OUTFRONT Media’s Fourth Quarter And Full-Year 2023 Results

Fourth Quarter Revenues of $501.2 million

Operating income of $111.0 million

Net income attributable to OUTFRONT Media Inc. of $60.4 million, $0.35 earnings per diluted share

Adjusted OIBDA of $151.7 million

AFFO attributable to OUTFRONT Media Inc. of $108.1 million

Quarterly dividend of $0.30 per share, payable March 28, 2024

NEW YORK, Feb. 21, 2024 — OUTFRONT Media Inc. (NYSE: OUT) today reported results for the quarter and full year ended December 31, 2023.

“We were pleased to finish the year with our fourth quarter revenues at the higher end of guidance as a result of strength in our local business and automated sales channels, which offset the headwind created by the media strikes.” said Jeremy Male, Chairman and Chief Executive Officer of OUTFRONT Media. “While it is still early in 2024, our business is accelerating and we expect that OUTFRONT, and the entire out-of-home industry, will benefit from a strong media market this year.”

T

Notes: See exhibits for reconciliations of non-GAAP financial measures; 1) References to “Net income (loss)”, “Net income (loss)
per share”, “FFO” and “AFFO” mean “Net income (loss) attributable to OUTFRONT Media Inc.”, “Net income (loss) attributable
to OUTFRONT Media Inc. per common share”, “FFO attributable to OUTFRONT Media Inc.” and “AFFO attributable to
OUTFRONT Media Inc.,” respectively; 2) References to “per share” means per common share for diluted earnings per weighted
average share; 3) Diluted weighted average shares outstanding.

Consolidated

Reported revenues of $501.2 million increased $6.5 million, or 1.3%, for the fourth quarter of 2023 as compared to the same prior-year period. Organic revenues of $501.2 million increased $6.5 million, or 1.3%.

Reported billboard revenues of $389.1 million increased $11.6 million, or 3.1%, due to higher average revenue per display (yield) compared to the same prior-year period, driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues, the impact of new and lost billboards in the period, including acquisitions, and higher proceeds from condemnations. Organic billboard revenues of $389.1 million increased $11.6 million, or 3.1%.

Reported transit and other revenues of $112.1 million decreased $5.1 million, or 4.4%, due primarily to a decrease in average revenue per display (yield) compared to the same prior-year period, partially offset by the impact of a new transit franchise contract. Organic transit and other revenues of $112.1 million decreased $5.1 million, or 4.4%.

Total operating expenses of $247.1 million increased $7.6 million, or 3.2%, due primarily to higher billboard property lease expenses.

Selling, General and Administrative expenses (“SG&A”) of $107.9 million decreased $2.4 million, or 2.2%, due primarily to lower compensation-related costs.

Adjusted OIBDA of $151.7 million decreased $2.0 million, or 1.3%, compared to the same prior-year period.

Segment Results

U.S. Media
Reported revenues of $474.2 million increased $5.0 million, or 1.1%, due to higher average revenue per display (yield) compared to the same prior-year period. Billboard revenues increased 2.6% and Transit and other revenues decreased 4.0% for the same reason. Organic revenues increased $5.0 million, or 1.1%.

Operating expenses increased $8.4 million, or 3.7%, due primarily to higher variable costs associated with higher billboard property lease expenses .

SG&A expenses increased $1.3 million, or 1.6%, due primarily to higher insurance costs and higher professional fees.

Adjusted OIBDA of $159.0 million decreased $4.7 million, or 2.9%, compared to the same prior-year period.

Other
Reported revenues of $27.0 million increased $1.5 million, or 5.9%, due primarily to an increase in average revenue per display (yield) compared to the same prior-year period. Organic revenues also increased $1.5 million, or 5.9%, also due primarily to an increase in yield compared to the same prior-year period.

Operating expenses decreased $0.8 million, or 6.1%, due to lower costs related to third-party digital equipment sales.

SG&A expenses decreased $0.3 million, or 5.1%, due primarily to lower compensation expenses.

Adjusted OIBDA of $9.0 million increased $2.6 million, or 40.6%, compared to the same prior-year period.

Corporate
Corporate costs, excluding stock-based compensation, decreased $0.1 million, or 0.6%, to $16.3 million due to lower compensation-related expenses, partially offset by higher professional fees.

Full Year 2023 Results

Consolidated
Reported revenues of $1,820.6 million increased $48.5 million, or 2.7%, for the year December 31, 2023 as compared to the same prior-year period. Organic revenues of $1,805.4 million increased $47.5 million, or 2.7%.

Reported billboard revenues of $1,444.9 million increased $60.2 million, or 4.3%, primarily due to an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues, the impact of new and lost billboards in the period, including acquisitions, and higher proceeds from condemnations. Organic billboard revenues increased by $58.7 million, or 4.3%.

Reported transit and other revenues of $375.7 million decreased $11.7 million, or 3.0%, due to lower average revenue per display (yield) compared to the same prior-year period driven by weaker market conditions in national advertising, which primarily impacted advertising sales on certain above-ground advertising displays, partially offset by the impact of a new transit franchise contract. Organic transit and other revenues decreased $11.2 million, or 2.9%.

Total operating expenses of $968.3 million increased $56.9 million, or 6.2%, due primarily to higher billboard property lease expenses, which are attributable to billboard revenue increases in large markets and high-profile locations, the impact of new locations, and higher guaranteed minimum annual payments to the New York Metropolitan Transportation Authority (the “MTA”).

SG&A expenses of $429.7 million increased $7.6 million, or 1.8%, primarily due to the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the Company to certain employees, higher professional fees, rent related to new offices, higher insurance costs and a higher provision for doubtful accounts partially offset by lower compensation-related expenses.

Adjusted OIBDA of $451.0 million decreased $21.4 million, or 4.5%, compared to the same prior-year period.

Segment Results

U.S. Media
Reported revenues of $1,722.3 million increased $48.4 million, or 2.9%, primarily due to an increase in average revenue per display (yield), driven by the impact of programmatic and direct sale advertising platforms on digital billboard revenues, the impact of new and lost billboards in the period, including acquisitions, and higher proceeds from condemnations. Organic billboard revenues increased 4.4% and organic transit and other revenues decreased 3.4%. Organic revenues of $1,707.1 million, increased $44.2 million, or 2.7%.

Operating expenses increased $59.0 million, or 6.9%, due primarily to higher billboard property lease expense and higher minimum guarantee payments to the MTA.

SG&A expenses increased $11.2 million, or 3.5%, due primarily to higher professional fees, higher insurance costs, higher rent related to new offices, a higher provision for doubtful accounts and higher compensation-related expenses.

Adjusted OIBDA of $479.4 million decreased $21.8 million, or 4.3%, compared to the same prior-year period.

Other
Reported revenues of $98.3 million increased $0.1 million, or 0.1%, primarily driven by an increase in average revenue per display (yield), partially offset by the impact of foreign currency exchange rates. Organic revenues increased $3.3 million, or 3.5% primarily driven by the impact of new billboards in the period, including acquisitions, and an increase in average revenue per display (yield).

Operating expenses decreased $2.1 million, or 3.8%, primarily driven by lower expenses in our Canada business, partially offset by the impact of foreign currency exchange rates.

SG&A expenses decreased $0.3 million, or 1.3%, driven primarily by lower expenses in our Canada business, partially offset by the impact of foreign currency exchange rates.

Adjusted OIBDA of $23.1 million increased $2.5 million, or 12.1%, compared to the same prior-year period.

Corporate
Corporate costs, excluding stock-based compensation, increased $2.1 million, or 4.3%, 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.

Impairment Charges
As previously disclosed, we recorded impairment charges in the second and third quarters of 2023 with respect to our U.S. Transit and Other reporting unit, primarily representing impairment charges related to our MTA asset group. As a result of our continued expectation of negative aggregate cash flows related to our MTA asset group, we recorded an additional impairment charge of $11.2 million in the fourth quarter of 2023, $11.0 million of which relates to additional MTA equipment deployment cost spending during the quarter. To date, we have recorded an aggregate of $534.7 million of impairment charges related to our U.S. Transit and Other reporting unit.

Interest Expense
Net interest expense in the fourth quarter of 2023 was $40.8 million, including amortization of deferred financing costs of $1.7 million, as compared to $35.9 million in the same prior-year period, including amortization of deferred financing costs of $1.6 million. The increase was due primarily to higher interest rates and higher debt balance compared to the same prior-year period. The weighted average cost of debt as of December 31, 2023, was 5.7% compared to 5.2% in the same prior-year period.

Income Taxes
The income tax provision decreased $8.8 million, or 83.0%, in the fourth quarter of 2023 as compared to the same prior-year period. This decrease is primarily related to the recording of a valuation allowance against our U.S.TRS’s (as defined below) deferred tax assets in the fourth quarter of 2022. Cash paid for income taxes in the year ended December 31, 2023 was $6.7 million.

Net Income Attributable to OUTFRONT Media Inc.
Net income attributable to OUTFRONT Media Inc. was $60.4 million in the fourth quarter of 2023, which increased $1.2 million, or 2.0%, compared to the same prior-year period. Diluted weighted average shares outstanding were 173.3 million for the fourth quarter of 2023 compared to 172.7 million for the same prior-year period. Net income attributable to OUTFRONT Media Inc. per common share for diluted earnings per weighted average share was $0.35 in the fourth quarter of 2023 as compared to $0.34 in the same prior-year period.

FFO
FFO attributable to OUTFRONT Media Inc. was $99.3 million in the fourth quarter of 2023, a decrease of $3.7 million, or 3.6%, from the same prior-year period, driven primarily by a gain on the disposition of real estate assets, partially offset by impairment charges on non-real estate assets.

AFFO
AFFO attributable to OUTFRONT Media Inc. was $108.1 million in the fourth quarter of 2023, an increase of $12.0 million, or 12.5%, from the same prior-year period due primarily to the impact of the non-cash effect of straight-line rent, partially offset by higher interest expense and lower Adjusted OIBDA.

Cash Flow & Capital Expenditures
Net cash flow provided by operating activities of $254.2 million for the year ended December 31, 2023 increased $0.1 million compared to $254.1 million during the same prior-year period, primarily due to lower MTA deployment costs, partially offset by lower net income. Total capital expenditures decreased 3.3% to $86.8 million for the year ended December 31, 2023, compared to the same prior-year period.

Dividends
In the year ended December 31, 2023, we paid cash dividends of $207.0 million, including $198.2 million on our common stock and vested restricted share units granted to employees and $8.8 million on our Series A Convertible Perpetual Preferred Stock (the “Series A Preferred Stock”). We announced on February 21, 2024, that our board of directors has approved a quarterly cash dividend on our common stock of $0.30 per share payable on March 28, 2024, to stockholders of record at the close of business on March 1, 2024.

Balance Sheet and Liquidity
As of December 31, 2023, our liquidity position included unrestricted cash of $36.0 million and $493.5 million of availability under our $500.0 million revolving credit facility, net of $6.5 million of issued letters of credit against the letter of credit facility sublimit under the revolving credit facility and $85.0 million of additional availability under our accounts receivable securitization facility. During the three months ended December 31, 2023, no shares of our common stock were sold under our at-the-market equity offering program, of which $232.5 million remains available. As of December 31, 2023, the maximum number of shares of our common stock that could be required to be issued on conversion of the outstanding shares of the Series A Preferred Stock was approximately 7.8 million shares. Total indebtedness as of December 31, 2023 was $2.8 billion, excluding $22.4 million of deferred financing costs, and includes a $600.0 million term loan, $450.0 million of senior secured notes, $1.7 billion of senior unsecured notes, and $65.0 million of borrowings under our accounts receivable securitization facility.