What changed in this filing

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Item 1. Financial Statements

2023-05-08 compared with 2022-11-04 · 150 added, 217 removed, 425 unchanged (46% of the section changed)

2 unchanged sentences

Consolidated Statements of Financial Position

(in millions) September 30,

(in millions) March 31,

2023 December 31,

3 unchanged sentences

Prepaid lease and franchise costs 8.2 9.1

Prepaid MTA equipment deployment costs (Note 16) 2.3 —

Other prepaid expenses 20.9 19.8

15 unchanged sentences

Deferred revenues 54.8 35.3

Short-term debt (Note 8) 115.0 30.0

Short-term operating lease liabilities (Note 5) 201.6 188.1

23 unchanged sentences

Consolidated Statements of Operations

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions, except per share amounts) 2023 2022

10 unchanged sentences

Interest expense, net ( 37.7 ) ( 30.7 )

Loss on extinguishment of debt — — — ( 6.3 )

Other expense, net — ( 0.1 )

Income (loss) before benefit (provision) for income taxes and equity in earnings of investee companies 40.4 33.2 86.5 ( 41.7 )

Loss before benefit (provision) for income taxes and equity in earnings of investee companies ( 27.5 ) ( 2.3 )

Benefit (provision) for income taxes ( 0.4 ) 2.1

2 unchanged sentences

Net income attributable to non-controlling interests 0.2 0.2

Net income (loss) attributable to OUTFRONT Media Inc.

Net loss attributable to OUTFRONT Media Inc.

$ ( 28.9 ) $ ( 0.1 )

Net income (loss) per common share:

Net loss per common share:

Basic $ ( 0.19 ) $ ( 0.04 )

6 unchanged sentences

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions) 2023 2022

1 unchanged sentence

Net income attributable to non-controlling interests 0.2 0.2

Net income (loss) attributable to OUTFRONT Media Inc.

Net loss attributable to OUTFRONT Media Inc.

( 28.9 ) ( 0.1 )

Other comprehensive income (loss), net of tax:

Other comprehensive income, net of tax:

Cumulative translation adjustments 0.3 2.7

Net actuarial loss 0.2 0.4 0.2 0.4

Change in fair value of interest rate swap agreements — 0.3

Total other comprehensive income (loss), net of tax ( 7.3 ) ( 2.0 ) ( 8.5 ) 4.3

Total other comprehensive income, net of tax 0.3 3.0

Total comprehensive income (loss) $ ( 28.6 ) $ 2.9

6 unchanged sentences

Additional Paid-In Capital Distribution in Excess of Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity Non-Controlling Interests Total Equity

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

Net income — — — — — 33.1 — 33.1 0.1 33.2

Other comprehensive loss — — — — — — ( 2.0 ) ( 2.0 ) — ( 2.0 )

Stock-based payments:

Amortization — — — — 7.2 — — 7.2 — 7.2

Class A equity interest redemptions — — — — 0.3 — — 0.3 ( 0.3 ) —

Series A Preferred Stock dividends ( 7 %)

— — — — — ( 7.0 ) — ( 7.0 ) — ( 7.0 )

Dividends ($ 0.10 per share)

— — — — — ( 14.6 ) — ( 14.6 ) — ( 14.6 )

Other — — — — — — — — ( 0.2 ) ( 0.2 )

Balance as of

September 30, 2021 0.4 $ 383.4 145.6 $ 1.5 $ 2,110.6 $ ( 1,171.5 ) $ ( 13.7 ) $ 926.9 $ 13.7 $ 1,324.0

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

Net income — — — — — 40.8 — 40.8 0.3 41.1

Other comprehensive loss — — — — — — ( 7.3 ) ( 7.3 ) — ( 7.3 )

Stock-based payments:

Amortization — — — — 8.6 — — 8.6 — 8.6

Series A Preferred Stock dividends ( 7 %)

— — — — — ( 2.2 ) — ( 2.2 ) — ( 2.2 )

Dividends ($ 0.30 per share)

— — — — — ( 49.3 ) — ( 49.3 ) — ( 49.3 )

Other — — — — — — — — ( 0.2 ) ( 0.2 )

Balance as of

September 30, 2022 0.1 $ 119.8 164.0 $ 1.6 $ 2,408.4 $ ( 1,191.1 ) $ ( 12.9 ) $ 1,206.0 $ 4.2 $ 1,330.0

OUTFRONT Media Inc.

Consolidated Statements of Equity (Continued)

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, 2021 0.4 $ 383.4 145.6 $ 1.5 $ 2,119.0 $ ( 1,122.0 ) $ ( 4.4 ) $ 994.1 $ 13.0 $ 1,390.5

5 unchanged sentences

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 ) —

5 unchanged sentences

Balance as of

September 30, 2021 0.4 $ 383.4 145.6 $ 1.5 $ 2,110.6 $ ( 1,171.5 ) $ ( 13.7 ) $ 926.9 $ 13.7 $ 1,324.0

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

Balance as of December 31, 2022 0.1 $ 119.8 164.2 $ 1.6 $ 2,416.3 $ ( 1,183.4 ) $ ( 9.1 ) $ 1,225.4 $ 4.0 $ 1,349.2

Net income — — — — — 88.7 — 88.7 0.9 89.6

Other comprehensive loss — — — — — — ( 8.5 ) ( 8.5 ) — ( 8.5 )

Net income (loss) — — — — — ( 28.9 ) — ( 28.9 ) 0.2 ( 28.7 )

Other comprehensive income — — — — — — 0.3 0.3 — 0.3

Stock-based payments:

2 unchanged sentences

Shares paid for tax withholding for stock-based payments — — ( 0.6 ) — ( 12.3 ) — — ( 12.3 ) — ( 12.3 )

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 %)

4 unchanged sentences

Balance as of

September 30, 2022 0.1 $ 119.8 164.0 $ 1.6 $ 2,408.4 $ ( 1,191.1 ) $ ( 12.9 ) $ 1,206.0 $ 4.2 $ 1,330.0

March 31, 2023 0.1 $ 119.8 165.0 $ 1.6 $ 2,411.8 $ ( 1,264.2 ) $ ( 8.8 ) $ 1,140.4 $ 4.1 $ 1,264.3

See accompanying notes to unaudited consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

Nine Months Ended

September 30,

Three Months Ended

(in millions) 2023 2022

Operating activities:

Net income (loss) attributable to OUTFRONT Media Inc.

Net loss attributable to OUTFRONT Media Inc.

$ ( 28.9 ) $ ( 0.1 )

Adjustments to reconcile net income (loss) to net cash flow provided by operating activities:

Adjustments to reconcile net loss to net cash flow provided by operating activities:

Net income attributable to non-controlling interests 0.2 0.2

Depreciation and amortization 41.9 34.1

Deferred tax benefit ( 4.2 ) ( 6.6 )

Deferred tax (benefit) provision 1.0 ( 1.3 )

Stock-based compensation 7.8 7.9

Provision (recovery) for doubtful accounts 2.7 ( 5.3 )

Provision for doubtful accounts 1.4 1.7

Accretion expense 0.8 0.7

Net (gain) loss on dispositions 0.3 ( 0.3 )

Loss on extinguishment of debt — 6.3

Equity in earnings of investee companies, net of tax 0.8 ( 0.3 )

2 unchanged sentences

Change in assets and liabilities, net of investing and financing activities:

(Increase) decrease in receivables 3.3 ( 28.5 )

Decrease in receivables 54.0 44.1

Increase in prepaid MTA equipment deployment costs ( 18.8 ) ( 15.4 )

Decrease in prepaid expenses and other current assets 1.8 9.6

Increase (decrease) in accounts payable and accrued expenses ( 16.2 ) 0.8

Increase (decrease) in prepaid expenses and other current assets ( 1.0 ) 3.4

Decrease in accounts payable and accrued expenses ( 70.9 ) ( 64.2 )

Increase in operating lease assets and liabilities 4.2 1.7

8 unchanged sentences

Net proceeds from dispositions 0.1 0.8

Investment in investee companies ( 0.3 ) —

Net cash flow used for investing activities

1 unchanged sentence

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 )

Proceeds from borrowings under short-term debt facilities 85.0 —

Taxes withheld for stock-based compensation ( 12.3 ) ( 10.9 )

Dividends ( 52.0 ) ( 51.5 )

Other — ( 3.7 )

Net cash flow used for financing activities

( 165.6 ) ( 140.5 )

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

Net decrease in cash, cash equivalents and restricted cash

Net cash flow provided by (used for) financing activities

20.7 ( 62.4 )

Cash, cash equivalents and restricted cash at beginning of period

Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

$ 42.8 $ 355.7

OUTFRONT Media Inc.

Consolidated Statements of Cash Flows (Continued)

Nine Months Ended

September 30,

(in millions) 2022 2021

Supplemental disclosure of cash flow information:

23 unchanged sentences

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 and the current heightened levels of inflation, 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.

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 events such as the COVID-19 pandemic and the current heightened levels of inflation, 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.

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.

Out-of-Period Adjustment

For the three months ended March 31, 2023, the Company recorded an out-of-period adjustment relating to variable billboard property lease expenses and accrued lease and franchise costs in 2022, resulting in a $ 5.2 million increase in Operating expenses for the three months ended March 31, 2023.

The Company assessed the materiality of the amount reflected in this adjustment on its previously issued financial statements in accordance with the SEC’s Staff Accounting Bulletin (“SAB”) No.

99 and SAB No.

108 and concluded that the amount was not material, individually or in the aggregate, to any of its previously issued financial statements .

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

New Accounting Standards

Adoption of New Accounting Standards

In the first quarter of 2023, we adopted the Financial Accounting Standards Board’s (the “FASB”) 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.

We will implement this guidance when accounting for business combinations in the future.

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.

In March 2020 and December 2022, the 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, 2024.

This guidance did not have a significant impact on our accounting for our existing debt.

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.

This guidance is effective for public entities for fiscal years beginning after December 15, 2022.

We will adopt this guidance when accounting for business combinations in the future.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

Property and Equipment, Net

The table below presents the balances of major classes of assets and accumulated depreciation.

(in millions) Estimated Useful Lives September 30,

(in millions) Estimated Useful Lives March 31,

2023 December 31,

8 unchanged sentences

Property and equipment, net $ 700.1 $ 699.8

Depreciation expense was $ 19.9 million in the three months ended September 30, 2022, $ 19.6 million in the three months ended September 30, 2021, $ 58.6 million in the nine months ended September 30, 2022, and $ 59.6 million in the nine months ended September 30, 2021.

Depreciation expense was $ 20.1 million in the three months ended March 31, 2023, and $ 19.3 million in the three months ended March 31, 2022.

Intangible Assets

1 unchanged sentence

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.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

Our identifiable intangible assets consist of the following:

(in millions) Gross Accumulated Amortization Net

As of September 30, 2022:

As of March 31, 2023:

Permits and leasehold agreements $ 1,601.8 $ ( 884.7 ) $ 717.1

7 unchanged sentences

Total intangible assets $ 2,149.7 $ ( 1,291.2 ) $ 858.5

In the nine months ended September 30, 2022, we acquired approximately 1,100 displays, resulting in amortizable intangible assets for permits and leasehold agreements of $ 238.0 million, which are amortized using the straight-line method over their estimated useful lives, an average period of 16.7 years.

In the three months ended March 31, 2023, we acquired approximately 30 displays, resulting in amortizable intangible assets for permits and leasehold agreements of $ 5.7 million, which are amortized using the straight-line method over their estimated useful lives, an average period of 10.1 years.

All of our intangible assets, except goodwill, are subject to amortization.

Amortization expense was $ 20.2 million in the three months ended September 30, 2022, $ 16.7 million in the three months ended September 30, 2021, $ 52.3 million in the nine months ended September 30, 2022, and $ 49.4 million in the nine months ended September 30, 2021.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

Amortization expense was $ 21.8 million in the three months ended March 31, 2023, and $ 14.8 million in the three months ended March 31, 2022.

The following table presents our operating lease assets and liabilities:

(in millions, except years and percentages) September 30,

(in millions, except years and percentages) March 31,

2023 December 31,

5 unchanged sentences

The components of our lease expenses were as follows:

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions) 2023 2022

Operating expenses $ 113.5 $ 100.9 $ 331.9 $ 294.5

Operating expenses (a)

$ 120.9 $ 106.7

Selling, general and administrative expenses 3.1 2.7

Variable costs 27.9 20.5 80.7 53.7

For each of the three and nine months ended September 30, 2022 and 2021, sublease income was immaterial.

For the nine months ended September 30, 2022, cash paid for operating leases was $ 332.1 million and leased assets obtained in exchange for new operating lease liabilities was $ 213.9 million.

For the nine months ended September 30, 2021, cash paid for operating leases was $ 285.6 million and leased assets obtained in exchange for new operating lease liabilities was $ 189.8 million.

We recorded rental income of $ 331.0 million for the three months ended September 30, 2022, $ 305.2 million for the three months ended September 30, 2021, $ 961.5 million for the nine months ended September 30, 2022, and $ 798.6 million for the nine months ended September 30, 2021, in Revenues on our Consolidated Statement of Operations.

Variable costs (a)

Cash paid for operating leases 137.7 118.4

Leased assets obtained in exchange for new operating lease liabilities 172.1 81.9

(a) Includes an out-of-period adjustment of $ 5.2 million recorded in the three months ended March 31, 2023, related to variable billboard property lease expenses (see Note 1.

Description of Business and Basis of Presentation ).

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

For each of the three months ended March 31, 2023 and 2022, sublease income related to office properties was immaterial.

We recorded rental income of $ 298.4 million for the three months ended March 31, 2023, and $ 288.3 million for the three months ended March 31, 2022, in Revenues on our Consolidated Statement of Operations.

Asset Retirement Obligation

5 unchanged sentences

Accretion expense 0.8

Additions 0.6

Liabilities settled ( 0.8 )

Foreign currency translation adjustments ( 0.3 )

As of September 30, 2022 $ 37.2

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

As of March 31, 2023 $ 37.8

Related Party Transactions

On January 18, 2023, we entered into a transaction with an affiliate of Providence Equity Partners L.L.C.

(the “Providence Affiliate”) in connection with the Providence Affiliate’s purchase of a lease for certain outdoor advertising assets (the “Assets”) from a third-party seller.

Pursuant to an agreement between us and the Providence Affiliate (the “Billboard Agreement”), we agreed to exclusively market, license and make advertising space available on the Assets to third-party advertisers for a term of up to ten years (the “Transaction”).

In return, we will retain all revenues from the sale of advertising with respect to the Assets less the following payments to the Providence Affiliate or its payment designee, as applicable:

(i) a minimum annual guarantee payment paid to the Providence Affiliate’s payment designee that increases from approximately $ 1.8 million to $ 3.5 million during the term of the Billboard Agreement;

(ii) a minimum annual guarantee payment paid to the Providence Affiliate that increases from $ 8.5 million to $ 12.0 million by year six and adjusted for inflation thereafter through year ten;

(iii) a percentage revenue share payment on gross revenues generated above $ 22.0 million paid to the Providence Affiliate during the term of the Billboard Agreement;

(iv) a percentage revenue share payment on net revenues until $ 100.0 million is paid to the Providence Affiliate or its payment designee, as applicable;

and (v) a one-time payment of $ 10.0 million paid to the Providence Affiliate on the fifth anniversary of the closing of the Transaction (the “Transaction Closing”) if we have not yet acquired the Assets as described below.

The Billboard Agreement also provides that (i) we have the option to acquire the Assets from the Providence Affiliate between the third and seventh anniversaries of the Transaction Closing at pre-agreed prices depending on the time at which we exercise the option;

(ii) prior to the seventh anniversary of the Transaction Closing, we have a right of first offer prior to any sale of the Assets by the Providence Affiliate to a third-party;

and (iii) in the event of a termination of the Billboard Agreement by the Providence Affiliate after a sale to a third-party, we may in certain circumstances be entitled to receive a termination payment.

As of March 31, 2023, operating lease assets related to the Billboard Agreement were $ 97.0 million and non-current operating lease liabilities related to the Billboard Agreement were $ 95.0 million , and are included in Operating lease assets and non-current Operating lease liabilities , respectively, on the Consolidated Statements of Financial Position.

Billboard revenues related to the Billboard Agreement were $ 1.9 million and operating lease expenses related to the Billboard Agreement were $ 2.3 million in the three months ended March 31, 2023, and are recorded in Revenues and Operating expenses, respectively, on the Consolidated Statement of Operations.

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 $ 12.7 million as of September 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 September 30, 2022, $ 2.0 million in the three months ended September 30, 2021, $ 6.3 million in the nine months ended September 30, 2022, and $ 4.4 million in the nine months ended September 30, 2021.

These investments totaled $ 10.6 million as of March 31, 2023, and $ 12.2 million as of December 31, 2022, 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 $ 1.0 million in the three months ended March 31, 2023, and $ 1.7 million in the three months ended March 31, 2022.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

Debt, net, consists of the following:

(in millions, except percentages) September 30,

(in millions, except percentages) March 31,

2023 December 31,

Short-term debt:

AR Facility $ 115.0 $ 30.0

Total short-term debt 115.0 30.0

Long-term debt:

10 unchanged sentences

Weighted average cost of debt 5.4 % 5.2 %

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 interest rate on the term loan due in 2026 (the “Term Loan”) was 6.6 % per annum as of March 31, 2023.

As of March 31, 2023, a discount of $ 1.3 million on the Term Loan remains unamortized.

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

1 unchanged sentence

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 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.

As of March 31, 2023, there were no outstanding borrowings under the Revolving Credit Facility.

The commitment fee based on the amount of unused commitments under the Revolving Credit Facility was $ 0.4 million in each of the three months ended March 31, 2023 and 2022.

As of March 31, 2023, 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 March 31, 2023, we had issued letters of credit totaling approximately $ 77.0 million under our aggregate $ 81.0 million standalone letter of credit facilities.

The total fees under the letter of credit facilities were immaterial in each of the three months ended March 31, 2023 and 2022.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

Standalone Letter of Credit Facilities

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 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.

(“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.

As of March 31, 2023, we have a $ 150.0 million revolving accounts receivable securitization facility (the “AR Facility”), which terminates in May 2025, unless further extended.

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

6 unchanged sentences

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 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.

As of March 31, 2023, there were $ 115.0 million outstanding borrowings under the AR Facility, at a borrowing rate of 5.7 %.

As of March 31, 2023, borrowing capacity remaining under the AR Facility was $ 21.5 million based on approximately $ 293.1 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 $ 0.1 million for the three months ended March 31, 2023, and immaterial for the three months ended March 31, 2022.

Debt Covenants

1 unchanged sentence

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 September 30, 2022, our Consolidated Total Leverage Ratio was 5.0 to 1.0 in accordance with the Credit Agreement.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

As of March 31, 2023, 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 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.

As of March 31, 2023, our Consolidated Net Secured Leverage Ratio was 1.1 to 1.0 in accordance with the Credit Agreement.

As of March 31, 2023, we are in compliance with our debt covenants.

Deferred Financing Costs

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.

As of March 31, 2023, we had deferred $ 23.1 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.

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.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

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;

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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 $ 2.3 billion as of September 30, 2022, and $ 2.7 billion as of December 31, 2021.

The fair value of our debt as of both September 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.

As of September 30, 2022, 450,000,000 shares of our common stock, par value $ 0.01 per share, were authorized, of which 164,047,196 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.

The aggregate fair value of our debt, which is estimated based on quoted market prices of similar liabilities, was approximately $ 2.5 billion as of both March 31, 2023, and December 31, 2022.

The fair value of our debt as of both March 31, 2023, and December 31, 2022, is classified as Level 2.

As of March 31, 2023, 450,000,000 shares of our common stock, par value $ 0.01 per share, were authorized;

164,981,632 shares were issued and outstanding;

and 50,000,000 shares of our preferred stock, par value $ 0.01 per share, were authorized, with 125,000 shares of our Series A Convertible Perpetual Preferred Stock (the “Series A Preferred Stock”), par value $ 0.01 per share, issued and outstanding.

The Series A Preferred Stock ranks senior to the shares of the Company’s common stock with respect to dividend and distribution rights.

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If any dividends or distributions in respect of the shares of our common stock are paid in cash, the shares of Series A Preferred Stock will participate in the dividends or distributions on an as-converted basis up to the amount of their accrued dividend for such quarter, which amounts will reduce the dividends payable on the shares of Series A Preferred Stock dollar-for-dollar for such quarter.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

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.

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 September 30, 2022, we paid cash dividends of $ 2.2 million on the Series A Preferred Stock and during the nine months ended September 30, 2022, we paid cash dividends of $ 6.6 million on the Series A Preferred Stock.

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.

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 September 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 nine months ended September 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.

During the three months ended March 31, 2023, we paid cash dividends of $ 2.2 million on the Series A Preferred Stock.

As of March 31, 2023, 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.

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 nine months ended September 30, 2022.

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

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 .

No shares were sold under the ATM Program during the three months ended March 31, 2023.

As of March 31, 2023, we had approximately $ 232.5 million of capacity remaining under the ATM Program.

On May 3, 2023 , we announced that our board of directors approved a quarterly cash dividend of $ 0.30 per share on our common stock, payable on June 30, 2023 , to stockholders of record at the close of business on June 2, 2023 .

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

The following table summarizes revenues by source:

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions) 2023 2022

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Total revenues $ 395.8 $ 373.5

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

Rental income was $ 331.0 million in the three months ended September 30, 2022, $ 305.2 million in the three months ended September 30, 2021, $ 961.5 million in the nine months ended September 30, 2022, and $ 798.6 million in the nine months ended September 30, 2021, and is recorded in Billboard revenues on the Consolidated Statement of Operations.

Rental income was $ 298.4 million in the three months ended March 31, 2023, and $ 288.3 million in the three months ended March 31, 2022, and is recorded in Billboard revenues on the Consolidated Statement of Operations.

The following table summarizes revenues by geography:

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions) 2023 2022

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We recognized substantially all of the Deferred revenues on the Consolidated Statement of Financial Position as of December 31, 2022, during the three months ended March 31, 2023.

We completed several asset acquisitions for a total purchase price of approximately $ 278.9 million in the nine months ended September 30, 2022, and $ 55.0 million in the nine months ended September 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.

We completed several asset acquisitions for a total purchase price of approximately $ 5.1 million in the three months ended March 31, 2023, and $ 9.6 million in the three months ended March 31, 2022.

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 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.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

Stock-Based Compensation

The following table summarizes our stock-based compensation expense for the three and nine months ended September 30, 2022 and 2021.

Three Months Ended Nine Months Ended

September 30, September 30,

The following table summarizes our stock-based compensation expense for the three months ended March 31, 2023 and 2022.

Three Months Ended

(in millions) 2023 2022

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Stock-based compensation expense, net of tax $ 7.4 $ 7.5

As of September 30, 2022, total unrecognized compensation cost related to non-vested RSUs and PRSUs was $ 38.2 million, which is expected to be recognized over a weighted average period of 1.7 years.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

As of March 31, 2023, total unrecognized compensation cost related to non-vested RSUs and PRSUs was $ 51.9 million, which is expected to be recognized over a weighted average period of 2.1 years.

RSUs and PRSUs

The following table summarizes activity for the nine months ended September 30, 2022, of RSUs and PRSUs issued to our employees.

The following table summarizes activity for the three months ended March 31, 2023, of RSUs and PRSUs issued to our employees.

Activity Weighted Average Per Share Grant Date Fair Market Value

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PRSUs ( 4,635 ) 23.31

Non-vested as of September 30, 2022 2,802,401 23.80

Non-vested as of March 31, 2023 2,891,867 21.25

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 Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions) 2023 2022

Components of net periodic pension cost:

Service cost $ 0.1 $ — $ 0.1 $ 0.2

Interest cost $ 0.6 $ 0.5

Expected return on plan assets ( 0.7 ) ( 0.7 )

Amortization of net actuarial losses (a)

Net periodic pension cost $ ( 0.1 ) $ ( 0.2 )

(a) Reflects amounts reclassified from accumulated other comprehensive income to net income.

In the nine months ended September 30, 2022, we contributed $ 0.2 million to our defined benefit pension plans.

In 2022, we expect to contribute approximately $ 0.2 million to our defined benefit pension plans.

In 2023, we do not expect to contribute to our defined benefit pension plans.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

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.

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Our effective income tax rate represents a combined annual effective tax rate for federal, state, local and foreign taxes applied to interim operating results.

OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

In the three and nine months ended September 30, 2022 and 2021, our effective tax rate differed from the U.S.

In the three months ended March 31, 2023 and 2022, 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.

Earnings Per Share (“EPS”)

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions) 2023 2022

Net income (loss) available for common stockholders $ 40.8 $ 33.1 $ 88.7 $ ( 35.5 )

Net loss available for common stockholders $ ( 28.9 ) $ ( 0.1 )

Distributions to holders of Series A Preferred Stock

2.2 7.0 9.8 21.0

Distributions to holders of Class A equity interests of a subsidiary

Undistributed earnings allocable to Class A equity interests of a subsidiary

Net income (loss) available for common stockholders, basic and diluted $ 38.6 $ 25.8 $ 78.8 $ ( 56.5 )

Weighted average shares for basic EPS 164.0 145.6 160.0 145.3

Dilutive potential shares from grants of RSUs, PRSUs and stock options (a)

0.6 0.8 0.7 —

Weighted average shares for basic and diluted EPS 164.6 146.4 160.7 145.3

(a) The potential impact of 0.9 million granted RSUs and PRSUs in the three months ended September 30, 2022, 0.1 million granted RSUs, PRSUs and options in the three months ended September 30, 2021, 0.7 million granted RSUs and PRSUs in the nine months ended September 30, 2022, and 1.4 million granted RSUs, PRSUs and stock options in the nine months ended September 30, 2021, were antidilutive.

(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 September 30, 2022, 25.0 million shares of our common stock issuable upon conversion of the Series A Preferred Stock in the three months ended September 30, 2021, 11.5 million shares of our common stock issuable upon conversion of the Series A Preferred Stock in the nine months ended September 30, 2022, and 25.0 million shares of our common stock issuable upon conversion of the Series A Preferred Stock in the nine months ended September 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 September 30, 2021, 0.1 million of Class A equity interests of Outfront Canada in the nine months ended September 30, 2022, and 0.6 million of Class A equity interests of Outfront Canada in the nine months ended September 30, 2021, was antidilutive.

Equity to the Consolidated Financial Statements.)

Net loss available for common stockholders, basic and diluted $ ( 31.1 ) $ ( 5.6 )

Weighted average shares for basic and diluted EPS (a)(b)(c)

(a) The potential impact of 1.4 million granted RSUs and PRSUs in the three months ended March 31, 2023, and 1.1 million granted RSUs, PRSUs and stock options in the three months ended March 31, 2022, were antidilutive.

(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 March 31, 2023, and 19.1 million shares of our common stock issuable upon conversion of the Series A Preferred Stock in the three months ended March 31, 2022, were antidilutive.

(c) The potential impact of 0.3 million of Class A equity interests of a subsidiary of the Company that controls its Canadian business in the three months ended March 31, 2022, was antidilutive.

Commitments and Contingencies

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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.

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

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

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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 the nine months ended September 30, 2022, and we do not expect to recoup equipment deployment costs in the remainder of 2022.

We did not recoup any equipment deployment costs in the three months ended March 31, 2023, and we do not expect to recoup any equipment deployment costs in the remainder of 2023.

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

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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 nine months ended September 30, 2022, we had no recoupment from incremental revenues 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.

During the three months ended March 31, 2023, we had no recoupment from incremental revenues.

As of March 31, 2023, 15,200 digital displays had been installed, composed of 5,002 digital advertising screens on subway and train platforms and entrances, 5,658 smaller-format digital advertising screens on rolling stock and 4,540 MTA communications displays.

In the three months ended March 31, 2023, 1,047 installations occurred.

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

Nine months ended September 30, 2022:

Three months ended March 31, 2023:

Prepaid MTA equipment deployment costs $ 363.2 $ 18.8 $ — $ — $ 382.0

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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 September 30, 2022, the outstanding letters of credit were approximately $ 82.2 million and outstanding surety bonds were approximately $ 167.8 million, and were not recorded on the Consolidated Statements of Financial Position.

As of March 31, 2023, the outstanding letters of credit were approximately $ 83.4 million and outstanding surety bonds were approximately $ 169.9 million, and were not recorded on the Consolidated Statements of Financial Position.

Legal Matters

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The following tables set forth our financial performance by segment.

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions) 2023 2022

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Notes to Consolidated Financial Statements

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions) 2023 2022

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Interest expense, net 37.7 30.7

Loss on extinguishment of debt — — — 6.3

Other expense, net — 0.1

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Total Adjusted OIBDA $ 60.2 $ 70.2

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions) 2023 2022

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Media $ 0.3 $ ( 0.3 )

Other — — — ( 3.0 )

Total gain (loss) on dispositions $ 0.3 $ ( 0.3 )

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Notes to Consolidated Financial Statements

(in millions) September 30,

(in millions) March 31,

2023 December 31, 2022

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

What changed 10-Q

Item 1. Financial Statements