What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-02-22 compared with 2023-02-23 · 249 added, 172 removed, 504 unchanged (46% of the section changed)

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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 20% of its revenues in the New York City metropolitan area in 2022 and 17% in 2021, and generated 15% in the Los Angeles metropolitan area in each of 2022 and 2021.

Media segment generated Revenues of $1,673.9 million in 2022 and $1,382.0 million in 2021, and Operating income before Depreciation , Amortization , Net gain on dispositions , Stock-based compensation and an Impairment charge (“Adjusted OIBDA”) of $501.2 million in 2022 and $382.9 million in 2021.

(See the “Segment Results of Operations” section of this MD&A.)

Other (includes International).

Other generated Revenues of $98.2 million in 2022 and $81.9 million in 2021, and Adjusted OIBDA of $20.6 million in 2022 and $10.4 million in 2021.

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”).

(See Item 8., Note 12.

Acquisitions and Dispositions :

Disposition :

Canadian Business to the Consolidated Financial Statements.)

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.

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, industry shutdowns or slowdowns (including due to labor strikes), 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.

These sensitivities may adversely impact our revenues and operating results on a consolidated basis and/or may have a disproportionate adverse impact on one or more of our operating segments, especially our U.S.

Transit operating segment.

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, 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.

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 may continue throughout 2024, 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, 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.

and abroad, which has resulted in rising interest rates, we have experienced increases with respect to some of our posting, maintenance and other expenses, some of our corporate expenses, and our interest expense, which 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.

However, our transit franchise agreements that contain inflationary price adjustments may cause increases in our transit franchise expenses in the near-term if the current heightened levels of inflation continue.

However, our transit franchise agreements that contain inflationary price adjustments may cause increases in our transit franchise expenses in the near-term.

Though the Company cannot reasonably estimate the full impact of the current heightened levels of inflation on our business, financial condition and results of operations at this time, a portion of these increases may be partially offset by increases in advertising rates on our displays and cost efficiencies.

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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.

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

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.

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 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.

We built or converted 84 new digital billboard displays in the U.S.

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Additionally, in 2023, we entered into marketing arrangements to sell advertising on 46 third-party digital billboard displays in the U.S.

and two in Canada.

In 2023, we built, converted or replaced 5,624 digital transit and other displays in the U.S.

and 23 in Canada.

The following table sets forth information regarding our digital displays.

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Media segment revenues, respectively.

During 2021, our largest categories of advertisers were entertainment, health/medical and retail, which represented 19%, 10% and 10% of our total U.S.

Media segment revenues.

During 2022, our largest categories of advertisers were entertainment, retail and health/medical, which represented 20%, 11% 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.

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1,805.4 1,757.9 3

Operating income

287.7 168.3 71

Operating income (loss) (258.4) 287.7 *

Adjusted OIBDA (b)

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Adjusted OIBDA (b) margin

Net income attributable to OUTFRONT Media Inc.

Net income (loss) attributable to OUTFRONT Media Inc.

(430.4) 147.9 *

Funds from operations (“FFO”) (b) attributable to OUTFRONT Media Inc.

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

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

(b) See the “Reconciliation of Non-GAAP Financial Measures” and “Revenues” sections of this MD&A for reconciliations of Operating income (loss) to Operating income (loss) before Depreciation , Amortization , Net gain (loss) on dispositions , Stock-based compensation and Impairment charges (“Adjusted OIBDA”) Net income (loss) attributable to OUTFRONT Media Inc.

to FFO attributable to OUTFRONT Media Inc.

and AFFO attributable to OUTFRONT Media Inc.

and Revenues to organic revenues.

and AFFO attributable to OUTFRONT Media Inc., and Revenues to organic revenues.

Analysis of Results of Operations

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Total revenues increased $48.5 million, or 3%, and organic revenues increased $47.5 million, or 3%, in 2023 compared to 2022.

In 2022, non-organic revenues reflect the impact of a significant acquisition.

In 2021, non-organic revenues reflect the impact of foreign currency exchange rates.

Total billboard revenues increased $202.4 million, or 17%, in 2022 compared to 2021, 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 $194.3 million, or 16%, in 2022 compared to 2021, 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 insignificant acquisitions.

Total transit and other revenues increased $105.8 million, or 38%, in 2022 compared to 2021, primarily driven by an increase in average revenue per display (yield), as we have experienced increases in overall demand for our services primarily due to an increase in transit ridership, partially offset by the loss of a transit franchise contract.

Organic transit and other revenues in 2022 increased $106.3 million, or 38%, compared to 2021, primarily driven by an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services primarily due to an increase in transit ridership, partially offset by the loss of a transit franchise contract.

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

In 2023 and 2022, non-organic revenues reflect the impact of a significant acquisition.

In 2022, non-organic revenues also reflect the impact of foreign currency exchange rates.

Total billboard revenues increased $60.2 million, or 4%, in 2023 compared to 2022, primarily due to an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues, the impact of new and lost billboards in the period, including acquisitions, and higher proceeds from condemnations.

Organic billboard revenues increased $58.7 million, or 4%, in 2023 compared to 2022, primarily due to an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues, the impact of new and lost billboards in the period, including insignificant acquisitions, and higher proceeds from condemnations.

Total transit and other revenues decreased $11.7 million, or 3%, in 2023 compared to 2022, 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, partially offset by the impact of a new transit franchise contract.

Organic transit and other revenues in 2023 decreased $11.2 million, or 3%, compared to 2022, 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, partially offset by the impact of a new transit franchise contract.

Transit ridership remains materially below pre-COVID-19 pandemic levels in our largest transit markets and while we expect ridership to gradually grow over time, we do not expect ridership to reach pre-COVID-19 pandemic levels during the remaining terms of our current transit agreements.

While ridership has increased during 2023 as compared to 2022, the increase in ridership has not led to an increase in overall demand for transit displays.

Year Ended December 31, % Change

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Net (gain) loss on dispositions (14.2) 0.2 *

Impairment charge — 2.5 *

Impairment charges 534.7 — *

Depreciation 79.3 77.4 2

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These expenses reflect costs charged by municipalities and transit operators under transit advertising contracts.

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.

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.

The costs that are determined based on a percentage of revenues are expensed as incurred when the related revenues are recognized, and any guaranteed minimum annual payment is expensed over the contract term.

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Billboard property lease expenses represented 35% of billboard revenues in 2023 and 33% in 2022.

Billboard property lease expenses as a percentage of billboard revenues in 2022 were slightly lower than pre-COVID-19 pandemic levels.

The decrease in billboard property lease expenses as a percentage of revenues in 2022 compared to 2021 is primarily due to an increase in billboard revenues and the fixed nature of certain billboard property lease expenses (see Item 8., Note 5.

Leases to the Consolidated Financial Statements).

The increase in billboard property lease expenses as a percentage of billboard revenues in 2023 compared to 2022 is primarily due to an increase in variable billboard property lease expenses (see Item 8., Note 5.

Leases to the Consolidated Financial Statements), which are primarily attributable to billboard revenue increases in large markets and high profile locations, an out-of-period adjustment of $5.2 million recorded in 2023, related to variable billboard property lease expenses (see Item 8., Note 1.

Description of Business and Basis of Presentation to the Consolidated Financial Statements), and the impact of new locations, including through acquisitions.

Transit franchise expenses represented 71% of transit display revenues in 2023 and 67% in 2022.

The decrease in transit franchise expense, as a percentage of revenues, is primarily driven by an increase in transit revenue, while the MTA was paid guaranteed minimum annual payments in both 2022 and 2021.

We expect transit franchise expenses, as a percentage of revenues, to decline in 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 2023 than in 2022.

Billboard property lease and transit franchise expenses increased by $102.0 million in 2022 compared to 2021, primarily due to higher billboard and transit revenues, and higher guaranteed minimum annual payments to the MTA.

Posting, maintenance and other expenses, as a percentage of revenues, were 12% in 2022 and 13% in 2021.

Posting, maintenance and other expenses increased $25.4 million, or 13%, in 2022 compared to 2021, primarily due to higher posting and rotation costs, higher maintenance and utilities cost, driven by economic recovery from the COVID-19 pandemic and inflation-driven cost increases in 2022, higher compensation-related expenses and increased activity resulting in higher production and materials cost.

The increase in transit franchise expenses, as a percentage of revenues, is primarily driven by higher guaranteed minimum annual payments to the MTA.

We expect transit franchise expenses, as a percentage of transit display revenues, to decline in 2024 compared to 2023, but remain above pre-COVID-19 pandemic levels, as a result of our expectation that revenues generated under the MTA Agreement (as defined below) in 2024 will grow at a compound annual growth rate above the inflation-adjusted guaranteed minimum annual payments to the MTA.

Billboard property lease and transit franchise expenses increased by $55.2 million in 2023 compared to 2022, primarily due to higher variable billboard property lease expenses, including an out-of-period adjustment of $5.2 million recorded in 2023, related to variable billboard property lease expenses (see Item 8., Note 1.

Description of Business and Basis of Presentation to the Consolidated Financial Statements), the impact of new locations, including through acquisitions, and higher guaranteed minimum annual payments to the MTA.

Posting, maintenance and other expenses, as a percentage of revenues, were 12% in each of 2023 and 2022.

Posting, maintenance and other expenses increased $1.7 million, or 1%, in 2023 compared to 2022, primarily due to higher compensation-related expenses and higher maintenance and utilities cost, driven by inflationary cost increases in 2023, partially offset by lower posting and rotation costs.

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

SG&A expenses represented 24% of Revenues in 2023 and 24% in 2022.

SG&A expenses increased $53.9 million, or 15%, in 2022 compared to 2021, 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 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 unfunded equity-linked retirement plan offered by the Company to certain employees.

SG&A expenses increased $7.6 million, or 2%, in 2023 compared to 2022, primarily due to the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the Company to certain employees, higher professional fees, rent related to new offices, higher insurance costs and a higher provision for doubtful accounts, partially offset by lower compensation-related expenses.

We continue to evaluate methods to lower SG&A expense growth.

Net (Gain) Loss on Dispositions

Net loss on dispositions was $0.2 million in 2022 compared a Net gain on dispositions of $4.5 million in 2021.

Impairment Charge

In 2021, we recorded $2.5 million in impairment charges related to an other-than-temporary decline in fair value of a cost-method investment.

Depreciation decreased $2.0 million, or 3%, in 2022 compared to 2021, primarily due to an increase in fully-depreciated assets, partially offset by new capital expenditures and acquisitions.

Amortization increased $7.3 million, or 11%, in 2022 compared to 2021, principally driven by higher amortization of leasehold interest intangibles recorded related to asset acquisitions completed during 2021 and 2022.

Net gain on dispositions was $14.2 million in 2023 compared to a Net loss on dispositions of $0.2 million in 2022.

The Net gain on dispositions in 2023 was primarily related to the sale of three parcels of land and the related structures in Los Angeles, California, (see Item 8., Note 12.

Acquisitions and Dispositions :

Dispositions :

Los Angeles Office and Operations Center to the Consolidated Financial Statements) and in St.

Louis, Missouri.

Impairment Charges

In 2023, we recorded impairment charges of $534.7 million.

As a result of the impairment analysis performed during the second quarter of 2023, we determined that the carrying value of our U.S.

Transit and Other reporting unit exceeded its fair value and we recorded an impairment charge of $47.6 million in the Consolidated Statements of Operations, representing the entire goodwill balance associated with the reporting unit.

(See the “Critical Accounting Policies” section of this MD&A.)

During the second quarter of 2023, we also performed an analysis of the carrying value of our long-lived asset groups within our U.S.

Transit and Other reporting unit as a result of the triggering event noted above utilizing undiscounted cash flows compared to the carrying value of the asset groups and determined that they were not fully recoverable.

We then compared the fair value of the assets (calculated using a cash flow model) to the carrying value and we recorded an impairment charge of $463.5 million in the second quarter of 2023, primarily representing a $443.1 million impairment charge related to our MTA asset group.

As a result of our continued expectation of negative aggregate cash flows related to our MTA asset group, we recorded additional impairment charges of $12.1 million in the third quarter of 2023 and $11.0 million in the fourth quarter of 2023, representing additional MTA equipment deployment cost spending during the quarters.

(See Item 8., Note 4.

Long-Lived Assets to the Consolidated Financial Statements.)

In addition, in the second quarter of 2023, we recorded an impairment charge of $0.3 million related to an other-than-temporary decline in fair value of a cost-method investment.

Depreciation increased $1.9 million, or 2%, in 2023 compared to 2022, primarily due to capital expenditures and acquisitions in 2022, partially offset by an increase in fully-depreciated assets.

Amortization increased $7.9 million, or 11%, in 2023 compared to 2022, due primarily to higher amortization of leasehold interest intangibles recorded related to asset acquisitions, partially offset by lower amortization related to franchise agreements associated with the MTA.

Interest Expense

Interest expense, net, was $158.4 million (including $6.7 million of deferred financing costs) in 2023 and $131.8 million (including $6.5 million of deferred financing costs) in 2022.

The increase in Interest expense, net, in 2022 compared to 2021, was primarily due to higher interest rates, partially offset by the impact of interest rate swaps in 2021 and a lower average debt balance.

The increase in Interest expense, net, in 2023 compared to 2022, was primarily due to higher interest rates and a higher average debt balance.

Loss on Extinguishment of Debt

In 2021, we recorded a loss on extinguishment of debt of $6.3 million relating to the redemption of our 5.625% Senior Unsecured Notes due 2024 in the first quarter of 2021.

In 2023, we recorded a loss on extinguishment of debt of $8.1 million relating to the redemption of all of our outstanding 6.250% Senior Unsecured Notes due 2025 (the “2025 Notes”) in the fourth quarter of 2023.

Benefit (Provision) for Income Taxes

Provision for income taxes was $9.4 million in 2022 compared to a Benefit for income taxes of $3.4 million in 2021, due primarily to the recording of a valuation allowance against our U.S.

taxable REIT subsidiary (“TRS”) deferred tax assets and increased profitability in Canada in 2022.

Provision for income taxes decreased $5.4 million, or 57%, in 2023 compared to 2022, due primarily to a valuation allowance against our U.S.

taxable REIT subsidiary (“TRS”) accumulated deferred tax assets in 2022.

The effective income tax rate was 0.9% for 2023 and 6.0% for 2022.

Net income before allocation to non-controlling interests increased $112.7 million in 2022 compared to 2021, 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.

Net Income (Loss)

Net loss before allocation to non-controlling interests was $429.7 million in 2023 compared to Net income before allocation to non-controlling interests of $149.1 million in 2022, driven by lower operating income, due primarily to impairment charges, 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, stock-based compensation, restructuring charges and an impairment charge.

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

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

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FFO reflects net income (loss) attributable to OUTFRONT Media Inc.

adjusted to exclude gains and losses from the sale of real estate assets, depreciation and amortization of real estate assets, amortization of direct lease acquisition costs and the same adjustments for our equity-based investments and non-controlling interests, as well as the related income tax effect of adjustments, as applicable.

adjusted to exclude gains and losses from the sale of real estate assets, impairment charges, depreciation and amortization of real estate assets, amortization of direct lease acquisition costs and the same adjustments for our equity-based investments and non-controlling interests, as well as the related income tax effect of adjustments, as applicable.

We calculate AFFO as FFO adjusted to include cash paid for direct lease acquisition costs as such costs are generally amortized over a period ranging from four weeks to one year and therefore are incurred on a regular basis.

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, an impairment charge on 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 losses on extinguishment of debt, as well as certain non-cash items, including non-real estate depreciation and amortization, impairment charges on 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.

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.

Our management believes users of our financial data are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in managing, planning and executing our business strategy.

Our management believes

users of our financial data are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in managing, planning and executing our business strategy.

Our management also believes that the presentations of FFO and AFFO, as supplemental measures, are useful in evaluating our business because adjusting results to reflect items that have more bearing on the operating performance of REITs highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures.

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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.

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

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

to FFO attributable to OUTFRONT Media Inc.

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Total revenues $ 1,820.6 $ 1,772.1

Operating income $ 287.7 $ 168.3

Operating income (loss) $ (258.4) $ 287.7

Net (gain) loss on dispositions (14.2) 0.2

Impairment charge — 2.5

Impairment charges 534.7 —

Depreciation 79.3 77.4

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Adjusted OIBDA margin 25 % 27 %

Net income attributable to OUTFRONT Media Inc.

Net (loss) income attributable to OUTFRONT Media Inc.

$ (430.4) $ 147.9

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Net (gain) loss on disposition of real estate assets (14.2) 0.2

Adjustment related to equity-based investments — 0.1

Impairment charges (b)

Adjustment related to non-controlling interests (0.3) (0.3)

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Other amortization 10.1 10.5

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

Impairment charge on non-real estate assets (c)

Impairment charges on non-real estate assets (b)(c)

Stock-based compensation 28.4 33.8

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Loss on extinguishment of debt 8.1 —

Income tax effect of adjustments (d)

AFFO attributable to OUTFRONT Media Inc.

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(a) Variable commissions directly associated with billboard revenues.

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

(See Item 8., Note 13.

Acqui sitions and Dispositions :

Dispositions to the Consolidated Financial Statements.)

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

(b) Impairment charges related to a decline in the long-term outlook of our U.S.

Transit and Other reporting unit (see Note 4.

Long-Lived Assets to the Consolidated Financial Statements).

FFO attributable to OUTFRONT Media Inc.

in 2022 of $325.2 million increased $130.1 million, or 67%, compared to 2021, due primarily to higher operating income, a provision for income taxes in 2022 compared to a benefit for income taxes in 2021, a loss on extinguishment of debt in 2021 and higher amortization of both real estate-related intangible assets and direct lease acquisition costs.

in 2023 of $130.0 million decreased $195.2 million, or 60%, compared to 2022, due primarily to impairment charges on non-real estate assets, higher interest expense and lower Adjusted OIBDA.

AFFO attributable to OUTFRONT Media Inc.

in 2022 of $311.3 million increased $106.2 million, or 52%, compared to 2021, due primarily to higher operating income, partially offset by the impact of straight-line rent.

in 2023 of $270.6 million decreased $40.7 million, or 13%, compared to 2022, due primarily to higher interest expense, lower Adjusted OIBDA and higher maintenance capital expenditures, partially offset by the impact of non-cash effect of straight-line rent.

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 2022 and 2021.

The following table presents our Revenues , Adjusted OIBDA and Operating income (loss) by segment in 2023 and 2022.

Year Ended December 31,

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Total revenues $ 1,820.6 $ 1,772.1

Operating income $ 287.7 $ 168.3

Operating income (loss) $ (258.4) $ 287.7

Net (gain) loss on dispositions (14.2) 0.2

Impairment charge — 2.5

Impairment charges 534.7 —

Depreciation 79.3 77.4

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Corporate (79.9) (83.2)

Total operating income $ 287.7 $ 168.3

Total operating income (loss) $ (258.4) $ 287.7

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

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Adjusted OIBDA margin 28 % 30 %

Operating income $ 363.0 $ 248.5 46

Operating income (loss) $ (189.9) $ 363.0 (152)

Net (gain) loss on dispositions (14.2) 0.2 *

Impairment charge — 2.5 *

Impairment charges 534.7 — *

Depreciation and amortization 148.8 138.0 8

Adjusted OIBDA $ 479.4 $ 501.2 (4)

New York metropolitan area revenues as a percentage of U.S.

Media segment revenues

Los Angeles metropolitan area revenues as a percentage of U.S.

Media segment revenues

* Calculation is not meaningful.

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

Media segment revenues increased $291.9 million, or 21%, in 2022 compared to 2021, 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.

Media segment revenues increased $48.4 million, or 3%, in 2023 compared to 2022, due primarily to higher billboard revenues.

We generated approximately 42% in 2023 and 44% in 2022 of our U.S.

Media segment revenues from national advertising campaigns.

In 2022, non-organic revenues reflect the impact of a significant acquisition.

In 2023 and 2022, non-organic revenues reflect the impact of a significant acquisition.

Billboard revenues in the U.S.

Media segment increased $192.7 million, or 17%, in 2022 compared to 2021, 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 $60.9 million, or 5%, in 2023 compared to 2022, reflecting an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues, the impact of new and lost billboards in the period, including acquisitions, and higher proceeds from condemnations.

Organic billboard revenues in the U.S.

Media segment increased $181.7 million, or 16%, in 2022 compared to 2021, 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 insignificant acquisitions.

Media segment increased $56.7 million, or 4%, in 2023 compared to 2022, primarily due to an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues, the impact of new and lost billboards in the period, including insignificant acquisitions, and higher proceeds from condemnations.

Transit and other revenues in the U.S.

Media segment increased $99.2 million, or 37%, in 2022 compared to 2021, driven by an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services primarily due to an increase in transit ridership, partially offset by the loss of a transit franchise contract.

Media segment decreased $12.5 million, or 3%, in 2023 compared to 2022, 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 $99.2 million, or 37%, in 2022, compared to 2021, primarily driven by an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services primarily due to an increase in transit ridership, partially offset by the loss of a transit franchise contract.

Media segment decreased $12.5 million, or 3%, in 2023, compared to 2022, 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.

While ridership has increased during 2023 as compared to 2022, the increase in ridership has not led to an increase in overall demand for transit displays.

Billboard property lease expenses in the U.S.

Media segment represented 35% of billboard revenues in 2023 and 33% in 2022, and transit franchise expenses represented 73% of transit display revenues in 2023 and 68% in 2022.

Operating expenses in the U.S.

Media segment increased $123.2 million, or 17%, in 2022 compared to 2021, primarily driven by higher transit franchise expenses and billboard lease costs associated with the increase in revenue, higher guaranteed minimum annual payments to the MTA, higher compensation-related expenses, higher posting and rotation costs, higher maintenance and utilities cost, driven by economic recovery from the COVID-19 pandemic and inflation-driven utility cost increases in 2022, and increased activity resulting in higher production and materials cost.

Media segment increased $59.0 million, or 7%, in 2023 compared to 2022, primarily driven by higher variable billboard property lease expenses, including an out-of-period adjustment of $5.2 million recorded in 2023 (see Item 8., Note 1.

Description of Business and Basis of Presentation to the Consolidated Financial Statements), higher guaranteed minimum annual payments to the MTA, higher compensation-related expenses and higher maintenance and utilities cost, driven by inflationary cost increases in 2023, partially offset by lower posting and rotation costs.

SG&A expenses in the U.S.

Media segment increased $50.4 million, or 19%, in 2022 compared to 2021, primarily driven by higher compensation-related expenses, including commissions and salaries, driven by both business performance improvements during the period and the impact of the COVID-19 pandemic 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.

Media segment Adjusted OIBDA increased $118.3 million, or 31%, in 2022 compared to 2021.

Media segment increased $11.2 million, or 4%, in 2023 compared to 2022, primarily driven by higher professional fees, higher insurance costs, higher rent related to new offices, a higher provision for doubtful accounts and higher compensation-related expenses.

In 2023, we recorded impairment charges of $534.7 million in the U.S.

Media segment, primarily related to impairment charges related to our MTA asset group and our U.S.

Transit and Other reporting unit (see the “Critical Accounting Policies” section of this MD&A and Item 8., Note 4.

Long-Lived Assets to the Consolidated Financial Statements).

Media segment Adjusted OIBDA decreased $21.8 million, or 4%, in 2023 compared to 2022.

Adjusted OIBDA margin was 28% in 2023 and 30% in 2022.

The increase in Adjusted OIBDA margins was due primarily to a higher increase in revenues compared to the increase in operating expenses, due to the fixed nature of certain billboard property lease expenses and the MTA being paid guaranteed minimum annual payments in both 2022 and 2021.

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 2023 related to variable billboard property lease expenses (see Item 8., 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.

Year Ended December 31, % Change

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Operating income $ 11.4 $ 7.9 44

Net gain on dispositions — (3.0) *

Depreciation and amortization 11.7 12.7 (8)

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

Total Other revenues increased $16.3 million, or 20%, in 2022 compared to 2021, reflecting an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services.

Total Other revenues increased $0.1 million in 2023 compared to 2022, primarily driven by an increase in average revenue per display (yield), partially offset by the impact of foreign currency exchange rates.

In 2022, non-organic revenues reflect the impact of foreign currency exchange rates.

Organic Other revenues increased $19.7 million, or 25%, in 2022, compared to 2021, driven by an increase in average revenue per display (yield) as we have experienced increases in overall demand for our services.

Other operating expenses increased $4.2 million, or 8%, in 2022 compared to 2021, driven by higher expenses in Canada.

Other SG&A expenses increased $1.9 million, or 9%, in 2022 compared to 2021, primarily driven by higher expenses in Canada.

Other Adjusted OIBDA increased $10.2 million, or 98%, in 2022 compared to 2021, primarily driven by an increase in average revenue per display (yield).

Organic Other revenues increased $3.3 million, or 3%, in 2023, compared to 2022, primarily driven by the impact of new billboards in the period, including acquisitions, and an increase in average revenue per display (yield).

Other operating expenses decreased $2.1 million, or 4%, in 2023 compared to 2022, primarily driven by lower expenses in Canada, partially offset by the impact of foreign currency exchange rates.

Other SG&A expenses decreased $0.3 million, or 1%, in 2023 compared to 2022, primarily driven by lower expenses in Canada, partially offset by the impact of foreign currency exchange rates.

Other Adjusted OIBDA increased $2.5 million, or 12%, in 2023 compared to 2022, due primarily to an increase in average revenue per display (yield) and lower expenses in Canada, partially offset by the impact of foreign currency exchange rates.

Corporate expenses primarily include expenses associated with employees who provide centralized services.

Corporate expenses, excluding stock-based compensation, were $51.5 million in 2023 and $49.4 million in 2022.

Corporate expenses decreased $3.6 million in 2022 compared to 2021, primarily due to the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the Company to certain employees, partially offset by higher compensation-related expenses, including salaries, and higher professional fees.

Corporate expenses increased $2.1 million in 2023 compared to 2022, primarily due to the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the Company to certain employees and higher professional fees, partially offset by lower compensation-related expenses.

Liquidity and Capital Resources

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Receivables, less allowances of $17.2 in 2023 and $20.2 in 2022 287.6 315.5 (9)

Prepaid lease and franchise costs 9.1 12.5 (27)

Prepaid lease and transit franchise costs 4.5 9.1 (51)

Other prepaid expenses 19.2 19.8 (3)

Assets held for sale 34.6 — *

Other current assets 15.7 5.6 180

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Short-term operating lease liabilities 180.9 188.1 (4)

Liabilities held for sale 24.1 — *

Other current liabilities 18.0 21.2 (15)

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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.

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 $161.2 million as of December 31, 2022, compared to working capital of $269.6 million as of December 31, 2021, primarily driven by lower cash due to acquisitions (see Item 8., Note 13.

Acquisitions and Dispositions :

Acquisitions to the Consolidated Financial Statements).

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

Working capital was a deficit of $195.4 million as of December 31, 2023, compared to a working capital deficit of $161.2 million as of December 31, 2022, primarily driven by increased borrowings under the AR Facility and higher accrued lease and franchise costs, partially offset by lower bonus accruals.

Under the current MTA agreement, which was amended in June 2020 and July 2021 and is subject to modification as agreed-upon by us and the MTA (as amended, the “MTA Agreement”):

• Deployments .

We must deploy, over a number of years, (i) 5,433 digital advertising screens on subway and train platforms and entrances, (ii) 15,896 smaller-format digital advertising screens on rolling stock, and (iii) 9,283 MTA communications displays, subject to modification as agreed-upon by us and the MTA.

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

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As presented in the table below, recoupable MTA equipment deployment costs are recorded as Prepaid MTA equipment deployment costs and Intangible assets on our Consolidated Statement of Financial Position, and as these costs are recouped from incremental revenues that the MTA would otherwise be entitled to receive, Prepaid MTA equipment deployment costs will be reduced.

If incremental revenues generated over the term of the agreement are not sufficient to cover all or a portion of the equipment deployment costs, the costs will not be recouped, which could have an adverse effect on our business, financial condition and results of operations.

Long-Lived Assets to the Consolidated Financial Statements).

If we do not recoup all costs of deploying advertising and communications screens with respect to the New Inventory by the end of the term of the MTA Agreement, the MTA will be obligated to reimburse us for these costs.

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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 2022 and we do not expect to recoup any equipment deployment costs in 2023.

For 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 did not recoup any equipment deployment costs in 2023.

In addition, we currently do not expect to recoup any equipment deployment costs throughout the remainder of the Amended Term (as defined below) of the MTA Agreement.

We expect our MTA equipment deployment costs to be approximately $50.0 million in 2024.

After 2024, we expect MTA equipment deployment costs to be approximately $30.0 million to $40.0 million annually throughout the remainder of the Amended Term (as defined below) of the MTA Agreement and encompass replacement costs.

Accordingly, we expect annual MTA equipment deployment costs after 2024 to be significantly below prior year levels as we expect to substantially complete our initial deployment during 2024.

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

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The MTA Agreement also provides that if prior to April 1, 2028 the balance of unrecovered costs of deploying advertising and communications screens throughout the transit system is equal to or less than zero, then in any year following the year in which such recoupment occurs (the “Recoupment Year”), the MTA is entitled to receive an additional payment equal to 2.5% of the annual base revenue amount for such year calculated in accordance with the MTA Agreement, provided that gross revenues in such year (i) were at least equal to the gross revenues generated in the Recoupment Year, and (ii) did not decline by more than 5% from the prior year.

In July 2021, we extended the initial 10-year term of the MTA Agreement to a 13-year initial term.

We have the option to extend this initial 13-year term for an additional five-year period at the end of the 13-year initial term, subject to satisfying certain quantitative and qualitative conditions.

In July 2021, we extended the initial 10-year term of the MTA Agreement to a 13-year base term (the “Amended Term”).

We have the option to extend the Amended Term for an additional five-year period at the end of the Amended Term, subject to satisfying certain quantitative and qualitative conditions.

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

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

As of December 31, 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 decline in 2023 but remain above pre-COVID-19 pandemic levels.

As indicated in the table below, we incurred $88.9 million related to MTA equipment deployment costs in 2022 (which includes equipment deployment costs related to future deployments), for a total of $535.9 million to date, of which $33.9 million had been recouped from incremental revenues to date and as of December 31, 2022, $49.1 million has been funded by the MTA.

As of December 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 2024 compared to 2023, but remain above pre-COVID-19 pandemic levels, as a result of our expectation that revenues generated under the MTA Agreement in 2024 will grow at a compound annual growth rate above the inflation-adjusted guaranteed minimum annual payments to the MTA.

As indicated in the table below, we incurred $43.7 million related to MTA equipment deployment costs in 2023 (which includes equipment deployment costs related to future deployments), for a total of $579.6 million to date, of which $33.9 million had been recouped from incremental revenues to date.

As of December 31, 2023, 19,697 digital displays had been installed, composed of 5,121 digital advertising screens on subway and train platforms and entrances, 9,674 smaller-format digital advertising screens on rolling stock and 4,902 MTA communications displays.

In the fourth quarter of 2023, 911 installations occurred, for a total of 5,544 installations occurring in 2023.

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

During the second quarter of 2023, we performed an analysis of the carrying value of our long-lived asset groups within our U.S.

(See the “Critical Accounting Policies” section of this MD&A and Item 8., Note 4.

Long-Lived Assets to the Consolidated Financial Statements.)

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

Year Ended December 31, 2023:

Prepaid MTA equipment deployment costs $ 363.2 $ 21.8 $ — $ — $ (385.0) $ —

$ 279.8 $ 83.4 $ — $ — $ 363.2

Other current assets 1.6 (0.4) (0.1) — — 1.1

Intangible assets (franchise agreements) 62.0 22.3 — (469.3) 385.0 —

63.0 5.4 — (6.4) 62.0

Total $ 426.8 $ 43.7 $ (0.1) $ (469.3) $ — $ 1.1

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Prepaid MTA equipment deployment costs $ 279.8 $ 83.4 $ — $ — $ — $ 363.2

$ 204.6 $ 75.2 $ — $ — $ 279.8

Other current assets 5.2 0.1 (3.7) — — 1.6

Intangible assets (franchise agreements) 63.0 5.4 — (6.4) — 62.0

58.4 14.5 — (9.9) 63.0

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

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Term loan, due 2026

$ 598.9 $ 598.6

Senior secured notes:

7.375% senior secured notes, due 2031

Senior unsecured notes:

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We also have a $500.0 million revolving credit facility, which matures in 2028 (the “Revolving Credit Facility,” together with the Term Loan, the “Senior Credit Facilities”).

During the second quarter of 2023, the Company, along with its wholly-owned subsidiaries, Outfront Media Capital LLC (“Finance LLC”) and Outfront Media Capital Corporation (together with Finance LLC, the “Borrowers”), and the other guarantors party thereto, entered into two amendments (the “Amendments”) to the Credit Agreement (as defined below).

The Amendments provide for (i) the replacement of the London Interbank Offered Rate with the Secured Overnight Financing Rate as the interest rate benchmark , (ii) the extension of the maturity date of the Revolving Credit Facility from its previous maturity date of November 18, 2024 to June 15, 2028, and (iii) an increase in the interest rate margins applicable to the Borrowers under the Revolving Credit Facility from a range of 1.25% to 1.75% to a range of 1.75% to 2.25%, in the case of Secured Overnight Financing Rate borrowings, based on the Borrowers’ leverage ratio.

The Amendments also include springing maturity refinancing provisions with respect to the Borrowers’ outstanding term loan indebtedness and certain series of senior notes issued by the Borrowers, in each case, which have maturity dates prior to June 15, 2028, as well as other clarifying, conforming and ministerial changes to the Credit Agreement.

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

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

On June 1, 2022, the Company, certain subsidiaries of the Company and MUFG Bank, Ltd.

(“MUFG”) entered into an amendment to the agreements governing the AR Facility, pursuant to which the Company (i) increased the borrowing capacity under the AR Facility from $125.0 million to $150.0 million;

(ii) extended the term of the AR Facility so that it now terminates on May 30, 2025, unless further extended;

and (iii) increased the delinquency and termination ratios under the AR Facility for the tenure of the agreements to provide additional flexibility to the Company.

The amendment to the agreements governing the AR Facility do not change how we account for the AR Facility as a collateralized financing activity.

In connection with the AR Facility, Outfront Media LLC and Outfront Media Outernet Inc., each a wholly-owned subsidiary of the Company, and certain of the Company’s 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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As of December 31, 2023, borrowing capacity remaining under the AR Facility was $85.0 million based on approximately $316.0 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 $0.3 million in 2022, and immaterial in each of 2021 and 2020.

The commitment fee based on the amount of unused commitments under the AR Facility was $0.2 million in 2023, $0.3 million in 2022 and immaterial in 2021.

In January 2024, we made a repayment of $10.0 million under the AR Facility.

Senior Secured Notes

On November 20, 2023, the Borrowers issued $450.0 million aggregate principal amount of 7.375% Senior Secured Notes due 2031 (the “2031 Notes”) in a private placement.

The 2031 Notes are senior secured obligations of the Borrowers and are guaranteed on a senior secured basis by the Company and each of its direct and indirect domestic subsidiaries that guarantee the Senior Credit Facilities (the “Guarantors”).

The Notes and the related guarantees are secured by liens on substantially all of the assets of the Borrowers and the Guarantors, on a pari passu basis with the Senior Credit Facilities (subject to the terms of an intercreditor agreement), subject to certain exceptions and permitted liens, including the exclusion of equity in Canadian subsidiaries that are pending sale.

Interest on the 2031 Notes is payable on May 15 and November 15 of each year, beginning on May 15, 2024.

On or after November 15, 2026, the Borrowers may redeem at any time, or from time to time, some or all of the 2031 Notes.

Prior to such date the Borrowers may redeem up to 40% of the aggregate principal amount with the net proceeds of certain equity offerings, provided that at least 50% of the aggregate principal amount of the 2031 Notes will remain outstanding after the redemption.

In addition the Borrowers may redeem some or all of the 2031 Notes at any time, or from time to time, prior to November 15, 2026, at a price equal to 100% of the principal amount of the 2031 Notes to be redeemed, plus the applicable “make whole” premium, plus accrued and unpaid interest, if any, to the date of redemption.

On November 21, 2023, we used the net proceeds from the issuance of the 2031 Notes to redeem all of our outstanding 2025 Notes and to pay accrued and unpaid interest on the 2025 Notes, if any, to, but excluding, the redemption date, and to pay fees and expenses in connection with the 2031 Notes offering and the 2025 Notes redemption.

In the fourth quarter of 2023, we recorded a Loss on extinguishment of debt of $8.1 million relating to the 2025 Notes on the Consolidated Statement of Operations.

Debt Covenants

Our credit agreement, dated as of January 31, 2014 (as amended, supplemented or otherwise modified, the “Credit Agreement”), governing the Senior Credit Facilities, the agreements governing the AR Facility, and the indentures governing our senior unsecured notes contain customary affirmative and negative covenants, subject to certain exceptions, including but not limited to those that restrict the Company’s and its subsidiaries’ abilities to (i) pay dividends on, repurchase or make distributions in respect to the Company’s or its wholly-owned subsidiary, Outfront Media Capital LLC’s capital stock or make other restricted payments other than dividends or distributions necessary for us to maintain our REIT status, subject to certain conditions and exceptions, (ii) enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany or third-party transfers, and (iii) incur additional indebtedness.

Our credit agreement, dated as of January 31, 2014 (as amended, restated, amended and restated, supplemented or otherwise modified, the “Credit Agreement”), governing the Senior Credit Facilities, the agreements governing the AR Facility, and the indentures governing our senior notes contain customary affirmative and negative covenants, subject to certain exceptions, including but not limited to those that restrict the Company’s and its subsidiaries’ abilities to (i) pay dividends on, repurchase or make distributions in respect to the Company’s or its wholly-owned subsidiary, Outfront Media Capital LLC’s capital stock or make other restricted payments other than dividends or distributions necessary for us to maintain our REIT status, subject to certain conditions and exceptions, (ii) enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany or third-party transfers, and (iii) incur additional indebtedness.

One of the exceptions to the restriction on our ability to incur additional indebtedness is satisfaction of a Consolidated Total Leverage Ratio, which is the ratio of our consolidated total debt to our Consolidated EBITDA (as defined in the Credit Agreement) for the trailing four consecutive quarters, of no greater than 6.0 to 1.0.

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Deferred Financing Costs

As of December 31, 2022, we had deferred $24.6 million in fees and expenses associated with the Term Loan, Revolving Credit Facility, AR Facility and our senior unsecured notes.

We are amortizing the deferred fees through Interest expense, net, on our Consolidated Statement of Operations over the respective terms of the Term Loan, Revolving Credit Facility, AR Facility and our senior unsecured notes.

Interest Rate Swap Agreements

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.

As of December 31, 2023, we had deferred $27.4 million in fees and expenses associated with the Term Loan, the Revolving Credit Facility, the AR Facility and our senior notes.

At-the-Market Equity Offering Program

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(in millions, except percentages) 2023 2022 Change

Cash provided by operating activities $ 254.1 $ 98.8 157 %

Cash used for investing activities (449.5) (224.0) 101

Cash used for financing activities (188.0) (162.2) 16

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

Net cash flow provided by operating activities $ 254.2 $ 254.1 — %

Net cash flow used for investing activities (107.5) (449.5) (76)

Net cash flow used for financing activities (151.5) (188.0) (19)

Effect of exchange rate changes on cash and cash equivalents 0.4 (1.0) *

Net decrease to cash, cash equivalents and restricted cash $ (4.4) $ (384.4) (99)

* Calculation is not meaningful.

Cash provided by operating activities increased $155.3 million, or 157%, in 2022 compared to 2021, 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 the timing of payments and an increase in prepaid MTA equipment deployment costs.

Cash provided by operating activities increased $0.1 million in 2023 compared to 2022, due primarily to a decrease in prepaid MTA equipment deployment costs, partially offset by lower net income in 2023 compared to 2022, due to increased operating and SG&A expenses, and higher interest expense.

In 2023, we paid net cash of $44.4 million related to MTA equipment deployment costs and installed 5,544 digital displays.

In 2022, we paid $79.8 million related to MTA equipment deployment costs and installed 3,061 digital displays.

Cash used for investing activities increased $225.5 million, or 101%, in 2022 compared to 2021, due primarily to higher cash paid for acquisitions, primarily related to an acquisition in the second quarter of 2022 (see Item 8., Note 13.

Acquisitions and Dispositions :

Acquisitions to the Consolidated Financial Statements) and higher cash paid for capital expenses, partially offset by lower cash paid for MTA franchise rights.

Cash used for investing activities decreased $342.0 million, or 76%, in 2023 compared to 2022, due primarily to lower cash paid for acquisitions and higher cash received from dispositions.

The following table presents our capital expenditures in 2023 and 2022.

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Total capital expenditures $ 86.8 $ 89.8 (3)

Capital expenditures increased $16.0 million, or 22%, in 2022 compared to 2021, primarily due to growth in digital displays, increased maintenance spending for billboard display and safety upgrades, and office remodel projects, partially offset by lower spending on software and technology, and vehicles.

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, software and technology, the renovation of certain office facilities, safety-related projects and maintenance.

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 by financing activities increased $25.8 million, or 16%, in 2022 compared to 2021.

Capital expenditures decreased $3.0 million, or 3%, in 2023 compared to 2022, primarily due to the timing of payments related to growth in digital displays and lower spending on safety-related projects, partially offset by higher spending related to the renovation of certain office facilities.

For the full year of 2024, we expect our capital expenditures to be approximately $75.0 million, which will be used primarily for growth in digital displays, software and technology, maintenance, safety-related projects and the renovation of certain office facilities.

This estimate does not include equipment deployment costs that will be incurred in connection with the MTA Agreement (as described above).

Cash used for financing activities decreased $36.5 million, or 19%, in 2023 compared to 2022.

In 2023, drew $35.0 million of net borrowings under the AR Facility, received net proceeds of $50.0 million related to the offering of the 2031 Notes and the redemption of the 2025 Notes, and paid total cash dividends of $207.0 million on our common stock, the Series A Preferred Stock and vested restricted share units granted to employees, as well as deferred financing costs related to the offering of the 2031 Notes and payment of debt extinguishment charges related to the redemption of the 2025 Notes.

In 2022, we drew $30.0 million of borrowings on the AR Facility and paid total cash dividends of $205.8 million on our common stock, the Series A Preferred Stock, and vested restricted share units granted to employees.

In 2021, we made a repayment of $80.0 million under a 364-day structured repurchase facility, which was not extended, and paid total cash dividends of $57.5 million on the Series A Preferred Stock, our common stock and vested restricted share units granted to employees.

Cash paid for income taxes was $6.7 million in 2023 and $3.3 million in 2022.

The increase was due primarily to improved results in Canada.

The increase was due primarily to the timing of Canadian estimated income tax payments.

Contractual Obligations

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In 2024, we do not expect to contribute to our defined benefit pension plans.

Contributions to our defined benefit pension plans were $0.2 million in 2021.

(See Item 8., Note 14.

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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.

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.

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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We consider the following accounting policies to be the most critical as they are significant to our financial condition and results of operations, and require significant judgment and estimates on the part of management in their application.

For a summary of our significant accounting policies, see Item 8., Note 2.

summary of our significant accounting policies, see Item 8., Note 2.

Summary of Significant Accounting Policies to the Consolidated Financial Statements.

MTA Agreement

Under the MTA agreement, we are obligated to deploy, over a number of years, (i) 5,433 digital advertising screens on subway and train platforms and entrances, (ii) 15,896 smaller-format digital advertising screens on rolling stock, and (iii) 9,283 MTA communications displays, with such deployment amounts being subject to modification as agreed-upon by us and the MTA.

Under the current MTA Agreement, which is subject to modification as agreed-upon by us and the MTA, we are obligated to deploy, over a number of years, (i) 5,433 digital advertising screens on subway and train platforms and entrances, (ii) 15,896 smaller-format digital advertising screens on rolling stock, and (iii) 9,283 MTA communications displays.

In addition, we are entitled to generate revenue through the sale of advertising on transit advertising displays and incur transit franchise expenses, which are calculated based on contractually stipulated percentages of revenue generated under the contract, subject to a minimum guarantee.

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The portion of deployment costs expected to be reimbursed from advertising revenues that would otherwise be retained by us under the contract are recorded as Intangible assets on the Consolidated Statement of Financial Position and charged to amortization expense on a straight-line basis over the contract period.

We assess the recoverability of the MTA contract on an as-needed basis and apply significant judgment in assessing factors to determine if there is an indication that the revenues expected to be generated over the term of the agreement will be sufficient to cover all or a portion of the equipment deployment costs, including evaluating macroeconomic conditions, industry trends, and events specific to the Company, including monitoring the Company’s actual installation of digital displays against the deployment schedule.

We assess the recoverability of the MTA contract on an as-needed basis and apply significant judgment in assessing factors to determine if there is an indication that the revenues expected to be generated over the term of the agreement will be sufficient to cover all or a portion of the equipment deployment costs, including evaluating macroeconomic conditions, product demand, industry trends, and events specific to the Company, including monitoring the Company’s actual installation of digital displays against the deployment schedule.

Additionally, we assess these factors by comparing revenue projections of the deployed digital displays to actual financial results.

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This assessment requires evaluating qualitative and quantitative factors to determine if there is an indication that the carrying amount may not be recoverable.

Management applies significant judgment in assessing these factors, including evaluating macroeconomic conditions, industry trends, and events specific to the Company, including monitoring the Company’s actual installation of digital displays against the initial deployment schedule.

Management applies significant judgment in assessing these factors, including evaluating macroeconomic conditions, product demand, industry trends, and events specific to the Company, including monitoring the Company’s actual installation of digital displays against the initial deployment schedule.

Additionally, management assesses quantitative factors by comparing revenue projections of the deployed digital displays to actual financial results.

In 2022, we updated our projections and did not identify a triggering event for an impairment review of our Prepaid MTA equipment deployment costs .

The projections utilized for 2022 assumed the continued recovery of transit ridership and revenues towards pre-COVID-19 levels and expected growth in revenue generation from our significant digital deployment throughout the MTA transit system as required by the MTA Agreement.

By the end of the first half of 2023, it was determined that our MTA transit revenue recovery had stalled since our MTA transit revenue did not meet our revenue expectations, and as of June 30, 2023, our revenue pacing and outlook for the remainder of 2023 reflected a continued decline in MTA transit revenues as compared to our 2023 forecast due to the underperformance across the MTA transit system.

Accordingly, in the second quarter of 2023, we updated our revenue projections to reflect no growth in 2023 followed by 5% to 10% growth throughout the remainder of the Amended Term of the MTA Agreement.

As a result of the reduced revenue forecast and reduced time remaining on the Amended Term of the MTA Agreement, we currently do not expect to recoup any Prepaid MTA equipment deployment costs throughout the remainder of the Amended Term of the MTA Agreement.

As a result, in the second quarter of 2023, we reclassified $385.0 million of Prepaid MTA equipment deployment costs to Intangible Assets.

We then reviewed our MTA long-lived asset group to determine if there was a triggering event for impairment, noting that we were projecting negative aggregate cash flows of approximately $50.0 million through the remainder of the Amended Term of the MTA Agreement.

Consequently, in the second quarter of 2023, we recorded an impairment charge of $443.1 million, representing all of our MTA long-lived asset group.

All future deployment costs spending will be recorded as Intangible assets rather than as Prepaid MTA equipment deployment costs until such time as we project to recoup spending from transit franchise fees that would otherwise be payable to the MTA, which we currently do not expect throughout the remainder of the Amended Term of the MTA Agreement.

Even if we do not recoup our spending from transit franchise fees that would otherwise be payable to the MTA, our current projections are that the MTA Agreement will be cash flow neutral (i.e., Adjusted OIBDA related to the MTA Agreement will equal MTA equipment deployment costs) over the remaining Amended Term of the MTA Agreement at some point in 2024.

We will assess

these equipment deployment costs for impairment each period.

Currently, future impairment charges may be required during 2024 with respect to all or a portion of the up to approximately $50.0 million of MTA equipment deployment costs we expect to spend in 2024, and may be required beyond 2024 with respect to all or a portion of the additional MTA equipment deployment costs we will be required to incur under the MTA Agreement, in each case, to the extent we continue to project cash flow losses throughout the remainder of the Amended Term of the MTA Agreement based on the assumptions and estimates described in this section and/or other factors that may arise.

Our performance during the second half of 2023 was in line with our expectations as of the end of the second quarter of 2023.

We evaluated our long-term MTA revenue projections as of year-end 2023, and we continue to believe that MTA transit revenue will grow by 5% to 10% throughout the remainder of the Amended Term of the MTA Agreement.

As a result, as of December 31, 2023, we continue to project negative aggregate cash flows of approximately $25.0 million through the remainder of the Amended Term of the MTA Agreement.

We expect to be cash flow neutral at some point in 2024.

As a result of our continued expectation of negative aggregate cash flows related to the MTA, we recorded additional impairment charges of $12.1 million in the third quarter of 2023 and $11.0 million in the fourth quarter of 2023, representing additional MTA equipment deployment cost spending during the quarters.

We performed a sensitivity analysis on our MTA transit revenue assumptions, noting that a change in our annual revenue growth rate of 1% between 2024 and 2030, holding all other assumptions constant except for variable sales compensation, would result in an approximately $70.0 million aggregate change in estimated cash flows.

The assumptions and estimates included in our analysis require significant judgment about future events, market conditions and financial performance.

Actual results may differ from our assumptions.

We currently expect to recoup all equipment deployment costs spent to date and projected to be spent by the end of the base term of our agreement with the MTA.

If projected incremental revenues generated over the term of the MTA agreement are not achieved to cover all or a portion of the equipment deployment costs, the costs will not be recouped, which could result in impairment charges and/or future deployment costs being expensed as incurred.

We test goodwill qualitatively and/or quantitatively at the reporting-unit level annually for impairment as of October 31 of each year and between annual tests if events occur or circumstances change that would more likely than not reduce the fair value

below its carrying amount.

There can be no assurance that these estimates and assumptions will prove to be an accurate prediction of the future, and a downward revision of these estimates and/or assumptions would decrease our cash flows, which could result in additional impairment charges in the future.

A qualitative test assesses macroeconomic conditions, industry and market conditions, cost factors, overall financial performance and other relevant entity specific events, as well as events affecting a reporting unit.

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The discount rates represent the weighted average cost of capital derived using known and estimated market metrics.

By the end of the first half of 2023, it was determined that our transit revenue recovery had stalled since our U.S.

Transit and Other reporting unit did not meet revenue expectations, and as of June 30, 2023, our pacing and outlook for the remainder of 2023 reflected a continued decline in transit revenues as compared to our 2023 forecast due to the underperformance across our transit business, including the MTA transit system.

As a result, we determined that there was a triggering event requiring an interim goodwill impairment analysis of our U.S.

Transit and Other reporting unit.

Our current discounted cash flow model assumptions and estimates with respect to revenues in our U.S.

Transit and Other reporting unit is currently projected to grow in the mid-single digits in 2024, high single digits in 2025-2026 and then trending back to a mid-single digit growth rate thereafter.

We believe this growth will be driven by expected revenue generation from increased demand for transit digital displays due to additional rolling stock digital deployment in the MTA transit system and additional digital deployment in other transit systems, product enhancements to our transit digital displays and related assets, and a gradual increase in transit ridership over the remaining terms of our transit franchise agreements.

Additionally, we are currently no longer assuming that we will exercise the five-year extension to the Amended Term of the MTA Agreement due to our lowered revenue growth assumptions and currently contractually required increase to the minimum annual guarantee

payments to the MTA during the extension period.

Other than with respect to the MTA Agreement, we are assuming that we will be able to renew our significant transit franchise agreements.

As a result of the impairment analysis performed during the second quarter of 2023, we determined that the carrying value of our U.S.

In the fourth quarter of 2023, we performed a qualitative assessment on our U.S.

Billboard and Canadian reporting units as the estimated fair value of those reporting units substantially exceeded carrying value and there were no factors indicating that it was more likely than not that those reporting units were impaired.

We performed a quantitative assessment on our U.S.

Transit and Other reporting unit, for which the fair value exceeded carrying value by approximately 28%.

As of December 31, 2022, goodwill associated with our U.S.

Transit and Other reporting unit was $47.6 million.

In our discounted cash flow model assumptions and estimates, revenue in our U.S.

Transit and Other reporting unit after growing by 37% in 2022 is projected to grow at a compound annual growth rate in the high teens through 2026 before leveling off to a normalized growth rate in the mid-single digits over the remaining forecast period, driven by continued recovery of the transit market as ridership climbs toward pre-COVID-19 levels and expected revenue generation from our significant digital deployment in the MTA and other transit systems.

We are also assuming that we will be able to renew significant transit franchise agreements.

Regarding the MTA agreement, we are assuming that the five-year extension to the base term will be exercised by us.

However, we are not assuming any extension or renewal beyond that time.

We utilized a discount rate of 11%.

We performed a sensitivity analysis to determine how our assumptions impact the goodwill impairment assessment.

Our plan to grow revenues is highly dependent on the recovery of transit ridership to pre-COVID-19 levels and the success of our digital deployment strategy.

Failure of transit ridership to recover and/or our inability to fully execute on our digital deployment strategy could result in impairment charges.

In addition, the loss of significant transit franchise agreements or our inability to qualify for the five-year extension to the MTA agreement could result in impairment charges.

Holding all other assumptions constant, a change in the discount rate of 1% would result in a change in value of $50.6 million.

While our current projections supported no impairment of goodwill in our U.S.

Transit and Other reporting unit in the fourth quarter of 2022, given the sensitivities around the assumptions used in the calculation of the U.S.

Transit and Other reporting unit’s projected cash flows, it is possible that impairment charges could be incurred in the future.

As of December 31, 2023, the goodwill balances associated with the U.S.

billboard reporting unit was $2,006.4 million and $22.9 million related to the Canada reporting unit was included in Assets Held for Sale on the Consolidated Statements of Financial Position.

The assumptions and estimates included in our analysis require significant judgment about future events, market conditions and financial performance.

Actual results may differ from our assumptions.

There can be no assurance that these estimates and assumptions will prove to be an accurate prediction of the future, and a downward revision of these estimates and/or assumptions would decrease the fair values of our reporting units, which could result in additional impairment charges in the future.

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Our long-lived identifiable intangible assets are amortized on a straight-line basis over their estimated useful lives, which is the respective life of the agreement and in some cases includes an estimation for renewals, which is based on historical experience.

Long-lived assets subject to depreciation and amortization are also reviewed for impairment when events and circumstances indicate that the long-lived asset might be impaired, by comparing the forecasted undiscounted cash flows to be generated by those assets to the carrying values of those assets.

The significant assumptions we use to determine the useful lives and fair values of long-lived assets include contractual commitments, regulatory requirements, future expected cash flows and industry growth rates, as well as future salvage values.

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Long-lived assets held for sale are required to be measured at the lower of their carrying value (including unrecognized foreign currency translation adjustment losses) or fair value less cost to sell.

We compute the estimated fair value of each asset group for which we perform a quantitative assessment using an income approach.

Under the income approach, the fair value is determined using a discounted cash flow model.

Our cash flow models requires us to use significant estimates and assumptions such as projected revenue growth rates, billboard lease and transit franchise expenses, other operating and selling, general and administrative expenses, capital expenditures, and discount rates.

The projected revenue growth rates, billboard lease and transit franchise expenses, other operating and selling, general and administrative expenses and capital expenditures are based on our internal forecasts of future performance, as well as historical trends.

The discount rates represent the weighted average cost of capital derived using known and estimated market metrics.

There can be no assurance that these estimates and assumptions will prove to be an accurate prediction of the future, and a downward revision of these estimates and/or assumptions would decrease the fair values of our asset groups, which could result in additional impairment charges in the future.

By the end of the first half of 2023, it was determined that our transit revenue recovery had stalled since our U.S.

As a result, we determined that there was a triggering event requiring an impairment analysis of the assets groups within our U.S.

Transit and Other reporting unit.

We performed an analysis of the carrying value of our long-lived asset groups, utilizing undiscounted cash flows, and determined that they were not fully

As a result of our continued expectation of negative aggregate cash flows related to the MTA asset group, we recorded additional impairment charges of $12.1 million in the third quarter of 2023 and $11.0 million in the fourth quarter of 2023, representing additional MTA equipment deployment cost spending during the quarters.

(See the “Critical Accounting Policies:

MTA Agreement” section of this MD&A.”

Accounting Standards

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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 7. Management’s Discussion and Analysis