OUTFRONT Media Inc. 10-K

Item 8. Financial Statements and Supplementary Data. Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of OUTFRONT Media Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated statements of financial position of OUTFRONT Media Inc. and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, of comprehensive income (loss), of equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes and financial statement schedules listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the 65 company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Recoverability of Prepaid MTA Equipment Deployment Costs As described in Notes 2 and 17 to the consolidated financial statements, the Company has an agreement with the New York Metropolitan Transportation Authority (“MTA”). As disclosed by management, under the current MTA agreement, which was amended in June 2020 and July 2021 and is subject to modification as agreed upon by the Company and the MTA, the Company is obligated to deploy, over a number of years, certain digital advertising screens and MTA communications displays. The Company is entitled to generate revenue through the sale of advertising on transit advertising displays and incurs transit franchise fees payable to the MTA, which are calculated based on a percentage of the advertising revenues generated under the contract, subject to a minimum guarantee. As title of the various digital displays the Company is obligated to deploy transfers to the MTA on installation, the cost of deploying these screens throughout the transit system does not represent the Company’s property and equipment. The portion of deployment costs expected to be reimbursed from transit franchise fees that would otherwise be payable to the MTA are recorded as prepaid MTA equipment deployment costs on the consolidated statement of financial position and charged to operating expenses as advertising revenue is generated. Management assesses the recoverability of the MTA contract on an as-needed basis and applies 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. Additionally, management assesses these factors by comparing revenue projections of the deployed digital displays to actual financial results. As disclosed by management, as a result of the reduced revenue forecast and reduced time remaining on the amended term of the MTA agreement, the Company currently does 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, the Company reclassified $385.0 million of prepaid MTA equipment deployment costs to intangible assets. Consequently, as of December 31, 2023, prepaid MTA equipment deployment costs were $0. The principal considerations for our determination that performing procedures relating to the recoverability of the prepaid MTA equipment deployment costs is a critical audit matter are (i) the significant judgment by management in evaluating the recoverability of the prepaid equipment deployment costs; and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumption related to revenues expected to be generated over the term of the agreement. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s accounting for performance under the MTA agreement, including controls over the assessment of the recoverability of the prepaid MTA equipment deployment costs. These procedures also included, among others, (i) determining whether there have been amendments to the MTA agreement in the current year and evaluating the impact of any such amendments, (ii) testing management’s process for assessing the recoverability of the prepaid MTA equipment deployment costs, (iii) testing the completeness and accuracy of underlying data used in management’s recoverability assessment, (iv) evaluating the actual revenue generated from the deployed digital displays in comparison to management’s revenue projections from the prior year, (v) evaluating the Company’s installation of digital displays against the deployment schedule, and (vi) evaluating the reasonableness of the significant assumption used by management related to revenues expected to be generated over the term of the agreement. Evaluating management’s assumption related to revenues expected to be generated over the term of the agreement involved evaluating whether the assumption used by management was reasonable considering (i) the comparison of revenue projections of the deployed digital displays to actual financial results; (ii) the consistency with external market and industry data; and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit. 66 Long-Lived Asset Interim Impairment Assessment - MTA Asset Group As described in Notes 2 and 4 to the consolidated financial statements, long-lived assets are assessed for impairment whenever there is an indication that the carrying amount of the assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows generated by those assets to the respective asset’s carrying value. The amount of the impairment loss, if any, will be measured by the difference between the net carrying value and the estimated fair value of the asset. Management computes the estimated fair value of each asset group for which a quantitative assessment is performed using an income approach. Under the income approach, the fair value is determined using a discounted cash flow model. Management determined that the decline in the long-term outlook of the U.S. Transit and Other reporting unit and the related impact to future revenues and cash flows constituted a triggering event in the second quarter of 2023, requiring management to perform a recoverability test of the Company’s long-lived asset groups as of June 30, 2023. As a result of that test, management recorded a long-lived asset impairment charge of $463.5 million, primarily representing a $443.1 million impairment charge related to the MTA asset group, of which substantially all of the impairment related to intangible assets. Management’s cash flow models include 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 principal considerations for our determination that performing procedures relating to the long-lived asset interim impairment assessment for the MTA asset group is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the MTA asset group; and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumption related to the projected revenue growth; and (iii) the audit effort involved in the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s long-lived asset interim impairment assessment, including controls over management’s identification of events or changes in circumstances that indicate an impairment of an asset group has occurred and controls over the valuation of the MTA asset group. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the MTA asset group; (ii) evaluating the appropriateness of the cash flow models used by management; (iii) testing the completeness and accuracy of underlying data used in the cash flow models; and (iv) evaluating the reasonableness of the significant assumption used by management related to the projected revenue growth. Evaluating management’s assumption related to the projected revenue growth involved evaluating whether the assumption used by management was reasonable considering (i) the current and past performance of the asset grouping; (ii) the consistency with external market and industry data; and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the cash flow models. /s/ PricewaterhouseCoopers LLP New York, New York February 22, 2024 We have served as the Company’s auditor since 2008. 67 Table of Contents OUTFRONT Media Inc. Consolidated Statements of Financial Position As of December 31, (in millions) 2023 2022 Assets: Current assets: Cash and cash equivalents $ 36.0 $ 40.4 Receivables, less allowances of $ 17.2 in 2023 and $ 20.2 in 2022 287.6 315.5 Prepaid lease and transit franchise costs 4.5 9.1 Other prepaid expenses 19.2 19.8 Assets held for sale (Note 12) 34.6 — Other current assets 15.7 5.6 Total current assets 397.6 390.4 Property and equipment, net (Note 3) 657.8 699.8 Goodwill (Note 4) 2,006.4 2,076.4 Intangible assets (Note 4) 695.4 858.5 Operating lease assets (Note 5) 1,591.9 1,562.6 Prepaid MTA equipment deployment costs (Note 17) — 363.2 Assets held for sale (Note 12) 214.3 — Other assets 19.5 39.1 Total assets $ 5,582.9 $ 5,990.0 Liabilities: Current liabilities: Accounts payable $ 55.5 $ 65.4 Accrued compensation 41.4 68.0 Accrued interest 34.2 31.1 Accrued lease and franchise costs 80.0 64.9 Other accrued expenses 56.2 47.6 Deferred revenues 37.7 35.3 Short-term debt (Note 8) 65.0 30.0 Short-term operating lease liabilities (Note 5) 180.9 188.1 Liabilities held for sale (Note 12) 24.1 — Other current liabilities 18.0 21.2 Total current liabilities 593.0 551.6 Long-term debt, net (Note 8) 2,676.5 2,626.0 Deferred income tax liabilities, net (Note 15) — 15.2 Asset retirement obligation (Note 6) 33.0 37.8 Operating lease liabilities (Note 5) 1,417.4 1,369.0 Liabilities held for sale (Note 12) 90.9 — Other liabilities 42.0 41.2 Total liabilities 4,852.8 4,640.8 Commitments and contingencies (Note 17) Preferred stock (2023 - 50.0 shares authorized, and 0.1 shares of Series A Preferred Stock issued and outstanding; 2022 - 50.0 shares authorized, and 0.1 shares of Series A Preferred Stock issued and outstanding) (Note 10) 119.8 119.8 Stockholders’ equity (Note 10): Common stock 2023 - 450.0 shares authorized, and 165.1 shares issued and outstanding; 2022 - 450.0 shares authorized, and 164.2 shares issued or outstanding) 1.7 1.6 Additional paid-in capital 2,432.2 2,416.3 Distribution in excess of earnings ( 1,821.1 ) ( 1,183.4 ) Accumulated other comprehensive loss (Note 9) ( 5.8 ) ( 9.1 ) Total stockholders’ equity 607.0 1,225.4 Non-controlling interests 3.3 4.0 Total equity 730.1 1,349.2 Total liabilities and equity $ 5,582.9 $ 5,990.0 See accompanying notes to consolidated financial statements. 68 Table of Contents OUTFRONT Media Inc. Consolidated Statements of Operations Year Ended December 31, (in millions, except per share amounts) 2023 2022 2021 Revenues: Billboard $ 1,444.9 $ 1,384.7 $ 1,182.3 Transit and other 375.7 387.4 281.6 Total revenues 1,820.6 1,772.1 1,463.9 Expenses: Operating 968.3 911.4 784.0 Selling, general and administrative 429.7 422.1 368.2 Net (gain) loss on dispositions ( 14.2 ) 0.2 ( 4.5 ) Impairment charges 534.7 — 2.5 Depreciation 79.3 77.4 79.4 Amortization 81.2 73.3 66.0 Total expenses 2,079.0 1,484.4 1,295.6 Operating income (loss) ( 258.4 ) 287.7 168.3 Interest expense, net ( 158.4 ) ( 131.8 ) ( 130.4 ) Loss on extinguishment of debt ( 8.1 ) — ( 6.3 ) Other income (loss), net 0.3 ( 0.2 ) — Income (loss) before benefit (provision) for income taxes and equity in earnings of investee companies ( 424.6 ) 155.7 31.6 Benefit (provision) for income taxes ( 4.0 ) ( 9.4 ) 3.4 Equity in earnings of investee companies, net of tax ( 1.1 ) 2.8 1.4 Net income (loss) before allocation to non-controlling interests ( 429.7 ) 149.1 36.4 Net income attributable to non-controlling interests 0.7 1.2 0.8 Net income (loss) attributable to OUTFRONT Media Inc. $ ( 430.4 ) $ 147.9 $ 35.6 Net income (loss) per common share: Basic $ ( 2.66 ) $ 0.84 $ 0.05 Diluted $ ( 2.66 ) $ 0.84 $ 0.05 Weighted average shares outstanding: Basic 164.9 161.1 145.4 Diluted 164.9 161.8 146.1 See accompanying notes to consolidated financial statements. 69 Table of Contents OUTFRONT Media Inc. Consolidated Statements of Comprehensive Income (Loss) Year Ended December 31, (in millions) 2023 2022 2021 Net income (loss) before allocation to non-controlling interests $ ( 429.7 ) $ 149.1 $ 36.4 Net income attributable to non-controlling interests 0.7 1.2 0.8 Net income (loss) attributable to OUTFRONT Media Inc. ( 430.4 ) 147.9 35.6 Other comprehensive income (loss), net of tax: Cumulative translation adjustments 3.1 ( 7.9 ) — Net actuarial gain 0.2 2.8 8.4 Change in fair value of interest rate swap agreements — 0.4 5.2 Total other comprehensive income (loss), net of tax 3.3 ( 4.7 ) 13.6 Total comprehensive income (loss) $ ( 427.1 ) $ 143.2 $ 49.2 See accompanying notes to consolidated financial statements. 70 Table of Contents OUTFRONT Media Inc. Consolidated Statements of Equity Stockholders’ Equity (in millions, except per share amounts) Shares of Series A Preferred Stock Series A Preferred Stock ($ 0.01 per share par value) Shares of Common Stock Common Stock $ 0.01 per share par value) Additional Paid-In Capital Distribution in Excess of Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Non-Controlling Interests Total Equity Balance as of December 31, 2020 0.4 $ 383.4 144.5 $ 1.4 $ 2,090.8 $ ( 1,100.4 ) $ ( 18.0 ) $ 973.8 $ 26.5 $ 1,383.7 Net income — — — — — 35.6 — 35.6 0.8 36.4 Other comprehensive income — — — — — — 13.6 13.6 — 13.6 Stock-based payments: Vested — — 1.1 0.1 — — — 0.1 — 0.1 Amortization — — — — 28.6 — — 28.6 — 28.6 Shares paid for tax withholding for stock-based payments — — ( 0.5 ) — ( 8.9 ) — — ( 8.9 ) — ( 8.9 ) Class A equity interest redemptions — — 0.5 — 11.8 — — 11.8 ( 11.8 ) — Series A Preferred Stock dividends 7 %) — — — — — ( 28.0 ) — ( 28.0 ) — ( 28.0 ) Dividends ($ 0.20 per share) — — — — — ( 29.2 ) — ( 29.2 ) — ( 29.2 ) Other — — ( 3.3 ) — — ( 3.3 ) ( 2.5 ) ( 5.8 ) Balance as of December 31, 2021 0.4 383.4 145.6 1.5 2,119.0 ( 1,122.0 ) ( 4.4 ) 994.1 13.0 1,390.5 Net income — — — — — 147.9 — 147.9 1.2 149.1 Other comprehensive (loss) — — — — — — ( 4.7 ) ( 4.7 ) — ( 4.7 ) Stock-based payments: Vested — — 1.2 — — — — — — — Amortization — — — — 33.8 — — 33.8 — 33.8 Shares paid for tax withholding for stock-based payments — — ( 0.4 ) — ( 11.8 ) — — ( 11.8 ) — ( 11.8 ) Class A equity interest redemptions — — 0.4 — 8.6 — — 8.6 ( 8.6 ) — Series A Preferred Stock Conversions ( 0.3 ) ( 266.8 ) 17.4 0.1 266.7 — — 266.8 — — Series A Preferred Stock dividends 7 %) — 3.2 — — — ( 12.0 ) — ( 12.0 ) — ( 8.8 ) Dividends ($ 1.20 per share) — — — — — ( 197.3 ) — ( 197.3 ) — ( 197.3 ) Other — — — — — — — — ( 1.6 ) ( 1.6 ) Balance as of December 31, 2022 0.1 $ 119.8 164.2 $ 1.6 $ 2,416.3 $ ( 1,183.4 ) $ ( 9.1 ) $ 1,225.4 $ 4.0 $ 1,349.2 71 Table of Contents OUTFRONT Media Inc. Consolidated Statements of Equity (Continued) Stockholders’ Equity (in millions, except per share amounts) Shares of Series A Preferred Stock Series A Preferred Stock ($ 0.01 per share par value) Shares of Common Stock Common Stock ($ 0.01 per share par value) Additional Paid-In Capital Distribution in Excess of Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity Non-Controlling Interests Total Equity Balance as of December 31, 2022 0.1 $ 119.8 164.2 $ 1.6 $ 2,416.3 $ ( 1,183.4 ) $ ( 9.1 ) $ 1,225.4 $ 4.0 $ 1,349.2 Net income (loss) — — — — — ( 430.4 ) — ( 430.4 ) 0.7 ( 429.7 ) Other comprehensive income — — — — — — 3.3 3.3 — 3.3 Stock-based payments: Vested — — 1.6 0.1 — — — 0.1 — 0.1 Amortization — — — — 28.4 — — 28.4 — 28.4 Shares paid for tax withholding for stock-based payments — — ( 0.7 ) — ( 12.5 ) — — ( 12.5 ) — ( 12.5 ) Series A Preferred Stock dividends 7 %) — — — — — ( 8.8 ) — ( 8.8 ) — ( 8.8 ) Dividends ($ 1.20 per share) — — — — — ( 198.5 ) — ( 198.5 ) — ( 198.5 ) Other — — — — — — — — ( 1.4 ) ( 1.4 ) Balance as of December 31, 2023 0.1 $ 119.8 165.1 $ 1.7 $ 2,432.2 $ ( 1,821.1 ) $ ( 5.8 ) $ 607.0 $ 3.3 $ 730.1 See accompanying notes to consolidated financial statements. 72 Table of Contents OUTFRONT Media Inc. Consolidated Statements of Cash Flows Year Ended December 31, (in millions) 2023 2022 2021 Operating activities: Net income (loss) attributable to OUTFRONT Media Inc. $ ( 430.4 ) $ 147.9 $ 35.6 Adjustments to reconcile net income (loss) to net cash flow provided by operating activities: Net income attributable to non-controlling interests 0.7 1.2 0.8 Depreciation and amortization 160.5 150.7 145.4 Deferred tax (benefit) provision ( 0.1 ) 4.7 ( 4.7 ) Stock-based compensation 28.4 33.8 28.6 Provision (recovery) for doubtful accounts 5.8 4.9 ( 4.0 ) Accretion expense 3.1 2.8 2.7 Net (gain) loss on dispositions ( 14.2 ) 0.2 ( 4.5 ) Impairment charges 511.4 — 2.5 Loss on extinguishment of debt 8.1 — 6.3 Equity in earnings of investee companies, net of tax 1.1 ( 2.8 ) ( 1.4 ) Distributions from investee companies 1.0 1.9 0.7 Amortization of deferred financing costs and debt discount and premium 6.7 6.5 7.1 Change in assets and liabilities, net of investing and financing activities: Increase in receivables ( 4.0 ) ( 11.2 ) ( 94.6 ) Increase in prepaid MTA equipment deployment costs ( 21.8 ) ( 83.4 ) ( 75.2 ) (Increase) decrease in prepaid expenses and other current assets ( 4.9 ) 6.0 15.0 Increase (decrease) in accounts payable and accrued expenses ( 4.0 ) ( 0.3 ) 38.9 Increase (decrease) in operating lease assets and liabilities 10.6 ( 15.4 ) 0.4 Increase in deferred revenues 3.5 4.5 1.4 Increase (decrease) in income taxes ( 2.6 ) 1.3 ( 0.4 ) Other, net ( 4.7 ) 0.8 ( 1.8 ) Net cash flow provided by operating activities 254.2 254.1 98.8 Investing activities: Capital expenditures ( 86.8 ) ( 89.8 ) ( 73.8 ) Acquisitions ( 33.7 ) ( 353.9 ) ( 136.5 ) MTA franchise rights 0.6 ( 6.8 ) ( 16.5 ) Proceeds from dispositions 12.4 1.3 2.8 Investment in investee companies — ( 0.3 ) — Net cash flow used for investing activities ( 107.5 ) ( 449.5 ) ( 224.0 ) Financing activities: Proceeds from long-term debt borrowings 450.0 — 500.0 Repayments of long-term debt borrowings ( 400.0 ) — ( 500.0 ) Proceeds from borrowings under short-term debt facilities 120.0 30.0 — Repayments of borrowings under short-term debt facilities ( 85.0 ) — ( 80.0 ) Payments of deferred financing costs ( 10.7 ) ( 0.4 ) ( 7.3 ) Payments of debt extinguishment charges ( 6.3 ) — ( 4.7 ) Taxes withheld for stock-based compensation ( 12.5 ) ( 11.8 ) ( 9.0 ) Dividends ( 207.0 ) ( 205.8 ) ( 57.5 ) Other — — ( 3.7 ) Net cash flow used for financing activities ( 151.5 ) ( 188.0 ) ( 162.2 ) 73 Table of Contents OUTFRONT Media Inc. Consolidated Statements of Cash Flows (Continued) Year Ended December 31, (in millions) 2023 2022 2021 Effect of exchange rate changes on cash, cash equivalents and restricted cash 0.4 ( 1.0 ) 0.2 Net decrease in cash, cash equivalents and restricted cash ( 4.4 ) ( 384.4 ) ( 287.2 ) Cash, cash equivalents and restricted cash at beginning of year 40.4 424.8 712.0 Cash, cash equivalents and restricted cash at end of year $ 36.0 $ 40.4 $ 424.8 Supplemental disclosure of cash flow information: Cash paid for income taxes (Note 15) $ 6.7 $ 3.3 $ 1.7 Cash paid for interest 150.7 126.3 117.8 Non-cash investing and financing activities: Accrued purchases of property and equipment $ 7.7 $ 8.4 $ 3.2 Accrued MTA franchise rights 3.0 3.1 4.5 See accompanying notes to consolidated financial statements. 74 OUTFRONT Media Inc. Notes to Consolidated Financial Statements Note 1. Description of Business and Basis of Presentation Description of Business OUTFRONT Media Inc. (the “Company”) and its subsidiaries (collectively, “we,” “us” or “our”) is a real estate investment trust (“REIT”), which provides advertising space (“displays”) on out-of-home advertising structures and sites in the United States (the “U.S.”) and Canada. Our inventory consists of billboard displays, which are primarily located on the most heavily traveled highways and roadways in top Nielsen Designated Market Areas (“DMAs”), and transit advertising displays operated under exclusive multi-year contracts with municipalities in large cities across the U.S. and Canada. In total, we have displays in all of the 25 largest markets in the U.S. and approximately 150 markets across the U.S. and Canada. We currently manage our operations through two operating segments—U.S. Billboard and Transit, which is included in our U.S. Media reportable segment, and International. 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”). (See Note 12. Acquisitions and Dispositions : Dispositions : Canadian Business .) Basis of Presentation and Use of Estimates The accompanying consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission (the “SEC”). In the opinion of our management, the accompanying financial statements reflect all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation of our financial position, results of operations and cash flows for the years presented. The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions. Out-of-Period Adjustment For the three months ended March 31, 2023, the Company recorded an out-of-period adjustment relating to variable billboard property lease expenses and accrued lease and franchise costs in 2022, resulting in a $ 5.2 million increase in Operating expenses for the three months ended March 31, 2023. The Company assessed the materiality of the amount reflected in this adjustment on its previously issued financial statements in accordance with the SEC’s Staff Accounting Bulletin (“SAB”) No. 99 and SAB No. 108 and concluded that the amount was not material, individually or in the aggregate, to any of its previously issued financial statements. Note 2. Summary of Significant Accounting Policies Principles of Consolidation— The consolidated financial statements include the accounts of OUTFRONT Media Inc. and all of its subsidiaries in which a controlling interest is maintained. Controlling interest is determined by majority ownership interest and the absence of substantive third-party participating rights. Investments over which we have a significant influence or ownership of more than 20 % but less than or equal to 50 %, without a controlling interest, are accounted for under the equity method. Investments of 20 % or less, over which we have no significant influence, that do not have a readily determinable fair value, are measured at cost less impairment, if any. Intercompany transactions have been eliminated. 75 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) Cash and Cash Equivalents —Cash and cash equivalents consist of cash on hand and short-term (maturities of three months or less at the date of purchase) highly liquid investments. Receivables —Receivables consist primarily of trade receivables from customers, net of advertising agency commissions, and are stated net of an allowance for doubtful accounts. The provision for doubtful accounts is estimated based on historical bad debt experience, the aging of accounts receivable, industry trends and economic indicators, recent payment history for specific customers and expected future trends. New York Metropolitan Transportation Authority (the “MTA”) Agreement— Under our agreement with the MTA, as title of the various digital displays we are obligated to deploy transfers to the MTA on installation, the cost of deploying these screens throughout the transit system does not represent our property and equipment. The portion of deployment costs expected to be reimbursed from transit franchise fees that would otherwise be payable to the MTA are recorded as Prepaid MTA equipment deployment costs on the Consolidated Statement of Financial Position and charged to operating expenses as advertising revenue is generated. The short-term portion of Prepaid MTA equipment deployment costs represents the costs that we expect to recover from the MTA in the next twelve months. 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. Additionally, we assess these factors by comparing revenue projections of the deployed digital displays to actual financial results. Property and Equipment —Property and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives as follows: Buildings and improvements 15 to 35 years Advertising structures 3 to 20 years Furniture, equipment and other 3 to 10 years For advertising structures associated with a contract, the assets are depreciated over the shorter of the contract term or useful life. Maintenance and repair costs to maintain property and equipment in their original operating condition are charged to expense as incurred. Improvements or additions that extend the useful life of the assets are capitalized. When an asset is retired or otherwise disposed of, the associated cost and accumulated depreciation are removed and the resulting gain or loss is recognized. Construction in progress includes all costs capitalized related to projects, primarily related to in-process digital conversion and development, which have yet to be placed in service. Business Combinations and Asset Acquisitions —We routinely acquire out-of-home advertising assets, including advertising structures, permits and leasehold agreements. We determine the accounting for these transactions by first evaluating whether the assets acquired and liabilities assumed, if any, constitute a business using the guidelines in the Financial Accounting Standards Board (“FASB”) guidance for business combinations. If the assets acquired and liabilities assumed constitute a business, the purchase price is allocated to the tangible and identifiable intangible net assets acquired based on their estimated fair values with the excess of the purchase price over those estimated fair values recorded as goodwill. If the acquired assets do not constitute a business, we allocate the purchase price to the individual tangible and intangible assets acquired based on their relative fair values. Impairment of Long-Lived Assets— 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. Long-lived assets are assessed for impairment whenever there is an indication that the carrying amount of the asset may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows generated by those assets to the respective asset’s carrying value. The amount of impairment loss, if any, will be measured by the difference between the net carrying value and the estimated fair value of the asset. 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 76 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) 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. Goodwill— Goodwill is allocated to various reporting units. Goodwill is not amortized but is tested 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. 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. If after the qualitative assessment, we determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we perform a quantitative assessment. We may also choose to only perform a quantitative assessment. We compute the estimated fair value of each reporting unit 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 discounted cash flow value is calculated by adding the present value of the estimated annual cash flows over a discrete projection period to the terminal value, which represents the value of the projected cash flows beyond the discrete projection period. Our discounted cash flow model requires us to use significant estimates and assumptions such as projected revenue growth rates, terminal growth rates, billboard lease and transit franchise expenses, other operating and selling, general and administrative expenses, capital expenditures, contract renewals and extensions, and discount rates. The projected revenue growth rates, billboard lease and transit franchise expenses, other operating and selling, general and administrative expenses, capital expenditures and contract renewals and extensions for the projection period are based on our internal forecasts of future performance, as well as historical trends. The terminal value is estimated based on a perpetual nominal growth rate, which is based on projected long-range inflation and long-term industry projections. 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 reporting units, which could result in additional impairment charges in the future. If the carrying value of a reporting unit is greater than its fair value, a goodwill impairment charge will be recorded as a non-cash charge for the difference up to the carrying value of the goodwill. The loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Intangible Assets —Intangible assets, which primarily consist of acquired permits and leasehold agreements and franchise agreements, are amortized by the straight-line method over their estimated useful lives, which range from five to 40 years. Leases (Lessees) —We generally lease the underlying sites upon which the physical billboard structures on which we display advertising copy for our customers are located. We also have leases for office and warehouse spaces. All leases are recorded on the Consolidated Statement of Financial Position and we recognize lease expense on a straight-line basis over the lease term. We do not separate lease and non-lease components from contracts. Many of our leases include one or more options to renew, with renewal terms that can extend the lease term for varying lengths of time. These renewal provisions typically require consent of both parties. Many of our leases also contain termination provisions at our option, based on a variety of factors, including termination due to changing economic conditions of the related billboard location. Certain of our lease agreements include rental payments based on a percentage of revenue over contractual levels and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement or amendment. We rent or sublease certain real estate to third parties. 77 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) Leases (Lessors) —Our agreements with customers to advertise on our billboards are considered operating leases. Substantially all of our advertising structures (see Note 3. Property and Equipment, Net ) are utilized to lease advertising space to customers, for which the contracts are accounted for as rental income. Billboard display revenues are recognized as rental income on a straight-line basis over the customer lease term. We exclude from rental income all taxes assessed by a governmental authority that we collect from customers. These operating leases are short-term in duration, typically a term of 4 weeks to one year and do not include any variable lease provisions or options to extend the lease. Certain contracts may include provisions for the early termination of the lease after an agreed upon notice period. We account for non-lease installation services and the lease associated with providing advertising space on our billboards as a combined component under the lease standard. Hedging Activities —We have utilized interest rate cash flow swap agreements in the past to effectively convert a portion of our variable rate debt to a fixed rate and may do so again in the future. The interest rate swaps were designated and qualified as cash flow hedges and, as a result, changes in the fair value of the swaps were recorded in Other comprehensive income (loss) before taxes on the Consolidated Statements of Comprehensive Income. Revenue Recognition —We derive Revenues from the following sources: (i) billboard displays, (ii) transit displays, and (iii) other. Billboard display revenues are derived from providing advertising space to customers on our physical billboards or other outdoor structures. We generally (i) own the physical structures on which we display advertising copy for our customers, (ii) hold the legal permits to display advertising thereon, and (iii) lease the underlying sites. Billboard display revenues and installation services are recognized on a combined basis under the lease accounting standard as rental income on a straight-line basis over the customer lease term. Transit display revenues are derived from agreements with municipalities and transit operators, which entitle us to operate advertising displays within their transit systems, including on the interior and exterior of rail and subway cars and buses, as well as on benches, transit shelters, street kiosks and transit platforms. Transit display contracts typically require the installation and delivery of multiple advertising displays, for which locations are not specifically identified. Installation services are highly interdependent with the provision of advertising space, and therefore the installation and display of advertising is recognized as a single performance obligation. Transit display revenues are recognized based on the level of units displayed in proportion to the total units to be displayed over the contract period. Other revenues are derived primarily from providing print production services for advertisements to be displayed on our billboards or other outdoor sites, or on displays that we operate within transit systems. Print production services are not interrelated with the provision of advertising space and are considered a distinct performance obligation. Production revenue is recognized over the production period, which is typically very short in duration. Our billboard display and transit display contracts with customers range from four weeks to one year and billing commences at the beginning of the contract term, with payment generally due within 30 days of billing. For the majority of our contracts, transaction prices are explicitly stated. Any contracts with transaction prices that contain multiple performance obligations are allocated primarily based on a relative standalone selling price basis. Deferred revenues primarily consist of revenues collected in advance of being earned. For all revenue sources, we evaluate whether we should be considered the principal (i.e., report revenues on a gross basis) or an agent (i.e., report revenues on a net basis). We are considered the principal in our arrangements and report revenues on a gross basis, wherein the amounts billed to customers are recorded as revenues, and amounts paid to municipalities, transit operators and suppliers are recorded as expenses. We are considered the principal because we control the advertising space before and after the contract term, are primarily responsible to our customers, have discretion in pricing and typically have inventory risk. For space provided to advertisers through the use of an advertising agency whose commission is calculated based on a stated percentage of gross advertising spending, our Revenues are reported net of agency commissions. Concentration of Credit Risk— In the opinion of management, credit risk is limited due to the large number of customers and advertising agencies utilized. We perform credit evaluations on our customers and agencies and believe that the allowances for doubtful accounts are adequate. 78 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) Billboard Property Lease and Transit Franchise Expenses —Our billboards are primarily located on leased real property. Lease agreements are negotiated for varying terms ranging from one month to multiple years, most of which provide renewal options. Lease costs consist of a fixed monthly amount and certain lease agreements also include contingent rent based on the revenues we generate from the leased site. Property leases are generally paid in advance for periods ranging from one to twelve months . The fixed component of lease costs is expensed evenly over the non-cancellable contract term, and contingent rent is expensed as incurred when the related revenues are recognized. Our transit franchise agreements 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 revenues generated under the contract and/or a guaranteed minimum annual payment. The costs which are determined based on a percentage of revenues are expensed as incurred when the related revenues are recognized, and the guaranteed minimum annual payment is expensed over the contract term. Direct Lease Acquisition Costs— Variable commissions directly associated with billboard revenues are amortized on a straight-line basis over the related customer lease term, which generally ranges from four weeks to one year . Amortization of direct lease acquisition costs are presented within Selling General and Administrative expenses (“ SG&A ”) in the accompanying Consolidated Statements of Operations. Foreign Currency Translation and Transactions— The assets and liabilities of foreign subsidiaries are translated at exchange rates in effect at the balance sheet date, while results of operations are translated at average exchange rates for the respective periods. Any gain or loss on translation is included within other comprehensive income (loss) and Accumulated other comprehensive loss on our Consolidated Statement of Financial Position. Foreign currency transaction gains and losses are included in Other income (loss), net, on the Consolidated Statements of Operations. Income Taxes —As a REIT, We generally will not be subject to U.S. federal income tax on our REIT taxable income that we distribute to our stockholders. We have elected to treat our subsidiaries that participate in certain non-REIT qualifying activities, and certain of our foreign subsidiaries, as taxable REIT subsidiaries (“TRSs”). As such, the taxable income of our TRSs will be subject to federal, state and foreign income taxation at regular corporate rates. Income taxes are accounted for under the asset and liability method of accounting. Deferred income tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the financial statement carrying amounts and their respective tax basis. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized. We have applied the FASB’s guidance relating to uncertainty in income taxes recognized. Under this guidance we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also provides guidance on de-recognition, classification, interest and penalties on income taxes, and accounting in interim periods. Asset Retirement Obligation —An asset retirement obligation is established for the estimated future obligation, upon termination or non-renewal of a lease, associated with removing structures from the leased property and, when required by the contract, the cost to return the leased property to its original condition. These obligations are recorded at their present value in the period in which the liability is incurred and are capitalized as part of the related assets’ carrying value. Accretion of the liability is recognized in selling, general and administrative expenses and the capitalized cost is depreciated over the expected useful life of the related asset. Stock-based Compensation —We measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost is recognized over the vesting period during which an employee is required to provide service in exchange for the award. Adoption of New Accounting Standards In the first quarter of 2023, we adopted the FASB’s guidance on the recognition and measurement of contract assets and 79 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) contract liabilities acquired in a business combination. At the acquisition date, the acquirer should account for the related revenue contracts as if it had originated the contracts. The guidance also provides certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination. We will implement this guidance when accounting for business combinations in the future. In March 2020 and December 2022, the FASB issued guidance providing optional expedients and exceptions for accounting for contracts, hedging relationships and other transactions that reference to the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. The guidance is effective for all entities as of March 12, 2020, through December 31, 2024. This guidance did not have a significant impact on our accounting for our existing debt. Recent Pronouncements In November 2023, the FASB issued guidance to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements. In December 2023, the FASB issued guidance to enhance the transparency and decision usefulness of income tax disclosures primarily related to rate reconciliation and income taxes paid information. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. Retrospective application is permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements. Note 3. Property and Equipment, Net The table below presents the balances of major classes of assets and accumulated depreciation. As of December 31, (in millions) 2023 (a) 2022 Land $ 110.1 $ 112.2 Buildings and improvements 42.7 56.5 Advertising structures 1,716.2 2,006.8 Furniture, equipment and other 173.9 183.4 Construction in progress 39.5 38.5 2,082.4 2,397.4 Less accumulated depreciation 1,424.6 1,697.6 Property and equipment, net $ 657.8 $ 699.8 (a) In 2023, in connection with the Transaction, Property and equipment were reclassified as Assets held for sale on the Consolidated Statement of Financial Position. (See Note 12. Acquisitions and Dispositions : Dispositions : Canadian Business .) Depreciation expense was $ 79.3 million in 2023, $ 77.4 million in 2022 and $ 79.4 million in 2021. Note 4. Long-Lived Assets By the end of the first half of 2023, our U.S. Transit and Other reporting unit did not meet revenue expectations and as of June 30, 2023, our revenue pacing and outlook for the remainder of 2023 reflected a continued decline in transit revenues as compared to our 2023 forecast due to underperformance across our transit business, including the MTA transit system. As a result, in the second quarter of 2023, we determined that there was a decline in the long-term outlook for our U.S. Transit and Other reporting unit constituting a triggering event, which required an interim impairment analysis of goodwill and long-lived assets. 80 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) Goodwill For the years ended December 31, 2023 and 2022, the changes in the book value of goodwill by segment were as follows: (in millions) U.S. Media Other Total As of December 31, 2021 $ 2,054.0 $ 23.8 $ 2,077.8 Currency translation adjustments — ( 1.4 ) ( 1.4 ) As of December 31, 2022 2,054.0 22.4 2,076.4 Dispositions (a) — ( 22.9 ) ( 22.9 ) Currency translation adjustments — 0.5 0.5 Impairment ( 47.6 ) — ( 47.6 ) As of December 31, 2023 2,006.4 — 2,006.4 (a) In 2023, in connection with the Transaction, Goodwill in Other was reclassified as Assets held for sale on the Consolidated Statement of Financial Position. (See Note 12. Acquisitions and Dispositions : Dispositions : Canadian Business .) The estimated fair value of our U.S. Transit and Other reporting unit exceeded its carrying value by 28 % as of December 31, 2022, based on our goodwill impairment assessment in the prior year. 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. In the fourth quarter of 2023, we performed a qualitative assessment of two of our reporting units for possible goodwill impairment and no additional goodwill impairment was identified. As of December 31, 2023, all outstanding goodwill balances were associated with the U.S. billboard reporting unit. Intangible Assets Our identifiable intangible assets primarily consist of acquired permits and leasehold agreements, and franchise agreements, which grant us the right to operate out-of-home structures in specified locations and the right to provide advertising space on railroad and municipal transit properties. Identifiable intangible assets are amortized on a straight-line basis over their estimated useful life, which is the respective life of the agreement that in some cases includes historical experience of renewals. Our identifiable intangible assets consist of the following: (in millions) Gross Accumulated Amortization Impairment Net As of December 31, 2023: Permits and leasehold agreements $ 1,535.5 $ ( 893.8 ) $ — $ 641.7 Franchise agreements (a) 934.8 ( 426.4 ) ( 467.9 ) 40.5 Other intangible assets 19.5 ( 6.3 ) — 13.2 Total intangible assets (b) $ 2,489.8 $ ( 1,326.5 ) $ ( 467.9 ) $ 695.4 As of December 31, 2022: Permits and leasehold agreements $ 1,597.6 $ ( 868.7 ) $ — $ 728.9 Franchise agreements 533.2 ( 418.6 ) — 114.6 Other intangible assets 18.9 ( 3.9 ) — 15.0 Total intangible assets $ 2,149.7 $ ( 1,291.2 ) $ — $ 858.5 (a) We reclassified all Prepaid MTA equipment deployment costs (see Note 17. Commitments and Contingencies ) and recorded impairments in the second, third and fourth quarters of 2023 due to a decline in the long-term outlook of our U.S. Transit and Other reporting unit. (b) In 2023, in connection with the Transaction, Intangible assets, net, of $ 53.0 million was reclassified as Assets held for sale on the Consolidated Statement of Financial Position. (See Note 12. Acquisitions and Dispositions : Disposition s: Canadian Business. ) In 2023, we acquired 453 displays, resulting in amortizable intangible assets for permits and leasehold agreements, and other intangible assets of $ 30.4 million, which are amortized using the straight-line method over their estimated useful lives, an 81 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) average period of 17.5 years, including five displays related to the Transaction, resulting in amortizable intangible assets for permits and leasehold agreements, and other intangible assets of $ 2.7 million, that has been reclassified as Assets held for sale on the Consolidated Statement of Financial Position. All of our intangible assets, except goodwill, are subject to amortization. Amortization expense was $ 81.2 million in 2023, $ 73.3 million in 2022 and $ 66.0 million in 2021. During the second quarter of 2023, we 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 impairment charges of $ 463.5 million, 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. We expect our aggregate annual amortization expense for intangible assets for each of the years 2024 through 2028, to be as follows: (in millions) 2024 2025 2026 2027 2028 Amortization expense $ 68.9 $ 65.9 $ 61.1 $ 55.3 $ 51.2 Note 5. Leases Lessee As of (in millions, except years and percentages) December 31, 2023 December 31, 2022 Operating lease assets (a) $ 1,591.9 $ 1,562.6 Short-term operating lease liabilities (a) 180.9 188.1 Non-current operating lease liabilities (a) 1,417.4 1,369.0 Weighted-average remaining lease term 10.9 years 11.0 years Weighted-average discount rate 6.2 % 5.8 % (a) In 2023, in connection with the Transaction, Operating lease assets of $ 85.9 million was reclassified as Assets held for sale and Short-term operating lease liabilities of $ 15.1 million and Non-current Operating lease liabilities of $ 70.4 million were reclassified as Liabilities held for sale on the Consolidated Statement of Financial Position. (See Note 12. Acquisitions and Dispositions : Disposition s: Canadian Business. ) Year Ended December 31, (in millions) 2023 2022 2021 Operating expenses $ 502.9 $ 451.5 $ 401.7 Selling, general and administrative expenses 13.0 10.5 9.3 Variable costs 143.7 113.8 80.6 Cash paid for operating leases 486.6 458.2 394.3 Leased assets obtained in exchange for new operating lease liabilities 397.2 285.1 279.4 (a) Includes an out-of-period adjustment of $ 5.2 million recorded in the first quarter of 2023 related to variable billboard property lease expenses (see Note 1. Description of Business and Basis of Presentation ). In 2023, 2022 and 2021, sublease income related to office properties was immaterial. 82 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) As of December 31, 2023, minimum rental payments under operating leases are as follows: (in millions) Operating Leases 2024 $ 275.2 2025 264.2 2026 239.9 2027 218.3 2028 178.5 2029 and thereafter 1,146.9 Total operating lease payments 2,323.0 Less: Interest 724.7 Present value of lease liabilities (a) $ 1,598.3 (a) Excludes minimum rental payments to be made in connection with $ 85.4 million of lease liabilities reclassified to Liabilities held for sale on the Consolidated Statement of Financial Position in connection with the Transaction. (See Note 12. Acquisitions and Dispositions : Dispositions : Canadian Business .) Lessor We recorded rental income of $ 1,349.3 million in 2023, $ 1,321.1 million in 2022 and $ 1,141.1 million in 2021 in Revenues on our Consolidated Statement of Operations. As of December 31, 2023, rental payments to be received under non-cancellable operating leases are as follows: (in millions) Rental Income 2024 $ 521.8 2025 28.8 2026 6.5 2027 2.3 2028 2.0 2029 and thereafter 10.0 Total minimum payments (a) $ 571.4 (a) Excludes an immaterial amount of rental payments to be received under non-cancellable operating leases related to amounts reclassified to Assets held for sale on the Consolidated Statement of Financial Position in connection with the Transaction. (See Note 12. Acquisitions and Dispositions : Dispositions : Canadian Business .) 83 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) Note 6. Asset Retirement Obligation The following table sets forth the change in the asset retirement obligations associated with our advertising structures located on leased properties. The obligation is calculated based on the assumption that all of our advertising structures will be removed within the next 50 years. The estimated annual costs to dismantle and remove the structures upon the termination or non-renewal of our leases are consistent with our historical experience. Year Ended December 31, (in millions) 2023 2022 Balance, at beginning of period $ 37.8 $ 36.4 Accretion expense 3.1 2.8 Additions 0.2 0.8 Liabilities settled (a) ( 8.2 ) ( 1.9 ) Foreign currency translation adjustments 0.1 ( 0.3 ) Balance, at end of period $ 33.0 $ 37.8 (a) In 2023, includes $ 5.0 million of liabilities reclassified to Liabilities held for sale on the Consolidated Statement of Financial Position in connection with the Transaction. (See Note 12. Acquisitions and Dispositions : Dispositions : Canadian Business . ) Note 7. Related Party Transactions On January 18, 2023, we entered into a transaction with an affiliate of Providence Equity Partners L.L.C. (the “Providence Affiliate”) in connection with the Providence Affiliate’s purchase of a lease for certain outdoor advertising assets (the “Assets”) from a third-party seller. Pursuant to an agreement between us and the Providence Affiliate (the “Billboard Agreement”), we agreed to exclusively market, license and make advertising space available on the Assets to third-party advertisers for a term of up to ten years (the “Billboard Transaction”). In return, we will retain all revenues from the sale of advertising with respect to the Assets less the following payments to the Providence Affiliate or its payment designee, as applicable: (i) a minimum annual guarantee payment paid to the Providence Affiliate’s payment designee that increases from approximately $ 1.8 million to $ 3.5 million during the term of the Billboard Agreement; (ii) a minimum annual guarantee payment paid to the Providence Affiliate that increases from $ 8.5 million to $ 12.0 million by year six and adjusted for inflation thereafter through year ten; (iii) a percentage revenue share payment on gross revenues generated above $ 22.0 million paid to the Providence Affiliate during the term of the Billboard Agreement; (iv) a percentage revenue share payment on net revenues until $ 100.0 million is paid to the Providence Affiliate or its payment designee, as applicable; and (v) a one-time payment of $ 10.0 million paid to the Providence Affiliate on the fifth anniversary of the closing of the Billboard Transaction (the “Billboard Transaction Closing”) if we have not yet acquired the Assets as described below. The Billboard Agreement also provides that (i) we have the option to acquire the Assets from the Providence Affiliate between the third and seventh anniversaries of the Billboard Transaction Closing at pre-agreed prices depending on the time at which we exercise the option; (ii) prior to the seventh anniversary of the Billboard Transaction Closing, we have a right of first offer prior to any sale of the Assets by the Providence Affiliate to a third-party; and (iii) in the event of a termination of the Billboard Agreement by the Providence Affiliate after a sale to a third-party, we may in certain circumstances be entitled to receive a termination payment. As of December 31, 2023, operating lease assets related to the Billboard Agreement were $ 91.5 million , current operating lease liabilities related to the Billboard Agreement were $ 3.6 million and non-current operating lease liabilities related to the Billboard Agreement were $ 92.1 million , and are included in Operating lease assets , current Operating lease liabilities and non-current Operating lease liabilities , respectively, on the Consolidated Statements of Financial Position. Billboard revenues related to the Billboard Agreement were $ 11.4 million in 2023 and recorded in Revenues on the Consolidated Statement of Operations. Operating lease expenses related to the Billboard Agreement were $ 11.5 million in 2023 and recorded in Operating expenses on the Consolidated Statement of 84 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) Operations. Joint Ventures We have a 50 % ownership interest in two active joint ventures that operate transit shelters in the greater Los Angeles area and Vancouver, and two active joint ventures which operate a total of seven billboard displays in New York and Boston. All of these ventures are accounted for as equity investments. These investments totaled $ 8.2 million as of December 31, 2023, and $ 12.2 million as of December 31, 2022, and are included in Other assets on the Consolidated Statements of Financial Position. In 2023, in connection with the Transaction, an equity investment was reclassified as Assets held for sale on the Consolidated Statement of Financial Position. (See Note 12. Acquisitions and Dispositions : Dispositions : Canadian Business .) We provided sales and management services to these joint ventures and recorded management fees in Revenues on the Consolidated Statement of Operations of $ 4.9 million in 2023, $ 8.6 million in 2022 and $ 6.3 million in 2021. Note 8. Debt Debt, net, consists of the following: As of December 31, (in millions, except percentages) 2023 2022 Short-term debt: AR Facility $ 65.0 $ 30.0 Total short-term debt 65.0 30.0 Long-term debt: Term loan, due 2026 $ 598.9 $ 598.6 Senior secured notes: 7.375 % senior secured notes, due 2031 450.0 — Senior unsecured notes: 6.250 % senior unsecured notes, due 2025 — 400.0 5.000 % senior unsecured notes, due 2027 650.0 650.0 4.250 % senior unsecured notes, due 2029 500.0 500.0 4.625 % senior unsecured notes, due 2030 500.0 500.0 Total senior unsecured notes 1,650.0 2,050.0 Debt issuance costs ( 22.4 ) ( 22.6 ) Total long-term debt, net 2,676.5 2,626.0 Total debt, net $ 2,741.5 $ 2,656.0 Weighted average cost of debt 5.7 % 5.2 % Term Loan The interest rate on the term loan due in 2026 (the “Term Loan”) was 7.1 % per annum as of December 31, 2023. As of December 31, 2023, a discount of $ 1.1 million on the Term Loan remains unamortized. The discount is being amortized through Interest expense, net, on the Consolidated Statement of Operations. 85 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) Revolving Credit Facility 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. The commitment fee based on the amount of unused commitments under the Revolving Credit Facility was $ 1.7 million in 2023, $ 1.6 million in 2022 and $ 1.8 million in 2021. As of December 31, 2023, we had issued letters of credit totaling approximately $ 6.5 million against the letter of credit facility sublimit under the Revolving Credit Facility. Standalone Letter of Credit Facilities As of December 31, 2023, we had issued letters of credit totaling approximately $ 75.6 million under our aggregate $ 81.0 million standalone letter of credit facilities. The total fees under the letter of credit facilities in 2023, 2022 and 2021 were immaterial. Accounts Receivable Securitization Facilities 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. In connection with the AR Facility, Outfront Media LLC and Outfront Media Outernet Inc., each a wholly-owned subsidiary of the Company, and certain of the Company’s taxable REIT subsidiaries (“TRSs”) (the “Originators”), will sell and/or contribute their respective existing and future accounts receivable and certain related assets to either Outfront Media Receivables LLC, a special purpose vehicle and wholly-owned subsidiary of the Company relating to the Company’s qualified REIT subsidiary accounts receivable assets (the “QRS SPV”) or Outfront Media Receivables TRS, LLC a special purpose vehicle and wholly-owned subsidiary of the Company relating to the Company’s TRS accounts receivable assets (the “TRS SPV” and together with the QRS SPV, the “SPVs”). The SPVs may transfer undivided interests in their respective accounts receivable assets to certain purchasers from time to time (the “Purchasers”). The SPVs are separate legal entities with their own separate creditors who will be entitled to access the SPVs’ assets before the assets become available to the Company. Accordingly, the SPVs’ assets are not available to pay creditors of the Company or any of its subsidiaries, although collections from the receivables in excess of amounts required to repay the Purchasers and other creditors of the SPVs may be remitted to the Company. Outfront Media LLC will service the accounts receivables on behalf of the SPVs for a fee. The Company has agreed to guarantee the performance of the Originators and Outfront Media LLC, in its capacity as servicer, of their respective obligations under the agreements governing the AR Facility. Neither the Company, the Originators nor the SPVs guarantee the collectability of the receivables under the AR Facility. Further, the TRS SPV and the QRS SPV are jointly and severally liable for their respective obligations under the agreements governing the AR Facility. As of December 31, 2023, there were $ 65.0 million of outstanding borrowings under the AR Facility, at a borrowing rate of 6.5 %. 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 86 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) 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 6.250 % Senior Unsecured Notes due 2025 (the “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, 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. As of December 31, 2023, our Consolidated Total Leverage Ratio was 5.3 to 1.0 in accordance with the Credit Agreement. The terms of the Credit Agreement (and under certain circumstances, the agreements governing the AR Facility) require that we maintain a Consolidated Net Secured Leverage Ratio, which is the ratio of (i) our consolidated secured debt (less up to $ 150.0 million of unrestricted cash) to (ii) our Consolidated EBITDA (as defined in the Credit Agreement) for the trailing four consecutive quarters, of no greater than 4.5 to 1.0. As of December 31, 2023, our Consolidated Net Secured Leverage Ratio was 2.0 to 1.0 in accordance with the Credit Agreement. As of December 31, 2023, we are in compliance with our debt covenants. Deferred Financing Costs 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. 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 notes. 87 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) Fair Value Under the fair value hierarchy, observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities are defined as Level 1; observable inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for the asset or liability are defined as Level 2; and unobservable inputs for the asset or liability are defined as Level 3. The aggregate fair value of our debt, which is estimated based on quoted market prices of similar liabilities, was approximately $ 2.7 billion as of December 31, 2023 and $ 2.5 billion as of December 31, 2022. The fair value of our debt as of both December 31, 2023 and 2022 is classified as Level 2. Note 9. Accumulated Other Comprehensive Loss The following table presents the changes in the components of accumulated other comprehensive loss. (in millions) Cumulative Translation Adjustments Net Actuarial Gain (Loss) Loss on Interest Rate Cash Flow Swaps Accumulated Other Comprehensive Loss As of December 31, 2020 $ ( 1.3 ) $ ( 11.1 ) $ ( 5.6 ) $ ( 18.0 ) Other comprehensive income before reclassifications — 7.9 5.2 13.1 Amortization of actuarial losses reclassified to net income (a) — 0.5 — 0.5 Total other comprehensive income, net of tax — 8.4 5.2 13.6 As of December 31, 2021 ( 1.3 ) ( 2.7 ) ( 0.4 ) ( 4.4 ) Other comprehensive income (loss) before reclassifications ( 7.9 ) 2.8 0.4 ( 4.7 ) Total other comprehensive income (loss), net of tax ( 7.9 ) 2.8 0.4 ( 4.7 ) As of December 31, 2022 ( 9.2 ) 0.1 — ( 9.1 ) Other comprehensive income before reclassifications 3.1 0.2 — 3.3 Total other comprehensive income, net of tax 3.1 0.2 — 3.3 As of December 31, 2023 $ ( 6.1 ) $ 0.3 $ — $ ( 5.8 ) (a) See Note 14. Retirement Benefits to the Consolidated Financial Statements for additional details of items reclassified from accumulated other comprehensive loss to net income. Net actuarial gain (loss) included in other comprehensive income (loss) is net of a tax provision of $ 1.0 million in 2022 and $ 2.9 million in 2021. There was no tax provision or benefit related to net actuarial gain (loss) included in other comprehensive income in 2023. Note 10. Equity As of December 31, 2023, 450,000,000 shares of our common stock, par value $ 0.01 per share, were authorized; 165,052,191 shares were issued and outstanding; and 50,000,000 shares of our preferred stock, par value $ 0.01 per share, were authorized with 125,000 shares of our Series A Convertible Perpetual Preferred Stock (the “Series A Preferred Stock”), par value $ 0.01 per share, issued and outstanding. The Series A Preferred Stock ranks senior to the shares of the Company’s common stock with respect to dividend and distribution rights. Holders of the Series A Preferred Stock are entitled to a cumulative dividend accruing at the initial rate of 7.0 % per year, payable quarterly in arrears, subject to increases as set forth in the Articles Supplementary, effective as of April 20, 2020 (the “Articles”). Dividends may, at the option of the Company, be paid in cash, in-kind, through the issuance of additional shares of Series A Preferred Stock or a combination of cash and in-kind, until April 20, 2028, after which time dividends will be payable solely in cash. So long as any shares of Series A Preferred Stock remain outstanding, the Company may not, without the consent of a specified percentage of holders of shares of Series A Preferred Stock, declare a dividend on, or make any distributions relating to, capital stock that ranks junior to, or on a parity basis with, the Series A Preferred Stock, subject to certain exceptions, including but not limited to (i) any dividend or distribution in cash or capital stock of the Company on or in respect of the capital stock of the Company to the extent that such dividend or distribution is necessary to maintain the Company’s status as a REIT; and (ii) any dividend or distribution in cash in respect of our common stock that, 88 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) together with the dividends or distributions during the 12 -month period immediately preceding such dividend or distribution, is not in excess of 5 % of the aggregate dividends or distributions paid by the Company necessary to maintain its REIT status during such 12 -month period. If any dividends or distributions in respect of the shares of our common stock are paid in cash, the shares of Series A Preferred Stock will participate in the dividends or distributions on an as-converted basis up to the amount of their accrued dividend for such quarter, which amounts will reduce the dividends payable on the shares of Series A Preferred Stock dollar-for-dollar for such quarter. The Series A Preferred Stock is convertible at the option of any holder at any time into shares of our common stock at an initial conversion price of $ 16.00 per share and an initial conversion rate of 62.50 shares of our common stock per share of Series A Preferred Stock, subject to certain anti-dilution adjustments and a share cap as set forth in the Articles. Subject to certain conditions set forth in the Articles (including a change of control), each of the Company and the holders of the Series A Preferred Stock may convert or redeem the Series A Preferred Stock at the prices set forth in the Articles, plus any accrued and unpaid dividends. During 2023, we paid cash dividends of $ 8.8 million on the Series A Preferred Stock. As of December 31, 2023, the maximum number of shares of common stock that could be required to be issued on conversion of the outstanding shares of Series A Preferred Stock was approximately 7.8 million shares. We have a sales agreement in connection with an “at-the-market” equity offering program (the “ATM Program”), under which we may, from time to time, issue and sell shares of our common stock up to an aggregate offering price of $ 300.0 million. We have no obligation to sell any of our common stock under the sales agreement and may at any time suspend solicitations and offers under the sales agreement. In 2023, no shares of our common stock were sold under the ATM Program. As of December 31, 2023, we had approximately $ 232.5 million of capacity remaining under the ATM Program. On February 21, 2024 , we announced that our board of directors approved a quarterly cash dividend of $ 0.30 per share on our common stock, payable on March 28, 2024 , to stockholders of record at the close of business on March 1, 2024 . Note 11. Revenues We do not disclose the value of unsatisfied performance obligations for contracts with an original expected term of one year or less, which primarily represent the transaction price allocated to the remaining display period for unsatisfied transit franchise contracts. The following table summarizes revenues by source: Years Ended December 31, (in millions) 2023 2022 2021 Billboard: Static displays $ 948.0 $ 936.9 $ 829.8 Digital displays 441.7 400.8 308.1 Other 55.2 47.0 44.4 Billboard revenues 1,444.9 1,384.7 1,182.3 Transit: Static displays 191.8 212.6 170.5 Digital displays 146.6 139.1 81.3 Other 31.1 29.4 26.2 Total transit revenues 369.5 381.1 278.0 Other 6.2 6.3 3.6 Transit and other revenues 375.7 387.4 281.6 Total revenues $ 1,820.6 $ 1,772.1 $ 1,463.9 Rental income was $ 1,349.3 million in 2023, $ 1,321.1 million in 2022 and $ 1,141.1 million in 2021, and is recorded in Billboard revenues on the Consolidated Statement of Operations. 89 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) The following table summarizes revenues by geography: Years Ended December 31, (in millions) 2023 2022 2021 United States: Billboard $ 1,369.7 $ 1,308.8 $ 1,116.1 Transit and other 352.6 365.1 265.9 Other 6.2 6.3 3.6 Total United States revenues 1,728.5 1,680.2 1,385.6 Canada 92.1 91.9 78.3 Total revenues $ 1,820.6 $ 1,772.1 $ 1,463.9 Our revenues are sensitive to fluctuations in advertising expenditures, general economic conditions and other external events beyond our control. Contract Costs and Balances Variable sales commission costs directly associated with billboard display revenues are considered direct lease acquisition costs in accordance with the lease accounting standard and are capitalized and amortized on a straight-line basis over the related customer lease term (see Note 5. Leases : Lessee to the Consolidated Financial Statements). Amortization of direct lease acquisition costs is presented within SG&A in the accompanying Consolidated Statements of Operations. Variable sales commission costs which are directly associated with transit display and other revenues are included in SG&A on the Consolidated Statement of Operations, and are expensed as incurred since the amortization period of the asset would have been less than one year. Amounts to be collected from customers for revenues recognized in previous periods are included in Receivables, less allowance , on the Consolidated Statement of Financial Position. Amounts collected from customers for revenues to be recognized in future periods are included in Deferred revenues on the Consolidated Statement of Financial Position. We recognized substantially all of the Deferred revenues on the Consolidated Statement of Financial Position as of December 31, 2022, during the three months ended March 31, 2023. Note 12. Acquisitions and Dispositions Acquisitions We completed several asset acquisitions for a total purchase price of approximately $ 33.7 million in 2023, $ 353.9 million in 2022 and $ 136.5 million in 2021. In the second quarter of 2022, we completed the acquisition of approximately 950 billboard displays, including 21 digital displays, as well as certain business assets, in Portland, Oregon, and Clark County, Washington, from Pacific Outdoor Advertising, L.L.C., for $ 185.0 million, subject to closing and post-closing adjustments, using cash on hand. Dispositions Canadian Business On October 22, 2023, the Selling Subsidiaries entered into a Share Purchase Agreement with the Buyer, relating to the sale of 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, 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 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. 90 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) The consummation of the Transaction is expected to occur in the first half of 2024, subject to certain closing conditions, including, among others, (i) the absence of any enacted or pending law, order, judgment or litigation by a governmental authority prohibiting the consummation of the Transaction, and (ii) receipt of antitrust approval in Canada (the “Antitrust Approval”). The obligation of the Buyer to consummate the Transaction is also conditioned on the absence of a material adverse effect on the Canadian Business following the date of the Share Purchase Agreement and the Selling Subsidiaries’ obligation to spend a target percentage of forecasted capital expenditures through the Closing. The obligation of each party to consummate the Transaction is conditioned on each party’s representations and warranties being true and correct and each party having performed in all material respects its obligations under the Share Purchase Agreement. In addition, the Share Purchase Agreement may be terminated under certain circumstances, including (i) by mutual written agreement of the Buyer and the Selling Subsidiaries; (ii) by either the Buyer or the Selling Subsidiaries if the Closing does not occur by July 22, 2024, with extensions by the Buyer or the Selling Subsidiaries under certain conditions until no later than October 22, 2024 (the “Outside Date”); or (iii) by either the Buyer or the Selling Subsidiaries if a failure by either the Buyer or the Seller Subsidiaries is the principal cause of any closing condition not being satisfied. If the Antitrust Approval is not received by the Outside Date and the principal cause of such failure is not a failure of the Selling Subsidiaries or its subsidiaries to perform any of their obligations under the Share Purchase Agreement, the Buyer will pay a termination fee to the Selling Subsidiaries in the amount of C$ 20.0 million. In connection with the Transaction, the assets of our outdoor advertising business in Canada has been classified as Assets held for sale on the Consolidated Statement of Financial Position. It is required that we measure assets held for sale at the lower of their carrying value (including unrecognized foreign currency translation adjustment losses) or fair value less cost to sell. The components of Assets held for sale and Liabilities held for sale were as follows: (in millions) As of December 31, 2023 Current assets: Receivables, less allowances $ 26.7 Other current assets 7.9 Current assets held for sale 34.6 Property and equipment, net 39.9 Goodwill 22.9 Intangible assets 53.0 Operating lease assets 85.9 Other assets 12.6 Total assets held for sale $ 248.9 Current liabilities held for sale 24.1 Deferred income tax liabilities, net 15.5 Asset retirement obligation 5.0 Operating lease liabilities 70.4 Total liabilities held for sale $ 115.0 Los Angeles Office and Operations Center In the fourth quarter of 2023, we sold three parcels of land and the related structures in Los Angeles, California, for a total sales price of $ 15.5 million. This facility previously housed our Los Angeles sales office and operations center. Our Los Angeles sales office has relocated to a new location, and we entered into a leaseback of the operational portion of the facility for a term of five years . We have accounted for the transaction as a sale-leaseback, resulting in a gain of $ 12.4 million. We have also recorded Operating lease assets and Operating lease liabilities of $ 2.5 million in connection with the lease on our Statements of Financial Position. 91 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) Note 13. Stock-Based Compensation Effective as of June 6, 2023, we amended the OUTFRONT Media Inc. Amended and Restated Omnibus Stock Incentive Plan (the “Stock Plan”) to, among other things, increase the number of shares of our common stock reserved for issuance under our prior plan by 6,475,000 shares, so that the aggregate number of shares reserved for issuance under the Stock Plan is 19,575,000 shares of our common stock. Under the Stock Plan, the board of directors is authorized to grant awards of options to purchase shares of our common stock, stock appreciation rights, restricted and unrestricted stock, restricted share units (“RSUs”), dividend equivalents, performance awards, including performance-based restricted share units (“PRSUs”), and other equity-related awards and cash payments to all of our employees and non-employee directors and employees of our subsidiaries. In addition, consultants and advisors who perform services for us and our subsidiaries may, under certain conditions, receive grants under the Stock Plan. RSUs and PRSUs accrue dividend equivalents in amounts equal to the regular cash dividends paid on our common stock and will be paid in either cash or stock. Accrued dividend equivalents payable in stock shall convert to shares of our common stock on the date of vesting. Compensation expense for RSUs is determined based upon the market price of the shares underlying the awards on the date of grant and expensed over the vesting period, which is generally a three -year service period. For PRSU awards, the number of shares an employee earns may range from 0 % to 120 % based on the outcome of a one -year performance condition. Compensation expense is recorded based on the probable outcome of the performance condition. On an annual basis, our board of directors will review actual performance and certify the degree to which performance goals applicable to the award have been met. Forfeitures of RSUs are recorded as incurred. Adjustments are made to compensation expense based on actual forfeitures. In the first quarter of 2021, the Company granted one-time equity award grants to our executive officers. The grant values of the one-time RSU awards were equal to 100 % of each executive officer’s current base salary, and comprised of 60 % PRSUs, which contain a market and service condition, and 40 % time-based RSUs, which only contain a service condition. The PRSU market condition will be based on the Company’s total shareholder return (“TSR”) relative to the TSRs of the companies in the iShares Evolved U.S. Media and Entertainment Index as of January 1, 2021, measured over a 2 -year performance period, with the number of PRSUs eligible to vest ranging from 0 % to 200 % of target based on a percentile ranking of the Company’s relative TSR. Subject to the market condition, these one-time equity grants will cliff vest in full on the second anniversary of the award grant date. A Monte Carlo method simulation has been used to estimate the grant date fair value of the PRSUs that have a market condition. The following table summarizes our stock-based compensation expense for 2023, 2022 and 2021. Year Ended December 31, (in millions) 2023 2022 2021 Stock-based compensation expense (RSUs and PRSUs), before income taxes $ 28.4 $ 33.8 $ 28.6 Tax benefit ( 1.0 ) ( 1.6 ) ( 1.4 ) Stock-based compensation expense, net of tax $ 27.4 $ 32.2 $ 27.2 As of December 31, 2023, total unrecognized compensation cost related to non-vested RSUs and PRSUs was $ 26.6 million, which is expected to be recognized over a weighted average period of 1.6 years. 92 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) RSUs and PRSUs The following table summarizes the 2023 activity of the RSUs and PRSUs issued to our employees. Activity Weighted Average Per Share Grant Date Fair Market Value Non-vested as of December 31, 2022 2,644,039 $ 24.28 Granted: RSUs 1,109,485 19.03 PRSUs 619,687 20.64 Vested: RSUs ( 941,942 ) 24.56 PRSUs ( 516,609 ) 25.36 Forfeitures: RSUs ( 97,480 ) 21.25 PRSUs ( 35,344 ) 21.50 Non-vested as of December 31, 2023 2,781,836 21.10 The total fair value of RSUs and PRSUs that vested was $ 36.2 million during 2023, $ 25.9 million during 2022 and $ 22.6 million during 2021. Note 14. Retirement Benefits We sponsor two defined benefit pension plans covering specific groups of employees in Canada and the U.S. The Outfront Media Canada LP pension plan (the “Plan”) is closed to new employees and as of December 31, 2021, we completed freezing the Plan to any future benefit accruals. Employees under the Plan are now entitled to enhanced defined contribution plan benefits. The benefits for the pension plan in Canada were based primarily on an employee’s years of service and an average of the employee’s highest five years of earnings. Participating employees in the pension plan in Canada were vested after two years of service or immediately, depending on the province of their employment. We funded the pension plan in Canada in accordance with the rules and regulations of the Pension Benefits Act of the Province of Ontario, Canada. Canada pension plan assets consist principally of insurance contracts, equity securities and corporate and government-related fixed income securities, and global infrastructure. The pension plan in the U.S. covers a small number of hourly employees. The investments of the pension plan in the U.S. consist entirely of the plan’s interest in a trust, which invests the assets of this plan. The pension plan in the U.S. is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended. We use a December 31 measurement date for all pension plans. 93 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) The following table sets forth the change in benefit obligation for our pension plans. As of December 31, (in millions) 2023 2022 2021 Benefit obligation, beginning of year $ 47.0 $ 65.3 $ 71.3 Service cost — — 0.1 Interest cost 2.1 1.9 1.8 Actuarial gain ( 0.3 ) ( 14.8 ) ( 5.2 ) Settlements paid ( 20.2 ) — — Benefits paid ( 2.0 ) ( 2.2 ) ( 2.9 ) Cumulative translation adjustments 0.6 ( 3.2 ) 0.2 Benefit obligation, end of year $ 27.2 $ 47.0 $ 65.3 The following table sets forth the change in plan assets for our pension plans. As of December 31, (in millions) 2023 2022 Fair value of plan assets, beginning of year $ 55.5 $ 69.5 Actual return on plan assets 2.9 ( 8.2 ) Settlements paid ( 20.2 ) — Benefits paid ( 2.0 ) ( 2.2 ) Cumulative translation adjustments 0.9 ( 3.6 ) Fair value of plan assets, end of year $ 37.1 $ 55.5 The unfunded status of pension benefit obligations and the related amounts recognized on the Consolidated Statement of Financial Position were as follows: As of December 31, (in millions) 2023 2022 Funded status, end of year $ 9.9 $ 8.5 Amounts recognized on the Consolidated Statement of Financial Position: Assets held for sale $ 10.4 — Other assets — 8.5 Other liabilities ( 0.5 ) — Net amounts recognized 9.9 7.9 The following amounts were recognized in accumulated other comprehensive loss on the Consolidated Statement of Financial Position. As of December 31, (in millions) 2023 2022 Net actuarial gain $ 0.4 $ 0.2 Deferred income taxes ( 0.1 ) ( 0.1 ) Net amount recognized in accumulated other comprehensive income $ 0.3 $ 0.1 The accumulated benefit obligation for the defined benefit pension plans was $ 25.1 million as of December 31, 2023, and $ 45.2 million as of December 31, 2022. 94 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) The following table presents our benefit obligations and fair value of plan assets. As of December 31, (in millions) 2023 2022 Projected benefit obligation $ 27.2 $ 47.0 Accumulated benefit obligation 25.1 45.2 Fair value of plan assets 37.1 55.5 The following tables present the components of net periodic pension cost and amounts recognized in other comprehensive income (loss). As of December 31, (in millions) 2023 2022 2021 Service cost $ — $ — $ 0.1 Interest cost 2.1 1.9 1.8 Expected return on plan assets ( 2.6 ) ( 2.8 ) ( 2.6 ) Amortization of actuarial losses (a) — — 0.6 Settlement gain ( 0.5 ) — — Net periodic pension cost $ ( 1.0 ) $ ( 0.9 ) $ ( 0.1 ) (in millions) Year Ended December 31, 2023 Actuarial gain $ 0.7 Settlement cost ( 0.5 ) Recognized in other comprehensive income, net of tax $ 0.2 (a) Reflects amounts reclassified from accumulated other comprehensive income (loss) to net income. Estimated net actuarial losses related to the defined benefit pension plan that will be amortized from accumulated other comprehensive loss into net periodic pension costs in 2024 is immaterial. As of and for the Year Ended December 31, 2023 2022 Weighted average assumptions used to determine benefit obligations: Discount rate 4.8 % 5.0 % Rate of compensation increase 3.3 3.3 Weighted average assumptions used to determine net periodic cost: Discount rate 5.0 3.0 Expected long-term return on plan assets 4.2 5.2 Rate of compensation increase 3.3 3.3 For the pension plan, the discount rate is determined based on the yield on portfolios of high quality bonds, constructed to provide cash flows necessary to meet the expected future benefit payments, as determined for the projected benefit obligation. The expected return on plan assets assumption was derived using the current and expected asset allocation of the pension plan assets and considering historical as well as expected returns on various classes of plan assets. Plan Assets Our plan assets are included in a trust in Canada and a trust in the U.S. The asset allocations of these trusts are based upon an analysis of the timing and amount of projected benefit payments, projected company contributions, the expected returns and risk of the asset classes and the correlation of those returns. As of December 31, 2023, we invested approximately 82 % in fixed income instruments and global infrastructure, 17 % in equity instruments, and the remainder in cash, cash equivalents. 95 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) The following tables set forth our pension plan assets measured at fair value on a recurring basis as of December 31, 2023 and 2022. These assets have been categorized according to the three-level fair value hierarchy established by the FASB which prioritizes the inputs used in measuring fair value. Level 1 is based on quoted prices for the asset in active markets. Level 2 is based on inputs that are observable other than quoted market prices in active markets, such as quoted prices for the asset in inactive markets or quoted prices for similar assets. Level 3 is based on unobservable inputs that market participants would use in pricing the asset. As of December 31, 2023 (in millions) Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 0.1 $ — $ — $ 0.1 Fixed income securities: Corporate bonds (a) 0.6 — — 0.6 Equity securities : U.S. equity 0.8 — — 0.8 International equity 0.3 — — 0.3 Total assets in fair value hierarchy $ 1.8 $ — $ — $ 1.8 Common collective funds measured at net asset value 35.3 Total assets $ 37.1 As of December 31, 2022 (in millions) Level 1 Level 2 Level 3 Total Fixed income securities: Corporate bonds (a) $ 0.5 $ — $ — $ 0.5 Equity securities : U.S. equity 0.7 — — 0.7 International equity 0.3 — — 0.3 Insurance contracts — — 22.0 22.0 Total assets in fair value hierarchy $ 1.5 $ — $ 22.0 $ 23.5 Common collective funds measured at net asset value 32.0 Total assets $ 55.5 (a) Securities of diverse industries, substantially all investment grade. Significant changes in Level 3 plan assets are as follows: Year Ended December 31, (in millions) 2023 2022 Insurance contracts: Beginning of year $ 22.0 $ 29.4 Settlement (a) ( 22.0 ) — Payments — ( 1.9 ) Actuarial loss — ( 4.6 ) Interest income — 0.8 Cumulative translation adjustments — ( 1.7 ) End of year $ — $ 22.0 (a) In the fourth quarter of 2023, insurance contracts that were part of the assets of the Plan were converted into buy-out annuities with third-party insurance companies. Former employees now collect their benefit from the third-party insurance companies and the Plan no longer has liability associated with those former employees. Our insurance contracts classified as Level 3 are valued based on a discount rate determined by reference to the market interest rates prevailing on high quality debt instruments with cash flows that match the timing and amount of expected benefit payments under the pension plan in Canada, as well as a mortality assumption based upon the current mortality table, CPM2014 96 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) generational projected using mortality improvement scale CPM-B. As a result, the fair value of the insurance contract is equal to the defined benefit obligation in respect of the members covered under the insurance contract. Money market investments are carried at amortized cost which approximates fair value due to the short-term maturity of these investments. Investments in equity securities are reported at fair value based on quoted market prices on national security exchanges. The fair value of investments in common collective funds are determined using the Net Asset Value (“NAV”) provided by the administrator of the fund. The NAV is determined by each fund’s trustee based upon the fair value of the underlying assets owned by the fund, less liabilities, divided by the number of outstanding units. The fair value of government related securities and corporate bonds is determined based on quoted market prices on national security exchanges, when available, or using valuation models which incorporate certain other observable inputs including recent trading activity for comparable securities and broker-quoted prices. Future Benefit Payments (in millions) 2024 2025 2026 2027 2028 2029-2033 Estimated future benefit payments for pension plans 0.9 0.8 1.0 1.1 1.4 8.1 We do not expect to contribute to our defined benefit pension plans in 2024. Multi-Employer Pension and Postretirement Benefit Plans We contribute to multi-employer plans that provide pension and other postretirement benefits to certain employees under collective bargaining agreements. Contributions to these plans were $ 3.3 million in 2023, $ 3.5 million in 2022 and $ 3.0 million in 2021. Based on our contributions to each individual multi-employer plan relative to the total contributions of all participating employers in such plan, no multi-employer plan was deemed to be individually significant to us. Defined Contribution Plans Employer contributions for defined contribution plans sponsored by us were $ 8.6 million in 2023, $ 8.3 million in 2022 and $ 6.4 million in 2021. Note 15. Income Taxes We are organized in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”) and, accordingly, we have not provided for U.S. federal income tax on our REIT taxable income that we distribute to our stockholders. We have elected to treat our subsidiaries that participate in certain non-REIT qualifying activities as taxable REIT subsidiaries (“TRSs”). As such, we have provided for their federal, state and foreign income taxes. Cash paid for income taxes was $ 6.7 million in 2023, $ 3.3 million in 2022 and $ 1.7 million in 2021. The U.S. and foreign components of Income (loss) before benefit (provision) for income taxes and equity in earnings of investee companies were as follows: Year Ended December 31, (in millions) 2023 2022 2021 United States $ ( 436.4 ) $ 148.0 $ 32.6 Foreign 11.8 7.7 ( 1.0 ) Income (loss) before benefit (provision) for income taxes and equity in earnings of investee companies $ ( 424.6 ) $ 155.7 $ 31.6 97 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) The following table reconciles Income (loss) before benefit (provision) for income taxes and equity in earnings of investee companies to REIT taxable income. Year Ended December 31, (in millions) 2023 2022 2021 Income (loss) before benefit (provision) for income taxes and equity in earnings of investee companies $ ( 424.6 ) $ 155.7 $ 31.6 Net loss of TRSs 151.4 15.2 21.9 Income (loss) from REIT operations ( 273.2 ) 170.9 53.5 Book/tax differences Depreciation 27.9 33.7 ( 2.0 ) Amortization ( 13.6 ) ( 13.3 ) ( 6.1 ) Dividend from foreign subsidiary 2.1 2.1 1.4 Stock-based compensation ( 0.9 ) 3.8 5.0 Deferred gain for tax ( 6.8 ) ( 1.0 ) ( 3.0 ) Investments in joint ventures 5.5 9.9 5.0 Executive compensation 11.2 9.4 6.3 Lease expense 8.4 4.3 5.7 Provision for doubtful accounts 1.5 3.3 ( 7.5 ) Interest — ( 11.2 ) 13.8 Impairment charges (a) 388.2 — — Other 13.6 1.5 4.3 REIT taxable income (estimated) $ 163.9 $ 213.4 $ 76.4 (a) Impairment charges related to our U.S. transit business (see Note 4. Long-Lived Assets) . The components of the Benefit (provision) for income taxes are as follows: Year Ended December 31, (in millions) 2023 2022 2021 Current: Federal $ — $ ( 0.1 ) $ 0.5 State and local ( 1.0 ) ( 1.0 ) ( 0.7 ) Foreign ( 3.1 ) ( 3.6 ) ( 1.1 ) ( 4.1 ) ( 4.7 ) ( 1.3 ) Deferred: Federal — ( 5.0 ) 3.2 State and local — ( 1.7 ) 1.1 Foreign 0.1 2.0 0.4 0.1 ( 4.7 ) 4.7 Benefit (provision) for income taxes $ ( 4.0 ) $ ( 9.4 ) $ 3.4 The effective income tax rate was 0.9 % in 2023, 6.0 % in 2022 and 10.8 % in 2021. 98 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) The difference between income taxes expected at the U.S. federal statutory income tax rate of 21 % and the Benefit (provision) for income taxes is summarized as follows: Year Ended December 31, (in millions) 2023 2022 2021 Benefit (provision) for income taxes on income at U.S. statutory rate $ 89.2 $ ( 32.7 ) $ ( 6.6 ) REIT dividends paid deduction 24.2 35.9 11.3 State and local taxes, net of federal tax benefit ( 1.0 ) ( 2.9 ) 0.1 Effect of foreign operations ( 1.0 ) ( 0.5 ) ( 0.9 ) Impairment charges (a) ( 110.6 ) — — Other, net ( 4.8 ) ( 9.2 ) ( 0.5 ) Benefit (provision) for income taxes $ ( 4.0 ) $ ( 9.4 ) $ 3.4 (a) Primarily a permanent book/tax difference for impairment charges related to our U.S. transit business ( see Note 4. Long-Lived Assets) . The following table is a summary of the components of deferred income tax assets and liabilities. As of December 31, (in millions) 2023 2022 Deferred income tax assets: Provision for expenses and losses $ 6.6 $ 3.5 Postretirement and other employee benefits 2.2 2.5 Tax credit and loss carryforwards 5.8 5.9 Property, equipment and intangible assets 2.0 0.2 Total deferred income tax assets 16.6 12.1 Valuation allowance ( 16.6 ) ( 11.9 ) Deferred income tax assets, net — 0.2 Deferred income tax liabilities: Property, equipment and intangible assets ( 12.8 ) ( 13.0 ) Postretirement and other employee benefits ( 2.5 ) ( 2.2 ) Other ( 0.2 ) ( 0.2 ) Total deferred income tax liabilities ( 15.5 ) ( 15.4 ) Deferred income tax liabilities, net $ ( 15.5 ) $ ( 15.2 ) As of December 31, 2023, we had federal, state and local net operating loss carryforwards of $ 22.6 million. These losses can be carried forward indefinitely for federal tax purposes but are subject to certain state and local utilization limitations. Our undistributed earnings of foreign subsidiaries not includable in our federal income tax returns that could be subject to additional income taxes if remitted was approximately $ 4.4 million as of December 31, 2023, and $ 2.3 million as of December 31, 2022. No provision was recorded for taxes that could result from the remittance of such undistributed earnings since we intend to declare dividends to our shareholders in an amount sufficient to offset such distributions and intend to reinvest the remainder outside of the U.S. indefinitely. The determination of the unrecognized U.S. federal deferred income tax liability for undistributed earnings is not practicable. The reserve for uncertain tax positions of $ 0.3 million as of December 31, 2023, includes $ 0.2 million which would affect our effective income tax rate if recognized in future years. We recognize interest and penalty charges related to the reserve for uncertain tax positions as part of income tax expense. These charges were not material for any of the periods presented. 99 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) We are subject to taxation in the U.S. and various state, local and foreign jurisdictions. Tax years 2020 to present are open for examination by the tax authorities. We are currently under examination by New York State for the 2019 through 2021 tax years. Note 16. Earnings Per Share (“EPS”) Year Ended December 31, (in millions) 2023 2022 2021 Net income (loss) available for common stockholders $ ( 430.4 ) $ 147.9 $ 35.6 Less: Distributions to holders of Series A Preferred Stock 8.8 12.0 28.0 Less: Distributions to holders of Class A equity interests of a subsidiary — 0.1 0.1 Net income (loss) available for common stockholders, basic and diluted $ ( 439.2 ) $ 135.8 $ 7.5 Weighted average shares for basic EPS 164.9 161.1 145.4 Dilutive potential shares from grants of RSUs, PRSUs and stock options (a) — 0.7 0.7 Weighted average shares for diluted EPS (a)(b)(c) 164.9 161.8 146.1 (a) The potential impact of an aggregate 1.8 million granted RSUs, PRSUs and stock options for 2023, 0.7 million granted RSUs, PRSUs and stock options for 2022 and 0.1 million granted RSUs, PRSUs and stock options for 2021 was antidilutive. (b) The potential impact of 7.8 million shares of our common stock issuable upon conversion of our Series A Preferred Stock in 2023, 10.6 million shares of our common stock issuable upon conversion of our Series A Preferred Stock in 2022 and 25.0 million shares of our common stock issuable upon conversion of our Series A Preferred Stock in 2021 was antidilutive. (c) The potential impact of 0.1 million shares of Class A equity interests of Outfront Canada in 2022 and 0.5 million shares of Class A equity interests of Outfront Canada in 2021 was antidilutive. Note 17. Commitments and Contingencies Off-Balance Sheet Arrangements Our off-balance sheet commitments primarily consist of guaranteed minimum annual payments. These arrangements result from our normal course of business and represent obligations that are payable over several years. Contractual Obligations We have agreements with municipalities and transit operators which entitle us to operate advertising displays within their transit systems, including on the interior and exterior of rail and subway cars and buses, as well as on benches, transit shelters, street kiosks, and transit platforms. Under most of these franchise agreements, the franchisor is entitled to receive the greater of a percentage of the relevant revenues, net of agency fees, or a specified guaranteed minimum annual payment. As of December 31, 2023, guaranteed minimum annual payments are as follows: (in millions) Guaranteed Minimum Annual Payments 2024 $ 199.3 2025 205.9 2026 205.8 2027 193.6 2028 196.3 2029 and thereafter 367.9 Total minimum payments (a) $ 1,368.8 (a) Excludes guaranteed minimum annual payments of $ 11.9 million in connection with the Transaction. (See Note 12. Acquisitions and Dispositions : Dispositions : Canadian Business .) 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”): 100 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) • 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. 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”). • Recoupment of Equipment Deployment Costs. We may retain incremental revenues that exceed an annual base revenue amount for the cost of deploying advertising and communications displays throughout the transit system. 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, including impairment charges (see Note 4. Long-Lived Assets ). 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. Deployment costs in an amount not to exceed $ 50.7 million, which are deemed authorized before December 31, 2020, will be paid directly by the MTA. 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 2023 and we do not expect to recoup any equipment deployment costs in 2024. • Payments . We must pay to the MTA the greater of a percentage of revenues or a guaranteed minimum annual payment. Our payment obligations with respect to guaranteed minimum annual payment amounts owed to the MTA resumed on January 1, 2021, in accordance with the terms of the MTA Agreement, and any guaranteed minimum annual payment amounts that would have been paid for the period from April 1, 2020 through December 31, 2020 (less any revenue share amounts actually paid during this period using an increased revenue share percentage of 65 %) will instead be added in equal increments to the guaranteed minimum annual payment amounts owed for the period from January 1, 2022, through December 31, 2026. 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. • Term . 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. During 2023, we had no recoupment from incremental revenues. 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. 101 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) (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 ) $ — Other current assets 1.6 ( 0.4 ) ( 0.1 ) — — 1.1 Intangible assets (franchise agreements) 62.0 22.3 — ( 469.3 ) 385.0 — Total $ 426.8 $ 43.7 $ ( 0.1 ) $ ( 469.3 ) $ — $ 1.1 Year Ended December 31, 2022: Prepaid MTA equipment deployment costs $ 279.8 $ 83.4 $ — $ — $ — $ 363.2 Other current assets 5.2 0.1 ( 3.7 ) — — 1.6 Intangible assets (franchise agreements) 63.0 5.4 — ( 6.4 ) — 62.0 Total $ 348.0 $ 88.9 $ ( 3.7 ) $ ( 6.4 ) $ — $ 426.8 Letters of Credit We have indemnification obligations with respect to letters of credit and surety bonds primarily used as security against non-performance in the normal course of business. As of December 31, 2023, the outstanding letters of credit were approximately $ 82.1 million and outstanding surety bonds were approximately $ 172.8 million, and were not recorded on the Consolidated Statements of Financial Position. Legal Matters On an ongoing basis, we are engaged in lawsuits and governmental proceedings and respond to various investigations, inquiries, notices and claims from national, state and local governmental and other authorities (collectively, “litigation”). Litigation is inherently uncertain and always difficult to predict. Although it is not possible to predict with certainty the eventual outcome of any litigation, in our opinion, none of our current litigation is expected to have a material adverse effect on our results of operations, financial position or cash flows. Note 18. Segment Information We currently manage our operations through two operating segments—U.S. Billboard and Transit, which is included in our U.S. Media reportable segment, and International. International does not meet the criteria to be a reportable segment and accordingly, is included in Other . The following tables set forth our financial performance by segment. Year Ended December 31, (in millions) 2023 2022 2021 Revenues: U.S. Media $ 1,722.3 $ 1,673.9 $ 1,382.0 Other 98.3 98.2 81.9 Total revenues $ 1,820.6 $ 1,772.1 $ 1,463.9 We present Operating income (loss) before Depreciation , Amortization , Net (gain) loss on dispositions, Stock-based compensation and Impairment charges (“Adjusted OIBDA”) as the primary measure of profit and loss for our operating segments. 102 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) Year Ended December 31, (in millions) 2023 2022 2021 Net income (loss) before allocation to non-controlling interests $ ( 429.7 ) $ 149.1 $ 36.4 (Benefit) provision for income taxes 4.0 9.4 ( 3.4 ) Equity in earnings of investee companies, net of tax 1.1 ( 2.8 ) ( 1.4 ) Interest expense, net 158.4 131.8 130.4 Loss on extinguishment of debt 8.1 — 6.3 Other (income) loss, net ( 0.3 ) 0.2 — Operating income (loss) ( 258.4 ) 287.7 168.3 Net (gain) loss on dispositions ( 14.2 ) 0.2 ( 4.5 ) Impairment charges 534.7 — 2.5 Depreciation and amortization 160.5 150.7 145.4 Stock-based compensation 28.4 33.8 28.6 Total Adjusted OIBDA $ 451.0 $ 472.4 $ 340.3 Adjusted OIBDA: U.S. Media $ 479.4 $ 501.2 $ 382.9 Other 23.1 20.6 10.4 Corporate ( 51.5 ) ( 49.4 ) ( 53.0 ) Total Adjusted OIBDA $ 451.0 $ 472.4 $ 340.3 103 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) Year Ended December 31, (in millions) 2023 2022 2021 Operating income (loss): U.S. Media $ ( 189.9 ) $ 363.0 $ 248.5 Other 11.4 7.9 1.4 Corporate ( 79.9 ) ( 83.2 ) ( 81.6 ) Total operating income (loss) $ ( 258.4 ) $ 287.7 $ 168.3 Net (gain) loss on dispositions: U.S. Media $ ( 14.2 ) $ 0.2 $ ( 1.5 ) Other — — ( 3.0 ) Total (gain) loss on dispositions $ ( 14.2 ) $ 0.2 $ ( 4.5 ) Impairment charges (a)(b) : U.S. Media $ 534.7 $ — $ 2.5 Total impairment charges $ 534.7 $ — $ 2.5 Depreciation and amortization: U.S. Media $ 148.8 $ 138.0 $ 133.4 Other 11.7 12.7 12.0 Total depreciation and amortization $ 160.5 $ 150.7 $ 145.4 Capital expenditures: U.S. Media $ 76.0 $ 85.4 $ 69.3 Other 10.8 4.4 4.5 Total capital expenditures $ 86.8 $ 89.8 $ 73.8 (a) In 2023, 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) and an other-than-temporary decline in fair value of a cost-method investment. (b) In 2021, Impairment charges related to an other-than-temporary decline in fair value of a cost-method investment. As of December 31, (in millions) 2023 2022 2021 Assets: U.S. Media $ 5,297.2 $ 5,732.1 $ 5,280.7 Other (a) 259.7 240.4 248.1 Corporate 26.0 17.5 395.9 Total assets $ 5,582.9 $ 5,990.0 $ 5,924.7 (a) In 2023, includes amounts reclassified as Assets held for sale on the Consolidated Statement of Financial Position. (See Note 12. Acquisitions and Dispositions : Dispositions : Canadian Business .) Year Ended December 31, (in millions) 2023 2022 2021 Revenues (a) : United States $ 1,728.5 $ 1,680.2 $ 1,385.6 Canada 92.1 91.9 78.3 Total revenues $ 1,820.6 $ 1,772.1 $ 1,463.9 (a) Revenues classifications are based on the geography of the advertising. 104 OUTFRONT Media Inc. Notes to Consolidated Financial Statements (Continued) As of December 31, (in millions) 2023 2022 2021 Long-lived assets (a) : United States $ 4,962.6 $ 5,391.0 4,937.0 Canada (b) 214.3 195.8 192.1 Total long-lived assets $ 5,176.9 $ 5,586.8 $ 5,129.1 (a) Reflects total assets less current assets, investments and non-current deferred tax assets. (b) In 2023, includes amounts reclassified as Assets held for sale on the Consolidated Statement of Financial Position. (See Note 12. Acquisitions and Dispositions : Dispositions : Canadian Business .) 105 Table of Contents Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.