimum annual payment.

Guaranteed minimum annual payments are generally paid monthly.

(b) Consists of rental payments under operating leases for billboard sites, office space and equipment.

Total future minimum payments of $1,966.8 million include $1,883.7 million for our billboard sites.

(See Item 8, Note 19.

Commitments and Contingencies to the Consolidated Financial Statements.)

Total future minimum payments for rental payments under operating leases for billboard sites, office space and equipment of $2,036.7 million include $1,960.4 million for our billboard sites.

(See Item 8, Note 6.

Leases to the Consolidated Financial Statements.)

As of December 31, 2021, we had long-term debt of approximately $2.7 billion.

Interest on the Term Loan is variable.

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An increase or decrease of 1/4% in the interest rate will change the annual interest expense by $1.4 million.

The above table excludes $0.5 million of reserves for uncertain tax positions and the related accrued interest and penalties, as we cannot reasonably predict the amount of and timing of cash payments related to this obligation.

In 2021, we expect to contribute $1.4 million to our pension plans.

Contributions to our pension plans were $0.7 million in 2020 and $1.5 million in 2019.

For further information about our contractual obligations, see Item 8, Note 19.

Commitments and Contingencies to the Consolidated Financial Statements.

(See Item 8, Note 9.

Debt to the Consolidated Financial Statements.)

In 2022, we expect to contribute $0.1 million to our defined benefit pension plans.

Contributions to our defined benefit pension plans were $0.2 million in 2021 and $0.7 million in 2020.

(See Item 8, Note 16.

Retirement Benefits to the Consolidated Financial Statements.)

Off-Balance Sheet Arrangements

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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.

We assess the recoverability of the MTA contract on an as-needed basis and apply significant judgment in assessing factors to determine if there is an indication that the revenues generated over the term of the agreement will be sufficient to cover all or a portion of the equipment deployment costs, including evaluating macroeconomic conditions (such as the impact of the COVID-19 pandemic), industry trends, and events specific to the Company, including monitoring the Company’s actual installation of digital displays against the deployment schedule.

We assess the recoverability of the MTA contract on an as-needed basis and apply significant judgment in assessing factors to determine if there is an indication that the revenues expected to be generated over the term of the agreement will be sufficient to cover all or a portion of the equipment deployment costs, including evaluating macroeconomic conditions (such as the impact of the COVID-19 pandemic), industry trends, and events specific to the Company, including monitoring the Company’s actual installation of digital displays against the deployment schedule.

Additionally, we assess these factors by comparing revenue projections of the deployed digital displays to actual financial results.

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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.

In the second, third and fourth quarters of 2020, we updated our projections and did not identify a triggering event for an impairment review of our P repaid MTA equipment deployment costs .

In 2021, we updated our projections and did not identify a triggering event for an impairment review of our Prepaid MTA equipment deployment costs .

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

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Our discounted cash flow value is calculated by adding the present value of the estimated annual cash flows over a discrete projection period to the terminal value, which represents the value of the projected cash flows beyond the discrete projection period.

Our discounted cash flow model requires us to use significant estimates and assumptions such as revenue growth rates, terminal growth rates, projected billboard lease and transit franchise expenses, projected other operating and selling, general and administrative expenses, capital expenditures and discount rates.

Our discounted cash flow model requires us to use significant estimates and assumptions such as projected revenue growth rates, terminal growth rates, billboard lease and transit franchise expenses, other operating and selling, general and administrative expenses, capital expenditures, contract renewals and extensions, and discount rates.

The estimated growth rates, operating margins and capital expenditures for the projection period are based on our internal forecasts of future performance as well as historical trends.

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The discount rates represent the weighted average cost of capital derived using known and estimated market metrics.

be no assurance that these estimates and assumptions will prove to be an accurate prediction of the future, and a downward revision of these estimates and/or assumptions would decrease the fair values of our reporting units, which could result in additional impairment charges in the future.

In the fourth quarter of 2020, we performed a quantitative assessment of our reporting units for possible goodwill impairment.

There can be no assurance that these estimates and assumptions will prove to be an accurate prediction of the future, and a downward revision of these estimates and/or assumptions would decrease the fair values of our reporting units, which could result in additional impairment charges in the future.

In the fourth quarter of 2021, we performed a qualitative assessment of two of our reporting units and a quantitative assessment of our other reporting unit for possible goodwill impairment.

No impairment was identified for any of our reporting units.

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We report long-lived assets, including billboard advertising structures, other property, plant and equipment and intangible assets, at historical cost less accumulated depreciation and amortization.

We depreciate or amortize these assets over their estimated useful lives, which generally range from five to 40 years.

We depreciate or amortize these assets over their estimated useful lives, which generally range from three to 40 years.

For billboard advertising structures, we estimate the useful lives based on the estimated economic life of the asset.

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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-K

Item 7. Management’s Discussion and Analysis