10-Q 1 out-20220331.htm 10-Q out-20220331
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Table of Contents        
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 March 31, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
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.)
405 Lexington Avenue, 17th Floor
New York,NY
10174
(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 May 2, 2022, the number of shares outstanding of the registrant’s common stock was 164,009,700.



OUTFRONT MEDIA INC.
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2022
TABLE OF CONTENTS


PART I
Item 1.    Financial Statements.
OUTFRONT Media Inc.
Consolidated Statements of Financial Position
(Unaudited)
As of
(in millions)March 31,
2022
December 31,
2021
Assets:
Current assets:
Cash and cash equivalents$355.7 $424.8 
Receivables, less allowance ($20.3 in 2022 and $18.5 in 2021)
265.0 310.5 
Prepaid lease and franchise costs10.3 12.5 
Other prepaid expenses18.5 17.8 
Other current assets11.2 11.7 
Total current assets660.7 777.3 
Property and equipment, net (Note 4)652.1 647.9 
Goodwill2,078.3 2,077.8 
Intangible assets (Note 5)609.5 614.9 
Operating lease assets (Note 6)1,503.5 1,485.5 
Prepaid MTA equipment deployment costs (Note 18)295.2 279.8 
Other assets43.7 41.5 
Total assets$5,843.0 $5,924.7 
Liabilities:
Current liabilities:
Accounts payable$52.6 $64.9 
Accrued compensation43.2 74.5 
Accrued interest17.4 30.7 
Accrued lease and franchise costs50.1 60.1 
Other accrued expenses46.6 40.3 
Deferred revenues43.0 30.9 
Short-term operating lease liabilities (Note 6)194.3 187.5 
Other current liabilities18.6 18.8 
Total current liabilities465.8 507.7 
Long-term debt, net (Note 9)2,621.9 2,620.6 
Deferred income tax liabilities, net18.5 17.2 
Asset retirement obligation (Note 7)36.9 36.4 
Operating lease liabilities (Note 6)1,319.4 1,308.4 
Other liabilities41.6 43.9 
Total liabilities4,504.1 4,534.2 
Commitments and contingencies (Note 18)
Preferred stock (2022 - 50.0 shares authorized, and 0.1 shares of Series A Preferred Stock issued and outstanding; 2021 - 50.0 shares authorized, and 0.4 shares of Series A Preferred Stock issued and outstanding) (Note 10)
119.8 383.4 
Stockholders’ equity (Note 10):
Common stock (2022 - 450.0 shares authorized, and 164.0 shares issued and outstanding; 2021 - 450.0 shares authorized, and 145.6 issued and outstanding)
1.6 1.5 
Additional paid-in capital2,391.3 2,119.0 
Distribution in excess of earnings(1,176.8)(1,122.0)
Accumulated other comprehensive loss(1.4)(4.4)
Total stockholders’ equity1,214.7 994.1 
Non-controlling interests4.4 13.0 
Total equity1,338.9 1,390.5 
Total liabilities and equity$5,843.0 $5,924.7 
See accompanying notes to unaudited consolidated financial statements.
3

OUTFRONT Media Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
March 31,
(in millions, except per share amounts)20222021
Revenues:
Billboard$298.2 $223.6 
Transit and other75.3 35.6 
Total revenues373.5 259.2 
Expenses:
Operating212.8 177.6 
Selling, general and administrative98.4 76.5 
Net gain on dispositions(0.3)(0.3)
Depreciation19.3 20.0 
Amortization14.8 16.4 
Total expenses345.0 290.2 
Operating income (loss)28.5 (31.0)
Interest expense, net(30.7)(34.6)
Loss on extinguishment of debt (6.3)
Other loss, net(0.1) 
Loss before benefit for income taxes and equity in earnings of investee companies(2.3)(71.9)
Benefit for income taxes2.1 4.7 
Equity in earnings of investee companies, net of tax0.3 (0.4)
Net income (loss) before allocation to non-controlling interests0.1 (67.6)
Net income attributable to non-controlling interests0.2 0.1 
Net loss attributable to OUTFRONT Media Inc.$(0.1)$(67.7)
Net loss per common share:
Basic$(0.04)$(0.52)
Diluted$(0.04)$(0.52)
Weighted average shares outstanding:
Basic152.0 144.8 
Diluted152.0 144.8 
See accompanying notes to unaudited consolidated financial statements.
4

OUTFRONT Media Inc.
Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
Three Months Ended
March 31,
(in millions)20222021
Net income (loss) before allocation to non-controlling interests$0.1 $(67.6)
Net income attributable to non-controlling interests0.2 0.1 
Net loss attributable to OUTFRONT Media Inc.(0.1)(67.7)
Other comprehensive income, net of tax:
Cumulative translation adjustments2.7 1.3 
Change in fair value of interest rate swap agreements0.3 1.2 
Total other comprehensive income, net of tax3.0 2.5 
Total comprehensive income (loss)$2.9 $(65.2)
See accompanying notes to unaudited consolidated financial statements.
5

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 CapitalDistribution in Excess of EarningsAccumulated Other Comprehensive LossTotal Stockholders’ EquityNon-Controlling InterestsTotal Equity
Balance as of December 31, 20200.4 $383.4 144.5 $1.4 $2,090.8 $(1,100.4)$(18.0)$973.8 $26.5 $1,383.7 
Net income (loss)— — — — — (67.7)— (67.7)0.1 (67.6)
Other comprehensive income— — — — — — 2.5 2.5 — 2.5 
Stock-based payments:
Vested— — 1.0 0.1 — — — 0.1 — 0.1 
Amortization— — — — 6.0 — — 6.0 — 6.0 
Shares paid for tax withholding for stock-based payments— — (0.5)— (8.7)— — (8.7)— (8.7)
Class A equity interest redemptions— — 0.5 — 10.7 — — 10.7 (10.7)— 
Series A Preferred Stock dividends (7%)
— — — — — (7.0)— (7.0)— (7.0)
Other— — — — (3.3)— — (3.3)(1.5)(4.8)
Balance as of March 31, 20210.4 $383.4 145.5 $1.5 $2,095.5 $(1,175.1)$(15.5)$906.4 $14.4 $1,304.2 
Balance as of December 31, 20210.4 $383.4 145.6 $1.5 $2,119.0 $(1,122.0)$(4.4)$994.1 $13.0 $1,390.5 
Net income (loss)— — — — — (0.1)— (0.1)0.2 0.1 
Other comprehensive income— — — — — — 3.0 3.0 — 3.0 
Stock-based payments:
Vested— — 1.0 — — — — — — — 
Amortization— — — — 7.9 — — 7.9 — 7.9 
Shares paid for tax withholding for stock-based payments— — (0.4)— (10.9)— — (10.9)— (10.9)
Series A Preferred Stock conversions(0.3)(266.8)17.4 0.1 266.7 — — 266.8 — — 
Class A equity interest redemptions— — 0.4 — 8.6 — — 8.6 (8.6)— 
Series A Preferred Stock dividends (7%)
— 3.2 — — — (5.4)— (5.4)— (2.2)
Dividends ($0.30 per share)
— — — — — (49.3)— (49.3)— (49.3)
Other— — — — — — — — (0.2)(0.2)
Balance as of March 31, 20220.1 $119.8 164.0 $1.6 $2,391.3 $(1,176.8)$(1.4)$1,214.7 $4.4 $1,338.9 
See accompanying notes to unaudited consolidated financial statements.
6

OUTFRONT Media Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31,
(in millions)20222021
Operating activities:
Net loss attributable to OUTFRONT Media Inc.
$(0.1)$(67.7)
Adjustments to reconcile net loss to net cash flow provided by (used for) operating activities:
Net income attributable to non-controlling interests0.2 0.1 
Depreciation and amortization34.1 36.4 
Deferred tax benefit(1.3)(5.2)
Stock-based compensation7.9 6.0 
Provision (recovery) for doubtful accounts1.7 (2.8)
Accretion expense0.7 0.7 
Net gain on dispositions(0.3)(0.3)
Loss on extinguishment of debt 6.3 
Equity in earnings of investee companies, net of tax(0.3)0.4 
Distributions from investee companies0.3 0.3 
Amortization of deferred financing costs and debt discount and premium1.6 1.9 
Change in assets and liabilities, net of investing and financing activities:
Decrease in receivables44.1 47.2 
Increase in prepaid MTA equipment deployment costs(15.4)(3.6)
Decrease in prepaid expenses and other current assets3.4 1.2 
Decrease in accounts payable and accrued expenses(64.2)(46.1)
Increase in operating lease assets and liabilities1.7 0.4 
Increase in deferred revenues12.1 12.8 
Decrease in income taxes(3.0)(0.1)
Other, net(2.7)1.3 
Net cash flow provided by (used for) operating activities
20.5 (10.8)
Investing activities:
Capital expenditures(16.9)(9.4)
Acquisitions(9.6)(15.8)
MTA franchise rights(2.1)(4.2)
Net proceeds from dispositions0.8 1.1 
Net cash flow used for investing activities
(27.8)(28.3)
Financing activities:
Proceeds from long-term debt borrowings 500.0 
Repayments of long-term debt borrowings (500.0)
Repayments of borrowings under short-term debt facilities (80.0)
Payments of deferred financing costs (7.1)
Payments of debt extinguishment charges (4.7)
Taxes withheld for stock-based compensation(10.9)(8.8)
Dividends(51.5)(7.3)
Other (3.7)
Net cash flow used for financing activities
(62.4)(111.6)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
0.6 0.3 
Net decrease in cash, cash equivalents and restricted cash
(69.1)(150.4)
Cash, cash equivalents and restricted cash at beginning of period
424.8 712.0 
Cash, cash equivalents and restricted cash at end of period
$355.7 $561.6 
7


OUTFRONT Media Inc.
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
Three Months Ended
March 31,
(in millions)20222021
Supplemental disclosure of cash flow information:
Cash paid for income taxes
$2.1 $0.5 
Cash paid for interest
42.6 39.9 
Non-cash investing and financing activities:
Accrued purchases of property and equipment
$7.3 $3.8 
Accrued MTA franchise rights3.8 7.0 
Taxes withheld for stock-based compensation0.1  
See accompanying notes to unaudited consolidated financial statements.
8

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.”) and Canada. Our inventory consists of billboard displays, which are primarily located on the most heavily traveled highways and roadways in top Nielsen Designated Market Areas (“DMAs”), and transit advertising displays operated under exclusive multi-year contracts with municipalities in large cities across the U.S. and Canada. In total, we have displays in all of the 25 largest markets in the U.S. and approximately 150 markets across the U.S. and Canada. We currently manage our operations through two operating segments—U.S. Billboard and Transit, which is included in our U.S. Media reportable segment, and International.

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, 2021, filed with the SEC on February 24, 2022.

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, including the impact of extraordinary events such as the ongoing novel coronavirus (“COVID-19”) pandemic, 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, including the severity and duration of the COVID-19 pandemic.

The COVID-19 pandemic and the related preventative measures taken to help curb the spread, have had, and may continue to have, a significant impact on the global economy and our business. Given the uncertainty around the severity and duration of the COVID-19 pandemic and the measures taken, or may be taken, in response to the COVID-19 pandemic, the Company cannot reasonably estimate the full impact of the COVID-19 pandemic on our business, financial condition and results of operations at this time, which may be material.

Note 2. New Accounting Standards

Recent Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued guidance providing optional expedients and exceptions for accounting for contracts, hedging relationships and other transactions that reference to the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. The guidance is effective for all entities as of March 12, 2020, through December 31, 2022. We do not expect this guidance to impact our accounting for our existing debt and hedging instruments.

In October 2021, the FASB issued guidance on the recognition and measurement of contract assets and contract liabilities acquired in a business combination. At the acquisition date, the acquirer should account for the related revenue contracts as if it had originated the contracts. The guidance also provides certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination. This guidance is effective for public entities as of December 15, 2022. We are currently evaluating the impact of this guidance on our consolidated financial statements.

9

OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)
Note 3. Restricted Cash

In August 2021, the escrow agreement in connection with one of our transit franchise contracts, which required us to deposit funds into an escrow account to fund capital expenditures over the term of the transit franchise contract, was terminated. As of March 31, 2022, we have no restricted cash.
As of
(in millions)March 31,
2022
March 31,
2021
December 31, 2021
Cash and cash equivalents$355.7 $560.0 $424.8 
Restricted cash 1.6  
Cash, cash equivalents and restricted cash$355.7 $561.6 $424.8 

Note 4. Property and Equipment, Net

The table below presents the balances of major classes of assets and accumulated depreciation.
As of
(in millions)Estimated Useful LivesMarch 31,
2022
December 31,
2021
Land$103.3 $102.9 
Buildings
15 to 35 years
50.6 50.3 
Advertising structures
3 to 20 years
1,953.6 1,937.4 
Furniture, equipment and other
3 to 10 years
175.6 171.3 
Construction in progress47.8 38.7 
2,330.9 2,300.6 
Less: Accumulated depreciation1,678.8 1,652.7 
Property and equipment, net$652.1 $647.9 

Depreciation expense was $19.3 million in the three months ended March 31, 2022, and $20.0 million in the three months ended March 31, 2021.

Note 5. 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)GrossAccumulated AmortizationNet
As of March 31, 2022:
Permits and leasehold agreements$1,311.8 $(828.3)$483.5 
Franchise agreements529.3 (405.4)123.9 
Other intangible assets4.9 (2.8)2.1 
Total intangible assets$1,846.0 $(1,236.5)$609.5 
As of December 31, 2021:
Permits and leasehold agreements$1,303.6 $(816.5)$487.1 
Franchise agreements528.2 (402.7)125.5 
Other intangible assets4.9 (2.6)2.3 
Total intangible assets$1,836.7 $(1,221.8)$614.9 
10

OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)

In the three months ended March 31, 2022, we acquired 15 displays, resulting in amortizable intangible assets for permits and leasehold agreements of $6.1 million, which are amortized using the straight-line method over their estimated useful lives, an average period of 13.4 years.

All of our intangible assets, except goodwill, are subject to amortization. Amortization expense was $14.8 million in the three months ended March 31, 2022, and $16.4 million in the three months ended March 31, 2021.

Note 6. Leases

Lessee

As of March 31, 2022, we have operating lease assets of $1.5 billion, short-term operating lease liabilities of $194.3 million and non-current operating lease liabilities of $1.3 billion. As of December 31, 2021, we had operating lease assets of $1.5 billion, short-term operating lease liabilities of $187.5 million and non-current operating lease liabilities of $1.3 billion. As of March 31, 2022, the weighted-average remaining lease term was 10.7 years and the weighted-average discount rate was 5.2%. As of December 31, 2021, the weighted-average remaining lease term was 10.5 years and the weighted-average discount rate was 5.2%.

For the three months ended March 31, 2022, we recorded operating lease costs of $106.7 million in Operating expenses and $2.7 million in Selling, general and administrative expenses. For the three months ended March 31, 2022, these costs include $25.0 million of variable operating lease costs. For the three months ended March 31, 2021, we recorded operating lease costs of $93.7 million in Operating expenses and $2.1 million in Selling, general and administrative expenses. For the three months ended March 31, 2021, these costs include $13.9 million of variable operating lease costs. For each of the three months ended March 31, 2022 and 2021, sublease income was immaterial.

For the three months ended March 31, 2022, cash paid for operating leases was $118.4 million and leased assets obtained in exchange for new operating lease liabilities was $81.9 million. For the three months ended March 31, 2021, cash paid for operating leases was $97.9 million and leased assets obtained in exchange for new operating lease liabilities was $69.1 million.

Lessor

We recorded rental income of $288.3 million for the three months ended March 31, 2022, and $215.8 million for the three months ended March 31, 2021, in Revenues on our Consolidated Statement of Operations.

Note 7. 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, 2021$36.4 
Accretion expense0.7 
Additions0.1 
Liabilities settled(0.4)
Foreign currency translation adjustments0.1 
As of March 31, 2022$36.9 

11

OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)
Note 8. Related Party Transactions

We have a 50% ownership interest in two joint ventures that operate transit shelters in the greater Los Angeles area and Vancouver, and four joint ventures which currently 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 $11.3 million as of March 31, 2022, and $11.2 million as of December 31, 2021, and are included in Other assets on the Consolidated Statements of Financial Position. We provided sales and management services to these joint ventures and recorded management fees in Revenues on the Consolidated Statement of Operations of $1.7 million in the three months ended March 31, 2022, and $1.1 million in the three months ended March 31, 2021.

Note 9. Debt

Debt, net, consists of the following:
As of
(in millions, except percentages)March 31,
2022
December 31,
2021
Long-term debt:
Term loan, due 2026598.3 598.2 
Senior unsecured notes:
6.250% senior unsecured notes, due 2025
400.0 400.0 
5.000% senior unsecured notes, due 2027
650.0 650.0 
4.250% senior unsecured notes, due 2029
500.0 500.0 
4.625% senior unsecured notes, due 2030
500.0 500.0 
Total senior unsecured notes2,050.0 2,050.0 
Debt issuance costs(26.4)(27.6)
Total long-term debt, net2,621.9 2,620.6 
Total debt, net$2,621.9 $2,620.6 
Weighted average cost of debt4.3 %4.3 %

Term Loan

The interest rate on the term loan due in 2026 (the “Term Loan”) was 2.2% per annum as of March 31, 2022. As of March 31, 2022, a discount of $1.7 million on the Term Loan remains unamortized. The discount is being amortized through Interest expense, net, on the Consolidated Statement of Operations.

Revolving Credit Facility

We also have a $500.0 million revolving credit facility, which matures in 2024 (the “Revolving Credit Facility,” together with the Term Loan, the “Senior Credit Facilities”).

As of March 31, 2022, 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 $0.4 million in each of the three months ended March 31, 2022, and 2021. As of March 31, 2022, we had issued letters of credit totaling approximately $4.1 million against the letter of credit facility sublimit under the Revolving Credit Facility.

12

OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)
Standalone Letter of Credit Facilities

As of March 31, 2022, we had issued letters of credit totaling approximately $72.7 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 months ended March 31, 2022 and 2021.

Accounts Receivable Securitization Facility

As of March 31, 2022, we have a revolving accounts receivable securitization facility (the “AR Facility”), which terminates in June 2022, unless further extended.

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

As of March 31, 2022, there were no outstanding borrowings under the AR Facility. As of March 31, 2022, there was no borrowing capacity under the AR Facility due to a voluntary temporary suspension of the AR Facility in accordance with the agreements governing the AR Facility; however, as of March 31, 2022, we had approximately $303.2 million of accounts receivable that could be used as collateral for the AR Facility. The commitment fee based on the amount of unused commitments under the AR Facility was immaterial for each of the three months ended March 31, 2022 and 2021.

Debt Covenants

Our credit agreement, dated as of January 31, 2014 (as amended, supplemented or otherwise modified, the “Credit Agreement”), governing the Senior Credit Facilities, the agreements governing the AR Facility, and the indentures governing our senior unsecured notes contain customary affirmative and negative covenants, subject to certain exceptions, including but not limited to those that restrict the Company’s and its subsidiaries’ abilities to (i) pay dividends on, repurchase or make distributions in respect to the Company’s or its wholly-owned subsidiary, Outfront Media Capital LLC’s capital stock or make other restricted payments other than dividends or distributions necessary for us to maintain our REIT status, subject to certain conditions and exceptions, (ii) enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany or third-party transfers, and (iii) incur additional indebtedness. 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 March 31, 2022, our Consolidated Total Leverage Ratio was 5.8 to 1.0 in accordance with the Credit Agreement.

The terms of the Credit Agreement (and under certain circumstances, the agreements governing the AR Facility) require that we maintain a Consolidated Net Secured Leverage Ratio, which is the ratio of (i) our consolidated secured debt (less up to $150.0 million of unrestricted cash) to (ii) our Consolidated EBITDA (as defined in the Credit Agreement) for the trailing four consecutive quarters, of no greater than 4.5 to 1.0. As of March 31, 2022, our Consolidated Net Secured Leverage Ratio was 1.0 to 1.0 in accordance with the Credit Agreement. As of March 31, 2022, we are in compliance with our debt covenants.

13

OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)
Deferred Financing Costs

As of March 31, 2022, we had deferred $28.8 million in fees and expenses associated with the Term Loan, Revolving Credit Facility, AR Facility and our senior unsecured notes. We are amortizing the deferred fees through Interest expense, net, on our Consolidated Statement of Operations over the respective terms of the Term Loan, Revolving Credit Facility, AR Facility and our senior unsecured notes.

Interest Rate Swap Agreement

We have an interest rate cash flow swap agreement to effectively convert a portion of our LIBOR-based variable rate debt to a fixed rate and hedge our interest rate risk related to such variable rate debt. The fair value of this swap position was a net liability of approximately $0.1 million as of March 31, 2022, and $0.4 million as of December 31, 2021, and is included in Other current liabilities on our Consolidated Statement of Financial Position.

As of March 31, 2022, under the terms of this agreement, we will pay interest based on an aggregate notional amount of $50.0 million, under a weighted-average fixed interest rate of 1.8%, with a receive rate of one-month LIBOR and which matures on June 30, 2022. The one-month LIBOR rate was approximately 0.5% as of March 31, 2022.

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 $2.6 billion as of March 31, 2022, and $2.7 billion as of December 31, 2021. The fair value of our debt as of both March 31, 2022, and December 31, 2021, is classified as Level 2. The aggregate fair value loss associated with our interest rate cash flow swap agreements was approximately $0.1 million as of March 31, 2022, and $0.4 million as of December 31, 2021. The aggregate fair value of our interest rate cash flow swap agreements as of both March 31, 2022 and December 31, 2021, is classified as Level 2.

Note 10. Equity

As of March 31, 2022, 450,000,000 shares of our common stock, par value $0.01 per share, were authorized, of which 164,009,700 shares were issued and outstanding; and 50,000,000 shares of our preferred stock, par value $0.01 per share, were authorized, of which 125,000 shares of Series A Convertible Perpetual Preferred Stock (the “Series A Preferred Stock”), par value $0.01 per share, were 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
14

OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)
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.

On March 1, 2022, 275,000 shares of Series A Preferred Stock were converted into approximately 17.4 million shares of the Company’s common stock, which included $3.2 million of accrued and unpaid dividends through and including the conversion date that were settled in the Company’s common stock in accordance with the Articles. During the three months ended March 31, 2022, we paid cash dividends of $2.2 million on the Series A Preferred Stock. As of March 31, 2022, 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.

In connection with the acquisition of outdoor advertising assets in Canada in June 2017, the Company issued 1,953,407 shares of Class A equity interests of a subsidiary of the Company that controls its Canadian business (“Outfront Canada”), which, among other things, were (i) entitled to receive priority cash distributions from Outfront Canada at the same time and in the same per share amount as the dividends paid on shares of the Company’s common stock, and (ii) redeemable by the holders in exchange for shares of the Company’s common stock on a one-for-one basis. During the three months ended March 31, 2022, we made distributions of $0.1 million to holders of the Class A equity interests, which are recorded in Dividends on our Consolidated Statements of Equity and Consolidated Statements of Cash Flows. As of March 31, 2022, all Class A equity interests have been redeemed for shares of the Company’s common stock and no Class A equity interests are outstanding.

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 three months ended March 31, 2022. As of March 31, 2022, we had approximately $232.5 million of capacity remaining under the ATM Program.

On May 2, 2022, we announced that our board of directors approved a quarterly cash dividend of $0.30 per share on our common stock, payable on June 30, 2022, to stockholders of record at the close of business on June 3, 2022.

Note 11. Revenues

The following table summarizes revenues by source:
Three Months Ended
March 31,
(in millions)20222021
Billboard:
Static displays$206.0 $165.1 
Digital displays81.4 49.3 
Other10.8 9.2 
Billboard revenues298.2 223.6 
Transit:
Static displays41.2 23.9 
Digital displays25.9 6.4 
Other6.4 4.6 
Total transit revenues73.5 34.9 
Other1.8 0.7 
Transit and other revenues75.3 35.6 
Total revenues$373.5 $259.2 

Rental income was $288.3 million in the three months ended March 31, 2022, and $215.8 million in the three months ended March 31, 2021, and is recorded in Billboard revenues on the Consolidated Statement of Operations.

15

OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)
The following table summarizes revenues by geography:
Three Months Ended
March 31,
(in millions)20222021
United States:
Billboard$283.4 $212.5 
Transit and other70.8 32.9 
Other1.8 0.7 
Total United States revenues356.0 246.1 
Canada17.5 13.1 
Total revenues$373.5 $259.2 

We recognized substantially all of the Deferred revenues on the Consolidated Statement of Financial Position as of December 31, 2021, during the three months ended March 31, 2022.

Note 12. Restructuring Charges

As of March 31, 2022, $0.4 million in restructuring reserves remain outstanding and is included in Other current liabilities on the Consolidated Statement of Financial Position.

Note 13. Acquisitions

We completed several asset acquisitions for a total purchase price of approximately $9.6 million in the three months ended March 31, 2022, and $15.8 million in the three months ended March 31, 2021.

In the second quarter of 2018, we entered into an agreement to acquire 14 digital and seven static billboard displays in California for a total estimated purchase price of $35.4 million. In the second quarter of 2019, we completed this acquisition except with respect to four digital displays, which we expect to acquire in 2023 for an estimated purchase price of $9.2 million, subject to customary closing conditions and the timing of site development.

Note 14. Stock-Based Compensation

The following table summarizes our stock-based compensation expense for the three months ended March 31, 2022 and 2021.
Three Months Ended
March 31,
(in millions)20222021
Stock-based compensation expenses (restricted share units (“RSUs”) and performance-based RSUs (“PRSUs”)), before income taxes$7.9 $6.0 
Tax benefit(0.4)(0.3)
Stock-based compensation expense, net of tax$7.5 $5.7 

As of March 31, 2022, total unrecognized compensation cost related to non-vested RSUs and PRSUs was $55.2 million, which is expected to be recognized over a weighted average period of 2.1 years.

16

OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)
RSUs and PRSUs

The following table summarizes activity for the three months ended March 31, 2022, of RSUs and PRSUs issued to our employees.
ActivityWeighted Average Per Share Grant Date Fair Market Value
Non-vested as of December 31, 20212,447,246 $23.18 
Granted:
RSUs908,598 25.24 
PRSUs482,618 24.42 
Vested:
RSUs(710,912)24.13 
PRSUs(293,773)21.65 
Forfeitures:
RSUs(5,925)