OUTFRONT Media Inc

Previous wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our historical consolidated financial statements and the notes thereto in “Item 8. Financial Statements and Supplementary Data.” This MD&A contains forward-looking statements that involve numerous risks and uncertainties. The forward-looking statements are subject to a number of important factors, including, but not limited to, those factors discussed in “Item 1A. Risk Factors” and the “Cautionary Statement Regarding Forward-Looking Statements” section of this Annual Report on Form 10-K, that could cause our actual results to differ materially from the results described herein or implied by such forward-looking statements. Management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2022, as compared to the year ended December 31, 2021, is included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC“) on February 23, 2023.

Current wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our historical consolidated financial statements and the notes thereto in “Item 8. Financial Statements and Supplementary Data.” This MD&A contains forward-looking statements that involve numerous risks and uncertainties. The forward-looking statements are subject to a number of important factors, including, but not limited to, those factors discussed in “Item 1A. Risk Factors” and the “Cautionary Statement Regarding Forward-Looking Statements” section of this Annual Report on Form 10-K, that could cause our actual results to differ materially from the results described herein or implied by such forward-looking statements.

Previous wording

OUTFRONT Media is a real estate investment trust (“REIT”), which provides advertising space (“displays”) on out-of-home advertising structures and sites in the United States (the “U.S.”) 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. International does not meet the criteria to be a reportable segment and accordingly, is included in Other (see Item 8., Note 18. Segment Information to the Consolidated Financial Statements).

Current wording

OUTFRONT Media is a real estate investment trust (“REIT”), which provides advertising space (“displays”) on out-of-home advertising structures and sites in the United States (the “U.S.”) . We currently manage our operations through two reportable operating segments—(1)Billboard and (2)Transit. Prior to its sale, our Canadian operations comprised our International operating segment, which did not meet the criteria to be a reportable segment and accordingly, was included in Other. Historical operating results of our Canadian operations are included in Other (see Item 8., Note 19. Segment Information to the Consolidated Financial Statements) through the date of sale.

Previous wording

On October 22, 2023, the Company, Outfront Canada HoldCo 2 LLC, a wholly-owned subsidiary of the Company, and Outfront Canada Sub LLC, a wholly-owned subsidiary of the Company (together, the “Selling Subsidiaries”), entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with Bell Media Inc. (the “Buyer”), relating to the sale of the Company’s outdoor advertising business in Canada (the “Canadian Business”). Pursuant to the Share Purchase Agreement, the Selling Subsidiaries agreed to sell all of its (and its affiliates) equity interests in Outdoor Systems Americas ULC and its subsidiaries (the “Transaction”), which hold all of the assets of the Canadian Business, to the Buyer, for C$410.0 million in cash, payable on the date of the consummation of the Transaction (the “Closing”). The purchase price is subject to (i) adjustments at and following the Closing for working capital, cash, indebtedness, capital expenditures and transaction expenses, and (ii) a holdback to be released at or following the Closing, in whole or in part, if certain third-party contracts are renewed or extended on certain terms. The consummation of the Transaction is expected to occur in the first half of 2024, subject to certain closing conditions, including, among others, (i) the absence of any enacted or pending law, order, judgment or litigation by a governmental authority prohibiting the consummation of the Transaction, and (ii) receipt of antitrust approval in Canada (the

Current wording

On June 7, 2024, we sold all of our equity interests in Outdoor Systems Americas ULC and its subsidiaries (the “Transaction”), which hold all of the assets of the Company’s outdoor advertising business in Canada (the “Canadian Business”). In connection with the Transaction, the Company received C$410.0 million in cash, subject to certain purchase price adjustments (see Item 8. Note 13. Acquisitions and Dispositions: Dispositions: Canadian Business to the Consolidated Financial Statements).

Previous wording

We are one of the largest providers of advertising space on out-of-home advertising structures and sites across 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 in the U.S. and Canada. Our top market, high profile location focused portfolio includes sites in and around both Grand Central Station and Times Square in New York, various locations along Sunset Boulevard in Los Angeles, and the Bay Bridge in San Francisco. The breadth and depth of our portfolio provides our customers with a range of options to address their marketing objectives, from national, brand-building campaigns to hyper-local campaigns that drive customers to the advertiser’s website or retail location “one mile down the road.”

Current wording

We are one of the largest providers of advertising space on out-of-home advertising structures and sites across the U.S. Our inventory consists of billboard displays, which are primarily located on the most heavily traveled highways and roadways in top Nielsen Designated Market Areas (“DMAs”), and transit advertising displays operated under exclusive multi-year contracts with municipalities in large cities across the U.S. In total, we have displays in all of the 25 largest markets in the U.S. and approximately 120 markets in the U.S. Our top market, high profile location focused portfolio includes sites in and around both Grand Central Station and Times Square in New York, various locations along Sunset Boulevard in Los Angeles, and the Bay Bridge in San Francisco. The breadth and depth of our portfolio provides our customers with a range of options to address their marketing objectives, from national, brand-building campaigns to hyper-local campaigns that drive customers to the advertiser’s website or retail location “one mile down the road.”

Previous wording

Our revenues and operating results are sensitive to fluctuations in advertising expenditures, general economic conditions and other external events beyond our control, such as supply chain disruptions, heightened levels of inflation, pandemics like the COVID-19 pandemic, industry shutdowns or slowdowns (including due to labor strikes), and shifts in market demographics and transportation patterns (including reductions in foot traffic, roadway traffic, commuting, transit ridership and overall target audiences due to remote work, safety concerns or otherwise), as described in this MD&A. These sensitivities may adversely impact our revenues and operating results on a consolidated basis and/or may have a disproportionate adverse impact on one or more of our operating segments, especially our U.S. Transit operating segment.

Current wording

Our revenues and operating results are sensitive to fluctuations in advertising expenditures, general economic conditions and other external events beyond our control, such as supply chain disruptions, inflationary price increases, changes in governmental fiscal and trade policies (such as tariffs), pandemics like the COVID-19 pandemic, industry shutdowns or slowdowns (including due to labor strikes), extraordinary weather events (such as hurricanes and wildfires), and shifts in market demographics and transportation patterns (including reductions in foot traffic, roadway traffic, commuting, transit ridership and overall target audiences due to remote work, safety concerns or otherwise), among other things. These sensitivities may adversely impact our revenues and operating results on a consolidated basis and/or may have a disproportionate adverse impact on our Transit segment.

Previous wording

We rely on third parties to manufacture and transport our digital displays. As a result of the current market-wide supply shortages and logistics disruptions, we have experienced delays and price increases with respect to certain of our digital displays, which may continue throughout 2024, and could have an adverse effect on our business, financial condition and results of operations.

Current wording

We rely on third parties to manufacture, transport and install our digital displays, and provide programmatic and direct sale advertising platform technologies for our digital display inventory. Historically, we have experienced delays and price increases with respect to certain of our digital displays due to external events beyond our control. If we experience delays and/or price increases in the future, it could have an adverse effect on our business, financial condition and results of operations. See “Item 1A. Risk Factors—Risks Related to Our Business and Operations—Operating our digital display platform may be more difficult, costly or time consuming than expected and the anticipated benefits may not be fully realized.”

Previous wording

Due to the current heightened levels of inflation and commodity prices in the U.S. and abroad, which has resulted in rising interest rates, we have experienced increases with respect to some of our posting, maintenance and other expenses, some of our corporate expenses, and our interest expense, which could have an adverse effect on our business, financial condition and results of operations. Our billboard property lease expenses and transit franchise expenses have been less impacted by the current heightened levels of inflation due to the long-term nature of most of our operating leases and transit franchise agreements. However, our transit franchise agreements that contain inflationary price adjustments may cause increases in our transit franchise expenses in the near-term. Though the Company cannot reasonably estimate the full impact of the current heightened levels of inflation on our business, financial condition and results of operations at this time, a portion of these increases may be partially offset by increases in advertising rates on our displays and cost efficiencies.

Current wording

Historically, we have experienced inflationary increases with respect to some of our posting, maintenance and other expenses, some of our corporate expenses, and our interest expense. Our billboard property lease expenses and transit franchise expenses have been less impacted by inflation due to the long-term nature of most of our operating leases and transit franchise agreements. However, our transit franchise agreements that contain inflationary price adjustments may cause increases in our transit franchise expenses in the over the remaining terms of the agreements. Though the Company cannot reasonably estimate the full impact of inflationary increases on our business, financial condition and results of operations at this time, a portion of these increases may be fully or partially offset by increases in advertising rates on our displays and cost efficiencies.

Previous wording

Increasing the number of digital displays in our prime audience locations is an important element of our organic growth strategy, as digital displays have the potential to attract additional business from both new and existing customers. We believe digital displays are attractive to our customers because they allow for the development of richer and more visually engaging messages, provide our customers with the flexibility both to target audiences by time of day and to quickly launch new advertising campaigns, and eliminate or greatly reduce print production and installation costs. In addition, digital displays enable us to run multiple advertisements on each display. Digital billboard displays generate approximately four to five times more revenue per display on average than comparable traditional static billboard displays. Digital billboard displays also incur, on average, approximately two to four times more costs, including higher variable costs associated with the increase in revenue than comparable traditional static billboard displays. As a result, digital billboard displays generate higher profits and cash flows than comparable traditional static billboard displays.

Current wording

Increasing the number of digital displays in our prime audience locations is an important element of our organic growth strategy, as digital displays have the potential to attract additional business from both new and existing customers. We believe digital displays are attractive to our customers because they allow for the development of richer and more visually engaging messages, provide our customers with the flexibility both to target audiences and to quickly launch new advertising campaigns, and eliminate or greatly reduce print production and installation costs. In addition, digital displays enable us to run multiple advertisements on each display. Digital billboard displays generate approximately four to five times more revenue per display on average than comparable traditional static billboard displays. Digital billboard displays also incur, on average, approximately two to four times more costs, including higher variable costs associated with the increase in revenue than comparable traditional static billboard displays. As a result, digital billboard displays generate higher profits and cash flows than comparable traditional static billboard displays.

Previous wording

We have deployed state-of-the-art digital transit displays in connection with several transit franchises we operate and we expect to continue these deployments over the coming years, but at a slower pace than our historical deployments. We believe revenues generated on our network of digital transit displays will be higher than revenues generated on a comparable portfolio of our static transit displays.

Current wording

We have deployed state-of-the-art digital transit displays in connection with several transit franchises we operate and we expect to continue these deployments over the coming years, but at a slower pace than our historical deployments. Revenues generated on our network of digital transit displays are generally higher than revenues generated on a comparable portfolio of our static transit displays.

Previous wording

We have incurred, and we intend to incur, significant equipment deployment costs and capital expenditures in the coming years to continue increasing the number of digital displays in our portfolio. However, we expect our annual equipment deployment cost spending with respect to the New York Metropolitan Transportation Authority (the “MTA”) transit franchise will decline after our expected material completion of our initial deployment in 2024.

Current wording

We have incurred, and we intend to incur, significant equipment deployment costs and capital expenditures, in the coming years to continue increasing the number of digital displays in our portfolio. However, we expect our annual equipment deployment cost spending with respect to the New York Metropolitan Transportation Authority (the “MTA”) transit franchise will decline now that we have substantially completed our initial deployment during 2024.

Previous wording

We built or converted 84 new digital billboard displays in the U.S. and 45 in Canada in 2023. Additionally, in 2023, we entered into marketing arrangements to sell advertising on 46 third-party digital billboard displays in the U.S. and two in Canada. In 2023, we built, converted or replaced 5,624 digital transit and other displays in the U.S. and 23 in Canada. The following table sets forth information regarding our digital displays.

Current wording

In 2024, we built or converted 89 new digital billboard displays in the U.S. and entered into marketing arrangements to sell advertising on 21 third-party digital billboard displays in the U.S. In 2024, we built, converted or replaced 6,664 digital transit and other displays in the U.S. The following table sets forth information regarding our digital displays.

Previous wording

(a)Digital display amounts include 4,980 displays reserved for transit agency use. Our number of digital displays is impacted by acquisitions, dispositions, management agreements, the net effect of new and lost billboards, and the net effect of won and lost franchises in the period.

Current wording

(a)Digital display amounts include 6,089 displays reserved for transit agency use. Our number of digital displays is impacted by acquisitions, dispositions, management agreements, the net effect of new and lost billboards, and the net effect of won and lost franchises in the period.

Previous wording

Our revenues and profits may fluctuate due to seasonal advertising patterns and influences on advertising markets. Typically, our revenues and profits are highest in the fourth quarter, during the holiday shopping season, and lowest in the first quarter, as advertisers adjust their spending following the holiday shopping season. As described above, our revenues and profits may also fluctuate due to external events beyond our control.

Current wording

Our revenues and profits fluctuate due to seasonal advertising patterns and influences on advertising markets. Typically, our revenues and profits are highest in the fourth quarter, during the holiday shopping season, and lowest in the first quarter, as advertisers adjust their spending following the holiday shopping season. As described above, our revenues and profits also fluctuate due to external events beyond our control.

Previous wording

We have a diversified base of customers across various industries. During 2023, our largest categories of advertisers were entertainment, retail and health/medical, which represented 20%, 11%, and 9% of our total U.S. Media segment revenues, respectively. During 2022, our largest categories of advertisers were entertainment, retail and health/medical, which represented 20%, 11% and 9% of our total U.S. Media segment revenues, respectively.

Current wording

We have a diversified base of customers across various industries. During 2024, our largest categories of advertisers were entertainment, retail and health/medical, which represented 18%, 12%, and 9% of our total revenues from our Billboard and Transit segments, respectively. During 2023, our largest categories of advertisers were entertainment, retail and health/medical, which represented 20%, 11% and 9% of our total revenues from our Billboard and Transit segments, respectively.

Previous wording

Our large-scale portfolio allows our customers to reach a national audience and also provides the flexibility to tailor campaigns to specific regions or markets. In 2023, we generated approximately 42% of our U.S. Media segment revenues from national advertising campaigns, compared to approximately 44% in 2022.

Current wording

Our large-scale portfolio allows our customers to reach a national audience and also provides the flexibility to tailor campaigns to specific regions or markets. In 2024, we generated approximately 42% of our total revenues from our Billboard and Transit segments from national advertising campaigns, compared to approximately 43% in 2023.

Previous wording

(a)Organic revenues exclude revenues associated with a significant acquisition and the impact of foreign currency exchange rates (“non-organic revenues”). We provide organic revenues to understand the underlying growth rate of revenue excluding the impact of non-organic revenue items. Our management believes organic revenues are useful to users of our financial data because it enables them to better understand the level of growth of our business period to period. Since organic revenues are not calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, revenues as an indicator of operating performance. Organic revenues, as we calculate it, may not be comparable to similarly titled measures employed by other companies.

Current wording

(a)Organic revenues exclude revenues associated with the impact of the Transaction (“non-organic revenues”). We provide organic revenues to understand the underlying growth rate of revenue excluding the impact of non-organic revenue items. Our management believes organic revenues are useful to users of our financial data because it enables them to better understand the level of growth of our business period to period. Since organic revenues are not calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, revenues as an indicator of operating performance. Organic revenues, as we calculate it, may not be comparable to similarly titled measures employed by other companies.

Previous wording

We derive Revenues primarily from providing advertising space to customers on our advertising structures and sites. Our contracts with customers generally cover periods ranging from four weeks to one year. Revenues from billboard displays are recognized as rental income on a straight-line basis over the contract term. Transit and other revenues are recognized over the contract period. (See Item 8., Note 11. Revenues to the Consolidated Financial Statements.)

Current wording

We derive Revenues primarily from providing advertising space to customers on our advertising structures and sites. Our traditional contracts with customers generally cover periods ranging from four weeks to one year. Revenues from billboard displays are recognized as rental income on a straight-line basis over the contract term. Transit display revenues are recognized based on the level of units displayed in proportion to the total units to be displayed over the contract period. Billboard display and Transit display revenues generated from programmatic advertising platforms are recognized as rental income as the related advertisement is displayed. Billboard and Transit display revenues derived from impression-based sales contracts fulfilled on direct sales advertising platforms are recognized as revenue over the contract period based pro-rata on the number of impressions delivered in proportion to the total number of impressions to be delivered. Revenues generated from programmatic advertising platforms are based on agreements with the platforms, rather than direct contracts with individual advertisers. (See Item 8., Note 12. Revenues to the Consolidated Financial Statements.)

Previous wording

Total revenues increased $48.5 million, or 3%, and organic revenues increased $47.5 million, or 3%, in 2023 compared to 2022.

Current wording

Total revenues increased $48.5 million, or 3%, and organic revenues increased $47.5 million, or 3%, in 2023 compared to 2022, primarily due to an increase in Billboard segment revenues. See the “Segment Results of Operations” section of this MD&A.

Previous wording

Billboard property lease expenses represented 35% of billboard revenues in 2023 and 33% in 2022. The increase in billboard property lease expenses as a percentage of billboard revenues in 2023 compared to 2022 is primarily due to an increase in variable billboard property lease expenses (see Item 8., Note 5. Leases to the Consolidated Financial Statements), which are primarily attributable to billboard revenue increases in large markets and high profile locations, an out-of-period adjustment of $5.2 million recorded in 2023, related to variable billboard property lease expenses (see Item 8., Note 1. Description of Business and Basis of Presentationto the Consolidated Financial Statements), and the impact of new locations, including through acquisitions.

Current wording

Billboard property lease expenses represented 34% of total billboard revenues in 2024, 35% in 2023 and 33% in 2022. The decrease in billboard property lease expenses as a percentage of total billboard revenues in 2024 compared to 2023 is primarily due to lower variable billboard property lease costs driven by higher relative revenue performance in advertising markets that have lower variable billboard property lease costs and lower revenue performance in advertising markets that have higher variable billboard property lease costs (see Item 8., Note 5. Leases to the Consolidated Financial Statements) and the impact of new and lost locations, including through acquisitions. The increase in billboard property lease expenses as a percentage of total billboard revenues in 2023 compared to 2022 is primarily due to an increase in variable billboard property lease expenses (see Item 8., Note 5. Leases to the Consolidated Financial Statements), which are primarily attributable to total billboard revenue increases in large markets and high profile locations, and the impact of new locations, including through acquisitions.

Previous wording

Transit franchise expenses represented 71% of transit display revenues in 2023 and 67% in 2022. The increase in transit franchise expenses, as a percentage of revenues, is primarily driven by higher guaranteed minimum annual payments to the MTA. We expect transit franchise expenses, as a percentage of transit display revenues, to decline in 2024 compared to 2023, but remain above pre-COVID-19 pandemic levels, as a result of our expectation that revenues generated under the MTA Agreement (as defined below) in 2024 will grow at a compound annual growth rate above the inflation-adjusted guaranteed minimum annual payments to the MTA.

Current wording

Transit franchise expenses represented 61% of total transit display revenues in 2024, 65% in 2023 and 62% in 2022. The decrease in transit franchise expenses, as a percentage of total transit display revenues in 2024 compared to 2023 was primarily driven by MTA revenues growing at a faster rate than the inflationary adjustment to the guaranteed minimum annual payments to the MTA under the MTA Agreement (as defined below), partially offset by the net impact of new and lost transit franchise contracts. The increase in transit franchise expenses, as a percentage of total transit display revenues in 2023 compared to 2022, was primarily driven by higher guaranteed minimum annual payments to the MTA.

Previous wording

Billboard property lease and transit franchise expenses increased by $55.2 million in 2023 compared to 2022, primarily due to higher variable billboard property lease expenses, including an out-of-period adjustment of $5.2 million recorded in 2023, related to variable billboard property lease expenses (see Item 8., Note 1. Description of Business and Basis of Presentationto the Consolidated Financial Statements), the impact of new locations, including through acquisitions, and higher guaranteed minimum annual payments to the MTA.

Current wording

Billboard property lease and transit franchise expenses decreased by $19.1 million in 2024 compared to 2023, primarily due to lower variable property lease expenses, the impact of the Transaction and the net impact of new and lost transit franchise contracts, partially offset by higher guaranteed minimum annual payments to the MTA and the impact of new and lost locations, including through acquisitions. Billboard property lease and transit franchise expenses increased by $44.8 million in 2023 compared to 2022, primarily due to higher variable billboard property lease expenses, the impact of new locations, including through acquisitions, and higher guaranteed minimum annual payments to the MTA.

Previous wording

Posting, maintenance and other expenses, as a percentage of revenues, were 12% in each of 2023 and 2022. Posting, maintenance and other expenses increased $1.7 million, or 1%, in 2023 compared to 2022, primarily due to higher compensation-related expenses and higher maintenance and utilities cost, driven by inflationary cost increases in 2023, partially offset by lower posting and rotation costs.

Current wording

Posting, maintenance and other expenses, as a percentage of revenues, were 12% in each of 2024, 2023 and 2022. Posting, maintenance and other expenses increased $5.0 million, or 2%, in 2024 compared to 2023, primarily due to higher compensation-related expenses, higher maintenance and utilities costs due to inflationary cost increases, and higher posting and rotation costs caused by higher business activity, partially offset by the impact of the Transaction and lower materials costs driven by lower third-party equipment sales. Posting, maintenance and other expenses increased $1.7 million, or 1%, in 2023 compared to 2022, primarily due to higher compensation-related expenses and higher maintenance and utilities cost, driven by inflationary cost increases in 2023, partially offset by lower posting and rotation costs.

Previous wording

SG&A expenses represented 24% of Revenues in 2023 and 24% in 2022. SG&A expenses increased $7.6 million, or 2%, in 2023 compared to 2022, primarily due to the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the Company to certain employees, higher professional fees, rent related to new offices, higher insurance costs and a higher provision for doubtful accounts, partially offset by lower compensation-related expenses. We continue to evaluate methods to lower SG&A expense growth.

Current wording

SG&A expenses represented 24% of Revenues in each of 2024, 2023 and 2022. SG&A expenses increased $18.2 million, or 4%, in 2024 compared to 2023, primarily due to higher compensation-related expenses, including salaries, commissions and severance, higher professional fees, as a result of a management consulting project and higher rent related to new offices, partially offset by the impact of the Transaction. SG&A expenses increased $7.6 million, or 2%, in 2023 compared to 2022, primarily due to the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the Company to certain employees, higher professional fees, rent related to new offices, higher insurance costs and a higher provision for doubtful accounts, partially offset by lower compensation-related expenses. We continue to evaluate methods to lower SG&A expense growth.

Previous wording

Net gain on dispositions was $14.2 million in 2023 compared to a Net loss on dispositions of $0.2 million in 2022. The Net gain on dispositions in 2023 was primarily related to the sale of three parcels of land and the related structures in Los Angeles, California, (see Item 8., Note 12. Acquisitions and Dispositions: Dispositions: Los Angeles Office and Operations Center to the Consolidated Financial Statements) and in St. Louis, Missouri.

Current wording

Net gain on dispositions increased by $146.7 million in 2024 compared to 2023, primarily due to the impact of the Transaction. Net gain on dispositions was $14.2 million in 2023 compared to a Net loss on dispositions of $0.2 million in 2022. The Net gain on dispositions in 2023 was primarily related to the sale of three parcels of land and the related structures in Los Angeles, California, (see Item 8., Note 13. Acquisitions and Dispositions: Dispositions: Los Angeles Office and Operations Center to the Consolidated Financial Statements) and in St. Louis, Missouri.

Previous wording

Depreciation increased $1.9 million, or 2%, in 2023 compared to 2022, primarily due to capital expenditures and acquisitions in 2022, partially offset by an increase in fully-depreciated assets.

Current wording

Depreciation increased $0.2 million in 2024 compared to 2023, primarily due to higher depreciation related to the change in estimated useful life of certain advertising displays, partially offset by the impact of the Transaction (see Note 13. Acquisitions and Dispositions: Dispositions: Canadian Business). Depreciation increased $1.9 million, or 2%, in 2023 compared to 2022, primarily due to capital expenditures and acquisitions in 2022, partially offset by an increase in fully-depreciated assets.

Previous wording

Amortization increased $7.9 million, or 11%, in 2023 compared to 2022, due primarily to higher amortization of leasehold interest intangibles recorded related to asset acquisitions, partially offset by lower amortization related to franchise agreements associated with the MTA.

Current wording

Amortization decreased $9.2 million, or 11%, in 2024 compared to 2023, due primarily to the impact of the Transaction (see Note 13. Acquisitions and Dispositions: Dispositions: Canadian Business) and lower amortization related to franchise agreements associated with the MTA, partially offset by higher amortization of leasehold interest intangibles recorded related to asset acquisitions. Amortization increased $7.9 million, or 11%, in 2023 compared to 2022, due primarily to higher amortization of leasehold interest intangibles recorded related to asset acquisitions, partially offset by lower amortization related to franchise agreements associated with the MTA.

Previous wording

Interest expense, net, was $158.4 million (including $6.7 million of deferred financing costs) in 2023 and $131.8 million (including $6.5 million of deferred financing costs) in 2022. The increase in Interest expense, net, in 2023 compared to 2022, was primarily due to higher interest rates and a higher average debt balance.

Current wording

Interest expense, net, was $156.2 million (including $6.1 million of deferred financing costs) in 2024, $158.4 million (including $6.7 million of deferred financing costs) in 2023 and $131.8 million (including $6.5 million of deferred financing costs) in 2022. The decrease in Interest expense, net, in 2024 compared to 2023, was primarily due to a lower average debt balance, partially offset by higher interest rates. The increase in Interest expense, net, in 2023 compared to 2022, was primarily due to higher interest rates and a higher average debt balance.

Previous wording

In 2023, we recorded a loss on extinguishment of debt of $8.1 million relating to the redemption of all of our outstanding 6.250% Senior Unsecured Notes due 2025 (the “2025 Notes”) in the fourth quarter of 2023.

Current wording

In 2024, we recorded a Loss on extinguishment of debt of $1.2 million relating to the write-off of deferred financing costs and a portion of the discount on the Term Loan (as defined below), due to prepayments on the Term Loan. In 2023, we recorded a Loss on extinguishment of debt of $8.1 million relating to the redemption of all of our outstanding 6.250% Senior Unsecured Notes due 2025 in the fourth quarter of 2023.

Previous wording

Provision for income taxes decreased $5.4 million, or 57%, in 2023 compared to 2022, due primarily to a valuation allowance against our U.S. taxable REIT subsidiary (“TRS”) accumulated deferred tax assets in 2022. The effective income tax rate was 0.9% for 2023 and 6.0% for 2022.

Current wording

Provision for income taxes increased $7.0 million, or 175%, in 2024 compared to 2023, due primarily to a gain on disposition related the Transaction. Provision for income taxes decreased $5.4 million, or 57%, in 2023 compared to 2022, due primarily to a valuation allowance against our U.S. taxable REIT subsidiary (“TRS”) accumulated deferred tax assets in 2022. The effective income tax rate was 4.1% for 2024, 0.9% for 2023 and 6.0% for 2022.

Previous wording

Net loss before allocation to non-controlling interests was $429.7 million in 2023 compared to Net income before allocation to non-controlling interests of $149.1 million in 2022, driven by lower operating income, due primarily to impairment charges, and higher interest expense.

Current wording

Net income before allocation to redeemable and non-redeemable noncontrolling interests was $258.7 million in 2024 compared to a Net loss before allocation to redeemable and non-redeemable noncontrolling interests of $424.5 million in 2023, driven by higher operating income, due primarily to higher impairment charges incurred in 2023 and a gain on disposition related to the Transaction, and a lower loss on extinguishment of debt, partially offset by a higher provision for income taxes. Net loss before allocation to redeemable and non-redeemable noncontrolling interests was $424.5 million in 2023 compared to Net income before allocation to redeemable and non-redeemable noncontrolling interests of $143.9 million in 2022, driven by lower operating income, due primarily to impairment charges and higher interest expense.

Previous wording

When used herein, references to “FFO” and “AFFO” mean “FFO attributable to OUTFRONT Media Inc.” and “AFFO attributable to OUTFRONT Media Inc.,” respectively. We calculate FFO in accordance with the definition established by the National Association of Real Estate Investment Trusts (“NAREIT”). FFO reflects net income (loss) attributable to OUTFRONT Media Inc. adjusted to exclude gains and losses from the sale of real estate assets, impairment charges, depreciation and amortization of real estate assets, amortization of direct lease acquisition costs and the same adjustments for our equity-based investments and non-controlling interests, as well as the related income tax effect of adjustments, as applicable. We calculate AFFO as FFO adjusted to include cash paid for direct lease acquisition costs as such costs are generally amortized over a period ranging from four weeks to one year and therefore are incurred on a regular basis. AFFO also includes cash paid for maintenance capital expenditures since these are routine uses of cash that are necessary for our operations. In addition, AFFO excludes losses on extinguishment of debt, as well as certain non-cash items, including non-real estate depreciation and amortization, impairment charges on non-real estate assets, stock-based compensation expense, accretion expense, the non-cash effect of straight-line rent, amortization of deferred financing costs and the same adjustments for our non-controlling interests, along with the non-cash portion of income taxes, and the related income tax effect of adjustments, as applicable. We use FFO and AFFO measures for managing our business and for planning and forecasting future periods, and each is an important indicator of our operational strength and business performance, especially compared to other REITs. Our management believes users of our financial data are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in managing, planning and executing our business strategy. Our management also believes that the presentations of FFO and AFFO, as supplemental measures, are useful in evaluating our business because adjusting results to reflect items that have more bearing on the operating performance of REITs highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures. It is management’s opinion that these supplemental measures provide users of our financial data with an important perspective on our operating performance and also make it easier to compare our results to other companies in our industry, as well as to REITs.

Current wording

When used herein, references to “FFO” and “AFFO” mean “FFO attributable to OUTFRONT Media Inc.” and “AFFO attributable to OUTFRONT Media Inc.,” respectively. We calculate FFO in accordance with the definition established by the National Association of Real Estate Investment Trusts (“NAREIT”). FFO reflects net income (loss) attributable to OUTFRONT Media Inc. adjusted to exclude gains and losses from the sale of real estate assets, impairment charges, depreciation and amortization of real estate assets, amortization of direct lease acquisition costs and the same adjustments for our equity-based investments and redeemable and non-redeemable noncontrolling interests, as well as the related income tax effect of adjustments, as applicable. We calculate AFFO as FFO adjusted to include cash paid for direct lease acquisition costs as such costs are generally amortized over a period ranging from four weeks to one year and therefore are incurred on a regular basis. AFFO also includes cash paid for maintenance capital expenditures since these are routine uses of cash that are necessary for our operations. In addition, AFFO excludes losses on extinguishment of debt, as well as certain non-cash items, including non-real estate depreciation and amortization, impairment charges on non-real estate assets, stock-based compensation expense, accretion expense, the non-cash effect of straight-line rent, amortization of deferred financing costs and the same adjustments for our redeemable and non-redeemable noncontrolling interests, along with the non-cash portion of income taxes, and the related income tax effect of adjustments, as applicable. We use FFO and AFFO measures for managing our business and for planning and forecasting future periods, and each is an important indicator of our operational strength and business performance, especially compared to other REITs. Our management believes users of our financial data are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in managing, planning and executing our business strategy. Our management also believes that the presentations of FFO and AFFO, as supplemental measures, are useful in evaluating our business because adjusting results to reflect items that have more bearing on the operating performance of REITs highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures. It is management’s opinion that these supplemental measures provide users of our financial data with an important perspective on our operating performance and also make it easier to compare our results to other companies in our industry, as well as to REITs.

Previous wording

Since Adjusted OIBDA, Adjusted OIBDA margin, FFO and AFFO are not measures calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, operating income (loss), net income (loss) attributable to OUTFRONT Media Inc., and revenues, the most directly comparable GAAP financial measures, as indicators of operating performance. These measures, as we calculate them, may not be comparable to similarly titled measures employed by other companies. In addition, these measures do not necessarily represent funds available for discretionary use and are not necessarily a measure of our ability to fund our cash needs.

Current wording

OUTFRONT Media Inc., and revenues, the most directly comparable GAAP financial measures, as indicators of operating performance. These measures, as we calculate them, may not be comparable to similarly titled measures employed by other companies. In addition, these measures do not necessarily represent funds available for discretionary use and are not necessarily a measure of our ability to fund our cash needs.

Previous wording

Organic billboard revenues increased $58.7 million, or 4%, in 2023 compared to 2022, primarily due to an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues, the impact of new and lost billboards in the period, including insignificant acquisitions, and higher proceeds from condemnations.

Current wording

Billboard segment revenues increased $39.6 million, or 3%, in 2024 compared to 2023, reflecting an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues, partially offset by the impact of new and lost billboards in the period, including insignificant acquisitions, and lower proceeds from condemnations. We generated approximately 39% in 2024 and 40% in 2023 of our Billboard segment revenues from national advertising campaigns.

Previous wording

(a)Organic revenues exclude revenues associated with a significant acquisition (“non-organic revenues”).

Current wording

(a)Organic revenues associated with a significant acquisition (“non-organic revenues”).

Previous wording

Billboard revenues in the U.S. Media segment increased $60.9 million, or 5%, in 2023 compared to 2022, reflecting an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues, the impact of new and lost billboards in the period, including acquisitions, and higher proceeds from condemnations.

Current wording

Billboard segment revenues increased $60.9 million, or 5%, in 2023 compared to 2022, reflecting an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues, the impact of new and lost billboards in the period, including acquisitions, and higher proceeds from condemnations. We generated approximately 40% in each of 2023 and 2022 of our Billboard segment revenues from national advertising campaigns.

Previous wording

SG&A expenses in the U.S. Media segment increased $11.2 million, or 4%, in 2023 compared to 2022, primarily driven by higher professional fees, higher insurance costs, higher rent related to new offices, a higher provision for doubtful accounts and higher compensation-related expenses.

Current wording

SG&A expenses in the Billboard segment increased $8.9 million, or 4%, in 2023 compared to 2022, primarily driven by higher insurance costs, higher compensation-related expenses, higher rent related to new offices, higher professional fees and a higher provision for doubtful accounts.

Previous wording

U.S. Media segment Adjusted OIBDA decreased $21.8 million, or 4%, in 2023 compared to 2022. Adjusted OIBDA margin was 28% in 2023 and 30% in 2022. The decrease in Adjusted OIBDA margins was due primarily to a higher increase in operating expenses, due to an increase in billboard property lease expenses, including an out-of-period adjustment of $5.2 million recorded in 2023 related to variable billboard property lease expenses (see Item 8., Note 1. Description of Business and Basis of Presentationto the Consolidated Financial Statements), increases in the MTA guaranteed minimum annual payments in 2023 and an increase in SG&A expenses, compared to a lower increase in revenues.

Current wording

Billboard segment Adjusted OIBDA increased $8.4 million, or 2%, in 2023 compared to 2022. Billboard segment Adjusted OIBDA margin was 36.5% in 2023 and 37.6% in 2022. The decrease in Billboard segment Adjusted OIBDA margins in 2023 compared to 2022 was due primarily to a higher increase in Billboard segment operating expenses, due to an increase in Billboard segment property lease expenses, and an increase in Billboard segment SG&A expenses, compared to a lower increase in Billboard segment revenues.

Previous wording

Transit and other revenues in the U.S. Media segment decreased $12.5 million, or 3%, in 2023 compared to 2022, driven by a decrease in average revenue per display (yield), driven by weaker market conditions in national advertising, which primarily impacted advertising sales on certain above-ground advertising displays, partially offset by the impact of a new transit franchise contract.

Current wording

Transit segment revenues decreased $12.5 million, or 3%, in 2023 compared to 2022, driven by a decrease in average revenue per display (yield), driven by weaker market conditions in national advertising, which primarily impacted advertising sales on certain above-ground advertising displays, partially offset by the impact of a new transit franchise contract. We generated approximately 55% in 2023 and 60% in 2022 of our Transit segment revenues from national advertising campaigns.

Previous wording

In 2023, we recorded impairment charges of $534.7 million in the U.S. Media segment, primarily related to impairment charges related to our MTA asset group and our U.S. Transit and Other reporting unit (see the “Critical Accounting Policies” section of this MD&A and Item 8., Note 4. Long-Lived Assets to the Consolidated Financial Statements).

Current wording

In 2023, we recorded impairment charges of $534.7 million in the Transit segment, primarily related to impairment charges related to our MTA asset group and our historical Transit reporting unit (see Item 8., Note 4. Long-Lived Assets to the Consolidated Financial Statements).

Previous wording

Total Other revenues increased $0.1 million in 2023 compared to 2022, primarily driven by an increase in average revenue per display (yield), partially offset by the impact of foreign currency exchange rates.

Current wording

Other revenues increased $0.1 million in 2023 compared to 2022, primarily driven by an increase in average revenue per display (yield), partially offset by the impact of foreign currency exchange rates.