Item 1. Financial Statements
Item 1. Financial Statements.
OUTFRONT Media Inc.
Consolidated Statements of Financial Position
(Unaudited)
As of
(in millions) June 30,
2022 December 31,
2021
Assets:
Current assets:
Cash and cash equivalents $ 117.0 $ 424.8
Receivables, less allowance ($ 19.6 in 2022 and $ 18.5 in 2021)
288.4 310.5
Prepaid lease and franchise costs 7.5 12.5
Other prepaid expenses 20.1 17.8
Other current assets 8.8 11.7
Total current assets 441.8 777.3
Property and equipment, net (Note 4) 679.6 647.9
Goodwill 2,077.5 2,077.8
Intangible assets (Note 5) 806.6 614.9
Operating lease assets (Note 6) 1,531.2 1,485.5
Prepaid MTA equipment deployment costs (Note 17) 327.9 279.8
Other assets 44.4 41.5
Total assets $ 5,909.0 $ 5,924.7
Liabilities:
Current liabilities:
Accounts payable $ 57.9 $ 64.9
Accrued compensation 54.4 74.5
Accrued interest 30.8 30.7
Accrued lease and franchise costs 58.9 60.1
Other accrued expenses 45.4 40.3
Deferred revenues 41.9 30.9
Short-term operating lease liabilities (Note 6) 196.9 187.5
Other current liabilities 19.8 18.8
Total current liabilities 506.0 507.7
Long-term debt, net (Note 9) 2,623.3 2,620.6
Deferred income tax liabilities, net 16.6 17.2
Asset retirement obligation (Note 7) 37.3 36.4
Operating lease liabilities (Note 6) 1,345.6 1,308.4
Other liabilities 40.9 43.9
Total liabilities 4,569.7 4,534.2
Commitments and contingencies (Note 17)
Preferred stock (2022 - 50.0 shares authorized, and 0.1 shares of Series A Preferred Stock issued and outstanding; 2021 - 50.0 shares authorized, and 0.4 shares of Series A Preferred Stock issued and outstanding) (Note 10)
119.8 383.4
Stockholders’ equity (Note 10):
Common stock (2022 - 450.0 shares authorized, and 164.0 shares issued and outstanding; 2021 - 450.0 shares authorized, and 145.6 issued and outstanding)
1.6 1.5
Additional paid-in capital 2,399.8 2,119.0
Distribution in excess of earnings ( 1,180.4 ) ( 1,122.0 )
Accumulated other comprehensive loss ( 5.6 ) ( 4.4 )
Total stockholders’ equity 1,215.4 994.1
Non-controlling interests 4.1 13.0
Total equity 1,339.3 1,390.5
Total liabilities and equity $ 5,909.0 $ 5,924.7
See accompanying notes to unaudited consolidated financial statements.
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OUTFRONT Media Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
(in millions, except per share amounts) 2022 2021 2022 2021
Revenues:
Billboard $ 354.0 $ 287.3 $ 652.2 $ 510.9
Transit and other 96.2 53.7 171.5 89.3
Total revenues 450.2 341.0 823.7 600.2
Expenses:
Operating 226.5 189.6 439.3 367.2
Selling, general and administrative 106.9 88.9 205.3 165.4
Net (gain) loss on dispositions 0.2 ( 2.9 ) ( 0.1 ) ( 3.2 )
Depreciation 19.4 20.0 38.7 40.0
Amortization 17.3 16.3 32.1 32.7
Total expenses 370.3 311.9 715.3 602.1
Operating income (loss) 79.9 29.1 108.4 ( 1.9 )
Interest expense, net ( 31.6 ) ( 32.1 ) ( 62.3 ) ( 66.7 )
Loss on extinguishment of debt — — — ( 6.3 )
Other income, net 0.1 — — —
Income (loss) before benefit (provision) for income taxes and equity in earnings of investee companies 48.4 ( 3.0 ) 46.1 ( 74.9 )
Benefit (provision) for income taxes ( 1.2 ) 2.4 0.9 7.1
Equity in earnings of investee companies, net of tax 1.2 ( 0.1 ) 1.5 ( 0.5 )
Net income (loss) before allocation to non-controlling interests 48.4 ( 0.7 ) 48.5 ( 68.3 )
Net income attributable to non-controlling interests 0.4 0.2 0.6 0.3
Net income (loss) attributable to OUTFRONT Media Inc. $ 48.0 $ ( 0.9 ) $ 47.9 $ ( 68.6 )
Net income (loss) per common share:
Basic $ 0.28 $ ( 0.05 ) $ 0.25 $ ( 0.57 )
Diluted $ 0.28 $ ( 0.05 ) $ 0.25 $ ( 0.57 )
Weighted average shares outstanding:
Basic 164.0 145.6 158.0 145.2
Diluted 164.6 145.6 158.8 145.2
See accompanying notes to unaudited consolidated financial statements.
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OUTFRONT Media Inc.
Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
(in millions) 2022 2021 2022 2021
Net income (loss) before allocation to non-controlling interests $ 48.4 $ ( 0.7 ) $ 48.5 $ ( 68.3 )
Net income attributable to non-controlling interests 0.4 0.2 0.6 0.3
Net income (loss) attributable to OUTFRONT Media Inc. 48.0 ( 0.9 ) 47.9 ( 68.6 )
Other comprehensive income (loss), net of tax:
Cumulative translation adjustments ( 4.3 ) 2.4 ( 1.6 ) 3.7
Change in fair value of interest rate swap agreements 0.1 1.4 0.4 2.6
Total other comprehensive income (loss), net of tax ( 4.2 ) 3.8 ( 1.2 ) 6.3
Total comprehensive income (loss) $ 43.8 $ 2.9 $ 46.7 $ ( 62.3 )
See accompanying notes to unaudited consolidated financial statements.
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OUTFRONT Media Inc.
Consolidated Statements of Equity
(Unaudited)
Stockholders’ Equity
(in millions, except per share amounts) Shares of Series A Preferred Stock Series A Preferred Stock ($ 0.01 per share par value)
Shares of Common Stock Common Stock ($ 0.01 per share par value)
Additional Paid-In Capital Distribution in Excess of Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity Non-Controlling Interests Total Equity
Balance as of
March 31, 2021 0.4 $ 383.4 145.5 $ 1.5 $ 2,095.5 $ ( 1,175.1 ) $ ( 15.5 ) $ 906.4 $ 14.4 $ 1,304.2
Net income (loss) — — — — — ( 0.9 ) — ( 0.9 ) 0.2 ( 0.7 )
Other comprehensive income — — — — — — 3.8 3.8 — 3.8
Stock-based payments:
Vested — — 0.1 — — — — — — —
Amortization — — — — 7.5 — — 7.5 — 7.5
Shares paid for tax withholding for stock-based payments — — — — ( 0.2 ) — — ( 0.2 ) — ( 0.2 )
Class A equity interest redemptions — — — — 0.3 — — 0.3 ( 0.3 ) —
Series A Preferred Stock dividends ( 7 %)
— — — — — ( 7.0 ) — ( 7.0 ) — ( 7.0 )
Other — — — — — — — — ( 0.2 ) ( 0.2 )
Balance as of
June 30, 2021 0.4 $ 383.4 145.6 $ 1.5 $ 2,103.1 $ ( 1,183.0 ) $ ( 11.7 ) $ 909.9 $ 14.1 $ 1,307.4
Balance as of
March 31, 2022 0.1 $ 119.8 164.0 $ 1.6 $ 2,391.3 $ ( 1,176.8 ) $ ( 1.4 ) $ 1,214.7 $ 4.4 $ 1,338.9
Net income — — — — — 48.0 — 48.0 0.4 48.4
Other comprehensive loss — — — — — — ( 4.2 ) ( 4.2 ) — ( 4.2 )
Stock-based payments:
Amortization — — — — 8.5 — — 8.5 — 8.5
Series A Preferred Stock dividends ( 7 %)
— — — — — ( 2.2 ) — ( 2.2 ) — ( 2.2 )
Dividends ($ 0.30 per share)
— — — — — ( 49.4 ) — ( 49.4 ) — ( 49.4 )
Other — — — — — — — — ( 0.7 ) ( 0.7 )
Balance as of
June 30, 2022 0.1 $ 119.8 164.0 $ 1.6 $ 2,399.8 $ ( 1,180.4 ) $ ( 5.6 ) $ 1,215.4 $ 4.1 $ 1,339.3
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OUTFRONT Media Inc.
Consolidated Statements of Equity (Continued)
(Unaudited)
Stockholders’ Equity
(in millions, except per share amounts) Shares of Series A Preferred Stock Series A Preferred Stock ($ 0.01 per share par value)
Shares of Common Stock Common Stock ($ 0.01 per share par value)
Additional Paid-In Capital Distribution in Excess of Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity Non-Controlling Interests Total Equity
Balance as of December 31, 2020 0.4 $ 383.4 144.5 $ 1.4 $ 2,090.8 $ ( 1,100.4 ) $ ( 18.0 ) $ 973.8 $ 26.5 $ 1,383.7
Net income (loss) — — — — — ( 68.6 ) — ( 68.6 ) 0.3 ( 68.3 )
Other comprehensive income — — — — — — 6.3 6.3 — 6.3
Stock-based payments:
Vested — — 1.1 0.1 — — — 0.1 — 0.1
Amortization — — — — 13.5 — — 13.5 — 13.5
Shares paid for tax withholding for stock-based payments — — ( 0.5 ) — ( 8.9 ) — — ( 8.9 ) — ( 8.9 )
Class A equity interest redemptions — — 0.5 — 11.0 — — 11.0 ( 11.0 ) —
Series A Preferred Stock dividends ( 7 %)
— — — — — ( 14.0 ) — ( 14.0 ) — ( 14.0 )
Other — — — — ( 3.3 ) — — ( 3.3 ) ( 1.7 ) ( 5.0 )
Balance as of
June 30, 2021 0.4 $ 383.4 145.6 $ 1.5 $ 2,103.1 $ ( 1,183.0 ) $ ( 11.7 ) $ 909.9 $ 14.1 $ 1,307.4
Balance as of December 31, 2021 0.4 $ 383.4 145.6 $ 1.5 $ 2,119.0 $ ( 1,122.0 ) $ ( 4.4 ) $ 994.1 $ 13.0 $ 1,390.5
Net income — — — — — 47.9 — 47.9 0.6 48.5
Other comprehensive loss — — — — — — ( 1.2 ) ( 1.2 ) — ( 1.2 )
Stock-based payments:
Vested — — 1.0 — — — — — — —
Amortization — — — — 16.4 — — 16.4 — 16.4
Shares paid for tax withholding for stock-based payments — — ( 0.4 ) — ( 10.9 ) — — ( 10.9 ) — ( 10.9 )
Series A Preferred Stock conversions ( 0.3 ) ( 266.8 ) 17.4 0.1 266.7 — — 266.8 — —
Class A equity interest redemptions — — 0.4 — 8.6 — — 8.6 ( 8.6 ) —
Series A Preferred Stock dividends ( 7 %)
— 3.2 — — — ( 7.6 ) — ( 7.6 ) — ( 4.4 )
Dividends ($ 0.60 per share)
— — — — — ( 98.7 ) — ( 98.7 ) — ( 98.7 )
Other — — — — — — — — ( 0.9 ) ( 0.9 )
Balance as of
June 30, 2022 0.1 $ 119.8 164.0 $ 1.6 $ 2,399.8 $ ( 1,180.4 ) $ ( 5.6 ) $ 1,215.4 $ 4.1 $ 1,339.3
See accompanying notes to unaudited consolidated financial statements.
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OUTFRONT Media Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30,
(in millions) 2022 2021
Operating activities:
Net income (loss) attributable to OUTFRONT Media Inc.
$ 47.9 $ ( 68.6 )
Adjustments to reconcile net income (loss) to net cash flow provided by operating activities:
Net income attributable to non-controlling interests 0.6 0.3
Depreciation and amortization 70.8 72.7
Deferred tax benefit ( 2.5 ) ( 7.1 )
Stock-based compensation 16.4 13.5
Provision (recovery) for doubtful accounts 1.7 ( 4.4 )
Accretion expense 1.4 1.3
Net gain on dispositions ( 0.1 ) ( 3.2 )
Loss on extinguishment of debt — 6.3
Equity in earnings of investee companies, net of tax ( 1.5 ) 0.5
Distributions from investee companies 0.4 0.4
Amortization of deferred financing costs and debt discount and premium 3.3 3.8
Change in assets and liabilities, net of investing and financing activities:
Decrease in receivables 20.1 10.7
Increase in prepaid MTA equipment deployment costs ( 48.1 ) ( 25.0 )
Decrease in prepaid expenses and other current assets 4.5 10.2
Decrease in accounts payable and accrued expenses ( 24.9 ) ( 18.0 )
Increase in operating lease assets and liabilities 2.9 2.1
Increase in deferred revenues 11.0 14.1
Decrease in income taxes ( 1.3 ) ( 1.3 )
Other, net ( 1.5 ) 5.3
Net cash flow provided by operating activities
101.1 13.6
Investing activities:
Capital expenditures ( 41.8 ) ( 25.5 )
Acquisitions ( 248.6 ) ( 42.7 )
MTA franchise rights ( 5.1 ) ( 10.0 )
Net proceeds from dispositions 1.1 1.2
Net cash flow used for investing activities
( 294.4 ) ( 77.0 )
Financing activities:
Proceeds from long-term debt borrowings — 500.0
Repayments of long-term debt borrowings — ( 500.0 )
Repayments of borrowings under short-term debt facilities — ( 80.0 )
Payments of deferred financing costs ( 0.4 ) ( 7.3 )
Payments of debt extinguishment charges — ( 4.7 )
Taxes withheld for stock-based compensation ( 10.9 ) ( 8.9 )
Dividends ( 102.9 ) ( 14.3 )
Other — ( 3.7 )
Net cash flow used for financing activities
( 114.2 ) ( 118.9 )
Effect of exchange rate changes on cash, cash equivalents and restricted cash
( 0.3 ) 0.9
Net decrease in cash, cash equivalents and restricted cash
( 307.8 ) ( 181.4 )
Cash, cash equivalents and restricted cash at beginning of period
424.8 712.0
Cash, cash equivalents and restricted cash at end of period
$ 117.0 $ 530.6
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OUTFRONT Media Inc.
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
Six Months Ended
June 30,
(in millions) 2022 2021
Supplemental disclosure of cash flow information:
Cash paid for income taxes
$ 2.9 $ 1.4
Cash paid for interest
59.6 57.3
Non-cash investing and financing activities:
Accrued purchases of property and equipment
$ 4.9 $ 6.2
Accrued MTA franchise rights 3.6 4.5
Taxes withheld for stock-based compensation — 0.1
See accompanying notes to unaudited consolidated financial statements.
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OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)
Note 1. Description of Business and Basis of Presentation
Description of Business
OUTFRONT Media Inc. (the “Company”) and its subsidiaries (collectively, “we,” “us” or “our”) is a real estate investment trust (“REIT”), which provides advertising space (“displays”) on out-of-home advertising structures and sites in the United States (the “U.S.”) and Canada. Our inventory consists of billboard displays, which are primarily located on the most heavily traveled highways and roadways in top Nielsen Designated Market Areas (“DMAs”), and transit advertising displays operated under exclusive multi-year contracts with municipalities in large cities across the U.S. and Canada. In total, we have displays in all of the 25 largest markets in the U.S. and approximately 150 markets across the U.S. and Canada. We currently manage our operations through two operating segments—U.S. Billboard and Transit, which is included in our U.S. Media reportable segment, and International.
Basis of Presentation and Use of Estimates
The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission (the “SEC”). In the opinion of our management, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting of normal and recurring adjustments, necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented. These financial statements should be read in conjunction with the more detailed financial statements and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 24, 2022.
The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, including the impact of extraordinary events such as the ongoing novel coronavirus (“COVID-19”) pandemic, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions, including the severity and duration of the COVID-19 pandemic.
The COVID-19 pandemic and the related preventative measures taken to help curb the spread, have had, and may continue to have, a significant impact on the global economy and our business. 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.
Note 2. New Accounting Standards
Recent Pronouncements
In March 2020, the Financial Accounting Standards Board (“FASB”) issued guidance providing optional expedients and exceptions for accounting for contracts, hedging relationships and other transactions that reference to the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. The guidance is effective for all entities as of March 12, 2020, through December 31, 2022. We do not expect this guidance to impact our accounting for our existing debt and hedging instruments.
In October 2021, the FASB issued guidance on the recognition and measurement of contract assets and contract liabilities acquired in a business combination. At the acquisition date, the acquirer should account for the related revenue contracts as if it had originated the contracts. The guidance also provides certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination. This guidance is effective for public entities as of December 15, 2022. We are currently evaluating the impact of this guidance on our consolidated financial statements.
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OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)
Note 3. Restricted Cash
In August 2021, the escrow agreement in connection with one of our transit franchise contracts, which required us to deposit funds into an escrow account to fund capital expenditures over the term of the transit franchise contract, was terminated. As of June 30, 2022, we have no restricted cash.
As of
(in millions) June 30,
2022 June 30,
2021 December 31, 2021
Cash and cash equivalents $ 117.0 $ 529.0 $ 424.8
Restricted cash — 1.6 —
Cash, cash equivalents and restricted cash $ 117.0 $ 530.6 $ 424.8
Note 4. Property and Equipment, Net
The table below presents the balances of major classes of assets and accumulated depreciation.
As of
(in millions) Estimated Useful Lives June 30,
2022 December 31,
2021
Land $ 113.7 $ 102.9
Buildings 15 to 35 years
56.5 50.3
Advertising structures 3 to 20 years
1,975.8 1,937.4
Furniture, equipment and other 3 to 10 years
178.5 171.3
Construction in progress 39.3 38.7
2,363.8 2,300.6
Less: Accumulated depreciation 1,684.2 1,652.7
Property and equipment, net $ 679.6 $ 647.9
Depreciation expense was $ 19.4 million in the three months ended June 30, 2022, $ 20.0 million in the three months ended June 30, 2021, $ 38.7 million in the six months ended June 30, 2022, and $ 40.0 million in the six months ended June 30, 2021.
Note 5. Intangible Assets
Our identifiable intangible assets primarily consist of acquired permits and leasehold agreements, and franchise agreements, which grant us the right to operate out-of-home structures in specified locations and the right to provide advertising space on railroad and municipal transit properties. Identifiable intangible assets are amortized on a straight-line basis over their estimated useful life, which is the respective life of the agreement that in some cases includes historical experience of renewals.
Our identifiable intangible assets consist of the following:
(in millions) Gross Accumulated Amortization Net
As of June 30, 2022:
Permits and leasehold agreements $ 1,522.0 $ ( 839.8 ) $ 682.2
Franchise agreements 532.3 ( 409.8 ) 122.5
Other intangible assets 4.9 ( 3.0 ) 1.9
Total intangible assets $ 2,059.2 $ ( 1,252.6 ) $ 806.6
As of December 31, 2021:
Permits and leasehold agreements $ 1,303.6 $ ( 816.5 ) $ 487.1
Franchise agreements 528.2 ( 402.7 ) 125.5
Other intangible assets 4.9 ( 2.6 ) 2.3
Total intangible assets $ 1,836.7 $ ( 1,221.8 ) $ 614.9
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OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)
In the six months ended June 30, 2022, we acquired approximately 1,000 displays, resulting in amortizable intangible assets for permits and leasehold agreements of $ 220.0 million, which are amortized using the straight-line method over their estimated useful lives, an average period of 16.5 years.
All of our intangible assets, except goodwill, are subject to amortization. Amortization expense was $ 17.3 million in the three months ended June 30, 2022, $ 16.3 million in the three months ended June 30, 2021, $ 32.1 million in the six months ended June 30, 2022, and $ 32.7 million in the six months ended June 30, 2021.
Note 6. Leases
Lessee
The following table presents our operating lease assets and liabilities:
As of
(in millions, except years and percentages) June 30,
2022 December 31,
2021
Operating lease assets $ 1,531.2 $ 1,485.5
Short-term operating lease liabilities 196.9 187.5
Non-current operating lease liabilities 1,345.6 1,308.4
Weighted-average remaining lease term 10.8 years 10.5 years
Weighted-average discount rate 5.4 % 5.2 %
The components of our lease expenses were as follows:
Three Months Ended Six Months Ended
June 30, June 30,
(in millions) 2022 2021 2022 2021
Operating expenses $ 111.7 $ 99.9 $ 218.4 $ 193.6
Selling, general and administrative expenses 2.7 2.4 5.4 4.5
Variable costs 27.8 19.3 52.8 33.2
For each of the three and six months ended June 30, 2022 and 2021, sublease income was immaterial.
For the six months ended June 30, 2022, cash paid for operating leases was $ 224.7 million and leased assets obtained in exchange for new operating lease liabilities was $ 152.3 million. For the six months ended June 30, 2021, cash paid for operating leases was $ 190.9 million and leased assets obtained in exchange for new operating lease liabilities was $ 139.9 million.
Lessor
We recorded rental income of $ 342.2 million for the three months ended June 30, 2022, $ 277.6 million for the three months ended June 30, 2021, $ 630.5 million for the six months ended June 30, 2022, and $ 493.4 million for the six months ended June 30, 2021, in Revenues on our Consolidated Statement of Operations.
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OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)
Note 7. Asset Retirement Obligation
The following table sets forth the change in the asset retirement obligations associated with our advertising structures located on leased properties. The obligation is calculated based on the assumption that all of our advertising structures will be removed within the next 50 years. The estimated annual costs to dismantle and remove the structures upon the termination or non-renewal of our leases are consistent with our historical experience.
(in millions)
As of December 31, 2021 $ 36.4
Accretion expense 1.4
Additions 0.4
Liabilities settled ( 0.9 )
As of June 30, 2022 $ 37.3
Note 8. Related Party Transactions
We have a 50 % ownership interest in two joint ventures that operate transit shelters in the greater Los Angeles area and Vancouver, and four joint ventures which currently operate a total of seven billboard displays in New York and Boston. All of these joint ventures are accounted for as equity investments. These investments totaled $ 12.2 million as of June 30, 2022, and $ 11.2 million as of December 31, 2021, and are included in Other assets on the Consolidated Statements of Financial Position. We provided sales and management services to these joint ventures and recorded management fees in Revenues on the Consolidated Statement of Operations of $ 2.3 million in the three months ended June 30, 2022, $ 1.3 million in the three months ended June 30, 2021, $ 4.0 million in the six months ended June 30, 2022, and $ 2.4 million in the six months ended June 30, 2021.
Note 9. Debt
Debt, net, consists of the following:
As of
(in millions, except percentages) June 30,
2022 December 31,
2021
Long-term debt:
Term loan, due 2026 $ 598.4 $ 598.2
Senior unsecured notes:
6.250 % senior unsecured notes, due 2025
400.0 400.0
5.000 % senior unsecured notes, due 2027
650.0 650.0
4.250 % senior unsecured notes, due 2029
500.0 500.0
4.625 % senior unsecured notes, due 2030
500.0 500.0
Total senior unsecured notes 2,050.0 2,050.0
Debt issuance costs ( 25.1 ) ( 27.6 )
Total long-term debt, net 2,623.3 2,620.6
Total debt, net $ 2,623.3 $ 2,620.6
Weighted average cost of debt 4.6 % 4.3 %
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OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)
Term Loan
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.
Revolving Credit Facility
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 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 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 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 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”). The SPVs are separate legal entities with their own separate creditors who will be entitled to access the SPVs’ assets before the assets become available to the Company. Accordingly, the SPVs’ assets are not available to pay creditors of the Company or any of its subsidiaries, although collections from the receivables in excess of amounts required to repay the Purchasers and other creditors of the SPVs may be remitted to the Company. Outfront Media LLC will service the accounts receivables on behalf of the SPVs for a fee. The Company has agreed to guarantee the performance of the Originators and Outfront Media LLC, in its capacity as servicer, of their respective obligations under the agreements governing the AR Facility. Neither the Company, the Originators nor the SPVs guarantee the collectability of the receivables under the AR Facility. 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 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
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OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)
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. One of the exceptions to the restriction on our ability to incur additional indebtedness is satisfaction of a Consolidated Total Leverage Ratio, which is the ratio of our consolidated total debt to our Consolidated EBITDA (as defined in the Credit Agreement) for the trailing four consecutive quarters, of no greater than 6.0 to 1.0. As of June 30, 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 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 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 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.
Fair Value
Under the fair value hierarchy, observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities are defined as Level 1; observable inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for the asset or liability are defined as Level 2; and unobservable inputs for the asset or liability are defined as Level 3. The aggregate fair value of our debt, which is estimated based on quoted market prices of similar liabilities, was approximately $ 2.4 billion as of June 30, 2022, and $ 2.7 billion as of December 31, 2021. The fair value of our debt as of both June 30, 2022, and December 31, 2021, is classified as Level 2. The aggregate fair value loss associated with our interest rate cash flow swap agreement was approximately $ 0.4 million as of December 31, 2021. The aggregate fair value of our interest rate cash flow swap agreement as of December 31, 2021, was classified as Level 2.
Note 10. Equity
As of June 30, 2022, 450,000,000 shares of our common stock, par value $ 0.01 per share, were authorized, of which 164,046,342 shares were issued and outstanding; and 50,000,000 shares of our preferred stock, par value $ 0.01 per share, were authorized, of which 125,000 shares of Series A Convertible Perpetual Preferred Stock (the “Series A Preferred Stock”), par value $ 0.01 per share, were issued and outstanding.
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Notes to Consolidated Financial Statements
(Unaudited)
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. 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. 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. During the three months ended June 30, 2022, we paid cash dividends of $ 2.2 million on the Series A Preferred Stock and during the six months ended June 30, 2022, we paid cash dividends of $ 4.4 million on the Series A Preferred Stock. 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.
In connection with the acquisition of outdoor advertising assets in Canada in June 2017, the Company issued 1,953,407 shares of Class A equity interests of a subsidiary of the Company that controls its Canadian business (“Outfront Canada”), which, among other things, were (i) entitled to receive priority cash distributions from Outfront Canada at the same time and in the same per share amount as the dividends paid on shares of the Company’s common stock, and (ii) redeemable by the holders in exchange for shares of the Company’s common stock on a one-for-one basis. As of June 30, 2022, all Class A equity interests have been redeemed for shares of the Company’s common stock and no Class A equity interests were outstanding. During the six months ended June 30, 2022, we made distributions of $ 0.1 million to holders of the Class A equity interests, which are recorded in Dividends on our Consolidated Statements of Equity and Consolidated Statements of Cash Flows.
We have a sales agreement in connection with an “at-the-market” equity offering program (the “ATM Program”), under which we may, from time to time, issue and sell shares of our common stock up to an aggregate offering price of $ 300.0 million. We have no obligation to sell any of our common stock under the sales agreement and may at any time suspend solicitations and offers under the sales agreement. No shares were sold under the ATM Program during the six months ended June 30, 2022. As of June 30, 2022, we had approximately $ 232.5 million of capacity remaining under the ATM Program.
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 .
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Notes to Consolidated Financial Statements
(Unaudited)
Note 11. Revenues
The following table summarizes revenues by source:
Three Months Ended Six Months Ended
June 30, June 30,
(in millions) 2022 2021 2022 2021
Billboard:
Static displays $ 241.7 $ 208.3 $ 447.7 $ 373.4
Digital displays 99.9 68.9 181.3 118.2
Other 12.4 10.1 23.2 19.3
Billboard revenues 354.0 287.3 652.2 510.9
Transit:
Static displays 55.5 34.6 96.7 58.5
Digital displays 32.2 11.9 58.1 18.3
Other 7.1 6.2 13.5 10.8
Total transit revenues 94.8 52.7 168.3 87.6
Other 1.4 1.0 3.2 1.7
Transit and other revenues 96.2 53.7 171.5 89.3
Total revenues $ 450.2 $ 341.0 $ 823.7 $ 600.2
Rental income was $ 342.2 million in the three months ended June 30, 2022, $ 277.6 million in the three months ended June 30, 2021, $ 630.5 million in the six months ended June 30, 2022, and $ 493.4 million in the six months ended June 30, 2021, and is recorded in Billboard revenues on the Consolidated Statement of Operations.
The following table summarizes revenues by geography:
Three Months Ended Six Months Ended
June 30, June 30,
(in millions) 2022 2021 2022 2021
United States:
Billboard $ 332.1 $ 271.8 $ 615.5 $ 484.3
Transit and other 90.4 50.0 161.2 82.9
Other 1.4 1.0 3.2 1.7
Total United States revenues 423.9 322.8 779.9 568.9
Canada 26.3 18.2 43.8 31.3
Total revenues $ 450.2 $ 341.0 $ 823.7 $ 600.2
We recognized substantially all of the Deferred revenues on the Consolidated Statement of Financial Position as of December 31, 2021, during the three months ended March 31, 2022.
Note 12. Acquisitions
We completed several asset acquisitions for a total purchase price of approximately $ 248.6 million in the six months ended June 30, 2022, and $ 42.7 million in the six months ended June 30, 2021.
In the second quarter of 2022, we completed the acquisition of approximately 950 billboard displays, including 21 digital displays, as well as certain business assets, in Portland, Oregon, and Clark County, Washington, from Pacific Outdoor Advertising, L.L.C., for $ 185.0 million, subject to closing and post-closing adjustments, using cash on hand.
In the second quarter of 2018, we entered into an agreement to acquire 14 digital and seven static billboard displays in California for a total estimated purchase price of $ 35.4 million. In the second quarter of 2019, we completed this acquisition
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Notes to Consolidated Financial Statements
(Unaudited)
except with respect to four digital displays, which we expect to acquire in 2023 for an estimated purchase price of $ 9.2 million, subject to customary closing conditions and the timing of site development.
Note 13. Stock-Based Compensation
The following table summarizes our stock-based compensation expense for 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
Stock-based compensation expenses (restricted share units (“RSUs”) and performance-based RSUs (“PRSUs”)), before income taxes $ 8.5 $ 7.5 $ 16.4 $ 13.5
Tax benefit ( 0.4 ) ( 0.4 ) ( 0.8 ) ( 0.7 )
Stock-based compensation expense, net of tax $ 8.1 $ 7.1 $ 15.6 $ 12.8
As of June 30, 2022, total unrecognized compensation cost related to non-vested RSUs and PRSUs was $ 47.1 million, which is expected to be recognized over a weighted average period of 1.9 years.
RSUs and PRSUs
The following table summarizes activity for the six months ended June 30, 2022, of RSUs and PRSUs issued to our employees.
Activity Weighted Average Per Share Grant Date Fair Market Value
Non-vested as of December 31, 2021 2,447,246 $ 23.18
Granted:
RSUs 959,628 24.96
PRSUs 482,618 24.42
Vested:
RSUs ( 746,663 ) 24.14
PRSUs ( 293,773 ) 21.65
Forfeitures:
RSUs ( 29,901 ) 24.40
PRSUs ( 3,061 ) 26.60
Non-vested as of June 30, 2022 2,816,094 23.80
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OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)
Note 14. Retirement Benefits
The following table presents the components of net periodic pension cost and amounts recognized in other comprehensive income (loss) for our pension plans:
Three Months Ended Six Months Ended
June 30, June 30,
(in millions) 2022 2021 2022 2021
Components of net periodic pension cost:
Service cost $ — $ 0.1 $ — $ 0.2
Interest cost 0.5 0.7 1.0 1.2
Expected return on plan assets ( 0.7 ) ( 1.0 ) ( 1.4 ) ( 1.8 )
Amortization of net actuarial losses (a)
— 0.2 — 0.4
Net periodic pension cost $ ( 0.2 ) $ — $ ( 0.4 ) $ —
(a) Reflects amounts reclassified from accumulated other comprehensive income to net income.
In the six months ended June 30, 2022, we contributed $ 0.1 million to our defined benefit pension plans. In 2022, we expect to contribute approximately $ 0.2 million to our defined benefit pension plans.
Note 15. Income Taxes
We are organized in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”) and, accordingly, we have not provided for U.S. federal income tax on our REIT taxable income that we distribute to our stockholders. We have elected to treat our subsidiaries that participate in certain non-REIT qualifying activities as TRSs. As such, we have provided for their federal, state and foreign income taxes.
Tax years 2018 to present are open for examination by the tax authorities.
Our effective income tax rate represents a combined annual effective tax rate for federal, state, local and foreign taxes applied to interim operating results.
In the three and six months ended June 30, 2022 and 2021, our effective tax rate differed from the U.S. federal statutory income tax rate primarily due to our REIT status, including the dividends paid deduction, the impact of state and local taxes, and the effect of foreign operations.
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Notes to Consolidated Financial Statements
(Unaudited)
Note 16. Earnings Per Share (“EPS”)
Three Months Ended Six Months Ended
June 30, June 30,
(in millions) 2022 2021 2022 2021
Net income (loss) available for common stockholders $ 48.0 $ ( 0.9 ) $ 47.9 $ ( 68.6 )
Less: Distributions to holders of Series A Preferred Stock
2.2 7.0 7.6 14.0
Less: Distributions to holders of Class A equity interests of a subsidiary
— — 0.1 —
Net income (loss) available for common stockholders, basic and diluted $ 45.8 $ ( 7.9 ) $ 40.2 $ ( 82.6 )
Weighted average shares for basic EPS 164.0 145.6 158.0 145.2
Dilutive potential shares from grants of RSUs, PRSUs and stock options (a)
0.6 — 0.8 —
Weighted average shares for basic and diluted EPS 164.6 145.6 158.8 145.2
(a) The potential impact of 1.1 million granted RSUs and PRSUs in the three months ended June 30, 2022 , 1.3 million granted RSUs and PRSUs in the three months ended June 30, 2021, and 1.3 million granted RSUs, PRSUs and stock options in the six months ended June 30, 2021, were antidilutive. The potential impact of antidilutive granted RSUs and PRSUs in the six months ended June 30, 2022, was immaterial.
(b) The potential impact of 7.8 million shares of our common stock issuable upon conversion of the Series A Preferred Stock in the three months ended June 30, 2022, 25.0 million shares of our common stock issuable upon conversion of the Series A Preferred Stock in the three months ended June 30, 2021, 13.4 million shares of our common stock issuable upon conversion of the Series A Preferred Stock in the six months ended June 30, 2022, and 25.0 million shares of our common stock issuable upon conversion of the Series A Preferred Stock in the six months ended June 30, 2021, were antidilutive.
(c) The potential impact of 0.4 million of Class A equity interests of Outfront Canada in the three months ended June 30, 2021 , 0.2 million of Class A equity interests of Outfront Canada in the six months ended June 30, 2022, and 0.6 million of Class A equity interests of Outfront Canada in the six months ended June 30, 2021, was antidilutive. (See Note 10. Equity to the Consolidated Financial Statements.)
Note 17. Commitments and Contingencies
Off-Balance Sheet Arrangements
Our off-balance sheet commitments primarily consist of guaranteed minimum annual payments. These arrangements result from our normal course of business and represent obligations that are payable over several years.
Contractual Obligations
We have agreements with municipalities and transit operators that 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.
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”).
• 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 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
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Notes to Consolidated Financial Statements
(Unaudited)
business, financial condition and results of operations. 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 the six months ended June 30, 2022, and it is unlikely we will recoup equipment deployment costs in the remainder of 2022.
• Payments . 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.
• Term . 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.
During the six months ended June 30, 2022, we had no recoupment from incremental revenues 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
Six months ended June 30, 2022:
Prepaid MTA equipment deployment costs $ 279.8 $ 48.1 $ — $ — $ 327.9
Other current assets 5.2 0.1 ( 3.7 ) — 1.6
Intangible assets (franchise agreements) 63.0 4.2 — ( 2.5 ) 64.7
Total $ 348.0 $ 52.4 $ ( 3.7 ) $ ( 2.5 ) $ 394.2
Year ended December 31, 2021:
Prepaid MTA equipment deployment costs $ 204.6 $ 75.2 $ — $ — $ 279.8
Other current assets 28.0 6.2 ( 29.0 ) — 5.2
Intangible assets (franchise agreements) 58.4 14.5 — ( 9.9 ) 63.0
Total $ 291.0 $ 95.9 $ ( 29.0 ) $ ( 9.9 ) $ 348.0
Letters of Credit
We have indemnification obligations with respect to letters of credit and surety bonds primarily used as security against non-performance in the normal course of business. As of June 30, 2022, the outstanding letters of credit were approximately $ 76.8 million and outstanding surety bonds were approximately $ 167.1 million, and were not recorded on the Consolidated Statements of Financial Position.
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Notes to Consolidated Financial Statements
(Unaudited)
Legal Matters
On an ongoing basis, we are engaged in lawsuits and governmental proceedings and respond to various investigations, inquiries, notices and claims from national, state and local governmental and other authorities (collectively, “litigation”). Litigation is inherently uncertain and always difficult to predict. Although it is not possible to predict with certainty the eventual outcome of any litigation, in our opinion, none of our current litigation is expected to have a material adverse effect on our results of operations, financial position or cash flows.
Note 18. Segment Information
We currently manage our operations through two operating segments—U.S. Billboard and Transit, which is included in our U.S. Media reportable segment, and International. International does not meet the criteria to be a reportable segment and accordingly, is included in Other .
The following tables set forth our financial performance by segment.
Three Months Ended Six Months Ended
June 30, June 30,
(in millions) 2022 2021 2022 2021
Revenues:
U.S. Media $ 422.5 $ 321.8 $ 776.7 $ 567.2
Other 27.7 19.2 47.0 33.0
Total revenues $ 450.2 $ 341.0 $ 823.7 $ 600.2
We present Operating income (loss) before Depreciation , Amortization , Net (gain) loss on dispositions and Stock-based compensation (“Adjusted OIBDA”) as the primary measure of profit and loss for our operating segments.
Three Months Ended Six Months Ended
June 30, June 30,
(in millions) 2022 2021 2022 2021
Net income (loss) before allocation to non-controlling interests $ 48.4 $ ( 0.7 ) $ 48.5 $ ( 68.3 )
(Benefit) provision for income taxes 1.2 ( 2.4 ) ( 0.9 ) ( 7.1 )
Equity in earnings of investee companies, net of tax ( 1.2 ) 0.1 ( 1.5 ) 0.5
Interest expense, net 31.6 32.1 62.3 66.7
Loss on extinguishment of debt — — — 6.3
Other income, net ( 0.1 ) — — —
Operating income (loss) 79.9 29.1 108.4 ( 1.9 )
Net (gain) loss on dispositions 0.2 ( 2.9 ) ( 0.1 ) ( 3.2 )
Depreciation and amortization 36.7 36.3 70.8 72.7
Stock-based compensation 8.5 7.5 16.4 13.5
Total Adjusted OIBDA $ 125.3 $ 70.0 $ 195.5 $ 81.1
Adjusted OIBDA:
U.S. Media $ 129.2 $ 80.6 $ 209.3 $ 105.2
Other 7.8 1.6 8.4 ( 0.4 )
Corporate ( 11.7 ) ( 12.2 ) ( 22.2 ) ( 23.7 )
Total Adjusted OIBDA $ 125.3 $ 70.0 $ 195.5 $ 81.1
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Notes to Consolidated Financial Statements
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
(in millions) 2022 2021 2022 2021
Operating income (loss):
U.S. Media $ 95.3 $ 47.3 $ 144.6 $ 38.7
Other 4.8 1.5 2.4 ( 3.4 )
Corporate ( 20.2 ) ( 19.7 ) ( 38.6 ) ( 37.2 )
Total operating income (loss) $ 79.9 $ 29.1 $ 108.4 $ ( 1.9 )
Net gain (loss) on dispositions:
U.S. Media $ 0.2 $ 0.1 $ ( 0.1 ) $ ( 0.2 )
Other — ( 3.0 ) — ( 3.0 )
Total gain (loss) on dispositions $ 0.2 $ ( 2.9 ) $ ( 0.1 ) $ ( 3.2 )
Depreciation and amortization:
U.S. Media $ 33.7 $ 33.2 $ 64.8 $ 66.7
Other 3.0 3.1 6.0 6.0
Total depreciation and amortization $ 36.7 $ 36.3 $ 70.8 $ 72.7
Capital expenditures:
U.S. Media $ 24.2 $ 15.8 $ 40.3 $ 24.7
Other 0.7 0.3 1.5 0.8
Total capital expenditures $ 24.9 $ 16.1 $ 41.8 $ 25.5
As of
(in millions) June 30,
2022 December 31, 2021
Assets:
U.S. Media $ 5,573.9 $ 5,280.7
Other 247.3 248.1
Corporate 87.8 395.9
Total assets $ 5,909.0 $ 5,924.7
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.