What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-02-07 compared with 2023-02-08 · 297 added, 305 removed, 1128 unchanged (35% of the section changed)

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Other Information

During the fiscal quarter ended December 31, 2023, none of the Company’s directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement, in each case as defined in Item 408 of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

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1-10551) for the year ended December 31, 2021 and incorporated herein by reference).

10.1 Second Amended and Restated Five Year Credit Agreement, dated as of February 14, 2020, by and among Omnicom Capital Inc., a Connecticut corporation, Omnicom Finance Limited, a private limited company organized under the laws of England and Wales, Omnicom Group Inc., a New York corporation, any other subsidiary of Omnicom Group Inc.

10.1 Third Amended and Restated Five Year Credit Agreement, dated as of June 2, 2023, by and among Omnicom Capital Inc., a Connecticut corporation, Omnicom Finance Limited, a private limited company organized under the laws of England and Wales, Omnicom Group Inc., a New York corporation, any other subsidiary of Omnicom Group Inc.

designated for borrowing privileges, the banks, financial institutions and other institutional lenders and initial issuing banks listed on the signature pages thereof, Citibank, N.A., JPMorgan Chase Bank, N.A., and Wells Fargo Securities, LLC, as lead arrangers and book managers, JPMorgan Chase Bank, N.A.

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and HSBC Bank USA, National Association, as documentation agents, and Citibank, N.A., as administrative agent for the lenders (Exhibit 10.1 to our Current Report on Form 8-K (File No.

1-10551) filed on February 19, 2020 and incorporated herein by reference).

10.2 Amendment No.

1 to the Credit Agreement, dated October 26, 2020, to the Second Amended and Restated Five Year Credit Agreement, dated as of February 14, 2020, by and among Omnicom Capital Inc., Omnicom Finance Limited, Omnicom Group Inc., any other subsidiary of Omnicom Group Inc.

designated for borrowing privileges, the banks, financial institutions and other institutional lenders party thereto, Citibank, N.A., JPMorgan Chase Bank, N.A., and Wells Fargo Securities, LLC, as lead arrangers and book managers, JPMorgan Chase Bank, N.A.

and Wells Fargo Bank, National Association, as syndication agents, Bank of America, N.A., BNP Paribas, Barclays Bank PLC, Deutsche Bank Securities Inc.

and HSBC Bank USA, National Association, as documentation agents, and Citibank, N.A., as administrative agent for the lenders (Exhibit 10.1 to our Quarterly Report on Form 10-Q (File No.

1-10551) for the quarter ended September 30, 2020 and incorporated herein by reference ).

1-10551) dated June 5, 2023 and incorporated herein by reference) .

10.2 Delayed Draw Term Loan Agreement, dated as of January 3, 2024, among Omnicom Capital Inc., a Connecticut corporation, Omnicom Group Inc., a New York corporation, the initial lenders named therein, Citibank, N.A., BofA Securities, Inc., Barclays Bank PLC, BNP Paribas Securities Corp., Deutsche Bank Securities Inc., HSBC Securities (USA), Inc., JPMorgan Chase Bank, N.A., Mizuho Bank, Ltd., Société Générale, Sumitomo Mitsui Banking Corporation, TD Securities (USA), LLC, U.S.

Bank National Association and Wells Fargo Securities, LLC, as lead arrangers and book managers, and Citibank, N.A., as administrative agent for the lenders (Exhibit 10.1 to our Current Report on Form 8-K (File No.

1-10551) dated January 5, 2024 and incorporated herein by reference).

10.3 Director Compensation and Director Compensation and Deferred Stock Program Stock Program (Exhibit 10.1 to our Quarterly Report on Form 10-Q (File No.

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1-10551) for the year ended December 31, 1989 and incorporated herein by reference).

10.6 Senior Management Incentive Plan as amended and restated on December 4, 2008 (Exhibit 10.9 to our Annual Report on Form 10-K (File No.

1-10551) for the year ended December 31, 2008 (“2008 10-K”) and incorporated herein by reference).

10.6 Senior Management Incentive Plan as amended and restated on December 12, 2023.

10.7 Omnicom Group Inc.

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1-10551) dated December 13, 2006 and incorporated herein by reference).

10.9 Omnicom Group Inc.

Amended and Restated 2007 Incentive Award Plan (Appendix A to our Proxy Statement (File No.

1-10551) filed on April 15, 2010 and incorporated herein by reference).

10.9 Form of Indemnification Agreement (Exhibit 10.1 to our Quarterly Report on Form 10-Q (File No.

1-10551) for the quarter ended June 30, 2007 and incorporated herein by reference).

10.11 Restricted Stock Unit Deferred Compensation Plan (Exhibit 10.16 to the 2008 10-K and incorporated herein by reference).

10.10 Restricted Stock Unit Deferred Compensation Plan (Exhibit 10.16 to our Annual Report on Form 10-K (File No.

1-10551) for the year ended December 31, 2008 (the “ 2008 10-K ” ) and incorporated herein by reference).

10.11 Restricted Stock Deferred Compensation Plan (Exhibit 10.17 to the 2008 10-K and incorporated herein by reference).

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1-10551) filed on July 23, 2021 and incorporated herein by reference).

10.24 Rochelle Tarlowe employment letter (Exhibit 10.3 to the March 31, 2020 10-Q and incorporated herein by reference).

21 Subsidiaries of the Registrant.

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Section 1350.

97 Omnicom Group Inc.

Clawback Policy

101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

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Director February 7, 2024

Gerstein Director February 8, 2023

Director February 7, 2024

/s/ R ONNIE S.

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Director February 7, 2024

/s/ Patricia Salas Pineda Director February 8, 2023

/s/ P ATRICIA SALAS PINEDA

Director February 7, 2024

Patricia Salas Pineda

/s/ L INDA J OHNSON R ICE

/s/ LINDA JOHNSON RICE

Director February 7, 2024

Linda Johnson Rice

/s/ CASSANDRA SANTOS

Director February 7, 2024

Cassandra Santos

/s/ V ALERIE M .

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KPMG LLP, an independent registered public accounting firm that audited our consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on Omnicom’s internal control over financial reporting as of December 31, 2023, dated February 7, 2024.

The Board of Directors of Omnicom has an Audit Committee comprised of four independent directors.

The Board of Directors of Omnicom has an Audit Committee comprised of five independent directors.

The Audit Committee meets periodically with financial management, Internal Audit and the independent auditors to review accounting, control, audit and financial reporting matters.

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Customer advances 1,356.2 1,492.3

Current portion of debt 750.5 —

Short-term debt 10.9 16.9

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Occupancy and other costs 1,168.8 1,168.6 1,148.2

Real estate and other repositioning costs 191.5 — —

Charges arising from the effects of the war in Ukraine — 113.4 —

Gain on disposition of subsidiary ( 78.8 ) — ( 50.5 )

COVID-19 repositioning costs — — 277.9

Cost of services 11,982.7 11,607.9 11,499.7

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Depreciation and amortization 211.1 219.4 212.1

12,205.8 12,091.5 11,572.3

Operating Profit 2,083.3 2,197.9 1,598.8

Total Operating Expenses 12,587.5 12,205.8 12,091.5

Operating Income 2,104.7 2,083.3 2,197.9

Interest Expense 218.5 208.6 236.4

Interest Income 106.7 70.7 27.3

Income Before Income Taxes and Income (Loss) From Equity Method Investments 1,945.4 1,988.8 1,409.3

Income Before Income Taxes and Income From Equity Method Investments 1,992.9 1,945.4 1,988.8

Income Tax Expense 524.9 546.8 488.7

Income (Loss) From Equity Method Investments 5.2 7.5 ( 6.8 )

Income From Equity Method Investments 5.2 5.2 7.5

Net Income 1,473.2 1,403.8 1,507.6

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2023 2022 2021

$ 1,403.8 $ 1,507.6 $ 1,020.8

Net Income $ 1,473.2 $ 1,403.8 $ 1,507.6

Other Comprehensive Income (Loss):

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Income tax effect ( 1.6 ) ( 1.6 ) ( 1.6 )

( 1.6 ) ( 1.6 ) ( 1.6 )

Cash flow hedge, net of tax 4.0 4.0 4.0

Defined benefit pension plans and postemployment arrangements:

Unrecognized actuarial gains (losses) and prior service cost for the period ( 6.8 ) 58.4 28.3

58.4 28.3 ( 29.5 )

Amortization of prior service cost and actuarial losses

10.7 18.1 13.9

Amortization of prior service cost and actuarial (gains) losses 4.8 10.7 18.1

Income tax effect 0.6 ( 20.0 ) ( 13.6 )

( 20.0 ) ( 13.6 ) 4.5

Defined benefit plans and postemployment arrangements, net of tax

( 1.4 ) 49.1 32.8

Foreign currency translation adjustment 98.9 ( 255.2 ) ( 92.2 )

( 255.2 ) ( 92.2 ) ( 5.0 )

Other Comprehensive Income (Loss) 101.5 ( 202.1 ) ( 55.4 )

Comprehensive Income 1,574.7 1,201.7 1,452.2

1,201.7 1,452.2 1,008.6

Comprehensive Income Attributed To Noncontrolling Interests 83.0 70.8 82.9

70.8 82.9 79.5

Comprehensive Income - Omnicom Group Inc.

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Common stock dividends declared ( 559.2 ) ( 576.0 ) ( 599.6 )

( 576.0 ) ( 599.6 ) ( 561.1 )

Ending balance 10,571.5 9,739.3 8,998.8

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Amortization of intangible assets 80.3 80.3 80.0

Amortization of net deferred (gain) loss on interest rate swaps 5.4 ( 8.8 ) ( 8.1 )

Amortization of net deferred loss (gain) on interest rate swaps 5.3 5.4 ( 8.8 )

Share-based compensation 84.8 81.7 84.7

Non-cash charges related to the effects of the war in Ukraine 65.8 — —

Real estate and other repositioning costs 191.5 — —

Gain on disposition of subsidiary ( 78.8 ) — ( 50.5 )

COVID-19 repositioning costs — — 277.9

Non-cash charges related to the effects of the war in Ukraine — 65.8 —

Other, net ( 2.3 ) ( 5.6 ) 39.8

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Acquisition of businesses and interests in affiliates, net of cash acquired ( 93.3 ) ( 276.8 ) ( 160.0 )

Proceeds from disposition of subsidiaries — 114.1 3.2

Proceeds (purchases) from sale of investments and other ( 25.9 ) 2.5 3.2

Net Cash Used In Investing Activities ( 380.9 ) ( 709.2 ) ( 136.1 )

Maturity (purchase) of short-term investments 60.8 ( 61.4 ) —

Proceeds from disposition of subsidiaries and other 190.0 35.5 116.6

Net Cash Provided By (Used In) Investing Activities 79.1 ( 380.9 ) ( 709.2 )

Cash Flows from Financing Activities:

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The accompanying notes to the consolidated financial statements are an integral part of these statements.

OMNICOM GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

Presentation of Financial Statements

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Risks and Uncertainties

Current global economic challenges, including the impact of the war in Ukraine, the lingering effects of the COVID-19 pandemic, high and sustained inflation, rising interest rates, and supply chain disruptions could cause economic uncertainty and volatility.

Global economic challenges, including geopolitical events, international hostilities, acts of terrorism, public health crises, high and sustained inflation in countries that comprise our major markets, high interest rates, and labor and supply chain issues could cause economic uncertainty and volatility.

The impact of these issues on our business will vary by geographic market and discipline.

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However, there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the current and future adverse economic conditions, reductions in client revenue, changes in client creditworthiness and other developments.

Impact of the War in Ukraine

Historically, we conducted operations in Russia and Ukraine through local agencies in which we held a majority stake.

During the first quarter of 2022, the war in Ukraine required us to suspend our business operations in Ukraine.

The war resulted in the imposition of sanctions by the United States, the United Kingdom, and the European Union, that affected the cross-border operations of businesses operating in Russia.

In addition, Russian regulators imposed currency restrictions and regulations.

All of these actions created uncertainty regarding our ability to recover our investment in our operations in Russia, as well as our ability to exercise control over the operations.

Therefore, the ability to continue operations in Russia was uncertain.

As a result, we disposed of all of our businesses in Russia.

Accordingly, in the first quarter of 2022, we recorded pretax charges of $ 113.4 million, which primarily consisted of the net investment in our Russian businesses, and included charges related to the suspension of operations in Ukraine.

Lingering Effects of the COVID-19 Pandemic

The COVID-19 pandemic adversely affected global economic activity.

Beginning in March 2020 and continuing through the first quarter of 2021, our business was impacted by reductions in client spending due to the COVID-19 pandemic.

While mixed by business and geography, the spending reductions impacted all our businesses and markets.

Globally, the most impacted businesses were our Experiential discipline, especially in our event marketing businesses, and our Execution & Support discipline, primarily in field marketing.

Most markets began to improve in April 2021 .

Significant Accounting Policies

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Our revenue is primarily derived from the planning and execution of advertising communications and marketing services in the following fundamental disciplines:

Advertising & Media, Precision Marketing, Commerce & Brand Consulting, Experiential, Execution & Support, Public Relations and Healthcare.

Advertising & Media, Precision Marketing, Commerce & Branding, Experiential, Execution & Support, Public Relations and Healthcare.

Our client contracts are primarily fees for service on a rate per hour or per project basis.

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Generally, our short-term contracts, which normally take 30 to 90 days to complete, are performed by a single agency and consist of a single performance obligation.

As a result, we do not consider the underlying services as separate or distinct performance obligations because our services are highly interrelated, occur in close proximity, and the integration of the various

OMNICOM GROUP INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

components of a marketing message is essential to overall service.

In certain of our long-term client contracts, which have a term of up to one year, the performance obligation is a stand-ready obligation, because we provide a constant level of similar services over the term of the contract.

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For these client contracts, other than when we have a stand-ready obligation to perform services, revenue is recognized over time using input measures that correspond to the level of staff effort expended to satisfy the performance obligation on a rate per hour or equivalent basis.

For client contracts when we have a stand-ready obligation to perform services on an ongoing basis over the life of the contract, typically for periods up to one year, where the scope of these arrangements is broad and there are no significant gaps in performing the services, we recognize revenue using a time-based measure resulting in a straight-line revenue recognition.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

measure resulting in a straight-line revenue recognition.

From time to time, there may be changes in the client service requirements during the term of a contract and the changes could be significant.

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However, the inclusion of billings related to third-party direct costs in revenue depends on whether we act as a principal or as an agent in the client arrangement.

In most of our businesses, including advertising, which also includes studio production efforts and media planning and buying services, public relations, healthcare advertising, precision marketing, commerce and brand consulting businesses, we act as an agent and arrange, at the client’s direction, for third parties to perform certain services.

In most of our businesses, including advertising, which also includes studio production efforts and media planning and buying services, public relations, healthcare advertising, precision marketing, commerce and branding businesses, we act as an agent and arrange, at the client’s direction, for third parties to perform certain services.

In these cases, we do not control the goods or services prior to the transfer to the client.

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Variable consideration is estimated and included in total consideration at contract inception based on either the expected value method or the most likely outcome method.

These estimates are based on historical award experience, anticipated performance and other

OMNICOM GROUP INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

factors known at the time.

These estimates are based on historical award experience, anticipated performance and other factors known at the time.

Performance incentives are typically recognized in revenue over time.

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salary and service costs and occupancy and other costs.

As a service business, salary and service costs make up the vast majority of our operating expenses and substantially all these costs comprise the essential components directly linked to the delivery of our services.

Salary and service costs include employee compensation and benefits, freelance labor and service costs, which primarily include third-party supplier costs and out-of-pocket costs.

Occupancy and other costs consist of the indirect costs related to the delivery of our services, including office rent and other occupancy costs, equipment rent, technology costs, general office and other expenses.

SG&A expenses primarily consist of third-party marketing costs, professional fees and compensation and benefits and occupancy and other costs of our corporate and executive offices, which includes group-wide finance and accounting, treasury, legal and governance, human resource oversight and similar costs.

Receipt of reimbursements under government programs for certain operating expenses are recorded as a reduction to the related operating expense.

As a service business, salary and service costs make up a significant portion of our operating expenses, and substantially all these costs comprise the essential components directly linked to the delivery of our services.

Salary and service costs include employee compensation and benefits, freelance labor, third-party service costs, and third-party incidental costs.

Third-party service costs include vendor costs when we act as principal in providing services to our clients.

Third-party incidental costs, primarily consist of client-related travel and incidental out-of-pocket costs, which we bill back to the client directly at our cost and which we are required to include in revenue.

SG&A expenses primarily consist of third-party marketing costs, professional fees and

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

compensation and benefits and occupancy and other costs of our corporate and executive offices, which includes group-wide finance and accounting, treasury, legal and governance, human resource oversight and similar costs.

Cash and Cash Equivalents.

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Work in Process.

Work in process represents accrued costs incurred on behalf of customers, including media and production costs, and fees and other third-party costs that have not yet been billed.

Work in process represents accrued costs incurred on behalf of customers, including media and production costs and fees, other third-party costs and contract assets that have not yet been billed.

Media and production costs are billed during the production process in accordance with the terms of the client contract.

Substantially all unbilled fees and costs will be billed within the next 30 days.

Contract assets primarily include incentive fees, which are not material, and will be billed to clients in accordance with the terms of the client contract.

Property and Equipment.

Property and equipment are carried at cost and are depreciated over the estimated useful lives of the assets using the straight-line method ranging from:

three to five years for equipment, seven to ten years for furniture, and up to 40 years for office buildings.

three to five years for technology and related equipment, seven to ten years for furniture, and up to 40 years for office buildings.

Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the estimated useful life of the asset.

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In a business combination, the assets acquired, including identified intangible assets, liabilities assumed and any noncontrolling interest in the acquired business are recorded at acquisition date fair value.

In circumstances where control is obtained and less than 100% of a business is acquired, goodwill is recorded as if 100% were acquired.

In circumstances where control is obtained and less than 100% of a business is acquired, goodwill related to the noncontrolling shareholders is recorded as if 100% were acquired.

Acquisition-related costs, including advisory, legal, accounting, valuation and other costs are expensed as incurred.

Certain acquisitions include an initial payment at closing and provide for future additional contingent purchase price payments (earn-outs), which are recorded as a

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liability at the acquisition date fair value using the discount rate in effect on the acquisition date.

Certain acquisitions include an initial payment at closing and provide for future additional contingent purchase price payments (earn-outs), which are recorded as a liability at the acquisition date fair value using the discount rate in effect on the acquisition date.

Subsequent changes in the fair value of the liability are recorded in results of operations.

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There is no estimated residual value for the intangible assets.

We review the carrying value of goodwill for impairment annually at the end of the second quarter and whenever events or circumstances indicate the carrying value may not be recoverable.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

In 2023, to better align with our internal financial processes, the date of our annual impairment test was changed from June 30 to May 1.

We will continue to evaluate goodwill for impairment at least annually on May 1 and whenever events or circumstances indicate the carrying value may not be recoverable.

The impairment evaluation compares the fair value of each reporting unit, which we identified as our six agency networks, to its carrying value, including goodwill.

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Goodwill is written down to its fair value through a non-cash expense recorded in results of operations in the period the impairment is identified.

We identified our regional reporting units as components of our operating segments, which are our six agency networks.

The regional reporting units and practice areas of each agency network monitor the performance and are responsible for the agencies in their region.

The regional reporting units report to the segment managers and facilitate the administrative and logistical requirements of our client-centric strategy for delivering services to clients in their regions.

We have concluded that, for each of our operating segments, their regional reporting units had similar economic characteristics and should be aggregated for purposes of testing goodwill for impairment at the operating segment level.

Our conclusion was based on a detailed analysis of the aggregation criteria set forth in FASB ASC Topic 280, Segment Reporting , and the guidance set forth in FASB ASC Topic 350, Intangibles - Goodwill and Other .

We identified our regional reporting units as components of our operating segments, which are our six global agency networks.

The regional reporting units and practice areas monitor the performance and are responsible for the agencies in their region.

The regional reporting units report to the segment managers and facilitate the administrative and logistical requirements of our key client matrix organization structure for delivering services to clients in their regions.

We have concluded that, for each of our operating segments, their regional reporting units have similar economic characteristics and should be aggregated for purposes of testing goodwill for impairment at the operating segment level.

Our conclusion was based on a detailed analysis of the aggregation criteria set forth in FASB ASC Topic 280, Segment Reporting , and in FASB ASC Topic 350.

Consistent with our fundamental business strategy, the agencies within our regional reporting units serve similar clients in similar industries, and in many cases the same clients.

The main economic components of each agency are employee compensation and related costs and direct service costs and occupancy and other costs, which include rent and occupancy costs, technology costs that are generally limited to personal computers, servers and off-the-shelf software and other overhead costs.

Finally, the expected benefits of our acquisitions are typically shared by multiple agencies in various regions as they work together to integrate the acquired agency into our client service strategy.

In addition, the agencies within our regional reporting units have similar economic characteristics, and the employees share similar skill sets.

The main economic components of each agency are employee compensation and related costs, and direct service costs and occupancy and other costs, which include rent and occupancy costs, technology costs that are generally limited to personal computers, servers and off-the-shelf software and other overhead expenses.

Finally, the expected benefits of our acquisitions are typically shared by multiple agencies in various regions as they work together to integrate the acquired agency into our virtual client network strategy.

We use the following valuation methodologies to determine the fair value of our reporting units:

(1) the income approach, which utilizes discounted expected future cash flows, (2) comparative market participant multiples of EBITDA (earnings before interest, taxes, depreciation and amortization) and (3) when available, consideration of recent and similar acquisition transactions.

Based on the results of the annual impairment test, we concluded that at June 30, 2022 and 2021 goodwill was not impaired because either the fair value of each reporting unit was substantially in excess of its respective net book value, or for reporting units with a negative book value, fair value of assets exceeds total assets.

The market assumptions used in our assessment reflected the current economic environment (see Note 1 - Risks and Uncertainties ).

Based on the results of the annual impairment test, we concluded that at May 1, 2023 and June 30, 2022, goodwill was not impaired because either the fair value of each reporting unit was substantially in excess of its respective net book value, or for reporting units with a negative book value, fair value of assets exceeds total assets.

Subsequent to the annual goodwill impairment test, there have been no events or circumstances that triggered the need for an interim impairment test.

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Repurchases of our common stock are accounted for at cost and are recorded as treasury stock.

The excise tax on net stock repurchases is recorded as a cost of acquiring treasury stock.

Reissued treasury stock, primarily in connection with share-based compensation plans, is accounted for at average cost.

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Dollars at the exchange rate on the balance sheet date and revenue and expenses are translated at the average exchange rate for the period.

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adjustments are recorded in accumulated other comprehensive income.

Translation adjustments are recorded in accumulated other comprehensive income.

Foreign currency gains and losses arising from transactions not in the subsidiaries’ local currency are recorded in results of operations.

In 2022, we recorded foreign currency transaction gains of $ 1.1 million, and recorded foreign currency transactions losses of $ 3.3 million and $ 4.8 million in 2021 and 2020, respectively.

We recorded foreign currency transaction losses of $ 14.0 million and $ 3.3 million in 2023 and 2021, respectively, and recorded foreign currency transaction gains of $ 1.1 million in 2022.

Foreign currency gains and losses for hyper-inflationary economies are recorded in results of operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

Share-Based Compensation.

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Interest and penalties related to tax positions taken in our tax returns are recorded in income tax expense.

We record a liability for uncertain tax positions that reflects the treatment of certain tax positions taken in our tax returns that do not meet the more-likely-than not threshold.

We record a liability for uncertain tax positions that reflects the treatment of certain tax positions taken in our tax returns that do not meet the more-likely-than not threshold, or that meet the more-likely-than-not threshold but have measurement related unrecognized tax benefits.

Until these positions are sustained by the taxing authorities or the statute of limitations concerning such issues lapses, we do not generally recognize the tax benefits resulting from such positions.

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A lease is classified as an operating lease if it does not meet any one of the criteria.

Substantially all our operating leases are leases for office space, and substantially all our finance leases are leases for office furniture and technology equipment.

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Substantially all our operating leases are office space leases, and substantially all our finance leases are office furniture and technology equipment leases.

For all leases a right-of-use, or ROU, asset and lease liability are recognized at the lease commencement date.

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All ROU assets are reviewed for impairment.

The lease liability is initially measured as the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, our secured incremental borrowing rate for the same term as the underlying lease.

The lease liability is initially measured as the present value of

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, our secured incremental borrowing rate for the same term as the underlying lease.

For real estate and certain equipment operating leases, we use our secured incremental borrowing rate.

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In determining the fair value of financial assets and liabilities, we consider certain market valuation adjustments that market participants would consider in determining fair value, including:

counterparty credit risk adjustments applied to financial assets

OMNICOM GROUP INC.

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counterparty credit risk adjustments applied to financial assets and liabilities, taking into account the actual credit risk of the counterparty when valuing assets measured at fair value and credit risk adjustments applied to reflect our credit risk when valuing liabilities measured at fair value.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

and liabilities, taking into account the actual credit risk of the counterparty when valuing assets measured at fair value and credit risk adjustments applied to reflect our credit risk when valuing liabilities measured at fair value.

(Dollars in tables in millions, except per share amounts.)

Nature of our services

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Our networks, practice areas and agencies provide a comprehensive range of services in the following fundamental disciplines:

Advertising & Media, Precision Marketing, Commerce & Brand Consulting, Experiential, Execution & Support, Public Relations and Healthcare.

Advertising & Media, Precision Marketing, Commerce & Branding, Experiential, Execution & Support, Public Relations and Healthcare.

Advertising & Media include creative services across digital and traditional media, strategic media planning and buying, performance media and data analytics services.

Precision Marketing includes digital and direct marketing, digital transformation consulting and data and analytics.

Commerce & Brand Consulting services include brand and product consulting, strategy and research, retail and ecommerce.

Commerce & Branding services include brand and product consulting, strategy and research, retail and e-commerce.

Experiential marketing services include live and digital events and experience design and execution.

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At the core of all our services is the ability to create or develop a client’s marketing or corporate communications message into content that can be delivered to a target audience across different communications mediums.

Revenue by discipline was (in millions):

Economic factors affecting our revenue

Global economic conditions have a direct impact on our revenue.

Adverse economic conditions pose a risk that our clients may reduce, postpone or cancel spending for our services, which would impact our revenue.

Revenue by discipline:

Year Ended December 31,

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Precision Marketing 1,473.5 1,426.6 1,205.2

Commerce & Brand Consulting 958.4 910.7 821.8

Commerce & Branding 853.7 848.1 802.2

Experiential 651.4 635.6 536.0

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Healthcare 1,362.7 1,322.3 1,265.7

$ 14,289.1 $ 14,289.4 $ 13,171.1

Economic factors affecting our revenue

Global economic conditions have a direct impact on our revenue.

Adverse economic conditions pose a risk that our clients may reduce, postpone or cancel spending for our services, which would impact our revenue.

Revenue in our geographic markets was (in millions):

Revenue $ 14,692.2 $ 14,289.1 $ 14,289.4

Effective January 1, 2023, we realigned the classification of certain services, primarily within our Commerce & Branding, Execution & Support and Experiential disciplines and prior year amounts have been reclassified.

Revenue by geographic market:

Year Ended December 31,

5 unchanged sentences

Asia-Pacific 1,777.9 1,746.9 1,796.4

$ 14,289.1 $ 14,289.4 $ 13,171.1

Revenue $ 14,692.2 $ 14,289.1 $ 14,289.4

The Americas is comprised of North America, which includes the United States, Canada and Puerto Rico, and Latin America, which includes South America and Mexico.

1 unchanged sentence

Asia-Pacific includes Australia, Greater China, India, Japan, Korea, New Zealand, Singapore and other Asian countries.

Revenue in the United States in 2022 and 2021 was $ 7,367.3 million and $ 7,245.9 million, respectively.

OMNICOM GROUP INC.

AND SUBSIDIARIES

Revenue in the United States in 2023, 2022 and 2021 was $ 7,471.6 million, $ 7,367.3 million and $ 7,245.9 million, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Contract assets and liabilities

Work in process includes contract assets, unbilled fees and costs, and media and production costs.

Contract liabilities primarily consist of customer advances.

Work in process and contract liabilities were (in millions):

(Dollars in tables in millions, except per share amounts.)

Contract balances

Contract balances include work in process and customer advances, which primarily consist of advance billings to customers in accordance with the terms of the client contracts, primarily for the reimbursement of third-party costs.

Work in process:

Media and production costs $ 664.4 $ 725.1

Contract assets and unbilled fees and costs 529.5 469.9

$ 1,254.6 $ 1,201.0

Contract liabilities:

Unbilled fees and costs and contract assets 678.1 529.5

Work in process $ 1,342.5 $ 1,254.6

Customer advances $ 1,356.2 $ 1,492.3

Work in process represents accrued costs incurred on behalf of customers, including media and production costs, and fees and other third-party costs that have not yet been billed.

Media and production costs are billed during the production process in accordance with the terms of the client contract.

Contract assets primarily include incentive fees, which are not material and will be billed to clients in accordance with the terms of the client contract.

Substantially all unbilled fees and costs will be billed within the next 30 days.

Contract liabilities primarily represent advance billings to customers in accordance with the terms of the client contracts, primarily for the reimbursement of third-party costs that are generally incurred in the near term.

There were no impairment losses to the contract assets recorded in 2022 or 2021.

There were no impairment losses to work in process recorded in 2023 or 2022.

Net Income per Share

The computations of basic and diluted net income per share were (in millions, except per share amounts):

Basic and diluted net income per share:

Year Ended December 31,

2 unchanged sentences

$ 1,391.4 $ 1,316.5 $ 1,407.8

Weighted average shares:

Weighted average shares (millions):

Basic 199.4 205.6 214.3

1 unchanged sentence

Diluted 201.4 207.0 215.6

Anti-dilutive stock options and restricted shares 4.3 4.7 0.8

Anti-dilutive stock options and restricted shares (millions) — 4.3 4.7

Net income per share - Omnicom Group Inc.:

2 unchanged sentences

Business Combinations

In 2022, we completed five acquisitions that increased goodwill by $ 268.4 million.

In 2023, we completed six acquisitions that increased goodwill by $ 340.0 million.

In addition, during 2023, we acquired additional equity interests in certain majority owned subsidiaries, which are accounted for as equity transactions, and no additional goodwill was recorded.

None of the acquisitions in 2022, either individually or in the aggregate, was material to our results of operations or financial position.

None of the acquisitions in 2023, either individually or in the aggregate, were material to our results of operations or financial position.

On January 2, 2024 , we acquired Flywheel Digital, the digital commerce business of Ascential plc, for a net cash purchase price of approximately $ 845 million .

Since the acquisition occurred subsequent to December 31, the allocation of the purchase price to the underlying assets acquired and liabilities assumed is subject to a formal valuation process that has not yet been completed.

The major assets acquired include trade receivables, goodwill and intangible assets, and the major liabilities assumed include trade and other payables.

The Flywheel Digital acquisition is not material to our results of operations and financial position.

We will include the results of Flywheel Digital in our 2024 results of operations from the date of acquisition.

In the fourth quarter of 2023 we incurred transaction costs of $ 14.5 million primarily related to the acquisition of Flywheel Digital.

The evaluation of potential acquisitions is based on various factors, including specialized know-how, reputation, geographic coverage, competitive position and service offerings, as well as our experience and judgment.

8 unchanged sentences

One of the primary drivers in executing

OMNICOM GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

our acquisition strategy is the existence of, or the ability to, expand our existing client relationships.

1 unchanged sentence

Goodwill and Intangible Assets

Goodwill (in millions):

Change in goodwill:

January 1 $ 9,734.3 $ 9,738.6

4 unchanged sentences

Foreign currency translation 128.6 ( 253.1 )

December 31 $ 9,734.3 $ 9,738.6

$ 10,082.3 $ 9,734.3

There were no goodwill impairment losses recorded in 2023 or 2022, and there are no accumulated goodwill impairment losses.

Intangible assets (in millions):

Intangible assets:

Value Accumulated

Amortization Net

Value Accumulated

Amortization Net

Purchased and internally developed software

1 unchanged sentence

Customer related and other 861.4 ( 557.0 ) 304.4 758.5 ( 510.8 ) 247.7

$ 1,133.3 $ ( 819.9 ) $ 313.4 $ 1,154.5 $ ( 856.5 ) $ 298.0

Credit Facility and Credit Lines

We have a $ 2.5 billion multi-currency revolving credit facility, or Credit Facility, with a termination date of February 14, 2025 .

In addition, we have the ability to issue up to $ 2 billion of U.S.

Intangible Assets $ 1,230.5 $ ( 863.6 ) $ 366.9 $ 1,133.3 $ ( 819.9 ) $ 313.4

Credit Facilities

In June 2023, we amended our existing $ 2.5 billion unsecured multi-currency revolving credit facility, or Credit Facility, to, among other things, extend its termination date to June 2, 2028 , and transition the benchmark rate for U.S.

Dollar denominated loans from LIBOR to the Secured Overnight Financing Rate, or SOFR.

We have the ability to issue up to $ 2 billion of U.S.

Dollar denominated commercial paper and issue up to the equivalent of $ 500 million in British Pounds or Euro under a Euro commercial paper program.

Certain of our international subsidiaries have uncommitted credit lines aggregating $ 582.9 million, which are guaranteed by Omnicom.

These facilities provide additional liquidity sources for operating capital and general corporate purposes.

During 2022, there were no borrowings under the Credit Facility, and there were no commercial paper issuances.

During 2021 and 2022, we did not issue commercial paper.

For the year ended December 31, 2023, the maximum amount of commercial paper issued was $ 200 million, the average amount outstanding was $ 5.1 million, the average days outstanding were 1.7 days, and the weighted average interest rate was 5.24 %.

At December 31, 2023, there were no outstanding borrowings under the Credit Facility and no outstanding commercial paper issuances.

In addition, certain of our international subsidiaries have uncommitted credit lines that are guaranteed by Omnicom aggregating $ 516.2 million.

All of these facilities provide additional liquidity sources for operating capital and general corporate purposes.

The Credit Facility contains a financial covenant that requires us to maintain a Leverage Ratio of consolidated indebtedness to consolidated EBITDA (earnings before interest, taxes, depreciation, amortization and non-cash charges) of no more than 3.5 times for the most recently ended 12-month period.

1 unchanged sentence

The Credit Facility does not limit our ability to declare or pay dividends or repurchase our common stock.

On January 3, 2024, we entered into a Delayed Draw Term Loan Agreement, or Term Loan Facility, that provides for a delayed-draw term loan up to an aggregate principal amount of $ 600 million.

The Term Loan Facility terminates on December 31, 2026 , and contains a financial covenant that requires us to maintain a Leverage Ratio of consolidated indebtedness to consolidated EBITDA of no more than 3.5 times for the most recently ended 12-month period.

The Term Loan Facility does not limit our ability to declare or pay dividends or repurchase our common stock.

Short-Term Debt

2 unchanged sentences

Due to the short-term nature of this debt, carrying value approximates fair value.

OMNICOM GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

Long-Term Debt

Long-term debt was (in millions):

3.65 % Senior Notes due 2024

8 unchanged sentences

£ 325 Million 2.25 % Senior Notes due 2033

5,611.8 5,727.0

Long-Term Debt, Gross 5,669.9 5,611.8

Unamortized discount ( 7.8 ) ( 9.0 )

Unamortized debt issuance costs ( 22.3 ) ( 26.2 )

Unamortized deferred gain from settlement of interest rate swaps 0.6 1.3

$ 5,577.2 $ 5,685.7

Unamortized deferred gain (loss) from settlement of interest rate swaps ( 0.2 ) 0.6

Current portion ( 750.5 ) —

Long-Term Debt $ 4,889.1 $ 5,577.2

Our 2.45 % Senior Notes due 2030, 4.20 % Senior Notes due 2030 and 2.60 % Senior Notes due 2031 are senior unsecured obligations of Omnicom that rank equal in right of payment with all existing and future unsecured senior indebtedness.

15 unchanged sentences

The Sterling Notes and the related guarantee are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness of OCH and Omnicom, respectively.

At December 31, 2022, the maturities of our long-term debt were (in millions):

Long-term debt maturities at December 31, 2023:

Thereafter 2,966.9

OMNICOM GROUP INC.

AND SUBSIDIARIES

Long-Term Debt, Gross $ 5,669.9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

Interest Expense

Interest expense is composed of (in millions):

Year Ended December 31,

1 unchanged sentence

Long-term debt $ 165.1 $ 164.7 $ 167.3

Early redemption payments and other fees 4.6 43.4 14.1

Fees and early redemption payments 4.8 4.6 43.4

Pension and other interest 50.5 35.8 35.3

Interest rate and cross currency swaps ( 1.9 ) 3.5 ( 9.6 )

$ 208.6 $ 236.4 $ 221.8

Interest Expense $ 218.5 $ 208.6 $ 236.4

Segment Reporting

1 unchanged sentence

Our networks, virtual client networks and agencies increasingly share clients and provide clients with integrated services.

The main economic components of each agency are employee compensation and related costs and direct service costs and occupancy and other costs which include rent and occupancy costs, technology costs and other overhead expenses.

Therefore, given these similarities, we aggregate our operating segments, which are our agency networks, into one reporting segment.

The main economic components of each agency are employee compensation and related costs, direct service costs and occupancy and other costs which include rent and occupancy costs, technology costs and other overhead expenses.

Therefore, given these similarities, we aggregate our six operating segments, which are our agency networks, into one reporting segment.

The agency networks' regional reporting units comprise three principal regions:

2 unchanged sentences

Agencies within the regional reporting units serve similar clients in similar industries and in many cases the same clients and have similar economic characteristics.

Revenue and long-lived assets and goodwill by geographic region were (in millions):

Revenue and long-lived assets and goodwill by geographic region:

Americas EMEA Asia-Pacific

9 unchanged sentences

Equity Method Investments

Income (loss) from our equity method investments was $ 5.2 million, $ 7.5 million and $( 6.8 ) million in 2022, 2021 and 2020, respectively.

Income from our equity method investments was $ 5.2 million in each of 2023 and 2022 and $ 7.5 million in 2021.

At December 31, 2023 and 2022, our proportionate share in the net assets of the equity method investments was $ 17.0 million and $ 18.3 million, respectively.

10 unchanged sentences

At December 31, 2023, there were 8,604,042 shares available for grant under the 2021 Plan.

Share-based compensation expense was $ 81.7 million, $ 84.7 million and $ 70.8 million in 2022, 2021 and 2020, respectively.

Share-based compensation expense in 2023, 2022 and 2021 was $ 84.8 million, $ 81.7 million and $ 84.7 million, respectively.

At December 31, 2023, unamortized share-based compensation that will be expensed over the next five years is $ 195.8 million.

1 unchanged sentence

Excess tax benefits and deficiencies represent the difference between the actual compensation deduction for tax purposes, which is calculated as the difference between the grant date price of the award, and the price of our common stock on the vesting or exercise date.

Any excess tax benefit or deficiency related to share-based compensation is recorded in results of operations, as a component of

OMNICOM GROUP INC.

AND SUBSIDIARIES

Any excess tax benefit or deficiency related to share-based compensation is recorded in results of operations, as a component of income tax expense, upon vesting of restricted stock awards or exercise of stock options.

In 2023 and 2022, we recognized a tax benefit of $ 6.7 million and $ 1.9 million, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

income tax expense, upon vesting of restricted stock awards or exercise of stock options.

We recognized a tax benefit of $ 1.9 million and $ 2.9 million in 2022 and 2021, respectively.

(Dollars in tables in millions, except per share amounts.)

Stock Options

The exercise price of stock option awards cannot be less than 100% of the market price of our common stock on the grant date and have a maximum contractual life of 10 years.

Stock option activity was:

Stock option activity:

Year Ended December 31,

2023 2022 2021

Shares Weighted Average Exercise Price

Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price

January 1 5,127,625 $ 72.90 4,689,250 $ 74.30 768,750 $ 83.65

4 unchanged sentences

Exercisable December 31 — $ — 423,750 $ 84.94 689,250 $ 84.94

At December 31, 2022, options outstanding and exercisable were:

Options outstanding and exercisable:

December 31, 2023

Options Outstanding Options Exercisable

Exercise Price Range Shares Weighted Average Remaining Contractual Life

Weighted Average

Exercise Price

Shares Weighted Average

Exercise Price Range Shares Weighted Average Remaining Contractual Life Weighted Average

Exercise Price Shares Weighted Average

Exercise Price

2 unchanged sentences

$ 72.00 to $ 73.00 3,725,000 7.9 years $ 72.47 — $ 0.00

$ 84.00 to $ 85.00 423,750 0.3 years $ 84.94 423,750 $ 84.94

4,564,575 — $ —

The grant date fair value of $ 12.60 and $ 8.47 for the 2022 and 2021 option awards, respectively, was determined using the Black-Scholes option valuation model.

The assumptions, without adjusting for forfeitures and lack of liquidity, in 2022 were:

an expected life ranging from 6.5 years to 7.5 years, risk free interest rate ranging from 3.0 % to 3.1 %, expected volatility ranging from 24.5 % to 24.7 %, and dividend yield ranging from 4.2 % to 4.5 % , and in 2021 were:

an expected life of 8.0 years, risk free interest rate of 1.4 %, expected volatility of 23 %, and dividend yield of 4.6 %.

The grant date fair value for the 2022 and 2021 option awards of $ 12.60 and $ 8.47 , respectively, was determined using the Black-Scholes option valuation model.

The assumptions, without adjusting for forfeitures and lack of liquidity, were:

in 2022, an expected life ranging from 6.5 years to 7.5 years, risk free interest rate ranging from 3.0 % to 3.1 %, expected volatility ranging from 24.5 % to 24.7 %, and dividend yield ranging from 4.2 % to 4.5 %, and in 2021, an expected life of 8.0 years, risk free interest rate of 1.4 %, expected volatility of 23 %, and dividend yield of 4.6 % .

Restricted Stock

Restricted stock activity was:

Restricted stock activity:

Year Ended December 31,

10 unchanged sentences

Under most circumstances, the employee forfeits the shares if employment ceases prior to the end of the restriction period.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

Performance Restricted Stock Units

1 unchanged sentence

Each PRSU represents the right to receive one share of common stock on vesting.

The ultimate number of PRSUs received by the employee depends on

OMNICOM GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the Company's average return on equity over a three year period compared to the average return on equity of a peer group of principal competitors over the same period.

The ultimate number of PRSUs received by the employee depends on the Company's average return on equity over a three-year period compared to the average return on equity of a peer group of principal competitors over the same period.

The PRSUs vest three years from the grant date.

2 unchanged sentences

We have assumed that all PRSUs will vest.

PRSU activity was:

PRSU activity:

Year Ended December 31,

2023 2022 2021

Shares Weighted Average Grant Date Fair Value

Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value

January 1 570,235 $ 71.19 533,890 $ 70.42 550,561 $ 70.17

5 unchanged sentences

Purchases are limited to 10 % of eligible compensation as defined by the Employee Retirement Income Security Act of 1974, or ERISA.

Employees purchased 72,672 shares, 73,250 shares and 91,605 shares in 2022, 2021 and 2020, respectively.

In 2023, 2022 and 2021, employees purchased 65,644 shares, 72,672 shares and 73,250 shares, respectively.

All shares purchased were issued from treasury stock, for which we received $ 5.3 million, $ 5.2 million and $ 5.0 million, respectively.

At December 31, 2023, there were 8,296,140 shares available under the ESPP.

The components of income before income taxes were (in millions):

Income before income taxes:

Year Ended December 31,

2 unchanged sentences

International 1,296.9 1,156.1 1,142.9

$ 1,945.4 $ 1,988.8 $ 1,409.3

Income tax expense (benefit) was (in millions):

Income Before Income Taxes $ 1,992.9 $ 1,945.4 $ 1,988.8

Income tax expense (benefit):

Year Ended December 31,

8 unchanged sentences

5.1 22.3 24.3

$ 546.8 $ 488.7 $ 381.7

The reconciliation from the statutory U.S.

federal income tax rate to our effective tax rate is:

Income Tax Expense $ 524.9 $ 546.8 $ 488.7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

Reconciliation from the statutory U.S.

federal income tax rate to effective tax rate:

Year Ended December 31,

5 unchanged sentences

Impact of foreign operations 3.9 3.5 3.6

Impact of war in Ukraine and other 1.3 ( 0.2 ) 0.5

Other, including impact of war in Ukraine — 1.3 ( 0.2 )

Effective tax rate 26.3 % 28.1 % 24.6 %

OMNICOM GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Our effective tax rate for 2022 increased year-over-year to 28.1 % from 24.6 %.

The higher effective tax rate for 2022 was predominantly the result of the non-deductibility of the $ 113.4 million charges recorded in the first quarter of 2022, arising from the effects of the war in Ukraine, as well as an additional increase in income tax expense of $ 4.8 million related to the disposition of our businesses in Russia.

These charges were partially offset by the tax benefit arising from our share-based compensation awards.

The effective tax rate for 2021 reflects a nominal tax applied to the book gain on the disposition in the Advertising & Media discipline resulting from the excess of tax over book basis and a reduction in income tax expense of $ 32.8 million, primarily related to the favorable settlements of uncertain tax positions in certain jurisdictions.

On August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law.

Among other things, the IRA imposes a 15% corporate alternative minimum tax for tax years beginning after December 31, 2022, levies a 1% excise tax on net stock repurchases after December 31, 2022, and provides tax incentives to promote clean energy.

Historically, we have made discretionary share repurchases.

Beginning in 2023, these purchases would be subject to the excise tax.

Based on the historical net repurchase activity, the excise tax and the other provisions of the IRA are not expected to have a material impact on our results of operations or financial position.

Our effective tax rate for 2023 decreased year-over-year to 26.3 % from 28.1 %.

The higher effective tax rate for 2022 was predominantly due to the non-deductibility of the $ 113.4 million of charges recorded in the first quarter of 2022, arising from the effects of the war in Ukraine, as well as an additional increase in income tax expense of $ 4.8 million related to the disposition of our businesses in Russia.

The Inflation Reduction Act of 2022, or IRA, levies a 1% excise tax on net stock repurchases after December 31, 2022.

The excise tax is recorded as a cost of acquiring treasury stock and is not material.

Additionally, the IRA imposes a 15% corporate alternative minimum tax, or CAMT, for tax years beginning after December 31, 2022.

The CAMT is not expected to have a material impact on our results of operations or financial position.

Numerous foreign jurisdictions have enacted or are in the process of enacting legislation to adopt a minimum effective tax rate described in the Global Anti-Base Erosion, or Pillar Two, model rules issued by the Organization for Economic Co-operation and Development, or OECD.

A minimum effective tax rate of 15% would apply to multinational companies with consolidated revenue above €750 million.

Under the Pillar Two rules, a company would be required to determine a combined effective tax rate for all entities located in a jurisdiction.

If the jurisdictional effective tax rate determined under the Pillar Two is less than 15%, a top-up tax will be due to bring the jurisdictional effective tax rate up to 15%.

We are continuing to monitor the pending implementation of Pillar Two by individual countries and the potential effects of Pillar Two on our business.

We do not expect the provisions effective in 2024 will have a materially adverse impact on our results of operations, financial position or cash flows.

The Tax Cuts and Jobs Act of 2017, or the Tax Act, imposed a one-time tax, the transition tax, on the accumulated earnings of foreign subsidiaries.

8 unchanged sentences

federal statutory income tax rate.

The international tax rate differentials in 2022 and 2021 are primarily attributed to our earnings in Germany, Australia, France, Japan and Canada being taxed at higher rates than the U.S.

The international tax rate differentials in 2023 and 2022 are primarily attributed to our earnings in Germany, Australia, Italy, Japan and Canada being taxed at higher rates than the U.S.

statutory tax rate.

1 unchanged sentence

We provided $ 17.0 million and $ 10.9 million in 2023 and 2022, respectively, for tax impact of GILTI.

The components of deferred tax assets and liabilities and balance sheet classification were (in millions):

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

Deferred tax assets and liabilities and balance sheet classification:

Deferred tax assets:

6 unchanged sentences

Valuation allowance ( 18.9 ) ( 21.1 )

Net deferred tax assets $ 286.5 $ 318.4

Deferred tax assets, net $ 307.5 $ 286.5

Deferred tax liabilities:

7 unchanged sentences

We have concluded that it is more likely than not that we will be able to realize our net deferred tax assets in future periods because results of future operations are expected to generate sufficient taxable income.

The valuation allowance of $ 21.1 million and $ 18.0 million at December 31, 2022 and 2021, respectively, relates to tax losses and tax credit carryforwards in the U.S.

At December 31, 2023 and 2022, the valuation allowance of $ 18.9 million and $ 21.1 million, respectively, relates to tax losses and tax credit carryforwards in the U.S.

and in international jurisdictions.

Tax loss and credit carryforwards for which there is no valuation allowance are available for periods ranging from 2024 to 2043, which is longer than the forecasted utilization of such carryforwards.

OMNICOM GROUP INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of our unrecognized tax benefits is (in millions):

Reconciliation of unrecognized tax benefits:

January 1 $ 167.6 $ 162.8

7 unchanged sentences

At December 31, 2023 and 2022, approximately $ 161.7 million and $ 161.8 million, respectively, of the liability for uncertain tax positions would affect our effective tax rate upon resolution of the uncertain tax positions.

Income tax expense in 2022, 2021 and 2020 includes $ 4.3 million, $ 2.1 million and $ 3.8 million, respectively, of interest, net of tax benefit, and penalties related to tax positions taken on our tax returns that have not been settled as of December 31, 2021.

Income tax expense in 2023, 2022 and 2021 includes $ 3.2 million, $ 4.3 million and $ 2.1 million, respectively, of interest, net of tax benefit, and penalties related to tax positions taken on our tax returns.

At December 31, 2023 and 2022, accrued interest and penalties were $ 19.9 million and $ 15.9 million, respectively.

2 unchanged sentences

Our subsidiaries file tax returns in various foreign jurisdictions.

Our principal foreign jurisdictions include the United Kingdom, France and Germany.

Our principal foreign jurisdictions include the U.K., France and Germany.

The Internal Revenue Service has completed its examination of our U.S.

federal tax returns through 2017.

Tax returns in the United Kingdom, France and Germany have been examined through 2020, 2018 and 2015, respectively.

Tax returns in the U.K., France and Germany have been examined through 2021, 2019 and 2015, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

Pension and Other Postemployment Benefits

12 unchanged sentences

We have a Senior Executive Restrictive Covenant and Retention Plan, or Retention Plan, for certain executive officers selected by the Compensation Committee.

The Retention Plan is a non-qualified deferred compensation severance plan that is not subject to ERISA and was adopted to secure non-competition, non-solicitation, non-disparagement and ongoing consulting services from such executive officers and to strengthen the retention aspect of executive officer compensation.

The Retention Plan is a non-qualified deferred compensation severance plan that is not subject to ERISA.

The Retention Plan was adopted to secure non-competition, non-solicitation, non-disparagement and ongoing consulting services from such executive officers and to strengthen the retention aspect of executive officer compensation.

The Retention Plan provides annual payments upon termination following at least seven years of service with Omnicom or its subsidiaries to the participants or to their beneficiaries.

2 unchanged sentences

The Retention Plan is not funded, and benefits are paid when due.

The components of net periodic benefit expense were (in millions):

Net periodic benefit expense:

Year Ended December 31,

6 unchanged sentences

$ 14.2 $ 11.4 $ 18.0

OMNICOM GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Included in accumulated other comprehensive income at December 31, 2022 and 2021 were unrecognized costs for actuarial losses and prior service cost of $ 23.4 million ($ 15.9 million net of income taxes) and $ 67.2 million ($ 46.8 million net of income taxes), respectively, that have not yet been recognized in net periodic benefit cost.

The unrecognized costs for actuarial gains and losses and prior service cost included in accumulated other comprehensive income and expected to be recognized in net periodic benefit cost in 2023 is $ 1.3 million.

The weighted average assumptions used to determine net periodic benefit expense were:

Included in AOCI at December 31, 2023 and 2022 were unrecognized costs for actuarial losses and prior service cost of $ 15.9 million ($ 11.0 million net of income taxes) and $ 23.4 million ($ 15.9 million net of income taxes), respectively, that have not yet been recognized in net periodic benefit cost.

The unrecognized costs for actuarial gains and losses and prior service cost included in AOCI and expected to be recognized in net periodic benefit cost in 2024 is $ 1.0 million.

Weighted average assumptions:

Year Ended December 31,

11 unchanged sentences

Experience gains and losses and the effects of changes in actuarial assumptions are generally amortized over a period no longer than the expected average future service of active employees.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

Our funding policy is to contribute amounts sufficient to meet minimum funding requirements in accordance with the applicable employee benefit and tax laws that the plans are subject to, plus such additional amounts as we may determine to be appropriate.

1 unchanged sentence

We do not expect the contributions for 2024 to differ materially from the 2023 contributions.

The change in benefit obligation and fair value of plan assets of the defined benefit pension plans were (in millions):

Change in benefit obligation and fair value of plan assets:

Benefit Obligation:

14 unchanged sentences

December 31 $ 45.5 $ 44.0

The funded status and balance sheet classification of the defined benefit pension plans were (in millions):

Funded status and balance sheet classification:

Funded Status $ ( 178.8 ) $ ( 184.6 )

3 unchanged sentences

$ ( 178.8 ) $ ( 184.6 )

OMNICOM GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

At December 31, 2023 and 2022, the accumulated benefit obligation for our defined benefit pension plans was $ 179.5 million and $ 181.4 million, respectively.

Plans with benefit obligations in excess of plan assets were (in millions):

Plans with benefit obligations in excess of plan assets:

Benefit obligation $ ( 215.5 ) $ ( 221.2 )

1 unchanged sentence

$ ( 180.8 ) $ ( 187.0 )

The weighted average assumptions used to determine the benefit obligation were:

Weighted average assumptions:

Discount rate 4.6 % 4.4 %

Compensation increases 3.5 % 3.5 %

At December 31, 2022, the estimated benefits expected to be paid over the next 10 years are (in millions):

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

At December 31, 2023, the estimated benefits expected to be paid over the next 10 years:

2029 - 2033 89.6

2 unchanged sentences

Our postemployment arrangements are unfunded, and benefits are paid when due.

The components of net periodic benefit expense were (in millions):

Net periodic benefit expense:

Year Ended December 31,

4 unchanged sentences

Amortization of actuarial loss — 2.5 3.9

$ 13.4 $ 14.9 $ 14.4

Included in accumulated other comprehensive income at December 31, 2022 and 2021 were unrecognized costs for actuarial losses and prior service cost of $ 31.6 million ($ 21.9 million net of income taxes) and $ 56.7 million ($ 39.5 million net of income taxes), respectively, that have not yet been recognized in the net periodic benefit cost.

The weighted average assumptions used to determine net periodic benefit expense were:

Total Net Periodic Benefit Expense $ 12.9 $ 13.4 $ 14.9

Included in AOCI at December 31, 2023 and 2022 were unrecognized costs for actuarial losses and prior service cost of $ 41.1 million ($ 28.8 million net of income taxes) and $ 31.6 million ($ 21.9 million net of income taxes), respectively, that have not yet been recognized in the net periodic benefit cost.

The unrecognized costs for actuarial gains and losses and prior service cost included in AOCI and expected to be recognized in net periodic benefit cost in 2024 is $ 3.8 million.

Weighted average assumptions:

Year Ended December 31,

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Experience gains and losses and effects of changes in actuarial assumptions are amortized over a period no longer than the expected average future service of active employees.

OMNICOM GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The benefit obligation and balance sheet classification at December 31, 2022 and 2021, were (in millions):

Benefit obligation and balance sheet classification:

January 1 $ 130.8 $ 153.0

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Long-term liabilities 130.3 120.3

$ 130.8 $ 153.0

The weighted average assumptions used to determine the benefit obligation were:

Total Benefit Obligation $ 142.2 $ 130.8

Weighted average assumptions:

Discount rate 4.6 % 4.8 %

Compensation increases 3.5 % 3.5 %

At December 31, 2022, the estimated benefits expected to be paid over the next 10 years are (in millions):

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

At December 31, 2023, the estimated benefits expected to be paid over the next 10 years:

2029 - 2033 52.9

Real Estate and Other Repositioning Costs

In connection with the transition to a flexible working environment, a hybrid model that allows for partial remote work, we took certain actions in the first quarter of 2023 to reduce and reposition our office lease portfolio.

In the second quarter of 2023, as a result of our continuing efforts to increase efficiencies and relevant skill sets to meet client demands, we incurred severance charges and other exit costs associated with rebalancing our workforce and consolidating operations in certain markets.

As a result, for the year ended December 31, 2023, operating expenses included $ 191.5 million ($ 145.5 million after tax), primarily related to non-cash impairment charges for the operating lease right-of-use, or ROU, assets, severance charges, and other exit costs.

All severance and other costs were paid during the year ended December 31, 2023.

Substantially all of the operating lease payments related to the ROU assets will be paid out over three years.

Dispositions of Subsidiaries

In April 2023, we disposed of certain research businesses included in our Execution & Support discipline.

As a result, we recorded a pretax gain of $ 78.8 million.

The disposition will not have a material impact on our ongoing results of operations or financial position.

Charges Arising from the Effects of the War in Ukraine

As discussed in Note 1, in the first quarter of 2022, we recorded pretax charges arising from the effects of the war in Ukraine of $ 113.4 million, which included cash charges of $ 47.6 million, primarily consisting of the loss on the disposition of the net investment in our Russian businesses, as well as impairment and other charges related to the suspension of operations in Ukraine.

In 2022, we disposed of our businesses in Russia.

In the first quarter of 2022, we recorded pretax charges of $ 113.4 million, which included cash charges of $ 47.6 million and primarily consisted of the loss on the disposition of our net investment in our Russian businesses and included charges related to the suspension of operations in Ukraine.

All the charges related to the disposition of our businesses in Russia have been paid as of December 31, 2022, and substantially all of our commitments related to the suspension of operations in Ukraine have been paid .

Supplemental Cash Flow Data

The change in operating capital was (in millions):

Change in operating capital:

Year Ended December 31,

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(Increase) decrease in accounts receivable $ ( 513.9 ) $ ( 129.1 ) $ ( 989.1 )

$ ( 129.1 ) $ ( 989.1 ) $ 141.2

(Increase) decrease in work in process and other current assets ( 121.8 ) ( 197.9 ) ( 281.7 )

2 unchanged sentences

current liabilities ( 399.6 ) ( 97.8 ) 338.8

( 97.8 ) 338.8 65.9

Change in other assets and liabilities, net ( 29.9 ) ( 69.1 ) 171.2

Increase (decrease) in operating capital $ ( 462.9 ) $ ( 844.0 ) $ 160.5

Supplemental financial information (in millions):

Supplemental financial information:

Year Ended December 31,

3 unchanged sentences

Interest paid for 2021 includes a $ 37.7 million cash payment on the early redemption of all the outstanding $1.25 billion principal amount of 3.625% Senior Notes due 2022.

OMNICOM GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Non-cash increase in lease liabilities (in millions):

(Dollars in tables in millions, except per share amounts.)

Non-cash increase in lease liabilities:

Year Ended December 31,

2 unchanged sentences

Noncontrolling Interests

Changes in the ownership interests in our less than 100% owned subsidiaries were (in millions):

Changes in the ownership interests in our less than 100% owned subsidiaries:

Year Ended December 31,

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transfers (to) from noncontrolling interests $ 1,303.3 $ 1,299.4 $ 1,395.6

$ 1,299.4 $ 1,395.6 $ 951.2

Leases and Property and Equipment

The components of lease cost were (in millions):

Year Ended December 31,

3 unchanged sentences

Sublease income ( 3.7 ) ( 3.8 )

Total Operating Leases 244.9 266.0

Finance lease cost:

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Interest 7.4 5.7

Total Finance Leases 66.3 60.8

Total Lease Cost $ 311.2 $ 326.8

Future lease payments at December 31, 2022 are (in millions):

Future lease payments:

Operating Leases Finance Leases

8 unchanged sentences

Present Value of Lease Liabilities $ 1,070.3 $ 138.2

The balance sheet classification of our operating leases at December 31 was (in millions):

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

Balance sheet classification of operating leases:

Operating Lease ROU Assets $ 1,046.4 $ 1,165.0

2 unchanged sentences

Long-term liability - operating leases 853.0 900.0

$ 1,107.9 $ 1,177.2

OMNICOM GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Office and equipment operating leases at December 31, 2022 and 2021, had a weighted average remaining lease term of 6.9 and 7.5 years, respectively, and a weighted average discount rate of 3.4 % and 3.2 %, respectively.

Total Operating Lease Liability $ 1,070.3 $ 1,107.9

At December 31, 2023 and 2022, office space and equipment operating leases had a weighted average remaining lease term of 6.4 and 6.9 years, respectively, and a weighted average discount rate of 3.7 % and 3.4 %, respectively.

Property and Equipment

Property and equipment at December 31 were (in millions):

Property and equipment:

Property and equipment - owned $ 1,620.9 $ 1,684.6

Equipment under finance leases 404.4 383.0

2,067.6 2,157.8

Property and Equipment, Gross 2,025.3 2,067.6

Accumulated depreciation ( 1,150.4 ) ( 1,167.5 )

$ 900.1 $ 992.1

Finance leases at December 31, 2022 and 2021, had a weighted average remaining lease term of 3.1 years and 3.1 years, respectively, and a weighted average discount rate of 5.1 % and 4.3 %, respectively.

Property and Equipment, Net $ 874.9 $ 900.1

At December 31, 2023 and 2022, finance leases had a weighted average remaining lease term of 2.9 years and 3.1 years, respectively, and a weighted average discount rate of 6.6 % and 5.1 %, respectively.

Temporary Equity - Redeemable Noncontrolling Interests

Owners of noncontrolling equity interests in some of our subsidiaries have the right in certain circumstances to require us to purchase all or a portion of their equity interest at fair value as defined in the applicable agreements.

Owners of noncontrolling equity interests in certain of our subsidiaries have the right in certain circumstances to require us to purchase all or a portion of their equity interest at fair value as defined in the applicable agreements.

Assuming that the subsidiaries perform at their current and projected profit levels, at December 31, 2023, the aggregate estimated amount we could be required to pay in future periods is $ 414.6 million, of which $ 120.9 million is currently exercisable by the holders.

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In the ordinary course of business, we are involved in various legal proceedings.

We do not expect that these proceedings will have a material adverse effect on our results of operations or financial position.

We do not expect that these proceedings will have a material adverse effect on our business, results of operations or financial position.

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss), net of income taxes were (in millions):

Hedge Defined Benefit Pension Plans and Postemployment Arrangements

Foreign Currency Translation

Changes in AOCI, net of income taxes:

Hedge Defined Benefit Pension Plans and Postemployment Arrangements Foreign Currency Translation Total

January 1, 2022 $ ( 16.1 ) $ ( 90.4 ) $ ( 1,145.8 ) $ ( 1,252.3 )

5 unchanged sentences

December 31, 2023 $ ( 8.1 ) $ ( 42.7 ) $ ( 1,286.8 ) $ ( 1,337.6 )

OMNICOM GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Financial assets and liabilities measured at fair value on a recurring basis were (in millions):

(Dollars in tables in millions, except per share amounts.)

Financial assets and liabilities measured at fair value on a recurring basis:

December 31, 2023 Level 1 Level 2 Level 3 Total

Cash and cash equivalents $ 4,432.0 $ 4,432.0

Short-term investments $ 60.7 60.7

Marketable equity securities 0.9 0.9

Foreign currency derivatives $ 0.1 $ 0.1

Cross currency swaps - net investment hedge $ 6.6 $ 6.6

2 unchanged sentences

Cash and cash equivalents $ 4,281.8 $ 4,281.8

Short-term investments $ 60.7 60.7

Marketable equity securities 0.9 0.9

Foreign currency derivatives $ 0.1 $ 0.1

Foreign currency derivatives 0.1 0.1

Cross currency swaps - net investment hedge 16.5 16.5

Contingent purchase price obligations $ 115.0 115.0

Changes in contingent purchase price obligations were (in millions):

Changes in contingent purchase price obligations:

January 1 $ 115.0 $ 167.1

4 unchanged sentences

December 31 $ 229.5 $ 115.0

The carrying amount and fair value of our financial assets and liabilities were (in millions):

Carrying amount and fair value of our financial assets and liabilities:

Value Carrying

Cash and cash equivalents $ 4,432.0 $ 4,432.0 $ 4,281.8 $ 4,281.8

2 unchanged sentences

Non-marketable equity securities 6.7 6.7 5.6 5.6

Foreign currency derivatives — — 0.3 0.3

Short-term debt $ 10.9 $ 10.9 $ 16.9 $ 16.9

6 unchanged sentences

The fair value of long-term debt is based on quoted market prices.

OMNICOM GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

Derivative Instruments and Hedging Activities

We manage our exposure to foreign exchange rate risk and interest rate risk through various strategies, including the use of derivative financial instruments.

We use forward foreign exchange contracts as economic hedges to manage the cash flow volatility arising from foreign exchange rate fluctuations.

We use net investment hedges to manage the volatility of foreign exchange rates on the investment in our foreign subsidiaries.

We may use forward foreign exchange contracts as economic hedges to manage the cash flow volatility arising from foreign exchange rate fluctuations related to foreign currency transactions.

We do not use derivatives for trading or speculative purposes.

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In these instances, amounts are either promptly settled or hedged with forward foreign exchange contracts.

To manage this risk, we had outstanding forward foreign exchange contracts with an aggregate notional amount of $ 40.3 million and $ 77.3 million at December 31, 2022 and 2021, respectively.

To manage this risk, at December 31, 2022, we had outstanding forward foreign exchange contracts with an aggregate notional amount of $ 40.3 million.

There were no outstanding forward foreign exchange contracts at December 31, 2023.

Foreign currency derivatives are designated as fair value hedges;

2 unchanged sentences

The terms of our forward foreign exchange contracts are generally less than 90 days.

In 2022, we entered into fixed-to-fixed cross currency swaps with a notional value of $ 150 million to hedge a portion of the net investment in our Japanese subsidiaries against volatility in the Yen/U.S.

We have fixed-to-fixed cross currency swaps with a notional value of $ 150 million that hedge a portion of the net investment in our Japanese subsidiaries against volatility in the Yen/U.S.

Dollar exchange rate.

These swaps are designated and qualify as a hedge of a net investment in a foreign subsidiary and are scheduled to mature in 2025 and 2029.

Changes in the fair value of the swaps are recognized in foreign currency translation and are reported in accumulated other comprehensive income (loss), or AOCI.

The swaps are designated and qualify as a hedge of a net investment in a foreign subsidiary and are scheduled to mature in 2025 and 2029.

Changes in the fair value of the swaps are recognized in foreign currency translation and are reported in AOCI.

Any gain or loss will remain in AOCI until the complete or substantially complete liquidation of our investment in the underlying operations.

1 unchanged sentence

We receive net fixed U.S.

Dollar interest payments, and in 2022, we recorded $ 1.2 million as a reduction of interest expense.

At December 31, 2022, the liability for the swap fair value was $ 16.5 million and is recorded in long-term liabilities.

Dollar interest payments from the swaps, and we recorded a reduction of interest expense of $ 6.6 million and $ 1.2 million in 2023 and 2022, respectively.

At December 31, 2023 and 2022, the liability for the swap fair value was $ 6.6 million and $ 16.5 million, respectively, and was recorded in long-term liabilities.

Interest Rate Risk

We may use interest rate swaps to manage our interest cost and structure our long-term debt portfolio to achieve a mix of fixed rate and floating rate debt.

During 2022, there were no interest rate swaps and, at December 31, 2022, long-term debt consisted entirely of fixed-rate debt.

There were no interest rate swaps in 2023 and 2022.

Long-term debt at December 31, 2023 and 2022 consisted entirely of fixed-rate debt.

New Accounting Standards

On January 1, 2023, we adopted ASU 2021-08, Accounting for Contract Assets and Contract Liabilities From Contracts With Customers , or ASU 2021-08, that requires acquiring companies to apply ASC 606 to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination consistent with those recorded by the acquiring company.

Contracts with customers in the advertising and marketing business are typically short duration contracts.

To the extent we acquire companies in the advertising and marketing communications business, the adoption of this standard will not have a material impact on our results of operations or financial position.

On November 27, 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”), that requires disclosure of significant expenses that are regularly provided to the chief operating decision maker.

ASU 2023-07 is effective for annual periods beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

ASU 2023-07 requires retrospective application in the period of initial application.

We will apply ASU 2023-07 for annual periods beginning on January 1, 2024, and for interim periods beginning on January 1, 2025.

ASU 2023-07 affects financial statement disclosure only, and its adoption will not affect our results of operations or financial position.

On December 14, 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”), that requires, among other things, greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024.

We will apply ASU 2023-09 on January 1, 2025.

ASU 2023-09 affects financial statement disclosure only and its adoption will not affect our results of operations or financial position.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share amounts.)

Subsequent Events

We have evaluated events subsequent to the balance sheet date and determined there have not been any events that have occurred that would require adjustment to or disclosure in the consolidated financial statements.

As described in Note 5, on January 2, 2024 , we acquired Flywheel Digital, the digital commerce business of Ascential plc, for a net cash purchase price of approximately $ 845 million .

As described in Note 7, on January 3, 2024, we entered into a Term Loan Facility that provides for a delayed-draw term loan up to an aggregate principal amount of $ 600 million.

We have evaluated events subsequent to the balance sheet date and determined there have not been any other events that have occurred that would require adjustment to or disclosure in the consolidated financial statements.

OMNICOM GROUP INC.

15 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures