- Revenues of $395.0 million, up 14.9% in Q4 on a reported basis
- Adjusted OIBDA of $120.6 million, up 9.4% in Q4 on a reported basis
- Q4 AFFO of $79.1 million; Operating Income of $50.5 million; Net income of $27.8 million
- Quarterly dividend increased 4.6% to $46.4 million, payable March 31, 2015
- Special dividend of $8.2 million payable March 31, 2015
OUTFRONT Media Inc. (NYSE: OUT) today reported results for the quarter and full year ended December 31, 2014.
"We're pleased to announce fourth quarter financial results that reflect solid business performance and the successful integration of the Van Wagner acquisition," said Jeremy Male, Chairman & Chief Executive Officer. "The increase in our quarterly dividend reflects confidence that our business is poised for continued growth, and we're confident that we're executing on all the right steps to grow and enhance our business for the benefit of both our clients and our shareholders."
Fourth Quarter 2014 Results
Consolidated
Reported revenues of $395.0 million increased $51.1 million, or 14.9%, for the fourth quarter of 2014 as compared to the same prior-year period. On an organic basis, revenues of $339.3 million for the fourth quarter of 2014 were up 0.7% compared to the same prior-year period.
Reported billboard revenues of $281.9 million increased $42.0 million, or 17.5%, due to acquisitions, stronger local advertising sales and increased revenues from digital, partially offset by foreign currency exchange losses and softer market conditions in national advertising. On an organic basis, billboard revenues increased 1.0% over the fourth quarter of 2013.
Reported transit and other revenues of $113.1 million increased $9.1 million, or 8.8%, due to acquisitions, partially offset by softer market conditions in national advertising. On an organic basis, transit and other revenues increased 0.2% over the fourth quarter of 2013.
Total Operating expenses and Selling, General and Administrative expenses ("SG&A") of $277.4 million grew $42.0 million, or 17.8%, primarily as a result of $38.9 million of expense related to acquisitions and $5.4 million of incremental stand-alone costs.
Reported Adjusted OIBDA of $120.6 million increased $10.4 million, or 9.4%.
Segment Results
United States
Reported revenues of $356.4 million increased $53.9 million, or 17.8%, for the fourth quarter of 2014 as compared to the same prior-year period. On an organic basis, revenues were $300.7 million for the fourth quarter of 2014, an increase of 0.5% from the same prior-year period, reflecting growth in digital revenues and stronger local advertising sales, partially offset by softer market conditions in national advertising. Reported Adjusted OIBDA of $123.2 million increased $17.0 million, or 16.0%, due to acquisitions, partially offset by $2.6 million of incremental standalone costs.
International
Reported revenues of $38.6 million decreased $2.8 million, or 6.8%, in the fourth quarter of 2014 as compared to the same prior-year period due to foreign currency exchange. Organic revenues increased $0.9 million, or 2.4%, led by solid growth in Canada and South America. Reported Adjusted OIBDA decreased $1.7 million to $7.4 million in the fourth quarter of 2014 as compared to the same prior-year period due to geographic mix and increased operating, marketing, and support costs.
Corporate
Corporate costs, excluding stock-based compensation, restructuring, and acquisition costs, increased $4.9 million to $10.0 million in the fourth quarter of 2014 compared to the same prior-year period, including $2.8 million of incremental stand-alone costs.
Full Year 2014 Results
Consolidated
Reported revenues of $1,353.8 million increased $59.8 million, or 4.6%, for the year ended December 31, 2014 as compared to the same prior-year period. On an organic basis, revenues of $1,295.5 million increased $28.1 million, or 2.2% compared to 2013.
Reported billboard revenues of $972.1 million increased $46.4 million, or 5.0%, due to acquisitions, stronger local advertising sales, and increased revenues from digital, partially offset by foreign currency exchange losses and softer market conditions in national advertising. Organic billboard revenues increased $13.9 million, or 1.5%, compared to 2013.
Reported transit & other revenues of $381.7 million increased $13.4 million, or 3.6%, due to acquisitions, partially offset by softer market conditions in national advertising. Organic transit and other revenues increased $14.2 million, or 4.0%, compared to 2013.
Total Operating expenses and SG&A of $950.8 million grew $64.1 million, or 7.2%, primarily as a result of $38.9 million of expense related to acquisitions, $19.6 million of incremental stand-alone costs, increased lease expenses and increased compensation-related expenses.
Reported Adjusted OIBDA of $413.4 million decreased $1.4 million, or 0.3%.
Segment Results
United States
Reported revenues of $1,198.8 million increased $68.7 million, or 6.1%, for the year ended December 31, 2014 as compared to the same prior-year period. On an organic basis, revenues were $1,140.5 million, an increase of 2.1% from the same prior-year period, reflecting increased revenues from digital and stronger local advertising sales offset by softer market conditions in national advertising. Reported Adjusted OIBDA of $416.2 million increased $9.8 million, or 2.4%, due primarily to acquisitions, partially offset by $9.2 million of incremental standalone costs.
International
Reported revenues of $155.0 million decreased $8.9 million, or 5.4%, due primarily to foreign currency exchange. Organic revenues increased $4.2 million, or 2.8%, led by solid growth in Canada and South America. Reported Adjusted OIBDA decreased $4.8 million to $24.3 million due to geographic mix and increased operating, marketing, and support costs.
Corporate
Corporate costs, excluding stock-based compensation, restructuring, and acquisition costs, increased $6.4 million to $27.1 million compared to the same prior-year period, including $10.4 million of incremental stand-alone costs.
Interest Expense
Net Interest expense in the fourth quarter of 2014 was $27.5 million, reflecting the incurrence of $1.6 billion of indebtedness on January 31, 2014 and $600 million of indebtedness on October 1, 2014 related to acquisitions. Net interest expense in the fourth quarter of 2014 includes $1.4 million for amortization of deferred financing costs. The weighted average cost of debt at December 31, 2014, was 4.6%.
Income Taxes
The benefit from income taxes was $3.1 million in the fourth quarter of 2014 compared to a provision of $26.1 million in the fourth quarter of 2013. On July 17, 2014, we began operating in a manner that will allow us to qualify as a real estate investment trust ("REIT") for U.S. federal income tax purposes for the tax year commencing July 17, 2014 and ending December 31, 2014. The effective income tax rate would have been 5.3% for the three months ended December 31, 2013 had we been operating as a REIT for that period. Cash paid for income taxes in the fourth quarter of 2014 was $21.6 million as compared to $37.5 million in the same prior-year period.
Net Income per Common Share
On December 31, 2014, we issued 16.5 million shares of common stock in connection with a special dividend related to our REIT qualification. Net income attributable to common shareholders was $27.8 million in the fourth quarter of 2014 as compared to $50.0 million in the same prior-year period. Net income for the fourth quarter of 2014 was impacted by the incurrence of interest expense, incremental stand-alone costs, restructuring charges, and acquisition costs, partially offset by lower taxes due to our conversion to a REIT. Diluted weighted average shares outstanding were 120.7 million for the fourth quarter of 2014. Net income per diluted weighted average share was $0.23 for the fourth quarter of 2014 as compared to $0.41 in the same prior-year period. Net income per diluted weighted average share on a REIT-comparable basis was $0.28 for the fourth quarter of 2014 as compared to $0.27 in the same prior-year period.
FFO & AFFO
FFO was $74.6 million in the fourth quarter of 2014, a decrease of $8.1 million from the same prior-year period, driven primarily by lower net income as a result of higher interest expense and restructuring and acquisition costs, partially offset by acquisitions and lower income tax. FFO would have been $76.3 million in the fourth quarter of 2013 had we been operating as a REIT. AFFO was $79.1 million in the fourth quarter of 2014, an increase of $15.6 million over the same prior-year period due to acquisitions and lower income taxes due to our conversion to a REIT. AFFO would have been $69.7 million in the fourth quarter of 2013 had we been operating as a REIT.
Cash Flow & Capital Expenditures
Net cash flow provided by operating activities of $262.8 million for the year ended December 31, 2014 decreased compared to $281.1 million during the same prior-year period due to higher interest expense, restructuring and acquisition costs, partially offset by acquisitions and lower income tax. Total capital expenditures increased $3.3 million to $64.2 million for the year ended December 31, 2014.
Dividends
For the year ended December 31, 2014, recurring dividends paid in cash were $133.2 million. In connection with the special dividend to distribute the Company's accumulated earnings and profits as of July 17, 2014, the date the Company began operating in a manner that will allow it to qualify as a REIT for U.S. federal income tax purposes (the "E&P Purge"), the Company paid approximately $109.5 million in cash, and issued approximately 16.5 million new shares of our common stock.
The Company announced today that its board of directors has approved a special cash dividend on the Company's common stock of approximately $8.2 million, or $0.06 per share based on the number of shares of common stock outstanding on December 31, 2014 of approximately 136.6 million, comprised of a "top-up" of the 2014 annual dividend for REIT distributable income. This $8.2 million special cash dividend represents the balance of 100% of the Company's 2014 REIT distributable income since becoming a REIT on July 17, 2014, over the recurring dividends paid on September 30, 2014 and December 15, 2014. The special cash dividend is payable on March 31, 2015, to shareholders of record at the close of business on March 11, 2015.
The Company also announced today that its board of directors has approved a quarterly cash dividend on the Company's common stock of $46.4 million, representing a 4.6% increase over the $44.4 million dividend paid for the quarter ended December 31, 2014 The new regular quarterly cash dividend is $0.34 per share based on the number of shares of common stock outstanding on December 31, 2014 of approximately 136.6 million, including approximately 16.5 million new shares issued in the E&P Purge, and is payable on March 31, 2015, to shareholders of record at the close of business on March 11, 2015.
Balance Sheet and Liquidity
As of December 31, 2014, the Company's liquidity position included cash of $28.5 million and $404.4 million of availability under its $425.0 million revolving credit facility, net of $20.6 million of letters of credit outstanding. Total debt outstanding at December 31, 2014 was $2.2 billion, primarily consisting of a $798.3 million term loan and $1.4 billion of senior unsecured notes.
www.outfrontmedia.com
