What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-05-08 compared with 2022-11-04 · 205 added, 285 removed, 394 unchanged (55% of the section changed)

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

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

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

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We provide our customers with a differentiated advertising solution at an attractive price point relative to other forms of advertising.

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 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.

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

Media segment generated 18% of its revenues in the New York City metropolitan area in the three months ended March 31, 2023, and 19% in the three months ended March 31, 2022, and generated 15% in the Los Angeles metropolitan area in the three months ended March 31, 2023 and 17% in the three months ended March 31, 2022.

In the three months ended March 31, 2023, our U.S.

Media segment generated $376.4 million of Revenues and $72.1 million of Operating income before Depreciation , Amortization , Net gain (loss) on dispositions and Stock-based compensation (“Adjusted OIBDA”).

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

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

Media segment generated $354.2 million of Revenues and $80.1 million of Adjusted OIBDA.

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Other (includes International).

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

Though we remain able to continue to sell and service our displays with no significant disruption, governmental restrictions have eased in most of our markets and most of our markets have commenced their economic recoveries, our transit businesses are still experiencing the significant impact of the ongoing novel coronavirus (“COVID-19”) pandemic.

There still remains uncertainty around the severity and duration of the COVID-19 pandemic and the measures that may be taken in response to the COVID-19 pandemic.

If the measures that were taken in response to the COVID-19 pandemic in 2020 and 2021 are reimplemented in a manner that reduces foot traffic, roadway traffic, commuting, transit ridership and overall target advertising audiences in the markets in which we do business, there could be a significant impact on our business.

We continue to monitor the evolving situation and guidance from federal, state and local public health authorities and may take actions based on their recommendations.

When the COVID-19 pandemic subsides, there can be no assurances as to the time it may take to generate total revenues, particularly in our U.S.

Media segment and with respect to our transit and other business, at pre-COVID-19 pandemic levels.

Accordingly, the Company cannot reasonably estimate the full impact of the COVID-19 pandemic on our business, financial condition and results of operations at this time, which may be material.

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 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.

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

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

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 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 nine months ended September 30, 2022, are not indicative of the results that may be expected for the fiscal year ending December 31, 2022.

In the three months ended March 31, 2023, Other generated $19.4 million of Revenues and $1.1 million of Adjusted OIBDA.

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

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 supply chain disruptions, heightened levels of inflation, pandemics like the COVID-19 pandemic, and shifts in market demographics and transportation patterns (including reductions in foot traffic, roadway traffic, commuting, transit ridership and overall target audiences due to remote work, safety concerns or otherwise), as described in this MD&A.

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

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

As a result of the current market-wide supply shortages and logistics disruptions, we have experienced delays and price increases with respect to certain of our digital displays, which we expect to continue in 2023, and could have an adverse effect on our business, financial condition and results of operations.

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

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

and abroad, which has resulted in rising interest rates, we have experienced increases with respect to our posting, maintenance and other expenses, our corporate expenses and our interest expense, which we expect to continue in 2023, 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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As a result, digital billboard displays generate higher profits and cash flows than traditional static billboard displays.

The majority of our digital billboard displays were converted from traditional static billboard displays.

We have commenced deployment of state-of-the-art digital transit displays in connection with several transit franchises and are planning to increase deployments over the coming years.

We have deployed state-of-the-art digital transit displays in connection with several transit franchises we operate and we expect to continue these deployments over the coming years.

In the future, we expect revenues generated on digital transit displays will be a multiple of the revenues generated on comparable static transit displays.

Subject to the impact of the COVID-19 pandemic, we intend to incur significant equipment deployment costs and capital expenditures in the coming years to continue increasing the number of digital displays in our portfolio.

We have built or converted 71 new digital billboard 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.

We intend to incur significant equipment deployment costs and capital expenditures in the coming years to continue increasing the number of digital displays in our portfolio.

We built or converted 17 new digital billboard displays in the U.S.

and 4 in Canada during the three months ended March 31, 2023.

Additionally, in the three months ended March 31, 2023, we entered into marketing arrangements to sell advertising on 15 third-party digital billboard displays in the U.S and 7 in Canada.

In the three months ended March 31, 2023, we built,

converted or replaced 1,075 digital transit and other displays in the U.S.

and 17 in Canada.

The following table sets forth information regarding our digital displays.

Digital Revenues (in millions)

for the Nine Months Ended

September 30, 2022 (a)

for the Three Months Ended

March 31, 2023 (a)

Number of Digital Displays as of

September 30, 2022 (a)

March 31, 2023 (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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Typically, our revenues and profits are highest in the fourth quarter, during the holiday shopping season, and lowest in the first quarter, as advertisers adjust their spending following the holiday shopping season.

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

As described above, our revenues and profits may also fluctuate due to external events beyond our control.

We have a diversified base of customers across various industries.

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 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 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.

During the three months ended March 31, 2023, our largest categories of advertisers were entertainment, health/medical and retail, each of which represented approximately 21%, 11% and 10% of our total U.S.

Media segment revenues, respectively.

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.

During the three months ended March 31, 2022, our largest categories of advertisers were entertainment, health/medical and retail, each of which represented approximately 23%, 10% and 9% of our total U.S.

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

In the three months ended March 31, 2023, we generated approximately 40% of our U.S.

Media segment revenues from national advertising campaigns compared to approximately 42% 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 Nine Months Ended

September 30, % September 30, %

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

Three Months Ended

(in millions, except percentages) 2023 2022 Change

Revenues $ 395.8 $ 373.5 6 %

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Adjusted OIBDA (b) margin

Net loss attributable to OUTFRONT Media Inc.

(28.9) (0.1) *

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8.8 35.5 (75)

Net income (loss) attributable to OUTFRONT Media Inc.

40.8 33.1 23 88.7 (35.5) *

* Calculation is not meaningful.

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and Revenues to organic revenues.

Adjusted OIBDA

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

We calculate Adjusted OIBDA margin by dividing Adjusted OIBDA by

Analysis of Results of Operations

We derive Revenues primarily from providing advertising space to customers on our advertising structures and sites.

Our contracts with customers generally cover periods ranging from four weeks to one year.

Revenues from billboard displays are recognized as rental income on a straight-line basis over the contract term.

Transit and other revenues are recognized over the contract period.

(See Note 10.

Revenues to the Consolidated Financial Statements.)

Three Months Ended

(in millions, except percentages) 2023 2022 Change

Billboard $ 320.6 $ 298.2 8 %

Transit and other

Total revenues $ 395.8 $ 373.5 6

Organic revenues (a) :

$ 317.7 $ 297.3 7

Transit and other

Total organic revenues (a)

392.9 372.4 6

Non-organic revenues:

Transit and other

Total non-organic revenues

Total revenues $ 395.8 $ 373.5 6

* Calculation is not meaningful.

(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 $22.3 million, or 6%, and organic revenues increased $20.5 million, or 6%, in the three months ended March 31, 2023, compared to the same prior-year period.

In the three months ended March 31, 2023, non-organic revenues reflect the impact of a significant acquisition.

In the three months ended March 31, 2022, non-organic revenues reflect the impact of foreign currency exchange rates.

Total billboard revenues increased $22.4 million, or 8%, in the three months ended March 31, 2023, compared to the same prior-year period, primarily due to the impact of new and lost billboards in the period, including acquisitions, higher proceeds from condemnations and an increase in average revenue per display (yield).

Organic billboard revenues increased $20.4 million, or 7%, in the three months ended March 31, 2023, compared to the same prior-year period, primarily due to the impact of new and lost billboards in the period, including insignificant acquisitions, higher proceeds from condemnations and an increase in average revenue per display (yield).

Total transit and other revenues decreased $0.1 million in the three months ended March 31, 2023, compared to the same prior-year period, primarily due to a decrease in average revenue per display (yield), driven by weaker market conditions in national advertising, which primarily impacted advertising sales on certain above-ground advertising displays, and the impact of foreign currency exchange rates, partially offset by the impact of a new transit franchise contract.

Organic transit and other revenues increased $0.1 million in the three months ended March 31, 2023, compared to the same prior-year period, primarily driven by the impact of a new transit franchise contract, partially offset by a decrease in average revenue per display (yield), driven by weaker market conditions in national advertising, which primarily impacted advertising sales on certain above-ground advertising displays.

Transit ridership remains materially below pre-COVID-19 pandemic levels in our largest transit markets and while we expect ridership and revenue to grow, we do not expect to reach pre-COVID-19 pandemic levels in the remainder of 2023.

Three Months Ended

(in millions, except percentages) 2023 2022 Change

Operating $ 235.5 $ 212.8 11 %

Selling, general and administrative 107.9 98.4 10

Net (gain) loss on dispositions 0.3 (0.3) *

Depreciation 20.1 19.3 4

Amortization 21.8 14.8 47

Total expenses $ 385.6 $ 345.0 12

* Calculation is not meaningful.

Operating Expenses

Three Months Ended

(in millions, except percentages) 2023 2022 Change

Operating expenses:

Billboard property lease $ 121.2 $ 107.3 13 %

Transit franchise 59.6 53.7 11

Posting, maintenance and other 54.7 51.8 6

Total operating expenses $ 235.5 $ 212.8 11

Billboard property lease expenses represented 38% of billboard revenues in the three months ended March 31, 2023, and 36% in the three months ended March 31, 2022.

The increase in billboard property lease expenses as a percentage of billboard revenues is primarily due to an increase in variable billboard property lease expenses (see Note 5.

Leases to the Consolidated Financial Statements), driven by 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 to the Consolidated Financial Statements) and billboard revenue increases in large markets and high profile locations.

Transit franchise expenses represented 89% of transit display revenues in the three months ended March 31, 2023, and 80% in the three months ended March 31, 2022.

The increase in transit franchise expense, as a percentage of transit display revenues, is primarily driven by guaranteed minimum annual payments to the New York Metropolitan Transportation Authority (the “MTA”) in each of the three months ended March 31, 2023 and 2022.

We expect transit franchise expenses, as a percentage of transit display revenues, to decline in the remainder of 2023, but remain above pre-COVID-19 pandemic levels, as a result of our expectation that revenues generated under the MTA agreement will be closer to a guaranteed minimum annual payment break-even level in the remainder of 2023 as compared to 2022.

Billboard property lease and transit franchise expenses increased $19.8 million, or 12%, in the three months ended March 31, 2023, compared to the same prior-year period, primarily due to 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 to the Consolidated Financial Statements), higher billboard revenues and higher guaranteed minimum annual payments to the MTA.

Posting, maintenance and other expenses as a percentage of Revenues were 14% in each of the three months ended March 31, 2023 and 2022.

Posting, maintenance and other expenses increased $2.9 million, or 6%, in the three months ended March 31, 2023, compared to the same prior-year period, primarily due to higher maintenance and utilities cost, driven by inflation-driven cost increases in 2023, higher compensation-related expenses and increased activity resulting in higher materials cost, partially offset by lower posting and rotation costs.

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

SG&A expenses represented 27% of Revenues in the three months ended March 31, 2023, and 26% of Revenues in the same prior-year period.

SG&A expenses increased $9.5 million, or 10%, in the three months ended March 31, 2023, compared to the same prior-year period, primarily due to higher professional fees, the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the Company to certain employees, higher compensation-related expenses, including salaries and net of lower commissions, and increased post-COVID-19 pandemic travel resulting in higher travel and entertainment expenses.

Net (Gain) Loss on Dispositions

Net loss on dispositions was $0.3 million in the three months ended March 31, 2023, compared to a Net gain on dispositions of $0.3 million in the same prior-year period.

Depreciation increased $0.8 million, or 4%, in the three months ended March 31, 2023, compared to the same prior-year period, primarily due to capital expenditures and acquisitions in 2022.

Amortization increased $7.0 million, or 47%, in the three months ended March 31, 2023, compared to the same prior-year period, due primarily to higher amortization of leasehold interest intangibles recorded related to asset acquisitions completed during each of the three months ended March 31, 2023 and in 2022.

Interest Expense, Net

Interest expense, net, was $37.7 million (including $1.6 million of deferred financing costs) in the three months ended March 31, 2023, and $30.7 million (including $1.6 million of deferred financing costs) in the same prior-year period, primarily due to higher interest rates and a higher average debt balance.

Benefit (Provision) for Income Taxes

Provision for income taxes was $0.4 million in the three months ended March 31, 2023, compared to a Benefit for income taxes of $2.1 million in the same prior-year period, due primarily to recording a valuation allowance against our U.S.

taxable REIT subsidiary (“TRS”) deferred tax assets.

Net Income (Loss)

Net loss before allocation to non-controlling interests was $28.7 million in the three months ended March 31, 2023, compared to Net income before allocation to non-controlling interests of $0.1 million in the same prior-year period, due primarily to lower operating income, due to an increase in billboard operating lease expenses, including 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 to the Consolidated Financial Statements), increases in the MTA guaranteed minimum annual payments in 2023, higher compensation-related expenses and higher interest expense.

Reconciliation of Non-GAAP Financial Measures

Adjusted OIBDA

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

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

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

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AFFO also includes cash paid for maintenance capital expenditures since these are routine uses of cash that are necessary for our operations.

In addition, AFFO excludes restructuring charges and losses on extinguishment of debt, as well as certain non-cash items, including non-real estate depreciation and amortization, a gain on disposition of non-real estate assets, stock-based compensation expense, accretion expense, the non-cash effect of straight-line rent, amortization of deferred financing costs and the same adjustments for our non-controlling interests, along with the non-cash portion of income taxes, and the related income tax effect of adjustments, as applicable.

In addition, AFFO excludes certain non-cash items, including non-real estate depreciation and amortization, stock-based compensation expense, accretion expense, the non-cash effect of straight-line rent, amortization of deferred financing costs and the same adjustments for our non-controlling interests, along with the non-cash portion of income taxes, and the related income tax effect of adjustments, as applicable.

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

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In addition, these measures do not necessarily represent funds available for discretionary use and are not necessarily a measure of our ability to fund our cash needs.

Reconciliation of Non-GAAP Financial Measures

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

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

to FFO attributable to OUTFRONT Media Inc.

and AFFO attributable to OUTFRONT Media Inc.

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions, except per share amounts) 2023 2022

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Adjusted OIBDA margin 15 % 19 %

Net income (loss) attributable to OUTFRONT Media Inc.

Net loss attributable to OUTFRONT Media Inc.

$ (28.9) $ (0.1)

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FFO attributable to OUTFRONT Media Inc.

88.0 74.6 222.2 83.9

Non-cash portion of income taxes (3.2) (4.2)

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Other amortization 3.5 1.4

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

Stock-based compensation 7.8 7.9

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Amortization of deferred financing costs

1.6 1.7 4.9 5.5

Loss on extinguishment of debt — — — 6.3

Income tax effect of adjustments (b)

AFFO attributable to OUTFRONT Media Inc.

$ 86.5 $ 79.0 $ 215.2 $ 94.1

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

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

FFO increased $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.

Analysis of Results of Operations

We derive Revenues primarily from providing advertising space to customers on our advertising structures and sites.

Our contracts with customers generally cover periods ranging from four weeks to one year.

Revenues from billboard displays are recognized as rental income on a straight-line basis over the contract term.

Transit and other revenues are recognized over the contract period.

(See Note 10.

Revenues to the Consolidated Financial Statements.)

Three Months Ended Nine Months Ended

September 30, % September 30, %

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

Billboard $ 355.0 $ 317.4 12 % $ 1,007.2 $ 828.3 22 %

Transit and other

98.7 81.8 21 270.2 171.1 58

Total revenues $ 453.7 $ 399.2 14 $ 1,277.4 $ 999.4 28

Organic revenues (a) :

$ 350.6 $ 316.6 11 $ 1,000.4 $ 827.0 21

Transit and other

98.7 81.6 21 270.2 170.8 58

Total organic revenues (a)

449.3 398.2 13 1,270.6 997.8 27

Non-organic revenues:

4.4 0.8 * 6.8 1.3 *

Transit and other

— 0.2 * — 0.3 *

Total non-organic revenues

4.4 1.0 * 6.8 1.6 *

Total revenues $ 453.7 $ 399.2 14 $ 1,277.4 $ 999.4 28

* Calculation is not meaningful.

(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 $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 $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

Operating $ 232.6 $ 199.8 16 % $ 671.9 $ 567.0 19 %

Selling, general and administrative 106.5 98.5 8 311.8 263.9 18

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

Depreciation 19.9 19.6 2 58.6 59.6 (2)

Amortization 20.2 16.7 21 52.3 49.4 6

Total expenses $ 379.4 $ 334.2 14 $ 1,094.7 $ 936.3 17

* Calculation is not meaningful.

Operating Expenses

Three Months Ended Nine Months Ended

September 30, % September 30, %

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

Operating expenses:

Billboard property lease $ 114.4 $ 101.8 12 % $ 334.2 $ 296.6 13 %

Transit franchise 59.8 49.0 22 172.9 131.1 32

Posting, maintenance and other 58.4 49.0 19 164.8 139.3 18

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 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 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 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 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 $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 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

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 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.

FFO attributable to OUTFRONT Media Inc.

decreased $24.7 million, or 59%, in the three months ended March 31, 2023, compared to the same prior-year period, due primarily to lower operating income, lower amortization of direct lease acquisition costs and a provision for income taxes in the three months ended March 31, 2023, compared to a benefit for income taxes in the same prior-year period, partially offset by higher amortization of real estate-related intangible assets.

AFFO attributable to OUTFRONT Media Inc.

decreased $26.7 million, or 75%, in the three months ended March 31, 2023, compared to the same prior-year period, due primarily to lower operating income and higher maintenance capital expenditures.

Segment Results of Operations

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Media and Other .

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,

The following table presents our Revenues , Adjusted OIBDA and Operating income by segment in the three months ended March 31, 2023 and 2022.

Three Months Ended

(in millions) 2023 2022

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Stock-based compensation (a)

8.6 7.2 25.0 20.7

Total Adjusted OIBDA $ 60.2 $ 70.2

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

Three Months Ended Nine Months Ended

September 30, % September 30, %

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

Three Months Ended

(in millions, except percentages) 2023 2022 Change

Billboard $ 306.1 $ 283.4 8 %

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

Media segment revenues increased $22.2 million, or 6%, in the three months ended March 31, 2023, compared to the same prior-year period, due primarily to higher billboard revenues, partially offset by lower transit and other revenues.

We generated approximately 40% in the three months ended March 31, 2023, and 42% in the three months ended March 31, 2022, of our U.S.

Media segment revenues from national advertising campaigns.

In the three months ended March 31, 2023, non-organic revenues reflect the impact of a significant acquisition.

Billboard revenues in the U.S.

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.

Media segment increased $22.7 million, or 8%, in the three months ended March 31, 2023, compared to the same prior-year period, reflecting the impact of new and lost billboards in the period, including acquisitions, higher proceeds from condemnations and an increase in average revenue per display (yield).

Organic billboard revenues in the U.S.

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.

Media segment increased $19.8 million, or 7%, in the three months ended March 31, 2023, compared to the same prior-year period, primarily due to the impact of new and lost billboards in the period, including insignificant acquisitions, higher proceeds from condemnations and an increase in average revenue per display (yield).

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.

Media segment decreased $0.5 million, or 1%, in the three months ended March 31, 2023, compared to the same prior-year period, primarily driven by a decrease in average revenue per display (yield), driven by weaker market conditions in national advertising, which primarily impacted advertising sales on certain above-ground advertising displays, partially offset by the impact of a new transit franchise contract.

Organic transit and other revenues in the U.S.

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.

by weaker market conditions in national advertising, which primarily impacted advertising sales on certain above-ground advertising displays, partially offset by the impact of a new transit franchise contract.

Operating expenses in the U.S.

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.

Media segment increased $23.2 million, or 12%, in the three months ended March 31, 2023, compared to the same prior-year period, primarily driven by higher billboard property lease expenses, including 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 to the Consolidated Financial Statements), higher guaranteed minimum annual payments to the MTA, higher maintenance and utilities cost, driven by inflation-driven utility cost increases in 2023, higher compensation-related expenses and increased activity resulting in higher materials cost, partially offset by lower posting and rotation costs.

SG&A expenses in the U.S.

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

Media segment increased $7.0 million, or 9%, in the three months ended March 31, 2023, compared to the same prior-year period, primarily driven by higher compensation-related expenses, higher professional fees and increased post-COVID-19 pandemic travel resulting in higher travel and entertainment expenses.

Media segment Adjusted OIBDA decreased $8.0 million, or 10%, in the three months ended March 31, 2023, compared to the same prior-year period.

Adjusted OIBDA margin was 19% in the three months ended March 31, 2023, and 23% in the same prior-year period.

The decrease in Adjusted OIBDA margins was due primarily to a higher increase in operating expenses, due to an increase in billboard property lease expenses, including 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 to the Consolidated Financial Statements), increases in the MTA guaranteed minimum annual payments in 2023 and an increase in SG&A expenses, compared to a lower increase in revenues.

Three Months Ended

(in millions, except percentages) 2023 2022 Change

$ 14.5 $ 14.8 (2) %

Transit and other

6.0 4.0 50 16.3 10.4 57

Total revenues $ 19.4 $ 19.3 1

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Transit and other

6.0 3.8 58 16.3 10.1 61

Total organic revenues (a)

25.7 22.0 17 72.7 54.4 34

Non-organic revenues:

— 0.8 * — 1.3 *

Transit and other

— 0.2 * — 0.3 *

Total non-organic revenues

— 1.0 * — 1.6 *

Total revenues 19.4 19.3 1

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Adjusted OIBDA margin 6 % 3 %

Operating income (loss) $ 2.4 $ 1.8 33 $ 4.8 $ (1.6) *

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

Operating loss $ (2.3) $ (2.4) (4)

Depreciation and amortization 3.4 3.0 13

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

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).

Total Other revenues increased $0.1 million, or 1%, in the three months ended March 31, 2023, compared to the same prior-year period, driven by an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services, partially offset by the impact of foreign currency exchange rates.

In the three months ended March 31, 2022, non-organic revenues reflect the impact of foreign currency exchange rates.

Organic Other revenues increased $1.2 million, or 7%, in the three months ended March 31, 2023, compared to the same prior-year period, driven by an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services.

Other operating expenses decreased $0.5 million, or 4%, in the three months ended March 31, 2023, compared to the same prior-year period, primarily driven by the impact of foreign currency exchange rates, partially offset by higher expenses in Canada.

Other SG&A expenses increased $0.1 million, or 2%, in the three months ended March 31, 2023, compared to the same prior-year periods primarily driven by higher expenses in Canada, partially offset by the impact of foreign currency exchange rates.

Other Adjusted OIBDA increased $0.5 million, or 83%, in the three months ended March 31, 2023, 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 $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.

Corporate expenses, excluding stock-based compensation, were $13.0 million in the three months ended March 31, 2023, compared to $10.5 million in the same prior-year period, primarily due to the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the Company to certain employees, higher compensation-related expenses, including salaries, and higher professional fees.

Liquidity and Capital Resources

(in millions, except percentages) September 30,

(in millions, except percentages) March 31,

2023 December 31, 2022 % Change

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Prepaid lease and transit franchise costs 8.2 9.1 (10)

Prepaid MTA equipment deployment costs 2.3 — *

Other prepaid expenses 20.9 19.8 6

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Deferred revenues 54.8 35.3 55

Short-term debt 115.0 30.0 *

Short-term operating lease liabilities 201.6 188.1 7

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Working capital $ (254.4) $ (161.2) 58

* Calculation is not meaningful.

We continually project anticipated cash requirements for our operating, investing and financing needs as well as cash flows generated from operating activities available to meet these needs.

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Our 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.

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 2023, 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 $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).

Working capital was a deficit of $254.4 million as of March 31, 2023, compared to a working capital deficit of $161.2 million as of December 31, 2022, primarily driven by lower receivable balances, increased borrowings under the AR Facility and increased short-term operating lease liabilities.

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

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

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

• Recoupment of Equipment Deployment Costs.

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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 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.

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.

For the full year of 2023, we expect our MTA equipment deployment costs to be approximately $100.0 million and between 2023 and 2024, an aggregate of approximately $140.0 million.

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

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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 $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.

As of March 31, 2023, 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 transit display revenues, to decline in 2023, but

remain above pre-COVID-19 pandemic levels.

As indicated in the table below, we incurred $18.8 million related to MTA equipment deployment costs in the three months ended March 31, 2023 (which includes equipment deployment costs related to future deployments), for a total of $554.7 million to date, of which $33.9 million had been recouped from incremental revenues to date.

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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Total $ 348.0 $ 88.9 $ (3.7) $ (6.4) $ 426.8

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.

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.

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:

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Total $ 3,395.5 $ 156.5 $ 670.8 $ 1,478.5 $ 1,089.7

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.

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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 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 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.

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.

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 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”).

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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 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

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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.

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.

At-the-Market Equity Offering Program

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

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

As of September 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 three months ended March 31, 2023.

As of March 31, 2023, 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;

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.

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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 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, %

The following table presents our cash flows in the three months ended March 31, 2023 and 2022.

Three Months Ended

(in millions, except percentages) 2023 2022 Change

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Net cash flow used for investing activities (27.7) (27.8) —

Net cash flow used for financing activities (165.6) (140.5) 18 %

Net cash flow provided by (used for) financing activities 20.7 (62.4) *

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

Net decrease in cash, cash equivalents and restricted cash

Net increase (decrease) in cash and cash equivalents

$ 2.4 $ (69.1) *

* Calculation is not meaningful.

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 nine months ended September 30, 2022 and 2021.

Nine Months Ended

September 30, %

Cash provided by operating activities decreased $11.1 million, or 54%, in the three months ended March 31, 2023, compared to the same prior-year period, due primarily to a higher net loss in 2023 compared to 2022, due to increased operating and SG&A expenses, the timing of payments and an increase in prepaid MTA equipment deployment costs, partially offset by improved cash collections.

In the three months ended March 31, 2023, we paid net cash of $18.8 million related to MTA equipment deployment costs and installed 1,047 digital displays.

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

Cash used for investing activities decreased $0.1 million in the three months ended March 31, 2023, compared to the same prior-year period, due primarily to lower cash paid for acquisitions and lower cash paid for MTA franchise rights, partially offset by higher cash paid for capital expenditures.

The following table presents our capital expenditures in the three months ended March 31, 2023 and 2022.

Three Months Ended

(in millions, except percentages) 2023 2022 Change

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Total capital expenditures $ 22.6 $ 16.9 34

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.

Capital expenditures increased $5.7 million, or 34%, in the three months ended March 31, 2023, compared to the same prior-year period, primarily due to higher spending on software and technology, and vehicles, partially offset by decreased growth in digital displays and decreased maintenance spending for billboard display upgrades.

For the full year of 2023, we expect our capital expenditures to be approximately $90.0 million, which will be used primarily for growth in digital displays, the renovation of certain office facilities, software and technology, maintenance, 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 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.

Cash provided by financing activities was $20.7 million in the three months ended March 31, 2023, compared to Cash used for financing activities of $62.4 million in the same prior-year period.

In the three months ended March 31, 2023, we drew $85.0 million of borrowings on the AR Facility and paid total cash dividends of $52.0 million on our common stock, the Series A Preferred Stock and vested restricted share units granted to employees.

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

Cash paid for income taxes was $3.6 million for in the three months ended March 31, 2023 and $2.1 million in the three months ended March 31, 2022.

The increase was primarily due to improved profitability in Canada.

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 and the current heightened levels of inflation.

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

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.

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You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “could,” “would,” “may,” “might,” “will,” “should,” “seeks,” “likely,” “intends,” “plans,” “projects,” “predicts,” “estimates,” “forecast” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters.

You can also identify forward-looking statements by discussions of strategy, plans or intentions related to our capital resources, portfolio performance and results of operations, including but not limited to the impact of the COVID-19 pandemic on our capital resources, portfolio performance and results of operations.

You can also identify forward-looking statements by discussions of strategy, plans or intentions related to our capital resources, portfolio performance and results of operations.

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).

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

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

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

• Declines in advertising and general economic conditions, including the current heightened levels of inflation;

• The severity and duration of pandemics, and the impact on our business, financial condition and results of operations;

• Competition;

• Government regulation;

• Our ability to implement our digital display platform and deploy digital advertising displays to our transit franchise partners, including interruptions and reductions in demand caused by the impact of the COVID-19 pandemic;

• Our ability to implement our digital display platform and deploy digital advertising displays to our transit franchise partners;

• Losses and costs resulting from recalls and product liability, warranty and intellectual property claims;

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• Environmental, health and safety laws and regulations;

• Expectations relating to environmental, social and governance considerations;

• Our substantial indebtedness;

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• We may face other tax liabilities even if we remain qualified to be taxed as a REIT;

• Complying with REIT requirements may cause us to liquidate investments or forgo otherwise attractive opportunities;

• Complying with REIT requirements may cause us to liquidate investments or forgo otherwise attractive investments or business opportunities;

• Our ability to contribute certain contracts to a TRS;

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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 2. Management’s Discussion and Analysis