10-Q 1 a20150930-10xqxoutfront.htm 10-Q 10-Q
Table of Contents        

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2015
or
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from
to
 
 
Commission File Number: 001-36367
OUTFRONT Media Inc.
(Exact name of registrant as specified in its charter)
Maryland
 
46-4494703
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
405 Lexington Avenue, 17th Floor
New York, NY
 
10174
(Address of principal executive offices)
 
(Zip Code)
(212) 297-6400
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     x Yes        o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).        x Yes     o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
 
Accelerated filer
o
 
 
 
 
 
Non-accelerated filer
x (Do not check if a smaller reporting company)
 
Smaller reporting company
o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    o Yes    x No

As of November 3, 2015, the number of shares outstanding of the registrant’s common stock was 137,574,646.



OUTFRONT MEDIA INC.
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2015
TABLE OF CONTENTS


PART 1

Item 1.    Financial Statements.

OUTFRONT Media Inc.
Consolidated Statements of Financial Position
(Unaudited)
 
 
As of
(in millions)
 
September 30,
2015
 
December 31,
2014
Assets:
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
106.4

 
$
28.5

Receivables, less allowance ($12.9 in 2015 and $14.2 in 2014)
 
227.1

 
217.5

Deferred income tax assets, net
 
1.5

 
2.3

Prepaid lease and transit franchise costs
 
81.5

 
68.2

Other prepaid expenses
 
32.3

 
26.1

Other current assets
 
14.5

 
12.7

Total current assets
 
463.3

 
355.3

Property and equipment, net (Note 3)
 
731.2

 
782.9

Goodwill
 
2,137.5

 
2,154.2

Intangible assets (Note 4)
 
587.6

 
633.2

Other assets
 
90.7

 
98.0

Total assets
 
$
4,010.3

 
$
4,023.6

 
 
 
 
 
Liabilities:
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
71.2

 
$
75.2

Accrued compensation
 
37.4

 
34.6

Accrued interest
 
27.4

 
18.0

Accrued lease costs
 
23.2

 
34.4

Other accrued expenses
 
45.2

 
47.4

Deferred revenues
 
26.4

 
18.6

Other current liabilities
 
22.5

 
27.0

Total current liabilities
 
253.3

 
255.2

Long-term debt (Note 7)
 
2,301.7

 
2,198.3

Deferred income tax liabilities, net
 
15.1

 
17.2

Asset retirement obligation (Note 5)
 
36.2

 
36.6

Other liabilities
 
70.0

 
70.8

Total liabilities
 
2,676.3

 
2,578.1

 
 
 
 
 
Commitments and contingencies (Note 15)
 


 


 
 
 
 
 
Stockholders’ equity (Note 8):
 
 
 
 
Common stock (2015 - 450.0 shares authorized, and 137.5 shares issued
 
 
 
 
 and outstanding; 2014 - 450.0 shares authorized, and 136.6 issued and outstanding)
 
1.4

 
1.4

Additional paid-in capital
 
1,929.3

 
1,911.2

Distribution in excess of earnings
 
(480.8
)
 
(377.0
)
Accumulated other comprehensive loss
 
(115.9
)
 
(90.1
)
Total stockholders’ equity
 
1,334.0

 
1,445.5

Total liabilities and stockholders’ equity
 
$
4,010.3

 
$
4,023.6


See accompanying notes to unaudited consolidated financial statements.

3

OUTFRONT Media Inc.
Consolidated Statements of Operations
(Unaudited)
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
(in millions, except per share amounts)
 
2015
 
2014
 
2015
 
2014
Revenues:
 
 
 
 
 
 
 
 
Billboard
 
$
278.3

 
$
239.7

 
$
805.3

 
$
689.0

Transit and other
 
108.4

 
96.8

 
310.0

 
269.8

Total revenues
 
386.7

 
336.5

 
1,115.3

 
958.8

Expenses:
 
 
 
 
 
 
 
 
Operating
 
209.3

 
177.2

 
614.5

 
512.3

Selling, general and administrative
 
67.2

 
55.1

 
192.5

 
161.1

Restructuring charges
 
—

 
6.2

 
2.6

 
6.2

Acquisition costs
 
—

 
1.4

 
—

 
1.4

Net (gain) loss on dispositions
 
—

 
(0.5
)
 
0.6

 
(1.4
)
Depreciation
 
28.4

 
26.7

 
85.1

 
79.3

Amortization
 
29.1

 
22.8

 
86.1

 
67.3

Total expenses
 
334.0

 
288.9

 
981.4

 
826.2

Operating income
 
52.7

 
47.6

 
133.9

 
132.6

Interest expense, net
 
(28.9
)
 
(26.3
)
 
(85.6
)
 
(57.3
)
Other expense, net
 
(0.4
)
 
—

 
(0.4
)
 
(0.5
)
Income before benefit (provision) for income taxes and equity in earnings of investee companies
 
23.4

 
21.3

 
47.9

 
74.8

Benefit (provision) for income taxes
 
(3.9
)
 
226.4

 
(7.0
)
 
202.9

Equity in earnings of investee companies, net of tax
 
1.7

 
0.6

 
3.6

 
1.4

Net income
 
$
21.2

 
$
248.3

 
$
44.5

 
$
279.1

 
 
 
 
 
 
 
 
 
Net income per common share:
 
 
 
 
 
 
 
 
Basic
 
$
0.15

 
$
2.07

 
$
0.32

 
$
2.49

Diluted
 
$
0.15

 
$
2.06

 
$
0.32

 
$
2.47

 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
 
Basic
 
137.5

 
120.0

 
137.3

 
112.3

Diluted
 
137.9

 
120.7

 
137.8

 
112.8

 
 
 
 
 
 
 
 
 
Dividends declared per common share
 
$
0.34

 
$
0.37

 
$
1.08

 
$
0.74


See accompanying notes to unaudited consolidated financial statements.

4

OUTFRONT Media Inc.
Consolidated Statements of Comprehensive Income
(Unaudited)
 
 
Three months ended
 
Nine months ended
 
 
September 30,
 
September 30,
(in millions)
 
2015
 
2014
 
2015
 
2014
Net income
 
$
21.2

 
$
248.3

 
$
44.5

 
$
279.1

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
Cumulative translation adjustments
 
(15.1
)
 
(8.2
)
 
(26.2
)
 
(3.1
)
Amortization of net actuarial loss
 
0.1

 
—

 
0.4

 
0.2

Deferred tax rate adjustment
 
—

 
(1.2
)
 
—

 
(1.2
)
Total other comprehensive loss, net of tax
 
(15.0
)
 
(9.4
)
 
(25.8
)
 
(4.1
)
Total comprehensive income
 
$
6.2

 
$
238.9

 
$
18.7

 
$
275.0


See accompanying notes to unaudited consolidated financial statements.

5

OUTFRONT Media Inc.
Consolidated Statements of Invested Equity/Stockholders’ Equity
(Unaudited)
(in millions, except per share amounts)
 
Shares of Common Stock
 
 Common Stock ($0.01 per share par value)
 
Additional Paid-In Capital
 
Retained Earnings (Distribution in Excess of Earnings)
 
Invested Capital
 
Accumulated Other Comprehensive Loss
 
Total Invested Equity/ Stockholders’ Equity
Balance as of December 31, 2013
 
—

 
$
—

 
$
—

 
$
—

 
$
2,829.5

 
$
(75.1
)
 
$
2,754.4

Net income
 
—

 
—

 
—

 
278.0

 
1.1

 
—

 
279.1

Other comprehensive loss
 
—

 
—

 
—

 
—

 
—

 
(4.1
)
 
(4.1
)
Initial public offering (“IPO”)
 
23.0

 
0.2

 
614.8

 
—

 
—

 
—

 
615.0

Stock-based payments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization
 
—

 
—

 
9.0

 
—

 
—

 
—

 
9.0

Shares for tax withholding for stock-based payments
 
—

 
—

 
(0.1
)
 
—

 
—

 
—

 
(0.1
)
Conversion to stockholders’ equity
 
97.0

 
1.0

 
2,829.6

 
—

 
(2,830.6
)
 
—

 
—

Distribution of debt and IPO proceeds to CBS Corporation (“CBS”)
 
—

 
—

 
(2,038.8
)
 
—

 
—

 
—

 
(2,038.8
)
Dividends ($0.74 per share)
 
—

 
—

 
—

 
(89.6
)
 
—

 
—

 
(89.6
)
Net contribution from CBS
 
—

 
—

 
42.1

 
—

 
—

 
—

 
42.1

Balance as of September 30, 2014
 
120.0

 
$
1.2

 
$
1,456.6

 
$
188.4

 
$
—

 
$
(79.2
)
 
$
1,567.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance as of December 31, 2014
 
136.6

 
$
1.4

 
$
1,911.2

 
$
(377.0
)
 
 
 
$
(90.1
)
 
$
1,445.5

Net income
 
—

 
—

 
—

 
44.5

 
 
 
—

 
44.5

Other comprehensive loss
 
—

 
—

 
—

 
—

 
 
 
(25.8
)
 
(25.8
)
Stock-based payments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vesting of RSUs and PRSUs
 
0.4

 
—

 
—

 
—

 
 
 
—

 
—

Exercise of stock options
 
0.2

 
—

 
2.0

 
—

 
 
 
—

 
2.0

Amortization
 
—

 
—

 
12.3

 
—

 
 
 
—

 
12.3

Shares for tax withholding for stock-based payments
 
—

 
—

 
(6.7
)
 
—

 
 
 
—

 
(6.7
)
Issuance of stock for purchase of property and equipment (see Note 8)
 
0.3

 
—

 
10.5

 
—

 
 
 
—

 
10.5

Dividends ($1.08 per share)
 
—

 
—

 
—

 
(148.3
)
 
 
 
—

 
(148.3
)
Balance as of September 30, 2015
 
137.5

 
$
1.4

 
$
1,929.3

 
$
(480.8
)
 
 
 
$
(115.9
)
 
$
1,334.0


See accompanying notes to unaudited consolidated financial statements.

6

OUTFRONT Media Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
 
Nine Months Ended
 
 
September 30,
(in millions)
 
2015
 
2014
Operating activities:
 
 
 
 
Net income
 
$
44.5

 
$
279.1

Adjustments to reconcile net income to net cash flow provided by operating activities:
 
 
 
 
Depreciation and amortization
 
171.2

 
146.6

Deferred tax benefit
 
(0.1
)
 
(246.4
)
Stock-based compensation
 
11.7

 
10.9

Provision for doubtful accounts
 
2.1

 
2.3

Accretion expense
 
1.9

 
1.7

Net (gain) loss on dispositions
 
0.6

 
(1.4
)
Equity in earnings of investee companies, net of tax
 
(3.6
)
 
(1.4
)
Distributions from investee companies
 
2.7

 
3.2

Amortization of deferred financing costs and debt discount and premium
 
4.4

 
10.7

Change in assets and liabilities, net of investing and financing activities
 
(59.0
)
 
(20.8
)
Net cash flow provided by operating activities
 
176.4

 
184.5

 
 
 
 
 
Investing activities:
 
 
 
 
Capital expenditures
 
(43.0
)
 
(43.6
)
Acquisitions
 
(11.1
)
 
—

Net proceeds from dispositions
 
8.8

 
2.3

Net cash flow used for investing activities
 
(45.3
)
 
(41.3
)
 
 
 
 
 
Financing activities:
 
 
 
 
Proceeds from IPO
 
—

 
615.0

Proceeds from long-term debt borrowings - term loan and senior notes
 
—

 
1,598.0

Proceeds from long-term debt borrowings - new senior notes
 
103.8

 
—

Proceeds from borrowings under revolving credit facility
 
105.0

 
—

Repayments of borrowings under revolving credit facility
 
(105.0
)
 
—

Deferred financing costs
 
(3.3
)
 
(24.8
)
Distribution of debt and IPO proceeds to CBS
 
—

 
(2,038.8
)
Net cash contribution from CBS
 
—

 
39.8

Proceeds from stock option exercises
 
2.0

 
—

Taxes withheld for stock-based compensation
 
(4.0
)
 
—

Dividends
 
(148.7
)
 
(88.8
)
Other
 
(0.6
)
 
—

Net cash flow provided by (used for) financing activities
 
(50.8
)
 
100.4

 
 
 
 
 
Effect of exchange rate changes on cash and cash equivalents
 
(2.4
)
 
(1.2
)
Net increase in cash and cash equivalents
 
77.9

 
242.4

Cash and cash equivalents at beginning of period
 
28.5

 
29.8

Cash and cash equivalents at end of period
 
$
106.4

 
$
272.2




7

OUTFRONT Media Inc.
Condensed Consolidated Statements of Cash Flows (Continued)
(Unaudited)
 
 
Nine Months Ended
 
 
September 30,
(in millions)
 
2015
 
2014
Supplemental disclosure of cash flow information:
 
 
 
 
Cash paid for income taxes
 
$
4.9

 
$
31.4

Cash paid for interest
 
71.9

 
25.6

 
 
 
 
 
Non-cash investing and financing activities:
 
 
 
 
Accrued purchases of property and equipment
 
5.2

 
3.5

Issuance of stock for purchase of property and equipment
 
10.5

 
—

Taxes withheld for stock-based compensation
 
2.7

 
—


See accompanying notes to unaudited consolidated financial statements.


8
OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)


Note 1. Description of Business and Basis of Presentation

Description of Business

OUTFRONT Media Inc. (the “Company”) and its subsidiaries (collectively, “we,” “us” or “our”) provides advertising space (“displays”) on out-of-home advertising structures and sites in the United States (the “U.S.”), Canada and Latin America. Our portfolio includes billboard displays, which are predominantly located in densely populated major metropolitan areas and along high-traffic expressways and major commuting routes. We also have a number of exclusive multi-year contracts to operate advertising displays in municipal transit systems. We have displays in all of the 25 largest markets in the U.S. and over 180 markets across the U.S., Canada and Latin America. We manage our business through two segments - U.S. and International.

As of July 17, 2014, we began operating as a real estate investment trust (“REIT”) for U.S. federal income tax purposes.

Basis of Presentation and Use of Estimates

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission (the “SEC”). In the opinion of our management, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation of our financial position, results of operations and cash flows for the periods presented. Consistent with the first quarter 2015, certain previously reported amounts within Revenues have been reclassified to conform with the current presentation. The impact of the reclassification is an increase in “Billboard” revenues of $2.5 million and a corresponding decrease in “Transit and other” revenues of $2.5 million for the three months ended September 30, 2014. The impact of the reclassification is a reduction in “Billboard” revenues of $1.2 million and a corresponding increase in “Transit and other” revenues of $1.2 million for the nine months ended September 30, 2014. These financial statements should be read in conjunction with the more detailed financial statements and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on March 6, 2015.

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Note 2. New Accounting Standards

Adoption of New Accounting Standards

Business Combinations

During the third quarter of 2015, we early adopted the Financial Accounting Standards Board’s (the “FASB’s”) guidance addressing provisional amounts for items in a business combination for which the accounting is incomplete by the end of the reporting period. The guidance requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, calculated as if the accounting had been completed as of the acquisition date and the amounts disclosed either on the face of the financial statements or the notes. This guidance is to be applied prospectively and is effective for fiscal years beginning after December 15, 2015. This guidance did not have a material effect on our financial statements.

Service Concession Arrangements

During the first quarter of 2015, we adopted the FASB’s guidance on the accounting for service concession arrangements with public sector entities. This guidance specifies that an operating entity should not account for a service concession arrangement as a lease and the infrastructure used in a service concession arrangement should not be recognized as property, plant and equipment. This guidance applies when the public sector entity controls the services that the operating entity must provide

9
OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)

within the infrastructure and also controls any residual interest in the infrastructure at the end of the term of the arrangement. This guidance did not have a material effect on our financial statements.

Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity

During the first quarter of 2015, we adopted the FASB guidance on reporting discontinued operations and disclosures of disposals of components of an entity. The new guidance changes the requirements, including additional disclosures, for reporting discontinued operations which may include a component of an entity or a group of components of an entity, or a business or nonprofit activity. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. This guidance did not have a material effect on our consolidated financial statements.

Recent Pronouncements

Simplifying the Presentation of Debt Issuance Costs

In April 2015, the FASB issued principles-based guidance addressing the recognition of debt issuance costs related to a recognized debt liability. The guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance is to be applied retrospectively and is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. We do not expect this guidance to have a material effect on our financial statements.

Revenue from Contracts with Customers

In May 2014, the FASB issued principles-based guidance addressing revenue recognition issues. The guidance may be applied to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. In July 2015, the FASB deferred the effective date of the standard by one year. This guidance is to be applied retrospectively and is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements.

Note 3. Property and Equipment

The table below presents the balances of major classes of assets and accumulated depreciation.
 
 
 
 
As of
(in millions)
 
Estimated Useful Lives
 
September 30,
2015
 
December 31,
2014
Land
 
 
 
$
91.6

 
$
88.1

Buildings
 
20 to 40 years
 
46.2

 
47.0

Advertising structures
 
5 to 20 years
 
1,684.6

 
1,745.6

Furniture, equipment and other
 
3 to 10 years
 
84.9

 
78.1

Construction in progress
 
 
 
28.5

 
17.1

 
 
 
 
1,935.8

 
1,975.9

Less: accumulated depreciation
 
 
 
1,204.6

 
1,193.0

Property and equipment, net
 
 
 
$
731.2

 
$
782.9


Depreciation expense was $28.4 million for the three months ended September 30, 2015, $26.7 million for the three months ended September 30, 2014, $85.1 million for the nine months ended September 30, 2015, and $79.3 million for the nine months ended September 30, 2014.


10
OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)

Note 4. Intangible Assets

Our identifiable intangible assets primarily consist of acquired permits and leasehold agreements and franchise agreements that grant us the right to operate out-of-home structures in specified locations and the right to provide advertising space on railroad and municipal transit properties. Identifiable intangible assets are amortized on a straight-line basis over their estimated useful life, which in some cases includes historical experience of renewals.

Our identifiable intangible assets consist of the following:
(in millions)
 
Gross
 
Accumulated Amortization
 
Net
As of September 30, 2015:
 
 
 
 
 
 
Permits and leasehold agreements
 
$
1,112.3

 
$
(695.4
)
 
$
416.9

Franchise agreements
 
472.0

 
(333.8
)
 
138.2

Other intangible assets
 
40.0

 
(7.5
)
 
32.5

Total intangible assets
 
$
1,624.3

 
$
(1,036.7
)
 
$
587.6

 
 
 
 
 
 
 
As of December 31, 2014:
 
 
 
 
 
 
Permits and leasehold agreements
 
$
1,119.2

 
$
(677.2
)
 
$
442.0

Franchise agreements
 
474.7

 
(321.1
)
 
153.6

Other intangible assets
 
39.9

 
(2.3
)
 
37.6

Total intangible assets
 
$
1,633.8

 
$
(1,000.6
)
 
$
633.2


All of our identifiable intangible assets, except goodwill, are subject to amortization. Amortization expense was $29.1 million for the three months ended September 30, 2015, and $22.8 million for the three months ended September 30, 2014, which includes the amortization of direct lease acquisition costs of $9.4 million for the three months ended September 30, 2015, and $8.8 million for the three months ended September 30, 2014. Amortization expense was $86.1 million for the nine months ended September 30, 2015, and $67.3 million for the nine months ended September 30, 2014, which includes the amortization of direct lease acquisition costs of $26.1 million for the nine months ended September 30, 2015, and $24.2 million for the nine months ended September 30, 2014. Direct lease acquisition costs are amortized on a straight-line basis over the related customer lease term, which generally ranges from four weeks to one year.

Note 5. Asset Retirement Obligation

The following table sets forth the change in the asset retirement obligations associated with our advertising structures located on leased properties. The obligation is calculated based on the assumption that all of our advertising structures will be removed within the next 50 years. The estimated annual costs to dismantle and remove the structures upon the termination or non-renewal of our leases are consistent with our historical experience.
(in millions)
 
 
As of December 31, 2014
 
$
36.6

Accretion expense
 
1.9

Additions
 
0.1

Liabilities settled
 
(0.9
)
Foreign currency translation adjustments
 
(1.5
)
As of September 30, 2015
 
$
36.2



11
OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)

Note 6. Related Party Transactions

We have a 50% ownership interest in two joint ventures that operate transit shelters in the greater Los Angeles area and Vancouver, and four joint ventures acquired in connection with the acquisition of certain outdoor advertising businesses (the “Acquired Business”) of Van Wagner Communications, LLC (the “Acquisition”), which operate a total of 13 billboards in New York and Boston. All of these ventures are accounted for as equity investments. These investments totaled $24.9 million as of September 30, 2015, and $27.0 million as of December 31, 2014, and are included in Other assets on the Consolidated Statements of Financial Position. We provided sales and management services to these joint ventures and recorded management fees in Revenues on the Consolidated Statement of Operations of $2.0 million in the three months ended September 30, 2015, $1.8 million in the three months ended September 30, 2014, $5.3 million in the nine months ended September 30, 2015, and $4.8 million in the nine months ended September 30, 2014.

CBS Corporation (“CBS”)

On July 16, 2014, CBS disposed of all of its shares of our common stock and as of July 16, 2014, we were separated from CBS (the “Separation”) and CBS and their affiliates ceased to be related parties. Our Statement of Operations for the three and nine months ended September 30, 2014, include charges from CBS for services, such as tax, internal audit, cash management, insurance, technology systems and other services. Charges for these services and benefits have been included in Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations and totaled $0.3 million for the three months ended September 30, 2014, and $9.5 million for the nine months ended September 30, 2014. Also included in these 2014 charges are professional fees associated with our planned election to be taxed as a REIT. As of December 31, 2014, all services previously provided by CBS have been transitioned to us.

For advertising spending placed by CBS and its subsidiaries, we recognized total revenues of $7.5 million, of which $0.7 million was before the Separation, for the three months ended September 30, 2014, and $14.5 million, of which $7.7 million was before the Separation, for the nine months ended September 30, 2014.

As of December 31, 2014, in connection with the Separation, there were no receivables from CBS and payables to CBS were $0.2 million, which were included in Other current liabilities on our Consolidated Statement of Financial Position.

Viacom Inc. is controlled by National Amusements, Inc., the controlling stockholder of CBS. On July 16, 2014, as a result of the Separation, Viacom Inc. ceased to be a related party. Revenues recognized for advertising spending placed by various subsidiaries of Viacom Inc. were $2.4 million, of which $0.7 million was before the Separation, in the three months ended September 30, 2014, and $6.0 million, of which $4.3 million was before the Separation, in the nine months ended September 30, 2014.


12
OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)

Note 7. Long-Term Debt

Long-term debt consists of the following:
 
 
As of
(in millions, except percentages)
 
September 30,
2015
 
December 31,
2014
Term loan, due 2021
 
$
798.5

 
$
798.3

 
 
 
 
 
Senior unsecured notes:
 
 
 
 
5.250% senior unsecured notes, due 2022
 
549.3

 
549.3

5.625% senior unsecured notes, due 2024
 
503.5

 
400.0

5.875% senior unsecured notes, due 2025
 
450.0

 
450.0

Total senior unsecured notes
 
1,502.8

 
1,399.3

 
 
 
 
 
Other
 
0.4

 
0.7

Total long-term debt
 
$
2,301.7

 
$
2,198.3

 
 
 
 
 
Weighted average cost of debt
 
4.7
%
 
4.6
%

Term Loan

The interest rate on the term loan due in 2021 (the “Term Loan”) was 3.0% per annum as of September 30, 2015. As of September 30, 2015, a discount of $1.5 million on the Term Loan remains unamortized. The discount is being amortized through Interest expense, net, on the Consolidated Statement of Operations.

On October 30, 2015, we made a payment of $50.0 million on the Term Loan.

Senior Unsecured Notes

As of September 30, 2015, a discount of $0.7 million on $150.0 million of the 5.250% Senior Unsecured Notes due 2022, remains unamortized. The discount is being amortized through Interest expense on the Consolidated Statement of Operations.

On March 30, 2015, two of our wholly owned subsidiaries, Outfront Media Capital LLC (“Capital LLC”) and Outfront Media Capital Corporation (“Finance Corp,” and together with Capital LLC, the “Borrowers”), issued an additional $100.0 million aggregate principal amount of 5.625% Senior Unsecured Notes due 2024 (the “New 2024 Senior Notes”) in a private placement. The New 2024 Senior Notes are of the same class and series as, and otherwise identical to, the 5.625% Senior Unsecured Notes due 2024 that were previously issued by the Borrowers on January 31, 2014. Interest on the New 2024 Senior Notes is payable on May 15 and November 15 of each year, beginning on May 15, 2015 and deemed to have accrued from November 15, 2014. As of September 30, 2015, a premium of $3.5 million on the New 2024 Senior Notes remains unamortized. The premium is being amortized through Interest expense, net, on the Consolidated Statement of Operations over the life of the New 2024 Senior Notes.

Pursuant to a registration rights agreement dated March 30, 2015, we and the Borrowers have agreed to use commercially reasonable efforts to cause a registration statement to become effective with the SEC by March 30, 2016, related to an offer to exchange the New 2024 Senior Notes for registered New 2024 Senior Notes having substantially identical terms, or, in certain cases, to register the New 2024 Senior Notes for resale. If we and the Borrowers do not register or exchange the New 2024 Senior Notes pursuant to the terms of the registration right agreement, the Borrowers will be required to pay additional interest to the holders of the New 2024 Senior Notes under certain circumstances.

Revolving Credit Facility

We also have a $425.0 million revolving credit facility, which matures in 2019 (the “Revolving Credit Facility”).


13
OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)

As of September 30, 2015, 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 $0.5 million in each of the three months ended September 30, 2015 and 2014. The commitment fee based on the amount of unused commitments under the Revolving Credit Facility was $1.4 million in each of the nine months ended September 30, 2015 and 2014. As of September 30, 2015, we had issued letters of credit totaling approximately $31.1 million against the Revolving Credit Facility.

Debt Covenants

The credit agreement dated January 31, 2014, (the “Credit Agreement”), governing the Term Loan and the Revolving Credit 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 limit the Company’s and our subsidiaries’ abilities to (i) pay dividends on, repurchase or make distributions in respect to the Company’s or Capital LLC’s capital stock or make other restricted payments, and (ii) enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany transfers.

The terms of the Credit Agreement require that, as long as any commitments remain outstanding under the Revolving Credit Facility, we maintain a Consolidated Net Secured Leverage Ratio, which is the ratio of (i) our consolidated secured debt (less up to $150.0 million of unrestricted cash) to (ii) our Consolidated EBITDA (as defined in the Credit Agreement) for the trailing four consecutive quarters, of no greater than 4.0 to 1.0. As of September 30, 2015, our Consolidated Net Secured Leverage Ratio was 1.5 to 1.0. The Credit Agreement also requires that, in connection with the incurrence of certain indebtedness, we maintain a Consolidated Total Leverage Ratio, which is the ratio of our consolidated total debt to our Consolidated EBITDA for the trailing four consecutive quarters, of no greater than 6.0 to 1.0. As of September 30, 2015, our Consolidated Total Leverage Ratio was 5.1 to 1.0. As of September 30, 2015, we are in compliance with our debt covenants.

Letter of Credit Facility

As of September 30, 2015, we issued letters of credit totaling approximately $67.6 million under our $80.0 million letter of credit facility. The fee under the letter of credit facility was immaterial in each of the nine months ended September 30, 2015 and 2014.

Deferred Financing Costs

As of September 30, 2015, we had deferred $34.7 million in fees and expenses associated with the Term Loan, Revolving Credit Facility, letter of credit facility and our senior unsecured notes. We are amortizing the deferred fees through Interest expense on the Consolidated Statement of Operations over the respective terms of the Term Loan, Revolving Credit Facility, letter of credit facility and our senior unsecured notes.

Fair Value

Under the fair value hierarchy, observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities are defined as Level 1; observable inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for the asset or liability are defined as Level 2; and unobservable inputs for the asset or liability are defined as Level 3. The aggregate fair value of our debt, which is estimated based on quoted market prices of similar liabilities, was approximately $2.3 billion as of September 30, 2015. The fair value of our debt is classified as Level 2.

Note 8. Equity

As of September 30, 2015, 450,000,000 shares of our common stock, par value $0.01 per share, were authorized; 137,506,040 shares were issued and outstanding; and 50,000,000 shares of our preferred stock, par value $0.01 per share, were authorized with no shares issued and outstanding.

In the nine months ended September 30, 2015, we issued 374,352 shares, valued at approximately $10.5 million, of our common stock to J&M Holding Enterprises, Inc. (“J&M”), an affiliate of Videri Inc. (“Videri”), or Videri, as applicable, in connection with licenses and services to be received under a development and license agreement (the “Videri Agreement”) with J&M and Videri. We have capitalized the payments, which are related to the development of software and equipment to be

14
OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)

utilized within digital displays, as construction in progress within Property and equipment, net, on the Consolidated Statement of Financial Position.

On October 27, 2015, we issued an additional 68,570 shares, valued at approximately $1.6 million of our common stock to J&M and Videri, as applicable.

On October 28, 2015, we announced that our board of directors approved a quarterly cash dividend of $0.34 per share on our common stock, payable on December 31, 2015, to stockholders of record at the close of business on December 10, 2015.

Note 9. Restructuring Charges

In third and fourth quarters of 2014, we recorded an aggregate restructuring charge of $9.8 million (including stock-based compensation of $5.6 million) associated with the reorganization of management and in the nine months ended September 30, 2015, we recorded a restructuring charge of $2.6 million in our U.S. segment associated with the elimination of management positions, the elimination of positions in connection with the sale of assets and the consolidation of leased locations. As of September 30, 2015, $2.1 million in restructuring reserves remained outstanding and is included in Other current liabilities on the Consolidated Statement of Financial Position.

Note 10. Acquisitions and Dispositions

Acquisitions

In the nine months ended September 30, 2015, we completed several small acquisitions for $11.1 million.

On October 1, 2014, we completed the Acquisition for $690.0 million in cash, plus working capital adjustments.

Our Consolidated Statement of Operations for the three months ended September 30, 2015, includes $50.3 million of revenue from the Acquired Business and for the nine months ended September 30, 2015, includes $145.3 million of revenue from the Acquired Business.

The allocation of the purchase price of the Acquired Business is based on the fair value of assets acquired and liabilities assumed as of October 1, 2014, the effective date of the Acquisition.

The allocation of the purchase price presented below represents the effect of recording the estimates of the fair value of assets acquired and liabilities assumed as of the date of the Acquisition, based on the total transaction consideration of $690.0 million in cash, plus working capital adjustments. The following allocation of purchase price includes minor revisions to the preliminary allocation that was reported as of December 31, 2014, for property and equipment, goodwill and other assets, primarily due to adjustments for the valuation of property and equipment based upon additional information.

15
OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)

(in millions)
 
Purchase Price
Base purchase price
 
$
690.0

Working capital and other adjustments
 
24.2

Estimated transaction consideration
 
$
714.2

 
 
 
Current assets
 
$
48.4

Property and equipment
 
73.3

Goodwill
 
298.9

Intangible assets(a)
 
325.2

Other assets
 
10.7

Current liabilities
 
(36.5
)
Long-term debt(b)
 
(1.4
)
Other liabilities
 
(4.4
)
Total net assets acquired
 
$
714.2


(a)
Intangible assets included with the preliminary purchase price allocation are as follows:
(in millions)
 
Estimated Useful Life
 
Intangible Assets Allocation
Permits and leasehold agreements
 
12 - 20 years
 
$
252.0

Franchise agreements
 
4 - 15 years
 
35.3

Advertising relationships
 
7 years
 
16.0

Other
 
1 - 5 years
 
21.9

 
 
 
 
$
325.2


(b)
In conjunction with the Acquisition, we assumed a total of $1.4 million of long term debt, due to three unrelated third parties. The debt had varying maturities through June 1, 2021. As of September 30, 2015, we have prepaid several of the debt obligations, leaving a remaining balance of $0.4 million, with varying maturities through January 31, 2017.

Dispositions

On October 31, 2015, we entered into an agreement with JCDecaux SA (“JC Decaux”), JCDecaux Latin America Investments Holding SL Unipersonal, a wholly-owned subsidiary of JCDecaux, and Corporacion Americana de Equipamientos Urbanos, S.L., a majority-owned subsidiary of JCDecaux, to sell all of our equity interests in certain of our subsidiaries (the “Transaction”),which hold all of the assets of our outdoor advertising business in Latin America, for $82.0 million in cash, subject to working capital and indebtedness adjustments. The consummation of the Transaction is expected to occur in the first half of 2016, subject to customary closing conditions, including regulatory approval.

In the second quarter of 2015, we disposed of substantially all of our assets in Puerto Rico and recorded a loss of $0.9 million in Net (gain) loss on dispositions on the Consolidated Statement of Operations.


16
OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)

Note 11. Stock-Based Compensation

The following table summarizes our stock-based compensation expense for the three and nine months ended September 30, 2015 and 2014.
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
(in millions)
 
2015
 
2014
 
2015
 
2014
Restricted stock units (“RSUs”) and performance-based RSUs (“PRSUs”)
 
$
3.6

 
$
4.7

 
$
11.5

 
$
9.0

Stock options
 
0.1

 
1.5

 
0.2

 
1.9

Stock-based compensation expense, before income taxes
 
3.7

 
6.2

 
11.7

 
10.9

Tax benefit
 
(0.3
)
 
(0.7
)
 
(1.0
)
 
(2.8
)
Stock-based compensation expense, net of tax
 
$
3.4

 
$
5.5

 
$
10.7

 
$
8.1


As of September 30, 2015, total unrecognized compensation cost related to non-vested RSUs and PRSUs was $24.1 million, which is expected to be recognized over a weighted average period of 2.2 years, and total unrecognized compensation cost related to non-vested stock options was $0.4 million, which is expected to be recognized over a weighted average period of 1.9 years.

RSUs and PRSUs

The following table summarizes activity for the nine months ended September 30, 2015, of RSUs and PRSUs issued to our employees.
 
 
Activity
 
Weighted Average Per Share Grant Date Fair Market Value
Non-vested as of December 31, 2014
 
1,278,602

 
$
21.92

Granted:
 
 
 
 
RSUs
 
419,609

 
29.64

PRSUs
 
226,197

 
29.83

Vested:
 
 
 
 
RSUs
 
(468,765
)
 
21.28

PRSUs
 
(75,460
)
 
28.61

Forfeitures:
 
 
 
 
RSUs
 
(31,744
)
 
25.41

PRSUs
 
(25,751
)
 
26.42

Non-vested as of September 30, 2015
 
1,322,688

 
26.46



17
OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)

Stock Options

The following table summarizes activity for the nine months ended September 30, 2015, of stock options issued to our employees.
 
 
Activity
 
Weighted Average Exercise Price
Outstanding as of December 31, 2014
 
450,890

 
$
15.29

Exercised
 
(141,600
)
 
14.67

Forfeited or expired
 
(14,393
)
 
12.73

Outstanding as of September 30, 2015
 
294,897

 
15.72

 
 
 
 
 
Exercisable as of September 30, 2015
 
208,515

 
12.77


Note 12. Retirement Benefits

The following table presents the components of net periodic pension cost and amounts recognized in other comprehensive income (loss) for our pension plans:
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
(in millions)
 
2015
 
2014
 
2015
 
2014
Components of net periodic pension cost:
 
 
 
 
 
 
 
 
Service cost
 
$
0.4

 
$
0.4

 
$
1.1

 
$
1.1

Interest cost
 
0.5

 
0.8

 
1.4

 
1.9

Expected return on plan assets
 
(0.5
)
 
(0.8
)
 
(1.6
)
 
(2.1
)
Amortization of net actuarial losses(a)
 
0.1

 
0.1

 
0.5

 
0.3

Amortization of transitional obligation
 
(0.1
)
 
—

 
(0.1
)
 
—

Net periodic pension cost
 
$
0.4

 
$
0.5

 
$
1.3

 
$
1.2


(a)
Reflects amounts reclassified from accumulated other comprehensive income (loss) to net income.

In the nine months ended September 30, 2015, we contributed $1.6 million to our pension plans. In 2015, we expect to contribute approximately $2.1 million to our pension plans.

Note 13. Income Taxes

On September 15, 2015, we filed our election to be taxed as a REIT for U.S. federal income tax purposes for the period July 17, 2014, through December 31, 2014, and all future calendar years. As of July 17, 2014, we were organized in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”) and, accordingly, we have not provided for U.S. federal income tax on our REIT taxable income that we distributed to our stockholders. We have elected to treat our subsidiaries that participate in certain non-REIT qualifying activities, and our foreign subsidiaries, as taxable REIT subsidiaries (“TRSs”). As such, we have provided for their federal, state and foreign income taxes.

As a result of our REIT conversion, our effective tax rate subsequent to the Separation was substantially lower than previous periods. Prior to the Separation, our income tax provisions were calculated on a separate tax return basis, with us as the taxpayer, even though our U.S. operating results were included in the consolidated federal, and certain state and local income tax returns of CBS. We believe that the assumptions and estimates used to determine these tax amounts were reasonable. However, the 2014 consolidated financial statements may not necessarily reflect our income tax expense or tax payments, or what our tax amounts would have been if we had been a stand-alone company operating as a REIT during the period prior to the Separation.

18
OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)


Our effective income tax rate represents a combined annual effective tax rate for federal, state, local and foreign taxes applied to interim operating results.

In the three and nine months ended September 30, 2015, our effective tax rate differed from the U.S. federal statutory income tax rate primarily due to our REIT status, including the dividends paid deduction, the impact of state and local taxes, and the effect of foreign operations. Our effective income tax rate in the three and nine months ended September 30, 2014, differed from the U.S. federal statutory income tax rate primarily due to a non-cash benefit of $232.3 million recorded as a result of our REIT conversion in 2014, partially offset by the impact of state and local taxes, and the effect of foreign operations.

Note 14. Earnings Per Share (“EPS”)
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
(in millions)
 
2015
 
2014
 
2015
 
2014
Net income
 
$
21.2

 
$
248.3

 
$
44.5

 
$
279.1

 
 
 
 
 
 
 
 
 
Weighted average shares for basic EPS
 
137.5

 
120.0

 
137.3

 
112.3

Dilutive potential shares from grants of RSUs, PRSUs and stock options(a)
 
0.4

 
0.7

 
0.5

 
0.5

Weighted average shares for diluted EPS
 
137.9

 
120.7

 
137.8

 
112.8


(a)
The potential impact of an aggregate 0.6 million granted RSUs, PRSUs and stock options for the three months ended September 30, 2015, and an aggregate 0.1 million granted RSUs, PRSUs and stock options for the nine months ended September 30, 2015, were antidilutive. The potential impact of an aggregate 0.1 million granted RSUs, PRSUs and stock options for each of the three and nine months ended September 30, 2014, were antidilutive.

Note 15. Commitments and Contingencies

Off-Balance Sheet Commitments

Our off-balance sheet commitments primarily consist of operating lease arrangements and guaranteed minimum franchise payments. These arrangements result from our normal course of business and represent obligations that are payable over several years.

We have long-term operating leases for office space, billboard sites and equipment, which expire at various dates. Certain leases contain renewal and escalation clauses.

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. 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.

On July 22, 2015, we entered into an agreement with the Metropolitan Transportation Authority (the “MTA”) to extend our existing transit contract for providing advertising services throughout the New York City subway system from December 31, 2015, to December 31, 2016, unless earlier terminated by the MTA on or after July 1, 2016. On July 22, 2015, we also entered into an agreement with the MTA to modify our existing bus and commuter rail advertising contract to change the MTA’s right to terminate the contract at any time, to a right to terminate at any time on or after July 1, 2016, and the right to exclude billboards on the MTA’s properties from any termination. The December 31, 2016, expiration date of the bus and commuter rail advertising contract remains unchanged.

Letters of Credit

We have indemnification obligations with respect to letters of credit and surety bonds primarily used as security against non-performance in the normal course of business. The outstanding letters of credit and surety bonds approximated $111.8 million as of September 30, 2015, and were not recorded on the Consolidated Statements of Financial Position.

19
OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)


Legal Matters

On an ongoing basis, we are engaged in lawsuits and governmental proceedings and respond to various investigations, inquiries, notices and claims from national, state and local governmental and other authorities (collectively, “litigation”). Litigation is inherently uncertain and always difficult to predict. Although it is not possible to predict with certainty the eventual outcome of any litigation, in our opinion, none of our current litigation is expected to have a material adverse effect on our results of operations, financial position or cash flows.

Note 16. Segment Information

The following tables set forth our financial performance by segment. We manage our operations through two segments—U.S. and International.
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
(in millions)
 
2015
 
2014
 
2015
 
2014
Revenues:
 
 
 
 
 
 
 
 
U.S.
 
$
353.9

 
$
296.3

 
$
1,013.9

 
$
842.4

International
 
32.8

 
40.2

 
101.4

 
116.4

Total revenues
 
$
386.7

 
$
336.5

 
$
1,115.3

 
$
958.8


We present Operating income (loss) before Depreciation, Amortization, Net (gain) loss on dispositions, Stock-based compensation, Restructuring charges and Acquisition costs (“Adjusted OIBDA”) as the primary measure of profit and loss for our operating segments in accordance with FASB guidance for segment reporting.
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
(in millions)
 
2015
 
2014
 
2015
 
2014
Net income
 
$
21.2

 
$
248.3

 
$
44.5

 
$
279.1

Provision (benefit) for income taxes
 
3.9

 
(226.4
)
 
7.0

 
(202.9
)
Equity in earnings of investee companies, net of tax
 
(1.7
)
 
(0.6
)
 
(3.6
)
 
(1.4
)
Interest expense, net
 
28.9

 
26.3

 
85.6

 
57.3

Other expense, net
 
0.4

 
—

 
0.4

 
0.5

Operating income
 
52.7

 
47.6

 
133.9

 
132.6

Restructuring charges
 
—

 
6.2

 
2.6

 
6.2

Acquisition costs(a)
 
—

 
1.4

 
—

 
1.4

Net (gain) loss on dispositions
 
—

 
(0.5
)
 
0.6

 
(1.4
)
Depreciation and amortization
 
57.5

 
49.5

 
171.2

 
146.6

Stock-based compensation(a)
 
3.7

 
2.7

 
11.7

 
7.4

Total Adjusted OIBDA
 
$
113.9

 
$
106.9

 
$
320.0

 
$
292.8

 
 
 
 
 
 
 
 
 
Adjusted OIBDA:
 
 
 
 
 
 
 
 
U.S.
 
$
121.6

 
$
106.3

 
$
337.0

 
$
293.0

International
 
3.9

 
6.3

 
11.5

 
16.9

Corporate
 
(11.6
)
 
(5.7
)
 
(28.5
)
 
(17.1
)
Total Adjusted OIBDA
 
$
113.9

 
$
106.9

 
$
320.0

 
$
292.8


(a)
Stock-based compensation and costs related to the Acquisition are classified as Corporate expenses.


20
OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)

 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
(in millions)
 
2015
 
2014
 
2015
 
2014
Operating income (loss):
 
 
 
 
 
 
 
 
U.S.
 
$
69.9

 
$
64.3

 
$
180.9

 
$
168.5

International
 
(1.9
)
 
(0.7
)
 
(6.8
)
 
(3.8
)
Corporate
 
(15.3
)
 
(16.0
)
 
(40.2
)
 
(32.1
)
Total operating income
 
$
52.7

 
$
47.6

 
$
133.9

 
$
132.6

 
 
 
 
 
 
 
 
 
Net (gain) loss on dispositions:
 
 
 
 
 
 
 
 
U.S.
 
$
—

 
$
(0.5
)
 
$
0.5

 
$
(1.3
)
International
 
—

 
—

 
0.1

 
(0.1
)
Total (gain) loss on dispositions
 
$
—

 
$
(0.5
)
 
$
0.6

 
$
(1.4
)
 
 
 
 
 
 
 
 
 
Depreciation and amortization:
 
 
 
 
 
 
 
 
U.S.
 
$
51.7

 
$
42.5

 
$
153.0

 
$
125.8

International
 
5.8

 
7.0

 
18.2

 
20.8

Total depreciation and amortization
 
$
57.5

 
$
49.5

 
$
171.2

 
$
146.6

 
 
 
 
 
 
 
 
 
Capital expenditures:
 
 
 
 
 
 
 
 
U.S.
 
$
13.8

 
$
12.9

 
$
39.5

 
$
37.4

International
 
1.5

 
1.4

 
3.5

 
6.2

Total capital expenditures
 
$
15.3

 
$
14.3

 
$
43.0

 
$
43.6

 
 
As of
(in millions)
 
September 30, 2015
 
December 31, 2014
Assets:
 
 
 
 
U.S.
 
$
3,675.1

 
$
3,704.2

International
 
244.7

 
270.4

Corporate
 
90.5

 
49.0

Total assets
 
$
4,010.3

 
$
4,023.6



21
OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)

Note 17. Condensed Consolidating Financial Information

We and our material existing and future direct and indirect 100% owned domestic subsidiaries (except the Borrowers under the Term Loan and the Revolving Credit Facility) guarantee the obligations under the Term Loan and the Revolving Credit Facility. Our senior unsecured notes are fully and unconditionally, and jointly and severally guaranteed on a senior unsecured basis by us and each of our direct and indirect wholly owned domestic subsidiaries that guarantees the Term Loan and the Revolving Credit Facility (see Note 7. Long-Term Debt). The following condensed consolidating schedules present financial information on a combined basis in conformity with the SEC’s Regulation S-X, Rule 3-10 for: (i) OUTFRONT Media Inc. (the “Parent Company”); (ii) Capital LLC (the “Subsidiary Issuer”); (iii) the guarantor subsidiaries; (iv) the non-guarantor subsidiaries;
(v) elimination entries necessary to consolidate the Parent Company with the Subsidiary Issuer, the guarantor subsidiaries and non-guarantor subsidiaries; and (vi) the Parent Company on a consolidated basis. Finance Corp. is a co-issuer finance subsidiary with no assets or liabilities, and therefore has not been included in the tables below.
 
 
As of September 30, 2015
(in millions)
 
Parent Company
 
Subsidiary Issuer
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
Current assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
—

 
$
53.6

 
$
31.5

 
$
21.3

 
$
—

 
$
106.4

Receivables, less allowance
 
—

 
—

 
197.8

 
29.3

 
—

 
227.1

Other current assets
 
—

 
5.6

 
102.1

 
22.1

 
—

 
129.8

Total current assets
 
—

 
59.2

 
331.4

 
72.7

 
—

 
463.3

Property and equipment, net
 
—

 
—

 
656.9

 
74.3

 
—

 
731.2

Goodwill
 
—

 
—

 
2,046.1

 
91.4

 
—

 
2,137.5

Intangible assets
 
—

 
—

 
587.5

 
0.1

 
—

 
587.6

Investment in subsidiaries
 
1,334.0

 
3,574.4

 
173.3

 
—

 
(5,081.7
)
 
—

Other assets
 
—

 
29.1

 
55.4

 
6.2

 
—

 
90.7

Intercompany
 
—

 
—

 
70.6

 
58.8

 
(129.4
)
 
—

Total assets
 
$
1,334.0

 
$
3,662.7

 
$
3,921.2

 
$
303.5

 
$
(5,211.1
)
 
$
4,010.3

 
 
 
 
 
 
 
 
 
 
 
 
 
Total current liabilities
 
$
—

 
$
27.4

 
$
193.8

 
$
32.1

 
$
—

 
$
253.3

Long-term debt
 
—

 
2,301.3

 
0.4

 
—

 
—

 
2,301.7

Deferred income tax liabilities, net
 
—

 
—

 
—

 
15.1

 
—

 
15.1

Asset retirement obligation
 
—

 
—

 
28.8

 
7.4

 
—

 
36.2

Deficit in excess of investment of subsidiaries
 
—

 
—

 
2,240.4

 
—

 
(2,240.4
)
 
—

Other liabilities
 
—

 
—

 
65.0

 
5.0

 
—

 
70.0

Intercompany
 
—

 
—

 
58.8

 
70.6

 
(129.4
)
 
—

Total liabilities
 
—

 
2,328.7

 
2,587.2

 
130.2

 
(2,369.8
)
 
2,676.3

Total stockholders’ equity
 
1,334.0

 
1,334.0

 
1,334.0

 
173.3

 
(2,841.3
)
 
1,334.0

Total liabilities and stockholders’ equity
 
$
1,334.0

 
$
3,662.7

 
$
3,921.2

 
$
303.5

 
$
(5,211.1
)
 
$
4,010.3




22
OUTFRONT Media Inc.
Notes to Consolidated Financial Statements
(Unaudited)

 
 
As of December 31, 2014
(in millions)
 
Parent Company
 
Subsidiary Issuer
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
Current assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
—

 
$
11.5

 
$
8.8

 
$
8.2

 
$
—

 
$
28.5

Receivables, less allowances
 
—

 
—

 
186.5

 
31.0

 
—

 
217.5

Other current assets
 
—

 
5.3

 
83.5

 
20.5

 
—

 
109.3

Total current assets
 
—

 
16.8

 
278.8

 
59.7

 
—

 
355.3

Property and equipment, net
 
—

 
—

 
683.3

 
99.6

 
—

 
782.9

Goodwill
 
—

 
—

 
2,050.6

 
103.6

 
—

 
2,154.2

Intangible assets