What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-12 compared with 2024-08-07 · 193 added, 187 removed, 526 unchanged (42% of the section changed)

32 unchanged sentences

COVID-19 pandemic, industry shutdowns or slowdowns (including due to labor strikes), and shifts in market demographics and transportation patterns (including reductions in foot traffic, roadway traffic, commuting, transit ridership and overall target audiences due to remote work, safety concerns or otherwise), as described in this MD&A.

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

Transit operating segment.

These sensitivities may adversely impact our revenues and operating results on a consolidated basis and/or may have a disproportionate adverse impact on our U.S.

transit business within our U.S.

Media reportable segment.

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

1 unchanged sentence

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

and abroad, which has resulted in rising interest rates, we have experienced increases with respect to some of our posting, maintenance and other expenses, some of our corporate expenses, and our interest expense, which could have an adverse effect on our business, financial condition and results of operations.

and abroad, which has resulted in elevated interest rates, we have experienced increases with respect to some of our posting, maintenance and other expenses, some of our corporate expenses, and our interest expense, which could have an adverse effect on our business, financial condition and results of operations.

Our billboard property lease expenses and transit franchise expenses have been less impacted by the current levels of inflation due to the long-term nature of most of our operating leases and transit franchise agreements.

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

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

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

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

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

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

During the six months ended June 30, 2024, we built or converted 46 new digital billboard displays in the U.S.

Additionally, in the six months ended June 30, 2024, we entered into marketing arrangements to sell advertising on 13 third-party digital billboard displays in the U.S.

In the six months ended June 30, 2024, we built, converted or replaced 4,316 digital transit and other displays in the U.S.

However, we expect our annual equipment deployment cost spending with respect to the New York Metropolitan Transportation Authority (the “MTA”) transit franchise will decline now that we have substantially completed our initial deployment during 2024.

During the nine months ended September 30, 2024, we built or converted 65 new digital billboard displays in the U.S.

and entered into marketing arrangements to sell advertising on 14 third-party digital billboard displays in the U.S.

In the nine months ended September 30, 2024, we built, converted or replaced 5,717 digital transit and other displays in the U.S.

The following table sets forth information regarding our digital displays.

Digital Revenues (in millions)

for the Six Months Ended

June 30, 2024 (a)

for the Nine Months Ended

September 30, 2024 (a)

Number of Digital Displays as of

June 30, 2024 (a)

September 30, 2024 (a)

Location Digital Billboard Digital Transit and Other Total Digital Revenues Digital Billboard Displays Digital Transit and Other Displays Total Digital Displays

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We have a diversified base of customers across various industries.

During the three months ended June 30, 2024, our largest categories of advertisers were entertainment, retail and health/medical, each of which represented approximately 18%, 11% and 8% of our total U.S.

During the three months ended September 30, 2024, our largest categories of advertisers were entertainment, retail and health/medical, each of which represented approximately 18%, 12% and 8% of our total U.S.

Media segment revenues, respectively.

During the three months ended June 30, 2023, our largest categories of advertisers were entertainment, retail and health/medical, each of which represented approximately 21%, 10% and 8% of our total U.S.

During the three months ended September 30, 2023, our largest categories of advertisers were entertainment, retail and health/medical, each of which represented approximately 19%, 11% and 9% of our total U.S.

Media segment revenues, respectively.

During the six months ended June 30, 2024, our largest categories of advertisers were entertainment, retail and health/medical, each of which represented approximately 19%, 11% and 9% of our total U.S.

During the nine months ended September 30, 2024, our largest categories of advertisers were entertainment, retail and health/medical, each of which represented approximately 18%, 11% and 9% of our total U.S.

Media segment revenues, respectively.

During the six months ended June 30, 2023, our largest categories of advertisers were entertainment, retail and health/medical, each of which represented approximately 20%, 10% and 9% of our total U.S.

During the nine months ended September 30, 2023, our largest categories of advertisers were entertainment, retail and health/medical, each of which represented approximately 20%, 10% and 9% of our total U.S.

Media segment revenues, respectively.

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We generated approximately 42% of our U.S.

Media segment revenues from national advertising campaigns in the three months ended June 30, 2024, compared to approximately 43% in the same prior-year period.

Media segment revenues from national advertising campaigns in the three months ended September 30, 2024, compared to approximately 43% in the same prior-year period.

We generated approximately 41% of our U.S.

Media segment revenues from national advertising campaigns in the six months ended June 30, 2024, compared to approximately 42% in the same prior-year period.

Media segment revenues from national advertising campaigns in the nine months ended September 30, 2024, compared to approximately 42% in the same prior-year period.

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

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We believe these non-GAAP performance indicators are meaningful supplemental measures of our operating performance and should not be considered in isolation of, or as a substitute for, their most directly comparable GAAP financial measures.

Three Months Ended Six Months Ended

June 30, % June 30, %

Three Months Ended Nine Months Ended

September 30, % September 30, %

(in millions, except percentages) 2024 2023 Change 2024 2023 Change

29 unchanged sentences

Revenues to the Consolidated Financial Statements.)

Three Months Ended Six Months Ended

June 30, % June 30, %

Three Months Ended Nine Months Ended

September 30, % September 30, %

(in millions, except percentages) 2024 2023 Change 2024 2023 Change

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Total revenues $ 451.9 $ 454.8 (1) $ 1,337.7 $ 1,319.4 1

* Calculation is not meaningful.

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

Total revenues increased by $8.5 million, or 2%, and organic revenues increased $16.1 million, or 4%, in the three months ended June 30, 2024, compared to the same prior-year period.

Total revenues increased by $21.2 million, or 2%, and organic revenues increased $27.8 million, or 3%, in the six months ended June 30, 2024, compared to the same prior-year period.

In the three and six months ended June 30, 2024, non-organic revenues reflect the impact of the Transaction.

In the three and six months ended June 30, 2023, non-organic revenues reflect the impact of the Transaction and the impact of foreign currency exchange rates.

Total billboard revenues increased $1.8 million in the three months ended June 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues and the impact of new and lost billboards in the period, including insignificant acquisitions, partially offset by the impact of the Transaction.

Total billboard revenues increased $10.0 million, or 1%, in the six months ended June 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues and the impact of new and lost billboards in the period, including insignificant acquisitions, partially offset by the impact of the Transaction and lower proceeds from condemnations.

Organic billboard revenues increased $8.0 million, or 2%, in the three months ended June 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues and the impact of new and lost billboards in the period, including insignificant acquisition.

Organic billboard revenues increased $15.8 million, or 2%, in the six months ended June 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues and the impact of new and lost billboards in the period, including insignificant acquisitions, partially offset by lower proceeds from condemnations.

Total transit and other revenues increased $6.7 million, or 7%, in the three months ended June 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), partially offset by the impact of new and lost transit franchise contracts in the period and the impact of the Transaction.

Total transit and other revenues increased $11.2 million, or 6%, in the six months ended June 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), partially offset by the impact of new and lost transit franchise contracts in the period and the impact of the Transaction.

Organic transit and other revenues increased $8.1 million, or 9%, in the three months ended June 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), partially offset by the impact of new and lost transit franchise contracts in the period.

Organic transit and other revenues increased $12.0 million, or 7%, in the six

months ended June 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), partially offset by the impact of new and lost transit franchise contracts in the period.

Three Months Ended Six Months Ended

June 30, % June 30, %

Total revenues decreased by $2.9 million, or 1%, and organic revenues increased $21.4 million, or 5%, in the three months ended September 30, 2024, compared to the same prior-year period.

Total revenues increased by $18.3 million, or 1%, and organic revenues increased $49.2 million, or 4%, in the nine months ended September 30, 2024, compared to the same prior-year period.

In the three months ended September 30, 2023, nine months ended September 30, 2024, and nine months ended September 30, 2023, non-organic revenues reflect the impact of the Transaction.

Also in the nine months ended September 30, 2023, non-organic revenues reflect the impact of foreign currency exchange rates.

Total billboard revenues decreased $3.0 million, or 1%, in the three months ended September 30, 2024, compared to the same prior-year period, primarily due to the impact of the Transaction, partially offset by an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues, the impact of new and lost billboards in the period, including insignificant acquisitions, and higher proceeds from condemnations.

Total billboard revenues increased $7.0 million, or 1%, in the nine months ended September 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues and the impact of new and lost billboards in the period, including insignificant acquisitions, partially offset by the impact of the Transaction and lower proceeds from condemnations.

Organic billboard revenues increased $16.6 million, or 5%, in the three months ended September 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues, the impact of new and lost billboards in the period, including insignificant acquisitions, and higher proceeds from condemnations.

Organic billboard revenues increased $32.4 million, or 3%, in the nine months ended September 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues and the impact of new and lost billboards in the period, including insignificant acquisitions, partially offset by lower proceeds from condemnations.

Total transit and other revenues increased $0.1 million in the three months ended September 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), partially offset by the impact of the Transaction and the impact of new and lost transit franchise contracts in the period.

Total transit and other revenues increased $11.3 million, or 4%, in the nine months ended September 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), partially offset by the impact of new and lost transit franchise contracts in the period and the impact of the Transaction.

Organic transit and other revenues increased $4.8 million, or 6%, in the three months ended September 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), partially offset by the impact of new and lost transit franchise contracts in the period.

Organic transit and other revenues increased $16.8 million, or 7%, in the nine months ended September 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), partially offset by the impact of new and lost transit franchise contracts in the period.

Three Months Ended Nine Months Ended

September 30, % September 30, %

(in millions, except percentages) 2024 2023 Change 2024 2023 Change

8 unchanged sentences

Operating Expenses

Three Months Ended Six Months Ended

June 30, % June 30, %

Three Months Ended Nine Months Ended

September 30, % September 30, %

(in millions, except percentages) 2024 2023 Change 2024 2023 Change

4 unchanged sentences

Total operating expenses $ 233.1 $ 239.8 (3) $ 711.6 $ 716.0 (1)

Billboard property lease expenses represented 33% of billboard revenues in the three months ended June 30, 2024, and 35% in the three months ended June 30, 2023.

The decrease in billboard property lease expenses as a percentage of billboard revenues in the three months ended June 30, 2024, is primarily due to lower variable billboard property lease costs driven by higher revenue performance in advertising markets that have lower variable billboard property lease costs and lower revenue performance in advertising markets that have higher variable billboard property lease costs, partially offset by the impact of new locations, including through acquisitions.

Billboard property lease expenses represented 35% of billboard revenues in the six months ended June 30, 2024, and 36% in the six months ended June 30, 2023.

The decrease in billboard property lease expenses as a percentage of billboard revenues in the six months ended June 30, 2024, is primarily due lower variable billboard property lease costs driven by higher revenue performance in advertising markets that have lower variable billboard property lease costs and lower revenue performance in advertising markets that have higher variable billboard property lease costs (see Note 5.

Leases to the Consolidated Financial Statements), which includes an out-of-period adjustment of $5.2 million recorded in the three months ended March 31, 2023, related to variable billboard property lease costs (see Note 1.

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

Transit franchise expenses represented 64% of transit display revenues in the three months ended June 30, 2024, 70% in the three months ended June 30, 2023, 72% of transit display revenues in the six months ended June 30, 2024, and 78% in the six months ended June 30, 2023.

The decreases in transit franchise expenses, as a percentage of transit display revenues in the three and six months ended June 30, 2024, compared to the same prior-year periods, are primarily driven by MTA revenues growing at a faster pace than the inflationary increase to the guaranteed minimum annual payments to the MTA under the MTA Agreement (as defined below), partially offset by the net impact of new and lost transit franchise contracts.

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

Billboard property lease and transit franchise expenses decreased $6.6 million, or 3%, in the three months ended June 30, 2024, compared to the same prior-year period, primarily due to lower variable property lease expenses, the impact of the Transaction and the net impact of new and lost transit franchise contracts, partially offset by higher guaranteed minimum annual payments to the MTA and the impact of new locations, including through acquisitions.

Billboard property lease and transit franchise expenses decreased $6.7 million, or 2%, in the six months ended June 30, 2024, compared to the same prior-year period, primarily due to lower variable property lease expenses, which includes an out-of-period adjustment of $5.2 million recorded in the three months ended March 31, 2023, related to variable billboard property lease costs (see Note 1.

Description of Business and Basis of Presentation to the Consolidated Financial Statements), the impact of the Transaction and the net impact of new and lost transit franchise contracts, partially offset by higher guaranteed minimum annual payments to the MTA and the impact of new locations, including through acquisitions.

Posting, maintenance and other expenses as a percentage of revenues were 12% in each of the three months ended June 30, 2024 and 2023, and 13% in each of the six months ended June 30, 2024, and 2023.

Posting, maintenance and other expenses increased $0.5 million, or 1%, in the three months ended June 30, 2024, compared to the same prior-year period, primarily due to higher compensation-related expenses, higher posting and rotation costs, driven by higher business activity, and higher maintenance and utilities cost, driven by inflationary cost increases, partially offset by the impact of the Transaction and lower materials costs driven by lower third-party equipment sales.

Posting, maintenance and other expenses increased $3.8 million, or 3%, in the six months ended June 30, 2024, compared to the same prior-year period, primarily due to higher compensation-related expenses, higher posting and rotation costs, driven by higher business activity, and higher maintenance and utilities cost, driven by inflationary cost increases, partially offset by the impact of the Transaction and lower materials costs driven by lower third-party equipment sales.

Billboard property lease expenses represented 33% of billboard revenues in the three months ended September 30, 2024, and 34% in the three months ended September 30, 2023.

The decrease in billboard property lease expenses as a percentage of billboard revenues in the three months ended September 30, 2024, is primarily due to lower variable billboard property lease costs driven by higher revenue performance in advertising markets that have lower variable billboard property lease costs and lower revenue performance in advertising markets that have higher variable billboard property lease costs, partially offset by the impact of new locations, including through acquisitions.

Billboard property lease expenses represented 34% of billboard revenues in the nine months ended September 30, 2024, and 35% in the nine months ended September 30, 2023.

The decrease in billboard property lease expenses as a percentage of billboard revenues in the nine months ended September 30, 2024, is primarily due to lower variable billboard property lease costs driven by higher revenue performance in advertising markets that have lower variable billboard property lease costs and lower revenue performance in advertising markets that have higher variable billboard property lease costs (see Note 5.

Leases to the Consolidated Financial Statements) and the impact of new locations, including through acquisitions.

Transit franchise expenses represented 73% of transit display revenues in the three months ended September 30, 2024, 73% in the three months ended September 30, 2023, 72% of transit display revenues in the nine months ended September 30, 2024, and 76% in the nine months ended September 30, 2023.

The decrease in transit franchise expenses, as a percentage of transit display revenues in the nine months ended September 30, 2024, compared to the same prior-year period, was primarily driven by MTA revenues growing at a faster pace than the inflationary increase to the guaranteed minimum annual payments to the MTA under the MTA Agreement (as defined below), partially offset by the net impact of new and lost transit franchise contracts.

Billboard property lease and transit franchise expenses decreased $5.3 million, or 3%, in the three months ended September 30, 2024, compared to the same prior-year period, primarily due to the impact of the Transaction, lower variable property lease expenses and the net impact of new and lost transit franchise contracts, partially offset by higher guaranteed minimum annual payments to the MTA and the impact of new locations, including through acquisitions.

Billboard property lease and transit

franchise expenses decreased $6.8 million, or 1%, in the nine months ended September 30, 2024, compared to the same prior-year period, primarily due to lower variable property lease expenses, the impact of the Transaction and the net impact of new and lost transit franchise contracts, partially offset by higher guaranteed minimum annual payments to the MTA and the impact of new locations, including through acquisitions.

Posting, maintenance and other expenses as a percentage of revenues were 12% in each of the three months ended September 30, 2024 and 2023, and 13% in each of the nine months ended September 30, 2024, and 2023.

Posting, maintenance and other expenses decreased $1.4 million, or 2%, in the three months ended September 30, 2024, compared to the same prior-year period, primarily due to the impact of the Transaction and lower materials costs driven by lower third-party equipment sales, partially offset by higher compensation-related expenses and higher posting and rotation costs, driven by higher business activity.

Posting, maintenance and other expenses increased $2.4 million, or 1%, in the nine months ended September 30, 2024, compared to the same prior-year period, primarily due to higher compensation-related expenses, higher posting and rotation costs, driven by higher business activity, and higher maintenance and utilities cost, driven by inflationary cost increases, partially offset by the impact of the Transaction and lower materials costs driven by lower third-party equipment sales.

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

SG&A expenses represented 25% of Revenues in the three months ended June 30, 2024, 23% of Revenues in the three months ended June 30, 2023, 26% of Revenues in the six months ended June 30, 2024 and 25% of Revenues in the six months ended June 30, 2023.

SG&A expenses increased $10.5 million, or 10%, in the three months ended June 30, 2024, compared to the same prior-year period, primarily due to higher compensation-related expenses, including salaries and commissions, higher professional fees, as a result of a management consulting project, a higher provision for doubtful accounts and higher rent related to new offices.

SG&A expenses increased $13.1 million, or 6%, in the six months ended June 30, 2024, compared to the same prior-year period, primarily due to higher compensation-related expenses, including salaries and commissions, higher professional fees, as a result of a management consulting project, higher rent related to new offices and a higher provision for doubtful accounts.

SG&A expenses represented 24% of Revenues in the three months ended September 30, 2024, 23% of Revenues in the three months ended September 30, 2023, 25% of Revenues in the nine months ended September 30, 2024 and 24% of Revenues in the nine months ended September 30, 2023.

SG&A expenses increased $3.4 million, or 3%, in the three months ended September 30, 2024, compared to the same prior-year period, primarily due to higher compensation-related expenses, including salaries and commissions, the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the Company to certain employees and higher professional fees, as a result of a management consulting project, partially offset by the impact of the Transaction and a lower provision for doubtful accounts.

SG&A expenses increased $16.5 million, or 5%, in the nine months ended September 30, 2024, compared to the same prior-year period, primarily due to higher compensation-related expenses, including salaries and commissions, higher professional fees, as a result of a management consulting project, the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the Company to certain employees and higher rent related to new offices, partially offset by the impact of the Transaction.

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

Net (Gain) Loss on Dispositions

Net gain on dispositions increased $155.1 million in the three months ended June 30, 2024, compared to the same prior-year period due primarily to the Transaction.

Net gain on dispositions was $155.1 million compared to a Net loss on dispositions of $0.2 million in the six months ended June 30, 2024, compared to the same prior-year period, due primarily to the impact of the Transaction.

Net loss on dispositions was $1.5 million in the three months ended September 30, 2024.

Net gain on dispositions was $153.6 million in the nine months ended September 30, 2024, compared to a Net loss on dispositions of $0.2 million in the same prior-year period, due primarily to the impact of the Transaction.

Impairment Charges

As a result of negative aggregate cash flows related to our MTA asset group, we performed quarterly impairment analyses on the MTA asset group and recorded impairment charges of $8.8 million in the three months ended June 30, 2024, and $17.9 million in the six months ended June 30, 2024, representing additional MTA equipment deployment cost spending during the periods.

In the three and six months ended June 30, 2023, we recorded impairment charges of $511.4 million, primarily representing a $443.1 million impairment charge related to our MTA asset group (see Note 4.

As a result of negative aggregate cash flow forecasts related to our MTA asset group, we performed quarterly impairment analyses on the MTA asset group during the three months ended March 31, 2024 and June 30, 2024, and recorded impairment charges of $9.1 million and $8.8 million, respectively, in those periods for a total of $17.9 million in the six months ended June 30, 2024.

The impairment charges recorded during 2024 represented additional MTA equipment deployment cost spending during the six months ended June 30, 2024.

Our analysis performed as of September 30, 2024, resulted in positive aggregate cash flows in excess of the carrying value of our MTA asset group.

As such, no impairment charges were recorded during the three months ended September 30, 2024.

In the three months ended September 30, 2023, we recorded impairment charges of $12.1 million, representing additional MTA equipment deployment costs spending during the quarter, and in the nine months ended September 30, 2023, we recorded impairment charges of $523.5 million, primarily representing $455.2 million of impairment charges related to our MTA asset group (see Note 4.

Intangible Assets to the Consolidated Financial Statements) and an impairment charge of $47.6 million representing the entire goodwill balance associated with our U.S.

Transit and Other reporting unit.

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

Depreciation decreased $1.3 million, or 7%, in the three months ended June 30, 2024, compared to the same prior-year period, and decreased $2.9 million, or 7%, in the six months ended June 30, 2024, compared to the same prior-year period, due primarily to the Transaction.

(See Note 11.

In addition, in the nine months ended September 30, 2023, we recorded an impairment charge of $0.3 million related to an other-than-temporary decline in fair value of a cost-method investment.

Depreciation decreased $0.7 million, or 4%, in the three months ended September 30, 2024, compared to the same prior-year period, and decreased $3.6 million, or 6%, in the nine months ended September 30, 2024, compared to the same prior-year period, due primarily to the impact of the Transaction (see Note 12.

Acquisitions and Dispositions :

Dispositions :

Canadian Business .)

Amortization decreased $4.2 million, or 20%, in the three months ended June 30, 2024, and decreased $8.4 million, or 19%, in the six months ended June 30, 2024, compared to the same prior-year periods, due primarily to the Transaction.

(See Note 11.

Canadian Business ), partially offset by higher depreciation on current year projects.

Amortization decreased $1.0 million, or 5%, in the three months ended September 30, 2024, and decreased $9.4 million, or 15%, in the nine months ended September 30, 2024, compared to the same prior-year periods, due primarily to the impact of the Transaction (see Note 12.

Acquisitions and Dispositions :

Dispositions :

Canadian Business .)

Canadian Business ), partially offset by higher amortization related to asset acquisitions completed within the last year.

Interest Expense, Net

Interest expense, net, was $41.1 million (including $1.5 million of deferred financing costs) in the three months ended June 30, 2024, and $39.7 million (including $1.8 million of deferred financing costs) in the same prior-year period.

Interest expense, net, was $82.5 million (including $3.1 million of deferred financing costs) in the six months ended June 30, 2024, and $77.4 million (including $3.4 million of deferred financing costs) in the same prior-year period.

The increases were primarily due to higher interest rates and a higher average debt balance.

Interest expense, net, was $37.1 million (including $1.5 million of deferred financing costs) in the three months ended September 30, 2024, and $40.2 million (including $1.6 million of deferred financing costs) in the same prior-year period.

Interest expense, net, decreased in the three months ended September 30, 2024, compared to the same prior-year period, due primarily to a lower average debt balance, partially offset by higher interest rates.

Interest expense, net, was $119.6 million (including $4.6 million of deferred financing costs) in the nine months ended September 30, 2024, and $117.6 million (including $5.0 million of deferred financing costs) in the same prior-year period.

Interest expense, net, increased in the nine months ended September 30, 2024, compared to the same prior-year period, primarily due to higher interest rates, partially offset by a lower average debt balance.

Loss on Extinguishment of Debt

In the three and six months ended June 30, 2024, we recorded a loss on extinguishment of debt of $1.2 million, relating to the write-off of deferred financing costs and a portion of the discount on the Term Loan (as defined below), due to prepayments on the Term Loan.

Provision for Income Taxes

Provision for income taxes increased $10.7 million in the three months ended June 30, 2024, compared to the same prior-year period, due primarily to a gain on disposition related to the Transaction.

Provision for income taxes increased $9.8 million in the six months ended June 30, 2024, compared to the same prior-year period, due primarily to a gain on disposition related to the Transaction.

In the nine months ended September 30, 2024, we recorded a loss on extinguishment of debt of $1.2 million, relating to the write-off of deferred financing costs and a portion of the discount on the Term Loan (as defined below), due to prepayments on the Term Loan.

Benefit (Provision) for Income Taxes

Benefit for income taxes was $0.2 million in the three months ended September 30, 2024, compared to a Provision for income taxes of $1.4 million in the same prior-year period, due primarily to the impact of the Transaction.

Provision for income taxes increased $8.2 million in the nine months ended September 30, 2024, compared to the same prior-year period, due primarily to a gain on disposition related to the Transaction.

Net Income (Loss)

Net income before allocation to non-controlling interests was $177.0 million in the three months ended June 30, 2024, compared to a Net loss before allocation to non-controlling interests of $478.4 million in the same prior-year period, primarily driven by higher operating income, due primarily to a gain on disposition related to the Transaction and higher impairment charges incurred in 2023, partially offset by a higher provision for income taxes and higher interest expense.

Net income before allocation to non-controlling interests was $149.9 million in the six months ended June 30, 2024, compared a Net loss before allocation to non-controlling interests of $507.1 million in the same prior-year period, primarily driven by higher operating income, due primarily to a gain on disposition related to the Transaction and higher impairment charges incurred in 2023, partially offset by partially offset by a higher provision for income taxes and higher interest expense.

Net income before allocation to redeemable and non-redeemable noncontrolling interests increased $18.1 million, or 108%, in the three months ended September 30, 2024, compared to the same prior-year period, primarily driven by higher operating income, impairment charges incurred in 2023 and lower interest expense.

Net income before allocation to redeemable and non-redeemable noncontrolling interests was $184.7 million in the nine months ended September 30, 2024, compared a Net loss before allocation to redeemable and non-redeemable noncontrolling interests of $485.2 million in the same prior-year period, primarily driven by higher operating income, due primarily to a gain on disposition related to the Transaction and higher impairment charges incurred in 2023, partially offset by a higher provision for income taxes and higher interest expense.

Reconciliation of Non-GAAP Financial Measures

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It is management’s opinion that these supplemental measures provide users of our financial data with an important perspective on our operating performance and also make it easier for users of our financial data to compare our results with other companies that have different financing and capital structures or tax rates.

When used herein, references to “FFO” and “AFFO” mean “FFO attributable to OUTFRONT Media Inc.” and “AFFO

attributable to OUTFRONT Media Inc.,” respectively.

When used herein, references to “FFO” and “AFFO” mean “FFO attributable to OUTFRONT Media Inc.” and “AFFO attributable to OUTFRONT Media Inc.,” respectively.

We calculate FFO in accordance with the definition established by the National Association of Real Estate Investment Trusts (“NAREIT”).

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

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

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

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

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

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

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

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

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

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

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

to FFO attributable to OUTFRONT Media Inc.

and AFFO attributable to OUTFRONT Media Inc.

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(in millions, except percentages) 2024 2023 2024 2023

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— 8.8 13.1 379.9

Adjustment related to non-controlling interests (0.1) (0.1) (0.2) (0.2)

Adjustment related to redeemable and non-redeemable noncontrolling interests — — (0.2) (0.2)

Income tax effect of adjustments (b)

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(b) Income tax effect related to Net gain on disposition of real estate assets.

(c) In 2023, also includes an Impairment charge related to an other-than-temporary decline in fair value of a cost-method investment.

(c) In nine months ended September 30, 2023, also includes an Impairment charge related to an other-than-temporary decline in fair value of a cost-method investment.

FFO attributable to OUTFRONT Media Inc.

was $83.8 million in the three months ended June 30, 2024, compared to a deficit of $59.8 million in the same prior-year period, due primarily to lower impairment charges on non-real estate assets.

increased $9.3 million, or 13%, in the three months ended September 30, 2024, compared to the same prior-year period, due primarily to lower impairment charges on non-real estate assets and lower interest expense.

AFFO attributable to OUTFRONT Media Inc.

increased $6.8 million, or 9%, in the three months ended June 30, 2024, compared to the same prior-year period, due primarily to higher Adjusted OIBDA and lower cash paid for income taxes.

increased $5.1 million, or 7%, in the three months ended September 30, 2024, compared to the same prior-year period, due primarily to lower maintenance capital expenditures.

FFO attributable to OUTFRONT Media Inc.

was $106.1 million in the six months ended June 30, 2024, compared to a deficit of $42.7 million in the same prior-year period, due primarily to lower impairment charges on non-real estate assets.

increased $152.9 million in the nine months ended September 30, 2024, compared to the same prior-year period, due primarily to lower impairment charges on non-real estate assets.

AFFO attributable to OUTFRONT Media Inc.

increased $21.2 million, or 24%, in the six months ended June 30, 2024, compared to the same prior-

year period, due primarily to higher Adjusted OIBDA, lower maintenance capital expenditures and lower cash paid for income taxes.

increased $21.1 million, or 13%, in the nine months ended September 30, 2024, compared to the same prior-year period, due primarily to higher Adjusted OIBDA, lower maintenance capital expenditures and lower cash paid for income taxes.

Segment Results of Operations

We present Adjusted OIBDA as the primary measure of profit and loss for our reportable segments.

We present Adjusted OIBDA as the primary measure of profit and loss for our U.S.

Media reportable segment and Other .

(See the “Key Performance Indicators” section of this MD&A and Note 18.

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Media and Other .

The following table presents our Revenues , Adjusted OIBDA and Operating income (loss) by segment in the three and six months ended June 30, 2024 and 2023.

Three Months Ended Six Months Ended

June 30, June 30,

The following table presents our Revenues , Adjusted OIBDA and Operating income (loss) by segment in the three and nine months ended September 30, 2024 and 2023.

Three Months Ended Nine Months Ended

September 30, September 30,

(in millions) 2024 2023 2024 2023

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

Three Months Ended Six Months Ended

June 30, % June 30, %

Three Months Ended Nine Months Ended

September 30, % September 30, %

(in millions, except percentages) 2024 2023 Change 2024 2023 Change

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Operating income (loss) $ 94.9 $ 72.7 31 $ 227.3 $ (309.7) *

Net (gain) loss on dispositions 0.1 (0.1) * 0.2 0.2 —

Net loss on dispositions 1.3 — * 1.5 0.2 *

Impairment charges — 12.1 * 17.9 523.5 (97)

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* Calculation is not meaningful.

Media segment revenues increased $17.9 million, or 4%, in the three months ended June 30, 2024, compared to the same prior-year period, due primarily to higher transit and other revenues, as well as higher billboard revenues.

Media segment revenues increased $31.1 million, or 4%, in the six months ended June 30, 2024, compared to the same prior-year period, due primarily to higher transit and other revenues, as well as higher billboard revenues.

We generated approximately 42% in the three months ended June 30, 2024, 43% in the three months ended June 30, 2023, 40% in the six months ended June 30, 2024, and 42% in the six months ended June 30, 2023, of our U.S.

Media segment revenues increased $22.8 million, or 5%, in the three months ended September 30, 2024, compared to the same prior-year period, due primarily to higher transit and other revenues, as well as higher billboard revenues.

Media segment revenues increased $53.9 million, or 4%, in the nine months ended September 30, 2024, compared to the same prior-year period, due primarily to higher transit and other revenues, as well as higher billboard revenues.

We generated approximately 42% in the three months ended September 30, 2024, 43% in the three months ended September 30, 2023, 41% in the nine months ended September 30, 2024, and 42% in the nine months ended September 30, 2023, of our U.S.

Media segment revenues from national advertising campaigns.

Billboard revenues in the U.S.

Media segment increased $8.0 million, or 2%, in the three months ended June 30, 2024, compared to the same prior-year period, reflecting an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues and the impact of new and lost billboards in the period, including insignificant acquisitions.

Media segment increased $16.6 million, or 5%, in the three months ended September 30, 2024, compared to the same prior-year period, reflecting an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues, the impact of new and lost billboards in the period, including insignificant acquisitions, and higher proceeds from condemnations.

Billboard revenues in the U.S.

Media segment increased $15.8 million, or 2%, in the six months ended June 30, 2024, compared to the same prior-year period, reflecting an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues and the impact of new and lost billboards in the period, including insignificant acquisitions, partially offset by lower proceeds from condemnations.

Media segment increased $32.4 million, or 3%, in the nine months ended September 30, 2024, compared to the same prior-year period, reflecting an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues and the impact of new and lost billboards in the period, including insignificant acquisitions, partially offset by lower proceeds from condemnations.

Transit and other revenues in the U.S.

Media segment increased $9.9 million, or 11%, in the three months ended June 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), partially offset by the impact of new and lost transit franchise contracts in the period.

Media segment increased $6.2 million, or 7%, in the three months ended September 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), partially offset by the impact of new and lost transit franchise contracts in the period.

Transit and other revenues in the U.S.

Media segment increased $15.3 million, or 9%, in the six months ended June 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), partially offset by the impact of new and lost transit franchise contracts in the period.

Operating expenses in the U.S.

Media segment decreased $1.9 million, or 1%, in the three months ended June 30, 2024, compared to the same prior-year period, primarily driven by lower variable property lease expenses and the net impact of new and lost transit franchise contracts, partially offset by higher guaranteed minimum annual payments to the MTA, higher compensation-related expenses, higher posting and rotation costs, driven by higher business activity, and higher maintenance

and utilities cost, driven by inflationary cost increases.

Media segment increased $21.5 million, or 9%, in the nine months ended September 30, 2024, compared to the same prior-year period, primarily due to an increase in average revenue per display (yield), partially offset by the impact of new and lost transit franchise contracts in the period.

Operating expenses in the U.S.

Media segment increased $1.7 million in the six months ended June 30, 2024, compared to the same prior-year period, primarily driven by higher billboard revenues, higher guaranteed minimum annual payments to the MTA, higher compensation-related expenses, higher posting and rotation costs, driven by higher business activity, and higher maintenance and utilities cost, driven by inflationary cost increases, partially offset by an out-of-period adjustment of $5.2 million recorded in the three months ended March 31, 2023, related to variable billboard property lease costs (see Note 1.

Description of Business and Basis of Presentation to the Consolidated Financial Statements) and the net impact of new and lost transit franchise contracts.

Media segment increased $7.1 million, or 3%, in the three months ended September 30, 2024, compared to the same prior-year period, primarily driven by higher guaranteed minimum annual payments to the MTA, higher compensation-related expenses and higher posting and rotation costs, driven by higher business activity, partially offset by lower variable property lease expenses and the net impact of new and lost transit franchise contracts.

Operating expenses in the

Media segment increased $14.0 million, or 2%, in the nine months ended September 30, 2024, compared to the same prior-year period, primarily driven by higher billboard revenues, higher compensation-related expenses, higher guaranteed minimum annual payments to the MTA, higher posting and rotation costs, driven by higher business activity, and higher maintenance and utilities cost, driven by inflationary cost increases, partially offset by the net impact of new and lost transit franchise contracts.

SG&A expenses in the U.S.

Media segment increased $7.4 million, or 9%, in the three months ended June 30, 2024, compared to the same prior-year period, primarily driven by higher compensation-related expenses, a higher provision for doubtful accounts, higher rent related to new offices and higher insurance costs, partially offset by lower professional fees.

Media segment increased $2.4 million, or 3%, in the three months ended September 30, 2024, compared to the same prior-year period, primarily driven by higher compensation-related expenses, partially offset by lower professional fees and a lower provision for doubtful accounts.

SG&A expenses in the U.S.

Media segment increased $7.3 million, or 4%, in the six months ended June 30, 2024, compared to the same prior-year period, primarily driven by higher compensation-related expenses, a higher provision for doubtful accounts and higher rent related to new offices, partially offset by lower professional fees.

In the three months ended June 30, 2024, we recorded impairment charges of $8.8 million and in the six months ended June 30, 2024, we recorded impairment charges of $17.9 million in the U.S.

Media segment increased $9.7 million, or 4%, in the nine months ended September 30, 2024, compared to the same prior-year period, primarily driven by higher compensation-related expenses and higher rent related to new offices, partially offset by lower professional fees.

In the nine months ended September 30, 2024, we recorded impairment charges of $17.9 million in the U.S.

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

Transit and Other reporting unit.

In the three and six months ended June 30, 2023, we recorded impairment charges of $511.4 million in the U.S.

We did not record any impairment charges in the three months ended September 30, 2024.

In the three months ended September 30, 2023, we recorded impairment charges of $12.1 million and in the nine months ended September 30, 2023, we recorded impairment charges of $523.5 million in the U.S.

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

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Intangible Assets to the Consolidated Financial Statements.)

Media segment Adjusted OIBDA increased $12.4 million, or 10%, in the three months ended June 30, 2024, and increased $22.1 million, or 11%, in the six months ended June 30, 2024, compared to the same prior-year period.

Adjusted OIBDA margin was 30% in the three months ended June 30, 2024, 29% in the three months ended June 30, 2023, 26% in the six months ended June 30, 2024, and 24% in the six months ended June 30, 2023.

Media segment Adjusted OIBDA increased $13.3 million, or 11%, in the three months ended September 30, 2024, and increased $30.2 million, or 9%, in the nine months ended September 30, 2024, compared to the same prior-year period.

Adjusted OIBDA margin was 30% in the three months ended September 30, 2024, 28% in the three months ended September 30, 2023, 27% in the nine months ended September 30, 2024, and 26% in the nine months ended September 30, 2023.

The increases in Adjusted OIBDA margin were due primarily to a higher increases in Adjusted OIBDA compared to lower increases in revenues.

The increase for the six months ended June 30, 2024, was also driven by an out-of-period adjustment of $5.2 million recorded in the three months ended March 31, 2023, related to variable billboard property lease costs (see Note 1.

Description of Business and Basis of Presentation to the Consolidated Financial Statements).

Three Months Ended Six Months Ended

June 30, % June 30, %

Three Months Ended Nine Months Ended

September 30, % September 30, %

(in millions, except percentages) 2024 2023 Change 2024 2023 Change

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Adjusted OIBDA margin (25) % 24 % 7 % 20 %

Operating income $ 156.9 $ 3.2 * $ 157.8 $ 0.9 *

Net gain on dispositions (155.3) — * (155.3) — *

Operating income (loss) $ (0.3) $ 2.7 * $ 157.5 $ 3.6 *

Net (gain) loss on dispositions 0.2 — * (155.1) — *

Depreciation and amortization — 3.6 * — 10.5 *

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

Total Other revenues decreased $9.4 million, or 36%, in the three months ended June 30, 2024, compared to the same prior-year period, primarily driven by the impact of the Transaction and a decline in third-party digital equipment sales, partially offset by an increase in average revenue per display (yield).

Total Other revenues decreased $9.9 million, or 22%, in the six months ended June 30, 2024, compared to the same prior-year period, primarily driven by the impact of the Transaction and a decline in third-party digital equipment sales, partially offset by an increase in average revenue per display (yield).

In the three and six months ended June 30, 2024, non-organic revenues reflect the impact of the Transaction.

In the three and six months ended June 30, 2023, non-organic revenues reflect the impact of the Transaction and the impact of foreign currency exchange rates.

Organic Other revenues decreased $1.8 million, or 95%, in the three months ended June 30, 2024, and decreased $3.3 million, or 89%, in the six months ended June 30, 2024, compared to the same prior-year periods, primarily driven by a decline in third-party digital equipment sales.

Other operating expenses decreased $4.2 million, or 31%, in the three months ended June 30, 2024, and decreased $4.6 million, or 17%, in the six months ended June 30, 2024, compared to the same prior-year periods, primarily driven by the impact of the Transaction and lower costs related to third-party digital equipment sales.

Other SG&A expenses decreased $0.1 million, or 2%, in the three months ended June 30, 2024, and was comparable in the six months ended June 30, 2024, compared to the same prior-year periods, primarily driven by the impact of the Transaction.

Other Adjusted OIBDA decreased $5.1 million, or 76%, in the three months ended June 30, 2024, and decreased $5.3 million, or 68%, in the six months ended June 30, 2024, compared to the same prior-year periods, due primarily to the impact of the Transaction and a decline in third-party digital equipment sales.

Total Other revenues decreased $25.7 million, or 98%, in the three months ended September 30, 2024, compared to the same prior-year period, primarily driven by the impact of the Transaction and a decline in third-party digital equipment sales.

Total Other revenues decreased $35.6 million, or 50%, in the nine months ended September 30, 2024, compared to the same prior-year period, primarily driven by the impact of the Transaction and a decline in third-party digital equipment sales.

In the three months ended September 30, 2023, nine months ended September 30, 2024, and nine months ended September 30, 2023, non-organic revenues reflect the impact of the Transaction.

Also in the nine months ended September 30, 2023, non-organic revenues reflect the impact of foreign currency exchange rates.

Organic Other revenues decreased $1.4 million, or 78%, in the three months ended September 30, 2024, and decreased $4.7 million, or 85%, in the nine months ended September 30, 2024, compared to the same prior-year periods, primarily driven by a decline in third-party digital equipment sales.

Other operating expenses decreased $13.8 million, or 97%, in the three months ended September 30, 2024, and decreased $18.4 million, or 45%, in the nine months ended September 30, 2024, compared to the same prior-year periods, primarily driven by the impact of the Transaction and lower costs related to third-party digital equipment sales.

Other SG&A expenses decreased $5.5 million, or 98%, in the three months ended September 30, 2024, and was comparable in the nine months ended September 30, 2024, compared to the same prior-year periods, primarily driven by the impact of the Transaction.

Other Adjusted OIBDA was a loss of $0.1 million in the three months ended September 30, 2024, compared to Other Adjusted OIBDA of $6.3 million in the same prior-year period, due primarily to the impact of the Transaction and a decline in third-party digital equipment sales.

Other Adjusted OIBDA decreased $11.7 million, or 83%, in the nine months ended September 30,

2024, compared to the same prior-year period, due primarily to the impact of the Transaction and a decline in third-party digital equipment sales.

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

Corporate expenses, excluding stock-based compensation, increased $3.5 million, or 28%, in the three months ended June 30, 2024, compared to the same prior-year period, and increased $6.7 million, or 26%, in the six months ended June 30, 2024, compared to the same prior-year period.

The increases were primarily due to higher professional fees, as a result of a management consulting project, and higher compensation-related expenses.

Corporate expenses, excluding stock-based compensation, increased $6.7 million, or 70%, in the three months ended September 30, 2024, compared to the same prior-year period, and increased $13.4 million, or 38%, in the nine months ended September 30, 2024, compared to the same prior-year period.

The increases were primarily due to higher professional fees, as a result of a management consulting project, higher compensation-related expenses and the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the Company to certain employees.

Liquidity and Capital Resources

(in millions, except percentages) June 30,

(in millions, except percentages) September 30,

2024 December 31, 2023 % Change

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In addition, as part of our growth strategy, we frequently evaluate strategic opportunities to acquire new businesses, assets or digital technology, directly or in connection with joint ventures (including buy/sell arrangements with joint venture partners).

Consistent with this strategy, we regularly evaluate potential acquisitions, ranging from small transactions to larger acquisitions, which transactions and transaction-related expenses will be funded through cash on hand, additional borrowings, equity or other securities, or some combination thereof.

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

which transactions and transaction-related expenses will be funded through cash on hand, additional borrowings, equity or other securities, or some combination thereof.

Our long-term cash needs include principal payments on outstanding indebtedness and commitments related to operating leases and franchise and other agreements, including any related guaranteed minimum annual payments, and equipment deployment costs.

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(See the “Overview” section of this MD&A.)

Working capital was a deficit of $171.5 million as of June 30, 2024, compared to a deficit of $195.4 million as of December 31, 2023, primarily driven by lower receivables and the impact of the Transaction, partially offset by decreased borrowings under the AR Facility and lower accrued lease and franchise costs, as well as by lower bonus accruals.

Working capital was a deficit of $183.3 million as of September 30, 2024, compared to a deficit of $195.4 million as of December 31, 2023, primarily driven by the impact of the Transaction.

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”):

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For any deployment costs deemed authorized after December 31, 2020, the MTA and the Company will no longer be obligated to directly pay 70% and 30% of the costs, respectively, and these costs will be subject to recoupment in accordance with the MTA Agreement.

We did not recoup any equipment deployment costs in the six months ended June 30, 2024.

We did not recoup any equipment deployment costs in the nine months ended September 30, 2024.

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

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

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

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

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.

least equal to the gross revenues generated in the Recoupment Year, and (ii) did not decline by more than 5% from the prior year.

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

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

As of June 30, 2024, we have issued surety bonds in favor of the MTA totaling approximately $136.0 million, which amount is subject to change as equipment installations are completed and revenues are generated.

As indicated in the table below, we incurred $17.9 million related to MTA equipment deployment costs in the six months ended June 30, 2024 (which includes equipment deployment costs related to future deployments), for a total of $597.5 million to date, of which $33.9 million had been recouped from incremental revenues to date.

As of June 30, 2024, 23,971 digital displays had been installed, composed of 5,004 digital advertising screens on subway and train platforms and entrances, 13,430 smaller-format digital advertising screens on rolling stock and 5,537 MTA communications displays.

In the three months ended June 30, 2024, 1,776 installations occurred, for a total of 4,274 installations in the six months ended June 30, 2024.

MTA performance during the six months ended June 30, 2024 was slightly better than the expectations and assumptions included in our year-end 2023 model and our current long-term assumptions continue to be in line with our year-end 2023 model.

As a result of negative aggregate cash flows during 2024, we performed quarterly impairment analyses on the MTA asset group and recorded impairment charges of $17.9 million in the six months ended June 30, 2024, representing additional MTA equipment deployment cost spending during the period.

As of September 30, 2024, we have issued surety bonds in favor of the MTA totaling approximately $136.0 million, which amount is subject to change as equipment installations are completed and revenues are generated.

As indicated in the table below, we incurred $24.5 million related to MTA equipment deployment costs in the nine months ended September 30, 2024 (which includes equipment deployment costs related to future deployments), for a total of $604.1 million to date, of which $33.9 million had been recouped from incremental revenues to date.

As of September 30, 2024, 25,345 digital displays had been installed, composed of 5,008 digital advertising screens on subway and train platforms and entrances, 14,548 smaller-format digital advertising screens on rolling stock and 5,789 MTA communications displays.

In the three months ended September 30, 2024, 1,374 installations occurred, for a total of 5,648 installations in the nine months ended September 30, 2024.

MTA performance during the nine months ended September 30, 2024, was slightly better than the expectations and assumptions included in our year-end 2023 model and our current long-term assumptions continue to be in line with our year-end 2023 model.

The impairment charges recorded during 2024 represented additional MTA equipment deployment cost spending during the six months ended June 30, 2024.

Our analysis performed as of September 30, 2024, resulted in positive aggregate cash flows in excess of the carrying value of our MTA asset group.

As such, no impairment charges were recorded during the three months ended September 30, 2024.

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

Intangible Assets to the Consolidated Financial Statements.) We currently expect to be cash flow neutral on an undiscounted basis from the third quarter of 2024 through to the end of the Amended Term of the MTA Agreement.

Intangible Assets to the Consolidated Financial Statements.) We currently expect positive aggregate cash flows on an undiscounted basis from the fourth quarter of 2024 through to the end of the Amended Term of the MTA Agreement.

If our MTA performance continues to be in line with, or better than, our current model, we would not expect to incur additional impairment charges on our MTA equipment deployment cost spending.

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

Six months ended June 30, 2024:

Nine months ended September 30, 2024:

Other current assets $ 1.1 $ — $ — $ — $ — $ 1.1

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

On August 6, 2024, we announced that our board of directors approved a quarterly cash dividend of $0.30 per share on our common stock, payable on September 27, 2024, to stockholders of record at the close of business on September 6, 2024.

On November 12, 2024, we announced that our board of directors approved a special dividend of $0.75 per share on our common stock payable on December 31, 2024, to stockholders of record at the close of business on November 15, 2024.

Approximately $0.30 per share will be paid in cash (exclusive of cash paid in lieu of fractional shares) and approximately $0.45 per share will be paid in shares of our common stock.

Stockholders will have the option to elect to receive their special dividend in all cash or all stock, however the aggregate amount of cash to be distributed will be equal to approximately $49.8 million, with the balance of the special dividend payable in the form of our common stock.

To offset the dilutive impact of the common stock portion of the special dividend, our board of directors also approved a reverse stock split, which we expect to complete in January 2025.

Debt, net, consists of the following:

(in millions, except percentages) June 30,

(in millions, except percentages) September 30,

2024 December 31,

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Total $ 3,238.6 $ 152.3 $ 670.4 $ 837.6 $ 1,578.3

The interest rate on the term loan due in 2026 (the “Term Loan”) was 7.1% per annum as of June 30, 2024.

As of June 30, 2024, a discount of $0.6 million on the Term Loan remains unamortized.

The interest rate on the term loan due in 2026 (the “Term Loan”) was 6.6% per annum as of September 30, 2024.

As of September 30, 2024, a discount of $0.5 million on the Term Loan remains unamortized.

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

In June 2024, we prepaid $200.0 million of the outstanding principal balance on the Term Loan.

In the three and six months ended June 30, 2024, we recorded a Loss on extinguishment of debt of $1.2 million on the Consolidated Statement of Operations, relating to the write-off of deferred financing costs and a portion of the discount on the Term Loan.

In the three and nine months ended September 30, 2024, we recorded a Loss on extinguishment of debt of $1.2 million on the Consolidated Statement of Operations, relating to the write-off of deferred financing costs and a portion of the discount on the Term Loan.

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”).

As of June 30, 2024, there were no outstanding borrowings under the Revolving Credit Facility.

The commitment fee based on the amount of unused commitments under the Revolving Credit Facility was $0.5 million in the three months ended June 30, 2024, $0.4 million in the three months ended June 30, 2023, $1.0 million in the six months ended June 30, 2024, and $0.8 million in the six months ended June 30, 2023.

As of June 30, 2024, we had issued letters of credit totaling approximately $6.3 million against the letter of credit facility sublimit under the Revolving Credit Facility.

As of September 30, 2024, there were no outstanding borrowings under the Revolving Credit Facility.

The commitment fee based on the amount of unused commitments under the Revolving Credit Facility was $0.5 million in each of the three months ended September 30, 2024 and 2023, $1.5 million in the nine months ended September 30, 2024, and $1.3 million in the nine months ended September 30, 2023.

As of September 30, 2024, we had issued letters of credit totaling approximately $5.7 million against the letter of credit facility sublimit under the Revolving Credit Facility.

Standalone Letter of Credit Facilities

As of June 30, 2024, we had issued letters of credit totaling approximately $67.3 million under our aggregate $81.0 million standalone letter of credit facilities.

The total fees under the letter of credit facilities were immaterial in each of the three and six months ended June 30, 2024 and 2023.

As of September 30, 2024, we had issued letters of credit totaling approximately $65.0 million under our aggregate $81.0 million standalone letter of credit facilities.

The total fees under the letter of credit facilities were immaterial in each of the three and nine months ended September 30, 2024 and 2023.

Accounts Receivable Securitization Facility

As of June 30, 2024, we have a $150.0 million revolving accounts receivable securitization facility (the “AR Facility”), which terminates in June 2027, unless further extended.

As of September 30, 2024, we have a $150.0 million revolving accounts receivable securitization facility (the “AR Facility”), which terminates in June 2027, unless further extended.

On June 14, 2024, we entered into an amendment to the agreements governing the AR Facility, pursuant to which we (i) extended the term of the AR Facility so that it now terminates on June 14, 2027, unless further extended;

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Further, the TRS SPV and the QRS SPV are jointly and severally liable for their respective obligations under the agreements governing the AR Facility.

As of June 30, 2024, there were $30.0 million of outstanding borrowings under the AR Facility, at a borrowing rate of 6.6%.

As of June 30, 2024, borrowing capacity remaining under the AR Facility was $120.0 million based on approximately $314.6 million of accounts receivable that could be used as collateral for the AR Facility in accordance with the agreements governing the AR Facility.

The commitment fee based on the amount of unused commitments under the AR Facility was $0.1 million for each of the six months ended June 30, 2024 and 2023, and was immaterial for each of the three months ended June 30, 2024 and 2023.

In July and August 2024, we made repayments totaling $30.0 million under the AR Facility.

As of September 30, 2024, there were $40.0 million of outstanding borrowings under the AR Facility, at a borrowing rate of 6.3%.

As of September 30, 2024, borrowing capacity remaining under the AR Facility was $110.0 million based on approximately $339.8 million of accounts receivable that could be used as collateral for the AR Facility in accordance with the agreements governing the AR Facility.

The commitment fee based on the amount of unused commitments under the AR Facility was $0.1 million in the three months ended September 30, 2024, immaterial for the three months ended September 30, 2023, $0.2 million in the nine months ended September 30, 2024, and $0.1 million in the nine months ended September 30, 2023.

In October and November 2024, we made repayments totaling $20.0 million under the AR Facility.

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 June 30, 2024, our Consolidated Total Leverage Ratio was 5.0 to 1.0, as adjusted to give pro forma effect to the Transaction, in accordance with the Credit Agreement.

One of the exceptions to the restriction on our ability to incur additional indebtedness is satisfaction of a Consolidated Total Leverage Ratio, which is the ratio of our

consolidated total debt to our Consolidated EBITDA (as defined in the Credit Agreement) for the trailing four consecutive quarters, of no greater than 6.0 to 1.0.

As of September 30, 2024, our Consolidated Total Leverage Ratio was 4.9 to 1.0, as adjusted to give pro forma effect to the Transaction, 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 June 30, 2024, our Consolidated Net Secured Leverage Ratio was 1.6 to 1.0, as adjusted to give pro forma effect to the Transaction, in accordance with the Credit Agreement.

As of June 30, 2024, we are in compliance with our debt covenants.

As of September 30, 2024, our Consolidated Net Secured Leverage Ratio was 1.6 to 1.0, as adjusted to give pro forma effect to the Transaction, in accordance with the Credit Agreement.

As of September 30, 2024, we are in compliance with our debt covenants.

Deferred Financing Costs

As of June 30, 2024, we had deferred $23.8 million in fees and expenses associated with the Term Loan, the Revolving Credit Facility, the AR Facility and our senior notes.

As of September 30, 2024, we had deferred $22.4 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.

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

No shares were sold under the ATM Program during the six months ended June 30, 2024.

As of June 30, 2024, we had approximately $232.5 million of capacity remaining under the ATM Program.

No shares were sold under the ATM Program during the nine months ended September 30, 2024.

As of September 30, 2024, we had approximately $232.5 million of capacity remaining under the ATM Program.

Series A Preferred Stock Issuance

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Subject to certain conditions set forth in the Articles (including a change of control), each of the Company and the holders of the Series A Preferred Stock may convert or redeem the Series A Preferred Stock at the prices set forth in the Articles, plus any accrued and unpaid dividends.

The following table presents our cash flows in the six months ended June 30, 2024 and 2023.

Six Months Ended

The following table presents our cash flows in the nine months ended September 30, 2024 and 2023.

Nine Months Ended

September 30, %

(in millions, except percentages) 2024 2023 Change

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Effect of exchange rate changes on cash and cash equivalents (0.4) 0.1 *

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

$ (8.0) $ 4.0 *

* Calculation is not meaningful.

Cash provided by operating activities increased $13.9 million, or 16%, in the six months ended June 30, 2024, compared to the same prior-year period, due primarily to a smaller use of cash related to accounts payable and accrued expenses, driven by lower incentive compensation payments made in 2024, and a decrease in prepaid MTA equipment deployment costs, partially offset by the timing of receivables and lower net income in 2024 compared to 2023, due to increased SG&A expenses and higher interest expense.

In the six months ended June 30, 2024, we paid net cash of $18.4 million related to MTA equipment deployment costs and installed 4,274 digital displays.

In the six months ended June 30, 2023, we paid net cash of $21.3 million related to MTA equipment deployment costs and installed 2,605 digital displays.

Cash provided by investing activities was $259.5 million in the six months ended June 30, 2024, compared to Cash used for investing activities of $71.5 million in the same prior-year period, due primarily to cash received from the Transaction and lower cash paid for acquisitions and capital expenditures.

We expect Cash provided by investing activities to be impacted slightly in the third quarter of 2024 by a use of cash as a result of the exercise of a buy/sell arrangement by one of our joint venture partners.

The following table presents our capital expenditures in the six months ended June 30, 2024 and 2023.

Six Months Ended

Cash provided by operating activities increased $25.5 million, or 17%, in the nine months ended September 30, 2024, compared to the same prior-year period, due primarily to a decrease in prepaid MTA equipment deployment costs, and a smaller use of cash related to accounts payable and accrued expenses, driven by lower incentive compensation payments made in 2024, partially offset by the timing of receivables and lower net income in 2024 compared to 2023, due to increased SG&A expenses and higher interest expense.

In the nine months ended September 30, 2024, we paid net cash of $18.8 million related to MTA equipment deployment costs and installed 5,648 digital displays.

In the nine months ended September 30, 2023, we paid net cash of $33.4 million related to MTA equipment deployment costs and installed 4,633 digital displays.

Cash provided by investing activities was $230.7 million in the nine months ended September 30, 2024, compared to Cash used by investing activities of $93.4 million in the same prior-year period, due primarily to cash received from the Transaction and lower cash paid for acquisitions and capital expenditures.

The following table presents our capital expenditures in the nine months ended September 30, 2024 and 2023.

Nine Months Ended

September 30, %

(in millions, except percentages) 2024 2023 Change

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Total capital expenditures $ 59.9 $ 63.6 (6)

Capital expenditures decreased $2.6 million, or 6%, in the six months ended June 30, 2024, compared to the same prior-year period, primarily due to lower spending on software and technology, and lower spending related to the renovation of certain office facilities, partially offset by increased growth in digital displays, increased maintenance spending for billboard display upgrades, and higher spending on safety-related projects.

For the full year of 2024, we expect our capital expenditures to be approximately $75.0 million to $85.0 million, which will be used primarily for growth in digital displays, safety-related projects, software and technology, maintenance and the renovation of certain office facilities.

Capital expenditures decreased $3.7 million, or 6%, in the nine months ended September 30, 2024, compared to the same prior-year period, primarily due to lower spending related to the renovation of certain office facilities and lower spending on software and technology, partially offset by increased growth in digital displays, increased maintenance spending for billboard display upgrades, and higher spending on safety-related projects.

For the full year of 2024, we expect our capital expenditures to be approximately $85.0 million, which will be used primarily for growth in digital displays, the renovation of certain office facilities, software and technology, maintenance and safety-related projects.

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

Cash used for financing activities increased by $332.4 million in the six months ended June 30, 2024 compared to the same prior-year period.

In the six months ended June 30, 2024, we prepaid $200.0 million on the outstanding balance of the Term Loan, made net repayments on the AR Facility of $35.0 million and paid total cash dividends of $104.4 million on our common stock, the Series A Preferred Stock and vested restricted share units granted to employees.

In the six months ended June 30, 2023, we drew $105.0 million of net borrowings on the AR Facility and paid total cash dividends of $103.7 million on our common stock, the Series A Preferred Stock and vested restricted share units granted to employees.

Cash paid for income taxes was $1.2 million in the six months ended June 30, 2024, compared to $5.5 million in the six months ended June 30, 2023.

The decrease was due primarily to tax refunds received by our U.S.

TRSs and the timing of Canadian estimated payments.

We expect cash paid for income taxes to increase in the third quarter of 2024 as a result of income tax payments related to the Transaction.

Cash used for financing activities increased by $361.1 million in the nine months ended September 30, 2024 compared to the same prior-year period.

In the nine months ended September 30, 2024, we prepaid $200.0 million on the outstanding balance of the Term Loan, made net repayments on the AR Facility of $25.0 million and paid total cash dividends of $156.4 million on our common stock, the Series A Preferred Stock and vested restricted share units granted to employees, and paid $23.9 million related to the exercise of a buy/sell arrangement by one of our joint venture partners resulting in our purchase of the outstanding noncontrolling interest in a consolidated subsidiary.

In the nine months ended September 30, 2023, we drew $120.0 million of net borrowings on the AR Facility and paid total cash dividends of $155.4 million on our common stock, the Series A Preferred Stock and vested restricted share units granted to employees.

Cash paid for income taxes was $11.4 million in the nine months ended September 30, 2024, compared to $5.9 million in the nine months ended September 30, 2023.

The increase was due primarily to income tax payments related to the Transaction.

Off-Balance Sheet Arrangements

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis