What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-04 compared with 2022-08-04 · 165 added, 162 removed, 514 unchanged (39% of the section changed)

25 unchanged sentences

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 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 19% of its revenues in the New York City metropolitan area in the three months ended September 30, 2022, 18% in the three months ended September 30, 2021, 19% in the nine months ended September 30, 2022, and 15% in the nine months ended September 30, 2021, and generated 15% in the Los Angeles metropolitan area in the three months ended September 30, 2022, 16% in the three months ended September 30, 2021, 16% in the nine months ended September 30, 2022 and 16% in the nine months ended September 30, 2021.

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

Media segment generated $428.0 million of Revenues and $128.2 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.

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

Media segment generated $376.2 million of Revenues and $116.4 million of Adjusted OIBDA.

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

In the nine months ended September 30, 2022, our U.S.

Media segment generated $1,204.7 million of Revenues and $337.5 million of Adjusted OIBDA.

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

In the nine months ended September 30, 2021, our U.S.

Media segment generated $943.4 million of Revenues and $221.6 million of Adjusted OIBDA.

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Other (includes International).

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.

In the three months ended September 30, 2022, Other generated $25.7 million of Revenues and $5.8 million of Adjusted OIBDA.

In the three months ended September 30, 2021, Other generated $23.0 million of Revenues and $4.8 million of Adjusted OIBDA.

In the nine months ended September 30, 2022, Other generated $72.7 million of Revenues and $14.2 million of Adjusted OIBDA.

In the nine months ended September 30, 2021, Other generated $56.0 million of Revenues and $4.4 million of Adjusted OIBDA.

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 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 be comparable to 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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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.

We expect total expenses to increase in 2022 as compared to 2021, and be comparable to 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 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.

Results for the three and nine months ended September 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 and supply chain disruptions and heightened levels of inflation as described below.

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, supply chain disruptions and heightened levels of inflation as described in this MD&A.

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

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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.

and abroad, we have also experienced increases with respect to our posting, maintenance and other expenses, our corporate expenses and our interest expense, 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.

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We have built or converted 71 new digital billboard 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.

and 6 new digital billboard displays in Canada during the nine months ended September 30, 2022.

Additionally, in the nine months ended September 30, 2022, we entered into marketing arrangements to sell advertising on 32 third-party digital billboard displays in the U.S.

In the nine months ended September 30, 2022, we have built, converted or replaced 2,780 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 Six Months Ended

June 30, 2022 (a)

for the Nine Months Ended

September 30, 2022 (a)

Number of Digital Displays as of

June 30, 2022 (a)

September 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 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.

During the three months ended September 30, 2022, our largest categories of advertisers were Entertainment, Retail and Health/Medical, each of which represented approximately 20%, 10% and 9% of our total U.S.

Media segment revenues, respectively.

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.

During the three months ended September 30, 2021, our largest categories of advertisers were Entertainment, Health/Medical and Retail, each of which represented approximately 20%, 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.

During the nine months ended September 30, 2022, our largest categories of advertisers were Entertainment, Retail and Health/Medical, each of which represented approximately 21%, 10% and 9% 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.

During the nine months ended September 30, 2021, our largest categories of advertisers were Entertainment, Health/Medical and Retail, each of which represented approximately 17%, 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 June 30, 2022, we generated approximately 42% of our U.S.

In the three months ended September 30, 2022, we generated approximately 45% of our U.S.

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

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

In the nine months ended September 30, 2022, we generated approximately 43% of our U.S.

Media segment revenues from national advertising campaigns compared to approximately 41% in the same prior-year period.

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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 Six Months Ended

June 30, % June 30, %

Three Months Ended Nine Months Ended

September 30, % September 30, %

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

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449.3 398.2 13 1,270.6 997.8 27

Operating income (loss) 79.9 29.1 175 108.4 (1.9) *

Operating income 74.3 65.0 14 182.7 63.1 190

Adjusted OIBDA (b)

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

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

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

to FFO attributable to OUTFRONT Media Inc.

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Reconciliation of Non-GAAP Financial Measures

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

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

to FFO attributable to OUTFRONT Media Inc.

and AFFO attributable to OUTFRONT Media Inc.

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

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

Total revenues $ 453.7 $ 399.2 $ 1,277.4 $ 999.4

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

Operating income $ 74.3 $ 65.0 $ 182.7 $ 63.1

Net (gain) loss on dispositions 0.2 (0.4) 0.1 (3.6)

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

— (3.0) — (3.0)

Stock-based compensation 8.6 7.2 25.0 20.7

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(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.

FFO increased $13.4 million, or 18%, in the three months ended September 30, 2022, compared to the same prior-year period, due primarily to higher operating income and higher amortization of real estate-related intangible assets, partially offset by higher interest expense, net.

FFO increased $138.3 million in the nine months ended September 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 $7.5 million, or 9%, in the three months ended September 30, 2022, and increased $121.1 million in the nine months ended September 30, 2022, compared to the same prior-year periods.

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

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Revenues to the Consolidated Financial Statements.)

Three Months Ended Six Months Ended

June 30, % June 30, %

Three Months Ended Nine Months Ended

September 30, % September 30, %

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

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(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.

Total revenues increased by $54.5 million, or 14%, and organic revenues increased $51.1 million, or 13%, in the three months ended September 30, 2022, compared to the same prior-year period.

Total revenues increased by $278.0 million, or 28%, and organic revenues increased $272.8 million, or 27%, in the nine months ended September 30, 2022, compared to the same prior-year period.

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

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

Total billboard revenues increased $37.6 million, or 12%, in the three months ended September 30, 2022, and increased $178.9 million, or 22%, in the nine months ended September 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 new and lost billboards in the period, including acquisitions.

Organic billboard revenues increased $34.0 million, or 11%, in the three months ended September 30, 2022, and increased $173.4 million, or 21%, in the nine months ended September 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 and the net effect of new and lost billboards in the period, including certain acquisitions.

Total transit and other revenues increased $16.9 million, or 21%, in the three months ended September 30, 2022, compared to the same prior-year period and increased $99.1 million, or 58%, in the nine months ended September 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, %

Organic transit and other revenues increased $17.1 million, or 21%, in the three months ended September 30, 2022, and increased $99.4 million, or 58%, in the nine months ended September 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 Nine Months Ended

September 30, % September 30, %

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

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Operating Expenses

Three Months Ended Six Months Ended

June 30, % June 30, %

Three Months Ended Nine Months Ended

September 30, % September 30, %

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

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Total operating expenses $ 232.6 $ 199.8 16 $ 671.9 $ 567.0 19

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.

Billboard property lease expenses represented 32% of billboard revenues in the three months ended September 30, 2022, 32% in the three months ended September 30, 2021, 33% of billboard revenues in the nine months ended September 30, 2022, and 36% in the nine months ended September 30, 2021.

The decrease in billboard property lease expenses as a percentage of revenues in the nine months ended September 30, 2022, is primarily due to an increase in billboard revenues and the fixed nature of certain billboard property lease expenses (see Note 5.

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.

Transit franchise expenses represented 67% of transit display revenues in the three months ended September 30, 2022, 66% in the three months ended September 30, 2021, 71% of transit display revenues in the nine months ended September 30, 2022, and 87% in the nine months ended September 30, 2021.

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

Billboard property lease and transit franchise expenses increased $23.4 million, or 16%, in the three months ended September 30, 2022, and increased $79.4 million, or 19%, in the nine months ended September 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 13% in the three months ended September 30, 2022, 12% in the three months ended September 30, 2021, 13% in the nine months ended September 30, 2022, and 14% in the nine months ended September 30, 2021.

Posting, maintenance and other expenses increased $9.4 million, or 19%, in the three months ended September 30, 2022, and increased $25.5 million, or 18%, in the nine months ended September 30, 2022, compared to the same prior-year periods, primarily due to higher compensation-related expenses, increased activity resulting in higher production and materials cost, higher posting and rotation costs, and higher maintenance and utilities cost, driven by economic recovery from the COVID-19 pandemic and inflation-driven cost increases in 2022.

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

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.

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.

SG&A expenses represented 23% of Revenues in the three months ended September 30, 2022, 25% of Revenues in the three months ended September 30, 2021, 24% of Revenues in the nine months ended September 30, 2022, and 26% of Revenues in

the same prior-year period.

SG&A expenses increased $8.0 million, or 8%, in the three months ended September 30, 2022, compared to the same prior-year period, primarily due to higher compensation-related expenses, including commissions and salaries, driven by both business performance improvements during the period and the impact of COVID-19 on the third quarter of 2021, a higher provision for doubtful accounts and increased business travel resulting in higher travel and entertainment expenses, partially offset by the impact of market fluctuations on an equity-linked retirement plan offered by the Company to certain employees.

SG&A expenses increased $47.9 million, or 18%, in the nine months ended September 30, 2022, compared to the same prior-year period, primarily due to higher compensation-related expenses, including commissions, salaries and bonuses, driven by both business performance improvements during the period and the impact of COVID-19 on 2021, a higher provision for doubtful accounts, increased post-COVID-19 pandemic travel resulting in higher travel and entertainment expenses, and higher professional fees, 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.

Net loss on dispositions was $0.2 million in the three months ended September 30, 2022, compared to a Net gain on dispositions of $0.4 million in the same prior-year period.

Net loss on dispositions was $0.1 million in the nine months ended September 30, 2022, compared to a Net gain on dispositions of $3.6 million in the same prior-year period.

Depreciation increased $0.3 million, or 2%, in the three months ended September 30, 2022, and decreased $1.0 million, or 2%, in the nine months ended September 30, 2022, compared to the same prior-year periods.

Amortization increased $3.5 million, or 21%, in the three months ended September 30, 2022, compared to the same prior-year period.

Amortization increased $2.9 million, or 6%, in the nine months ended September 30, 2022, compared to the same prior-year period.

The increases were due primarily to higher amortization of leasehold interest intangibles recorded related to asset acquisitions completed during 2021 and 2022.

Interest Expense, Net

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.

Interest expense, net, was $33.6 million (including $1.6 million of deferred financing costs) in the three months ended September 30, 2022, compared to $31.8 million (including $1.7 million of deferred financing costs) in the same prior-year period, primarily due to higher interest rates, partially offset by the impact of interest rate swaps in 2021.

Interest expense, net, was $95.9 million (including $4.9 million of deferred financing costs) in the nine months ended September 30, 2022, and $98.5 million (including $5.5 million of deferred financing costs) in the same prior-year period, primarily due to a lower outstanding average debt balance and the impact of interest rate swaps in 2021, partially offset by higher interest rates.

Loss on Extinguishment of Debt

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.

In the nine months ended September 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.

Benefit for income taxes was $0.3 million in the three months ended September 30, 2022, compared to Provision for income taxes of $1.1 million in the same prior-year period, due primarily to higher taxable REIT subsidiary (“TRS”) losses in 2022 compared to the same prior-year period, partially offset by slightly higher income in Canada in 2022 compared to the same prior-year period.

Benefit for income taxes decreased $4.8 million, or 80%, in the nine months ended September 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 $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.

Net income before allocation to non-controlling interests increased $7.9 million, or 23.8%, in the three months ended September 30, 2022, compared to 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.

Net income before allocation to non-controlling interests was $89.6 million in the nine months ended September 30, 2022, compared to a Net loss before allocation to non-controlling interests of $35.1 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 and six months ended June 30, 2022 and 2021.

Three Months Ended Six Months Ended

June 30, June 30,

The following table presents our Revenues , Adjusted OIBDA and Operating income by segment in the three and nine months ended September 30, 2022 and 2021.

Three Months Ended Nine Months Ended

September 30, September 30,

(in millions) 2022 2021 2022 2021

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Total revenues $ 453.7 $ 399.2 $ 1,277.4 $ 999.4

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

Operating income $ 74.3 $ 65.0 $ 182.7 $ 63.1

Net (gain) loss on dispositions 0.2 (0.4) 0.1 (3.6)

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Corporate (19.4) (20.3) (58.0) (57.5)

Total operating income (loss) $ 79.9 $ 29.1 $ 108.4 $ (1.9)

Total operating income $ 74.3 $ 65.0 $ 182.7 $ 63.1

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

Three Months Ended Six Months Ended

June 30, % June 30, %

Three Months Ended Nine Months Ended

September 30, % September 30, %

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

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(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.

Media segment revenues increased $51.8 million, or 14%, in the three months ended September 30, 2022, and increased $261.3 million, or 28%, in the nine months ended September 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 45% 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.

Media segment revenues from national advertising campaigns in the three months ended September 30, 2022, 43% in the three months ended September 30, 2021, 43% in the nine months ended September 30, 2022, and 41% in the nine months ended September 30, 2021.

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

Billboard revenues in the U.S.

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.

Media segment increased $36.9 million, or 12%, in the three months ended September 30, 2022, and increased $168.1 million, or 21%, in the nine months ended September 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 new and lost billboards in the period, including 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.

Media segment increased $32.5 million, or 11%, in the three months ended September 30, 2022, and increased $161.3 million, or 21%, in the nine months ended September 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 and the net effect of new and lost billboards in the period, including certain acquisitions.

Transit and other revenues in the U.S.

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.

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.

Media segment increased $14.9 million, or 19%, in the three months ended September 30, 2022, and increased $93.2 million, or 58%, in the nine months ended September 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 $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.

Media segment increased $31.6 million, or 17%, in the three months ended September 30, 2022, and increased $100.3 million, or 19%, in the nine months ended September 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 compensation-related expenses, increased activity resulting in higher production and materials cost, 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 $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, %

Media segment increased $8.4 million, or 12%, in the three months ended September 30, 2022, driven by and increased $45.1 million, or 23%, in the nine months ended September 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 $11.8 million, or 10%, in the three months ended September 30, 2022, and increased $115.9 million, or 52%, in the nine months ended September 30, 2022, compared to the same prior-year periods.

Adjusted OIBDA margin was 30% in the three months ended September 30, 2022, 31% in the three months ended September 30, 2021, 28% in the nine months ended September 30, 2022, and 23% in the same prior-year period.

Three Months Ended Nine Months Ended

September 30, % September 30, %

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

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

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).

Total Other revenues increased $2.7 million, or 12%, in the three months ended September 30, 2022, and increased $16.7 million, or 30%, in the nine months ended September 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 nine months ended September 30, 2021, non-organic revenues exclude the impact of foreign currency exchange rates.

Other operating expenses increased $1.2 million, or 9%, in the three months ended September 30, 2022, and increased $4.6 million, or 12%, in the nine months ended September 30, 2022, compared to the same prior-year periods, primarily driven by higher expenses in Canada.

Other SG&A expenses increased $0.5 million, or 9%, in the three months ended September 30, 2022, and increased $2.3 million, or 16%, in the nine months ended September 30, 2022, compared to the same prior-year periods, primarily driven by higher expenses in Canada.

Other Adjusted OIBDA increased $1.0 million, or 21%, in the three months ended September 30, 2022, compared to the same prior-year period, due primarily to an increase in average revenue per display (yield).

Other Adjusted OIBDA increased $9.8 million in the nine months ended September 30, 2022, compared to 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 $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.

Corporate expenses, excluding stock-based compensation, were $10.8 million in the three months ended September 30, 2022, compared to $13.1 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 and higher compensation-related expenses, including salaries.

Corporate expenses, excluding stock-based compensation, were $33.0 million in the nine months ended September 30, 2022, compared to $36.8 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) June 30,

(in millions, except percentages) September 30,

2022 December 31, 2021 % Change

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Prepaid lease and transit franchise costs 7.0 12.5 (44)

Prepaid MTA equipment deployment costs 2.3 — *

Other prepaid expenses 22.3 17.8 25

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

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

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.

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 current heightened levels of inflation and related 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.

Working capital was a deficit of $92.1 million as of September 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 11.

Acquisitions to the Consolidated Financial Statements).

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 six months ended June 30, 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 nine months ended September 30, 2022, and we do not expect to 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 $100.0 million.

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

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

As of 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.

However, given the current heightened levels of inflation and related economic environment, we cannot reasonably estimate the aggregate financing amount, if any, at this time.

As of September 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 $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.

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

As indicated in the table below, we incurred $66.6 million related to MTA equipment deployment costs in the nine months ended September 30, 2022 (which includes equipment deployment costs related to future deployments), for a total of $513.6 million to date, of which $33.9 million had been recouped from incremental revenues to date and as of September 30, 2022, $49.1 million has been funded by the MTA.

As of September 30, 2022, 13,657 digital displays had been installed, composed of 4,804 digital advertising screens on subway and train platforms and entrances, 4,638 smaller-format digital advertising screens on rolling stock and 4,215 MTA communications displays.

In the three months ended September 30, 2022, 496 installations occurred, for a total of 2,565 installations occurring in the nine months ended September 30, 2022.

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

Six months ended June 30, 2022:

Nine months ended September 30, 2022:

Prepaid MTA equipment deployment costs $ 279.8 $ 61.1 $ — $ — $ 340.9

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

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.

On November 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 December 30, 2022, to stockholders of record at the close of business on December 2, 2022.

Debt, net, consists of the following:

(in millions, except percentages) June 30,

(in millions, except percentages) September 30,

2022 December 31,

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Total $ 3,458.6 $ 127.6 $ 262.9 $ 1,225.5 $ 1,842.6

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 interest rate on the term loan due in 2026 (the “Term Loan”) was 4.9% per annum as of September 30, 2022.

As of September 30, 2022, a discount of $1.5 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 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.

As of September 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 September 30, 2022, $0.4 million in the three months ended September 30, 2021, $1.2 million in the nine months ended September 30, 2022, and $1.3 million in the nine months ended September 30, 2021.

As of September 30, 2022, we had issued letters of credit totaling approximately $6.4 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.

As of September 30, 2022, we had issued letters of credit totaling approximately $75.8 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 nine months ended September 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.

As of September 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.

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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 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.

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

As of September 30, 2022, borrowing capacity remaining under the AR Facility was $150.0 million based on approximately $337.2 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 nine months ended September 30, 2022 and 2021.

Debt Covenants

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

Our credit agreement, dated as of January 31, 2014 (as amended, supplemented or otherwise modified, the “Credit Agreement”), governing the Senior Credit Facilities, the agreements governing the AR Facility, and the indentures governing our senior unsecured notes contain customary affirmative and negative covenants, subject to certain exceptions, including but not limited to those that restrict the Company’s and its subsidiaries’ abilities to (i) pay dividends on, repurchase or make distributions in respect to the Company’s or its wholly-owned subsidiary, 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.

As of September 30, 2022, our Consolidated Total Leverage Ratio was 5.0 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.

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

As of September 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.

As of September 30, 2022, we had deferred $26.1 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.

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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 six months ended June 30, 2022.

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

No shares were sold under the ATM Program during the nine months ended September 30, 2022.

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

Series A Preferred Stock Issuance

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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;

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.

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

As of September 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 nine months ended September 30, 2022 and 2021.

Nine Months Ended

September 30, %

(in millions, except percentages) 2022 2021 Change

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* Calculation is not meaningful.

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.

Cash provided by operating activities increased $129.7 million in the nine months ended September 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 and improved cash collections, partially offset by an increase in prepaid MTA equipment deployment costs.

In the nine months ended September 30, 2022, we paid net cash of $57.5 million related to MTA equipment deployment costs and installed 2,565 digital displays.

In the nine months ended September 30, 2021, we paid net cash of $18.4 million related to MTA equipment deployment costs and installed 1,800 digital displays.

Cash used for investing activities increased $244.8 million in the nine months ended September 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 11.

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

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

Nine Months Ended

September 30, %

(in millions, except percentages) 2022 2021 Change

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Total capital expenditures $ 66.6 $ 41.2 62

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.

Capital expenditures increased $25.4 million, or 62%, in the nine months ended September 30, 2022, compared to the same prior-year period, primarily due to growth in digital displays, growth in transit 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 $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.

Cash used for financing activities increased by $25.1 million, or 18%, in the nine months ended September 30, 2022, compared to the same prior-year period.

In the nine months ended September 30, 2022, we paid total cash dividends of $154.3 million on our common stock, the Series A Preferred Stock and vested restricted share units granted to employees.

In the nine months ended September 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 $35.9 million on the Series A Preferred Stock and vested restricted share units granted to employees.

Cash paid for income taxes was $3.1 million for in the nine months ended September 30, 2022 and $1.5 million in the nine months ended September 30, 2021.

Off-Balance Sheet Arrangements

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The preparation of our financial statements in conformity with 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.

On an ongoing basis, we evaluate these estimates, which are based on historical experience and on various assumptions that we believe are reasonable under the circumstances, including the impact of extraordinary events such as the COVID-19 pandemic.

The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of revenues and expenses that are not readily apparent from other sources.

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

Actual results may differ from these estimates under different assumptions.

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

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Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events.

Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and may not be able to be realized.

Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and may not be

able to be realized.

We do not guarantee that the transactions and events described will happen as described (or that they will happen at all).

46 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