out-20200930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

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)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01, par value	OUT	New York Stock Exchange

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. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of November 4, 2020, the number of shares outstanding of the registrant’s common stock was 144,429,154.

Table of Contents

OUTFRONT MEDIA INC.

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2020

TABLE OF CONTENTS


PART I			3
Item 1. Financial Statements (Unaudited)			3
Consolidated Statements of Financial Position as of S eptember 30, 2020, and December 31, 2019			3
Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019			4
Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2020 and 2019			5
Consolidated Statements of Equity for the three and nine months ended September 30, 2020 and 2019			6
Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019			8
Notes to Consolidated Financial Statements			10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			29
Item 3. Quantitative and Qualitative Disclosures About Market Risk			53
Item 4. Controls and Procedures			55
PART II			56
Item 1. Legal Proceedings			56
Item 1A. Risk Factors			56
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			56
Item 3. Defaults Upon Senior Securities			56
Item 4. Mine Safety Disclosures			56
Item 5. Other Information			56
Item 6. Exhibits			56
SIGNATURES			58

Table of Contents

PART I

Item 1. Financial Statements.

OUTFRONT Media Inc.

Consolidated Statements of Financial Position

(Unaudited)


	As of
(in millions)	September 30, 2020		December 31, 2019
Assets:
Current assets:
Cash and cash equivalents	$	690.6	$	59.1
Restricted cash	1.6		1.8
Receivables, less allowance ($24.8 in 2020 and $12.1 in 2019)	191.4		290.0
Prepaid lease and franchise costs	4.7		8.6
Prepaid MTA equipment deployment costs (Notes 5 and 18)	—		55.4
Other prepaid expenses	18.4		15.8
Other current assets	31.5		5.1
Total current assets	938.2		435.8
Property and equipment, net (Note 4)	644.2		666.2
Goodwill	2,076.7		2,083.1
Intangible assets (Note 5)	549.4		550.9
Operating lease assets (Note 6)	1,422.2		1,457.0
Prepaid MTA equipment deployment costs (Notes 5 and 18)	200.9		116.1
Other assets	38.9		73.2
Total assets	$	5,870.5	$	5,382.3

Liabilities:
Current liabilities:
Accounts payable	$	51.9	$	67.9
Accrued compensation	25.9		56.1
Accrued interest	26.4		26.4
Accrued lease and franchise costs	54.0		55.3
Other accrued expenses	40.4		34.2
Deferred revenues	40.6		29.0

Short-term debt (Note 9)	80.0		195.0
Short-term operating lease liabilities (Note 6)	182.8		168.3
Other current liabilities	25.0		17.8
Total current liabilities	527.0		650.0
Long-term debt, net (Note 9)	2,619.6		2,222.1
Deferred income tax liabilities, net	14.6		18.0
Asset retirement obligation (Note 7)	35.4		35.1
Operating lease liabilities (Note 6)	1,248.0		1,285.1
Other liabilities	50.5		45.6
Total liabilities	4,495.1		4,255.9

Commitments and contingencies (Note 18)

Preferred stock (2020 - 50.0 shares authorized, and 0.4 shares of Series A Preferred Stock issued and outstanding; 2019 - 50.0 shares authorized, and no shares issued and outstanding) (Note 10)	383.4		—
Stockholders’ equity (Note 10):
Common stock (2020 - 450.0 shares authorized, and 144.4 shares issued and outstanding; 2019 - 450.0 shares authorized, and 143.6 issued and outstanding)	1.4		1.4
Additional paid-in capital	2,084.0		2,074.7
Distribution in excess of earnings	(1,097.7)		(964.6)
Accumulated other comprehensive loss	(23.1)		(17.7)
Total stockholders’ equity	964.6		1,093.8
Non-controlling interests	27.4		32.6
Total equity	1,375.4		1,126.4
Total liabilities and equity	$	5,870.5	$	5,382.3

See accompanying notes to unaudited consolidated financial statements.

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OUTFRONT Media Inc.

Consolidated Statements of Operations

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions, except per share amounts)	2020		2019		2020		2019
Revenues:
Billboard	$	239.9	$	312.0	$	699.3	$	868.8
Transit and other	42.4		150.5		201.2		425.3
Total revenues	282.3		462.5		900.5		1,294.1
Expenses:
Operating	155.8		245.5		534.6		702.7
Selling, general and administrative	63.4		82.3		205.3		237.1
Restructuring charges	0.6		—		5.3		0.3
Net gain on dispositions	(8.0)		(1.9)		(13.3)		(3.0)
Depreciation	21.0		22.4		63.2		64.9
Amortization	24.4		28.7		72.4		81.0
Total expenses	257.2		377.0		867.5		1,083.0
Operating income	25.1		85.5		33.0		211.1
Interest expense, net	(34.2)		(33.9)		(97.3)		(100.5)
Loss on extinguishment of debt	—		(11.0)		—		(11.0)
Other income (expense), net	(0.1)		—		0.1		0.1
Income (loss) before benefit (provision) for income taxes and equity in earnings of investee companies	(9.2)		40.6		(64.2)		99.7
Provision for income taxes	(3.5)		(3.3)		(0.3)		(8.5)
Equity in earnings of investee companies, net of tax	(0.6)		1.4		(0.5)		3.9
Net income (loss) before allocation to non-controlling interests	(13.3)		38.7		(65.0)		95.1
Net income attributable to non-controlling interests	0.2		—		0.3		—
Net income (loss) attributable to OUTFRONT Media Inc.	$	(13.5)	$	38.7	$	(65.3)	$	95.1

Net income (loss) per common share:
Basic	$	(0.14)	$	0.27	$	(0.54)	$	0.66
Diluted	$	(0.14)	$	0.27	$	(0.54)	$	0.66

Weighted average shares outstanding:
Basic	144.4		143.4		144.2		142.1
Diluted	144.4		144.2		144.2		142.7

See accompanying notes to unaudited consolidated financial statements.

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OUTFRONT Media Inc.

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2020		2019		2020		2019
Net income (loss) before allocation to non-controlling interests	$	(13.3)	$	38.7	$	(65.0)	$	95.1
Net income attributable to non-controlling interests	0.2		—		0.3		—
Net income (loss) attributable to OUTFRONT Media Inc.	(13.5)		38.7		(65.3)		95.1
Other comprehensive income (loss), net of tax:
Cumulative translation adjustments	2.6		(0.8)		(3.5)		6.4
Net actuarial gain (loss)	(0.1)		0.2		0.4		0.1
Change in fair value of interest rate swap agreements	1.3		(0.4)		(2.3)		(3.2)
Total other comprehensive income (loss), net of tax	3.8		(1.0)		(5.4)		3.3
Total comprehensive income (loss)	$	(9.7)	$	37.7	$	(70.7)	$	98.4

See accompanying notes to unaudited consolidated financial statements.

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OUTFRONT Media Inc.

Consolidated Statements of Equity

(Unaudited)


				Stockholders’ Equity
(in millions, except per share amounts)	Shares of Series A Preferred Stock	Series A Preferred Stock ($0.01 per share par value)		Shares of Common Stock	Common Stock ($0.01 per share par value)		Additional Paid-In Capital		Distribution in Excess of Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity		Non-Controlling Interests		Total Equity
Balance as of June 30, 2019				143.3	$	1.4	$	2,057.9	$	(943.9)	$	(17.7)	$	1,097.7	$	37.2	$	1,134.9
Net income				—	—		—		38.7		—		38.7		—		38.7
Other comprehensive loss				—	—		—		—		(1.0)		(1.0)		—		(1.0)
Stock-based payments:

Amortization				—	—		5.6		—		—		5.6		—		5.6

Class A equity interest redemptions				0.2	—		4.1		—		—		4.1		(4.1)		—

Dividends ($0.36 per share)				—	—		—		(52.1)		—		(52.1)		—		(52.1)
Other				—	—		—		—		—		—		0.1		0.1
Balance as of September 30, 2019				143.5	$	1.4	$	2,067.6	$	(957.3)	$	(18.7)	$	1,093.0	$	33.2	$	1,126.2

Balance as of June 30, 2020	0.4	$	383.4	144.4	$	1.4	$	2,078.8	$	(1,077.2)	$	(26.9)	$	976.1	$	27.2	$	1,386.7
Net income (loss)	—	—		—	—		—		(13.5)		—		(13.5)		0.2		(13.3)
Other comprehensive income	—	—		—	—		—		—		3.8		3.8		—		3.8
Stock-based payments:

Amortization	—	—		—	—		5.4		—		—		5.4		—		5.4
Shares paid for tax withholding for stock-based payments	—	—		—	—		(0.2)		—		—		(0.2)		—		(0.2)


Series A Preferred Stock dividends (7%)	—	—		—	—		—		(7.0)		—		(7.0)		—		(7.0)


Balance as of September 30, 2020	0.4	$	383.4	144.4	$	1.4	$	2,084.0	$	(1,097.7)	$	(23.1)	$	964.6	$	27.4	$	1,375.4

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OUTFRONT Media Inc.

Consolidated Statements of Equity (Continued)

(Unaudited)


	Stockholders’ Equity
(in millions, except per share amounts)	Shares of Common Stock	Common Stock ($0.01 per share par value)		Additional Paid-In Capital		Distribution in Excess of Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity		Non-Controlling Interests		Total Equity
Balance as of December 31, 2018	140.2	$	1.4	$	1,995.0	$	(871.6)	$	(22.0)	$	1,102.8	$	42.5	$	1,145.3
Cumulative effect of a new accounting standard	—	—		—		(24.8)		—		(24.8)		—		(24.8)
Net income	—	—		—		95.1		—		95.1		—		95.1
Other comprehensive income	—	—		—		—		3.3		3.3		—		3.3
Stock-based payments:
Vested	0.9	—		—		—		—		—		—		—
Amortization	—	—		16.4		—		—		16.4		—		16.4
Shares paid for tax withholding for stock-based payments	(0.4)	—		(7.7)		—		—		(7.7)		—		(7.7)
Class A equity interest redemptions	0.6	—		13.0		—		—		13.0		(13.0)		—
Shares issued under the ATM Program	2.2	—		50.8		—		—		50.8		—		50.8
Dividends ($1.08 per share)	—	—		—		(156.0)		—		(156.0)		—		(156.0)
Other	—	—		0.1		—		—		0.1		3.7		3.8
Balance as of September 30, 2019	143.5	$	1.4	$	2,067.6	$	(957.3)	$	(18.7)	$	1,093.0	$	33.2	$	1,126.2


				Stockholders’ Equity
(in millions, except per share amounts)	Shares of Series A Preferred Stock	Series A Preferred Stock ($0.01 per share par value)		Shares of Common Stock	Common Stock ($0.01 per share par value)		Additional Paid-In Capital		Distribution in Excess of Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity		Non-Controlling Interests		Total Equity
Balance as of December 31, 2019	—	$	—	143.6	$	1.4	$	2,074.7	$	(964.6)	$	(17.7)	$	1,093.8	$	32.6	$	1,126.4
Net income (loss)	—	—		—	—		—		(65.3)		—		(65.3)		0.3		(65.0)
Other comprehensive loss	—	—		—	—		—		—		(5.4)		(5.4)		—		(5.4)
Stock-based payments:
Vested	—	—		1.0	—		—		—		—		—		—		—
Amortization	—	—		—	—		17.3		—		—		17.3		—		17.3
Shares paid for tax withholding for stock-based payments	—	—		(0.4)	—		(12.4)		—		—		(12.4)		—		(12.4)
New share issues	0.4	383.4		—	—		—		—		—		—		—		383.4
Class A equity interest redemptions	—	—		0.2	—		4.4		—		—		4.4		(4.4)		—
Series A Preferred Stock dividends (7%)	—	—		—	—		—		(12.5)		—		(12.5)		—		(12.5)
Dividends ($0.38 per share)	—	—		—	—		—		(55.3)		—		(55.3)		—		(55.3)
Other	—	—		—	—		—		—		—		—		(1.1)		(1.1)
Balance as of September 30, 2020	0.4	$	383.4	144.4	$	1.4	$	2,084.0	$	(1,097.7)	$	(23.1)	$	964.6	$	27.4	$	1,375.4

See accompanying notes to unaudited consolidated financial statements.

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OUTFRONT Media Inc.

Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2020		2019
Operating activities:
Net income (loss) attributable to OUTFRONT Media Inc.	$	(65.3)	$	95.1
Adjustments to reconcile net income to net cash flow provided by operating activities:
Net income attributable to non-controlling interests	0.3		—
Depreciation and amortization	135.6		145.9
Deferred tax (benefit) provision	(3.8)		1.2
Stock-based compensation	17.3		16.4
Provision for doubtful accounts	17.4		4.0
Accretion expense	1.9		1.9
Net gain on dispositions	(13.3)		(3.0)
Loss on extinguishment of debt	—		11.0
Equity in earnings of investee companies, net of tax	0.5		(3.9)
Distributions from investee companies	2.1		3.1
Amortization of deferred financing costs and debt discount and premium	4.8		4.9
Cash paid for direct lease acquisition costs	(32.6)		(34.5)
Change in assets and liabilities, net of investing and financing activities:
(Increase) decrease in receivables	80.5		(29.2)
Increase in prepaid MTA equipment deployment costs	(29.4)		(64.2)
Increase in prepaid expenses and other current assets	(25.0)		(10.4)
Increase (decrease) in accounts payable and accrued expenses	(36.5)		3.0
Increase in operating lease assets and liabilities	13.4		9.7
Increase in deferred revenues	12.1		9.1
Increase (decrease) in income taxes	1.0		(0.5)
Other, net	5.0		2.5
Net cash flow provided by operating activities	86.0		162.1

Investing activities:
Capital expenditures	(42.0)		(65.4)
Acquisitions	(15.5)		(60.7)
MTA franchise rights	(14.4)		(16.9)
Net proceeds from dispositions	35.9		4.9
Return of investment in investee companies	0.9		—
Net cash flow used for investing activities	(35.1)		(138.1)

Financing activities:
Proceeds from long-term debt borrowings	895.0		760.0
Repayments of long-term debt borrowings	(495.0)		(695.0)
Proceeds from borrowings under short-term debt facilities	15.0		280.0
Repayments of borrowings under short-term debt facilities	(130.0)		(230.0)
Payments of deferred financing costs	(7.7)		(9.5)
Payments of debt extinguishment charges	—		(7.4)
Proceeds from Series A Preferred Stock issuances	383.8		—
Proceeds from shares issued under the ATM Program	—		50.9
Taxes withheld for stock-based compensation	(12.0)		(7.7)
Dividends	(68.1)		(156.0)

Net cash flow provided by (used for) financing activities	581.0		(14.7)

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OUTFRONT Media Inc.

Consolidated Statements of Cash Flows (Continued)

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2020		2019
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(0.6)		0.3
Net increase in cash, cash equivalents and restricted cash	631.3		9.6
Cash, cash equivalents and restricted cash at beginning of period	60.9		54.1
Cash, cash equivalents and restricted cash at end of period	$	692.2	$	63.7

Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	3.1	$	7.9
Cash paid for interest	93.5		92.3

Non-cash investing and financing activities:
Accrued purchases of property and equipment	$	5.3	$	10.9
Accrued MTA franchise rights	5.2		2.3


Taxes withheld for stock-based compensation	0.3		—

See accompanying notes to unaudited consolidated financial statements.

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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”) is a real estate investment trust (“REIT”), which provides advertising space (“displays”) on out-of-home advertising structures and sites in the United States (the “U.S.”) and Canada. Our inventory consists of billboard displays, which are primarily located on the most heavily traveled highways and roadways in top Nielsen Designated Market Areas (“DMAs”), and transit advertising displays operated under exclusive multi-year contracts with municipalities in large cities across the U.S. and Canada. In total, we have displays in all of the 25 largest markets in the U.S. and approximately 150 markets across the U.S. and Canada. We currently manage our operations through two operating segments—U.S. Billboard and Transit, which is included in our U.S. Media reportable segment, and International.

In the third quarter of 2020, we sold all of our equity interests in certain of our subsidiaries (the “Sports Disposition”), which held all of the assets of our Sports Marketing operating segment, for a purchase price of approximately $34.6 million in cash, subject to closing and post-closing adjustments (see Note 13. Acquisitions and Dispositions: Dispositions to the Consolidated Financial Statements). The Sports Marketing operating segment was the marketing and multimedia rights holder for a variety of colleges, universities and other educational institutions across the United States. The operating results of our Sports Marketing operating segment through June 30, 2020, are included in our Consolidated Financial Statements.

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 statement of our financial position, results of operations and cash flows for the periods presented. Certain reclassifications of prior year’s data have been made to conform to the current period’s presentation. 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, 2019, filed with the SEC on February 26, 2020.

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, including the impact of extraordinary events such as the novel coronavirus (COVID-19) pandemic, 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 materially from these estimates under different assumptions or conditions, including the severity and duration of the COVID-19 pandemic.

The COVID-19 pandemic and the related preventative measures taken to help curb the spread, have had, and may continue to have, a significant impact on the global economy and our business. In order to preserve financial flexibility and increase liquidity in light of the current uncertainty in the global economy and our business resulting from the COVID-19 pandemic, we undertook the following actions, among others: repaid in full all borrowings under the Revolving Credit Facility (as defined below) as of June 30, 2020, using the net proceeds from the offering of the Notes (as defined below) and cash on hand, and amended the Credit Agreement (as defined below) to modify the calculation of the Company’s financial maintenance covenant ratio (see Note 9. Debt to the Consolidated Financial Statements), completed the Private Placement (as defined below) (see Note 10. Equity to the Consolidated Financial Statements) and reduced capital expenditures and expenses through cost savings initiatives. Given the uncertainty around the severity and duration of the COVID-19 pandemic and the measures taken, or may be taken, in response to the COVID-19 pandemic, the Company cannot reasonably estimate the full impact of the COVID-19 pandemic on our business, financial condition and results of operations at this time, which may be material.

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OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Note 2. New Accounting Standards

Adoption of New Accounting Standards

In the first quarter of 2020, we adopted the Financial Accounting Standards Board’s (the “FASB’s”) guidance for evaluating and determining when a cloud computing arrangement (hosting arrangement) includes a software license. The adoption of this guidance did not have a material effect on our consolidated financial statements.

In the first quarter of 2020, we adopted the FASB’s guidance which requires a reporting entity to estimate credit losses on certain types of financial instruments, and present assets held at amortized cost and available-for-sale debt securities at the amount expected to be collected. The application of this guidance was limited to our receivables that are not related to rental income, which is accounted for under the lease accounting standard. The provision for doubtful accounts is estimated based on historical bad debt experience, the aging of accounts receivable, industry trends and economic indicators, recent payment history for specific customers and expected future trends.

We have recorded a Provision for doubtful accounts of $6.1 million in the three months ended September 30, 2020, and $17.4 million in the nine months ended September 30, 2020, for all receivables, which includes an estimate of the impact from the COVID-19 pandemic on future collections.

Recent Pronouncements

In December 2019, the FASB issued guidance simplifying the accounting for income taxes by removing certain exceptions to the general principles of Accounting Standards Codification Topic 740, Income Taxes. The new guidance is effective for annual and interim periods beginning after December 15, 2020. We do not expect this guidance to have a material effect on our consolidated financial statements.

In March 2020, the FASB issued guidance providing optional expedients and exceptions for accounting for contracts, hedging relationships and other transactions that reference to LIBOR or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. The guidance is effective for all entities as of March 12, 2020, through December 31, 2022. We do not expect this guidance to impact our accounting for our existing debt and hedging instruments.

Note 3. Restricted Cash

We have an escrow agreement in connection with one of our transit franchise contracts, which requires us to deposit funds into an escrow account to fund capital expenditures over the term of the transit franchise contract. As of September 30, 2020, we have $1.6 million of restricted cash deposited in the escrow account.


	As of
(in millions)	September 30, 2020		September 30, 2019		December 31, 2019
Cash and cash equivalents	$	690.6	$	58.3	$	59.1
Restricted cash	1.6		5.4		1.8
Cash, cash equivalents and restricted cash	$	692.2	$	63.7	$	60.9

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OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Note 4. Property and Equipment, Net

The table below presents the balances of major classes of assets and accumulated depreciation.


		As of
(in millions)	Estimated Useful Lives	September 30, 2020		December 31, 2019
Land		$	98.0	$	98.8
Buildings	20 to 40 years	47.6		50.4
Advertising structures	5 to 20 years	1,874.8		1,866.1
Furniture, equipment and other	3 to 10 years	164.0		153.1
Construction in progress		27.0		25.4
		2,211.4		2,193.8
Less: Accumulated depreciation		1,567.2		1,527.6
Property and equipment, net		$	644.2	$	666.2

Depreciation expense was $21.0 million in the three months ended September 30, 2020, $22.4 million in the three months ended September 30, 2019, $63.2 million in the nine months ended September 30, 2020, and $64.9 million in the nine months ended September 30, 2019.

Note 5. Long-Lived Assets

The assumptions and estimates used in our analyses below require significant judgment about future events, market conditions and financial performance. Given the uncertainty around the severity and duration of the COVID-19 pandemic and the measures taken, or may be taken, in response to the COVID-19 pandemic, actual results may differ materially from these assumptions and estimates, which may result in impairment charges of our long-lived assets in the future.

Goodwill

In the first quarter of 2020, we performed a qualitative assessment to determine if there has been a triggering event and impairment of goodwill as a result of the COVID-19 pandemic. As a result of the analysis performed, we determined that it was not “more likely than not” that the carrying value of any of our reporting units exceeded their fair value and no further evaluation of goodwill was necessary. We did not identify a triggering event in the second and third quarters of 2020.

Intangible Assets

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

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OUTFRONT Media Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Our identifiable intangible assets consist of the following:


(in millions)	Gross		Accumulated Amortization		Net
As of September 30, 2020:
Permits and leasehold agreements	$	1,186.0	$	(765.7)	$	420.3
Franchise agreements	504.3		(379.5)		124.8
Other intangible assets	45.6		(41.3)		4.3
Total intangible assets	$	1,735.9	$	(1,186.5)	$	549.4

As of December 31, 2019:
Permits and leasehold agreements	$	1,153.3	$	(735.7)	$	417.6
Franchise agreements	497.4		(