OUTFRONT Media Inc. [OUT] Filings

10-Q 1 out-20240630.htm 10-Q out-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File Number: 001-36367

OUTFRONT Media Inc.

(Exact name of registrant as specified in its charter)


Maryland		46-4494703
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

90 Park Avenue, 9th Floor
New York,	NY	10016
(Address of principal executive offices)		(Zip Code)

(212) 297-6400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01, par value	OUT	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

As of August 6, 2024, the number of shares outstanding of the registrant’s common stock was 165,981,712.

Table of Contents

OUTFRONT MEDIA INC.

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2024

TABLE OF CONTENTS


PART I			3
Item 1. Financial Statements (Unaudited)			3
Consolidated Statements of Financial Position as of June 30, 2024, and December 31, 2023			3
Consolidated Statements of Operations for the three and six months ended June 30, 2024 and 2023			4
Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2024 and 2023			5
Consolidated Statements of Equity for the three and six months ended June 30, 2024 and 2023			6
Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023			8
Notes to Consolidated Financial Statements			10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			26
Item 3. Quantitative and Qualitative Disclosures About Market Risk			48
Item 4. Controls and Procedures			49
PART II			50
Item 1. Legal Proceedings			50
Item 1A. Risk Factors			50
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			50
Item 3. Defaults Upon Senior Securities			50
Item 4. Mine Safety Disclosures			50
Item 5. Other Information			50
Item 6. Exhibits			50
SIGNATURES			52

Table of Contents

PART I

Item 1. Financial Statements.

OUTFRONT Media Inc.

Consolidated Statements of Financial Position

(Unaudited)


	As of
(in millions)	June 30, 2024		December 31, 2023
Assets:
Current assets:
Cash and cash equivalents	$	49.6	$	36.0
Receivables, less allowance ($18.6 in 2024 and $17.2 in 2023)	274.5		287.6
Prepaid lease and transit franchise costs	3.2		4.5
Other prepaid expenses	12.8		19.2
Assets held for sale (Note 11)	—		34.6
Other current assets	12.9		15.7
Total current assets	353.0		397.6
Property and equipment, net (Note 3)	656.6		657.8
Goodwill	2,006.4		2,006.4
Intangible assets (Note 4)	666.2		695.4
Operating lease assets (Note 5)	1,550.9		1,591.9
Assets held for sale (Note 11)	—		214.3
Other assets	19.1		19.5
Total assets	$	5,252.2	$	5,582.9

Liabilities:
Current liabilities:
Accounts payable	$	43.1	$	55.5
Accrued compensation	38.7		41.4
Accrued interest	34.9		34.2
Accrued lease and franchise costs	67.5		80.0
Other accrued expenses	54.6		56.2
Deferred revenues	44.3		37.7

Short-term debt (Note 8)	30.0		65.0
Short-term operating lease liabilities (Note 5)	181.7		180.9
Liabilities held for sale (Note 11)	—		24.1
Other current liabilities	29.7		18.0
Total current liabilities	524.5		593.0
Long-term debt, net (Note 8)	2,480.2		2,676.5

Asset retirement obligation (Note 6)	33.4		33.0
Operating lease liabilities (Note 5)	1,382.9		1,417.4
Liabilities held for sale (Note 11)	—		90.9
Other liabilities	42.9		42.0
Total liabilities	4,463.9		4,852.8

Commitments and contingencies (Note 16)

Preferred stock (2024 - 50.0 shares authorized, and 0.1 shares of Series A Preferred Stock issued and outstanding; 2023 - 50.0 shares authorized, and 0.1 shares of Series A Preferred Stock issued and outstanding) (Note 9)	119.8		119.8
Stockholders’ equity (Note 9):
Common stock (2024 - 450.0 shares authorized, and 166.0 shares issued and outstanding; 2023 - 450.0 shares authorized, and 165.1 issued and outstanding)	1.7		1.7
Additional paid-in capital	2,439.3		2,432.2
Distribution in excess of earnings	(1,775.8)		(1,821.1)
Accumulated other comprehensive loss	(0.3)		(5.8)
Total stockholders’ equity	664.9		607.0
Non-controlling interests	3.6		3.3
Total equity	788.3		730.1
Total liabilities and equity	$	5,252.2	$	5,582.9

See accompanying notes to unaudited consolidated financial statements.

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OUTFRONT Media Inc.

Consolidated Statements of Operations

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions, except per share amounts)	2024		2023		2024		2023
Revenues:
Billboard	$	373.4	$	371.6	$	702.2	$	692.2
Transit and other	103.9		97.2		183.6		172.4
Total revenues	477.3		468.8		885.8		864.6
Expenses:
Operating	239.8		245.9		478.5		481.4
Selling, general and administrative	119.1		108.6		229.6		216.5

Net (gain) loss on dispositions	(155.2)		(0.1)		(155.1)		0.2
Impairment charges	8.8		511.4		17.9		511.4
Depreciation	18.4		19.7		36.9		39.8
Amortization	17.3		21.5		34.9		43.3
Total expenses	248.2		907.0		642.7		1,292.6
Operating income (loss)	229.1		(438.2)		243.1		(428.0)
Interest expense, net	(41.1)		(39.7)		(82.5)		(77.4)
Loss on extinguishment of debt	(1.2)		—		(1.2)		—
Other income, net	1.1		0.2		1.1		0.2
Income (loss) before provision for income taxes and equity in earnings of investee companies	187.9		(477.7)		160.5		(505.2)
Provision for income taxes	(11.1)		(0.4)		(10.6)		(0.8)
Equity in earnings of investee companies, net of tax	0.2		(0.3)		—		(1.1)
Net income (loss) before allocation to non-controlling interests	177.0		(478.4)		149.9		(507.1)
Net income attributable to non-controlling interests	0.2		0.5		0.3		0.7
Net income (loss) attributable to OUTFRONT Media Inc.	$	176.8	$	(478.9)	$	149.6	$	(507.8)

Net income (loss) per common share:
Basic	$	1.05	$	(2.92)	$	0.88	$	(3.11)
Diluted	$	1.01	$	(2.92)	$	0.86	$	(3.11)

Weighted average shares outstanding:
Basic	165.9		165.0		165.7		164.8
Diluted	174.5		165.0		174.2		164.8

See accompanying notes to unaudited consolidated financial statements.

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OUTFRONT Media Inc.

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2024		2023		2024		2023
Net income (loss) before allocation to non-controlling interests	$	177.0	$	(478.4)	$	149.9	$	(507.1)
Net income attributable to non-controlling interests	0.2		0.5		0.3		0.7
Net income (loss) attributable to OUTFRONT Media Inc.	176.8		(478.9)		149.6		(507.8)
Other comprehensive income (loss), net of tax:
Cumulative translation adjustments	(0.9)		2.5		(4.0)		2.8

Write-off of currency translation losses related to a disposition	9.5		—		9.5		—
Total other comprehensive income, net of tax	8.6		2.5		5.5		2.8
Total comprehensive income (loss)	$	185.4	$	(476.4)	$	155.1	$	(505.0)

See accompanying notes to unaudited consolidated financial statements.

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OUTFRONT Media Inc.

Consolidated Statements of Equity

(Unaudited)


				Stockholders’ Equity
(in millions, except per share amounts)	Shares of Series A Preferred Stock	Series A Preferred Stock ($0.01 per share par value)		Shares of Common Stock	Common Stock ($0.01 per share par value)		Additional Paid-In Capital		Distribution in Excess of Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity		Non-Controlling Interests		Total Equity
Balance as of March 31, 2023	0.1	$	119.8	165.0	$	1.6	$	2,411.8	$	(1,264.2)	$	(8.8)	$	1,140.4	$	4.1	$	1,264.3
Net income (loss)	—	—		—	—		—		(478.9)		—		(478.9)		0.5		(478.4)
Other comprehensive income	—	—		—	—		—		—		2.5		2.5		—		2.5
Stock-based payments:
Vested	—	—		0.1	0.1		—		—		—		0.1		—		0.1
Amortization	—	—		—	—		7.9		—		—		7.9		—		7.9
Shares paid for tax withholding for stock-based payments	—	—		(0.1)	—		(0.1)		—		—		(0.1)		—		(0.1)
Series A Preferred Stock dividends (7%)	—	—		—	—		—		(2.2)		—		(2.2)		—		(2.2)
Dividends ($0.30 per share)	—	—		—	—		—		(49.6)		—		(49.6)		—		(49.6)
Other	—	—		—	—		—		—		—		—		0.1		0.1
Balance as of June 30, 2023	0.1	$	119.8	165.0	$	1.7	$	2,419.6	$	(1,794.9)	$	(6.3)	$	620.1	$	4.7	$	744.6

Balance as of March 31, 2024	0.1	$	119.8	165.9	$	1.7	$	2,431.9	$	(1,900.5)	$	(8.9)	$	524.2	$	3.2	$	647.2
Net income	—	—		—	—		—		176.8		—		176.8		0.2		177.0
Other comprehensive income	—	—		—	—		—		—		8.6		8.6		—		8.6
Stock-based payments:
Vested	—	—		0.1	—		—		—		—		—		—		—
Amortization	—	—		—	—		7.6		—		—		7.6		—		7.6
Shares paid for tax withholding for stock-based payments	—	—		—	—		(0.2)		—		—		(0.2)		—		(0.2)
Series A Preferred Stock dividends (7%)	—	—		—	—		—		(2.2)		—		(2.2)		—		(2.2)
Dividends ($0.30 per share)	—	—		—	—		—		(49.9)		—		(49.9)		—		(49.9)
Other	—	—		—	—		—		—		—		—		0.2		0.2
Balance as of June 30, 2024	0.1	$	119.8	166.0	$	1.7	$	2,439.3	$	(1,775.8)	$	(0.3)	$	664.9	$	3.6	$	788.3

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OUTFRONT Media Inc.

Consolidated Statements of Equity (Continued)

(Unaudited)


				Stockholders’ Equity
(in millions, except per share amounts)	Shares of Series A Preferred Stock	Series A Preferred Stock ($0.01 per share par value)		Shares of Common Stock	Common Stock ($0.01 per share par value)		Additional Paid-In Capital		Distribution in Excess of Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity		Non-Controlling Interests		Total Equity
Balance as of December 31, 2022	0.1	$	119.8	164.2	$	1.6	$	2,416.3	$	(1,183.4)	$	(9.1)	$	1,225.4	$	4.0	$	1,349.2
Net income (loss)	—	—		—	—		—		(507.8)		—		(507.8)		0.7		(507.1)
Other comprehensive income	—	—		—	—		—		—		2.8		2.8		—		2.8
Stock-based payments:
Vested	—	—		1.5	0.1		—		—		—		0.1		—		0.1
Amortization	—	—		—	—		15.7		—		—		15.7		—		15.7
Shares paid for tax withholding for stock-based payments	—	—		(0.7)	—		(12.4)		—		—		(12.4)		—		(12.4)
Series A Preferred Stock dividends (7%)	—	—		—	—		—		(4.4)		—		(4.4)		—		(4.4)
Dividends ($0.60 per share)	—	—		—	—		—		(99.3)		—		(99.3)		—		(99.3)

Balance as of June 30, 2023	0.1	$	119.8	165.0	$	1.7	$	2,419.6	$	(1,794.9)	$	(6.3)	$	620.1	$	4.7	$	744.6

Balance as of December 31, 2023	0.1	$	119.8	165.1	$	1.7	$	2,432.2	$	(1,821.1)	$	(5.8)	$	607.0	$	3.3	$	730.1
Net income	—	—		—	—		—		149.6		—		149.6		0.3		149.9
Other comprehensive income	—	—		—	—		—		—		5.5		5.5		—		5.5
Stock-based payments:
Vested	—	—		1.5	—		—		—		—		—		—		—
Amortization	—	—		—	—		14.8		—		—		14.8		—		14.8
Shares paid for tax withholding for stock-based payments	—	—		(0.6)	—		(7.7)		—		—		(7.7)		—		(7.7)

Series A Preferred Stock dividends (7%)	—	—		—	—		—		(4.4)		—		(4.4)		—		(4.4)
Dividends ($0.60 per share)	—	—		—	—		—		(99.9)		—		(99.9)		—		(99.9)

Balance as of June 30, 2024	0.1	$	119.8	166.0	$	1.7	$	2,439.3	$	(1,775.8)	$	(0.3)	$	664.9	$	3.6	$	788.3

See accompanying notes to unaudited consolidated financial statements.

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OUTFRONT Media Inc.

Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended
	June 30,
(in millions)	2024		2023
Operating activities:
Net income (loss) attributable to OUTFRONT Media Inc.	$	149.6	$	(507.8)
Adjustments to reconcile net income (loss) to net cash flow provided by operating activities:
Net income attributable to non-controlling interests	0.3		0.7
Depreciation and amortization	71.8		83.1
Deferred tax provision (benefit)	(1.2)		0.1
Stock-based compensation	14.8		15.7
Provision for doubtful accounts	2.2		0.7
Accretion expense	1.5		1.5
Net (gain) loss on dispositions	(155.1)		0.2
Impairment charges	—		511.4
Loss on extinguishment of debt	1.2		—
Equity in earnings of investee companies, net of tax	—		1.1
Distributions from investee companies	0.8		0.8
Amortization of deferred financing costs and debt discount	3.1		3.4
Change in assets and liabilities, net of investing and financing activities:
Decrease in receivables	11.0		22.3
Increase in prepaid MTA equipment deployment costs	—		(21.8)
Increase in prepaid expenses and other current assets	3.8		1.3
Decrease in accounts payable and accrued expenses	(26.8)		(40.5)
Increase in operating lease assets and liabilities	8.6		8.9
Increase in deferred revenues	6.6		12.7
Increase (decrease) in income taxes	10.6		(4.8)
Decrease in assets and liabilities held for sale, net	(2.1)		—
Other, net	0.9		(1.3)
Net cash flow provided by operating activities	101.6		87.7

Investing activities:
Capital expenditures	(42.3)		(44.9)
Acquisitions	(7.6)		(27.4)
MTA franchise rights	—		0.6
Net proceeds from dispositions	309.4		0.2


Net cash flow provided by (used for) investing activities	259.5		(71.5)

Financing activities:

Repayments of long-term debt borrowings	(200.0)		—
Proceeds from borrowings under short-term debt facilities	95.0		105.0
Repayments of borrowings under short-term debt facilities	(130.0)		—
Payments of deferred financing costs	(0.2)		(3.7)



Taxes withheld for stock-based compensation	(7.5)		(12.3)
Dividends	(104.4)		(103.7)

Net cash flow used for financing activities	(347.1)		(14.7)

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OUTFRONT Media Inc.

Consolidated Statements of Cash Flows (Continued)

(Unaudited)


	Six Months Ended
	June 30,
(in millions)	2024		2023
Effect of exchange rate changes on cash and cash equivalents	(0.4)		0.3
Net increase in cash and cash equivalents	13.6		1.8
Cash and cash equivalents at beginning of period	36.0		40.4
Cash and cash equivalents at end of period	$	49.6	$	42.2

Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	1.2	$	5.5
Cash paid for interest	79.9		74.4

Non-cash investing and financing activities:
Accrued purchases of property and equipment	$	7.4	$	3.9
Accrued MTA franchise rights	—		2.9
Taxes withheld for stock-based compensation	0.2		0.1

See accompanying notes to unaudited consolidated financial statements.

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OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Note 1. Description of Business and Basis of Presentation

Description of Business

OUTFRONT Media Inc. (the “Company”) and its subsidiaries (collectively, “we,” “us” or “our”) is a real estate investment trust (“REIT”), which provides advertising space (“displays”) on out-of-home advertising structures and sites in the United States (the “U.S.”). 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 across the U.S. We currently manage our operations through one operating segment, U.S. Billboard and Transit, which is included in our U.S. Media reportable segment. 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 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”). (See Note 11. Acquisitions and Dispositions: Dispositions: Canadian Business.)

Basis of Presentation and Use of Estimates

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission (the “SEC”). In the opinion of our management, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting of normal and recurring adjustments, necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented. These financial statements should be read in conjunction with the more detailed financial statements and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 22, 2024.

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

Out-of-Period Adjustment

For the three months ended March 31, 2023, the Company recorded an out-of-period adjustment relating to variable billboard property lease costs and accrued lease and franchise costs in 2022, resulting in a $5.2 million increase in Operating expenses for the three months ended March 31, 2023. The Company assessed the materiality of the amount reflected in this adjustment on its previously issued financial statements in accordance with the SEC’s Staff Accounting Bulletin (“SAB”) No. 99 and SAB No. 108 and concluded that the amount was not material, individually or in the aggregate, to any of its previously issued financial statements.

Note 2. New Accounting Standards

Recent Pronouncements

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued guidance to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements.

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OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

(Unaudited)

In December 2023, the FASB issued guidance to enhance the transparency and decision usefulness of income tax disclosures primarily related to rate reconciliation and income taxes paid information. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. Retrospective application is permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements.

Note 3. Property and Equipment, Net

The table below presents the balances of major classes of assets and accumulated depreciation.


		As of
(in millions)	Estimated Useful Lives	June 30, 2024		December 31, 2023
Land		$	110.2	$	110.1
Buildings	15 to 35 years	46.7		42.7
Advertising structures	3 to 20 years	1,738.1		1,716.2
Furniture, equipment and other	3 to 10 years	181.1		173.9
Construction in progress		36.1		39.5
		2,112.2		2,082.4
Less: Accumulated depreciation		1,455.6		1,424.6
Property and equipment, net		$	656.6	$	657.8

Depreciation expense was $18.4 million in the three months ended June 30, 2024, $19.7 million in the three months ended June 30, 2023, $36.9 million in the six months ended June 30, 2024, and $39.8 million in the six months ended June 30, 2023.

Note 4. Intangible Assets

Our identifiable intangible assets primarily consist of acquired permits and leasehold agreements, and franchise agreements, which grant us the right to operate out-of-home structures in specified locations and the right to provide advertising space on railroad and municipal transit properties. Identifiable intangible assets are amortized on a straight-line basis over their estimated useful life, which is the respective life of the agreement that in some cases includes historical experience of renewals.

Our identifiable intangible assets consist of the following:


(in millions)	Gross		Accumulated Amortization		Impairment		Net
As of June 30, 2024:
Permits and leasehold agreements	$	1,540.3	$	(921.2)	$	—	$	619.1
Franchise agreements(a)	953.7		(432.1)		(485.8)		35.8
Other intangible assets	19.4		(8.1)		—		11.3
Total intangible assets	$	2,513.4	$	(1,361.4)	$	(485.8)	$	666.2

As of December 31, 2023:
Permits and leasehold agreements	$	1,535.5	$	(893.8)	$	—	$	641.7
Franchise agreements(a)	934.8		(426.4)		(467.9)		40.5
Other intangible assets	19.5		(6.3)		—		13.2
Total intangible assets	$	2,489.8	$	(1,326.5)	$	(467.9)	$	695.4

(a)We reclassified all Prepaid MTA equipment deployment costs (see Note 16. Commitments and Contingencies) and recorded impairments in the second, third and fourth quarters of 2023, as well as the first and second quarters of 2024, due to the long-term outlook of our U.S. Transit and Other reporting unit.

In the six months ended June 30, 2024, we acquired 4 displays, resulting in amortizable intangible assets for permits and leasehold agreements of $5.2 million, which are amortized using the straight-line method over their estimated useful lives, an average period of 14.6 years.

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Notes to Consolidated Financial Statements

(Unaudited)

All of our intangible assets, except goodwill, are subject to amortization. Amortization expense was $17.3 million in the three months ended June 30, 2024, $21.5 million in the three months ended June 30, 2023, $34.9 million in the six months ended June 30, 2024, and $43.3 million in the six months ended June 30, 2023.

As a result of negative aggregate cash flows related to our New York Metropolitan Transportation Authority (the “MTA”) asset group, we performed quarterly impairment analyses on the MTA asset group and recorded impairment charges of $8.8 million in the three months ended June 30, 2024, and $17.9 million in the six months ended June 30, 2024, representing additional MTA equipment deployment cost spending during the periods. In the three and six months ended June 30, 2023, we recorded impairment charges of $511.4 million, primarily representing a $443.1 million impairment charge related to our MTA asset group.

Note 5. Leases

Lessee

The following table presents our operating lease assets and liabilities:


	As of
(in millions, except years and percentages)	June 30, 2024			December 31, 2023
Operating lease assets	$	1,550.9		$	1,591.9
Short-term operating lease liabilities	181.7			180.9
Non-current operating lease liabilities	1,382.9			1,417.4

Weighted-average remaining lease term	10.8 years			10.9 years
Weighted-average discount rate	6.3		%	6.2		%

The components of our lease expenses were as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2024		2023		2024		2023
Operating expenses(a)	$	121.8	$	128.1	$	243.0	$	249.0
Selling, general and administrative expenses	4.0		3.2		7.9		6.3
Variable costs(a)	30.3		38.1		58.9		70.6

Cash paid for operating leases(b)	113.5		113.2		256.0		250.9
Leased assets obtained in exchange for new operating lease liabilities	45.1		83.9		105.6		256.0

(a)Includes an out-of-period adjustment of $5.2 million recorded in the first quarter of 2023 related to variable billboard property lease costs (see Note 1. Description of Business and Basis of Presentation).

(b)Includes amounts related to Canada. (See Note 11. Acquisitions and Dispositions: Dispositions: Canadian Business.)

For each of the three and six months ended June 30, 2024 and 2023, sublease income related to office properties was immaterial.

Lessor

We recorded rental income of $345.8 million for the three months ended June 30, 2024, $349.3 million for the three months ended June 30, 2023, $649.9 million for the six months ended June 30, 2024, and $647.7 million for the six months ended June 30, 2023, in Revenues on our Consolidated Statement of Operations.

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Notes to Consolidated Financial Statements

(Unaudited)

Note 6. Asset Retirement Obligation

The following table sets forth the change in the asset retirement obligations associated with our advertising structures located on leased properties. The obligation is calculated based on the assumption that all of our advertising structures will be removed within the next 50 years. The estimated annual costs to dismantle and remove the structures upon the termination or non-renewal of our leases are consistent with our historical experience.


(in millions)
As of December 31, 2023	$	33.0
Accretion expense	1.5
Additions	0.2
Liabilities settled	(1.1)
Foreign currency translation adjustments	(0.2)
As of June 30, 2024	$	33.4

Note 7. Related Party Transactions

On January 18, 2023, we entered into a transaction with an affiliate of Providence Equity Partners L.L.C. (the “Providence Affiliate”) in connection with the Providence Affiliate’s purchase of a lease for certain outdoor advertising assets (the “Assets”) from a third-party seller. Pursuant to an agreement between us and the Providence Affiliate (the “Billboard Agreement”), we agreed to exclusively market, license and make advertising space available on the Assets to third-party advertisers for a term of up to ten years (the “Billboard Transaction”). In return, we will retain all revenues from the sale of advertising with respect to the Assets less the following payments to the Providence Affiliate or its payment designee, as applicable: (i) a minimum annual guarantee payment paid to the Providence Affiliate’s payment designee that increases from approximately $1.8 million to $3.5 million during the term of the Billboard Agreement; (ii) a minimum annual guarantee payment paid to the Providence Affiliate that increases from $8.5 million to $12.0 million by year six and adjusted for inflation thereafter through year ten; (iii) a percentage revenue share payment on gross revenues generated above $22.0 million paid to the Providence Affiliate during the term of the Billboard Agreement; (iv) a percentage revenue share payment on net revenues until $100.0 million is paid to the Providence Affiliate or its payment designee, as applicable; and (v) a one-time payment of $10.0 million paid to the Providence Affiliate on the fifth anniversary of the closing of the Billboard Transaction (the “Billboard Transaction Closing”) if we have not yet acquired the Assets as described below. The Billboard Agreement also provides that (i) we have the option to acquire the Assets from the Providence Affiliate between the third and seventh anniversaries of the Billboard Transaction Closing at pre-agreed prices depending on the time at which we exercise the option; (ii) prior to the seventh anniversary of the Billboard Transaction Closing, we have a right of first offer prior to any sale of the Assets by the Providence Affiliate to a third-party; and (iii) in the event of a termination of the Billboard Agreement by the Providence Affiliate after a sale to a third-party, we may in certain circumstances be entitled to receive a termination payment. As of June 30, 2024, operating lease assets related to the Billboard Agreement were $89.0 million, current operating lease liabilities related to the Billboard Agreement were $4.0 million and non-current operating lease liabilities related to the Billboard Agreement were $91.1 million, and are included in Operating lease assets, current Operating lease liabilities and non-current Operating lease liabilities, respectively, on the Consolidated Statements of Financial Position. Billboard revenues related to the Billboard Agreement were $2.4 million in the three months ended June 30, 2024, $1.9 million in the three months ended June 30, 2023, $5.2 million in the six months ended June 30, 2024 and $3.8 million in the six months ended June 30, 2023, and recorded in Revenues on the Consolidated Statement of Operations. Operating lease expenses related to the Billboard Agreement were $2.8 million in the three months ended June 30, 2024, $2.6 million in the three months ended June 30, 2023, $6.3 million in the six months ended June 30, 2024, and $4.9 million in the six months ended June 30, 2023, and recorded in Operating expenses on the Consolidated Statement of Operations.

Additionally, we have a 50% ownership interest in one active joint venture that operates transit shelters in the greater Los Angeles area and two active joint ventures which operate a total of seven billboard displays in New York and Boston. All of these joint ventures are accounted for as equity investments. These investments totaled $7.8 million as of June 30, 2024, and $8.2 million as of December 31, 2023, and are included in Other assets on the Consolidated Statements of Financial Position. In 2023, in connection with the Transaction, an equity investment was reclassified as Assets held for sale on the Consolidated Statement of Financial Position. (See Note 11. Acquisitions and Dispositions: Dispositions: Canadian Business.) We provided sales and management services to these joint ventures and recorded management fees in Revenues on the Consolidated

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Notes to Consolidated Financial Statements

(Unaudited)

Statement of Operations of $1.2 million in the three months ended June 30, 2024, $1.4 million in the three months ended June 30, 2023, $2.2 million in the six months ended June 30, 2024 and $2.4 million in the six months ended June 30, 2023.

Note 8. Debt

Debt, net, consists of the following:


	As of
(in millions, except percentages)	June 30, 2024			December 31, 2023
Short-term debt:
AR Facility	$	30.0		$	65.0
Total short-term debt	30.0			65.0

Long-term debt:
Term loan, due 2026	399.4			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	(19.2)			(22.4)
Total long-term debt, net	2,480.2			2,676.5

Total debt, net	$	2,510.2		$	2,741.5

Weighted average cost of debt	5.6		%	5.7		%

Term Loan

The interest rate on the term loan due in 2026 (the “Term Loan”) was 7.1% per annum as of June 30, 2024. As of June 30, 2024, a discount of $0.6 million on the Term Loan remains unamortized. The discount is being amortized through Interest expense, net, on the Consolidated Statement of Operations. In June 2024, we prepaid $200.0 million of the outstanding principal balance on the Term Loan. In the three and six months ended June 30, 2024, we recorded a Loss on extinguishment of debt of $1.2 million on the Consolidated Statement of Operations, relating to the write-off of deferred financing costs and a portion of the discount on the Term Loan.

Revolving Credit Facility

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

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

The commitment fee based on the amount of unused commitments under the Revolving Credit Facility was $0.5 million in the three months ended June 30, 2024, $0.4 million in the three months ended June 30, 2023, $1.0 million in the six months ended June 30, 2024, and $0.8 million in the six months ended June 30, 2023. As of June 30, 2024, we had issued letters of credit totaling approximately $6.3 million against the letter of credit facility sublimit under the Revolving Credit Facility.

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OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Standalone Letter of Credit Facilities

As of June 30, 2024, we had issued letters of credit totaling approximately $67.3 million under our aggregate $81.0 million standalone letter of credit facilities. The total fees under the letter of credit facilities were immaterial in each of the three and six months ended June 30, 2024 and 2023.

Accounts Receivable Securitization Facility

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

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 taxable REIT subsidiaries (“TRSs”) (the “Originators”), will sell and/or contribute their respective existing and future accounts receivable and certain related assets to either Outfront Media Receivables LLC, a special purpose vehicle and wholly-owned subsidiary of the Company relating to the Company’s qualified REIT subsidiary accounts receivable assets (the “QRS SPV”) or Outfront Media Receivables TRS, LLC a special purpose vehicle and wholly-owned subsidiary of the Company relating to the Company’s TRS accounts receivable assets (the “TRS SPV” and together with the QRS SPV, the “SPVs”). The SPVs may transfer undivided interests in their respective accounts receivable assets to certain purchasers from time to time (the “Purchasers”). The SPVs are separate legal entities with their own separate creditors who will be entitled to access the SPVs’ assets before the assets become available to the Company. Accordingly, the SPVs’ assets are not available to pay creditors of the Company or any of its subsidiaries, although collections from the receivables in excess of amounts required to repay the Purchasers and other creditors of the SPVs may be remitted to the Company. Outfront Media LLC will service the accounts receivables on behalf of the SPVs for a fee. The Company has agreed to guarantee the performance of the Originators and Outfront Media LLC, in its capacity as servicer, of their respective obligations under the agreements governing the AR Facility. Neither the Company, the Originators nor the SPVs guarantee the collectability of the receivables under the AR Facility. Further, the TRS SPV and the QRS SPV are jointly and severally liable for their respective obligations under the agreements governing the AR Facility.

As of June 30, 2024, there were $30.0 million of outstanding borrowings under the AR Facility, at a borrowing rate of 6.6%. As of June 30, 2024, borrowing capacity remaining under the AR Facility was $120.0 million based on approximately $314.6 million of accounts receivable that could be used as collateral for the AR Facility in accordance with the agreements governing the AR Facility. The commitment fee based on the amount of unused commitments under the AR Facility was $0.1 million for each of the six months ended June 30, 2024 and 2023, and was immaterial for each of the three months ended June 30, 2024 and 2023. In July and August 2024, we made repayments totaling $30.0 million under the AR Facility.

Debt Covenants

Our credit agreement, dated as of January 31, 2014 (as amended, restated, amended and restated, supplemented or otherwise modified, the “Credit Agreement”), governing the Senior Credit Facilities, the agreements governing the AR Facility, and the indentures governing our senior notes contain customary affirmative and negative covenants, subject to certain exceptions, including but not limited to those that restrict the Company’s and its subsidiaries’ abilities to (i) pay dividends on, repurchase or make distributions in respect to the Company’s or its wholly-owned subsidiary, Outfront Media Capital LLC’s capital stock or make other restricted payments other than dividends or distributions necessary for us to maintain our REIT status, subject to certain conditions and exceptions, (ii) enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany or third-party transfers, and (iii) incur additional indebtedness. One of the exceptions to the restriction on our ability to incur additional indebtedness is satisfaction of a Consolidated Total Leverage Ratio, which is the ratio of our consolidated total debt to our Consolidated EBITDA (as defined in the Credit Agreement) for the trailing four consecutive quarters, of no greater than 6.0 to 1.0. As of June 30, 2024, our Consolidated Total Leverage Ratio was 5.0 to 1.0, as adjusted to give pro forma effect to the Transaction, in accordance with the Credit Agreement.

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Notes to Consolidated Financial Statements

(Unaudited)

The terms of the Credit Agreement (and under certain circumstances, the agreements governing the AR Facility) require that we maintain a Consolidated Net Secured Leverage Ratio, which is the ratio of (i) our consolidated secured debt (less up to $150.0 million of unrestricted cash) to (ii) our Consolidated EBITDA (as defined in the Credit Agreement) for the trailing four consecutive quarters, of no greater than 4.5 to 1.0. As of June 30, 2024, our Consolidated Net Secured Leverage Ratio was 1.6 to 1.0, as adjusted to give pro forma effect to the Transaction,- in accordance with the Credit Agreement. As of June 30, 2024, we are in compliance with our debt covenants.

Deferred Financing Costs

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

Fair Value

Under the fair value hierarchy, observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities are defined as Level 1; observable inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for the asset or liability are defined as Level 2; and unobservable inputs for the asset or liability are defined as Level 3. The aggregate fair value of our debt, which is estimated based on quoted market prices of similar liabilities, was approximately $2.5 billion as of June 30, 2024, and $2.7 billion as of December 31, 2023. The fair value of our debt as of both June 30, 2024, and December 31, 2023, is classified as Level 2.

Note 9. Equity

As of June 30, 2024, 450,000,000 shares of our common stock, par value $0.01 per share, were authorized; 165,979,058 shares were issued and outstanding; and 50,000,000 shares of our preferred stock, par value $0.01 per share, were authorized, with 125,000 shares of our Series A Convertible Perpetual Preferred Stock (the “Series A Preferred Stock”), par value $0.01 per share, issued and outstanding.

The Series A Preferred Stock ranks senior to the shares of the Company’s common stock with respect to dividend and distribution rights. Holders of the Series A Preferred Stock are entitled to a cumulative dividend accruing at the initial rate of 7.0% per year, payable quarterly in arrears, subject to increases as set forth in the Articles Supplementary, effective as of April 20, 2020 (the “Articles”). Dividends may, at the option of the Company, be paid in cash, in-kind, through the issuance of additional shares of Series A Preferred Stock or a combination of cash and in-kind, until April 20, 2028, after which time dividends will be payable solely in cash. So long as any shares of Series A Preferred Stock remain outstanding, the Company may not, without the consent of a specified percentage of holders of shares of Series A Preferred Stock, declare a dividend on, or make any distributions relating to, capital stock that ranks junior to, or on a parity basis with, the Series A Preferred Stock, subject to certain exceptions, including but not limited to (i) any dividend or distribution in cash or capital stock of the Company on or in respect of the capital stock of the Company to the extent that such dividend or distribution is necessary to maintain the Company’s status as a REIT; and (ii) any dividend or distribution in cash in respect of our common stock that, together with the dividends or distributions during the 12-month period immediately preceding such dividend or distribution, is not in excess of 5% of the aggregate dividends or distributions paid by the Company necessary to maintain its REIT status during such 12-month period. If any dividends or distributions in respect of the shares of our common stock are paid in cash, the shares of Series A Preferred Stock will participate in the dividends or distributions on an as-converted basis up to the amount of their accrued dividend for such quarter, which amounts will reduce the dividends payable on the shares of Series A Preferred Stock dollar-for-dollar for such quarter. The Series A Preferred Stock is convertible at the option of any holder at any time into shares of our common stock at an initial conversion price of $16.00 per share and an initial conversion rate of 62.50 shares of our common stock per share of Series A Preferred Stock, subject to certain anti-dilution adjustments and a share cap as set forth in the Articles. Subject to certain conditions set forth in the Articles (including a change of control), each of the Company and the holders of the Series A Preferred Stock may convert or redeem the Series A Preferred Stock at the prices set forth in the Articles, plus any accrued and unpaid dividends.

During the three months ended June 30, 2024, we paid cash dividends of $2.2 million on the Series A Preferred Stock and during the six months ended June 30, 2024, we paid cash dividends of $4.4 million on the Series A Preferred Stock. As of June 30, 2024, the maximum number of shares of common stock that could be required to be issued on conversion of the outstanding shares of Series A Preferred Stock was approximately 7.8 million shares.

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Notes to Consolidated Financial Statements

(Unaudited)

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. No shares were sold under the ATM Program during the six months ended June 30, 2024. As of June 30, 2024, we had approximately $232.5 million of capacity remaining under the ATM Program.

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

Note 10. Revenues

The following table summarizes revenues by source:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2024		2023		2024		2023
Billboard:
Static displays	$	243.5	$	244.5	$	466.3	$	459.6
Digital displays	117.4		113.9		211.3		202.8
Other	12.5		13.2		24.6		29.8
Billboard revenues	373.4		371.6		702.2		692.2
Transit:
Static displays	51.8		52.1		90.5		90.9
Digital displays	43.0		35.1		75.8		63.2
Other	9.0		8.1		16.9		14.6
Total transit revenues	103.8		95.3		183.2		168.7
Other	0.1		1.9		0.4		3.7
Transit and other revenues	103.9		97.2		183.6		172.4
Total revenues	$	477.3	$	468.8	$	885.8	$	864.6

Rental income was $345.8 million in the three months ended June 30, 2024, $349.3 million in the three months ended June 30, 2023, $649.9 million in the six months ended June 30, 2024, and $647.7 million in the six months ended June 30, 2023, and is recorded in Billboard revenues on the Consolidated Statement of Operations.

The following table summarizes revenues by geography:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2024		2023		2024		2023
United States:
Billboard	$	360.2	$	352.2	$	674.1	$	658.3
Transit and other	100.7		90.8		176.4		161.1
Other	0.1		1.9		0.4		3.7
Total United States revenues	461.0		444.9		850.9		823.1
Canada	16.3		23.9		34.9		41.5
Total revenues	$	477.3	$	468.8	$	885.8	$	864.6

We recognized substantially all of the Deferred revenues on the Consolidated Statement of Financial Position as of December 31, 2023, during the three months ended March 31, 2024.

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Notes to Consolidated Financial Statements

(Unaudited)

Note 11. Acquisitions and Dispositions

Acquisitions

We completed several asset acquisitions for a total purchase price of approximately $7.6 million in the six months ended June 30, 2024, and $27.4 million in the six months ended June 30, 2023. The value of the assets acquired during 2024 and 2023 has primarily been allocated to the related permits and leasehold agreements intangible assets (see Note 4. Intangible Assets).

Dispositions

Canadian Business

On June 7, 2024, the Company completed the sale of the Canadian Business in the Transaction. In connection with the Transaction, the Company received C$410.0 million in cash, which is subject to certain purchase price adjustments.

In connection with the Transaction, the assets of our outdoor advertising business in Canada had been classified as Assets held for sale on the Consolidated Statement of Financial Position as of December 31, 2023. It is required that we measure assets held for sale at the lower of their carrying value (including unrecognized foreign currency translation adjustment losses) or fair value less cost to sell. The components of Assets held for sale and Liabilities held for sale, which were written off upon completion of the Transaction, were as follows:


(in millions)	As of June 7, 2024		As of December 31, 2023
Current assets:
Receivables, less allowances	$	22.9	$	26.7
Other current assets	9.3		7.9
Current assets held for sale	32.2		34.6
Property and equipment, net	44.7		39.9
Goodwill	22.2		22.9
Intangible assets	51.3		53.0
Operating lease assets	84.7		85.9
Other assets	11.9		12.6
Total assets held for sale	$	247.0	$	248.9

Current liabilities held for sale	$	24.7	$	24.1
Deferred income tax liabilities, net	13.7		15.5
Asset retirement obligation	4.9		5.0
Operating lease liabilities	69.4		70.4
Total liabilities held for sale	$	112.7	$	115.0

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Notes to Consolidated Financial Statements

(Unaudited)

Note 12. Stock-Based Compensation

The following table summarizes our stock-based compensation expense for the three and six months ended June 30, 2024 and 2023.


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2024		2023		2024		2023
Stock-based compensation expenses (restricted share units (“RSUs”) and performance-based RSUs (“PRSUs”)), before income taxes	$	7.6	$	7.9	$	14.8	$	15.7
Tax benefit	(0.4)		(0.1)		(0.6)		(0.5)
Stock-based compensation expense, net of tax	$	7.2	$	7.8	$	14.2	$	15.2

As of June 30, 2024, total unrecognized compensation cost related to non-vested RSUs and PRSUs was $41.0 million, which is expected to be recognized over a weighted average period of 1.9 years.

RSUs and PRSUs

The following table summarizes activity for the six months ended June 30, 2024, of RSUs and PRSUs issued to our employees.


	Activity	Weighted Average Per Share Grant Date Fair Market Value
Non-vested as of December 31, 2023	2,781,836	$	21.10
Granted:
RSUs	1,649,172	12.52
PRSUs	796,689	12.43
Vested:
RSUs	(965,084)	21.04
PRSUs	(417,637)	22.06
Forfeitures:
RSUs	(77,316)	14.91
PRSUs	(196,486)	18.66
Non-vested as of June 30, 2024	3,571,174	15.37

Note 13. Retirement Benefits

The following table presents the components of net periodic pension cost and amounts recognized in other comprehensive income (loss) for our pension plans:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2024		2023		2024		2023
Components of net periodic pension cost:

Interest cost	$	0.2	$	0.5	$	0.5	$	1.1
Expected return on plan assets	(0.2)		(0.7)		(0.6)		(1.4)


Net periodic pension cost	$	—	$	(0.2)	$	(