What changed in this filing

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Item 1. Business

2024-02-22 compared with 2023-02-23 · 64 added, 51 removed, 335 unchanged (26% of the section changed)

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Segment Information to the Consolidated Financial Statements).

On October 22, 2023, we entered into an agreement to sell our outdoor advertising business in Canada.

See “—Acquisition and Disposition Activity.”

Our corporate history can be traced back to companies that helped to pioneer the growth of out-of-home advertising in the U.S., such as Outdoor Systems, Inc., 3M National, Gannett Outdoor and TDI Worldwide Inc.

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Three years later, a predecessor of CBS acquired Outdoor Systems, Inc., which represented the consolidation of the outdoor advertising assets of large national operators such as 3M National, Gannett Outdoor (and its Canadian assets held in the name Mediacom) and many local operators in North America.

stock that were owned by CBS for outstanding shares of CBS Class B common stock (“the Exchange Offer”).

On April 2, 2014, the Company completed an initial public offering (the “IPO”) of its common stock under the name “CBS Outdoor Americas Inc.” On July 16, 2014, CBS completed a registered offer to exchange 97,000,000 shares of our common stock that were owned by CBS for outstanding shares of CBS Class B common stock (“the Exchange Offer”).

In connection with the Exchange Offer, CBS disposed of all of its shares of our common stock and as of July 16, 2014, we were separated from CBS (the “Separation”) and were no longer a subsidiary of CBS.

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We regularly evaluate potential acquisitions, ranging from small transactions to larger acquisitions.

On October 22, 2023, the Company, Outfront Canada HoldCo 2 LLC, a wholly-owned subsidiary of the Company, and Outfront Canada Sub LLC, a wholly-owned subsidiary of the Company (together, the “Selling Subsidiaries”), entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with Bell Media Inc.

(the “Buyer”), relating to the sale of the Company’s outdoor advertising business in Canada (the “Canadian Business”).

Pursuant to the Share Purchase Agreement, the Selling Subsidiaries agreed to sell all of its (and its affiliates) equity interests in Outdoor Systems Americas ULC and its subsidiaries (the “Transaction”), which hold all of the assets of the Canadian Business, to the Buyer, for C$410.0 million in cash, payable on the date of the consummation of the Transaction (the “Closing”).

The purchase price is subject to (i) adjustments at and following the Closing for working capital, cash, indebtedness, capital expenditures and transaction expenses, and (ii) a holdback to be released at or following the Closing, in whole or in part, if certain third-party contracts are renewed or extended on certain terms.

The consummation of the Transaction is expected to occur in the first half of 2024, subject to certain closing conditions, including, among others, (i) the absence of any enacted or pending law, order, judgment or litigation by a governmental authority prohibiting the consummation of the Transaction, and (ii) receipt of antitrust approval in Canada (the “Antitrust Approval”).

The obligation of the Buyer to consummate the Transaction is also conditioned on the absence of a material adverse effect on the Canadian Business following the date of the Share Purchase Agreement and the Selling Subsidiaries’ obligation to spend a target percentage of forecasted capital expenditures through the Closing.

The obligation of each party to consummate the Transaction is conditioned on each party’s representations and warranties being true and correct and each party having performed in all material respects its obligations under the Share Purchase Agreement.

In addition, the Share Purchase Agreement may be terminated under certain circumstances, including (i) by mutual written agreement of the Buyer and the Selling Subsidiaries;

(ii) by either the Buyer or the Selling Subsidiaries if the Closing does not occur by July 22, 2024, with extensions by the Buyer or the Selling Subsidiaries under certain conditions until no later than October 22, 2024 (the “Outside Date”);

or (iii) by either the Buyer or the Selling Subsidiaries if a failure by either the Buyer or the Seller Subsidiaries is the principal cause of any closing condition not being satisfied.

If the Antitrust Approval is not received by the Outside Date and the principal cause of such failure is not a failure of the Selling Subsidiaries or its subsidiaries to perform any of their obligations under the Share Purchase Agreement, the Buyer will pay a termination fee to the Selling Subsidiaries in the amount of C$20.0 million.

For additional information regarding our acquisition and disposition activity, see “Item 7.

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Continue Increasing the Number of Digital Displays in our Portfolio.

Increasing the number of digital displays in prime audience locations is an important element of our organic growth strategy, as digital displays have the potential to attract additional business from both new and existing customers.

Increasing the number of digital displays in our prime audience locations is an important element of our organic growth strategy, as digital displays have the potential to attract additional business from both new and existing customers.

We believe digital displays are attractive to our customers because they allow for the development of richer and more visually engaging messages, provide our customers with the flexibility both to target audiences by time of day and to quickly launch new advertising campaigns, and eliminate or greatly reduce print production and installation costs.

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

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

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

As a result, digital billboard displays generate higher profits and cash flows than traditional static billboard displays.

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.

Generally, we expect to generate higher revenue over time on digital transit displays since digital transit

displays allow us to sell each display to multiple advertisers within a relatively shorter period of time and provide customers with more visually engaging advertising content.

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.

See “—Renovation, Improvement and Development.”

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

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

As a result, digital billboard displays generate higher profits and cash flows than comparable traditional static billboard displays.

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, but at a slower pace than our historical deployments.

We believe revenues generated on our network of digital transit displays will be higher than revenues generated on a comparable portfolio of our static transit displays.

We have incurred, and 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.

However, we expect that our annual equipment deployment cost spending with respect to the New York Metropolitan Transportation Authority (the “MTA”) transit franchise will decline after our expected material completion of our initial deployment in 2024.

See “—Renovation, Improvement and Development” and “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Drive Enhanced Revenue Management.

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As part of our growth strategy, we frequently evaluate strategic opportunities to acquire new businesses and assets.

Consistent with this strategy, we regularly evaluate potential acquisitions, ranging from small transactions to larger acquisitions.

Consistent with this strategy, we regularly evaluate potential acquisitions, ranging from

small transactions to larger acquisitions.

See “—Acquisition and Disposition Activity.” There can be no assurances that any transactions currently being evaluated will be consummated or, if consummated, that such transactions would prove beneficial to us.

Further, our national footprint in the U.S.

and significant presence in Canada provide us with an attractive platform on which to add additional advertising structures and sites.

provides us with an attractive platform on which to add additional advertising structures and sites.

Our scale gives us advantages in driving additional revenues and reducing operating costs from acquired billboards.

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Health/Medical 9 9 10

Legal Services/Lawyers 7 5 5

Technology 6 8 7

Miscellaneous Service Providers 5 5 5

Legal Services/Lawyers 5 5 5

Restaurants 4 5 5

Financial 4 4 4

Automotive 4 4 4

Alcohol 3 4 4

Consumer Packaged Goods 4 3 3

Government/Political 3 4 4

Education 4 3 3

Financial 3 4 5

Alcohol 3 3 4

Government/Political 3 3 4

Utilities 3 3 3

Real Estate 2 3 2

Non-Profit 2 2 2

Insurance 2 2 3

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Houston, TX 4 1 3 1,075 188 1,263 <1

Chicago, IL 4 <1 3 1,086 123 1,209 <1

Tampa, FL 3 — 3 1,323 — 1,323 <1

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1 10 2 19 47,163 47,182 9

Chicago, IL 1 <1 1 1,196 — 1,196 <1

All other United States (b)

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The New York and Los Angeles metropolitan areas contributed 52% and 11%, respectively, of total transit and other revenues in 2022 and 49% and 12%, respectively, of total transit and other revenues in 2021.

Los Angeles contributed 15% of total billboard revenues in each of 2021 and 2020.

New York contributed 8% of total billboard revenues in each of 2021 and 2020.

Los Angeles contributed 16% of total billboard revenues in 2022 and contributed 15% of total billboard revenues in 2021.

New York contributed 10% of total billboard revenues in 2022 and contributed 8% of total billboard revenues in 2021.

For additional information regarding revenues for our billboard displays and transit and other displays by segment, see “Item 7.

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and 45 in Canada in 2023, compared to 110 digital billboard displays in the U.S.

and 10 in Canada in 2021, and 60 digital billboard displays in the U.S.

and nine in Canada in 2022, and 77 digital billboard displays in the U.S.

and 10 in Canada in 2021.

Additionally, we entered into marketing arrangements to sell advertising on 46 third-party digital billboard displays in the U.S.

in 2022, compared to 35 third-party digital billboard displays in the U.S.

and 4 in Canada in 2021, and 31 third-party billboard displays in each of the U.S.

and Canada in 2020.

and two in Canada in 2023, compared to 85 third-party digital billboard displays in the U.S.

in 2022, and 35 third-party billboard displays in the U.S.

and four in Canada in 2021.

We built, converted or replaced 5,624 digital transit and other displays in the U.S.

in 2022, and 3,778 digital transit and other displays in the U.S.

and 15 in Canada in 2021.

and 23 in Canada in 2023, and 3,410 digital transit and other displays in the U.S.

Our total number of digital displays is impacted by acquisitions, dispositions, management agreements and the net effect of new and lost billboards and the net effect of won and lost franchises.

Further, as a result of the COVID-19 pandemic, in 2020 and 2021, we reduced our digital billboard display conversions and temporarily suspended or delayed our deployment of certain digital transit displays.

As of December 31, 2023, our average initial investment required for a digital billboard display is approximately $250,000.

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Our maintenance capital expenditures were $30.2 million in 2023, $25.5 million in 2022 and $25.3 million in 2021.

Maintenance capital expenditures also include spending on software and technology.

Maintenance capital expenditures also include spending on software and technology, and office facilities renovations.

In the opinion of management, our outdoor advertising sites and structures are adequately covered by insurance.

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

All of these contracts have fixed terms, are typically terminable for convenience at the option of the governmental entity (other than with respect to the New York Metropolitan Transportation Authority (the “MTA”)), and generally provide for payments to the governmental entity based on a percentage of the revenues generated under the contract and/or a guaranteed minimum annual payment, and some may require us to incur capital expenditures.

All of these contracts have fixed terms, are typically terminable for convenience at the option of the governmental entity (other than with respect to the MTA), and generally provide for payments to the governmental entity based on a percentage of the revenues generated under the contract and/or a guaranteed minimum annual payment, and some may require us to incur capital expenditures.

When these contracts expire, we generally must participate in highly competitive bidding processes in order to obtain or renew contracts.

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Human Capital

We believe we can enhance stockholder value by conducting our business in a sustainable way that considers the long-term interests of all our stakeholders, including our employees.

We believe we can continue to enhance stockholder value through our purpose-driven business practices that consider the long-term interests of all our stakeholders, including our employees.

We aim to create a workplace where employees feel engaged, rewarded and empowered.

Culture plays an important role in the way we conduct business and attract talent and, as such, we actively promote a culture of collaboration, creativity, inclusivity and ownership throughout the employee experience.

As of December 31, 2022, we had 2,375 employees, of which 877 were sales and sales-related personnel in the U.S.

As of December 31, 2023, we had a total of 2,375 employees, of which 285 are located in Canada.

As of December 31, 2023, 884 employees were sales and sales-related personnel in the U.S.

and 84 were Canadian sales and sales-related personnel.

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As our business grows, we place a priority on helping our employees build both their skills and careers.

We provide regular and ongoing employee development and training, through among other things, our annual performance review process, and employee trainings in consultative selling, technology, safety, compliance, management and leadership skills.

We provide regular and ongoing employee development and training, through among other things, our annual performance review process, and employee trainings in sales strategy, technology, safety, compliance, management and leadership skills.

We also recognize the efforts of our employees with a variety of equity, cash and non-cash awards, such as our annual OUTShine!

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In 2023, we experienced lower total employee turnover of 13% compared to 14% in 2022 and 15% in 2021.

Employee turnover in 2020 was primarily due to actions taken in that year to reduce our expenses in response to the impact of the COVID-19 pandemic, including, among other things, workforce reductions.

The reduction in employee turnover in 2021 was partially offset by an increase in voluntary turnover.

Voluntary turnover decreased in 2022 compared to 2021.

Voluntary turnover decreased in 2023 compared to 2022 and decreased in 2022 compared to

We believe that our culture, competitive compensation and development opportunities have contributed to the low turnover at the Company.

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One of our basic principles is treating everyone with dignity and respect, and we believe it is our responsibility to respect all cultures, backgrounds, ethnicities, genders and sexual orientations.

Our diversity, equity and inclusion program is led by an advisory council and the Company’s co-Chief Diversity Officers as well as our Chief Human Resources Officer, and is charged with providing programs that focus on the value of diversity, equity and inclusion to the Company’s culture, including employee resource groups, diversity and inclusion training and events, presentations by keynote speakers, and internship programs, all of which support women, people of color and members of the LGBTQ+ community.

Our diversity, equity and inclusion program is led by an advisory council and the Company’s co-Chief Diversity Officers as well as our Chief Human Resources Officer, and is charged with providing programs that focus on the value of diversity, equity and inclusion to the Company’s culture, including employee resource groups, diversity and inclusion training and events, presentations by keynote speakers, and internship programs, all of which support inclusion and belonging for all employees, including members of underrepresented communities.

Compensation, Benefits, Health and Safety

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Our comprehensive training program is another essential aspect to promoting the safety of our employees.

We require all our field operations team members to participate in an extensive training process and we reinforce these trainings throughout the year.

In 2022, we did not suffer any significant employee accidents or injuries and continue to strictly manage our corporate health and safety programs to ensure compliance.

In 2022, we also introduced telematics in all of our vehicles to help maintain the safety of our personnel.

In addition, throughout the COVID-19 pandemic, we prioritized the health and safety of our employees by, among other things, (i) utilizing a secure remote workforce as needed for personnel other than operations personnel who service our displays and certain other personnel, (ii) implementing deep cleaning, social distancing and other protective policies and practices in accordance with federal, state and local regulations and guidance across all offices and facilities, and (iii) communicating frequently with our employees and customers to address any concerns and updates to our policies.

We require all our field operations team members to participate in an extensive training process and we reinforce and strictly manage these trainings throughout the year.

As of December 31, 2023, all of our company-owned vehicles have been installed with telematic monitoring systems.

This allows the Company to proactively monitor our employees to ensure they are following the best practices in defensive driving, which in turn, should create a safer environment for our employees and the people in the markets we serve, along with mitigating our insurance costs.

The outdoor advertising industry is subject to governmental regulation and enforcement at the federal, state and local levels in the U.S.

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and Canada limit or prohibit the ability to modify, relocate, rebuild, replace, repair, maintain and upgrade advertising structures, particularly those structures that are “legal nonconforming” (i.e., that conformed with applicable regulations when built but which no longer conform to current regulations), and impose restrictions on the construction, repair, maintenance, lighting, operation, upgrading, height, size, spacing and location of outdoor structures generally and/or on the surrounding land and vegetation, as well as on the use of new technologies such as digital signs.

In addition, from time to time, third parties or local governments commence proceedings in which they assert that we own or operate structures that are not properly permitted or otherwise in strict compliance with applicable law.

In addition, from time to time,

third parties or local governments commence proceedings in which they assert that we own or operate structures that are not properly permitted or otherwise in strict compliance with applicable law.

Governmental regulation of advertising displays also limits our installation of additional advertising displays, restricts advertising displays to governmentally controlled sites or permits the installation of advertising displays in a manner that could benefit our competitors disproportionately, any of which could have an adverse effect on our business, financial condition and results of operations.

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and Canada that restrict or prohibit these types of digital displays.

Furthermore, as digital advertising displays are introduced into the market on a large

scale, existing regulations that currently do not apply to digital advertising displays by their terms could be revised to impose specific restrictions on digital advertising displays due to alleged concerns over, among other things, aesthetics or driver safety.

Furthermore, as digital advertising displays are introduced into the market on a large scale, existing regulations that currently do not apply to digital advertising displays by their terms could be revised to impose specific restrictions on digital advertising displays due to alleged concerns over, among other things, aesthetics or driver safety.

We are subject to numerous federal, state, local and foreign laws, rules and regulations as well as industry standards and regulations regarding privacy, information security, data and consumer protection (including with respect to personally identifiable information), among other things.

Many of these laws and industry standards and regulations are still evolving and changes in the nature of the data that we collect, purchase and utilize, and the ways that data is permitted to be collected, stored, used and/or shared may negatively impact the way that we are able to conduct business, particularly our digital display platform.

Additionally, no cybersecurity measures are impenetrable, and if a cybersecurity incident occurs, we could lose competitively sensitive proprietary business information, disclose personally identifiable information, and/or suffer disruptions to our business operations, particularly our digital advertising displays, which could result in, among other things, regulatory investigations, legal proceedings and/or remedial actions relating to our cybersecurity measures.

Many of these laws and industry standards and regulations are still evolving and changes in the nature of the data that we collect, purchase and utilize, and the ways that data is permitted to be collected, stored, used and/or shared (including with respect to artificial intelligence, machine learning and automated processing) may negatively impact the way that we are able to conduct business, particularly our digital display platform.

Additionally, no cybersecurity

measures are impenetrable, and if a cybersecurity incident occurs, we could lose competitively sensitive proprietary business information, disclose personally identifiable information, and/or suffer significant disruptions to our business operations, particularly our digital advertising displays, which could result in, among other things, regulatory investigations, legal proceedings and/or remedial actions relating to our cybersecurity measures.

See “Item 1A.

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We have not and do not currently anticipate investing in securities of other issuers for the purpose of exercising control over such entities, acquiring any investments primarily for sale in the ordinary course of business, or holding any investments with a view to making short-term gains from their sale, but we may engage in these activities in the future.

Since we must comply with various requirements under the Code in order to maintain our qualification to be taxed as a REIT, including restrictions on the types of assets we may hold, the sources of our income and accumulation of earnings and profits, our ability to engage in certain investments and acquisitions, such as acquisitions of C corporations, may be limited.

Since we must comply with various requirements under the Code in order to maintain our qualification to be taxed as a REIT, our ability to engage in certain investments and acquisitions may be limited.

See “Item 1A.

Risk Factors—Risks Related to Our Corporate and REIT Structure.”

Investments in Other Securities.

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We may, when appropriate, employ leverage and use debt as a means to finance growth in our business, refinance existing debt, to provide additional funds to distribute to stockholders, and/or for corporate purposes.

The Company, along with Outfront Media Capital LLC (“Finance LLC”) and Outfront Media Capital Corporation (“Finance Corp.” and together with Finance LLC, the “Borrowers”) and other guarantor subsidiaries party thereto, are parties to a credit agreement, dated as of January 31, 2014 (as amended, supplemented or otherwise modified, the “Credit Agreement”), pursuant to which the Borrowers may borrow funds under a $500.0 million revolving credit facility, which matures in 2024 (the “Revolving Credit Facility”) and have incurred outstanding indebtedness of $600.0 million under a term loan due in 2026 (the “Term Loan,” together with the Revolving Credit Facility, the “Senior Credit Facilities”).

The Company, along with Outfront Media Capital LLC (“Finance LLC”) and Outfront Media Capital Corporation (“Finance Corp.” and together with Finance LLC, the “Borrowers”) and other guarantor subsidiaries party thereto, are parties to a credit agreement, dated as of January 31, 2014 (as amended, restated, amended and restated, supplemented or otherwise modified, the “Credit Agreement”), pursuant to which the Borrowers may borrow funds under a $500.0 million revolving credit facility, which matures in 2028 (the “Revolving Credit Facility”) and have incurred outstanding indebtedness of $600.0 million under a term loan due in 2026 (the “Term Loan,” together with the Revolving Credit Facility, the “Senior Credit Facilities”).

Since 2014, the Borrowers have also been parties to agreements governing our standalone letter of credit facilities.

As of December 31, 2023, we had issued letters of credit totaling approximately $75.6 million under our aggregate $81.0 million standalone letter of credit facilities.

Additionally, since 2014, the Borrowers have issued senior unsecured notes in several private placement transactions and redeemed certain of these senior unsecured notes.

As of December 31, 2022, of the senior unsecured notes issued by the Borrowers, $400.0 million aggregate principal amount of 6.250% Senior Unsecured Notes due 2025 (the “2025 Notes”), $650.0 million aggregate principal amount of 5.000% Senior Unsecured Notes due 2027 (the “2027 Notes”), $500.0 million aggregate principal amount of 4.250% Senior Unsecured Notes due 2029 (the “2029 Notes”) and $500.0 million aggregate principal amount of 4.625% Senior Unsecured Notes due 2030 (the “2030 Notes” and collectively with the 2025 Notes, 2027 Notes and 2029 Notes, the “Notes”) remain outstanding.

Additionally, since 2014, the Borrowers have issued senior notes in several private placement transactions and redeemed certain of these senior notes.

As of December 31, 2023, of the senior notes issued by the Borrowers, $650.0 million aggregate principal amount of 5.000% Senior Unsecured Notes due 2027 (the “2027 Notes”), $500.0 million aggregate principal amount of 4.250% Senior Unsecured Notes due 2029 (the “2029 Notes”), $500.0 million aggregate principal amount of 4.625% Senior Unsecured Notes due 2030 (the “2030 Notes”) and $450.0 million aggregate principal amount of 7.375% Senior Secured Notes due 2031 (the “2031 Notes” and collectively with the 2027 Notes, the 2029 Notes and the 2030 Notes, the “Notes”) remain outstanding.

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

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In the future, we may issue debt securities (including senior securities), offer common stock, preferred stock, convertible securities or options to purchase common stock in exchange for property, and/or repurchase or otherwise reacquire our common stock or other securities in the open market or otherwise.

Except in connection with the Notes, Class A equity interests of a subsidiary of the Company that controls its Canadian business in connection with the acquisition of outdoor advertising assets

in Canada, the ATM Program and the Series A Preferred Stock (each as defined and described in “Item 7.

Except in connection with the Notes, Class A equity interests of a subsidiary of the Company that controls its Canadian business in connection with the acquisition of outdoor advertising assets in Canada, the ATM Program and the Series A Preferred Stock (each as defined and described in “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources”) and stock-based employee and consultant compensation, in the past four years, we have not offered or issued debt securities, common stock, preferred stock, convertible securities, options to purchase common stock or any other securities in exchange for property or any other purpose.

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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-K

Item 1. Business