8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): March 25, 2015

OUTFRONT Media Inc.

(Exact name of registrant as specified in its charter)

Maryland	001-36367	46-4494703
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

405 Lexington Avenue, 17th Floor New York, New York	10174
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 297-6400

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01. Regulation FD Disclosure.

On March 25, 2015, two wholly owned subsidiaries of OUTFRONT Media Inc. (the “Company”) commenced an offering (the “Offering”) of an additional $100 million in aggregate principal amount of their existing 5.625% Senior Notes due 2024 (the “Notes”), to qualified institutional buyers and non-U.S. persons pursuant to Rule 144A and Regulation S, as applicable, under the Securities Act of 1933, as amended (the “Securities Act”).

In connection with the Offering, the Company provided potential investors with a preliminary offering memorandum, dated March 25, 2015 (the “Preliminary Offering Memorandum”). The Preliminary Offering Memorandum contains unaudited pro forma condensed consolidated financial information and notes thereto relating to the Company’s acquisition of certain outdoor advertising businesses of Van Wagner Communications, LLC (the “Pro Forma Financial Information”). The Pro Forma Financial Information is included in Exhibit 99.1 hereto and is incorporated by reference into this Item 7.01.

This Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy the Notes and shall not constitute an offer, solicitation or sale of the Notes in any jurisdiction in which such offering, solicitation or sale would be unlawful. The Notes have not been registered under the Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

The information contained in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished pursuant to Item 7.01. This information shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, or incorporated by reference into any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Cautionary Statement Concerning Forward-Looking Statements

The Company has made statements in this Current Report on Form 8-K that are forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “could,” “would,” “may,” “might,” “will,” “should,” “seeks,” “likely,” “intends,” “plans,” “projects,” “predicts,” “estimates,” “forecast” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions relating to the Offering, the Company’s real estate investment trust (“REIT”) status and its capital resources, portfolio performance and results of operations. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and may not be able to be realized. The Company does not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: the Company’s ability to consummate the Offering on favorable terms, or at all; the use of the net proceeds from the Offering; declines in advertising and general economic conditions; competition; government regulation; the Company’s inability to increase the number of digital advertising displays in its portfolio; taxes, fees and registration requirements; the Company’s ability to obtain and renew key municipal concessions on favorable terms; decreased government compensation for the removal of lawful billboards; content-based restrictions on outdoor advertising; environmental, health and safety laws and regulations; seasonal variations; acquisitions and other strategic transactions that the Company may pursue could have a negative effect on its results of operations; time and resources to comply with rules and regulations as a stand-alone public company; incremental costs incurred as a stand-alone public company; dependence on the Company’s management team and advertising executives; the ability of the Company’s board of directors to cause it to issue additional shares of stock without stockholder approval; certain provisions of Maryland law may limit the ability of a third party to acquire control of the Company; the Company’s rights and the rights of its stockholders to take action against its directors and officers are limited; the Company’s substantial indebtedness; restrictions in the agreements governing the Company’s indebtedness; incurrence of additional debt; interest rate risk exposure from the Company’s variable-rate indebtedness; the Company’s ability to generate cash to service its indebtedness; hedging transactions; establishing an operating partnership; asset impairment charges for goodwill; diverse risks in the Company’s international business; a breach of the Company’s security measures; failure to comply with regulations regarding privacy and data protection; failing to establish in a timely manner “OUTFRONT” as an independently recognized brand name with a strong reputation; the financial information included in the Company’s filings with the Securities and Exchange Commission (the “SEC”) may not be a reliable

indicator of its future results; cash available for distributions; legislative, administrative, regulatory or other actions affecting REITs, including positions taken by the Internal Revenue Service (the “IRS”); the Company’s failure to remain qualified to be taxed as a REIT; REIT ownership limits; REIT distribution requirements; availability of external sources of capital; the Company may face other tax liabilities even if it remains qualified to be taxed as a REIT; complying with REIT requirements may cause the Company to liquidate investments or forgo otherwise attractive opportunities; the Company’s ability to contribute certain contracts to a taxable REIT subsidiary (“TRS”); the Company’s planned use of TRSs may cause it to fail to remain qualified to be taxed as a REIT; the Company’s ability to hedge effectively; failure to meet the REIT income tests as a result of receiving non-qualifying income; even if the Company remains qualified to be taxed as a REIT, and it sells assets, it could be subject to tax on any unrealized net built-in gains in the assets held before electing to be treated as a REIT; the IRS may deem the gains from sales of the Company’s outdoor advertising assets to be subject to a 100% prohibited transaction tax; the Company’s lack of an operating history as a REIT; the Company may not be able to engage in desirable strategic or capital-raising transactions as a result of its separation from CBS Corporation, and it could be liable for adverse tax consequences resulting from engaging in significant strategic or capital-raising transactions; and other factors described in the Company’s filings with the SEC, including but not limited to the section entitled “Risk Factors” in its Annual Report on Form 10-K for the year ended December 31, 2014. All forward-looking statements in this Current Report on Form 8-K apply as of the date of this report or as of the date they were made and, except as required by applicable law, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors of new information, data or methods, future events or other changes.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. The following exhibit is furnished herewith:

Exhibit Number	Description
99.1	Unaudited pro forma condensed consolidated financial information and notes thereto relating to the Company’s acquisition of certain outdoor advertising businesses of Van Wagner Communications, LLC.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

OUTFRONT MEDIA INC.
By:	/s/ Donald R. Shassian
	Name:	Donald R. Shassian
	Title:	Executive Vice President and Chief Financial Officer

Date: March 25, 2015

EXHIBIT INDEX

Exhibit Number	Description
99.1	Unaudited pro forma condensed consolidated financial information and notes thereto relating to the Company’s acquisition of certain outdoor advertising businesses of Van Wagner Communications, LLC.

EX-99.1

Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

As described elsewhere in this offering memorandum, including the documents incorporated by reference, on January 31, 2014, we completed the Formation Borrowings, and on April 2, 2014, we completed our IPO. On April 16, 2014, CBS received a private letter ruling from the IRS with respect to certain issues relevant to our ability to qualify to be taxed as a REIT. On July 16, 2014, CBS completed the CBS Exchange Offer, and in connection with the CBS Exchange Offer, CBS disposed of all of its shares of our common stock. On July 16, 2014, in connection with the Separation, we ceased to be a member of the CBS consolidated tax group, and on July 17, 2014, we began operating in a manner that will allow us to qualify as a REIT for U.S. federal income tax purposes for the tax year commencing July 17, 2014, and ending December 31, 2014. On October 1, 2014, we completed the Acquisition.

The following unaudited pro forma condensed consolidated statement of operations, as well as the calculations of pro forma FFO and AFFO, have been adjusted to reflect the IPO, our REIT election, the E&P Purge, the consummation of the Acquisition and the Acquisition Borrowings as if each of these events had occurred on January 1, 2014 and also include pro forma adjustments to reflect a full period of incremental costs associated with operating as a stand-alone public company and interest expense relating to the Formation Borrowings incurred on January 31, 2014.

The unaudited pro forma condensed consolidated statement of operations is based upon our historical consolidated financial statements, as well as those of the Acquired Business, for the period presented. In the opinion of management, all adjustments and/or disclosures necessary for a fair statement of the pro forma data have been made. This unaudited pro forma condensed consolidated financial information is presented for illustrative purposes only and does not necessarily reflect what our results of operations would have been had the transactions referred to above occurred on such date. Accordingly, such information should not be relied upon as an indicator of our future performance, financial condition or liquidity.

These unaudited pro forma condensed consolidated statement of operations and the notes thereto should be read together with the following information included elsewhere in this offering memorandum:

• Our audited consolidated financial statements and the notes thereto for the year ended December 31, 2014.

• The Acquired Business’ unaudited condensed combined financial statements and the notes thereto for the nine months ended September 30, 2014 and audited combined financial statements and the notes thereto for the year ended December 31, 2013.

• The sections entitled “Use of Proceeds” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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OUTFRONT Media Inc.

Pro Forma Condensed Consolidated Statement of Operations

(Unaudited)

Year Ended December 31, 2014

(in millions, except per share amounts)	Historical			Acquisition Costs / IPO / Stand-alone costs			Formation and Acquisition Borrowings			Acquired Businesses			REIT Election / E&P Purge			This Offering			Pro Forma Adjustments			Pro Forma
Revenues	$	1,353.8		$	—			—		$	152.1	(5)	$	—		$	—		$	152.1		$	1,505.9
Operating expenses		726.5			—			—			105.2	(5)		—			—			105.2			831.7
Selling, general and administrative expenses		224.3			3.7	(4)		—			27.2	(5)(8)		—			—			30.9			255.2
Restructuring charges		9.8			—			—			0.7	(5)		—			—			0.7			10.5
Acquisition costs		10.4			(10.4	) (5)		—			—			—			—			(10.4	)		—
Net gain on dispositions		(2.5	)		—			—			—			—			—			—			(2.5	)
Depreciation		107.2			—			—			4.7	(5)		—			—			4.7			111.9
Amortization		95.0			—			—			14.0	(5)		—			—			14.0			109.0
Operating income		183.1			6.7			—			0.3	(5)		—			—			7.0			190.1
Interest income (expense), net		(84.8	)		7.6	(2)(5)		(32.9	) (2)		(0.3	) (2)(5)		—			(5.6	) (2)		(31.2	)		(116.0	)
Other expense, net		(0.3	)		—			—			—			—			—			—			(0.3	)
Income before provision for income taxes and equity in earnings of investee companies		98.0			14.3			(32.9	)		—			—			(5.6	)		(24.2	)		73.8
Benefit (provision) for income taxes		206.0			(0.4	) (3)		10.4	(3)		—			(219.4	) (3)		—			(209.4	)		(3.4	)
Equity in earnings of investee companies, net of tax		2.9			—			—			0.9	(5)		0.4	(3)		—			1.3			4.2
Net income	$	306.9		$	13.9		$	(22.5	)	$	0.9	(5)	$	(219.0	)	$	(5.6	)	$	(232.3	)	$	74.6
Net income per common share:
Basic		2.69																					0.55
Diluted		2.67																					0.54
Weighted average shares outstanding:
Basic		114.3			5.8	(1)								16.5	(3)								136.6
Diluted		114.8			5.8	(1)								16.5	(3)								137.1

The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial information.

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NOTES TO OUTFRONT MEDIA INC.

PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

(Unaudited)

1. Initial Public Offering

On April 2, 2014, we completed an IPO of 23,000,000 shares of our common stock, representing 19% of our outstanding common stock, for $28.00 per share, for total net proceeds after underwriting discounts and commissions, of $615.0 million. On July 16, 2014, CBS completed the CBS Exchange Offer in which 97,000,000 shares of our common stock that were owned by CBS were exchanged for shares of CBS Class B common stock.

2. Borrowings and Interest

Interest expense is adjusted by $31.2 million for the year ended December 31, 2014, to reflect interest for the entire period related to the $1.6 billion of debt incurred on January 31, 2014 in connection with the Formation Borrowings, including the amortization of deferred financing costs and commitment fees on the Senior Credit Facilities, the $600.0 million in Acquisition Borrowings, including deferred financing costs and commitment fees (as discussed below), and the $100.0 million of the new 2024 notes offered hereby (“this offering”). Interest expense is also adjusted to exclude $7.6 million related to the one-time costs associated with a lender commitment to provide a senior unsecured bridge term loan facility for the purpose of financing the acquisition in the event we did not complete the Acquisition Borrowings. The following table presents the pro forma detail of interest expense. The pro forma interest expense on the variable-rate Term Loan is calculated using a rate of 3.0%, which was the rate at December 31, 2014.

(in millions)	Year Ended December 31, 2014
$800 million Term Loan	$	24.3
$400 million, 5.250% Senior Notes due 2022		21.0
$400 million, 5.625% Senior Notes due 2024		22.5
Amortization of deferred financing costs and commitment fees		6.8
Pro Forma Formation Borrowings interest expenses		74.6
$150 million, 5.250% Senior Notes due 2022		7.9
$450 million, 5.875% Senior Notes due 2025		26.4
Amortization of deferred financing costs and commitment fees		1.2
Pro Forma Acquisition Borrowings interest expenses		35.5
$100 million, 5.625% Senior Notes due 2024 offered hereby		5.4
Amortization of deferred financing costs and commitment fees		0.2
Pro Forma new 2024 notes borrowings interest expenses		5.6
Other		0.3
Total Pro Forma interest expense	$	116.0

An increase or decrease of 1/8% in the interest rate on the Term Loan and Revolving Credit Facility will change annual interest expense by approximately $1.0 million.

3. REIT Election and Income Taxes

On April 16, 2014, CBS received a private letter ruling from the IRS, subject to the terms and conditions therein, with respect to certain issues relevant to our qualification to be taxed as a REIT. On July 16, 2014, we ceased to be a member of the CBS consolidated tax group, and on July 17, 2014, we began operating in a manner

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that will allow us to qualify as a REIT for U.S. federal income tax purposes for the tax year commencing July 17, 2014, and ending December 31, 2014. As long as we remain qualified to be taxed as a REIT, we generally will not be subject to U.S. federal income tax on our REIT taxable income that we distribute to our stockholders. If we fail to qualify to be taxed as a REIT in any taxable year and do not qualify for certain statutory relief provisions, we will be subject to U.S. federal income tax at regular corporate rates and will be precluded from re-electing to be taxed as a REIT for the subsequent four taxable years following the year during which we lose our REIT qualification. Even if we qualify for taxation as a REIT, we may be subject to certain U.S. federal, state and local taxes on our income or property, and the income of our TRSs will be subject to taxation at regular corporate rates. The pro forma adjustments for the year ended December 31, 2014 to “Benefit (provision) for income taxes” of $219.4 million, and to “Equity in earnings of investee companies, net of tax” of $0.4 million include the elimination of the one-time write-off of substantially all deferred taxes in connection with our REIT conversion and the reversal of the tax provision on taxable income that will no longer be subject to U.S. federal income tax subsequent to our REIT election. Any remaining tax provision mainly reflects taxes on our TRSs.

The pro forma adjustments to the “Benefit (provision) for income taxes” related to the “Acquisition Costs / IPO / Stand-alone costs” and the “Formation and Acquisition Borrowings” columns on the unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2014 of $0.4 million and $10.4 million, respectively, are calculated based upon the tax rates which would have been applied at the time the expenses were incurred.

In order to comply with certain REIT qualification requirements, on October 29, 2014, our board of directors approved a special dividend of approximately $547.7 million, or $4.56 per share, to distribute accumulated earnings and profits as of July 17, 2014, the date we began operating in a manner that will allow us to qualify as a REIT for U.S. federal income tax purposes, including any earnings and profits allocated to us by CBS in connection with the Separation. The special dividend was paid on December 31, 2014, to stockholders of record on November 20, 2014. In connection with the special dividend, we paid approximately $109.5 million in cash, and issued approximately 16.5 million new shares of our common stock based on the volume weighted average price of our common stock for the three trading days commencing on December 16, 2014, or $26.4974 per share. A portion ($100.0 million) of the IPO proceeds was retained by us and was applied to the cash portion of the E&P Purge. CBS transferred the balance of the cash portion of the E&P Purge (approximately $9.5 million) to us prior to the payment of the special dividend to stockholders.

4. Incremental Stand-Alone Public Company Expenses

As a stand-alone public company, we have incurred incremental expenses for services previously provided by CBS as well as for additional public company expenses that did not apply to us historically. In addition to costs already incurred, we estimate these expenses to be $3.7 million for the year ended December 31, 2014.

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5. Acquisition

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

The following table presents detail of the amounts included within the “Acquired Businesses” column of the pro forma financial information to reflect the nine months of the Acquired Business prior to closing.

(in millions)	Historical			Purchase Accounting & Acquisition- Related Adjustments			Acquired Businesses
For the nine months ended September 30, 2014:
Revenues	$	152.1		$	—		$	152.1
Operating expenses		105.2			—			105.2
Selling, general and administrative expenses		30.8			(3.6	)(a)		27.2
Restructuring charges		0.7			—			0.7
Depreciation		6.5			(1.8	)(b)		4.7
Amortization		7.6			6.4	(a)(b)		14.0
Operating income (loss)		1.3			(1.0	)		0.3
Interest expense		(12.6	)		12.3	(c)		(0.3	)
Other expense, net		—			—			—
Income (loss) before provision for income taxes and equity in earnings of investee companies		(11.3	)		11.3			—
(Provision) benefit for income taxes		0.1			(0.1	)(d)		—
Equity in earnings of investee companies, net of tax		0.9			—			0.9
Net income (loss)	$	(10.3	)	$	11.2		$	0.9

(a) Primarily represents adjustment to conform the accounting policy for commissions, which we capitalize as lease acquisition costs and amortize over the life of the lease. The adjustment to capitalize lease acquisition costs was $3.1 million for the year ended December 31, 2014.

(b) Represents adjustment to depreciation and amortization-based property, plant and equipment and goodwill balances allocated within the preliminary purchase accounting allocation.

(c) Represents the elimination of interest expense related to the Acquired Business’ senior secured credit facility, which are not part of the Acquired Business’ assets and liabilities.

(d) Represents an adjustment to historic tax expense to reflect our REIT conversion.

Transaction Costs

In the year ended December 31, 2014, we recorded $7.6 million of commitment and other fees in Interest income (expense), net, in the Consolidated Statement of Operations associated with a lender commitment to provide a senior unsecured bridge term loan facility for the purpose of financing the Acquisition in the event we did not complete the Acquisition Borrowings. In addition we also recorded $10.4 million of other Acquisition costs. These one-time transaction costs are removed from our historical results for the year ended December 31, 2014 within the unaudited pro forma condensed statement of operations.

Expected Cost Savings Resulting from the Acquisition

Based on current estimates and assumptions, we expect to achieve significant cost savings as a result of the Acquisition, principally by leveraging the scalability of our existing corporate administrative functions and information technology and systems. We estimate that our annualized cost savings will be approximately

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$28.0 million. These cost savings are not reflected within the unaudited pro forma condensed consolidated financial information. As a result of conforming accounting policies, we will also reclassify approximately $4.0 million of commission expense on an annualized basis from “Selling, general and administrative expenses” to “Amortization.” This adjustment is reflected within the unaudited pro forma condensed consolidated financial information.

The foregoing future cost savings are based on our estimates and assumptions that, although we consider them reasonable, are inherently uncertain. These expected cost savings are subject to significant business, economic and competitive uncertainties and contingencies, all of which are difficult to predict. As a result, there can be no assurance that these or any other cost savings or synergies will actually be realized.

6. Dividend

Although U.S. federal income tax law generally requires that a REIT distribute at least 90% of its REIT taxable income (determined before the deduction for dividends paid and excluding any net capital gains), we intend to pay regular quarterly distributions to our stockholders in an amount not less than 100% of our REIT taxable income (determined before the deduction for dividends paid).

7. Pro Forma FFO and AFFO

The following tables present FFO, AFFO, and related per weighted average share amounts on a historical basis and on a pro forma basis to adjust net income to reflect additional costs we will incur as a stand-alone public company (See Note 4), interest expense from the Formation Borrowings, the Acquisition Borrowings and this offering (See Note 2), and the reduction to our tax provision and deferred taxes associated with our REIT election (See Note 3). Pro forma weighted average shares are adjusted to reflect our IPO (See Note 1), the Acquisition (See Note 5) and the issuance of our common stock in connection with the E&P Purge (See Note 3). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further information about FFO and AFFO.

(in millions, except per share amounts)	Historical			Pro Forma Adjustments				Pro Forma
Year ended December 31, 2014:
Net income	$	306.9		$	(232.3	)	(2)(3)(4)(5)(8)	$	74.6
Depreciation of billboard advertising structures		99.6			4.7		(5)		104.3
Amortization of real estate related intangible assets		44.9			6.3		(5)		51.2
Amortization of direct lease acquisition costs		33.8			3.1		(5)		36.9
Net gain on disposition of billboard advertising structures, net of tax		(2.1	)		—				(2.1	)
Adjustment related to equity based investments		0.8			—				0.8
FFO (a)		483.9			(218.2	)			265.7
Adjustment for deferred income taxes		(249.5	)		247.2				(2.3	)
Cash paid for direct lease acquisition costs		(32.8	)		(3.1	)	(5)		(35.9	)
Maintenance capital expenditures		(23.3	)		(1.8	)	(5)		(25.1	)
Restructuring charges—severance, net of tax		3.7			—				3.7
Acquisition costs, net of tax		9.1			(9.1	)			—
Other depreciation		7.6			—		(5)		7.6
Other amortization		16.3			4.6		(5)		20.9
Stock-based compensation		16.0			2.9		(8)		18.9
Non-cash effect of straight-line rent		(0.2	)		1.1		(5)		0.9
Accretion expense		2.3			—				2.3
Amortization of deferred financing costs		12.1			(3.9	)	(2)		8.2
AFFO (a)	$	245.2		$	19.7			$	264.9

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(in millions, except per share amounts)	Historical		Pro Forma Adjustments		Pro Forma
FFO per weighted average share:
Basic	$	4.23			$	1.95
Diluted	$	4.22			$	1.94
AFFO per weighted average share:
Basic	$	2.15			$	1.94
Diluted	$	2.14			$	1.93
Weighted average shares outstanding:
Basic		114.3		22.3		136.6
Diluted		114.8		22.3		137.1

(a) FFO and AFFO are non-GAAP financial measures. We calculate FFO in accordance with the definition established by NAREIT. FFO reflects net income adjusted to exclude gains and losses from the sale of real estate assets, depreciation and amortization of real estate assets and amortization of direct lease acquisition costs, as well as the same adjustments for our equity-based investments, as applicable. We calculate AFFO as FFO adjusted to include cash paid for direct lease acquisition costs as such costs are generally amortized over a period ranging from four weeks to one year and therefore are incurred on a regular basis. AFFO also includes cash paid for maintenance capital expenditures since these are routine uses of cash that are necessary for our operations. In addition, AFFO excludes costs related to the Acquisition and restructuring charges, as well as certain non-cash items, including non-real estate depreciation and amortization, deferred income taxes, stock-based compensation expense, accretion expense, the non-cash effect of straight-line rent and amortization of deferred financing costs. We use FFO and AFFO for managing our business and for planning and forecasting future periods, and each is an important indicator of our operational strength and business performance, especially compared to other REITs. Our management believes users are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in managing, planning and executing our business strategy. Our management also believes that the presentations of FFO and AFFO, as supplemental measures, are useful in evaluating our business because adjusting results to reflect items that have more bearing on the operating performance of REITs highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures. It is management’s opinion that these supplemental measures provide users with an important perspective on our operating performance and also make it easier to compare our results to other companies in our industry, as well as to REITs. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further information about FFO and AFFO.

8. Stock-Based Compensation

Stock-based compensation included within the unaudited pro forma condensed consolidated statement of operations totaled $18.9 million for the year ended December 31, 2014.

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