OUTFRONT Media(US:OUT)2023-02-23 21:05Digital Revenue Growth - In 2022, total digital revenues reached $539.9 million, up from $389.4 million in 2021, representing a 38.6% increase[45] - The number of digital displays increased to 18,046 in 2022 from 14,368 in 2021, marking a growth of 25.8%[45] - The company built or converted 110 digital billboard displays in the U.S. in 2022, compared to 77 in 2021, reflecting a 42.9% increase[46] - The company entered into marketing arrangements to sell advertising on 85 third-party digital billboard displays in the U.S. in 2022, up from 35 in 2021[46] - The company expects to incur significant capital expenditures in the coming years to increase the number of digital displays in its portfolio[46] - The company plans to expand the deployment of digital billboards that can display advertising copy changing several times per minute, despite existing regulations in the U.S. and Canada that restrict such displays[72] - The company reported a notable increase in digital display revenues, which rose to $539.9 million across both billboard and transit segments, compared to $389.4 million in 2021[464] Financial Performance - Total revenues for 2022 increased to $1,772.1 million, up 21.1% from $1,463.9 million in 2021[347] - Billboard revenues rose to $1,384.7 million, a 17.1% increase compared to $1,182.3 million in 2021[347] - Operating income for 2022 was $287.7 million, representing a significant increase from $168.3 million in 2021[347] - Net income attributable to OUTFRONT Media Inc. reached $147.9 million, compared to $35.6 million in 2021, marking a substantial growth[347] - Basic net income per common share for 2022 was $0.84, significantly higher than $0.05 in 2021[347] - Total comprehensive income for 2022 was $143.2 million, compared to $49.2 million in 2021[350] - The company reported an increase in deferred revenues of $4.5 million in 2022, compared to $1.4 million in 2021[359] Capital Expenditures and Investments - Total capital expenditures in 2022 amounted to $89.8 million, an increase from $73.8 million in 2021[359] - The average initial investment for a digital billboard display was approximately $250,000 as of December 31, 2022[48] - The company has not recouped any equipment deployment costs in 2022 under the MTA agreement[335] Debt and Liabilities - As of December 31, 2022, the company had outstanding indebtedness of $600 million under a term loan due in 2026 and a $500 million revolving credit facility maturing in 2024[82] - The company has issued senior unsecured notes totaling $2.25 billion, with various due dates ranging from 2025 to 2030, including $650 million of 5.000% notes due in 2027[82] - As of December 31, 2022, total debt, net, was $2,656.0 million, an increase from $2,620.6 million in 2021, with a weighted average cost of debt of 5.2%[432] - Total liabilities increased to $4,640.8 million in 2022, compared to $4,534.2 million in 2021[345] Employee and Operational Metrics - Employee turnover decreased to 14% in 2022 from 15% in 2021, showing improved employee retention[58] - The company managed advertising displays in all of the 25 largest markets in the U.S. and approximately 150 markets across the U.S. and Canada[364] Market and Regulatory Environment - The outdoor advertising industry is fragmented, with competition from several national and local companies, impacting market dynamics[53] - The company is subject to various federal, state, and local laws regarding outdoor advertising, which may impose taxes based on a percentage of outdoor advertising revenue, potentially affecting profits and expansion opportunities[68] - The company contests laws and regulations that it believes unlawfully restrict its rights, which may impact the growth of its outdoor advertising business[69] Cash Flow and Dividends - Operating cash flow provided by OUTFRONT Media Inc. was $254.1 million in 2022, up from $98.8 million in 2021[359] - OUTFRONT Media Inc. paid dividends totaling $205.8 million in 2022, significantly higher than $57.5 million in 2021[361] - The company paid cash dividends of $8.8 million on the Series A Preferred Stock during 2022[457] - On February 22, 2023, the company announced a quarterly cash dividend of $0.30 per share on its common stock, payable on March 31, 2023[460] Assets and Intangible Assets - Total assets as of December 31, 2022, were $5,990.0 million, slightly up from $5,924.7 million in 2021[345] - Total intangible assets as of December 31, 2022, were $858.5 million, an increase from $614.9 million in 2021[419] - The amortization expense for intangible assets was $73.3 million in 2022, compared to $66.0 million in 2021 and $61.3 million in 2020[420] Revenue Recognition - Revenue sources include billboard displays, transit displays, and other, with billboard display revenues recognized on a straight-line basis over the lease term[389] - Transit display revenues are recognized based on the level of units displayed in proportion to the total units to be displayed over the contract period[392] - The company evaluates whether it should report revenues on a gross or net basis, being considered the principal in its arrangements[396]