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What changed in OUTFRONT Media Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of OUTFRONT Media Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+343 added−271 removedSource: 10-K (2024-02-22) vs 10-K (2023-02-23)

Top changes in OUTFRONT Media Inc.'s 2023 10-K

343 paragraphs added · 271 removed · 234 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

51 edited+13 added−7 removed105 unchanged
Biggest changePercentage of Total Revenues for the Year Ended December 31, 2022 Number of Displays as of December 31, 2022 (a) Location (Metropolitan Area) Billboard Transit and Other Total Billboard Displays Transit and Other Displays Total Displays Percentage of Total Displays New York, NY 10 % 52 % 19 % 566 261,131 261,697 52 % Los Angeles, CA 16 11 15 4,404 39,246 43,650 9 Miami, FL 6 7 6 939 20,578 21,517 4 State of New Jersey 5 4 3,533 — 3,533 San Francisco, CA 4 3 3 1,075 21,146 22,221 4 Houston, TX 4 1 3 1,079 188 1,267 Chicago, IL 4 3 1,086 123 1,209 Tampa, FL 3 — 3 1,386 — 1,386 Detroit, MI 3 1 3 1,837 6,128 7,965 2 Atlanta, GA 3 2 3 1,933 775 2,708 Boston, MA 2 6 3 249 36,316 36,565 7 Dallas, TX 3 1 2 708 516 1,224 Phoenix, AZ 2 1 2 1,365 1,359 2,724 Orlando, FL 2 — 2 1,238 — 1,238 Washington D.C. 8 2 19 47,099 47,118 9 All other United States (b) 28 1 22 19,578 18,669 38,247 8 Other — 2 — — — — — Total United States 95 96 95 40,995 453,274 494,269 98 Canada 5 4 5 4,729 4,596 9,325 2 Total 100 % 100 % 100 % 45,724 457,870 503,594 100 % Total revenues (in millions) $ 1,384.7 $ 387.4 $ 1,772.1 (a) All displays, including those reserved for transit agency use.
Biggest changePercentage of Total Revenues for the Year Ended December 31, 2023 Number of Displays as of December 31, 2023 (a) Location (Metropolitan Area) Billboard Transit and Other Total Billboard Displays Transit and Other Displays Total Displays Percentage of Total Displays New York, NY 10 % 52 % 18 % 563 266,022 266,585 53 % Los Angeles, CA 15 9 14 4,340 34,913 39,253 8 Miami, FL 6 6 6 917 20,363 21,280 4 State of New Jersey 5 4 3,491 — 3,491 San Francisco, CA 3 3 3 1,054 18,105 19,159 4 Houston, TX 4 1 3 1,075 188 1,263 Tampa, FL 3 — 3 1,323 — 1,323 Detroit, MI 3 3 1,782 4,501 6,283 1 Atlanta, GA 3 2 3 1,849 779 2,628 Boston, MA 2 7 3 263 38,711 38,974 8 Dallas, TX 3 1 2 707 508 1,215 Phoenix, AZ 2 1 2 1,348 1,326 2,674 Orlando, FL 2 2 1,187 16 1,203 Washington D.C. 1 10 2 19 47,163 47,182 9 Chicago, IL 1 1 1,196 — 1,196 All other United States (b) 32 2 26 19,677 18,581 38,258 8 Other — 2 — — — — Total United States 95 96 95 40,791 451,176 491,967 98 Canada 5 4 5 4,609 4,531 9,140 2 Total 100 % 100 % 100 % 45,400 455,707 501,107 100 % Total revenues (in millions) $ 1,444.9 $ 375.7 $ 1,820.6 (a) All displays, including those reserved for transit agency use.
Increasing the number of digital displays in 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.
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.
Risk Factors—Risks Related to Our Business and Operations—Government regulation of outdoor advertising, including any changes to such regulation, may restrict our outdoor advertising operations and our ability to increase the number of advertising displays in our portfolio.” 13 Municipal and county governments generally also have sign controls as part of their zoning laws and building codes, and many have adopted standards more restrictive than the federal requirements.
Risk Factors—Risks Related to Our Business and Operations—Government regulation of outdoor advertising, including any changes to such regulation, may restrict our outdoor advertising operations and our ability to increase the number of advertising displays in our portfolio.” Municipal and county governments generally also have sign controls as part of their zoning laws and building codes, and many have adopted standards more restrictive than the federal requirements.
Financial Statements and Supplementary Data.” Tax Status Our qualification to be taxed as a REIT is dependent on our ability to meet various complex requirements under the Internal Revenue Code of 1986, as amended (the “Code”), related to, among other things, the sources of our gross income, the composition and values of our assets and the diversity of ownership of our shares.
Financial Statements and Supplementary Data.” 7 Tax Status Our qualification to be taxed as a REIT is dependent on our ability to meet various complex requirements under the Internal Revenue Code of 1986, as amended (the “Code”), related to, among other things, the sources of our gross income, the composition and values of our assets and the diversity of ownership of our shares.
We have not engaged in trading, underwriting or agency distribution or sale of securities of other issuers and do not intend to do so. We make available to our stockholders our Annual Report on Form 10-K, including our audited financial statements, and other required periodic reports filed with the Securities and Exchange Commission (the “SEC”).
We have not engaged in trading, underwriting or agency distribution or sale of securities of other issuers and do not intend to do so. 17 We make available to our stockholders our Annual Report on Form 10-K, including our audited financial statements, and other required periodic reports filed with the Securities and Exchange Commission (the “SEC”).
Furthermore, as digital advertising displays are introduced into the market on a large 14 scale, existing regulations that currently do not apply to digital advertising displays by their terms could be revised to impose specific restrictions on digital advertising displays due to alleged concerns over, among other things, aesthetics or driver safety.
Furthermore, as digital advertising displays are introduced into the market on a large scale, existing regulations that currently do not apply to digital advertising displays by their terms could be revised to impose specific restrictions on digital advertising displays due to alleged concerns over, among other things, aesthetics or driver safety.
Consistent with this strategy, we regularly evaluate potential acquisitions, ranging from small transactions to larger acquisitions. See “—Acquisition and Disposition Activity.” There can be no assurances that any transactions currently being evaluated will be consummated or, if consummated, that such transactions would prove beneficial to us.
Consistent with this strategy, we regularly evaluate potential acquisitions, ranging from 8 small transactions to larger acquisitions. See “—Acquisition and Disposition Activity.” There can be no assurances that any transactions currently being evaluated will be consummated or, if consummated, that such transactions would prove beneficial to us.
From time to time in the ordinary course of business, we have both acquired and disposed of advertising structures and sites in order to optimize our portfolio, and we intend to continue to do so in the future. See “—Acquisition and Disposition Activity” and “—Growth Strategy.” Investments in Real Estate Mortgages.
From time to time in the ordinary course of business, we have both acquired and disposed of advertising structures and sites in order to optimize our portfolio, and we intend to continue to do so in the future. See “—Acquisition and Disposition Activity” and “—Growth Strategy.” 16 Investments in Real Estate Mortgages.
Except in connection with the Notes, Class A equity interests of a subsidiary of the Company that controls its Canadian business in connection with the acquisition of outdoor advertising assets 16 in Canada, the ATM Program and the Series A Preferred Stock (each as defined and described in “Item 7.
Except in connection with the Notes, Class A equity interests of a subsidiary of the Company that controls its Canadian business in connection with the acquisition of outdoor advertising assets in Canada, the ATM Program and the Series A Preferred Stock (each as defined and described in “Item 7.
In addition, from time to time, third parties or local governments commence proceedings in which they assert that we own or operate structures that are not properly permitted or otherwise in strict compliance with applicable law.
In addition, from time to time, 14 third parties or local governments commence proceedings in which they assert that we own or operate structures that are not properly permitted or otherwise in strict compliance with applicable law.
Additionally, no cybersecurity measures are impenetrable, and if a cybersecurity incident occurs, we could lose competitively sensitive proprietary business information, disclose personally identifiable information, and/or suffer disruptions to our business operations, particularly our digital advertising displays, which could result in, among other things, regulatory investigations, legal proceedings and/or remedial actions relating to our cybersecurity measures. See “Item 1A.
Additionally, no cybersecurity 15 measures are impenetrable, and if a cybersecurity incident occurs, we could lose competitively sensitive proprietary business information, disclose personally identifiable information, and/or suffer significant disruptions to our business operations, particularly our digital advertising displays, which could result in, among other things, regulatory investigations, legal proceedings and/or remedial actions relating to our cybersecurity measures. See “Item 1A.
The Company, along with Outfront Media Capital LLC (“Finance LLC”) and Outfront Media Capital Corporation (“Finance Corp.” and together with Finance LLC, the “Borrowers”) and other guarantor subsidiaries party thereto, are parties to a credit agreement, dated as of January 31, 2014 (as amended, supplemented or otherwise modified, the “Credit Agreement”), pursuant to which the Borrowers may borrow funds under a $500.0 million revolving credit facility, which matures in 2024 (the “Revolving Credit Facility”) and have incurred outstanding indebtedness of $600.0 million under a term loan due in 2026 (the “Term Loan,” together with the Revolving Credit Facility, the “Senior Credit Facilities”).
The Company, along with Outfront Media Capital LLC (“Finance LLC”) and Outfront Media Capital Corporation (“Finance Corp.” and together with Finance LLC, the “Borrowers”) and other guarantor subsidiaries party thereto, are parties to a credit agreement, dated as of January 31, 2014 (as amended, restated, amended and restated, supplemented or otherwise modified, the “Credit Agreement”), pursuant to which the Borrowers may borrow funds under a $500.0 million revolving credit facility, which matures in 2028 (the “Revolving Credit Facility”) and have incurred outstanding indebtedness of $600.0 million under a term loan due in 2026 (the “Term Loan,” together with the Revolving Credit Facility, the “Senior Credit Facilities”).
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 19. Segment Information to the Consolidated Financial Statements).
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).
Additionally, since 2014, the Borrowers have issued senior unsecured notes in several private placement transactions and redeemed certain of these senior unsecured notes.
Additionally, since 2014, the Borrowers have issued senior notes in several private placement transactions and redeemed certain of these senior notes.
The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. The contents of the websites referred to above are not incorporated into this filing. 17
The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. The contents of the websites referred to above are not incorporated into this filing. 18
Media segment revenues earned among different industries for 2022, 2021 and 2020. For 2022, as a result of our diverse base of customers in the U.S., no single industry contributed more than 20% of our U.S. Media segment revenues.
Media segment revenues earned among different industries for 2023, 2022 and 2021. For 2023, as a result of our diverse base of customers in the U.S., no single industry contributed more than 20% of our U.S. Media segment revenues.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8. Financial Statements and Supplementary Data.” 10 Renovation, Improvement and Development The following table sets forth information regarding our digital displays.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8. Financial Statements and Supplementary Data.” 11 Renovation, Improvement and Development The following table sets forth information regarding our digital displays.
In addition, as of December 31, 2022, we have a $150.0 million revolving accounts receivable securitization facility (the “AR Facility”), which terminates in 2025, unless further extended.
In addition, as of December 31, 2023, we have a $150.0 million revolving accounts receivable securitization facility (the “AR Facility”), which terminates in 2025, unless further extended.
Our Portfolio of Outdoor Advertising Structures and Sites Diversification by Customer For the year ended December 31, 2022, no individual customer represented more than 3% of U.S. Media segment revenues. Therefore, we do not consider detailed information about any individual customer to be meaningful. 8 Diversification by Industry The following table sets forth information regarding the diversification of U.S.
Our Portfolio of Outdoor Advertising Structures and Sites Diversification by Customer For the year ended December 31, 2023, no individual customer represented more than 3% of U.S. Media segment revenues. Therefore, we do not consider detailed information about any individual customer to be meaningful. 9 Diversification by Industry The following table sets forth information regarding the diversification of U.S.
Media Segment Revenues for the Year Ended December 31, Industry 2022 2021 2020 Entertainment 20 % 19 % 17 % Retail 11 10 9 Health/Medical 10 10 10 Technology 7 6 6 Miscellaneous Service Providers 5 6 5 Legal Services/Lawyers 5 5 5 Restaurants 5 5 5 Financial 4 4 4 Automotive 4 4 4 Alcohol 3 4 4 Consumer Packaged Goods 3 3 4 Government/Political 3 4 4 Education 3 3 3 Utilities 3 3 3 Real Estate 3 2 3 Travel 3 2 3 Insurance 2 3 4 Other (a) 6 7 7 Total 100 % 100 % 100 % (a) No single industry in “Other” individually represents more than 2% of total revenues. 9 Diversification by Geography Our advertising structures and sites are geographically diversified across 34 states, Washington D.C. and Canada.
Media Segment Revenues for the Year Ended December 31, Industry 2023 2022 2021 Entertainment 20 % 20 % 18 % Retail 11 11 10 Health/Medical 9 9 10 Legal Services/Lawyers 7 5 5 Technology 6 8 7 Miscellaneous Service Providers 5 5 5 Restaurants 4 5 5 Automotive 4 4 4 Consumer Packaged Goods 4 3 3 Education 4 3 3 Travel 4 3 2 Financial 3 4 5 Alcohol 3 3 4 Government/Political 3 3 4 Utilities 3 3 3 Real Estate 2 3 2 Non-Profit 2 2 2 Insurance 2 2 3 Other (a) 4 4 5 Total 100 % 100 % 100 % (a) No single industry in “Other” individually represents more than 2% of total revenues. 10 Diversification by Geography Our advertising structures and sites are geographically diversified across 34 states, Washington D.C. and Canada.
These structures are often located in areas where it is difficult or not permitted to build additional billboards under current laws, which enhances the value of our portfolio. We have a highly diversified portfolio of advertising sites. As of December 31, 2022, we had approximately 20,200 lease agreements with approximately 18,100 different landlords in the U.S.
These structures are often located in areas where it is difficult or not permitted to build additional billboards under current laws, which enhances the value of our portfolio. We have a highly diversified portfolio of advertising sites. As of December 31, 2023, we had approximately 19,300 lease agreements with approximately 18,100 different landlords in the U.S.
Since 2014, the Borrowers have also been parties to agreements governing our standalone letter of credit facilities. As of December 31, 2022, we had issued letters of credit totaling approximately $75.8 million under our aggregate $81.0 million standalone letter of credit facilities.
Since 2014, the Borrowers have also been parties to agreements governing our standalone letter of credit facilities. As of December 31, 2023, we had issued letters of credit totaling approximately $75.6 million under our aggregate $81.0 million standalone letter of credit facilities.
We also recognize the efforts of our employees with a variety of equity, cash and non-cash awards, such as our annual OUTShine! awards, our OUTpace awards and our President’s Club trips. 12 We continually monitor our employee turnover rates. In 2022, we experienced lower total employee turnover of 14% compared to 15% in 2021 and 26% in 2020.
We also recognize the efforts of our employees with a variety of equity, cash and non-cash awards, such as our annual OUTShine! awards, our OUTpace awards and our President’s Club trips. We continually monitor our employee turnover rates. In 2023, we experienced lower total employee turnover of 13% compared to 14% in 2022 and 15% in 2021.
Maintenance capital expenditures also include spending on software and technology. In the opinion of management, our outdoor advertising sites and structures are adequately covered by insurance. 11 Contract Expirations We derive revenues primarily from providing advertising space to customers on our advertising structures and sites.
Maintenance capital expenditures also include spending on software and technology, and office facilities renovations. In the opinion of management, our outdoor advertising sites and structures are adequately covered by insurance. 12 Contract Expirations We derive revenues primarily from providing advertising space to customers on our advertising structures and sites.
Further, our national footprint in the U.S. and significant presence in Canada provide us with an attractive platform on which to add additional advertising structures and sites. Our scale gives us advantages in driving additional revenues and reducing operating costs from acquired billboards.
Further, our national footprint in the U.S. provides us with an attractive platform on which to add additional advertising structures and sites. Our scale gives us advantages in driving additional revenues and reducing operating costs from acquired billboards.
All of these contracts have fixed terms, are typically terminable for convenience at the option of the governmental entity (other than with respect to the New York Metropolitan Transportation Authority (the “MTA”)), and generally provide for payments to the governmental entity based on a percentage of the revenues generated under the contract and/or a guaranteed minimum annual payment, and some may require us to incur capital expenditures.
All of these contracts have fixed terms, are typically terminable for convenience at the option of the governmental entity (other than with respect to the MTA), and generally provide for payments to the governmental entity based on a percentage of the revenues generated under the contract and/or a guaranteed minimum annual payment, and some may require us to incur capital expenditures.
We routinely invest capital in the maintenance and repair of our billboard and transit structures. This includes safety initiatives and replaced displays, as well as new billboard components such as panels, sections, catwalks, lighting and ladders. Our maintenance capital expenditures were $25.5 million in 2022, $25.3 million in 2021 and $17.8 million in 2020.
We routinely invest capital in the maintenance and repair of our billboard and transit structures. This includes safety initiatives and replaced displays, as well as new billboard components such as panels, sections, catwalks, lighting and ladders. Our maintenance capital expenditures were $30.2 million in 2023, $25.5 million in 2022 and $25.3 million in 2021.
Los Angeles contributed 15% of total billboard revenues in each of 2021 and 2020. New York contributed 8% of total billboard revenues in each of 2021 and 2020. For additional information regarding revenues for our billboard displays and transit and other displays by segment, see “Item 7.
Los Angeles contributed 16% of total billboard revenues in 2022 and contributed 15% of total billboard revenues in 2021. New York contributed 10% of total billboard revenues in 2022 and contributed 8% of total billboard revenues in 2021. For additional information regarding revenues for our billboard displays and transit and other displays by segment, see “Item 7.
(b) No single location (metropolitan area) in “All other United States” individually represents more than 2% of total revenues. The New York and Los Angeles metropolitan areas contributed 49% and 12%, respectively, of total transit and other revenues in 2021 and 40% and 10%, respectively, of total transit and other revenues in 2020.
(b) No single location (metropolitan area) in “All other United States” individually represents more than 2% of total revenues. The New York and Los Angeles metropolitan areas contributed 52% and 11%, respectively, of total transit and other revenues in 2022 and 49% and 12%, respectively, of total transit and other revenues in 2021.
On November 20, 2014, the Company changed its legal name to “OUTFRONT Media Inc.” and its common stock began trading on the New York Stock Exchange under the ticker symbol “OUT.” Acquisition and Disposition Activity We regularly evaluate potential acquisitions, ranging from small transactions to larger acquisitions. For additional information regarding our acquisition and disposition activity, see “Item 7.
On November 20, 2014, the Company changed its legal name to “OUTFRONT Media Inc.” and its common stock began trading on the New York Stock Exchange under the ticker symbol “OUT.” Acquisition and Disposition Activity We regularly evaluate potential acquisitions, ranging from small transactions to larger acquisitions.
Many of these laws and industry standards and regulations are still evolving and changes in the nature of the data that we collect, purchase and utilize, and the ways that data is permitted to be collected, stored, used and/or shared may negatively impact the way that we are able to conduct business, particularly our digital display platform.
Many of these laws and industry standards and regulations are still evolving and changes in the nature of the data that we collect, purchase and utilize, and the ways that data is permitted to be collected, stored, used and/or shared (including with respect to artificial intelligence, machine learning and automated processing) may negatively impact the way that we are able to conduct business, particularly our digital display platform.
Our diversity, equity and inclusion program is led by an advisory council and the Company’s co-Chief Diversity Officers as well as our Chief Human Resources Officer, and is charged with providing programs that focus on the value of diversity, equity and inclusion to the Company’s culture, including employee resource groups, diversity and inclusion training and events, presentations by keynote speakers, and internship programs, all of which support women, people of color and members of the LGBTQ+ community.
Our diversity, equity and inclusion program is led by an advisory council and the Company’s co-Chief Diversity Officers as well as our Chief Human Resources Officer, and is charged with providing programs that focus on the value of diversity, equity and inclusion to the Company’s culture, including employee resource groups, diversity and inclusion training and events, presentations by keynote speakers, and internship programs, all of which support inclusion and belonging for all employees, including members of underrepresented communities.
We believe that our culture, competitive compensation and development opportunities have contributed to the low turnover at the Company. Diversity, Equity and Inclusion We are committed to promoting a diverse and inclusive working environment.
Voluntary turnover decreased in 2023 compared to 2022 and decreased in 2022 compared to 13 2021. We believe that our culture, competitive compensation and development opportunities have contributed to the low turnover at the Company. Diversity, Equity and Inclusion We are committed to promoting a diverse and inclusive working environment.
As of December 31, 2022, of the senior unsecured notes issued by the Borrowers, $400.0 million aggregate principal amount of 6.250% Senior Unsecured Notes due 2025 (the “2025 Notes”), $650.0 million aggregate principal amount of 5.000% Senior Unsecured Notes due 2027 (the “2027 Notes”), $500.0 million aggregate principal amount of 4.250% Senior Unsecured Notes due 2029 (the “2029 Notes”) and $500.0 million aggregate principal amount of 4.625% Senior Unsecured Notes due 2030 (the “2030 Notes” and collectively with the 2025 Notes, 2027 Notes and 2029 Notes, the “Notes”) remain outstanding.
As of December 31, 2023, of the senior notes issued by the Borrowers, $650.0 million aggregate principal amount of 5.000% Senior Unsecured Notes due 2027 (the “2027 Notes”), $500.0 million aggregate principal amount of 4.250% Senior Unsecured Notes due 2029 (the “2029 Notes”), $500.0 million aggregate principal amount of 4.625% Senior Unsecured Notes due 2030 (the “2030 Notes”) and $450.0 million aggregate principal amount of 7.375% Senior Secured Notes due 2031 (the “2031 Notes” and collectively with the 2027 Notes, the 2029 Notes and the 2030 Notes, the “Notes”) remain outstanding.
See “—Growth Strategy.” We built or converted 110 digital billboard displays in the U.S. and 9 in Canada in 2022, compared to 77 digital billboard displays in the U.S. and 10 in Canada in 2021, and 60 digital billboard displays in the U.S. and 3 in Canada in 2020.
See “—Growth Strategy.” We built or converted 84 digital billboard displays in the U.S. and 45 in Canada in 2023, compared to 110 digital billboard displays in the U.S. and nine in Canada in 2022, and 77 digital billboard displays in the U.S. and 10 in Canada in 2021.
Additionally, we entered into marketing arrangements to sell advertising on 85 third-party digital billboard displays in the U.S. in 2022, compared to 35 third-party digital billboard displays in the U.S. and 4 in Canada in 2021, and 31 third-party billboard displays in each of the U.S. and Canada in 2020.
Additionally, 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, compared to 85 third-party digital billboard displays in the U.S. in 2022, and 35 third-party billboard displays in the U.S. and four in Canada in 2021.
Human Capital We believe we can enhance stockholder value by conducting our business in a sustainable way that considers the long-term interests of all our stakeholders, including our employees. We aim to create a workplace where employees feel engaged, rewarded and empowered.
Human Capital We believe we can continue to enhance stockholder value through our purpose-driven business practices that consider the long-term interests of all our stakeholders, including our employees. We aim to create a workplace where employees feel engaged, rewarded and empowered.
We built, converted or replaced 3,410 digital transit and other displays in the U.S. in 2022, and 3,778 digital transit and other displays in the U.S. and 15 in Canada in 2021.
We built, converted or replaced 5,624 digital transit and other displays in the U.S. and 23 in Canada in 2023, and 3,410 digital transit and other displays in the U.S. in 2022.
Digital Revenues (in millions) for the Year Ended Number of Digital Displays (a) as of Location Digital Billboard Digital Transit and Other Total Digital Revenues Digital Billboard Displays Digital Transit and Other Displays Total Digital Displays December 31, 2022: United States $ 368.5 $ 137.1 $ 505.6 1,702 15,998 17,700 Canada 32.3 2.0 34.3 268 78 346 Total $ 400.8 $ 139.1 $ 539.9 1,970 16,076 18,046 December 31, 2021: United States $ 280.5 $ 80.3 $ 360.8 1,401 12,610 14,011 Canada 27.6 1.0 28.6 237 120 357 Total $ 308.1 $ 81.3 $ 389.4 1,638 12,730 14,368 December 31, 2020: United States $ 195.5 $ 53.9 $ 249.4 1,228 8,920 10,148 Canada 19.8 0.1 19.9 222 95 317 Total $ 215.3 $ 54.0 $ 269.3 1,450 9,015 10,465 (a) Digital display amounts include 4,374 displays reserved for transit agency use in 2022, 3,795 in 2021 and 3,144 in 2020.
Digital Revenues (in millions) for the Year Ended Number of Digital Displays (a) as of Location Digital Billboard Digital Transit and Other Total Digital Revenues Digital Billboard Displays Digital Transit and Other Displays Total Digital Displays December 31, 2023: United States $ 409.5 $ 143.7 $ 553.2 1,874 21,593 23,467 Canada 32.2 2.9 35.1 317 101 418 Total $ 441.7 $ 146.6 $ 588.3 2,191 21,694 23,885 December 31, 2022: United States $ 368.5 $ 137.1 $ 505.6 1,702 15,998 17,700 Canada 32.3 2.0 34.3 268 78 346 Total $ 400.8 $ 139.1 $ 539.9 1,970 16,076 18,046 December 31, 2021: United States $ 280.5 $ 80.3 $ 360.8 1,401 12,610 14,011 Canada 27.6 1.0 28.6 237 120 357 Total $ 308.1 $ 81.3 $ 389.4 1,638 12,730 14,368 (a) Digital display amounts include 4,980 displays reserved for transit agency use in 2023, 4,374 in 2022 and 3,795 in 2021.
In addition, digital displays enable us to run multiple advertisements on each display. Digital billboard displays generate approximately four times more revenue per display on average than 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 traditional static billboard displays.
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.
Culture plays an important role in the way we conduct business and attract talent and, as such, we actively promote a culture of collaboration, creativity, inclusivity and ownership throughout the employee experience.
Culture plays an important role in the way we conduct business and attract talent and, as such, we actively promote a culture of collaboration, creativity, inclusivity and ownership throughout the employee experience. Our People As of December 31, 2023, we had a total of 2,375 employees, of which 285 are located in Canada.
On April 2, 2014, the Company completed an initial public offering (the “IPO”) of its common stock under the name “CBS Outdoor Americas Inc.” On July 16, 2014, CBS completed a registered offer to exchange 97,000,000 shares of our common 6 stock that were owned by CBS for outstanding shares of CBS Class B common stock (“the Exchange Offer”).
Three years later, a predecessor of CBS acquired Outdoor Systems, Inc., which represented the consolidation of the outdoor advertising assets of large national operators such as 3M National, Gannett Outdoor (and its Canadian assets held in the name Mediacom) and many local operators in North America. 6 On April 2, 2014, the Company completed an initial public offering (the “IPO”) of its common stock under the name “CBS Outdoor Americas Inc.” On July 16, 2014, CBS completed a registered offer to exchange 97,000,000 shares of our common stock that were owned by CBS for outstanding shares of CBS Class B common stock (“the Exchange Offer”).
As a result, digital billboard displays generate higher profits and cash flows than traditional static billboard displays. 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.
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.
Our total number of digital displays is impacted by acquisitions, dispositions, management agreements and the net effect of new and lost billboards and the net effect of won and lost franchises.
Our total number of digital displays is impacted by acquisitions, dispositions, management agreements and the net effect of new and lost billboards and the net effect of won and lost franchises. As of December 31, 2023, our average initial investment required for a digital billboard display is approximately $250,000.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and “Item 8.
For additional information regarding our acquisition and disposition activity, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and “Item 8.
Since we must comply with various requirements under the Code in order to maintain our qualification to be taxed as a REIT, including restrictions on the types of assets we may hold, the sources of our income and accumulation of earnings and profits, our ability to engage in certain investments and acquisitions, such as acquisitions of C corporations, may be limited. 15 Investments in Other Securities.
Since we must comply with various requirements under the Code in order to maintain our qualification to be taxed as a REIT, our ability to engage in certain investments and acquisitions may be limited. See “Item 1A. Risk Factors—Risks Related to Our Corporate and REIT Structure.” Investments in Other Securities.
History Our corporate history can be traced back to companies that helped to pioneer the growth of out-of-home advertising in the U.S., such as Outdoor Systems, Inc., 3M National, Gannett Outdoor and TDI Worldwide Inc. In 1996, a predecessor of CBS Corporation (“CBS”) acquired TDI Worldwide Inc., which specialized in transit advertising.
On October 22, 2023, we entered into an agreement to sell our outdoor advertising business in Canada. See “—Acquisition and Disposition Activity.” History Our corporate history can be traced back to companies that helped to pioneer the growth of out-of-home advertising in the U.S., such as Outdoor Systems, Inc., 3M National, Gannett Outdoor and TDI Worldwide Inc.
We provide regular and ongoing employee development and training, through among other things, our annual performance review process, and employee trainings in consultative selling, technology, safety, compliance, management and leadership skills.
Hiring, developing and retaining employees is important to our business. As our business grows, we place a priority on helping our employees build both their skills and careers. We provide regular and ongoing employee development and training, through among other things, our annual performance review process, and employee trainings in sales strategy, technology, safety, compliance, management and leadership skills.
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. See “—Renovation, Improvement and Development.” Drive Enhanced Revenue Management.
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. 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.
Our People As of December 31, 2022, we had 2,375 employees, of which 877 were sales and sales-related personnel in the U.S. and 88 were Canadian sales and sales-related personnel. As of December 31, 2022, 2,357, or 99%, of our employees were full-time employees and 18, or 1%, were part-time employees.
As of December 31, 2023, 884 employees were sales and sales-related personnel in the U.S. and 84 were Canadian sales and sales-related personnel. As of December 31, 2023, 2,362, or 99%, of our employees were full-time employees and 13, or 1%, were part-time employees. Some of these employees are represented by labor unions and are subject to collective bargaining agreements.
We require all our field operations team members to participate in an extensive training process and we reinforce these trainings throughout the year. In 2022, we did not suffer any significant employee accidents or injuries and continue to strictly manage our corporate health and safety programs to ensure compliance.
We require all our field operations team members to participate in an extensive training process and we reinforce and strictly manage these trainings throughout the year. As of December 31, 2023, all of our company-owned vehicles have been installed with telematic monitoring systems.
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Three years later, a predecessor of CBS acquired Outdoor Systems, Inc., which represented the consolidation of the outdoor advertising assets of large national operators such as 3M National, Gannett Outdoor (and its Canadian assets held in the name Mediacom) and many local operators in North America.
Added
In 1996, a predecessor of CBS Corporation (“CBS”) acquired TDI Worldwide Inc., which specialized in transit advertising.
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Generally, we expect to generate higher revenue over time on digital transit displays since digital transit 7 displays allow us to sell each display to multiple advertisers within a relatively shorter period of time and provide customers with more visually engaging advertising content.
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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.
Removed
Further, as a result of the COVID-19 pandemic, in 2020 and 2021, we reduced our digital billboard display conversions and temporarily suspended or delayed our deployment of certain digital transit displays. As of December 31, 2022, our average initial investment required for a digital billboard display is approximately $250,000.
Added
(the “Buyer”), relating to the sale of the Company’s outdoor advertising business in Canada (the “Canadian Business”).
Removed
Some of these employees are represented by labor unions and are subject to collective bargaining agreements. Hiring, developing and retaining employees is important to our business. As our business grows, we place a priority on helping our employees build both their skills and careers.
Added
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”).
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Employee turnover in 2020 was primarily due to actions taken in that year to reduce our expenses in response to the impact of the COVID-19 pandemic, including, among other things, workforce reductions. The reduction in employee turnover in 2021 was partially offset by an increase in voluntary turnover. Voluntary turnover decreased in 2022 compared to 2021.
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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.
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In 2022, we also introduced telematics in all of our vehicles to help maintain the safety of our personnel.
Added
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 “Antitrust Approval”).
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In addition, throughout the COVID-19 pandemic, we prioritized the health and safety of our employees by, among other things, (i) utilizing a secure remote workforce as needed for personnel other than operations personnel who service our displays and certain other personnel, (ii) implementing deep cleaning, social distancing and other protective policies and practices in accordance with federal, state and local regulations and guidance across all offices and facilities, and (iii) communicating frequently with our employees and customers to address any concerns and updates to our policies.
Added
The obligation of the Buyer to consummate the Transaction is also conditioned on the absence of a material adverse effect on the Canadian Business following the date of the Share Purchase Agreement and the Selling Subsidiaries’ obligation to spend a target percentage of forecasted capital expenditures through the Closing.
Added
The obligation of each party to consummate the Transaction is conditioned on each party’s representations and warranties being true and correct and each party having performed in all material respects its obligations under the Share Purchase Agreement.
Added
In addition, the Share Purchase Agreement may be terminated under certain circumstances, including (i) by mutual written agreement of the Buyer and the Selling Subsidiaries; (ii) by either the Buyer or the Selling Subsidiaries if the Closing does not occur by July 22, 2024, with extensions by the Buyer or the Selling Subsidiaries under certain conditions until no later than October 22, 2024 (the “Outside Date”); or (iii) by either the Buyer or the Selling Subsidiaries if a failure by either the Buyer or the Seller Subsidiaries is the principal cause of any closing condition not being satisfied.
Added
If the Antitrust Approval is not received by the Outside Date and the principal cause of such failure is not a failure of the Selling Subsidiaries or its subsidiaries to perform any of their obligations under the Share Purchase Agreement, the Buyer will pay a termination fee to the Selling Subsidiaries in the amount of C$20.0 million.
Added
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.
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However, we expect that 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. See “—Renovation, Improvement and Development” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Drive Enhanced Revenue Management.
Added
This allows the Company to proactively monitor our employees to ensure they are following the best practices in defensive driving, which in turn, should create a safer environment for our employees and the people in the markets we serve, along with mitigating our insurance costs.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

44 edited+9 added−1 removed187 unchanged
Biggest changeThe success of the digital display platform we are continuing to develop for our customers and the deployment of digital advertising displays to our transit franchise partners, such as the MTA, the Washington Metropolitan Area Transit Authority, the Massachusetts Bay Transportation Authority and the San Francisco Bay Area Rapid Transit District, and the realization of any anticipated benefits, will depend, in part, on our ability to execute and demonstrate the value-added capabilities of our digital display platform to our customers, and our ability to deliver and install digital displays in a timely manner to our transit franchise partners in satisfaction of our contractual obligations, including delivery and installation within complex transit infrastructures, such as the MTA.
Biggest changeThe success of the digital display platform we provide to our customers and partners (including the MTA) through deployment and maintenance of digital advertising displays, enhancements to our digital advertising displays, and the use of programmatic and direct sale advertising platform technologies, and the realization of any anticipated benefits, will depend, in part, on our ability to execute and demonstrate the value-added capabilities of our digital display platform to our customers and partners, and our ability to deliver these products in a timely manner in satisfaction of our contractual obligations.
If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain 30 statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences.
If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences.
Business—Our Portfolio of Outdoor Advertising Structures and Sites.” In addition, disasters, acts of terrorism, disease outbreaks and pandemics (such as the COVID-19 pandemic), hostilities, political uncertainty, extraordinary weather events (such as hurricanes), power outages, technological changes 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) caused by the foregoing or otherwise, could interrupt our ability to build, deploy, and/or display advertising on, advertising structures and sites, and/or lead to a reduction in economic certainty and advertising expenditures.
Business—Our Portfolio of Outdoor Advertising Structures and Sites.” In addition, disasters, acts of terrorism, disease outbreaks and pandemics (such as the COVID-19 pandemic), hostilities, wars, political uncertainty, extraordinary weather events (such as hurricanes), power outages, technological changes 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) caused by the foregoing or otherwise, could interrupt our ability to build, deploy, and/or display advertising on, advertising structures and sites, and/or lead to a reduction in economic certainty and advertising expenditures.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” Our level of debt could have important consequences, including: • making it more difficult for us to satisfy our obligations with respect to the Notes and our other debt; • requiring us to dedicate a substantial portion of our cash flow from operations to payments on indebtedness, thereby reducing the availability of cash flow to fund acquisitions, working capital, capital expenditures, and strategic business development efforts and other corporate purposes; • increasing our vulnerability to and limiting our flexibility in planning for, or reacting to, changes in the business, the industries in which we operate, the economy and governmental regulations; 24 • limiting our ability to make strategic acquisitions or causing us to make non-strategic divestitures; • exposing us to the risk of rising interest rates as borrowings under the Senior Credit Facilities and the AR Facility are subject to variable rates of interest; • placing us at a competitive disadvantage compared to our competitors that have less debt; and • limiting our ability to borrow additional funds.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” 25 Our level of debt could have important consequences, including: • making it more difficult for us to satisfy our obligations with respect to the Notes and our other debt; • requiring us to dedicate a substantial portion of our cash flow from operations to payments on indebtedness, thereby reducing the availability of cash flow to fund acquisitions, working capital, capital expenditures, and strategic business development efforts and other corporate purposes; • increasing our vulnerability to and limiting our flexibility in planning for, or reacting to, changes in the business, the industries in which we operate, the economy and governmental regulations; • limiting our ability to make strategic acquisitions or causing us to make non-strategic divestitures; • exposing us to the risk of rising interest rates as borrowings under the Senior Credit Facilities and the AR Facility are subject to variable rates of interest; • placing us at a competitive disadvantage compared to our competitors that have less debt; and • limiting our ability to borrow additional funds.
In addition, our charter authorizes us, and our bylaws obligate us, to the maximum extent permitted by Maryland law in effect from time to time, to indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to: • any present or former director or officer who is made or threatened to be made a party to, or witness in, a proceeding by reason of his or her service in that capacity; and 28 • any individual who, while a director or officer of our company and at our request, serves or has served as a director, officer, trustee or manager of another corporation, REIT, limited liability company, partnership, joint venture, trust, employee benefit plan or any other enterprise and who is made or threatened to be made a party to, or witness in, the proceeding by reason of his or her service in that capacity.
In addition, our charter authorizes us, and our bylaws obligate us, to the maximum extent permitted by Maryland law in effect from time to time, to indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to: • any present or former director or officer who is made or threatened to be made a party to, or witness in, a proceeding by reason of his or her service in that capacity; and • any individual who, while a director or officer of our company and at our request, serves or has served as a director, officer, trustee or manager of another corporation, REIT, limited liability company, partnership, joint venture, trust, 29 employee benefit plan or any other enterprise and who is made or threatened to be made a party to, or witness in, the proceeding by reason of his or her service in that capacity.
Our ability to refinance or restructure our debt will depend on the condition of the capital markets and our financial condition at the applicable time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.
Our ability to refinance or restructure our debt will depend on the condition of the capital markets and our financial condition at the 27 applicable time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.
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. As of December 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.
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. As of December 31, 2023, 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.
If we cannot service our indebtedness, we may have to take actions such as refinancing or restructuring our indebtedness, selling assets or reducing or delaying capital expenditures, strategic 26 acquisitions and investments. Such actions, if necessary, may not be effected on commercially reasonable terms or at all.
If we cannot service our indebtedness, we may have to take actions such as refinancing or restructuring our indebtedness, selling assets or reducing or delaying capital expenditures, strategic acquisitions and investments. Such actions, if necessary, may not be effected on commercially reasonable terms or at all.
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.
The Series A Preferred Stock is convertible at the option of any holder at 28 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.
This could increase the cost of our hedging activities because our TRS may be subject to tax on gains or expose us to greater risks 31 associated with changes in interest rates that we would otherwise choose to bear.
This could increase the cost of our hedging activities because our TRS may be subject to tax on gains or expose us to greater risks associated with changes in interest rates that we would otherwise choose to bear.
A breach of the covenants under the Credit Agreement or either of the indentures governing the Notes, as well as a breach of the covenants under the agreements governing the AR Facility, including the inability to repay any amounts due and payable, could result in an event of default or termination event under the applicable agreement.
A breach of the covenants under the Credit Agreement or the indentures governing the Notes, as well as a breach of the covenants under the agreements governing the AR Facility, including the inability to repay any amounts due and payable, could result in an event of default or termination event under the applicable agreement.
As a result, we may be required to liquidate or forgo otherwise attractive investments or business opportunities. These actions could have the effect of reducing our income and amounts available for distribution to holders of our common stock.
As a result, we may 31 be required to liquidate or forgo otherwise attractive investments or business opportunities. These actions could have the effect of reducing our income and amounts available for distribution to holders of our common stock.
Further, we face the risk of claims that we have infringed third parties’ intellectual property rights with respect to our digital display platform, digital displays and/or any other new products we develop, which could be expensive and time consuming to defend, could require us to alter our digital display platform, digital displays and/or any new products, prevent us from selling advertising on and/or using our digital display platform, digital displays and/or any new products, and/or could require us to pay license, royalty or other fees to third parties in order to continue using our digital display platform, digital displays and/or any new products. 20 The success of our transit advertising business is dependent on obtaining and renewing key municipal contracts on favorable terms.
Further, we face the risk of claims that we have infringed third parties’ intellectual property rights with respect to our digital display platform, digital displays and/or any other new products we develop, which could be expensive and time consuming to defend, could require us to alter our digital display platform, digital displays and/or any new products, prevent us from selling advertising on and/or using our digital display platform, digital displays and/or any new products, and/or could require us to pay license, royalty or other fees to third parties in order to continue using our digital display platform, digital displays and/or any new products. 21 The success of our transit advertising business is dependent on obtaining and renewing key municipal contracts on favorable terms.
As a result of all of these restrictions, we may be: • limited in how we conduct our business; • unable to raise additional debt or equity financing to operate during general economic or business downturns; or • unable to compete effectively or to take advantage of new business opportunities. 25 These restrictions could hinder our ability to grow in accordance with our strategy or inhibit our ability to adhere to our intended distribution policy and, accordingly, may cause us to incur additional U.S. federal income tax liability beyond current expectations.
As a result of all of these restrictions, we may be: • limited in how we conduct our business; • unable to raise additional debt or equity financing to operate during general economic or business downturns; or • unable to compete effectively or to take advantage of new business opportunities. 26 These restrictions could hinder our ability to grow in accordance with our strategy or inhibit our ability to adhere to our intended distribution policy and, accordingly, may cause us to incur additional U.S. federal income tax liability beyond current expectations.
In addition, we will be subject to a nondeductible 4% excise tax if the amount that we actually distribute to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws. 29 From time to time, we may generate taxable income greater than our cash flow as a result of differences in timing between the recognition of taxable income and the actual receipt of cash or the effect of nondeductible capital expenditures, the creation of reserves or required debt or amortization payments.
In addition, we will be subject to a nondeductible 4% excise tax if the amount that we actually distribute to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws. 30 From time to time, we may generate taxable income greater than our cash flow as a result of differences in timing between the recognition of taxable income and the actual receipt of cash or the effect of nondeductible capital expenditures, the creation of reserves or required debt or amortization payments.
We believe our future success depends on the continued service and skills of our existing management team and other key employees with experience and business relationships within their respective roles, including landlord and customer 22 relationships.
We believe our future success depends on the continued service and skills of our existing management team and other key employees with experience and business relationships within their respective roles, including landlord and customer relationships.
The Series A Preferred Stock ranks senior to 27 our common stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of our affairs.
The Series A Preferred Stock ranks senior to our common stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of our affairs.
In addition, losses in our TRS will generally not provide any tax benefit, except that such losses could theoretically be carried back or forward against past or future taxable income in the TRS.
In addition, losses in our TRS will generally 32 not provide any tax benefit, except that such losses could theoretically be carried back or forward against past or future taxable income in the TRS.
If a cybersecurity incident occurs, we could lose competitively sensitive proprietary business information, disclose personally identifiable information, and/or suffer disruptions to our business operations, particularly our digital advertising displays.
If a cybersecurity incident occurs, we could lose competitively sensitive proprietary business information, disclose personally identifiable information, and/or suffer significant disruptions to our business operations, particularly our digital advertising displays.
For example, certain classes and types of tobacco products have been effectively banned from outdoor advertising in all of the jurisdictions in which we currently do business. In addition, state and local governments in some cases limit outdoor advertising of alcohol, which represented 3% of our U.S. Media segment revenues in 2022, 4% in 2021 and 4% in 2020.
For example, certain classes and types of tobacco products have been effectively banned from outdoor advertising in all of the jurisdictions in which we currently do business. In addition, state and local governments in some cases limit outdoor advertising of alcohol, which represented 3% of our U.S. Media segment revenues in 2023, 3% in 2022 and 4% in 2021.
The effects of such seasonality make it difficult to estimate future operating results based on the 21 previous results of any specific quarter, which may make it difficult to plan capital expenditures and expansion, could affect operating results and could have an adverse effect on our business, financial condition and results of operations.
The effects of such seasonality make it difficult to estimate future operating results based on the 22 previous results of any specific quarter, which may make it difficult to plan capital expenditures and expansion, could affect operating results and could have an adverse effect on our business, financial condition and results of operations.
If we fail to satisfy our contractual obligations and any such failures cannot be resolved, and/or the digital display platform and/or the digital advertising displays that we provide to our customers and transit franchise partners do not meet their expectations or are found to be defective, or if we are unable to realize the anticipated benefits of these products due to reduced market demand for these products or digital advertising generally (including as a result of reductions in transit ridership due to remote work, safety concerns or otherwise), then we may incur financial liability, which could have an adverse effect on our business, financial condition and results of operation.
If we fail to satisfy our contractual obligations and any such failures cannot be resolved, and/or the digital display platform that we provide to our customers and partners do not meet their expectations or are found to be defective, or if we are unable to realize the anticipated benefits of these products due to reduced market demand for these products or digital advertising generally (including as a result of reduced transit ridership due to remote work, safety concerns or otherwise), then we may incur financial liability, which could have an adverse effect on our business, financial condition and results of operation.
At our level of indebtedness, as of December 31, 2022, each 1/4% change in interest rates on our variable rate Term Loan and AR Facility would have resulted in a $1.5 million and $0.1 million, respectively, change in annual estimated interest expense. Our aggregate annual estimated interest expense will increase if we make any borrowings under our Revolving Credit Facility.
At our level of indebtedness, as of December 31, 2023, each 1/4% change in interest rates on our variable rate Term Loan and AR Facility would have resulted in a $1.5 million and $0.2 million, respectively, change in annual estimated interest expense. Our aggregate annual estimated interest expense will increase if we make any borrowings under our Revolving Credit Facility.
Although we have implemented physical and logical cybersecurity measures, along with crisis management procedures, designed to protect against the loss, misuse and alteration of our websites, digital assets and proprietary business information as well as consumer, business partner and advertiser personally identifiable information, no cybersecurity measures are impenetrable and we remain subject to unauthorized access attempts to our networks and assets.
Although we have implemented physical and logical cybersecurity measures and processes, along with crisis management procedures, designed to protect against the loss, misuse and alteration of our websites, digital assets and proprietary business information as well as consumer, business partner and advertiser personally identifiable information, no cybersecurity measures are impenetrable and we have experienced and remain subject to attempts to access our networks and assets by unauthorized parties.
We make statements about our environmental, social and governance goals and initiatives through information provided on our website, press statements and other communications. Responding to these environmental, social and governance considerations and implementation of these goals and initiatives involves risks and uncertainties and requires ongoing investments.
We make statements about our environmental, social and governance goals and initiatives through information provided on our website, press statements and other communications, including our proxy statement. Responding to these environmental, social and governance considerations and implementation of these goals and initiatives involves risks and uncertainties and requires ongoing investments.
See “Our business is sensitive to a decline in advertising expenditures, general economic conditions and other external events beyond our control,” “—Implementing our digital display platform and the deployment of digital advertising displays to our transit franchise partners, may be more difficult, costly or time consuming than expected and the anticipated benefits may not be fully realized,” and “—The terms of the agreements governing our indebtedness restrict our current and future operations, particularly our ability to incur debt that we may need to fund initiatives in response to changes in our business, the industries in which we operate, the economy and governmental regulations.” 18 The extent to which any pandemic will impact our business will depend on future developments, including the severity and duration of such pandemic and the measures taken in response to such pandemic, which are highly uncertain and cannot be predicted.
See “Our business is sensitive to a decline in advertising expenditures, general economic conditions and other external events beyond our control,” “—Operating our digital display platform may be more difficult, costly or time consuming than expected and the anticipated benefits may not be fully realized,” and “—The terms of the agreements governing our indebtedness restrict our current and future operations, particularly our ability to incur debt that we may need to fund initiatives in response to changes in our business, the industries in which we operate, the economy and governmental regulations.” 19 The extent to which any pandemic will impact our business will depend on future developments, including the severity and duration of such pandemic and the measures taken in response to such pandemic, which are highly uncertain and cannot be predicted.
If any of these personnel were to leave and compete with us, it could have an adverse effect on our business, financial condition and results of operations. We face diverse risks in our Canadian business, which could adversely affect our business, financial condition and results of operations.
If any of these personnel were to leave and compete with us, it could have an adverse effect on our business, financial condition and results of operations. 23 We face diverse risks in our Canadian business, including risks related to the sale of our Canadian business, which could adversely affect our business, financial condition and results of operations.
Further, because techniques used to obtain unauthorized access and degrade or disable systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.
See “Item 1C. Cybersecurity.” Further, because techniques used to obtain unauthorized access and degrade or disable systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.
Any such impairment charges could have a material adverse effect on our reported net income. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” Environmental, health and safety laws and regulations may limit or restrict some of our operations.
Any such impairment charges could have a material adverse effect on our reported net income, operating income and our stock price. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies.” Environmental, health and safety laws and regulations may limit or restrict some of our operations.
An event of default or termination event under the Credit Agreement and the agreements governing the AR Facility would also permit the applicable lenders, Purchasers and any other secured creditors to proceed against the collateral that secures such indebtedness, and terminate all other commitments to extend additional credit to us.
An event of default or termination event under the Credit Agreement, the indenture and related agreements governing the 2031 Notes, and the agreements governing the AR Facility would also permit the applicable lenders, holders of the 2031 Notes, Purchasers and any other secured creditors to proceed against the collateral that secures such indebtedness, and, with respect to the Credit Agreement and AR Facility, terminate all other commitments to extend additional credit to us.
Our Canadian business contributed approximately $91.9 million to total revenues in 2022, approximately $78.3 million to total revenues in 2021 and approximately $59.8 million to total revenues in 2020. Inherent risks in our Canadian business activities could decrease our Canadian sales and have an adverse effect on our business, financial condition and results of operations.
Our Canadian business contributed approximately $92.1 million to total revenues in 2023, approximately $91.9 million to total revenues in 2022 and approximately $78.3 million to total revenues in 2021. Inherent risks in our Canadian business activities could decrease our Canadian sales and have an adverse effect on our business, financial condition and results of operations.
Although we monitor regulatory changes and have implemented internal policies and procedures designed to comply with all applicable laws, rules, industry standards and regulations, any failure or perceived failure by us to comply with applicable regulatory requirements or our internal policies related to privacy, information security, data and/or consumer protection could result in a loss of confidence, a loss of goodwill, damage to our brand, loss of business partners and advertisers, substantial remediation and compliance costs, adverse regulatory proceedings and/or civil litigation, which could negatively impact our business. 23 We could suffer losses due to impairment in the carrying value of our long-lived assets and goodwill.
Although we monitor regulatory changes and have implemented internal policies and procedures designed to comply with all applicable laws, rules, industry standards and regulations, any failure or perceived failure by us to comply with applicable regulatory requirements or our internal policies related to privacy, information security, data and/or consumer protection could result in a 24 loss of confidence, a loss of goodwill, damage to our brand, loss of business partners and advertisers, substantial remediation and compliance costs, adverse regulatory proceedings and/or civil litigation, which could negatively impact our business.
Further, as digital advertising displays are introduced into the market on a large scale, new or revised regulations could impose specific restrictions on the installation or use of digital advertising displays. 19 Implementing our digital display platform and the deployment of digital advertising displays to our transit franchise partners, may be more difficult, costly or time consuming than expected and the anticipated benefits may not be fully realized.
Further, as digital advertising displays are introduced into the market on a large scale, new or revised regulations could impose specific restrictions on the installation or use of digital advertising displays. 20 Operating our digital display platform may be more difficult, costly or time consuming than expected and the anticipated benefits may not be fully realized.
Many of these laws and industry standards and regulations are still evolving and changes in the nature of the data that we collect, purchase and utilize, and the ways that data is permitted to be collected, stored, used and/or shared may negatively impact the way that we are able to conduct business, particularly our digital display platform.
Many of these laws and industry standards and regulations are still evolving and changes in the nature of the data that we collect, purchase and utilize, and the ways that data is permitted to be collected, stored, used and/or shared (including with respect to artificial intelligence, machine learning and automated processing) may negatively impact the way that we are able to conduct business, particularly our digital display platform.
As of December 31, 2022, we had total indebtedness of approximately $2.7 billion (consisting of the Term Loan, the Notes and the AR Facility with outstanding aggregate principal balances of $600.0 million, approximately $2.1 billion and $30.0 million, respectively), undrawn commitments under the Revolving Credit Facility of $500.0 million, excluding $6.4 million of letters of credit issued against the Revolving Credit Facility, and $120.0 million borrowing capacity remaining under the AR Facility.
As of December 31, 2023, we had total indebtedness of approximately $2.8 billion (consisting of the Term Loan, the Notes and the AR Facility with outstanding aggregate principal balances of $600.0 million, $2.1 billion and $65.0 million, respectively), undrawn commitments under the Revolving Credit Facility of $500.0 million, excluding $6.5 million of letters of credit issued against the Revolving Credit Facility, and $85.0 million borrowing capacity remaining under the AR Facility.
A significant portion of our assets are long-lived assets and goodwill. We test our long-lived assets for impairment whenever there is an indication that the carrying amount of the asset may not be recoverable.
We could suffer losses due to impairment in the carrying value of our long-lived assets and goodwill. A significant portion of our assets are long-lived assets and goodwill. We test our long-lived assets for impairment whenever there is an indication that the carrying amount of the asset may not be recoverable.
A downward revision in the estimated fair value of a reporting unit could result in a non-cash goodwill impairment charge. For example, as a result of an impairment analysis performed during the second quarter of 2018, we determined that the carrying value of our Canadian reporting unit exceeded its fair value and we recorded an impairment charge.
A downward revision in the estimated fair value of a reporting unit could result in a non-cash goodwill impairment charge. For example, as a result of the impairment analysis performed during the second quarter of 2023, we determined that the carrying value of our U.S.
Implementing our digital display platform and deploying digital advertising displays to our transit franchise partners in satisfaction of our contractual obligations requires the Company to incur significant costs, which the Company may not be able to recover from its customer sales or transit franchise partners. See “Item 7.
Operating our digital display platform for our transit franchise partners in satisfaction of our contractual obligations requires us to incur significant costs, which we may not be able to recover from our customer sales or transit franchise partners. See “Item 7.
This could further exacerbate the risks to our financial condition described above.” Further, we rely on third parties to manufacture, transport and install digital displays, and if we are not able to engage third parties on reasonable pricing or other terms due to insufficient capacity or plant closures of a particular manufacturer, market-wide supply shortages, labor shortages, logistics disruptions, inflationary price increases or otherwise, or if the third parties that we do engage fail to meet their obligations to us, whether due to external events beyond anyone’s control or otherwise, we may be unable to deploy digital advertising displays to our transit franchise partners in a timely manner or at all, and may fail to satisfy our contractual obligations, which could have an adverse effect on our business, financial condition and results of operations.
See “—We could suffer losses due to impairment in the carrying value of our long-lived assets and goodwill.” Further, we rely on third parties to manufacture, transport and install digital displays, and provide programmatic and direct sale advertising platform technologies for our display inventory, and if we are not able to engage third parties on reasonable pricing or other terms due to insufficient capacity or plant closures of a particular manufacturer, market-wide supply shortages, labor shortages, logistics disruptions, software issues, inflationary price increases or otherwise, or if the third parties that we do engage fail to meet their obligations to us, whether due to external events beyond anyone’s control or otherwise, we may be unable to operate our digital display platform in an effective manner or at all, and may fail to satisfy our contractual obligations, which could have an adverse effect on our business, financial condition and results of operations.
However, we may not elect to maintain such interest rate swaps with respect to any of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk.
However, we may not elect to maintain such interest rate swaps with respect to any of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk. To service our indebtedness, we require a significant amount of cash and our ability to generate cash depends on many factors beyond our control.
Our ability to generate such cash flow is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. In addition, our ability to generate cash flow may be affected by our REIT compliance obligations and any consequences of failing to remain qualified as a REIT.
In addition, our ability to generate cash flow may be affected by our REIT compliance obligations and any consequences of failing to remain qualified as a REIT.
We are also experiencing the economic effects of the current heightened levels of inflation on our income and expenses.
We are also experiencing the economic effects of the current heightened levels of inflation on our income and expenses, particularly with respect to our posting, maintenance and other expenses, some of our corporate expenses, and our interest expense.
To service our indebtedness, we require a significant amount of cash and our ability to generate cash depends on many factors beyond our control. Our ability to make cash payments on and to refinance our indebtedness, including the Notes, and to fund planned capital expenditures will depend on our ability to generate significant operating cash flow in the future.
Our ability to make cash payments on and to refinance our indebtedness, including the Notes, and to fund planned capital expenditures will depend on our ability to generate significant operating cash flow in the future. Our ability to generate such cash flow is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.
We may also have difficulty repatriating profits or be adversely affected by exchange rate fluctuations in our Canadian business. If we experience a cybersecurity incident, we may suffer reputational harm and significant legal and financial exposure.
We may also have difficulty repatriating profits or be adversely affected by exchange rate fluctuations in our Canadian business. On October 22, 2023, we entered into the Share Purchase Agreement relating to the sale of the Canadian Business in the Transaction. See “Part I, Item 1.
Removed
In addition, the transition away from the use of the London Interbank Offered Rate (“LIBOR”) to the Secured Overnight Financing Rate (“SOFR”) may have unanticipated effects on the agreements governing our indebtedness, our interest rate swaps and the credit markets generally, as well as our interest expense, which we are not able to predict at this time.
Added
This could further exacerbate the risks to our financial condition described above.” In addition, if we are not able to recover these costs from our customer sales or transit franchise partners, we could suffer impairment charges.
Added
For example, in 2023, we suffered impairment charges in connection with our agreements with our transit franchise partners, primarily our agreement with the MTA .
Added
Business—Acquisition and Disposition Activity.” Consummating the Transaction may be more difficult, costly, or time consuming for us and our management than expected and the anticipated benefits of the Transaction may not be fully realized.
Added
In addition, the Transaction parties may be unable to satisfy closing conditions, including necessary regulatory approval for the Transaction (or obtaining regulatory approval for the Transaction subject to conditions that are not anticipated), which could delay or cause the parties to abandon or terminate the Transaction.
Added
See “—Acquisitions and other strategic transactions that we may pursue could have a negative effect on our results of operations.” If we experience a cybersecurity incident, we may suffer reputational harm and significant legal and financial exposure.
Added
Transit and Other reporting unit exceeded its fair value and we recorded an impairment charge of $47.6 million. During the second quarter of 2023, we also performed an analysis of the carrying value of our long-lived asset groups within our U.S.
Added
Transit and Other reporting unit utilizing undiscounted cash flows compared to the carrying value of the asset groups and determined that they were not fully recoverable.
Added
We then compared the fair value of the assets (calculated using a cash flow model) to the carrying value and we recorded an impairment charge of $463.5 million, primarily representing a $443.1 million impairment charge related to our MTA asset group.
Added
As a result of our continued expectation of negative aggregate cash flows related to our MTA asset group, we recorded additional impairment charges of $12.1 million in the third quarter of 2023, representing additional MTA equipment deployment cost spending during the third quarter of 2023, and $11.2 million in the fourth quarter of 2023, $11.0 million of which represents additional MTA equipment deployment cost spending during the fourth quarter of 2023.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our principal executive offices, which we lease, are located at 405 Lexington Avenue, 17th Floor, New York, NY 10174. We and our subsidiaries also own and lease office and warehouse space throughout the U.S. and Canada. We consider our properties adequate for our present needs, and adequately covered by insurance.
Biggest changeItem 2. Properties. Our principal executive offices, which we lease, are located at 90 Park Avenue, 9th Floor, New York, NY 10016. We and our subsidiaries also own and lease office and warehouse space throughout the U.S. and Canada. We consider our properties adequate for our present needs, and adequately covered by insurance.
Business—Our Portfolio of Outdoor Advertising Structures and Sites” and “Item 1. Business—Renovation, Improvement and Development.”
Business—Our Portfolio of Outdoor Advertising Structures and Sites” and “Item 1. Business—Renovation, Improvement and Development.” 34
Approximately 70% of our outdoor advertising site leases will expire or be subject to renewal in the next 5 years, 20% will expire or be subject to renewal in 6 to 10 years and 10% will expire or be subject to renewal in more than 10 years.
Approximately 71% of our outdoor advertising site leases will expire or be subject to renewal in the next 5 years, 20% will expire or be subject to renewal in 6 to 10 years and 9% will expire or be subject to renewal in more than 10 years.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following graph compares the cumulative total stockholder return on OUTFRONT Media Inc.’s common stock to the cumulative total return of Lamar Advertising Company, Clear Channel Outdoor Holdings, Inc., the Standard & Poor’s 500 Stock Index (“S&P 500”), the S&P 500 Media Industry Index, and the FTSE National Association of Real Estate Investment Trusts (“NAREIT”) All Equity REITs Index. 34 The performance graph assumes $100 invested on December 31, 2017, in OUTFRONT Media Inc.’s common stock, Lamar Advertising Company’s common stock, Clear Channel Outdoor Holdings, Inc.’s common stock, the S&P 500, the S&P 500 Media Industry Index, and the FTSE NAREIT All Equity REITs Index, including the reinvestment of dividends, through the calendar year ended December 31, 2022.
Biggest changeThe following graph compares the cumulative total stockholder return on OUTFRONT Media Inc.’s common stock to the cumulative total return of Lamar Advertising Company, Clear Channel Outdoor Holdings, Inc., the Standard & Poor’s 500 36 Stock Index (“S&P 500”), the S&P 500 Media Industry Index, and the FTSE National Association of Real Estate Investment Trusts (“NAREIT”) All Equity REITs Index.
Holders As of February 22, 2023, we had 162 holders of record of our common stock. Dividend Policy To maintain REIT status, we must annually distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the dividends-paid deduction and excluding any net capital gains.
Holders As of February 21, 2024, we had 149 holders of record of our common stock. Dividend Policy To maintain REIT status, we must annually distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the dividends-paid deduction and excluding any net capital gains.
We furnish annually to each of our stockholders a statement setting forth distributions paid during the preceding year and their characterization as ordinary income dividends, return of capital, qualified dividends, income or capital gain dividends or non-dividend distributions. 100.0% of the dividends we distributed in 2022 should be considered ordinary income by our stockholders for tax purposes.
We furnish annually to each of our stockholders a statement setting forth distributions paid during the preceding year and their characterization as ordinary income dividends, return of capital, qualified dividends, income or capital gain dividends or non-dividend distributions.
Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2022 OUTFRONT Media Inc. $ 100.00 $ 83.90 $ 131.54 $ 97.39 $ 134.61 $ 88.30 Lamar Advertising Company 100.00 98.07 132.67 128.11 193.84 159.00 Clear Channel Outdoor Holdings, Inc. 100.00 114.78 63.25 36.49 73.20 23.22 S&P 500 100.00 95.62 125.72 148.85 191.58 156.88 S&P 500 Media Industry Index (a) 100.00 92.44 124.77 143.88 144.37 101.07 FTSE NAREIT All Equity REITs Index 100.00 95.96 123.46 117.14 165.51 124.22 (a) As of December 31, 2022, the S&P 500 Media Industry Index consists of the following companies: Charter Communications, Inc.; Comcast Corporation; DISH Network Corporation; Fox Corporation; Interpublic Group of Companies Inc.; News Corporation; Omnicom Group Inc; and Paramount Global.
Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 OUTFRONT Media Inc. $ 100.00 $ 156.78 $ 116.08 $ 160.44 $ 105.24 $ 96.83 Lamar Advertising Company 100.00 135.29 130.64 197.66 162.13 192.28 Clear Channel Outdoor Holdings, Inc. 100.00 55.11 31.79 63.78 20.23 35.07 S&P 500 100.00 131.49 155.68 200.37 164.08 207.21 S&P 500 Media Industry Index (a) 100.00 134.98 155.65 156.18 109.34 131.76 FTSE NAREIT All Equity REITs Index 100.00 128.66 122.07 172.49 129.45 144.16 (a) As of December 31, 2023, the S&P 500 Media Industry Index consists of the following companies: Charter Communications, Inc.; Comcast Corporation; Fox Corporation; Interpublic Group of Companies Inc.; News Corporation; Omnicom Group Inc; and Paramount Global.
Removed
Unregistered Sales of Equity Securities None. 35 Purchases of Equity Securities by the Issuer Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Programs Remaining Authorizations October 1, 2022 through October 31, 2022 — $ — — — November 1, 2022 through November 30, 2022 — — — — December 1, 2022 through December 31, 2022 — — — — Total — — — —
Added
Approximately 84.3% of the dividends we distributed in 2023 should be considered ordinary income by our stockholders for tax purposes, approximately 6.9% should be considered a capital gain, and approximately 8.8% should be considered a return of capital. The capital gain distribution is subject to certain recapture provisions for both individual and corporate shareholders.
Added
The performance graph assumes $100 invested on December 31, 2018, in OUTFRONT Media Inc.’s common stock, Lamar Advertising Company’s common stock, Clear Channel Outdoor Holdings, Inc.’s common stock, the S&P 500, the S&P 500 Media Industry Index, and the FTSE NAREIT All Equity REITs Index, including the reinvestment of dividends, through the calendar year ended December 31, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIn the fourth quarter of 2022, 496 installations occurred, for a total of 3,061 installations occurring in 2022. 51 (in millions) Beginning Balance Deployment Costs Incurred Recoupment/MTA Funding Amortization Ending Balance Year Ended December 31, 2022: Prepaid MTA equipment deployment costs $ 279.8 $ 83.4 $ — $ — $ 363.2 Other current assets 5.2 0.1 (3.7) — 1.6 Intangible assets (franchise agreements) 63.0 5.4 — (6.4) 62.0 Total $ 348.0 $ 88.9 $ (3.7) $ (6.4) $ 426.8 Year Ended December 31, 2021: Prepaid MTA equipment deployment costs $ 204.6 $ 75.2 $ — $ — $ 279.8 Other current assets 28.0 6.2 (29.0) — 5.2 Intangible assets (franchise agreements) 58.4 14.5 — (9.9) 63.0 Total $ 291.0 $ 95.9 $ (29.0) $ (9.9) $ 348.0 On February 22, 2023, we announced that our board of directors approved a quarterly cash dividend of $0.30 per share on our common stock, payable on March 31, 2023, to stockholders of record at the close of business on March 3, 2023.
Biggest changeLong-Lived Assets to the Consolidated Financial Statements.) (in millions) Beginning Balance Deployment Costs Incurred Recoupment/MTA Funding Amortization/Impairment Reclassification Ending Balance 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 Year Ended December 31, 2022: Prepaid MTA equipment deployment costs $ 279.8 $ 83.4 $ — $ — $ — $ 363.2 Other current assets 5.2 0.1 (3.7) — — 1.6 Intangible assets (franchise agreements) 63.0 5.4 — (6.4) — 62.0 Total $ 348.0 $ 88.9 $ (3.7) $ (6.4) $ — $ 426.8 On February 21, 2024, we announced that our board of directors approved a quarterly cash dividend of $0.30 per share on our common stock, payable on March 28, 2024, to stockholders of record at the close of business on March 1, 2024. 54 Debt Debt, net, consists of the following: As of December 31, (in millions, except percentages) 2023 2022 Short-term debt: AR Facility $ 65.0 $ 30.0 Total short-term debt 65.0 30.0 Long-term debt: Term loan, due 2026 $ 598.9 $ 598.6 Senior secured notes: 7.375% senior secured notes, due 2031 450.0 — Senior unsecured notes: 6.250% senior unsecured notes, due 2025 — 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 notes 1,650.0 2,050.0 Debt issuance costs (22.4) (22.6) Total long-term debt, net 2,676.5 2,626.0 Total debt, net $ 2,741.5 $ 2,656.0 Weighted average cost of debt 5.7 % 5.2 % 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 723.2 157.4 258.2 187.6 $ 120.0 Total $ 3,423.2 $ 157.4 $ 858.2 $ 837.6 $ 1,570.0 Term Loan The interest rate on the term loan due in 2026 (the “Term Loan”) was 7.1% per annum as of December 31, 2023.
Commitments and Contingencies to the Consolidated Financial Statements for information about our off-balance sheet commitments.) 56 Critical Accounting Policies The preparation of our financial statements in conformity with 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.
Commitments and Contingencies to the Consolidated Financial Statements for information about our off-balance sheet commitments.) Critical Accounting Policies The preparation of our financial statements in conformity with 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.
Goodwill We test goodwill qualitatively and/or quantitatively at the reporting-unit level annually for impairment as of October 31 of each year and between annual tests if events occur or circumstances change that would more likely than not reduce the fair value 57 below its carrying amount.
Goodwill We test goodwill qualitatively and/or quantitatively at the reporting-unit level annually for impairment as of October 31 of each year and between annual tests if events occur or circumstances change that would more likely than not reduce the fair value below its carrying amount.
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 believes 45 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.
We assess the recoverability of the MTA contract on an as-needed basis and apply significant judgment in assessing factors to determine if there is an indication that the revenues expected to be generated over the term of the agreement will be sufficient to cover all or a portion of the equipment deployment costs, including evaluating macroeconomic conditions, industry trends, and events specific to the Company, including monitoring the Company’s actual installation of digital displays against the deployment schedule.
We assess the recoverability of the MTA contract on an as-needed basis and apply significant judgment in assessing factors to determine if there is an indication that the revenues expected to be generated over the term of the agreement will be sufficient to cover all or a portion of the equipment deployment costs, including evaluating macroeconomic conditions, product demand, industry trends, and events specific to the Company, including monitoring the Company’s actual installation of digital displays against the deployment schedule.
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.
We are amortizing the deferred fees through Interest expense, net, on our Consolidated Statement of Operations over the respective terms of the Term Loan, Revolving Credit Facility, AR Facility and our senior notes.
FFO reflects net income (loss) attributable to OUTFRONT Media Inc. adjusted to exclude gains and losses from the sale of real estate assets, 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.
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.
International does not meet the criteria to be a reportable segment and accordingly, is included in Other (see Item 8., Note 19. Segment Information to the Consolidated Financial Statements). Business We are one of the largest providers of advertising space on out-of-home advertising structures and sites across the U.S. and Canada.
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). Business We are one of the largest providers of advertising space on out-of-home advertising structures and sites across the U.S. and Canada.
Although we have taken several actions to date to preserve our financial flexibility and increase our liquidity, our short-term and long-term cash needs and related funding capability may be adversely affected by the current heightened levels of inflation and related economic environment if cash on hand and operating cash flows decrease in 2023, and our ability to issue debt and equity securities and/or borrow under our existing or new credit facilities on reasonable pricing terms, or at all, may become uncertain.
Although we have taken several actions to date to preserve our financial flexibility and increase our liquidity, our short-term and long-term cash needs and related funding capability may be adversely affected by the current heightened levels of inflation and related economic environment if cash on hand and operating cash flows decrease in 2024, and our ability to issue debt and 52 equity securities and/or borrow under our existing or new credit facilities on reasonable pricing terms, or at all, may become uncertain.
Our transit businesses require us to periodically obtain and renew contracts with municipalities and other governmental entities. When these contracts expire, we generally must participate in highly competitive bidding processes in order to obtain or renew contracts. 39 Key Performance Indicators Our management reviews our performance by focusing on the indicators described below.
Our transit businesses require us to periodically obtain and renew contracts with municipalities and other governmental entities. When these contracts expire, we generally must participate in highly competitive bidding processes in order to obtain or renew contracts. 40 Key Performance Indicators Our management reviews our performance by focusing on the indicators described below.
Management applies significant judgment in assessing these factors, including evaluating macroeconomic conditions, industry trends, and events specific to the Company, including monitoring the Company’s actual installation of digital displays against the initial deployment schedule. Additionally, management assesses quantitative factors by comparing revenue projections of the deployed digital displays to actual financial results.
Management applies significant judgment in assessing these factors, including evaluating macroeconomic conditions, product demand, industry trends, and events specific to the Company, including monitoring the Company’s actual installation of digital displays against the initial deployment schedule. Additionally, management assesses quantitative factors by comparing revenue projections of the deployed digital displays to actual financial results.
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. 44 The following table reconciles Operating income to Adjusted OIBDA, and Net income (loss) attributable to OUTFRONT Media Inc. to FFO attributable to OUTFRONT Media Inc. and AFFO attributable to OUTFRONT Media Inc.
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. 46 The following table reconciles Operating income (loss) to Adjusted OIBDA, and Net income (loss) attributable to OUTFRONT Media Inc. to FFO attributable to OUTFRONT Media Inc. and AFFO attributable to OUTFRONT Media Inc.
(See the “Key Performance Indicators” section of this MD&A and Item 8., Note 19. Segment Information to the Consolidated Financial Statements.) 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.
(See the “Key Performance Indicators” section of this MD&A and Item 8., Note 18. Segment Information to the Consolidated Financial Statements.) 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.
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 2022, we generated approximately 44% of our U.S. Media segment revenues from national advertising campaigns, compared to approximately 42% in 2021.
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.
The total fees under the letter of credit facilities in 2022, 2021 and 2020 were immaterial. Accounts Receivable Securitization Facilities As of December 31, 2022, we have a $150.0 million revolving accounts receivable securitization facility (the “AR Facility”), which terminates in May 2025, unless further extended.
The total fees under the letter of credit facilities in 2023, 2022 and 2021 were immaterial. Accounts Receivable Securitization Facilities As of December 31, 2023, we have a $150.0 million revolving accounts receivable securitization facility (the “AR Facility”), which terminates in May 2025, unless further extended.
Under most of these franchise agreements, the franchisor is entitled to receive the greater of a percentage of the relevant revenues, net of agency fees, or a specified guaranteed minimum annual payment. Guaranteed minimum annual payments are generally paid monthly. (See Item 8., Note 18.
Under most of these franchise agreements, the franchisor is entitled to receive the greater of a percentage of the relevant revenues, net of agency fees, or a specified guaranteed minimum annual payment. Guaranteed minimum annual payments are generally paid monthly. (See Item 8., Note 17.
We generated approximately 44% in 2022 and 42% in 2021 of our U.S. Media segment revenues from national advertising campaigns. In 2022, non-organic revenues reflect the impact of a significant acquisition. Billboard revenues in the U.S.
We generated approximately 42% in 2023 and 44% in 2022 of our U.S. Media segment revenues from national advertising campaigns. In 2023 and 2022, non-organic revenues reflect the impact of a significant acquisition. Billboard revenues in the U.S.
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. In 2022, no shares of our common stock were sold under the ATM Program.
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. In 2023, no shares of our common stock were sold under the ATM Program.
International does not meet the criteria to be a reportable segment and accordingly, is included in Other . Our segment reporting therefore includes U.S. Media and Other . The following table presents our Revenues , Adjusted OIBDA and Operating income by segment in 2022 and 2021. Year Ended December 31, (in millions) 2022 2021 Revenues: U.S.
International does not meet the criteria to be a reportable segment and accordingly, is included in Other . Our segment reporting therefore includes U.S. Media and Other . The following table presents our Revenues , Adjusted OIBDA and Operating income (loss) by segment in 2023 and 2022. Year Ended December 31, (in millions) 2023 2022 Revenues: U.S.
We consider the following accounting policies to be the most critical as they are significant to our financial condition and results of operations, and require significant judgment and estimates on the part of management in their application. For a summary of our significant accounting policies, see Item 8., Note 2. Summary of Significant Accounting Policies to the Consolidated Financial Statements.
We consider the following accounting policies to be the most critical as they are significant to our financial condition and results of operations, and require significant judgment and estimates on the part of management in their application. For a 59 summary of our significant accounting policies, see Item 8., Note 2.
Management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2021, as compared to the year ended December 31, 2020, is included in “Item 7.
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.
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 our posting, maintenance and other expenses, our corporate expenses and our interest expense, which we expect to continue in 2023, and could have an adverse effect on our business, financial condition and results of operations.
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.
Reconciliation of Non-GAAP Financial Measures Adjusted OIBDA We calculate Adjusted OIBDA as operating income (loss) before depreciation, amortization, net (gain) loss on dispositions, stock-based compensation, restructuring charges and an impairment charge. We calculate Adjusted OIBDA margin by dividing Adjusted OIBDA by total revenues.
Reconciliation of Non-GAAP Financial Measures Adjusted OIBDA We calculate Adjusted OIBDA as operating income (loss) before depreciation, amortization, net (gain) loss on dispositions, stock-based compensation and impairment charges. We calculate Adjusted OIBDA margin by dividing Adjusted OIBDA by total revenues.
As of December 31, 2022, we had approximately $232.5 million of capacity remaining under the ATM Program. 54 Series A Preferred Stock Issuance On April 20, 2020, we issued 400,000 shares of our Series A Convertible Perpetual Preferred Stock (the “Series A Preferred Stock”), par value $0.01 per share.
As of December 31, 2023, we had approximately $232.5 million of capacity remaining under the ATM Program. 57 Series A Preferred Stock Issuance On April 20, 2020, we issued 400,000 shares of our Series A Convertible Perpetual Preferred Stock (the “Series A Preferred Stock”), par value $0.01 per share.
Interest on the Term Loan is variable. For illustrative purposes, we are assuming an interest rate of 6.1% for all years, which reflects the interest rate as of December 31, 2022. An increase or decrease of 1/4% in the interest rate will change the annual interest expense by $1.5 million. (See Item 8., Note 8.
Interest on the Term Loan is variable. For illustrative purposes, we are assuming an interest rate of 7.1% for all years, which reflects the interest rate as of December 31, 2023. An increase or decrease of 1/4% in the interest rate will change the annual interest expense by $1.5 million. (See Item 8., Note 8.
In addition to leasing displays, we provide other value-added services to our customers, such as pre-campaign category research, consumer insights, print production, creative services and post-campaign tracking and analytics. U.S. Media. Our U.S.
In addition to leasing displays, we provide other value-added services to our customers, such as pre-campaign category research, consumer insights, print production, creative services and post-campaign tracking and analytics.
There can be no assurance that these estimates and assumptions will prove to be an accurate prediction of the future, and a downward revision of these estimates and/or assumptions would decrease the fair values of our reporting units, which could result in additional impairment charges in the future.
There can be no assurance that these estimates and assumptions will prove to be an accurate prediction of the future, and a downward revision of these estimates and/or assumptions would decrease the fair values of our asset groups, which could result in additional impairment charges in the future.
In addition, AFFO excludes restructuring charges and losses on extinguishment of debt, as well as certain non-cash items, including non-real estate depreciation and amortization, a gain on disposition of non-real estate assets, an impairment charge 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.
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.
As of December 31, 2022, our Consolidated Net Secured Leverage Ratio was 1.1 to 1.0 in accordance with the Credit Agreement. As of December 31, 2022, we are in compliance with our debt covenants.
As of December 31, 2023, our Consolidated Net Secured Leverage Ratio was 2.0 to 1.0 in accordance with the Credit Agreement. As of December 31, 2023, we are in compliance with our debt covenants.
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, 2021, filed with the Securities and Exchange Commission (the “SEC“) on February 24, 2022.
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.
As of December 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 $1.6 million in 2022, $1.8 million in 2021 and $1.4 million in 2020.
As of December 31, 2023, 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 $1.7 million in 2023, $1.6 million in 2022 and $1.8 million in 2021.
As of December 31, 2022, our Consolidated Total Leverage Ratio was 5.0 to 1.0 in accordance with the Credit Agreement.
As of December 31, 2023, our Consolidated Total Leverage Ratio was 5.3 to 1.0 in accordance with the Credit Agreement.
In July 2021, we extended the initial 10-year term of the MTA Agreement to a 13-year initial term. We have the option to extend this initial 13-year term for an additional five-year period at the end of the 13-year initial term, subject to satisfying certain quantitative and qualitative conditions.
In July 2021, we extended the initial 10-year term of the MTA Agreement to a 13-year base term (the “Amended Term”). We have the option to extend the Amended Term for an additional five-year period at the end of the Amended Term, subject to satisfying certain quantitative and qualitative conditions.
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 we expect to continue in 2023, and could have an adverse effect on our business, financial condition and results of operations.
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.
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 December 31, 2022, there were $30.0 million of outstanding borrowings under the AR Facility, at a borrowing rate of 5.4%.
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 December 31, 2023, there were $65.0 million of outstanding borrowings under the AR Facility, at a borrowing rate of 6.5%.
MTA Agreement Under the MTA agreement, we are obligated to deploy, over a number of years, (i) 5,433 digital advertising screens on subway and train platforms and entrances, (ii) 15,896 smaller-format digital advertising screens on rolling stock, and (iii) 9,283 MTA communications displays, with such deployment amounts being subject to modification as agreed-upon by us and the MTA.
MTA Agreement Under the current MTA Agreement, which is subject to modification as agreed-upon by us and the MTA, we are obligated to deploy, over a number of years, (i) 5,433 digital advertising screens on subway and train platforms and entrances, (ii) 15,896 smaller-format digital advertising screens on rolling stock, and (iii) 9,283 MTA communications displays.
All of these contracts have fixed terms, are typically terminable for convenience at the option of the governmental entity (other than with respect to the New York Metropolitan Transportation Authority (the “MTA”)), and generally provide for payments to the governmental entity based on a percentage of the revenues generated under the contract and/or a guaranteed minimum annual payment.
All of these contracts have fixed terms, are typically terminable for convenience at the option of the governmental entity (other than with respect to the MTA), and generally provide for payments to the governmental entity based on a percentage of the revenues generated under the contract and/or a guaranteed minimum annual payment.
For any deployment costs deemed authorized after December 31, 2020, the MTA and the Company will no longer be obligated to directly pay 70% and 30% of the costs, respectively, and these costs will be subject to recoupment in accordance with the MTA Agreement.
For any deployment costs deemed authorized after December 31, 2020, the MTA and the Company will no longer be obligated to directly pay 70% and 30% of the costs, respectively, and these costs will be subject to recoupment in accordance with the MTA Agreement. We did not recoup any equipment deployment costs in 2023.
Cash Flows The following table sets forth our cash flows in 2022 and 2021.
Cash Flows The following table sets forth our cash flows in 2023 and 2022.
Commitments and Contingencies to the Consolidated Financial Statements.) Total future minimum payments for rental payments under operating leases for billboard sites, office space and equipment of $2,215.1 million include $2,104.3 million for our billboard sites. (See Item 8., Note 5. Leases to the Consolidated Financial Statements.) As of December 31, 2022, we had long-term debt of approximately $2.7 billion.
Commitments and Contingencies to the Consolidated Financial Statements.) Total future minimum payments for rental payments under operating leases for billboard sites, office space and equipment of $2,323.0 million include $2,192.1 million for our billboard sites. (See Item 8., Note 5. Leases to the Consolidated Financial Statements.) As of December 31, 2023, we had long-term debt of approximately $2.7 billion.
As of December 31, 2022, we had issued letters of credit totaling approximately $6.4 million against the letter of credit facility sublimit under the Revolving Credit Facility. Standalone Letter of Credit Facilities As of December 31, 2022, we had issued letters of credit totaling approximately $75.8 million under our aggregate $81.0 million standalone letter of credit facilities.
As of December 31, 2023, we had issued letters of credit totaling approximately $6.5 million against the letter of credit facility sublimit under the Revolving Credit Facility. Standalone Letter of Credit Facilities As of December 31, 2023, we had issued letters of credit totaling approximately $75.6 million under our aggregate $81.0 million standalone letter of credit facilities.
During 2022, our largest categories of advertisers were entertainment, retail and health/medical, which represented 20%, 11%, and 10% of our total U.S. Media segment revenues, respectively. During 2021, our largest categories of advertisers were entertainment, health/medical and retail, which represented 19%, 10% and 10% of our total U.S. Media segment revenues.
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.
The commitment fee based on the amount of unused commitments under the AR Facility was $0.3 million in 2022, and immaterial in each of 2021 and 2020. 53 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.
Debt Covenants Our credit agreement, dated as of January 31, 2014 (as amended, restated, amended and restated, supplemented or otherwise modified, the “Credit Agreement”), governing the Senior Credit Facilities, the agreements governing the AR Facility, and the indentures governing our senior notes contain customary affirmative and negative covenants, subject to certain exceptions, including but not limited to those that restrict the Company’s and its subsidiaries’ abilities to (i) pay dividends on, repurchase or make distributions in respect to the Company’s or its wholly-owned subsidiary, Outfront Media Capital LLC’s capital stock or make other restricted payments other than dividends or distributions necessary for us to maintain our REIT status, subject to certain conditions and exceptions, (ii) enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany or third-party transfers, and (iii) incur additional indebtedness.
On an ongoing basis, we evaluate these estimates, which are based on historical experience and on various assumptions that we believe are reasonable under the circumstances, including the impact of extraordinary events.
On an ongoing basis, we evaluate these estimates, which are based on historical experience and on various assumptions that we believe are reasonable under the circumstances.
As of December 31, 2022, borrowing capacity remaining under the AR Facility was $120.0 million based on approximately $332.2 million of accounts receivable that could be used as collateral for the AR Facility in accordance with the agreements governing the AR Facility.
As of December 31, 2023, borrowing capacity remaining under the AR Facility was $85.0 million based on approximately $316.0 million of accounts receivable that could be used as collateral for the AR Facility in accordance with the agreements governing the AR Facility.
In 2022, we drew $30.0 million of borrowings on the AR Facility and paid total cash dividends of $205.8 million on our common stock, the Series A Preferred Stock and vested restricted share units granted to employees.
In 2022, we drew $30.0 million of borrowings on the AR Facility and paid total cash dividends of $205.8 million on our common stock, the Series A Preferred Stock, and vested restricted share units granted to employees. Cash paid for income taxes was $6.7 million in 2023 and $3.3 million in 2022.
The increase was due primarily to improved results in Canada. Contractual Obligations We have agreements with municipalities and transit operators which entitle us to operate advertising displays within their transit systems, including on the interior and exterior of rail and subway cars and buses, as well as on benches, transit shelters, street kiosks, and transit platforms.
The increase was due primarily to the timing of Canadian estimated income tax payments. Contractual Obligations We have agreements with municipalities and transit operators which entitle us to operate advertising displays within their transit systems, including on the interior and exterior of rail and subway cars and buses, as well as on benches, transit shelters, street kiosks, and transit platforms.
Deferred Financing Costs As of December 31, 2022, we had deferred $24.6 million in fees and expenses associated with the Term Loan, Revolving Credit Facility, AR Facility and our senior unsecured notes.
Deferred Financing Costs As of December 31, 2023, we had deferred $27.4 million in fees and expenses associated with the Term Loan, the Revolving Credit Facility, the AR Facility and our senior notes.
We must deploy, over a number of years, (i) 5,433 digital advertising screens on subway and train platforms and entrances, (ii) 15,896 smaller-format digital advertising screens on rolling stock, and (iii) 9,283 MTA communications displays, subject to modification as agreed-upon by us and the MTA.
We must deploy, over a number of years, (i) 5,433 digital advertising screens on subway and train platforms and entrances, (ii) 15,896 smaller-format digital advertising screens on rolling stock, and (iii) 9,283 MTA communications displays.
In 2022, we paid net cash of $79.8 million related to MTA equipment deployment costs and installed 3,061 digital displays. In 2021, we paid $52.4 million related to MTA equipment deployment costs and installed 3,712 digital displays.
In 2023, we paid net cash of $44.4 million related to MTA equipment deployment costs and installed 5,544 digital displays. In 2022, we paid $79.8 million related to MTA equipment deployment costs and installed 3,061 digital displays.
As of December 31, 2022, a discount of $1.4 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”).
The discount is being amortized through Interest expense, net, on the Consolidated Statement of Operations. 55 Revolving Credit Facility We also have a $500.0 million revolving credit facility, which matures in 2028 (the “Revolving Credit Facility,” together with the Term Loan, the “Senior Credit Facilities”).
Debt to the Consolidated Financial Statements.) In 2023, we do not expect to contribute to our defined benefit pension plans. Contributions to our defined benefit pension plans were $0.2 million in 2021. (See Item 8., Note 15. Retirement Benefits to the Consolidated Financial Statements.) Off-Balance Sheet Arrangements Our off-balance sheet commitments primarily consist of guaranteed minimum annual payments.
Debt to the Consolidated Financial Statements.) In 2024, we do not expect to contribute to our defined benefit pension plans. (See Item 8., Note 14. Retirement Benefits to the Consolidated Financial Statements.) Off-Balance Sheet Arrangements Our off-balance sheet commitments primarily consist of guaranteed minimum annual payments. (See Item 8., Note 17.
Billboard and Canadian reporting units as the estimated fair value of those reporting units substantially exceeded carrying value and there were no factors indicating that it was more likely than not that those reporting units were impaired. We performed a quantitative assessment on our U.S.
Billboard and Canadian reporting units as the estimated fair value of those reporting units substantially exceeded carrying value and there were no factors indicating that it was more likely than not that those reporting units were impaired.
Additionally, in 2022, we entered into marketing arrangements to sell advertising on 85 third-party digital billboard displays in the U.S. In 2022, we built, converted or replaced 3,410 digital transit and other displays in the U.S. The following table sets forth information regarding our digital displays.
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.
Media $ 1,673.9 $ 1,382.0 Other 98.2 81.9 Total revenues $ 1,772.1 $ 1,463.9 Operating income $ 287.7 $ 168.3 Net (gain) loss on dispositions 0.2 (4.5) Impairment charge — 2.5 Depreciation 77.4 79.4 Amortization 73.3 66.0 Stock-based compensation (a) 33.8 28.6 Total Adjusted OIBDA $ 472.4 $ 340.3 Adjusted OIBDA: U.S.
Media $ 1,722.3 $ 1,673.9 Other 98.3 98.2 Total revenues $ 1,820.6 $ 1,772.1 Operating income (loss) $ (258.4) $ 287.7 Net (gain) loss on dispositions (14.2) 0.2 Impairment charges 534.7 — Depreciation 79.3 77.4 Amortization 81.2 73.3 Stock-based compensation (a) 28.4 33.8 Total Adjusted OIBDA $ 451.0 $ 472.4 Adjusted OIBDA: U.S.
If incremental revenues generated over the term of the agreement are not sufficient to cover all or a portion of the equipment deployment costs, the costs will not be recouped, which could have an adverse effect on our business, financial condition and results of operations.
If incremental revenues generated over the term of the agreement are not sufficient to cover all or a portion of the equipment deployment costs, the costs will not be recouped, which could have an adverse effect on our business, financial condition and results of operations, including impairment charges (see Item 8., Note 4. Long-Lived Assets to the Consolidated Financial Statements).
Year Ended December 31, (in millions) 2022 2021 Total revenues $ 1,772.1 $ 1,463.9 Operating income $ 287.7 $ 168.3 Net (gain) loss on dispositions 0.2 (4.5) Impairment charge — 2.5 Depreciation 77.4 79.4 Amortization 73.3 66.0 Stock-based compensation 33.8 28.6 Adjusted OIBDA $ 472.4 $ 340.3 Adjusted OIBDA margin 27 % 23 % Net income attributable to OUTFRONT Media Inc. $ 147.9 $ 35.6 Depreciation of billboard advertising structures 56.1 56.0 Amortization of real estate-related intangible assets 62.8 50.9 Amortization of direct lease acquisition costs (a) 58.5 54.3 Net (gain) loss on disposition of real estate assets 0.2 (1.5) Adjustment related to equity-based investments — 0.1 Adjustment related to non-controlling interests (0.3) (0.3) FFO attributable to OUTFRONT Media Inc. 325.2 195.1 Non-cash portion of income taxes 6.1 (5.9) Cash paid for direct lease acquisition costs (a) (57.3) (48.8) Maintenance capital expenditures (25.5) (25.3) Other depreciation 21.3 23.4 Other amortization 10.5 15.1 Gain on disposition of non-real estate assets (b) — (3.0) Impairment charge on non-real estate assets (c) — 2.5 Stock-based compensation 33.8 28.6 Non-cash effect of straight-line rent (12.1) 6.5 Accretion expense 2.8 2.7 Amortization of deferred financing costs 6.5 7.1 Loss on extinguishment of debt — 6.3 Income tax effect of adjustments (d) — 0.8 AFFO attributable to OUTFRONT Media Inc. $ 311.3 $ 205.1 (a) Variable commissions directly associated with billboard revenues.
Year Ended December 31, (in millions) 2023 2022 Total revenues $ 1,820.6 $ 1,772.1 Operating income (loss) $ (258.4) $ 287.7 Net (gain) loss on dispositions (14.2) 0.2 Impairment charges 534.7 — Depreciation 79.3 77.4 Amortization 81.2 73.3 Stock-based compensation 28.4 33.8 Adjusted OIBDA $ 451.0 $ 472.4 Adjusted OIBDA margin 25 % 27 % Net (loss) income attributable to OUTFRONT Media Inc. $ (430.4) $ 147.9 Depreciation of billboard advertising structures 60.2 56.1 Amortization of real estate-related intangible assets 71.1 62.8 Amortization of direct lease acquisition costs (a) 55.4 58.5 Net (gain) loss on disposition of real estate assets (14.2) 0.2 Impairment charges (b) 388.2 — Adjustment related to non-controlling interests (0.3) (0.3) FFO attributable to OUTFRONT Media Inc. 130.0 325.2 Non-cash portion of income taxes (2.7) 6.1 Cash paid for direct lease acquisition costs (a) (58.2) (57.3) Maintenance capital expenditures (30.2) (25.5) Other depreciation 19.1 21.3 Other amortization 10.1 10.5 Impairment charges on non-real estate assets (b)(c) 146.5 — Stock-based compensation 28.4 33.8 Non-cash effect of straight-line rent 9.7 (12.1) Accretion expense 3.1 2.8 Amortization of deferred financing costs 6.7 6.5 Loss on extinguishment of debt 8.1 — AFFO attributable to OUTFRONT Media Inc. $ 270.6 $ 311.3 (a) Variable commissions directly associated with billboard revenues.
Year Ended December 31, % (in millions, except percentages) 2022 2021 Change Cash provided by operating activities $ 254.1 $ 98.8 157 % Cash used for investing activities (449.5) (224.0) 101 Cash used for financing activities (188.0) (162.2) 16 Effect of exchange rate changes on cash, cash equivalents and restricted cash (1.0) 0.2 * Net decrease to cash, cash equivalents and restricted cash $ (384.4) $ (287.2) 34 * Calculation is not meaningful.
Year Ended December 31, % (in millions, except percentages) 2023 2022 Change Net cash flow provided by operating activities $ 254.2 $ 254.1 — % Net cash flow used for investing activities (107.5) (449.5) (76) Net cash flow used for financing activities (151.5) (188.0) (19) Effect of exchange rate changes on cash and cash equivalents 0.4 (1.0) * Net decrease to cash, cash equivalents and restricted cash $ (4.4) $ (384.4) (99) * Calculation is not meaningful.
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.
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.
(a) Organic revenues exclude revenues associated with a significant acquisition and the impact of foreign currency exchange rates (“non-organic revenues”). Total revenues increased $308.2 million, or 21%, and organic revenues increased $300.6 million, or 21%, in 2022 compared to 2021. In 2022, non-organic revenues reflect the impact of a significant acquisition.
(a) Organic revenues exclude revenues associated with a significant acquisition and the impact of foreign currency exchange rates (“non-organic revenues”). Total revenues increased $48.5 million, or 3%, and organic revenues increased $47.5 million, or 3%, in 2023 compared to 2022. In 2023 and 2022, non-organic revenues reflect the impact of a significant acquisition.
Other generated Revenues of $98.2 million in 2022 and $81.9 million in 2021, and Adjusted OIBDA of $20.6 million in 2022 and $10.4 million in 2021. 37 Economic Environment 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, 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.
Acquisitions and Dispositions : Disposition : Canadian Business to the Consolidated Financial Statements.) Economic Environment 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.
Corporate expenses decreased $3.6 million in 2022 compared to 2021, primarily due to the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the Company to certain employees, partially offset by higher compensation-related expenses, including salaries, and higher professional fees. 49 Liquidity and Capital Resources As of December 31, % (in millions, except percentages) 2022 2021 Change Assets: Cash and cash equivalents $ 40.4 $ 424.8 (90) % Receivables, less allowances of $20.2 in 2022 and $18.5 in 2021 315.5 310.5 2 Prepaid lease and franchise costs 9.1 12.5 (27) Other prepaid expenses 19.8 17.8 11 Other current assets 5.6 11.7 (52) Total current assets 390.4 777.3 (50) Liabilities: Accounts payable 65.4 64.9 1 Accrued compensation 68.0 74.5 (9) Accrued interest 31.1 30.7 1 Accrued lease and franchise costs 64.9 60.1 8 Other accrued expenses 47.6 40.3 18 Deferred revenues 35.3 30.9 14 Short-term debt 30.0 — * Short-term operating lease liabilities 188.1 187.5 — Other current liabilities 21.2 18.8 13 Total current liabilities 551.6 507.7 9 Working capital $ (161.2) $ 269.6 * * Calculation is not meaningful.
Corporate expenses increased $2.1 million 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 and higher professional fees, partially offset by lower compensation-related expenses. 51 Liquidity and Capital Resources As of December 31, % (in millions, except percentages) 2023 2022 Change Assets: Cash and cash equivalents $ 36.0 $ 40.4 (11) % Receivables, less allowances of $17.2 in 2023 and $20.2 in 2022 287.6 315.5 (9) Prepaid lease and transit franchise costs 4.5 9.1 (51) Other prepaid expenses 19.2 19.8 (3) Assets held for sale 34.6 — * Other current assets 15.7 5.6 180 Total current assets 397.6 390.4 2 Liabilities: Accounts payable 55.5 65.4 (15) Accrued compensation 41.4 68.0 (39) Accrued interest 34.2 31.1 10 Accrued lease and franchise costs 80.0 64.9 23 Other accrued expenses 56.2 47.6 18 Deferred revenues 37.7 35.3 7 Short-term debt 65.0 30.0 117 Short-term operating lease liabilities 180.9 188.1 (4) Liabilities held for sale 24.1 — * Other current liabilities 18.0 21.2 (15) Total current liabilities 593.0 551.6 8 Working capital $ (195.4) $ (161.2) 21 * Calculation is not meaningful.
Corporate expenses, excluding stock-based compensation, were $49.4 million in 2022 and $53.0 million in 2021.
Corporate expenses, excluding stock-based compensation, were $51.5 million in 2023 and $49.4 million in 2022.
As indicated in the table below, we incurred $88.9 million related to MTA equipment deployment costs in 2022 (which includes equipment deployment costs related to future deployments), for a total of $535.9 million to date, of which $33.9 million had been recouped from incremental revenues to date and as of December 31, 2022, $49.1 million has been funded by the MTA.
As indicated in the table below, we incurred $43.7 million related to MTA equipment deployment costs in 2023 (which includes equipment deployment costs related to future deployments), for a total of $579.6 million to date, of which $33.9 million had been recouped from incremental revenues to date.
In addition, digital displays enable us to run multiple advertisements on each display. Digital billboard displays generate approximately four times more revenue per display on average than 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 traditional static billboard displays.
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.
The increase in Interest expense, net, in 2022 compared to 2021, was primarily due to higher interest rates, partially offset by the impact of interest rate swaps in 2021 and a lower average debt balance.
The increase in Interest expense, net, in 2023 compared to 2022, was primarily due to higher interest rates and a higher average debt balance.
Media $ 501.2 $ 382.9 Other 20.6 10.4 Corporate (49.4) (53.0) Total Adjusted OIBDA $ 472.4 $ 340.3 Operating income (loss): U.S. Media $ 363.0 $ 248.5 Other 7.9 1.4 Corporate (83.2) (81.6) Total operating income $ 287.7 $ 168.3 (a) Stock-based compensation is classified as Corporate expense. 46 U.S.
Media $ 479.4 $ 501.2 Other 23.1 20.6 Corporate (51.5) (49.4) Total Adjusted OIBDA $ 451.0 $ 472.4 Operating income (loss): U.S. Media $ (189.9) $ 363.0 Other 11.4 7.9 Corporate (79.9) (83.2) Total operating income (loss) $ (258.4) $ 287.7 (a) Stock-based compensation is classified as Corporate expense. 48 U.S.
Under the MTA agreement, which was amended in June 2020 and July 2021 (as amended, the “MTA Agreement”): • Deployments .
Under the current MTA agreement, which was amended in June 2020 and July 2021 and is subject to modification as agreed-upon by us and the MTA (as amended, the “MTA Agreement”): • Deployments .
As of December 31, 2022, we have issued surety bonds in favor of the MTA totaling approximately $136.0 million, which amount is subject to change as equipment installations are completed and revenues are generated. We expect transit franchise expenses, as a percentage of revenues, to decline in 2023 but remain above pre-COVID-19 pandemic levels.
As of December 31, 2023, we have issued surety bonds in favor of 53 the MTA totaling approximately $136.0 million, which amount is subject to change as equipment installations are completed and revenues are generated.
Benefit (Provision) for Income Taxes Provision for income taxes was $9.4 million in 2022 compared to a Benefit for income taxes of $3.4 million in 2021, due primarily to the recording of a valuation allowance against our U.S. taxable REIT subsidiary (“TRS”) deferred tax assets and increased profitability in Canada in 2022.
Benefit (Provision) for Income Taxes 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.
As a result, digital billboard displays generate higher profits and cash flows than traditional static billboard displays. 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.
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 to the Consolidated Financial Statements.) Year Ended December 31, % Change (in millions, except percentages) 2022 2021 Revenues: Billboard $ 1,384.7 $ 1,182.3 17 % Transit and other 387.4 281.6 38 Total revenues 1,772.1 1,463.9 21 Organic revenues (a) : Billboard $ 1,373.7 $ 1,179.4 16 Transit and other 387.4 281.1 38 Total organic revenues (a) 1,761.1 1,460.5 21 Non-organic revenues: Billboard 11.0 2.9 * Transit and other — 0.5 * Total non-organic revenues 11.0 3.4 * Total revenues $ 1,772.1 $ 1,463.9 21 * Calculation is not meaningful.
Revenues to the Consolidated Financial Statements.) 41 Year Ended December 31, % Change (in millions, except percentages) 2023 2022 Revenues: Billboard $ 1,444.9 $ 1,384.7 4 % Transit and other 375.7 387.4 (3) Total revenues 1,820.6 1,772.1 3 Organic revenues (a) : Billboard $ 1,429.7 $ 1,371.0 4 Transit and other 375.7 386.9 (3) Total organic revenues (a) 1,805.4 1,757.9 3 Non-organic revenues: Billboard 15.2 13.7 11 Transit and other — 0.5 * Total non-organic revenues 15.2 14.2 7 Total revenues $ 1,820.6 $ 1,772.1 3 * Calculation is not meaningful.
Year Ended December 31, % Change (in millions, except percentages) 2022 2021 Operating expenses: Billboard property lease $ 454.7 $ 404.6 12 % Transit franchise 235.3 183.4 28 Posting, maintenance and other 221.4 196.0 13 Total operating expenses $ 911.4 $ 784.0 16 Billboard property lease expenses represented 33% of billboard revenues in 2022 and 34% in 2021.
Year Ended December 31, % Change (in millions, except percentages) 2023 2022 Operating expenses: Billboard property lease $ 504.9 $ 454.7 11 % Transit franchise 240.3 235.3 2 Posting, maintenance and other 223.1 221.4 1 Total operating expenses $ 968.3 $ 911.4 6 Billboard property lease expenses represented 35% of billboard revenues in 2023 and 33% in 2022.
For the full year of 2023, we expect our capital expenditures to be approximately $90.0 million, which will be used primarily for growth in digital displays, software and technology, the renovation of certain office facilities, safety-related projects and maintenance.
For the full year of 2024, we expect our capital expenditures to be approximately $75.0 million, which will be used primarily for growth in digital displays, software and technology, maintenance, safety-related projects and the renovation of certain office facilities. This estimate does not include equipment deployment costs that will be incurred in connection with the MTA Agreement (as described above).
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.
Analysis of Results of Operations Revenues 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.
We expect transit franchise expenses, as a percentage of revenues, to decline in 2023, but remain above pre-COVID-19 pandemic levels, as a result of our expectation that revenues generated under the MTA agreement will be closer to a guaranteed minimum annual payment break-even level in 2023 than in 2022. Operating expenses in the U.S.
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 in 2024 will grow at a compound annual growth rate above the inflation-adjusted guaranteed minimum annual payments to the MTA.
AFFO attributable to OUTFRONT Media Inc. in 2022 of $311.3 million increased $106.2 million, or 52%, compared to 2021, due primarily to higher operating income, partially offset by the impact of straight-line rent. 45 Segment Results of Operations We present Adjusted OIBDA as the primary measure of profit and loss for our reportable segments.
AFFO attributable to OUTFRONT Media Inc. in 2023 of $270.6 million decreased $40.7 million, or 13%, compared to 2022, due primarily to higher interest expense, lower Adjusted OIBDA and higher maintenance capital expenditures, partially offset by the impact of non-cash effect of straight-line rent. 47 Segment Results of Operations We present Adjusted OIBDA as the primary measure of profit and loss for our reportable segments.
Billboard property lease expenses as a percentage of billboard revenues in 2022 were slightly lower than pre-COVID-19 pandemic levels. The decrease in billboard property lease expenses as a percentage of revenues in 2022 compared to 2021 is primarily due to an increase in billboard revenues and the fixed nature of certain billboard property lease expenses (see Item 8., Note 5.
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.
Our long-lived identifiable intangible assets are amortized on a straight-line basis over their estimated useful lives, which is the respective life of the agreement and in some cases includes an estimation for renewals, which is based on historical experience. 58 Long-lived assets subject to depreciation and amortization are also reviewed for impairment when events and circumstances indicate that the long-lived asset might be impaired, by comparing the forecasted undiscounted cash flows to be generated by those assets to the carrying values of those assets.
Our long-lived identifiable intangible assets are amortized on a straight-line basis over their estimated useful lives, which is the respective life of the agreement and in some cases includes an estimation for renewals, which is based on historical experience.
Billboard property lease expenses in the U.S. Media segment represented 33% of billboard revenues in 2022 and 34% in 2021, and transit franchise expenses represented 68% of transit display revenues in 2022 and 74% in 2021.
Media segment represented 35% of billboard revenues in 2023 and 33% in 2022, and transit franchise expenses represented 73% of transit display revenues in 2023 and 68% in 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+1 added−1 removed4 unchanged
Biggest changeProvisions for doubtful accounts have increased in 2022 compared to prior years, driven by increased business activity and therefore, we expect provisions for doubtful accounts to continue to increase in 2023. We do not currently use derivatives or other financial instruments to mitigate credit risk. 60 Table of Contents
Biggest changeWe perform credit evaluations on our customers and agencies and believe that the allowances for credit losses are adequate. We do not currently use derivatives or other financial instruments to mitigate credit risk. 64 Table of Contents
We do not currently use derivatives or other financial instruments to mitigate foreign currency risk, although we may do so in the future. 59 Interest Rate Risk We are subject to interest rate risk to the extent we have variable-rate debt outstanding, including under our Senior Credit Facilities and the AR Facility.
We do not currently use derivatives or other financial instruments to mitigate foreign currency risk, although we may do so in the future. 63 Interest Rate Risk We are subject to interest rate risk to the extent we have variable-rate debt outstanding, including under our Senior Credit Facilities and the AR Facility.
Foreign Exchange Risk Foreign currency translation risk is the risk that exchange rate gains or losses arise from translating our Canadian business’ statements of earnings and statements of financial position from functional currency to our reporting currency (the U.S. Dollar) for consolidation purposes.
Foreign Exchange Risk Foreign currency translation risk is the risk that exchange rate gains or losses arise from translating our Canadian business’s statements of earnings and statements of financial position from functional currency to our reporting currency (the U.S. Dollar) for consolidation purposes.
For the year ended December 31, 2022, such contracts accounted for 6.2% of our total utility costs. As of December 31, 2022, we had active electricity purchase agreements with fixed contract rates for locations in Illinois and Texas, which expire at various dates through May 2025.
For the year ended December 31, 2023, such contracts accounted for 6.2% of our total utility costs. As of December 31, 2023, we had active electricity purchase agreements with fixed contract rates for locations in Illinois, New York and Texas, which expire at various dates through May 2025.
As of December 31, 2022, we had a $600.0 million variable-rate Term Loan due 2026 outstanding, which has an interest rate of 6.1% per year. An increase or decrease of 1/4% in our interest rate on the Term Loan will change our annualized interest expense by approximately $1.5 million.
As of December 31, 2023, we had a $600.0 million variable-rate Term Loan due 2026 outstanding, which has an interest rate of 7.1% per year. An increase or decrease of 1/4% in our interest rate on the Term Loan will change our annualized interest expense by approximately $1.5 million.
As of December 31, 2022, there were $30.0 million of outstanding borrowings under the AR Facility, at a borrowing rate of 5.4%. An increase or decrease of 1/4% in our interest rate on the AR Facility will change our annualized interest expense by approximately $0.1 million.
As of December 31, 2023, there were $65.0 million of outstanding borrowings under the AR Facility, at a borrowing rate of 6.5%. An increase or decrease of 1/4% in our interest rate on the AR Facility will change our annualized interest expense by approximately $0.2 million. In January 2024, we made a repayment of $10.0 million under the AR Facility.
As of December 31, 2022, we have $9.2 million of unrecognized foreign currency translation losses included within Accumulated other comprehensive loss on our Consolidated Statement of Financial Position. Substantially all of our transactions at our Canadian subsidiary are denominated in their local functional currency, thereby reducing our risk of foreign currency transaction gains or losses.
Acquisitions and Dispositions : Disposition : Canadian Business to the Consolidated Financial Statements.) Substantially all of our transactions at our Canadian subsidiary are denominated in their local functional currency, thereby reducing our risk of foreign currency transaction gains or losses.
Removed
We perform credit evaluations on our customers and agencies and believe that the allowances for credit losses are adequate. We experienced an increase in credit losses during the COVID-19 pandemic and accordingly, we recorded additional provisions for doubtful accounts in prior years.
Added
As of December 31, 2023, we have $6.1 million of unrecognized foreign currency translation losses included within Accumulated other comprehensive loss on our Consolidated Statement of Financial Position. All unrecognized foreign currency losses will be included within the gain or loss recorded upon consummation of the Transaction. (See Item 8., Note 12.

Other OUT 10-K year-over-year comparisons