SEC Form 10-Q filed by OUTFRONT Media Inc.

5/3/24 4:03:31 PM ET

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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, 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 May 2, 2024, the number of shares outstanding of the registrant’s common stock was 165,885,759.


PART I			3
Item 1. Financial Statements (Unaudited)			3
Consolidated Statements of Financial Position as of March 31, 2024, and December 31, 2023			3
Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023			4
Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2024 and 2023			5
Consolidated Statements of Equity for the three months ended March 31, 2024 and 2023			6
Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023			7
Notes to Consolidated Financial Statements			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			24
Item 3. Quantitative and Qualitative Disclosures About Market Risk			44
Item 4. Controls and Procedures			45
PART II			46
Item 1. Legal Proceedings			46
Item 1A. Risk Factors			46
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			46
Item 3. Defaults Upon Senior Securities			46
Item 4. Mine Safety Disclosures			46
Item 5. Other Information			46
Item 6. Exhibits			46
SIGNATURES			48


	As of
(in millions)	March 31, 2024		December 31, 2023
Assets:
Current assets:
Cash and cash equivalents	$	42.4	$	36.0
Receivables, less allowance ($17.6 in 2024 and $17.2 in 2023)	251.7		287.6
Prepaid lease and transit franchise costs	3.3		4.5
Other prepaid expenses	15.8		19.2
Assets held for sale (Note 11)	31.8		34.6
Other current assets	14.4		15.7
Total current assets	359.4		397.6
Property and equipment, net (Note 3)	657.1		657.8
Goodwill	2,006.4		2,006.4
Intangible assets (Note 4)	682.9		695.4
Operating lease assets (Note 5)	1,577.6		1,591.9
Assets held for sale (Note 11)	211.1		214.3
Other assets	19.5		19.5
Total assets	$	5,514.0	$	5,582.9

Liabilities:
Current liabilities:
Accounts payable	$	54.4	$	55.5
Accrued compensation	32.2		41.4
Accrued interest	23.2		34.2
Accrued lease and franchise costs	59.2		80.0
Other accrued expenses	56.2		56.2
Deferred revenues	52.4		37.7

Short-term debt (Note 8)	120.0		65.0
Short-term operating lease liabilities (Note 5)	185.6		180.9
Liabilities held for sale (Note 11)	21.4		24.1
Other current liabilities	17.6		18.0
Total current liabilities	622.2		593.0
Long-term debt, net (Note 8)	2,677.8		2,676.5

Asset retirement obligation (Note 6)	33.3		33.0
Operating lease liabilities (Note 5)	1,400.8		1,417.4
Liabilities held for sale (Note 11)	90.8		90.9
Other liabilities	41.9		42.0
Total liabilities	4,866.8		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 165.9 shares issued and outstanding; 2023 - 450.0 shares authorized, and 165.1 issued and outstanding)	1.7		1.7
Additional paid-in capital	2,431.9		2,432.2
Distribution in excess of earnings	(1,900.5)		(1,821.1)
Accumulated other comprehensive loss	(8.9)		(5.8)
Total stockholders’ equity	524.2		607.0
Non-controlling interests	3.2		3.3
Total equity	647.2		730.1
Total liabilities and equity	$	5,514.0	$	5,582.9


	Three Months Ended
	March 31,
(in millions, except per share amounts)		2024		2023
Revenues:
Billboard		$	328.8	$	320.6
Transit and other		79.7		75.2
Total revenues		408.5		395.8
Expenses:
Operating		238.7		235.5
Selling, general and administrative		110.5		107.9

Net loss on dispositions		0.1		0.3
Impairment charges		9.1		—
Depreciation		18.5		20.1
Amortization		17.6		21.8
Total expenses		394.5		385.6
Operating income		14.0		10.2
Interest expense, net		(41.4)		(37.7)


Loss before benefit (provision) for income taxes and equity in earnings of investee companies		(27.4)		(27.5)
Benefit (provision) for income taxes		0.5		(0.4)
Equity in earnings of investee companies, net of tax		(0.2)		(0.8)
Net loss before allocation to non-controlling interests		(27.1)		(28.7)
Net income attributable to non-controlling interests		0.1		0.2
Net loss attributable to OUTFRONT Media Inc.		$	(27.2)	$	(28.9)

Net loss per common share:
Basic		$	(0.18)	$	(0.19)
Diluted		$	(0.18)	$	(0.19)

Weighted average shares outstanding:
Basic		165.4		164.5
Diluted		165.4		164.5


				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)	—	—		—	—		—		(28.9)		—		(28.9)		0.2		(28.7)
Other comprehensive income	—	—		—	—		—		—		0.3		0.3		—		0.3
Stock-based payments:
Vested	—	—		1.4	—		—		—		—		—		—		—
Amortization	—	—		—	—		7.8		—		—		7.8		—		7.8
Shares paid for tax withholding for stock-based payments	—	—		(0.6)	—		(12.3)		—		—		(12.3)		—		(12.3)
Series A Preferred Stock dividends (7%)	—	—		—	—		—		(2.2)		—		(2.2)		—		(2.2)
Dividends ($0.30 per share)	—	—		—	—		—		(49.7)		—		(49.7)		—		(49.7)
Other	—	—		—	—		—		—		—		—		(0.1)		(0.1)
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

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 (loss)	—	—		—	—		—		(27.2)		—		(27.2)		0.1		(27.1)
Other comprehensive loss	—	—		—	—		—		—		(3.1)		(3.1)		—		(3.1)
Stock-based payments:
Vested	—	—		1.4	—		—		—		—		—		—		—
Amortization	—	—		—	—		7.2		—		—		7.2		—		7.2
Shares paid for tax withholding for stock-based payments	—	—		(0.6)	—		(7.5)		—		—		(7.5)		—		(7.5)

Series A Preferred Stock dividends (7%)	—	—		—	—		—		(2.2)		—		(2.2)		—		(2.2)
Dividends ($0.30 per share)	—	—		—	—		—		(50.0)		—		(50.0)		—		(50.0)
Other	—	—		—	—		—		—		—		—		(0.2)		(0.2)
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


		As of
(in millions)	Estimated Useful Lives	March 31, 2024		December 31, 2023
Land		$	110.2	$	110.1
Buildings	15 to 35 years	46.2		42.7
Advertising structures	3 to 20 years	1,728.9		1,716.2
Furniture, equipment and other	3 to 10 years	176.4		173.9
Construction in progress		34.8		39.5
		2,096.5		2,082.4
Less: Accumulated depreciation		1,439.4		1,424.6
Property and equipment, net		$	657.1	$	657.8


(in millions)	Gross		Accumulated Amortization		Impairment		Net
As of March 31, 2024:
Permits and leasehold agreements	$	1,540.2	$	(907.7)	$	—	$	632.5
Franchise agreements(a)	944.0		(428.8)		(477.0)		38.2
Other intangible assets	19.4		(7.2)		—		12.2
Total intangible assets	$	2,503.6	$	(1,343.7)	$	(477.0)	$	682.9

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


	As of
(in millions, except years and percentages)	March 31, 2024			December 31, 2023
Operating lease assets	$	1,577.6		$	1,591.9
Short-term operating lease liabilities	185.6			180.9
Non-current operating lease liabilities	1,400.8			1,417.4

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


(in millions)
As of December 31, 2023	$	33.0
Accretion expense	0.8
Additions	0.1
Liabilities settled	(0.5)
Foreign currency translation adjustments	(0.1)
As of March 31, 2024	$	33.3


	As of
(in millions, except percentages)	March 31, 2024			December 31, 2023
Short-term debt:
AR Facility	$	120.0		$	65.0
Total short-term debt	120.0			65.0

Long-term debt:
Term loan, due 2026	599.0			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	(21.2)			(22.4)
Total long-term debt, net	2,677.8			2,676.5

Total debt, net	$	2,797.8		$	2,741.5

Weighted average cost of debt	5.7		%	5.7		%


(in millions)	As of March 31, 2024		As of December 31, 2023
Current assets:
Receivables, less allowances	$	22.0	$	26.7
Other current assets	9.8		7.9
Current assets held for sale	31.8		34.6
Property and equipment, net	39.8		39.9
Goodwill	22.4		22.9
Intangible assets	51.9		53.0
Operating lease assets	85.2		85.9
Other assets	11.8		12.6
Total assets held for sale	$	242.9	$	248.9

Current liabilities held for sale	$	21.4	$	24.1
Deferred income tax liabilities, net	16.2		15.5
Asset retirement obligation	4.9		5.0
Operating lease liabilities	69.7		70.4
Total liabilities held for sale	$	112.2	$	115.0


	Activity	Weighted Average Per Share Grant Date Fair Market Value
Non-vested as of December 31, 2023	2,781,836	$	21.10
Granted:
RSUs	1,547,171	12.43
PRSUs	787,035	12.43
Vested:
RSUs	(861,830)	21.62
PRSUs	(410,304)	22.07
Forfeitures:
RSUs	(13,404)	20.17
PRSUs	(176,427)	19.21
Non-vested as of March 31, 2024	3,654,077	15.43


	Digital Revenues (in millions) for the Three Months Ended March 31, 2024(a)						Number of Digital Displays as of March 31, 2024(a)
Location	Digital Billboard		Digital Transit and Other		Total Digital Revenues		Digital Billboard Displays	Digital Transit and Other Displays	Total Digital Displays
United States	$	87.6	$	32.1	$	119.7	1,909	24,116	26,025
Canada	6.3		0.7		7.0		318	65	383
Total	$	93.9	$	32.8	$	126.7	2,227	24,181	26,408


(in millions)	Beginning Balance		Deployment Costs Incurred		Recoupment/MTA Funding		Amortization/Impairment		Reclassification		Ending Balance
Three months ended March 31, 2024:
Other current assets	$	1.1	$	—	$	—	$	—	$	—	$	1.1
Intangible assets (franchise agreements)	—		9.1		—		(9.1)		—		—
Total	$	1.1	$	9.1	$	—	$	(9.1)	$	—	$	1.1

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


	Payments Due by Period
(in millions)	Total		2024		2025-2026		2027-2028		2029 and thereafter
Long-term debt	$	2,700.0	$	—	$	600.0	$	650.0	$	1,450.0
Interest	770.3		153.3		301.1		187.6		128.3
Total	$	3,470.3	$	153.3	$	901.1	$	837.6	$	1,578.3


Exhibit Number						Description

2.1						Share Purchase Agreement, dated October 22, 2023, by and among OUTFRONT Media Inc., Outfront Canada HoldCo 2 LLC, Outfront Canada Sub LLC, and Bell Media Inc. (incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 001-36367), filed on October 23, 2023).

3.1						Articles of Amendment and Restatement of OUTFRONT Media Inc. effective March 28, 2014, as amended by the Articles of Amendment of OUTFRONT Media Inc. effective November 20, 2014 and June 10, 2019 (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-36367), filed on June 10, 2019).

3.2						Amended and Restated Bylaws of OUTFRONT Media Inc. (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-36367), filed on December 9, 2022).

3.3						Articles Supplementary of OUTFRONT Media Inc. effective April 20, 2020 (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-36367), filed on April 21, 2020).

31.1						Certification of the Chief Executive Officer of OUTFRONT Media Inc. pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2						Certification of the Chief Financial Officer of OUTFRONT Media Inc. pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1						Certification of the Chief Executive Officer of OUTFRONT Media Inc. furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley act of 2002.

32.2						Certification of the Chief Financial Officer of OUTFRONT Media Inc. furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley act of 2002.

101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH						Inline XBRL Taxonomy Extension Schema

101.CAL						Inline XBRL Taxonomy Calculation Linkbase

101.DEF						Inline XBRL Taxonomy Definition Document

101.LAB						Inline XBRL Taxonomy Label Linkbase

101.PRE						Inline XBRL Taxonomy Presentation Linkbase

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Date	Price Target	Rating	Analyst
10/24/2024		Outperform → Peer Perform	Wolfe Research
9/19/2024	$22.00	Overweight	Wells Fargo
7/16/2024	$16.00	Hold	TD Cowen
8/4/2023		Outperform → Perform	Oppenheimer
8/4/2023	$20.00 → $14.00	Overweight → Neutral	JP Morgan
3/29/2022	$34.00	Outperform	Wolfe Research
12/15/2021	$32.00 → $30.00	Equal-Weight	Morgan Stanley

SEC Form 10-Q filed by OUTFRONT Media Inc.

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