Outfront Media (OUT) risk factors, FY2025 10-K

Risks Related to Our Business and Operations

1. 01Our business is sensitive to a decline in advertising expenditures, general economic conditions and other external events beyond our control60% rewritten
2. 02We operate in a highly competitive industry24% rewritten
3. 03we currently charge to retain customers, which could have an adverse effect on our business, financial condition and results of operationsNew
4. 04Government regulation of outdoor advertising, including any changes to such regulation, may restrict our outdoor advertising operations and our ability to increase the number of advertising displays in our portfolio
5. 05Operating our digital display platform may be more difficult, costly or time consuming than expected and the anticipated benefits may not be fully realized
6. 06We may incur material losses and costs as a result of recalls and product liability, warranty and intellectual property claims that may be brought against us
7. 07The success of our transit advertising business is dependent on obtaining and renewing key municipal contracts on favorable terms
8. 08Taxes, fees and registration requirements may reduce our profits or expansion opportunities
9. 09Government compensation for the removal of lawful billboards could decrease
10. 10Content-based restrictions on outdoor advertising may further restrict the categories of customers that can advertise using our structures and sites
11. 11Our operating results are subject to seasonal variations and other factors
12. 12Acquisitions and other strategic transactions that we may pursue could have a negative effect on our results of operations
13. 13We are dependent on our management team, and the loss of senior executive officers or other key employees could have an adverse effect on our business, financial condition and results of operations
14. 14If we experience a cybersecurity incident, we may suffer reputational harm and significant legal and financial exposure
15. 15Changes in regulations and consumer concerns regarding privacy, information security and data, or any failure or perceived failure to comply with these regulations or our internal policies, could negatively impact our business
16. 16We could suffer losses due to impairment in the carrying value of our long-lived assets and goodwill
17. 17Environmental, health and safety laws and regulations may limit or restrict some of our operations
18. 18Expectations relating to environmental, social and governance considerations expose us to potential liabilities, reputational harm and other unforeseen adverse effects on our business

Risks Related to Our Indebtedness

1. 19We have substantial indebtedness that could adversely affect our financial condition28% rewritten
2. 20The terms of the agreements governing our indebtedness restrict our current and future operations, particularly our ability to incur debt that we may need to fund initiatives in response to changes in our business, the industries in which we operate, the economy and governmental regulations
3. 21The agreements governing the AR Facility also contain affirmative and negative covenants with respect to the SPVs (as defined below) holding our accounts receivables
4. 22These restrictions could hinder our ability to grow in accordance with our strategy or inhibit our ability to adhere to our intended distribution policy and, accordingly, may cause us to incur additional U.S. federal income tax liability beyond current expectations
5. 23Despite our substantial indebtedness level, we and our subsidiaries may be able to incur substantially more indebtedness, including secured indebtedness. This could further exacerbate the risks to our financial condition described above
6. 24Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly21% rewritten
7. 25To service our indebtedness, we require a significant amount of cash and our ability to generate cash depends on many factors beyond our control
8. 26Our cash available for distribution to stockholders may not be sufficient to make distributions at expected levels, and we may need to borrow in order to make such distributions or may not be able to make such distributions in full20% rewritten
9. 27Hedging transactions could have a negative effect on our results of operations

Risks Related to Our Corporate and REIT Structure

1. 28Our board of directors has the power to cause us to issue additional shares of stock without common stockholder approval56% rewritten
2. 29Certain provisions of Maryland law may limit the ability of a third party to acquire control of us
3. 30Additionally, under Title 3, Subtitle 8 of the MGCL, our board of directors is permitted, without stockholder approval and regardless of what is provided in our charter or bylaws, to implement certain takeover defenses
4. 31Our rights and the rights of our stockholders to take action against our directors and officers are limited
5. 32Our charter and bylaws also permit us to indemnify and advance expenses to any person who served a predecessor of ours in any of the capacities described above and to any employee of our company or a predecessor of our company
6. 33If we fail to remain qualified as a REIT, we will be subject to federal, state and local income taxes as a regular corporation and could face a substantial tax liability, which would reduce the amount of cash available for distribution to our stockholders
7. 34REIT distribution requirements could adversely affect our ability to execute our business plan
8. 35To fund our growth strategy and refinance our indebtedness, we may depend on external sources of capital, which may not be available to us on commercially reasonable terms or at all
9. 36Even if we remain qualified to be taxed as a REIT, we may face other tax liabilities that reduce our cash flow
10. 37Complying with REIT requirements may cause us to liquidate investments or forgo otherwise attractive investments or business opportunities
11. 38Complying with REIT requirements may depend on our ability to contribute certain contracts to a taxable REIT subsidiary
12. 39Our planned use of taxable REIT subsidiaries may cause us to fail to remain qualified to be taxed as a REIT
13. 40The ownership limitations that apply to REITs, as prescribed by the Code and by our charter, may inhibit market activity in the shares of our common stock and restrict our business combination opportunities
14. 41Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities
15. 42Our board of directors may revoke our REIT election at any time
16. 43The IRS may deem the gains from sales of our outdoor advertising assets to be subject to a 100% prohibited transaction tax
17. 44We may establish operating partnerships as part of our REIT structure, which could result in conflicts of interests between our stockholders and holders of our operating partnership units and could limit our liquidity or flexibility