OUTFRONT Media Inc. 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our historical consolidated financial statements and the notes thereto in “Item 8. Financial Statements and Supplementary Data.” This MD&A contains forward-looking statements that involve numerous risks and uncertainties. The forward-looking statements are subject to a number of important factors, including, but not limited to, those factors discussed in “Item 1A. Risk Factors” and the “Cautionary Statement Regarding Forward-Looking Statements” section of this Annual Report on Form 10-K, that could cause our actual results to differ materially from the results described herein or implied by such forward-looking statements. Overview OUTFRONT Media 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.”) . We currently manage our operations through two reportable operating segments—(1) Billboard and (2) Transit . Prior to its sale, our Canadian operations comprised our International operating segment, which did not meet the criteria to be a reportable segment and accordingly, was included in Other . Historical operating results of our Canadian operations are included in Other (see Item 8., Note 19. Segment Information to the Consolidated Financial Statements) through the date of sale. On June 7, 2024, we sold all of our equity interests in Outdoor Systems Americas ULC and its subsidiaries (the “Transaction”), which hold all of the assets of the Company’s outdoor advertising business in Canada (the “Canadian Business”). In connection with the Transaction, the Company received C$410.0 million in cash, subject to certain purchase price adjustments (see Item 8. Note 13. Acquisitions and Dispositions : Dispositions : Canadian Business to the Consolidated Financial Statements). Business We are one of the largest providers of advertising space on out-of-home advertising structures and sites across the U.S. 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. In total, we have displays in all of the 25 largest markets in the U.S. and approximately 120 markets in the U.S. Our top market, high profile location focused portfolio includes sites in and around both Grand Central Station and Times Square in New York, various locations along Sunset Boulevard in Los Angeles, and the Bay Bridge in San Francisco. The breadth and depth of our portfolio provides our customers with a range of options to address their marketing objectives, from national, brand-building campaigns to hyper-local campaigns that drive customers to the advertiser’s website or retail location “one mile down the road.” In addition to providing location-based displays, we also focus on delivering mass and targeted audiences to our customers. Geopath, the out-of-home advertising industry’s audience measurement system, enables us to build campaigns based on the size and demographic composition of audiences. As part of our technology platform, we are developing solutions for enhanced demographic and location targeting, and engaging ways to connect with consumers on-the-go. We believe out-of-home continues to be an attractive form of advertising, as our displays are always viewable and cannot be turned off, skipped, blocked or fast-forwarded. Further, out-of-home advertising can be an effective “stand-alone” medium, as well as an integral part of a campaign to reach audiences using multiple forms of media, including television, radio, print, online, mobile and social media advertising platforms. We provide our customers with a differentiated advertising solution at an attractive price point relative to other forms of advertising. In addition to leasing displays, we provide other value-added services to our customers, such as pre-campaign category research, consumer insights, print production, creative services and post-campaign tracking and analytics. Economic Environment Our revenues and operating results are sensitive to fluctuations in advertising expenditures, general economic conditions and other external events beyond our control, such as supply chain disruptions, inflationary price increases, changes in governmental fiscal and trade policies (such as tariffs), pandemics like the COVID-19 pandemic, industry shutdowns or slowdowns (including due to labor strikes), extraordinary weather events (such as hurricanes and wildfires), 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), among other things. These 36 sensitivities may adversely impact our revenues and operating results on a consolidated basis and/or may have a disproportionate adverse impact on our Transit segment. We rely on third parties to manufacture, transport and install our digital displays, and provide programmatic and direct sale advertising platform technologies for our digital display inventory. Historically, we have experienced delays and price increases with respect to certain of our digital displays due to external events beyond our control. If we experience delays and/or price increases in the future, it could have an adverse effect on our business, financial condition and results of operations. See “Item 1A. Risk Factors—Risks Related to Our Business and Operations—Operating our digital display platform may be more difficult, costly or time consuming than expected and the anticipated benefits may not be fully realized.” Historically, we have experienced inflationary increases with respect to some of our posting, maintenance and other expenses, some of our corporate expenses, and our interest expense. Our billboard property lease expenses and transit franchise expenses have been less impacted by inflation due to the long-term nature of most of our operating leases and transit franchise agreements. However, our transit franchise agreements that contain inflationary price adjustments may cause increases in our transit franchise expenses in the over the remaining terms of the agreements. Though the Company cannot reasonably estimate the full impact of inflationary increases on our business, financial condition and results of operations at this time, a portion of these increases may be fully or partially offset by increases in advertising rates on our displays and cost efficiencies. Business Environment The outdoor advertising industry is fragmented, consisting of several companies operating on a national basis, as well as hundreds of smaller regional and local companies operating a limited number of displays in a single or a few local geographic markets. We compete with these companies for both customers and structure and display locations. We also compete with other media, including online, mobile and social media advertising platforms and traditional advertising platforms (such as television, radio, print and direct mail marketers). In addition, we compete with a wide variety of out-of-home media, including advertising in shopping centers, airports, movie theaters, supermarkets and taxis. 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 and to quickly launch new advertising campaigns, and eliminate or greatly reduce print production and installation costs. In addition, digital displays enable us to run multiple advertisements on each display. Digital billboard displays generate approximately four to five times more revenue per display on average than comparable traditional static billboard displays. Digital billboard displays also incur, on average, approximately two to four times more costs, including higher variable costs associated with the increase in revenue than comparable traditional static billboard displays. As a result, digital billboard displays generate higher profits and cash flows than comparable traditional static billboard displays. We have deployed state-of-the-art digital transit displays in connection with several transit franchises we operate and we expect to continue these deployments over the coming years, but at a slower pace than our historical deployments. Revenues generated on our network of digital transit displays are generally higher than revenues generated on a comparable portfolio of our static transit displays. We have incurred, and we intend to incur, significant equipment deployment costs and capital expenditures, in the coming years to continue increasing the number of digital displays in our portfolio. However, we expect our annual equipment deployment cost spending with respect to the New York Metropolitan Transportation Authority (the “MTA”) transit franchise will decline now that we have substantially completed our initial deployment during 2024. In 2024, we built or converted 89 new digital billboard displays in the U.S. and entered into marketing arrangements to sell advertising on 21 third-party digital billboard displays in the U.S. In 2024, we built, converted or replaced 6,664 digital transit and other displays in the U.S. The following table sets forth information regarding our digital displays. 37 Digital Revenues (in millions) for the Year Ended December 31, 2024 Number of Digital Displays as of December 31, 2024 (a) Location Digital Billboard Digital Transit Total Digital Revenues Digital Billboard Displays Digital Transit Displays Total Digital Displays United States $ 436.9 $ 164.8 $ 601.7 1,935 28,388 30,323 Canada (b) 11.5 1.1 12.6 — — — Total $ 448.4 $ 165.9 $ 614.3 1,935 28,388 30,323 (a) Digital display amounts include 6,089 displays reserved for transit agency use. Our number of digital displays is impacted by acquisitions, dispositions, management agreements, the net effect of new and lost billboards, and the net effect of won and lost franchises in the period. (b) On June 7, 2024, we completed the sale of the Canadian Business in the Transaction. (See Item 8., Note 13. Acquisition and Dispositions : Dispositions to the Consolidated Financial Statements). Our revenues and profits fluctuate due to seasonal advertising patterns and influences on advertising markets. Typically, our revenues and profits are highest in the fourth quarter, during the holiday shopping season, and lowest in the first quarter, as advertisers adjust their spending following the holiday shopping season. As described above, our revenues and profits also fluctuate due to external events beyond our control. We have a diversified base of customers across various industries. During 2024, our largest categories of advertisers were entertainment, retail and health/medical, which represented 18%, 12%, and 9% of our total revenues from our Billboard and Transit segments, respectively. During 2023, our largest categories of advertisers were entertainment, retail and health/medical, which represented 20%, 11% and 9% of our total revenues from our Billboard and Transit segments, respectively. Our large-scale portfolio allows our customers to reach a national audience and also provides the flexibility to tailor campaigns to specific regions or markets. In 2024, we generated approximately 42% of our total revenues from our Billboard and Transit segments from national advertising campaigns, compared to approximately 43% in 2023. Our transit businesses require us to periodically obtain and renew contracts with municipalities and other governmental entities. When these contracts expire, we generally must participate in highly competitive bidding processes in order to obtain or renew contracts. 38 Key Performance Indicators Our management reviews our performance by focusing on the indicators described below. Several of our key performance indicators are not prepared in conformity with Generally Accepted Accounting Principles in the United States of America (“GAAP”). 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. Year Ended December 31, (in millions, except percentages) 2024 2023 % Change Revenues $ 1,830.9 $ 1,820.6 1 % Organic revenues (a)(b) 1,796.0 1,728.5 4 Operating income (loss) 425.5 (253.2) * Adjusted OIBDA (b) 464.8 456.2 2 Adjusted OIBDA (b) margin 25.4 % 25.1 % Net income (loss) attributable to OUTFRONT Media Inc. 258.2 (425.2) * Funds from operations (“FFO”) (b) attributable to OUTFRONT Media Inc. 303.6 135.2 125 Adjusted FFO (“AFFO”) (b) attributable to OUTFRONT Media Inc. 307.5 275.8 11 * Calculation is not meaningful. (a) Organic revenues exclude revenues associated with the impact of the Transaction (“non-organic revenues”). We provide organic revenues to understand the underlying growth rate of revenue excluding the impact of non-organic revenue items. Our management believes organic revenues are useful to users of our financial data because it enables them to better understand the level of growth of our business period to period. Since organic revenues are not calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, revenues as an indicator of operating performance. Organic revenues, as we calculate it, may not be comparable to similarly titled measures employed by other companies. (b) See the “Reconciliation of Non-GAAP Financial Measures” and “Revenues” sections of this MD&A for reconciliations of Operating income (loss) to Operating income (loss) before Depreciation , Amortization , Net gain (loss) on dispositions , Stock-based compensation and Impairment charges (“Adjusted OIBDA”) Net income (loss) attributable to OUTFRONT Media Inc. to FFO attributable to OUTFRONT Media Inc. and AFFO attributable to OUTFRONT Media Inc., and Revenues to organic revenues. Analysis of Results of Operations Revenues We derive Revenues primarily from providing advertising space to customers on our advertising structures and sites. Our traditional contracts with customers generally cover periods ranging from four weeks to one year. Revenues from billboard displays are recognized as rental income on a straight-line basis over the contract term. Transit display revenues are recognized based on the level of units displayed in proportion to the total units to be displayed over the contract period. Billboard display and Transit display revenues generated from programmatic advertising platforms are recognized as rental income as the related advertisement is displayed. Billboard and Transit display revenues derived from impression-based sales contracts fulfilled on direct sales advertising platforms are recognized as revenue over the contract period based pro-rata on the number of impressions delivered in proportion to the total number of impressions to be delivered. Revenues generated from programmatic advertising platforms are based on agreements with the platforms, rather than direct contracts with individual advertisers. (See Item 8., Note 12. Revenues to the Consolidated Financial Statements.) 2024 vs 2023 Year Ended December 31, % Change (in millions, except percentages) 2024 2023 Total revenues $ 1,830.9 $ 1,820.6 1 % Organic revenues (a) $ 1,796.0 $ 1,728.5 4 Non-organic revenues 34.9 92.1 (62) Total revenues $ 1,830.9 $ 1,820.6 1 (a) Organic revenues exclude revenues associated with the impact of the Transaction (“non-organic revenues”). 39 Total revenues increased $10.3 million, or 1%, in 2024 compared to 2023, primarily due to revenue increases in our Billboard and Transit segments, partially offset by the impact of the Transaction. Organic revenues increased $67.5 million, or 4%, in 2024 compared to 2023, primarily due to revenue increases in our Billboard and Transit segments. See the “Segment Results of Operations” section of this MD&A. In 2024 and 2023, non-organic revenues reflect the impact of the Transaction. 2023 vs 2022 Year Ended December 31, % Change (in millions, except percentages) 2023 2022 Total revenues $ 1,820.6 $ 1,772.1 3 % Organic revenues (a) $ 1,805.4 $ 1,757.9 3 Non-organic revenues 15.2 14.2 7 Total revenues $ 1,820.6 $ 1,772.1 3 (a) Organic revenues exclude revenues associated with a significant acquisition and the impact of foreign currency exchange rates (“non-organic revenues”). Total revenues increased $48.5 million, or 3%, and organic revenues increased $47.5 million, or 3%, in 2023 compared to 2022, primarily due to an increase in Billboard segment revenues. See the “Segment Results of Operations” section of this MD&A. In 2023 and 2022, non-organic revenues reflect the impact of a significant acquisition. In 2022, non-organic revenues also reflect the impact of foreign currency exchange rates. Expenses Year Ended December 31, % Change (in millions, except percentages) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Expenses: Operating $ 949.0 $ 963.1 $ 916.6 (1) % 5 % Selling, general and administrative 447.9 429.7 422.1 4 2 Net (gain) loss on dispositions (160.9) (14.2) 0.2 * * Impairment charges 17.9 534.7 — * * Depreciation 79.5 79.3 77.4 — 2 Amortization 72.0 81.2 73.3 (11) 11 Total expenses $ 1,405.4 $ 2,073.8 $ 1,489.6 (32) 39 * Calculation is not meaningful. Operating Expenses Our operating expenses are composed of the following: Billboard property lease expenses . These expenses reflect the cost of leasing the real property on which our billboards are mounted. These lease agreements have terms varying between one month and multiple years, and usually provide renewal options. Rental expenses are comprised of a fixed rental amount and under certain agreements, also include contingent rent, which varies based on the revenues we generate from the leased site. The fixed portion of property leases are generally paid in advance for periods ranging from one to twelve months and expensed evenly over the contract term. Contingent rent is generally paid in arrears and is expensed as incurred when the related revenues are recognized. Transit franchise expenses . These expenses reflect costs charged by municipalities and transit operators under transit advertising contracts. All of these contracts have fixed terms, are typically terminable for convenience at the option of the governmental entity (other than with respect to the MTA), and generally provide for payments to the governmental entity based on a percentage of the revenues generated under the contract and/or a guaranteed minimum annual payment. The costs that are determined based on a percentage of revenues are expensed as incurred when the related revenues are recognized, and any guaranteed minimum annual payment is expensed over the contract term. 40 Posting, maintenance and other site-related expenses . These expenses primarily reflect costs associated with posting and rotation, materials, repairs and maintenance, utilities and property taxes. Year Ended December 31, % Change (in millions, except percentages) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Operating expenses: Billboard property lease $ 482.8 $ 499.7 $ 459.9 (3) % 9 % Transit franchise 238.1 240.3 235.3 (1) 2 Posting, maintenance and other 228.1 223.1 221.4 2 1 Total operating expenses $ 949.0 $ 963.1 $ 916.6 (1) 5 Billboard property lease expenses represented 34% of total billboard revenues in 2024, 35% in 2023 and 33% in 2022. The decrease in billboard property lease expenses as a percentage of total billboard revenues in 2024 compared to 2023 is primarily due to lower variable billboard property lease costs driven by higher relative 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 Item 8., Note 5. Leases to the Consolidated Financial Statements) and the impact of new and lost locations, including through acquisitions. The increase in billboard property lease expenses as a percentage of total billboard revenues in 2023 compared to 2022 is primarily due to an increase in variable billboard property lease expenses (see Item 8., Note 5. Leases to the Consolidated Financial Statements), which are primarily attributable to total billboard revenue increases in large markets and high profile locations, and the impact of new locations, including through acquisitions. Transit franchise expenses represented 61% of total transit display revenues in 2024, 65% in 2023 and 62% in 2022. The decrease in transit franchise expenses, as a percentage of total transit display revenues in 2024 compared to 2023 was primarily driven by MTA revenues growing at a faster rate than the inflationary adjustment 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. The increase in transit franchise expenses, as a percentage of total transit display revenues in 2023 compared to 2022, was primarily driven by higher guaranteed minimum annual payments to the MTA. Billboard property lease and transit franchise expenses decreased by $19.1 million in 2024 compared to 2023, 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 and lost locations, including through acquisitions. Billboard property lease and transit franchise expenses increased by $44.8 million in 2023 compared to 2022, primarily due to higher variable billboard property lease expenses, the impact of new locations, including through acquisitions, and higher guaranteed minimum annual payments to the MTA. Posting, maintenance and other expenses, as a percentage of revenues, were 12% in each of 2024, 2023 and 2022. Posting, maintenance and other expenses increased $5.0 million, or 2%, in 2024 compared to 2023, primarily due to higher compensation-related expenses, higher maintenance and utilities costs due to inflationary cost increases, and higher posting and rotation costs caused by higher business activity, 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 $1.7 million, or 1%, in 2023 compared to 2022, primarily due to higher compensation-related expenses and higher maintenance and utilities cost, driven by inflationary cost increases in 2023, partially offset by lower posting and rotation costs. Selling, General and Administrative Expenses (“SG&A”) SG&A expenses represented 24% of Revenues in each of 2024, 2023 and 2022. SG&A expenses increased $18.2 million, or 4%, in 2024 compared to 2023, primarily due to higher compensation-related expenses, including salaries, commissions and severance, higher professional fees, as a result of a management consulting project and higher rent related to new offices, partially offset by the impact of the Transaction. SG&A expenses increased $7.6 million, or 2%, in 2023 compared to 2022, primarily due to the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the Company to certain employees, higher professional fees, rent related to new offices, higher insurance costs and a higher provision for doubtful accounts, partially offset by lower compensation-related expenses. We continue to evaluate methods to lower SG&A expense growth. 41 Net (Gain) Loss on Dispositions Net gain on dispositions increased by $146.7 million in 2024 compared to 2023, primarily due to the impact of the Transaction. Net gain on dispositions was $14.2 million in 2023 compared to a Net loss on dispositions of $0.2 million in 2022. The Net gain on dispositions in 2023 was primarily related to the sale of three parcels of land and the related structures in Los Angeles, California, (see Item 8., Note 13. Acquisitions and Dispositions : Dispositions : Los Angeles Office and Operations Center to the Consolidated Financial Statements) and in St. Louis, Missouri. Impairment Charges We recorded impairment charges of $17.9 million in 2024 and $534.7 million in 2023. As a result of negative aggregate undiscounted 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, and December 31, 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 each of the three months ended September 30, 2024, and December 31, 2024. In 2023, we recorded impairment charges of $534.7 million, primarily representing $466.2 million of impairment charges related to our MTA asset group (see Note 4. Long-Lived Assets to the Consolidated Financial Statements) and an impairment charge of $47.6 million representing the entire goodwill balance associated with our historical Transit reporting unit. Depreciation Depreciation increased $0.2 million in 2024 compared to 2023, primarily due to higher depreciation related to the change in estimated useful life of certain advertising displays, partially offset by the impact of the Transaction (see Note 13. Acquisitions and Dispositions : Dispositions : Canadian Business ). Depreciation increased $1.9 million, or 2%, in 2023 compared to 2022, primarily due to capital expenditures and acquisitions in 2022, partially offset by an increase in fully-depreciated assets. Amortization Amortization decreased $9.2 million, or 11%, in 2024 compared to 2023, due primarily to the impact of the Transaction (see Note 13. Acquisitions and Dispositions : Dispositions : Canadian Business ) and lower amortization related to franchise agreements associated with the MTA, partially offset by higher amortization of leasehold interest intangibles recorded related to asset acquisitions. Amortization increased $7.9 million, or 11%, in 2023 compared to 2022, due primarily to higher amortization of leasehold interest intangibles recorded related to asset acquisitions, partially offset by lower amortization related to franchise agreements associated with the MTA. Interest Expense Interest expense, net, was $156.2 million (including $6.1 million of deferred financing costs) in 2024, $158.4 million (including $6.7 million of deferred financing costs) in 2023 and $131.8 million (including $6.5 million of deferred financing costs) in 2022. The decrease in Interest expense, net, in 2024 compared to 2023, was primarily due to a lower average debt balance, partially offset by higher interest rates. The increase in Interest expense, net, in 2023 compared to 2022, was primarily due to higher interest rates and a higher average debt balance. Loss on Extinguishment of Debt In 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. In 2023, we recorded a Loss on extinguishment of debt of $8.1 million relating to the redemption of all of our outstanding 6.250% Senior Unsecured Notes due 2025 in the fourth quarter of 2023. Benefit (Provision) for Income Taxes Provision for income taxes increased $7.0 million, or 175%, in 2024 compared to 2023, due primarily to a gain on disposition related the Transaction. Provision for income taxes decreased $5.4 million, or 57%, in 2023 compared to 2022, due primarily to 42 a valuation allowance against our U.S. taxable REIT subsidiary (“TRS”) accumulated deferred tax assets in 2022. The effective income tax rate was 4.1% for 2024, 0.9% for 2023 and 6.0% for 2022. Net Income (Loss) Net income before allocation to redeemable and non-redeemable noncontrolling interests was $258.7 million in 2024 compared to a Net loss before allocation to redeemable and non-redeemable noncontrolling interests of $424.5 million in 2023, driven by higher operating income, due primarily to higher impairment charges incurred in 2023 and a gain on disposition related to the Transaction, and a lower loss on extinguishment of debt, partially offset by a higher provision for income taxes. Net loss before allocation to redeemable and non-redeemable noncontrolling interests was $424.5 million in 2023 compared to Net income before allocation to redeemable and non-redeemable noncontrolling interests of $143.9 million in 2022, driven by lower operating income, due primarily to impairment charges and higher interest expense. Reconciliation of Non-GAAP Financial Measures Adjusted OIBDA We calculate Adjusted OIBDA as operating income (loss) before depreciation, amortization, net (gain) loss on dispositions, stock-based compensation and impairment charges. We calculate Adjusted OIBDA margin by dividing Adjusted OIBDA by total revenues. Adjusted OIBDA and Adjusted OIBDA margin are among the primary measures we use for managing our business, evaluating our operating performance and planning and forecasting future periods, as each is an important indicator of our operational strength and business performance. Our management believes users of our financial data are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in managing, planning and executing our business strategy. Our management also believes that the presentations of Adjusted OIBDA and Adjusted OIBDA margin, as supplemental measures, are useful in evaluating our business because eliminating certain non-comparable items highlight operational trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures. 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. FFO and AFFO 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 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 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. Our management believes users of our financial data are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in managing, planning and executing our business strategy. Our management also believes that the presentations of FFO and AFFO, as supplemental measures, are useful in evaluating our business because adjusting results to reflect items that have more bearing on the operating performance of REITs highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures. 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 to compare our results to other companies in our industry, as well as to REITs. Since Adjusted OIBDA, Adjusted OIBDA margin, FFO and AFFO are not measures calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, operating income (loss), net income (loss) attributable to 43 OUTFRONT Media Inc., and revenues, the most directly comparable GAAP financial measures, as indicators of operating performance. These measures, as we calculate them, may not be comparable to similarly titled measures employed by other companies. 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 income (loss) attributable to OUTFRONT Media Inc. to FFO attributable to OUTFRONT Media Inc. and AFFO attributable to OUTFRONT Media Inc. Year Ended December 31, (in millions) 2024 2023 Total revenues $ 1,830.9 $ 1,820.6 Operating income (loss) 425.5 (253.2) Net gain on dispositions (160.9) (14.2) Impairment charges 17.9 534.7 Depreciation 79.5 79.3 Amortization 72.0 81.2 Stock-based compensation 30.8 28.4 Adjusted OIBDA $ 464.8 $ 456.2 Adjusted OIBDA margin 25.4 % 25.1 % Net income (loss) attributable to OUTFRONT Media Inc. $ 258.2 $ (425.2) Depreciation of billboard advertising structures 59.5 60.2 Amortization of real estate-related intangible assets 65.5 71.1 Amortization of direct lease acquisition costs (a) 58.4 55.4 Net gain on disposition of real estate assets (160.9) (14.2) Impairment charges (b) 13.1 388.2 Adjustment related to redeemable and non-redeemable noncontrolling interests (0.3) (0.3) Income tax effect of adjustments (c) 10.1 — FFO attributable to OUTFRONT Media Inc. 303.6 135.2 Non-cash portion of income taxes (0.5) (2.7) Cash paid for direct lease acquisition costs (a) (56.9) (58.2) Maintenance capital expenditures (21.7) (30.2) Other depreciation 20.0 19.1 Other amortization 6.5 10.1 Impairment charges on non-real estate assets (b) 4.8 146.5 Stock-based compensation 30.8 28.4 Non-cash effect of straight-line rent 10.7 9.7 Accretion expense 2.9 3.1 Amortization of deferred financing costs 6.1 6.7 Loss on extinguishment of debt 1.2 8.1 AFFO attributable to OUTFRONT Media Inc. $ 307.5 $ 275.8 (a) Variable commissions directly associated with billboard revenues. (b) Primarily Impairment charges related to our Transit reporting unit and MTA asset group (see Note 4. Long-Lived Assets to the Consolidated Financial Statements). (c) Income tax effect related to Net gain on disposition of real estate assets. FFO attributable to OUTFRONT Media Inc. in 2024 of $303.6 million increased $168.4 million, or 125%, compared to 2023, due primarily to lower impairment charges on non-real estate assets. AFFO attributable to OUTFRONT Media Inc. in 2024 of $307.5 million increased $31.7 million, or 11%, compared to 2023, due primarily to higher Adjusted OIBDA, lower maintenance capital expenditures and lower cash paid for income taxes. 44 Segment Results of Operations We present Adjusted OIBDA as the primary measure of profit and loss for our reportable segments. (See the “Key Performance Indicators” section of this MD&A and Item 8., Note 19. Segment Information to the Consolidated Financial Statements.) We currently manage our operations through two reportable operating segments—(1) Billboard and (2) Transit . Prior to its sale, our Canadian operations comprised our International operating segment, which did not meet the criteria to be a reportable segment and accordingly, was included in Other . Historical operating results of our Canadian operations are included in Other (see Item 8., Note 19. Segment Information to the Consolidated Financial Statements) through the date of sale (see Item 8., Note 13. Acquisitions and Dispositions : Dispositions : Canadian Business to the Consolidated Financial Statements). Also included in Other are operating results for third-party digital equipment sales. The following table presents our Revenues , Adjusted OIBDA and Operating income (loss) by segment in 2024, 2023 and 2022. Year Ended December 31, (in millions) 2024 2023 2022 Revenues: Billboard $ 1,409.3 $ 1,369.7 $ 1,308.8 Transit 383.8 352.6 365.1 Other 37.8 98.3 98.2 Total revenues $ 1,830.9 $ 1,820.6 $ 1,772.1 Operating income (loss) $ 425.5 $ (253.2) $ 282.5 Net (gain) loss on dispositions (160.9) (14.2) 0.2 Impairment charges 17.9 534.7 — Depreciation 79.5 79.3 77.4 Amortization 72.0 81.2 73.3 Stock-based compensation (a) 30.8 28.4 33.8 Total Adjusted OIBDA $ 464.8 $ 456.2 $ 467.2 Adjusted OIBDA: Billboard $ 520.5 $ 500.6 $ 492.2 Transit 8.3 (16.0) 3.8 Other 2.8 23.1 20.6 Corporate (66.8) (51.5) (49.4) Total Adjusted OIBDA $ 464.8 $ 456.2 $ 467.2 Operating income (loss): Billboard $ 385.9 $ 382.2 $ 377.0 Transit (20.7) (566.9) (19.2) Other 157.9 11.4 7.9 Corporate (97.6) (79.9) (83.2) Total operating income (loss) $ 425.5 $ (253.2) $ 282.5 (a) Stock-based compensation is classified as Corporate expense. 45 Billboard 2024 vs 2023 Year Ended December 31, % Change (in millions, except percentages) 2024 2023 Operating income $ 385.9 $ 382.2 1 % Net gain on dispositions (5.9) (14.2) (58) Depreciation 72.5 65.6 11 Amortization 68.0 67.0 1 Adjusted OIBDA $ 520.5 $ 500.6 4 Revenues $ 1,409.3 $ 1,369.7 3 Operating expenses: Billboard property lease (472.3) (477.3) (1) Posting, maintenance and other (148.4) (134.9) 10 Total operating expenses (620.7) (612.2) 1 SG&A expenses (268.1) (256.9) 4 Adjusted OIBDA $ 520.5 $ 500.6 4 Adjusted OIBDA margin 36.9 % 36.5 % New York metropolitan area revenues as a percentage of Billboard segment revenues 9 % 10 % Los Angeles metropolitan area revenues as a percentage of Billboard segment revenues 15 % 16 % Billboard segment revenues increased $39.6 million, or 3%, in 2024 compared to 2023, reflecting an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues, partially offset by the impact of new and lost billboards in the period, including insignificant acquisitions, and lower proceeds from condemnations. We generated approximately 39% in 2024 and 40% in 2023 of our Billboard segment revenues from national advertising campaigns. Billboard segment property lease expenses represented 34% of Billboard segment revenues in 2024 and 35% in 2023. Billboard segment property lease expenses decreased $5.0 million, or 1%, in 2024 compared to 2023, primarily driven by lower variable lease costs. Billboard segment posting maintenance and other expenses increased $13.5 million, or 10%, in 2024 compared to 2023, primarily driven by higher compensation-related expenses, higher maintenance and utilities cost, and higher office expenses, driven by inflationary cost increases. SG&A expenses in the Billboard segment increased $11.2 million, or 4%, in 2024 compared to 2023, primarily driven by higher compensation-related expenses and higher rent related to new offices, partially offset by lower professional fees. Billboard segment Adjusted OIBDA increased $19.9 million, or 4%, in 2024 compared to 2023. Billboard segment Adjusted OIBDA margin was 36.9% in 2024 and 36.5% in 2023. 46 2023 vs 2022 Year Ended December 31, % Change (in millions, except percentages) 2023 2022 Operating income $ 382.2 $ 377.0 1 % Net gain on dispositions (14.2) (0.1) * Depreciation 65.6 59.2 11 Amortization 67.0 56.1 19 Adjusted OIBDA $ 500.6 $ 492.2 2 Revenues $ 1,369.7 $ 1,308.8 5 Organic revenues (a) $ 1,354.5 $ 1,297.8 4 Non-organic revenues 15.2 11.0 38 Total revenues 1,369.7 1,308.8 5 Operating expenses: Billboard property lease (477.3) (436.1) 9 Posting, maintenance and other (134.9) (132.5) 2 Total operating expenses (612.2) (568.6) 8 SG&A expenses (256.9) (248.0) 4 Adjusted OIBDA $ 500.6 $ 492.2 2 Adjusted OIBDA margin 36.5 % 37.6 % New York metropolitan area revenues as a percentage of Billboard segment revenues 10 % 10 % Los Angeles metropolitan area revenues as a percentage of Billboard segment revenues 16 % 17 % * Calculation is not meaningful. (a) Organic revenues associated with a significant acquisition (“non-organic revenues”). Billboard segment revenues increased $60.9 million, or 5%, in 2023 compared to 2022, reflecting an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues, the impact of new and lost billboards in the period, including acquisitions, and higher proceeds from condemnations. We generated approximately 40% in each of 2023 and 2022 of our Billboard segment revenues from national advertising campaigns. In 2023 and 2022, non-organic revenues reflect the impact of a significant acquisition. Billboard segment property lease expenses represented 35% of Billboard segment revenues in 2023 and 33% in 2022. Billboard segment property lease expenses increased $41.2 million, or 9%, in 2023 compared to 2022, primarily driven by higher variable billboard property lease expenses. Billboard segment posting maintenance and other expenses increased $2.4 million, or 2%, in 2023 compared to 2022, primarily driven by higher compensation-related expenses and higher maintenance and utilities cost, driven by inflationary cost increases in 2023, partially offset by lower posting and rotation costs. SG&A expenses in the Billboard segment increased $8.9 million, or 4%, in 2023 compared to 2022, primarily driven by higher insurance costs, higher compensation-related expenses, higher rent related to new offices, higher professional fees and a higher provision for doubtful accounts. Billboard segment Adjusted OIBDA increased $8.4 million, or 2%, in 2023 compared to 2022. Billboard segment Adjusted OIBDA margin was 36.5% in 2023 and 37.6% in 2022. The decrease in Billboard segment Adjusted OIBDA margins in 2023 compared to 2022 was due primarily to a higher increase in Billboard segment operating expenses, due to an increase in Billboard segment property lease expenses, and an increase in Billboard segment SG&A expenses, compared to a lower increase in Billboard segment revenues. 47 Transit 2024 vs 2023 Year Ended December 31, % Change (in millions, except percentages) 2024 2023 Operating loss $ (20.7) $ (566.9) (96) % Net loss on dispositions 0.1 — * Impairment charges 17.9 534.7 (97) Depreciation 7.0 8.8 (20) Amortization 4.0 7.4 (46) Adjusted OIBDA $ 8.3 $ (16.0) * Revenues $ 383.8 $ 352.6 9 Operating expenses: Transit franchise (236.3) (235.6) — Posting, maintenance and other (68.2) (62.4) 9 Total operating expenses (304.5) (298.0) 2 SG&A expenses (71.0) (70.6) 1 Adjusted OIBDA $ 8.3 $ (16.0) * Adjusted OIBDA margin 2.2 % (4.5) % New York metropolitan area revenues as a percentage of Transit segment revenues 57 % 56 % Los Angeles metropolitan area revenues as a percentage of Transit segment revenues 8 % 10 % * Calculation is not meaningful. Transit segment revenues increased $31.2 million, or 9%, in 2024 compared to 2023, 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. We generated approximately 55% in each of 2024 and 2023 of our Transit segment revenues from national advertising campaigns. Transit segment franchise expenses represented 62% of Transit segment revenues in 2024 and 67% in 2023. Transit segment franchise expenses increased $0.7 million in 2024 compared to 2023, primarily driven by higher guaranteed minimum annual payments to the MTA, partially offset by the net impact of new and lost transit franchise contracts. Transit segment posting, maintenance and other expenses increased $5.8 million, or 9%, in 2024 compared to 2023, primarily driven by higher posting and rotation costs, driven by higher business activity, and higher compensation-related expenses. SG&A expenses in the Transit segment increased $0.4 million, or 1%, in 2024 compared to 2023, primarily driven by higher compensation-related expenses, partially offset by lower professional fees. In 2024, we recorded impairment charges of $17.9 million in the Transit segment, primarily related to impairment charges with respect to our MTA asset group and our historical Transit reporting unit. In 2023, we recorded impairment charges of $534.7 million primarily related to impairment charges with respect to our MTA asset group and our historical Transit reporting unit (see Item 8., Note 4. Long-Lived Assets to the Consolidated Financial Statements). Transit segment Adjusted OIBDA was $8.3 million in 2024 compared an Adjusted OIBDA loss of $16.0 million in 2023. The increase in Transit segment Adjusted OIBDA was due primarily to a higher increase in Transit segment revenues compared to lower increases in Transit segment SG&A expenses and guaranteed minimum annual payments to the MTA. 48 2023 vs 2022 Year Ended December 31, % Change (in millions, except percentages) 2023 2022 Operating loss $ (566.9) $ (19.2) * Net loss on dispositions — 0.3 * Impairment charges 534.7 — * Depreciation 8.8 12.4 (29) % Amortization 7.4 10.3 (28) Adjusted OIBDA $ (16.0) $ 3.8 * Revenues $ 352.6 $ 365.1 (3) Operating expenses: Transit franchise (235.6) (230.5) 2 Posting, maintenance and other (62.4) (62.5) — Total operating expenses (298.0) (293.0) 2 SG&A expenses (70.6) (68.3) 3 Adjusted OIBDA $ (16.0) $ 3.8 * Adjusted OIBDA margin (4.5) % 1.0 % New York metropolitan area revenues as a percentage of Transit segment revenues 56 % 55 % Los Angeles metropolitan area revenues as a percentage of Transit segment revenues 10 % 12 % * Calculation is not meaningful. Transit segment revenues decreased $12.5 million, or 3%, in 2023 compared to 2022, driven by a decrease in average revenue per display (yield), driven by weaker market conditions in national advertising, which primarily impacted advertising sales on certain above-ground advertising displays, partially offset by the impact of a new transit franchise contract. We generated approximately 55% in 2023 and 60% in 2022 of our Transit segment revenues from national advertising campaigns. Transit segment franchise expenses represented 67% of Transit segment revenues in 2023 and 63% in 2022. Transit segment franchise expenses increased $5.1 million, or 2%, in 2023 compared to 2022, primarily driven by higher guaranteed minimum annual payments to the MTA. Posting, maintenance and other expenses decreased $0.1 million in 2023 compared to 2022, primarily driven by higher posting and rotation costs, partially offset by higher compensation-related expenses. SG&A expenses in the Transit segment increased $2.3 million, or 3%, in 2023 compared to 2022, primarily driven by higher professional fees, higher rent related to new offices and higher insurance costs, partially offset by lower compensation-related expenses. In 2023, we recorded impairment charges of $534.7 million in the Transit segment, primarily related to impairment charges related to our MTA asset group and our historical Transit reporting unit (see Item 8., Note 4. Long-Lived Assets to the Consolidated Financial Statements). Transit segment Adjusted OIBDA was a loss of $16.0 million in 2023 compared to Transit segment Adjusted OIBDA of $3.8 million in 2022. The decrease in Transit segment Adjusted OIBDA was due primarily to increases in the MTA guaranteed minimum annual payments in 2023 and an increase in Transit segment SG&A expenses, compared to a lower increase in Transit segment revenues. 49 Other 2024 vs 2023 Year Ended December 31, % Change (in millions, except percentages) 2024 2023 Operating income $ 157.9 $ 11.4 * Net gain on dispositions (155.1) — * Depreciation — 4.9 * Amortization — 6.8 * Adjusted OIBDA $ 2.8 $ 23.1 (88) % Revenues $ 37.8 $ 98.3 (62) Organic revenues (a) $ 2.9 $ 6.2 (53) Non-organic revenues 34.9 92.1 (62) Total revenues 37.8 98.3 (62) Operating expenses: Billboard property lease (10.5) (22.4) (53) Transit franchise (1.8) (4.7) (62) Posting, maintenance and other (11.5) (25.8) (55) Total operating expenses (23.8) (52.9) (55) SG&A expenses (11.2) (22.3) (50) Adjusted OIBDA $ 2.8 $ 23.1 (88) Adjusted OIBDA margin 7.4 % 23.5 % * Calculation is not meaningful. (a) Organic revenues exclude the impact of the Transaction (“non-organic revenues”). Total Other revenues decreased $60.5 million, or 62%, in 2024 compared to 2023, primarily driven by the impact of the Transaction and a decline in third-party digital equipment sales. In 2024 and 2023, non-organic revenues reflect the impact of the Transaction. Organic Other revenues decreased $3.3 million, or 53%, in 2024, compared to 2023, primarily driven by a decline in third-party digital equipment sales. Other operating expenses decreased $29.1 million, or 55%, in 2024 compared to 2023, primarily driven by the impact of the Transaction and lower costs related to third-party digital equipment sales. Other SG&A expenses decreased $11.1 million, or 50%, in 2024 compared to 2023, primarily driven by the impact of the Transaction. Other Adjusted OIBDA decreased $20.3 million, or 88%, in 2024 compared to 2023, due primarily to the impact of the Transaction and a decline in third-party digital equipment sales. 50 2023 vs 2022 Year Ended December 31, % Change (in millions, except percentages) 2023 2022 Operating income $ 11.4 $ 7.9 44 % Depreciation 4.9 5.8 (16) Amortization 6.8 6.9 (1) Adjusted OIBDA $ 23.1 $ 20.6 12 Revenues $ 98.3 $ 98.2 — Organic revenues (a) $ 98.3 $ 95.0 3 Non-organic revenues — 3.2 * Total revenues 98.3 98.2 — Operating expenses: Billboard property lease (22.4) (23.8) (6) Transit franchise (4.7) (4.8) (2) Posting, maintenance and other (25.8) (26.4) (2) Total operating expenses Total operating expenses (52.9) (55.0) (4) SG&A expenses (22.3) (22.6) (1) Adjusted OIBDA $ 23.1 $ 20.6 12 Adjusted OIBDA margin 23.5 % 21.0 % * Calculation is not meaningful. (a) Organic revenues exclude the impact of foreign currency exchange rates (“non-organic revenues”). Other revenues increased $0.1 million in 2023 compared to 2022, primarily driven by an increase in average revenue per display (yield), partially offset by the impact of foreign currency exchange rates. In 2022, non-organic revenues reflect the impact of foreign currency exchange rates. Organic Other revenues increased $3.3 million, or 3%, in 2023, compared to 2022, primarily driven by the impact of new billboards in the period, including acquisitions, and an increase in average revenue per display (yield). Other operating expenses decreased $2.1 million, or 4%, in 2023 compared to 2022, primarily driven by lower expenses in Canada, partially offset by the impact of foreign currency exchange rates. Other SG&A expenses decreased $0.3 million, or 1%, in 2023 compared to 2022, primarily driven by lower expenses in Canada, partially offset by the impact of foreign currency exchange rates. Other Adjusted OIBDA increased $2.5 million, or 12%, in 2023 compared to 2022, due primarily to an increase in average revenue per display (yield) and lower expenses in Canada, partially offset by the impact of foreign currency exchange rates. Corporate Corporate expenses primarily include expenses associated with employees who provide centralized services. Corporate expenses, excluding stock-based compensation, were $66.8 million in 2024 and $51.5 million in 2023 and $49.4 million in 2022. Corporate expenses increased $15.3 million in 2024 compared to 2023, primarily due to higher compensation-related expenses, including salaries, commissions and severance, and higher professional fees, as a result of a management consulting project. Corporate expenses increased $2.1 million in 2023 compared to 2022, primarily due to the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the Company to certain employees and higher professional fees, partially offset by lower compensation-related expenses. 51 Liquidity and Capital Resources As of December 31, % (in millions, except percentages) 2024 2023 Change Assets: Cash and cash equivalents $ 46.9 $ 36.0 30 % Receivables, less allowances of $20.6 in 2024 and $17.2 in 2023 305.3 287.6 6 Prepaid lease and transit franchise costs 4.0 4.5 (11) Other prepaid expenses 17.8 19.2 (7) Assets held for sale — 34.6 * Other current assets 11.8 15.7 (25) Total current assets 385.8 397.6 (3) Liabilities: Accounts payable 51.4 55.5 (7) Accrued compensation 56.7 41.4 37 Accrued interest 34.5 34.2 1 Accrued lease and franchise costs 82.8 80.0 4 Other accrued expenses 54.3 56.2 (3) Deferred revenues 42.8 37.7 14 Short-term debt 10.0 65.0 (85) Short-term operating lease liabilities 168.7 180.9 (7) Liabilities held for sale — 24.1 * Other current liabilities 19.6 18.0 9 Total current liabilities 520.8 593.0 (12) Working capital $ (135.0) $ (195.4) (31) * Calculation is not meaningful. We continually project anticipated cash requirements for our operating, investing and financing needs as well as cash flows generated from operating activities available to meet these needs. Due to seasonal advertising patterns and influences on advertising markets, our revenues and operating income are typically highest in the fourth quarter, during the holiday shopping season, and lowest in the first quarter, as advertisers adjust their spending following the holiday shopping season. Further, certain of our municipal transit contracts require guaranteed minimum annual payments to be paid on a monthly or quarterly basis, as applicable. Our short-term cash requirements primarily include payments for operating leases, guaranteed minimum annual payments, interest, capital expenditures, equipment deployment costs and dividends. Funding for short-term cash needs will come primarily from our cash on hand, operating cash flows, our ability to issue debt and equity securities, and borrowings under the Revolving Credit Facility (as defined below), the AR Facility (as defined below) or other credit facilities that we may establish, to the extent available. 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. Our long-term cash needs include principal payments on outstanding indebtedness and commitments related to operating leases and franchise and other agreements, including any related guaranteed minimum annual payments, and equipment deployment costs. Funding for long-term cash needs will come from our cash on hand, operating cash flows, our ability to issue debt and equity securities, and borrowings under the Revolving Credit Facility or other credit facilities that we may establish, to the extent available. Although we have taken several actions to date to enhance our financial flexibility and increase our liquidity, our short-term and long-term cash needs and related funding capability may be adversely affected if cash on hand and operating cash flows 52 decrease in 2025, and our ability to issue debt and equity securities and/or borrow under our existing or new credit facilities on reasonable pricing terms, or at all, may become uncertain. (See the “Overview” section of this MD&A.) Working capital was a deficit of $135.0 million as of December 31, 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”): • 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, which amounts are subject to the MTA’s ability to fulfill its pre-installation obligations under the MTA Agreement. 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 Item 8., Note 4. Long-Lived Assets to the Consolidated Financial Statements). If we do not recoup all costs of deploying advertising and communications screens with respect to the New Inventory by the end of the term of the MTA Agreement, the MTA will be obligated to reimburse us for these costs. 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 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. We expect our MTA equipment deployment costs to be approximately $35.0 million in 2025. 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 will decline now that we have substantially completed our initial deployment during 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. We may utilize cash on hand and/or incremental third-party financing to fund equipment deployment costs over the next couple of years. However, we cannot reasonably estimate the aggregate financing amount, if any, at this time. As of December 31, 2024, we have issued surety bonds in favor of the MTA totaling approximately $136.0 million, which amount is subject to 53 change as equipment installations are completed and revenues are generated. As indicated in the table below, we incurred $29.3 million related to MTA equipment deployment costs in 2024 (which includes equipment deployment costs related to future deployments), for a total of $608.9 million to date, of which $33.9 million had been recouped from incremental revenues to date. As of December 31, 2024, 26,245 digital displays had been installed, composed of 5,010 digital advertising screens on subway and train platforms and entrances, 15,224 smaller-format digital advertising screens on rolling stock and 6,011 MTA communications displays. In the fourth quarter of 2024, 900 installations occurred, for a total of 6,548 installations occurring in 2024. As a result of negative aggregate undiscounted 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, and December 31, 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 each of the three months ended September 30, 2024, and December 31, 2024. (See the “Critical Accounting Policies” section of this MD&A and Item 8., Note 4. Long-lived Assets to the Consolidated Financial Statements.) We currently expect positive aggregate cash flows on an undiscounted basis 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. There can be no assurance that these estimates and assumptions will prove to be an accurate prediction of the future, and a downward revision of these estimates and/or assumptions would decrease our cash flows, which could result in additional impairment charges in the future. (in millions) Beginning Balance Deployment Costs Incurred Recoupment/MTA Funding Amortization/Impairment Reclassification Ending Balance Year Ended December 31, 2024: Other current assets $ 1.1 $ — $ — $ — $ — $ 1.1 Intangible assets (franchise agreements) — 29.3 — (18.5) — 10.8 Total $ 1.1 $ 29.3 $ — $ (18.5) $ — $ 11.9 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 On February 25, 2025, we announced that our board of directors approved a quarterly cash dividend of $0.30 per share on our common stock, payable on March 31, 2025, to stockholders of record at the close of business on March 7, 2025. 54 Debt Debt, net, consists of the following: As of December 31, (in millions, except percentages) 2024 2023 Short-term debt: AR Facility $ 10.0 $ 65.0 Total short-term debt 10.0 65.0 Long-term debt: Term loan, due 2026 $ 399.5 $ 598.9 Senior secured notes: 7.375% senior secured notes, due 2031 450.0 450.0 Senior unsecured notes: 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 1,650.0 Debt issuance costs (17.0) (22.4) Total long-term debt, net 2,482.5 2,676.5 Total debt, net $ 2,492.5 $ 2,741.5 Weighted average cost of debt 5.4 % 5.7 % Payments Due by Period (in millions) Total 2025 2026-2027 2028-2029 2030 and thereafter Long-term debt $ 2,500.0 $ — $ 1,050.0 $ 500.0 $ 950.0 Interest 582.6 143.3 241.7 144.5 $ 53.1 Total $ 3,082.6 $ 143.3 $ 1,291.7 $ 644.5 $ 1,003.1 Term Loan The interest rate on the term loan due in 2026 (the “Term Loan”) was 6.1% per annum as of December 31, 2024. As of December 31, 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 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 December 31, 2024, there were no outstanding borrowings under the Revolving Credit Facility. 55 The commitment fee based on the amount of unused commitments under the Revolving Credit Facility was $2.0 million in 2024, $1.7 million in 2023 and $1.6 million in 2022. As of December 31, 2024, we had issued letters of credit totaling approximately $5.5 million against the letter of credit facility sublimit under the Revolving Credit Facility. Standalone Letter of Credit Facilities As of December 31, 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 in 2024, 2023 and 2022 were immaterial. Accounts Receivable Securitization Facilities As of December 31, 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; and (ii) modified the upfront fee and modified the program fee so that the program fee may increase or decrease based on the Company’s Consolidated Net Secured Leverage Ratio (as defined and described below). The amendment to the agreements governing the AR Facility do not change how we account for the AR Facility as a collateralized financing activity. In connection with the AR Facility, Outfront Media LLC and Outfront Media Outernet Inc., each a wholly-owned subsidiary of the Company, and certain of the Company’s TRSs (the “Originators”), will sell and/or contribute their respective existing and future accounts receivable and certain related assets to either Outfront Media Receivables LLC, a special purpose vehicle and wholly-owned subsidiary of the Company relating to the Company’s qualified REIT subsidiary accounts receivable assets (the “QRS SPV”) or Outfront Media Receivables TRS, LLC a special purpose vehicle and wholly-owned subsidiary of the Company relating to the Company’s TRS accounts receivable assets (the “TRS SPV” and together with the QRS SPV, the “SPVs”). 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, 2024, there were $10.0 million of outstanding borrowings under the AR Facility, at a borrowing rate of 5.9%. As of December 31, 2024, borrowing capacity remaining under the AR Facility was $140.0 million based on approximately $345.3 million of accounts receivable that could be used as collateral for the AR Facility in accordance with the agreements governing the AR Facility. The commitment fee based on the amount of unused commitments under the AR Facility was $0.3 million in 2024, $0.2 million in 2023 and $0.3 million in 2022. In January 2025, we made a repayment of $10.0 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 December 31, 2024, our Consolidated Total Leverage Ratio was 4.8 to 1.0, as adjusted to give pro forma effect to the Transaction, in accordance with the Credit Agreement. 56 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, 2024, our Consolidated Net Secured Leverage Ratio was 1.5 to 1.0, as adjusted to give pro forma effect to the Transaction, in accordance with the Credit Agreement. As of December 31, 2024, we are in compliance with our debt covenants. Deferred Financing Costs As of December 31, 2024, we had deferred $21.0 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. Equity At-the-Market Equity Offering Program 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 2024, no shares of our common stock were sold under the ATM Program. As of December 31, 2024, we had approximately $232.5 million of capacity remaining under the ATM Program. Series A Preferred Stock Issuance On April 20, 2020, we issued 400,000 shares of our Series A Convertible Perpetual Preferred Stock (the “Series A Preferred Stock”), par value $0.01 per share. 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, 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. Special Dividend and Reverse Stock Split We issued 4,074,770 shares of common stock on December 31, 2024, to our common stockholders to pay the common stock portion of the Company’s special dividend of $0.75 per share on our common stock payable on December 31, 2024 (the “Special Dividend”). To offset the dilutive impact of the Special Dividend, on January 8, 2025, we announced a 1-for-1.024549 reverse stock split on our common stock, such that every common stockholder would receive one share of common stock for every 1.024549 shares 57 of common stock held by such common stockholder outstanding as of January 17, 2025 (the “Reverse Stock Split”). The Reverse Stock Split took effect on January 17, 2025. As a result of the Reverse Stock Split, the number of outstanding shares of Common Stock as of January 17, 2025, was reduced from 170,061,181 to 165,986,229, which is substantially similar to the outstanding shares of common stock prior to the Special Dividend. The Company’s authorized shares of common stock and par value of each share of common stock remained unchanged. Cash Flows The following table sets forth our cash flows in 2024 and 2023. Year Ended December 31, % (in millions, except percentages) 2024 2023 Change Net cash flow provided by operating activities $ 299.2 $ 254.2 18 % Net cash flow provided by (used for) investing activities 207.5 (107.5) * Net cash flow used for financing activities (495.4) (151.5) * Effect of exchange rate changes on cash and cash equivalents (0.4) 0.4 * Net increase (decrease) to cash, cash equivalents and restricted cash $ 10.9 $ (4.4) * * Calculation is not meaningful. Cash provided by operating activities increased $45.0 million in 2024 compared to 2023, due primarily to decrease in prepaid MTA equipment deployment costs, the timing of receivables and a smaller use of cash related to accounts payable and accrued expenses, driven by lower incentive compensation payments made in 2024 related to prior year performance and higher net income, partially offset by the timing of receivables. Cash provided by investing activities was $207.5 million in 2024 compared to Cash used for investing activities of $107.5 million in 2023, due primarily to an increase in proceeds from dispositions of $305.2 million, primarily related to the Transaction, as well as lower cash paid for acquisitions and capital expenditures. The following table presents our capital expenditures in 2024 and 2023. Year Ended December 31, % (in millions, except percentages) 2024 2023 Change Growth $ 56.4 $ 56.6 — % Maintenance 21.7 30.2 (28) Total capital expenditures $ 78.1 $ 86.8 (10) Capital expenditures decreased $8.7 million, or 10%, in 2024 compared to 2023, 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 and increased maintenance spending for billboard display upgrades. For the full year of 2025, we expect our capital expenditures to be approximately $85.0 million, which will be used primarily for new and replacement 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 $343.9 million in 2024 compared to 2023. In 2024, we prepaid $200.0 million on the outstanding balance of the Term Loan, made net repayments on the AR Facility of $55.0 million and paid total cash dividends of $208.4 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 2023, we drew $35.0 million of net borrowings on the AR Facility, received net proceeds of $50.0 million related to the offering of the 7.375% Senior Secured Notes due 2031 and the redemption of the 6.250% Senior Unsecured Notes due 2025, and paid total cash dividends of $207.0 million on our common stock, the Series A Preferred Stock, and vested restricted share units granted to employees. Cash paid for income taxes was $11.5 million in 2024 and $6.7 million in 2023. The increase was due primarily to income tax payments related to the Transaction. 58 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. Guaranteed minimum annual payments are generally paid monthly. (See Item 8., Note 18. Commitments and Contingencies to the Consolidated Financial Statements.) Total future minimum payments for rental payments under operating leases for billboard sites, office space and equipment of $2,210.5 million include $1,424.5 million for our billboard sites. (See Item 8., Note 5. Leases to the Consolidated Financial Statements.) As of December 31, 2024, we had long-term debt of approximately $2.5 billion. Interest on the Term Loan is variable. For illustrative purposes, we are assuming an interest rate of 6.1% for all years, which reflects the interest rate as of December 31, 2024. An increase or decrease of 1/4% in the interest rate will change the annual interest expense by $1.0 million. (See Item 8., Note 8. Debt to the Consolidated Financial Statements.) Off-Balance Sheet Arrangements Our off-balance sheet commitments primarily consist of guaranteed minimum annual payments. (See Item 8., Note 18. Commitments and Contingencies to the Consolidated Financial Statements for information about our off-balance sheet commitments.) Critical Accounting Policies The preparation of our financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. On an ongoing basis, we evaluate these estimates, which are based on historical experience and on various assumptions that we believe are reasonable under the circumstances. The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of revenues and expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions. We consider the following accounting policies to be the most critical as they are significant to our financial condition and results of operations, and require significant judgment and estimates on the part of management in their application. For a summary of our significant accounting policies, see Item 8., Note 2. Summary of Significant Accounting Policies to the Consolidated Financial Statements. MTA Agreement Under the current MTA Agreement, which is subject to modification as agreed-upon by us and the MTA, we are obligated to deploy, over a number of years, (i) 5,433 digital advertising screens on subway and train platforms and entrances, (ii) 15,896 smaller-format digital advertising screens on rolling stock, and (iii) 9,283 MTA communications displays, which amounts are subject to the MTA’s ability to fulfill its pre-installation obligations under the MTA Agreement. In addition, we are entitled to generate revenue through the sale of advertising on transit advertising displays and incur transit franchise expenses, which are calculated based on contractually stipulated percentages of revenue generated under the contract, subject to a minimum guarantee. Title of the various digital displays transfers to the MTA on installation, therefore the cost of deploying these screens throughout the transit system does not represent our property and equipment. The portion of recoupable MTA equipment 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 59 the agreement will be sufficient to cover all or a portion of the equipment deployment costs, including evaluating macroeconomic conditions, product demand, industry trends, and events specific to the Company, including monitoring the Company’s actual installation of digital displays against the deployment schedule. Additionally, we assess these factors by comparing revenue projections of the deployed digital displays to actual financial results. If we do not generate sufficient advertising revenues from the MTA contract, there is a risk that the related Prepaid MTA equipment deployment costs and Intangible assets may not be recoverable. Management assesses the prepaid MTA equipment deployment costs for recoverability on a quarterly basis. This assessment requires evaluating qualitative and quantitative factors to determine if there is an indication that the carrying amount may not be recoverable. Management applies significant judgment in assessing these factors, including evaluating macroeconomic conditions, product demand, industry trends, and events specific to the Company, including monitoring the Company’s actual installation of digital displays against the initial deployment schedule. Additionally, management assesses quantitative factors by comparing revenue projections of the deployed digital displays to actual financial results. In 2023, it was determined that our MTA transit revenue recovery had stalled since our MTA transit revenue did not meet our revenue expectations, and as of June 30, 2023, our revenue pacing and outlook for the remainder of 2023 reflected a continued decline in MTA transit revenues as compared to our 2023 forecast due to the underperformance across the MTA transit system. Accordingly, in the second quarter of 2023, we updated our revenue projections to reflect no growth in 2023 followed by 5% to 10% growth throughout the remainder of the Amended Term of the MTA Agreement. As a result of the reduced revenue forecast and reduced time remaining on the Amended Term of the MTA Agreement, we did not expect to recoup any Prepaid MTA equipment deployment costs throughout the remainder of the Amended Term of the MTA Agreement. As a result, in the second quarter of 2023, we reclassified $385.0 million of Prepaid MTA equipment deployment costs to Intangible Assets. We then reviewed our MTA long-lived asset group to determine if there was a triggering event for impairment, noting that we were then projecting negative aggregate undiscounted cash flows of approximately $50.0 million through the remainder of the Amended Term of the MTA Agreement. Consequently, in the second quarter of 2023, we recorded an impairment charge of $443.1 million, representing all of our MTA long-lived asset group. Since that time, all future deployment costs spending have and will continue to be recorded as Intangible assets rather than as Prepaid MTA equipment deployment costs until such time as we project to recoup spending from transit franchise fees that would otherwise be payable to the MTA, which we currently do not expect throughout the remainder of the Amended Term of the MTA Agreement. We assess these equipment deployment costs for impairment each period based on the assumptions and estimates described in this section and/or other factors that may arise. As a result of our expectation of negative aggregate undiscounted cash flows related to the MTA in 2023, 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, for a total impairment charge related to the MTA asset group of $466.2 million during the year ended December 31, 2023. 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. Our analysis performed as of September 30, 2024, and December 31, 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 and three months ended December 31, 2024. The total impairment charge recorded during the year ended December 31, 2024 was $17.9 million. Our current assumption related to revenue continues to be annual growth between 5% and 10% throughout the remainder of the Amended Term of the MTA Agreement. We performed a sensitivity analysis on our MTA transit revenue assumptions, noting that a change in our annual revenue growth rate of 1% between 2025 and 2030, holding all other assumptions constant except for variable sales compensation, would result in an approximately $50.0 million aggregate change in estimated cash flows. We currently estimate we will spend between $30.0 million to $40.0 million annually on equipment deployment costs throughout the remainder of the Amended Term of the MTA Agreement. We performed a sensitivity analysis on this assumption noting that a 10% change in our estimate of equipment deployment costs, holding all other assumptions constant, would result in an approximately $21.6 million aggregate change in estimated cash flows. Based on the above, we currently expect positive aggregate cash flows on an undiscounted basis 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. The assumptions and estimates included in our analysis require significant judgment about future events, market conditions and financial performance. Actual results may differ from our assumptions. There can be no assurance that these estimates and 60 assumptions will prove to be an accurate prediction of the future, and a downward revision of these estimates and/or assumptions would decrease our cash flows, which could result in additional impairment charges in the future. Goodwill We test goodwill qualitatively and/or quantitatively at the reporting-unit level annually for impairment as of October 31 of each year and between annual tests if events occur or circumstances change that would more likely than not reduce the fair value below its carrying amount. 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 by 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 estimated growth rates, operating margins and capital expenditures 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. During the first half of 2023, it was determined that our transit revenue recovery had stalled since our historical Transit reporting unit did not meet revenue expectations, and as of June 30, 2023, our pacing and outlook for the remainder of 2023 reflected a continued decline in transit revenues as compared to our 2023 forecast due to the underperformance across our transit business, including the MTA transit system. As a result, we determined that there was a triggering event requiring an interim goodwill impairment analysis of our historical Transit reporting unit. As a result of the impairment analysis performed during the second quarter of 2023, we determined that the carrying value of our historical Transit reporting unit exceeded its fair value and we recorded an impairment charge of $47.6 million in the Consolidated Statements of Operations, representing the entire goodwill balance associated with the reporting unit. As a result of impairment charges recorded in 2023 and the sale of the Canadian Business in the Transaction, the only reporting unit with a goodwill balance is our Billboard reporting unit. In the fourth quarter of 2024, we performed a qualitative assessment on our Billboard reporting unit as the estimated fair value of the reporting unit substantially exceeded carrying value and there were no factors indicating that it was more likely than not that the reporting unit was impaired. As of December 31, 2024, the goodwill balances associated with the Billboard reporting unit was $2.0 billion on the Consolidated Statements of Financial Position. The assumptions and estimates included in our analysis require significant judgment about future events, market conditions and financial performance. Actual results may differ from our assumptions. There can be no assurance that these estimates and assumptions will prove to be an accurate prediction of the future, and a downward revision of these estimates and/or assumptions would decrease the fair values of our reporting units, which could result in additional impairment charges in the future. Long-Lived Assets We report long-lived assets, including billboard advertising structures, other property, plant and equipment and intangible assets, at historical cost less accumulated depreciation and amortization. We depreciate or amortize these assets over their estimated useful lives, which generally range from three to 40 years. For billboard advertising structures, we estimate the useful lives based on the estimated economic life of the asset. Transit fixed assets are depreciated over the shorter of their estimated useful lives or the related contractual term. Our long-lived identifiable intangible assets primarily consist of acquired permits and leasehold agreements and franchise agreements, which grant us the right to operate out-of-home advertising structures in specified locations and the right to provide advertising displays on railroad and municipal transit properties. Our long-lived identifiable intangible assets are amortized on a straight-line basis over their estimated useful lives, which is the respective life of the agreement and in some cases includes an estimation for renewals, which is based on historical experience. The significant assumptions we use to determine the useful lives and fair values of long-lived assets include contractual commitments, regulatory requirements, future expected cash flows and industry growth rates, as well as future salvage values. 61 We test for long-lived asset impairment whenever there is an indication that the carrying amount of the asset group 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, excluding any impacts from foreign currency translation adjustments reflected in Accumulated other comprehensive loss on the Consolidated Statement Financial Position in conformity with GAAP. 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 and recognized as a non-cash charge. Long-lived assets held for sale are required to be measured at the lower of their carrying value (including unrecognized foreign currency translation adjustment losses) or fair value less cost to sell. We compute the estimated fair value of each asset group for which we perform a quantitative assessment using an income approach. Under the income approach, the fair value is determined using a discounted cash flow model. Our cash flow models requires us to use significant estimates and assumptions such as projected revenue growth rates, billboard lease and transit franchise expenses, other operating and selling, general and administrative expenses, capital expenditures, and discount rates. The projected revenue growth rates, billboard lease and transit franchise expenses, other operating and selling, general and administrative expenses and capital expenditures are based on our internal forecasts of future performance, as well as historical trends. The discount rates represent the weighted average cost of capital derived using known and estimated market metrics. There can be no assurance that these estimates and assumptions will prove to be an accurate prediction of the future, and a downward revision of these estimates and/or assumptions would decrease the fair values of our asset groups, which could result in additional impairment charges in the future. As a result of negative aggregate undiscounted 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, and December 31, 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 and December 31, 2024. In 2023, we recorded impairment charges of $486.8 million, primarily representing $466.2 million of impairment charges related to our MTA asset group. (See the “Critical Accounting Policies: MTA Agreement” section of this MD&A.) Accounting Standards See Item 8., Note 2. Summary of Significant Accounting Policies to the Consolidated Financial Statements, for information about adoption of new accounting standards and recent accounting pronouncements.