What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-04 compared with 2022-05-03 · 235 added, 148 removed, 441 unchanged (46% of the section changed)

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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 19% of its revenues in the New York City metropolitan area in the three months ended March 31, 2022 and 12% in the three months ended March 31, 2021, and generated 17% in the Los Angeles metropolitan area in the three months ended March 31, 2022, and 15% in the three months ended March 31, 2021.

In the three months ended March 31, 2022, our U.S.

Media segment generated $354.2 million of Revenues and $80.1 million of Operating income before Depreciation , Amortization , Net gain on dispositions and Stock-based compensation (“Adjusted OIBDA”).

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

Media segment generated 19% of its revenues in the New York City metropolitan area in the three months ended June 30, 2022, 14% in the three months ended June 30, 2021, 19% in the six months ended June 30, 2022, and 13% in the six months ended June 30, 2021, and generated 16% in the Los Angeles metropolitan area in each of the three and six months ended June 30, 2022 and 2021.

In the three months ended June 30, 2022, our U.S.

Media segment generated $422.5 million of Revenues and $129.2 million of Operating income before Depreciation , Amortization , Net (gain) loss on dispositions and Stock-based compensation (“Adjusted OIBDA”).

In the three months ended June 30, 2021, our U.S.

Media segment generated $321.8 million of Revenues and $80.6 million of Adjusted OIBDA.

In the six months ended June 30, 2022, our U.S.

Media segment generated $776.7 million of Revenues and $209.3 million of Adjusted OIBDA.

In the six months ended June 30, 2021, our U.S.

Media segment generated $567.2 million of Revenues and $105.2 million of Adjusted OIBDA.

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

Other (includes International).

In the three months ended March 31, 2022, Other generated $19.3 million of Revenues and $0.6 million of Adjusted OIBDA.

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

In the three months ended June 30, 2022, Other generated $27.7 million of Revenues and $7.8 million of Adjusted OIBDA.

In the three months ended June 30, 2021, Other generated $19.2 million of Revenues and $1.6 million of Adjusted OIBDA.

In the six months ended June 30, 2022, Other generated $47.0 million of Revenues and $8.4 million of Adjusted OIBDA.

In the six months ended June 30, 2021, Other generated $33.0 million of Revenues and an Adjusted OIBDA loss of $0.4 million.

COVID-19 Impact

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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.

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

Media segment.

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Media segment to incrementally improve in 2022, but still remain materially below pre-COVID-19 pandemic levels until 2023.

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 also expect Adjusted OIBDA to incrementally improve in 2022, driven by improvements in our transit and other business, and be comparable to 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.

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

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 slightly lower than 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 New York Metropolitan Transportation Authority (the “MTA”) and other transit franchise partners as total transit and other revenues incrementally improve in the future.

Results for the three and six months ended June 30, 2022, are not indicative of the results that may be expected for the fiscal year ending December 31, 2022.

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 beginning 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.

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 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.

Due to the current heightened levels of inflation and commodity prices in the U.S.

and abroad, we have also experienced increases with respect to our posting, maintenance and other expenses and our corporate expenses, which will continue in 2022, and could have an adverse effect on our business, financial condition and results of operations.

Our billboard property lease expenses and transit franchise expenses have been less impacted by the current heightened levels of inflation due to the long-term nature of most of our operating leases and transit franchise agreements.

However, our transit franchise agreements that contain inflationary price adjustments may cause increases in our transit franchise expenses in the near-term if the current heightened levels of inflation continue.

Though the Company cannot reasonably estimate the full impact of the current heightened levels of inflation on our business, financial condition and results of operations at this time, a portion of these increases may be partially offset by increases in advertising rates on our displays and cost efficiencies.

Business Environment

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In addition, digital displays enable us to run multiple advertisements on each display.

Digital billboard displays generate approximately four times more

revenue per display on average than traditional static billboard displays.

Digital billboard displays generate approximately four times more revenue per display on average than traditional static billboard displays.

Digital billboard displays also incur, on average, approximately two to four times more costs, including higher variable costs associated with the increase in revenue than traditional static billboard displays.

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We have built or converted 54 new digital billboard displays in the U.S.

during the three months ended March 31, 2022.

Additionally, in the three months ended March 31, 2022, we entered into marketing arrangements to sell advertising on 16 third-party digital billboard displays in the U.S.

In the three months ended March 31, 2022, we have built, converted or replaced 1,409 digital transit and other displays in the U.S.

and 5 new digital billboard displays in Canada during the six months ended June 30, 2022.

Additionally, in the six months ended June 30, 2022, we entered into marketing arrangements to sell advertising on 25 third-party digital billboard displays in the U.S.

In the six months ended June 30, 2022, we have built, converted or replaced 2,241 digital transit and other displays in the U.S.

The following table sets forth information regarding our digital displays.

Digital Revenues (in millions)

for the Three Months Ended March 31, 2022 (a)

for the Six Months Ended

June 30, 2022 (a)

Number of Digital Displays as of

March 31, 2022 (a)

June 30, 2022 (a)

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

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We have a diversified base of customers across various industries.

During the three months ended March 31, 2022, our largest categories of advertisers were Entertainment, Health/Medical and Retail, each of which represented approximately 23%, 10% and 9% of our total U.S.

During the three months ended June 30, 2022, our largest categories of advertisers were Entertainment, Retail and Health/Medical, each of which represented approximately 20%, 11% and 9% of our total U.S.

Media segment revenues, respectively.

During the three months ended March 31, 2021, our largest categories of advertisers were Entertainment, Health/Medical and Retail, each of which represented approximately 16%, 10% and 8% of our total U.S.

During the three months ended June 30, 2021, our largest categories of advertisers were Entertainment, Health/Medical and Retail, each of which represented approximately 16%, 9% and 9% of our total U.S.

Media segment revenues, respectively.

During the six months ended June 30, 2022, our largest categories of advertisers were Entertainment, Retail and Health/Medical, each of which represented approximately 21%, 10% and 10% of our total U.S.

Media segment revenues, respectively.

During the six months ended June 30, 2021, our largest categories of advertisers were Entertainment, Health/Medical and Retail, each of which represented approximately 16%, 10% and 9% of our total U.S.

Media segment revenues, respectively.

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

In the three months ended March 31, 2022, we generated approximately 41% of our U.S.

In the three months ended June 30, 2022, we generated approximately 42% of our U.S.

Media segment revenues from national advertising campaigns compared to approximately 40% in the same prior-year period.

In the six months ended June 30, 2022, we generated approximately 42% of our U.S.

Media segment revenues from national advertising campaigns compared to approximately 39% in the same prior-year period.

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

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

Three Months Ended

(in millions, except percentages) 2022 2021 Change

Three Months Ended Six Months Ended

June 30, % June 30, %

(in millions, except percentages) 2022 2021 Change 2022 2021 Change

Revenues $ 450.2 $ 341.0 32 % $ 823.7 $ 600.2 37 %

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Adjusted OIBDA (b)

125.3 70.0 79 195.5 81.1 141

Adjusted OIBDA (b) margin

28 % 21 % 24 % 14 %

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

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93.2 39.6 135 128.7 15.1 *

Net loss attributable to OUTFRONT Media Inc.

Net income (loss) attributable to OUTFRONT Media Inc.

48.0 (0.9) * 47.9 (68.6) *

* Calculation is not meaningful.

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

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

We provide organic revenues to understand the underlying growth rate of revenue excluding the impact of non-organic revenue items.

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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 margin by dividing Adjusted OIBDA by total revenues.

We calculate Adjusted OIBDA margin by dividing Adjusted OIBDA by

total revenues.

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

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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, 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, along with 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, 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, along with the non-cash portion of income taxes, and the related income tax effect of adjustments, as applicable.

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

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

Our management also believes that the presentations of FFO and AFFO, as supplemental measures, are useful in evaluating our business because adjusting results to reflect items that have more bearing on the operating performance of REITs highlight trends in our business

that may not otherwise be apparent when relying solely on GAAP financial measures.

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

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and AFFO attributable to OUTFRONT Media Inc.

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions, except per share amounts) 2022 2021 2022 2021

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Operating income (loss) $ 79.9 $ 29.1 $ 108.4 $ (1.9)

Net gain on dispositions (0.3) (0.3)

Net (gain) loss on dispositions 0.2 (2.9) (0.1) (3.2)

Depreciation 19.4 20.0 38.7 40.0

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Adjusted OIBDA margin 28 % 21 % 24 % 14 %

Net loss attributable to OUTFRONT Media Inc.

Net income (loss) attributable to OUTFRONT Media Inc.

$ 48.0 $ (0.9) $ 47.9 $ (68.6)

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Amortization of direct lease acquisition costs 15.7 13.9 31.0 25.1

Net gain on disposition of real estate assets (0.3) (0.3)

Net (gain) loss on disposition of real estate assets 0.2 0.1 (0.1) (0.2)

Adjustment related to non-controlling interests — (0.1) (0.1) (0.2)

FFO attributable to OUTFRONT Media Inc.

92.4 39.7 134.2 9.3

Non-cash portion of income taxes 0.4 (4.1) (3.8) (9.3)

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Other amortization 2.8 3.7 4.2 7.7

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

— (3.0) — (3.0)

Stock-based compensation 8.5 7.5 16.4 13.5

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Amortization of deferred financing costs

1.7 1.9 3.3 3.8

Loss on extinguishment of debt — — — 6.3

Income tax effect of adjustments (b)

AFFO attributable to OUTFRONT Media Inc.

$ 93.2 $ 39.6 $ 128.7 $ 15.1

FFO was $41.8 million in the three months ended March 31, 2022, compared to a deficit of $30.4 million in the same prior-year period.

The increase in FFO was due primarily to higher operating income, a loss on extinguishment of debt in 2021 and higher amortization of direct lease acquisition costs.

AFFO was $35.5 million compared to a deficit of $24.5 million in the same prior-year period.

The increase in AFFO was due primarily to higher operating income.

(a) Gain related to the sale of all of our equity interests in certain of our subsidiaries, which held all of the assets of our Sports Marketing operating segment.

(b) Income tax effect related to a Gain on disposition of non-real estate assets.

FFO increased $52.7 million, or 133%, in the three months ended June 30, 2022, compared to the same prior-year period, due primarily to higher operating income and higher amortization of both real estate-related intangible assets and direct lease acquisition costs.

FFO increased $124.9 million in the six months ended June 30, 2022, compared to the same prior-year period, due primarily to higher operating income, a loss on extinguishment of debt in 2021 and higher amortization of both real estate-related intangible assets and direct lease acquisition costs.

AFFO increased $53.6 million, or 135%, in the three months ended June 30, 2022, and increased $113.6 million in the six months ended June 30, 2022, compared to the same prior-year periods.

The increases in AFFO were due primarily to higher operating income.

Analysis of Results of Operations

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Revenues to the Consolidated Financial Statements.)

Three Months Ended

(in millions, except percentages) 2022 2021 Change

Three Months Ended Six Months Ended

June 30, % June 30, %

(in millions, except percentages) 2022 2021 Change 2022 2021 Change

Billboard $ 354.0 $ 287.3 23 % $ 652.2 $ 510.9 28 %

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Non-organic revenues:

2.4 0.5 * 2.4 0.5 *

Transit and other

— 0.1 * — 0.1 *

Total non-organic revenues

2.4 0.6 * 2.4 0.6 *

Total revenues $ 450.2 $ 341.0 32 $ 823.7 $ 600.2 37

* Calculation is not meaningful.

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

Total revenues increased by $114.3 million, or 44%, and organic revenues increased $114.3 million, or 44%, in the three months ended March 31, 2022, compared to the same prior-year period.

Total billboard revenues increased $74.6 million, or 33%, in the three months ended March 31, 2022, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services.

Total transit and other revenues increased $39.7 million, or 112%, in the three months ended March 31, 2022, compared to the same prior-year period, primarily driven by an increase in average revenue per display (yield), as we have experienced increases in overall demand for our services due to an increase in transit ridership, partially offset by the loss of a transit franchise contract.

Three Months Ended

(in millions, except percentages) 2022 2021 Change

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

Total revenues increased by $109.2 million, or 32%, and organic revenues increased $107.4 million, or 32%, in the three months ended June 30, 2022, compared to the same prior-year period.

Total revenues increased by $223.5 million, or 37%, and organic revenues increased $221.7 million, or 37%, in the six months ended June 30, 2022, compared to the same prior-year period.

In the three and six months ended June 30, 2022, non-organic revenues reflect the impact of a significant acquisition.

In the three and six months ended June 30, 2021, non-organic revenues reflect the impact of foreign currency exchange rates.

Total billboard revenues increased $66.7 million, or 23%, in the three months ended June 30, 2022, and increased $141.3 million, or 28%, in the six months ended June 30, 2022, compared to the same prior-year periods.

The increases were primarily due to an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services, and the impact of acquisitions.

Organic billboard revenues increased $64.8 million, or 23%, in the three months ended June 30, 2022, and increased $139.4 million, or 27%, in the six months ended June 30, 2022, compared to the same prior-year periods, primarily due to an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services.

Total transit and other revenues increased $42.5 million, or 79%, in the three months ended June 30, 2022, compared to the same prior-year period and increased $82.2 million, or 92%, in the six months ended June 30, 2022, compared to the same prior-year period.

The increases were primarily driven by an increase in average revenue per display (yield), as we have experienced increases in overall demand for our services due to an increase in transit ridership, partially offset by the loss of a transit franchise contract.

Organic transit and other revenues increased $42.6 million, or 79%, in the three months ended June 30, 2022, and increased $82.3 million, or 92%, in the six months ended June 30, 2022, compared to the same prior-year periods, primarily driven by an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services due to an increase in transit ridership, partially offset by the loss of a transit franchise contract.

Three Months Ended Six Months Ended

June 30, % June 30, %

(in millions, except percentages) 2022 2021 Change 2022 2021 Change

Operating $ 226.5 $ 189.6 19 % $ 439.3 $ 367.2 20 %

Selling, general and administrative 106.9 88.9 20 205.3 165.4 24

Net gain on dispositions (0.3) (0.3) —

Net (gain) loss on dispositions 0.2 (2.9) * (0.1) (3.2) (97)

Depreciation 19.4 20.0 (3) 38.7 40.0 (3)

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Operating Expenses

Three Months Ended

(in millions, except percentages) 2022 2021 Change

Three Months Ended Six Months Ended

June 30, % June 30, %

(in millions, except percentages) 2022 2021 Change 2022 2021 Change

Operating expenses:

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Total operating expenses $ 226.5 $ 189.6 19 $ 439.3 $ 367.2 20

Billboard property lease expenses represented 36% of billboard revenues in the three months ended March 31, 2022, and 42% in the three months ended March 31, 2021.

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

Transit franchise expenses represented 80% of transit display revenues in the three months ended March 31, 2022 and 131% in the three months ended March 31, 2021.

The decrease in transit franchise expense as a percentage of revenues are primarily driven by an increase in transit revenue, while the New York Metropolitan Transportation Authority (the “MTA”) was paid guaranteed minimum annual payments in each of the three months ended March 31, 2022 and 2021.

Billboard property lease and transit franchise expenses increased $27.3 million in the three months ended March 31, 2022, compared to the same prior-year period, primarily due to higher billboard and transit revenues, and higher guaranteed minimum annual payments to the MTA.

Posting, maintenance and other expenses as a percentage of Revenues were 14% in the three months ended March 31, 2022, and 17% in the three months ended March 31, 2021.

Posting, maintenance and other expenses increased $7.9 million, or 18%, in the three months ended March 31, 2022, compared to the same prior-year period, primarily due to increased activity resulting in higher posting and rotation costs, compensation-related expenses, production costs and materials cost.

Billboard property lease expenses represented 32% of billboard revenues in the three months ended June 30, 2022, 35% in the three months ended June 30, 2021, 34% of billboard revenues in the six months ended June 30, 2022, and 38% in the six months ended June 30, 2021.

The decreases in billboard property lease expenses as a percentage of revenues is primarily due to an increase in billboard revenues and the fixed nature of certain billboard property lease expenses (see Note 6.

Leases to the Consolidated Financial Statements).

Transit franchise expenses represented 68% of transit display revenues in the three months ended June 30, 2022, 91% in the three months ended June 30, 2021, 73% of transit display revenues in the six months ended June 30, 2022, and 107% in the six months ended June 30, 2021.

The decreases in transit franchise expense as a percentage of revenues are primarily driven by an increase in transit revenue, while the MTA was paid guaranteed minimum annual payments in each of the three and six months ended June 30, 2022 and 2021.

Billboard property lease and transit franchise expenses increased $28.7 million, or 20%, in the three months ended June 30, 2022, and increased $56.0 million, or 20%, in the six months ended June 30, 2022, compared to the same prior-year periods, primarily due to higher billboard and transit revenues, and higher guaranteed minimum annual payments to the MTA.

Posting, maintenance and other expenses as a percentage of Revenues were 12% in the three months ended June 30, 2022, 14% in the three months ended June 30, 2021, 13% in the six months ended June 30, 2022, and 15% in the six months ended June 30, 2021.

Posting, maintenance and other expenses increased $8.2 million, or 18%, in the three months ended June 30, 2022, and increased $16.1 million, or 18%, in the six months ended June 30, 2022, compared to the same prior-year periods, primarily due to increased activity resulting in higher production and materials cost, higher compensation-related expenses, higher posting and rotation costs and higher maintenance and utilities cost, driven by economic recovery from the COVID-19 pandemic and inflation-driven utility cost increases in 2022.

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

SG&A expenses represented 26% of Revenues in the three months ended March 31, 2022 and 30% of Revenues in the same prior-year period.

SG&A expenses increased $21.9 million, or 29%, in the three months ended March 31, 2022, compared to the same prior-year period, primarily due to higher compensation-related expenses, including commissions, salaries and bonuses, and a higher provision for doubtful accounts, both driven by business performance improvements during the period and the impact of COVID-19 on the first quarter of 2021.

SG&A expenses represented 24% of Revenues in the three months ended June 30, 2022, 26% of Revenues in the three months ended June 30, 2021, 25% of Revenues in the six months ended June 30, 2022, and 28% of Revenues in the same prior-year period.

SG&A expenses increased $18.0 million, or 20%, in the three months ended June 30, 2022, compared to the same prior-year period, primarily due to higher compensation-related expenses, including commissions and salaries, higher professional fees, increased business travel resulting in higher travel and entertainment expenses, and a higher provision for doubtful

accounts, driven by both business performance improvements during the period and the impact of COVID-19 on the second quarter of 2021.

The increase in SG&A expenses was partially offset by the impact of market fluctuations on an equity-linked retirement plan offered by the Company to certain employees.

Net Gain on Dispositions

Net gain on dispositions was $0.3 million in each of the three months ended March 31, 2022 and 2021.

Depreciation decreased $0.7 million, or 4%, in the three months ended March 31, 2022, compared to the same prior-year period.

Amortization decreased $1.6 million, or 10%, in the three months ended March 31, 2022, compared to the same prior-year period.

The increase was principally driven by lower amortization of intangible assets.

SG&A expenses increased $39.9 million, or 24%, in the six months ended June 30, 2022, compared to the same prior-year period, primarily due to higher compensation-related expenses, including commissions, salaries and bonuses, and a higher provision for doubtful accounts, driven by both business performance improvements during the period and the impact of COVID-19 on the first half of 2021, increased post-COVID-19 pandemic travel resulting in higher travel and entertainment expenses, and higher professional fees.

The increase in SG&A expenses was partially offset by the impact of market fluctuations on an equity-linked retirement plan offered by the Company to certain employees.

Net (Gain) Loss on Dispositions

Net loss on dispositions was $0.2 million in the three months ended June 30, 2022, compared to a Net gain on dispositions of $2.9 million in the three months ended June 30, 2021.

Net gain on dispositions decreased $3.1 million, or 97%, in the six months ended June 30, 2022, compared to the same prior-year period.

Depreciation decreased $0.6 million, or 3%, in the three months ended June 30, 2022, and decreased $1.3 million, or 3%, in the six months ended June 30, 2022, compared to the same prior-year periods.

Amortization increased $1.0 million, or 6%, in the three months ended June 30, 2022, compared to the same prior-year period.

Amortization decreased $0.6 million, or 2%, in the six months ended June 30, 2022, compared to the same prior-year period.

Interest Expense, Net

Interest expense, net, was $30.7 million (including $1.6 million of deferred financing costs) in the three months ended March 31, 2022, and $34.6 million (including $1.9 million of deferred financing costs) in the same prior-year period.

The decrease in Interest expense, net, was primarily due to a lower outstanding average debt balance.

Interest expense, net, was $31.6 million (including $1.7 million of deferred financing costs) in the three months ended June 30, 2022, compared to $32.1 million (including $1.9 million of deferred financing costs) in the same prior-year period.

Interest expense, net, was $62.3 million (including $3.3 million of deferred financing costs) in the six months ended June 30, 2022, and $66.7 million (including $3.8 million of deferred financing costs) in the same prior-year period, primarily due to a lower outstanding average debt balance, partially offset by higher interest rates.

Loss on Extinguishment of Debt

In the three months ended March 31, 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 in the first quarter of 2021.

Benefit for Income Taxes

Benefit for income taxes decreased $2.6 million, or 55%, in the three months ended March 31, 2022, compared to the same prior-year period due primarily to a lower taxable REIT subsidiary (“TRS”) loss in the three months ended March 31, 2022.

In the six months ended June 30, 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 in the first quarter of 2021.

Benefit (Provision) for Income Taxes

Provision for income taxes was $1.2 million in the three months ended June 30, 2022, compared to a Benefit for income taxes of $2.4 million in the three months ended June 30, 2021, due primarily to income in Canada in 2022 compared to losses in Canada in 2021 and lower taxable REIT subsidiary (“TRS”) losses in 2022 compared to 2021.

Benefit for income taxes decreased $6.2 million, or 87%, in the six months ended June 30, 2022, compared to the same prior-year period, due primarily to income in Canada in 2022 compared to losses in Canada in 2021 and lower TRS losses in 2022.

Net Income (Loss)

Net income before allocation to non-controlling interests was $0.1 million compared to a Net loss before allocation to non-controlling interests of $67.6 million in the same prior-year period, due primarily to higher operating income, as we have experienced increases in customer advertising expenditures and overall demand for our services, and a loss on extinguishment of debt in 2021.

Net income before allocation to non-controlling interests was $48.4 million in the three months ended June 30, 2022, compared to a Net loss before allocation to non-controlling interests of $0.7 million in the same prior-year period, due primarily to higher operating income, as we have experienced increases in customer advertising expenditures and overall demand for our services, partially offset by a provision for income taxes in 2022 compared to a benefit for income taxes in 2021.

Net income before allocation to non-controlling interests was $48.5 million in the six months ended June 30, 2022, compared to a Net loss before allocation to non-controlling interests of $68.3 million in the same prior-year period, due primarily to higher operating income, as we have experienced increases in customer advertising expenditures and overall demand for our services, and a loss on extinguishment of debt in 2021, partially offset by a lower benefit for income taxes.

Segment Results of Operations

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Media and Other .

The following table presents our Revenues , Adjusted OIBDA and Operating income (loss) by segment in the three months ended March 31, 2022 and 2021.

Three Months Ended

The following table presents our Revenues , Adjusted OIBDA and Operating income (loss) by segment in the three and six months ended June 30, 2022 and 2021.

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2022 2021 2022 2021

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Operating income (loss) $ 79.9 $ 29.1 $ 108.4 $ (1.9)

Net gain on dispositions (0.3) (0.3)

Net (gain) loss on dispositions 0.2 (2.9) (0.1) (3.2)

Depreciation 19.4 20.0 38.7 40.0

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Stock-based compensation (a)

8.5 7.5 16.4 13.5

Total Adjusted OIBDA $ 125.3 $ 70.0 $ 195.5 $ 81.1

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

Three Months Ended

(in millions, except percentages) 2022 2021 Change

Three Months Ended Six Months Ended

June 30, % June 30, %

(in millions, except percentages) 2022 2021 Change 2022 2021 Change

Billboard $ 332.1 $ 271.8 22 % $ 615.5 $ 484.3 27 %

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Total revenues $ 422.5 $ 321.8 31 $ 776.7 $ 567.2 37

Organic revenues (a) :

Billboard $ 329.7 $ 271.8 21 $ 613.1 $ 484.3 27

Transit and other 90.4 50.0 81 161.2 82.9 94

Total organic revenues (a)

420.1 321.8 31 774.3 567.2 37

Non-organic revenues:

Billboard 2.4 — * 2.4 — *

Transit and other — — * — — *

Total non-organic revenues 2.4 — * 2.4 — *

Total revenues 422.5 321.8 31 776.7 567.2 37

Operating expenses (212.2) (176.8) 20 (411.6) (342.9) 20

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Adjusted OIBDA margin 31 % 25 % 27 % 19 %

Operating income (loss) $ 49.3 $ (8.6) *

Net gain on dispositions (0.3) (0.3) —

Operating income $ 95.3 $ 47.3 101 $ 144.6 $ 38.7 *

Net (gain) loss on dispositions 0.2 0.1 100 (0.1) (0.2) (50)

Depreciation and amortization 33.7 33.2 2 64.8 66.7 (3)

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* Calculation is not meaningful.

Media segment revenues increased $108.8 million, or 44%, in the three months ended March 31, 2022, compared to the same prior-year period, due primarily to stronger transit revenues and higher billboard revenues.

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

In the three months ended March 31, 2022, we generated approximately 41% of our U.S.

Media segment revenues from national advertising campaigns and 38% in the same prior-year period.

(a) Organic revenues exclude revenues associated with a significant acquisition (“non-organic revenues”).

Media segment revenues increased $100.7 million, or 31%, in the three months ended June 30, 2022, and increased $209.5 million, or 37%, in the six months ended June 30, 2022, compared to the same prior-year periods, due primarily to stronger transit revenues and higher billboard revenues.

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

We generated approximately 42% of our U.S.

Media segment revenues from national advertising campaigns in the three months ended June 30, 2022, 40% in the three months ended June 30, 2021, 42% in the six months ended June 30, 2022, and 39% in the six months ended June 30, 2021.

In the three and six months ended June 30, 2022, non-organic revenues reflect the impact of a significant acquisition.

Billboard revenues in the U.S.

Media segment increased $70.9 million, or 33%, in the three months ended March 31, 2022, compared to the same prior-year period, reflecting an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services.

Media segment increased $60.3 million, or 22%, in the three months ended June 30, 2022, and increased $131.2 million, or 27%, in the six months ended June 30, 2022, compared to the same prior-year periods, reflecting an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services and the impact of acquisitions.

Organic billboard revenues in the U.S.

Media segment increased $57.9 million, or 21%, in the three months ended June 30, 2022, and increased $128.8 million, or 27%, in the six months ended June 30, 2022, compared to the same prior-year periods, primarily due to an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services.

Transit and other revenues in the U.S.

Media segment increased $37.9 million, or 115%, in the three months ended March 31, 2022, compared to the same prior-year period, driven by an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services due to an increase in transit ridership, partially offset by the loss of a transit franchise contract.

primarily driven by an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services due to an increase in transit ridership, partially offset by the loss of a transit franchise contract.

Organic transit and other revenues in the U.S.

Media segment increased $40.4 million, or 81%, in the three months ended June 30, 2022, and increased $78.3 million, or 94%, in the six months ended June 30, 2022, compared to the same prior-year periods, primarily driven by an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services due to an increase in transit ridership, partially offset by the loss of a transit franchise contract.

Operating expenses in the U.S.

Media segment increased $33.3 million, or 20%, in the three months ended March 31, 2022, compared to the same prior-year period, primarily driven by higher transit franchise, billboard lease and posting maintenance and other costs, associated with the increase in revenue, as well as higher guaranteed minimum annual payments to the MTA.

Media segment increased $35.4 million, or 20%, in the three months ended June 30, 2022, and increased $68.7 million, or 20%, in the six months ended June 30, 2022, compared to the same prior-year periods, primarily driven by higher transit franchise and billboard lease costs associated with the increase in revenue, higher production and materials cost, higher compensation-related expenses, higher posting and rotation costs and higher maintenance and utilities cost, driven by economic recovery from the COVID-19 pandemic and inflation-driven utility cost increases in 2022, as well as higher guaranteed minimum annual payments to the MTA.

SG&A expenses in the U.S.

Media segment increased $20.0 million, or 37%, in the three months ended March 31, 2022, compared to the same prior-year period, primarily driven by higher compensation-related expenses, including commissions, salaries and bonuses, and a higher provision for doubtful accounts.

Media segment Adjusted OIBDA increased $55.5 million in the three months ended March 31, 2022, compared to the same prior-year period.

Adjusted OIBDA margin was 23% in the three months ended March 31, 2022, and 10% in the same prior-year period.

Three Months Ended

(in millions, except percentages) 2022 2021 Change

Media segment increased $16.7 million, or 26%, in the three months ended June 30, 2022, and increased $36.7 million, or 31%, in the six months ended June 30, 2022, compared to the same prior-year periods, primarily driven by higher compensation-related expenses, including commissions, salaries and bonuses, increased business travel resulting in higher travel and entertainment expenses, and a higher provision for doubtful accounts.

Media segment Adjusted OIBDA increased $48.6 million, or 60%, in the three months ended June 30, 2022, and increased $104.1 million, or 99%, in the six months ended June 30, 2022, compared to the same prior-year periods.

Adjusted OIBDA margin was 31% in the three months ended June 30, 2022, 25% in the three months ended June 30, 2021, 27% in the six months ended June 30, 2022, and 19% in the same prior-year period.

Three Months Ended Six Months Ended

June 30, % June 30, %

(in millions, except percentages) 2022 2021 Change 2022 2021 Change

$ 21.9 $ 15.5 41 % $ 36.7 $ 26.6 38 %

Transit and other

5.8 3.7 57 10.3 6.4 61

Total revenues $ 27.7 $ 19.2 44 $ 47.0 $ 33.0 42

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Transit and other

5.8 3.6 61 10.3 6.3 63

Total organic revenues (a)

27.7 18.6 49 47.0 32.4 45

Non-organic revenues:

— 0.5 * — 0.5 *

Transit and other

— 0.1 * — 0.1 *

Total non-organic revenues

— 0.6 * — 0.6 *

Total revenues 27.7 19.2 44 47.0 33.0 42

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Operating income (loss) $ 4.8 $ 1.5 * $ 2.4 $ (3.4) *

Net gain on dispositions — (3.0) (100) — (3.0) (100)

Depreciation and amortization 3.0 3.1 (3) 6.0 6.0 —

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

Total Other revenues increased $5.5 million, or 40%, in the three months ended March 31, 2022, compared to the same prior-year period, reflecting an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services.

Other operating expenses increased $1.9 million, or 17%, in the three months ended March 31, 2022, compared to the same prior-year period, primarily driven by higher expenses in Canada.

Other SG&A expenses increased $1.0 million, or 23%, in the three months ended March 31, 2022, compared to the same prior-year period, primarily driven by higher expenses in Canada.

Other Adjusted OIBDA was $0.6 million compared to an Adjusted OIBDA loss of $2.0 million in the same prior-year period, due primarily to an increase in average revenue per display (yield).

Total Other revenues increased $8.5 million, or 44%, in the three months ended June 30, 2022, and increased $14.0 million, or 42%, in the six months ended June 30, 2022, compared to the same prior-year periods, reflecting an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services.

In the three and six months ended June 30, 2021, non-organic revenues exclude the impact of foreign currency exchange rates.

Other operating expenses increased $1.5 million, or 12%, in the three months ended June 30, 2022, and increased $3.4 million, or 14%, in the six months ended June 30, 2022, compared to the same prior-year periods, primarily driven by higher expenses in Canada.

Other SG&A expenses increased $0.8 million, or 17%, in the three months ended June 30, 2022, and increased $1.8 million, or 20%, in the six months ended June 30, 2022, compared to the same prior-year periods, primarily driven by higher expenses in Canada.

Other Adjusted OIBDA increased $6.2 million in the three months ended June 30, 2022, compared to the same prior-year period, due primarily to an increase in average revenue per display (yield).

Other Adjusted OIBDA was $8.4 million in the six months ended June 30, 2022, compared to an Adjusted OIBDA loss of $0.4 million in the same prior-year period, due primarily to an increase in average revenue per display (yield).

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

Corporate expenses, excluding stock-based compensation, were $10.5 million in the three months ended March 31, 2022, compared to $11.5 million in the same prior-year period, primarily due to the impact of market fluctuations on an equity-linked retirement plan offered by the Company to certain employees, partially offset by higher compensation-related expenses, including salaries and bonuses.

Corporate expenses, excluding stock-based compensation, were $11.7 million in the three months ended June 30, 2022, compared to $12.2 million in the same prior-year period, primarily due to the impact of market fluctuations on an equity-linked retirement plan offered by the Company to certain employees, partially offset by higher compensation-related expenses, including salaries, and higher professional fees.

Corporate expenses, excluding stock-based compensation, were $22.2 million in the six months ended June 30, 2022, compared to $23.7 million in the same prior-year period, primarily due to the impact of market fluctuations on an equity-linked retirement plan offered by the Company to certain employees, partially offset by higher compensation-related expenses, including salaries and bonuses, and higher professional fees.

Liquidity and Capital Resources

(in millions, except percentages) March 31,

(in millions, except percentages) June 30,

2022 December 31, 2021 % Change

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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 decrease in working capital as of March 31, 2022, compared to as of December 31, 2021, is primarily driven by lower cash and accounts receivable balances due to seasonal advertising patterns and influences on advertising markets as advertisers

adjust their spending following the holiday shopping season, partially offset by lower accrued compensation and accrued interest due to the timing of payments.

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 and the current economic environment 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” section of this MD&A.)

Working capital was a deficit of $64.2 million as of June 30, 2022, compared to working capital of $269.6 million as of December 31, 2021, is primarily driven by lower cash due to acquisitions (see Note 12.

Acquisitions to the Consolidated

Financial Statements) and lower accounts receivable balances due to seasonal advertising patterns and influences on advertising markets, partially offset by lower accrued compensation due to the timing of payments.

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

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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 three months ended March 31, 2022, and it is unlikely we will recoup equipment deployment costs in the remainder of 2022.

We did not recoup any equipment deployment costs in six months ended June 30, 2022, and it is unlikely we will recoup equipment deployment costs in the remainder of 2022.

For the full year of 2022, we expect our MTA equipment deployment costs to be approximately $125.0 million.

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

As of March 31, 2022, 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.

As of June 30, 2022, we have issued surety bonds in favor of the MTA totaling approximately $136.0 million, which amount is subject to change as equipment installations are completed and revenues are generated.

We expect transit franchise expenses, as a percentage of revenues, to 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 $16.9 million related to MTA equipment deployment costs in the three months ended March 31, 2022 (which includes equipment deployment costs related to future deployments), for a total of $463.9 million to date, of which $33.9 million had been recouped from incremental revenues to date and as of March 31, 2022, $48.5 million has been funded by the MTA.

As of March 31, 2022, 12,479 digital displays had been installed, of which 1,387 installations occurred in the three months ended March 31, 2022.

(See the “Overview—COVID-19 Impact” section of this MD&A.) As indicated in the table below, we incurred $52.4 million related to MTA equipment deployment costs in the six months ended June 30, 2022 (which includes equipment deployment costs related to future deployments), for a total of $499.4 million to date, of which $33.9 million had been recouped from incremental revenues to date and as of June 30, 2022, $49.1 million has been funded by the MTA.

As of June 30, 2022, 13,161 digital displays had been installed, composed of 4,749 digital advertising screens on subway and train platforms and entrances, 4,292 smaller-format digital advertising screens on rolling stock and 4,120 MTA communications displays.

In the three months ended June 30, 2022, 682 installations occurred, for a total of 2,069 installations occurring in the six months ended June 30, 2022.

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

Three months ended March 31, 2022:

Six months ended June 30, 2022:

Prepaid MTA equipment deployment costs $ 279.8 $ 48.1 $ — $ — $ 327.9

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Total $ 291.0 $ 95.9 $ (29.0) $ (9.9) $ 348.0

On May 2, 2022, we announced that our board of directors approved a quarterly cash dividend of $0.30 per share on our common stock, payable on June 30, 2022, to stockholders of record at the close of business on June 3, 2022.

On August 3, 2022, we announced that our board of directors approved a quarterly cash dividend of $0.30 per share on our common stock, payable on September 30, 2022, to stockholders of record at the close of business on September 2, 2022.

Debt, net, consists of the following:

(in millions, except percentages) March 31,

(in millions, except percentages) June 30,

2022 December 31,

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Total $ 3,412.7 $ 124.8 $ 245.3 $ 1,207.8 $ 1,834.8

The interest rate on the term loan due in 2026 (the “Term Loan”) was 2.2% per annum as of March 31, 2022.

As of March 31, 2022, a discount of $1.7 million on the Term Loan remains unamortized.

The interest rate on the term loan due in 2026 (the “Term Loan”) was 3.4% per annum as of June 30, 2022.

As of June 30, 2022, a discount of $1.6 million on the Term Loan remains unamortized.

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

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

As of March 31, 2022, there were no outstanding borrowings under the Revolving Credit Facility.

The commitment fee based on the amount of unused commitments under the Revolving Credit Facility was $0.4 million in each of the three months ended March 31, 2022, and 2021.

As of March 31, 2022, we had issued letters of credit totaling approximately $4.1 million against the letter of credit facility sublimit under the Revolving Credit Facility.

As of June 30, 2022, there were no outstanding borrowings under the Revolving Credit Facility.

The commitment fee based on the amount of unused commitments under the Revolving Credit Facility was $0.4 million in the three months ended June 30, 2022, $0.5 million in the three months ended June 30, 2021, $0.8 million in the six months ended June 30, 2022, and $0.9 million in the six months ended June 30, 2021.

As of June 30, 2022, we had issued letters of credit totaling approximately $4.1 million against the letter of credit facility sublimit under the Revolving Credit Facility.

Standalone Letter of Credit Facilities

As of March 31, 2022, we had issued letters of credit totaling approximately $72.7 million under our aggregate $81.0 million standalone letter of credit facilities.

The total fees under the letter of credit facilities were immaterial in each of the three months ended March 31, 2022 and 2021.

As of June 30, 2022, we had issued letters of credit totaling approximately $72.7 million under our aggregate $81.0 million standalone letter of credit facilities.

The total fees under the letter of credit facilities were immaterial in each of the three and six months ended June 30, 2022 and 2021.

Accounts Receivable Securitization Facility

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

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”).

As of June 30, 2022, we have a $150.0 million revolving accounts receivable securitization facility (the “AR Facility”), which terminates in May 2025, unless further extended.

On June 1, 2022, the Company, certain subsidiaries of the Company and MUFG Bank, Ltd.

(“MUFG”) entered into an amendment to the agreements governing the AR Facility, pursuant to which the Company (i) increased the borrowing capacity under the AR Facility from $125.0 million to $150.0 million;

(ii) extended the term of the AR Facility so that it now terminates on May 30, 2025, unless further extended;

and (iii) increased the delinquency and termination ratios under the AR Facility for the tenure of the agreements to provide additional flexibility to the Company.

The amendment to the agreements governing the AR Facility do not change how we account for the AR Facility as a collateralized financing activity.

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 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.

As of March 31, 2022, there were no outstanding borrowings under the AR Facility.

As of March 31, 2022, 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 March 31, 2022, we had approximately $303.2 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 for each of the three months ended March 31, 2022 and 2021.

As of June 30, 2022, there were no outstanding borrowings under the AR Facility.

As of June 30, 2022, borrowing capacity remaining under the AR Facility was $150.0 million based on approximately $319.7 million of accounts receivable that could be used as collateral for the AR Facility in accordance with the agreements governing the AR Facility.

The commitment fee based on the amount of unused commitments under the AR Facility was immaterial for each of the three and six months ended June 30, 2022 and 2021.

Debt Covenants

Our credit agreement, dated as of January 31, 2014 (as amended, supplemented or otherwise modified, the “Credit Agreement”), governing the Senior Credit Facilities, the agreements governing the AR 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, Outfront Media Capital 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.

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 March 31, 2022, our Consolidated Total Leverage Ratio was 5.8 to 1.0 in accordance with the Credit Agreement.

As of June 30, 2022, our Consolidated Total Leverage Ratio was 5.1 to 1.0 in accordance with the Credit Agreement.

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 March 31, 2022, our Consolidated Net Secured Leverage Ratio was 1.0 to 1.0 in accordance with the Credit Agreement.

As of March 31, 2022, we are in compliance with our debt covenants.

As of June 30, 2022, our Consolidated Net Secured Leverage Ratio was 0.9 to 1.0 in accordance with the Credit Agreement.

As of June 30, 2022, we are in compliance with our debt covenants.

Deferred Financing Costs

As of March 31, 2022, we had deferred $28.8 million in fees and expenses associated with the Term Loan, Revolving Credit Facility, AR Facility and our senior unsecured notes.

As of June 30, 2022, we had deferred $27.6 million in fees and expenses associated with the Term Loan, Revolving Credit Facility, AR Facility 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 Facility and our senior unsecured notes.

Interest Rate Swap Agreement

We have an interest rate cash flow swap agreement 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 this swap position was a net liability of approximately $0.1 million as of March 31, 2022, and $0.4 million as of December 31, 2021, and is included in Other current liabilities on our Consolidated Statement of Financial Position.

As of March 31, 2022, under the terms of this 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 0.5% as of March 31, 2022.

We had an interest rate cash flow swap agreement 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, which matured in June 2022.

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

At-the-Market Equity Offering Program

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

No shares were sold under the ATM Program during the three months ended March 31, 2022.

As of March 31, 2022, we had approximately $232.5 million of capacity remaining under the ATM Program.

No shares were sold under the ATM Program during the six months ended June 30, 2022.

As of June 30, 2022, we had approximately $232.5 million of capacity remaining under the ATM Program.

Series A Preferred Stock Issuance

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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.

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 and a share cap as set forth in the Articles.

adjustments and a share cap as set forth in the Articles.

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.

On March 1, 2022, 275,000 shares of Series A Preferred Stock were converted into approximately 17.4 million shares of the Company’s common stock, which included $3.2 million of accrued and unpaid dividends through and including the conversion date that were settled in the Company’s common stock in accordance with the Articles.

As of March 31, 2022, 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 approximately 7.8 million shares.

The following table presents our cash flows in the three months ended March 31, 2022 and 2021.

Three Months Ended

As of June 30, 2022, 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 approximately 7.8 million shares.

The following table presents our cash flows in the six months ended June 30, 2022 and 2021.

Six Months Ended

(in millions, except percentages) 2022 2021 Change

Net cash flow provided by (used for) operating activities $ 20.5 $ (10.8) *

Net cash flow provided by operating activities $ 101.1 $ 13.6 *

Net cash flow used for investing activities (294.4) (77.0) *

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* Calculation is not meaningful.

Cash provided by operating activities was $20.5 million in the three months ended March 31, 2022, compared to Cash used for operating activities of $10.8 million the same prior-year period, due primarily to a lower net loss in 2022 compared to 2021 due to increases in overall demand for our services, partially offset by an increase in accrued expenses and an increase in prepaid MTA equipment deployment costs.

In the three months ended March 31, 2022, we paid net cash of $12.4 million related to MTA equipment deployment costs and installed 1,387 digital displays.

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

Cash used for investing activities decreased $0.5 million, or 2%, in the three months ended March 31, 2022, compared to the same prior-year period, due primarily to lower cash paid for acquisitions and MTA franchise rights and lower proceeds from dispositions.

The following table presents our capital expenditures in the three months ended March 31, 2022 and 2021.

Three Months Ended

Cash provided by operating activities increased $87.5 million in the six months ended June 30, 2022, compared to the same prior-year period, due primarily to higher net income in 2022 compared to 2021 due to increases in overall demand for our services, partially offset by an increase in prepaid MTA equipment deployment costs.

In the six months ended June 30, 2022, we paid net cash of $44.5 million related to MTA equipment deployment costs and installed 2,069 digital displays.

In the six months ended June 30, 2021, we paid net cash of $7.0 million related to MTA equipment deployment costs and installed 441 digital displays.

Cash used for investing activities increased $217.4 million in the six months ended June 30, 2022, compared to the same prior-year period, due primarily to higher cash paid for acquisitions, primarily related to an acquisition in the second quarter of 2022 (see Note 12.

Acquisitions to the Consolidated Financial Statements) and higher cash paid for capital expenses, partially offset by lower cash paid for MTA franchise rights.

The following table presents our capital expenditures in the six months ended June 30, 2022 and 2021.

Six Months Ended

(in millions, except percentages) 2022 2021 Change

1 unchanged sentence

Total capital expenditures $ 41.8 $ 25.5 64

Capital expenditures increased $7.5 million, or 80%, in the three months ended March 31, 2022, compared to the same prior-year period, primarily due to growth in digital displays.

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.

Capital expenditures increased $16.3 million, or 64%, in the six months ended June 30, 2022, compared to the same prior-year period, primarily due to growth in digital displays and increased maintenance spending for billboard display, safety and vehicles upgrades.

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, maintenance, the renovation of certain office facilities, software and technology, and safety-related projects.

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

Cash used for financing activities decreased $49.2 million, or 44%, in the three months ended March 31, 2022, compared to the same prior-year period.

In the three months ended March 31, 2022, we paid total cash dividends of $51.5 million on our common stock, the Series A Preferred Stock and vested restricted share units granted to employees.

In the three months ended March 31, 2021, we made a repayment of $80.0 million under a 364-day uncommitted structured repurchase facility, which expired on June 29, 2021, and paid total cash dividends of $7.3 million on the Series A Preferred Stock and vested restricted share units granted to employees.

Cash paid for income taxes was $2.1 million for in the three months ended March 31, 2022 and $0.5 million in the three months ended March 31, 2021.

Cash used for financing activities decreased $4.7 million, or 4%, in the six months ended June 30, 2022, compared to the same prior-year period.

In the six months ended June 30, 2022, we paid total cash dividends of $102.9 million on our common stock, the Series A Preferred Stock and vested restricted share units granted to employees.

In the six months ended June 30, 2021, we

made a repayment of $80.0 million under a 364-day uncommitted structured repurchase facility, which expired on June 29, 2021, and paid total cash dividends of $14.3 million on the Series A Preferred Stock and vested restricted share units granted to employees.

Cash paid for income taxes was $2.9 million for in the six months ended June 30, 2022 and $1.4 million in the six months ended June 30, 2021.

Off-Balance Sheet Arrangements

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

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

• Declines in advertising and general economic conditions, including declines caused by the COVID-19 pandemic and the current heightened levels of inflation;

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

43 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis