OUTFRONT Media Inc. Files Q2 2024 10-Q

TL;DR

**OUTFRONT Media Q2 10-Q filed. Check financials.**

AI Summary

OUTFRONT Media Inc. filed its 10-Q for the period ending June 30, 2024. The filing details financial performance and operational updates for the second quarter of 2024. Key financial data and disclosures relevant to investors are presented, including information on revenue, expenses, and assets.

Why It Matters

This filing provides investors with a detailed look at OUTFRONT Media's financial health and operational performance during the second quarter of 2024, impacting investment decisions.

Risk Assessment

Risk Level: medium — 10-Q filings inherently carry medium risk due to the detailed financial and operational information that can significantly impact stock prices.

Key Numbers

• 2024-06-30 — Period End Date (The end of the reporting quarter)
• 2024-08-07 — Filing Date (The date the report was submitted to the SEC)
• 2024-01-01 to 2024-06-30 — Year-to-Date Period (First six months of fiscal year 2024)
• 2023-01-01 to 2023-06-30 — Prior Year-to-Date Period (First six months of fiscal year 2023 for comparison)

Key Players & Entities

• OUTFRONT Media Inc. (company) — Filer of the 10-Q
• 20240630 (date) — End of reporting period
• 20240807 (date) — Filing date
• 90 PARK AVENUE (location) — Company's business and mailing address
• NEW YORK (location) — Company's city
• 212-297-6400 (phone_number) — Company's business phone number
• CBS OUTDOOR AMERICAS INC. (company) — Former company name
• 20130621 (date) — Date of name change

FAQ

Key Financial Figures

• $0 — nge on which registered Common Stock, $0.01, par value OUT New York Stock Excha

Filing Documents

• out-20240630.htm (10-Q) — 1956KB
• a311section302jun302024.htm (EX-31.1) — 11KB
• a312section302jun302024.htm (EX-31.2) — 11KB
• a321section906jun302024.htm (EX-32.1) — 5KB
• a322section906jun302024.htm (EX-32.2) — 6KB
• 0001579877-24-000086.txt ( ) — 9257KB
• out-20240630.xsd (EX-101.SCH) — 56KB
• out-20240630_cal.xml (EX-101.CAL) — 69KB
• out-20240630_def.xml (EX-101.DEF) — 335KB
• out-20240630_lab.xml (EX-101.LAB) — 712KB
• out-20240630_pre.xml (EX-101.PRE) — 564KB
• out-20240630_htm.xml (XML) — 1297KB

Financial Statements (Unaudited)

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

Notes to Consolidated Financial Statements 10

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 26

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 48

Controls and Procedures

Item 4. Controls and Procedures 49 PART II 50

Legal Proceedings

Item 1. Legal Proceedings 50

Risk Factors

Item 1A. Risk Factors 50

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 50

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 50

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 50

Other Information

Item 5. Other Information 50

Exhibits

Item 6. Exhibits 50

SIGNATURES

SIGNATURES 52 Table of Contents PART I

Financial Statements

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 Dist

Notes to Consolidated Financial Statements

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 stateme

Notes to Consolidated Financial Statements

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 agreem

Notes to Consolidated Financial Statements

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 quar

Notes to Consolidated Financial Statements

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 mi

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