What changed in this filing

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Item 1. Financial Statements

2024-10-16 compared with 2024-07-17 · 80 added, 69 removed, 422 unchanged (26% of the section changed)

4 unchanged sentences

(In millions)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Current Assets:

43 unchanged sentences

(In millions, except per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

2024 2023 2024 2023

12 unchanged sentences

Interest Income 26.0 15.2 74.0 80.9

INCOME BEFORE INCOME TAXES AND INCOME FROM EQUITY METHOD INVESTMENTS 468.6 523.3 920.7 850.5

INCOME BEFORE INCOME TAXES AND INCOME FROM

EQUITY METHOD INVESTMENTS 559.7 522.5 1,480.4 1,373.0

Income Tax Expense 150.2 136.1 389.9 360.7

15 unchanged sentences

(In millions)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

2024 2023 2024 2023

9 unchanged sentences

Income tax effect ( 1.0 ) ( 0.9 ) ( 3.3 ) ( 1.7 )

Defined benefit pension plans and postemployment arrangements, net of tax 0.9 1.3 0.6 1.7

Defined benefit pension plans and postemployment

arrangements, net of tax 0.5 0.3 1.1 2.0

Foreign currency translation adjustment 180.2 ( 110.4 ) 62.0 ( 34.2 )

9 unchanged sentences

(In millions, except per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

2024 2023 2024 2023

37 unchanged sentences

(In millions)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

12 unchanged sentences

Acquisition of businesses and interests in affiliates, net of cash acquired ( 900.9 ) ( 80.6 )

Maturity of short-term investments — 60.8

Other, net 1.2 192.6

28 unchanged sentences

Risks and Uncertainties

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.

Global economic disruptions, 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.

3 unchanged sentences

Nature of our services

We provide an extensive range of advertising, marketing and corporate communications services through various client-centric networks that are organized to meet specific client objectives.

We provide data-inspired, creative marketing and sales solutions through various client-centric networks that are organized to meet specific client objectives.

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

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

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

Advertising & Media includes creative services across digital and traditional media, strategic media planning and buying, performance media, data analytics services, and Omnicom Production, a new practice area that brings together Omnicom's global production capabilities.

Precision Marketing includes digital and direct marketing, digital transformation consulting, e-commerce operations, media execution, market intelligence and data and analytics.

9 unchanged sentences

Revenue by discipline:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

8 unchanged sentences

Revenue by geographic market:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

8 unchanged sentences

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

Revenue in the United States for the three months ended June 30, 2024, and 2023 was $ 2,033.4 million and $ 1,850.6 million, respectively, and revenue in the United States for the six months ended June 30, 2024, and 2023 was $ 3,959.3 million and $ 3,662.8 million, respectively.

Revenue in the United States for the three months ended September 30, 2024, and 2023 was $ 2,039.7 million and $ 1,868.8 million, respectively, and revenue in the United States for the nine months ended September 30, 2024, and 2023 was $ 5,999.0 million and $ 5,531.6 million, respectively.

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.

June 30, 2024 December 31, 2023 June 30, 2023

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

September 30, 2024 December 31, 2023 September 30, 2023

Work in process:

3 unchanged sentences

Customer advances $ 1,303.2 $ 1,356.2 $ 1,192.9

There were no work in process impairment charges recorded in the six months ended June 30, 2024 and 2023.

There were no impairment charges recorded in work in process in the nine months ended September 30, 2024 and 2023.

Net Income per Share

Basic and diluted net income per share:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

10 unchanged sentences

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 .

The financial statements of Flywheel Digital are included in our consolidated financial statements as of and for the period ended June 30, 2024.

The acquisition of Flywheel Digital did not have a material effect on our financial position or results of operations in the three and six months ended June 30, 2024 and is not expected to do so for the remainder of the year.

The financial statements of Flywheel Digital are included in our consolidated financial statements as of and for the period ended September 30, 2024.

The acquisition of Flywheel Digital did not have a material effect on our financial position or results of operations in the three and nine months ended September 30, 2024 and is not expected to do so for the remainder of the year.

The principal tangible assets and liabilities acquired were net working capital, and the intangible assets acquired were primarily comprised of customer relationships, intellectual property, trade name and goodwill.

1 unchanged sentence

operations of Flywheel Digital to be tax deductible.

The allocation of the purchase price to the underlying assets is undergoing a formal valuation process and is substantially complete.

As a result, as of June 30, 2024, we estimated amortizable intangible assets to be $ 182.6 million.

The allocation of the purchase price to the underlying assets is substantially complete.

As a result, as of September 30, 2024, we estimated amortizable intangible assets to be $ 182.6 million.

We do not expect any changes arising from the completion of the purchase price allocation to be material to our financial position or results of operations.

1 unchanged sentence

Change in goodwill:

Six Months Ended June 30,

Nine Months Ended September 30,

January 1 $ 10,082.3 $ 9,734.3

5 unchanged sentences

$ 10,928.0 $ 9,889.4

The increase in goodwill during the six months ended June 30, 2024 is primarily attributable to the acquisition of Flywheel Digital.

There were no goodwill impairment losses recorded in the six months ended June 30, 2024 and 2023, and there are no accumulated goodwill impairment losses.

The increase in goodwill during the nine months ended September 30, 2024 is primarily attributable to the acquisition of Flywheel Digital.

There were no goodwill impairment charges recorded in the nine months ended September 30, 2024 and 2023, and there are no accumulated goodwill impairment charges.

Intangible assets:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Value Accumulated

2 unchanged sentences

Amortization Net

Acquired intangible assets and internally developed strategic platform assets

Acquired intangible assets and internally

developed strategic platform assets

$ 1,136.2 $ ( 629.4 ) $ 506.8 $ 902.6 $ ( 572.9 ) $ 329.7

Other purchased and internally developed software 291.4 ( 258.8 ) 32.6 327.9 ( 290.7 ) 37.2

Other purchased and internally

developed software 282.7 ( 250.1 ) 32.6 327.9 ( 290.7 ) 37.2

Total Intangible Assets $ 1,418.9 $ ( 879.5 ) $ 539.4 $ 1,230.5 $ ( 863.6 ) $ 366.9

Amortization of intangible assets:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Acquired intangible assets and internally developed strategic platform assets $ 21.5 $ 14.7 $ 43.0 $ 29.5

Acquired intangible assets and internally developed

strategic platform assets $ 22.2 $ 15.7 $ 65.2 $ 45.2

Other purchased and internally developed software 4.3 4.6 13.4 13.7

5 unchanged sentences

Our $ 2.5 billion unsecured multi-currency revolving credit facility, or Credit Facility, terminates on June 2, 2028 .

The $ 600 million Delayed Draw Term Loan Agreement, or Term Loan Facility automatically terminated on July 15, 2024 .

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

We can 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.

During the three months ended June 30, 2024, there were no drawings under the Credit Facility or the Term Loan Facility, and no commercial paper issuances.

In addition, certain of our international subsidiaries have uncommitted credit lines that are guaranteed by Omnicom, aggregating $ 510.3 million.

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

The Credit Facility has and Term Loan Facility had 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.

At June 30, 2024, we were in compliance with this covenant as our Leverage Ratio was 2.6 times.

The $ 600 million Delayed Draw Term Loan Agreement, or Term Loan Facility, automatically terminated on July 15, 2024 .

During the three months ended September 30, 2024, there were no drawings under the Credit Facility or the Term Loan Facility, and no commercial paper issuances.

The Credit Facility has 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.

At September 30, 2024, we were in compliance with this covenant as our Leverage Ratio was 2.8 times.

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

Short-Term Debt

Short-term debt of $ 15.1 million and $ 10.9 million at June 30, 2024 and December 31, 2023, respectively, represented bank overdrafts and short-term borrowings primarily of our international subsidiaries.

Short-term debt of $ 16.9 million and $ 10.9 million at September 30, 2024 and December 31, 2023, respectively, represented bank overdrafts and short-term borrowings primarily of our international subsidiaries.

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

1 unchanged sentence

Long-term debt:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

3.65 % Senior Notes due 2024

9 unchanged sentences

£ 325 million 2.25 % Senior Notes due 2033

5.30 % Senior Notes due 2034

Long-Term Debt, Gross 6,970.6 5,669.9

4 unchanged sentences

Long-Term Debt $ 6,180.1 $ 4,889.1

On March 6, 2024, Omnicom Finance Holdings plc, or OFH, a U.K.-based wholly owned subsidiary of Omnicom, issued € 600 million 3.70 % Senior Notes due 2032, or 2032 Notes.

On August 2, 2024, Omnicom issued $ 600 million 5.30 % Senior Notes due 2034, or 2034 Notes.

The net proceeds from the issuance after deducting the underwriting discount and offering expenses, were $ 592.4 million.

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.

The net proceeds from the issuance, along with available cash, will be used to fund the repayment of our $ 750 million 3.65 % Senior Notes due November 1, 2024.

On March 6, 2024, Omnicom Finance Holdings plc, or OFH, a U.K.-based wholly owned subsidiary of Omnicom, issued € 600 million 3.70 % Senior Notes due 2032, or 2032 Notes.

The net proceeds from the issuance, after deducting the underwriting discount and offering expenses, were $ 643.1 million and were used for general corporate purposes, including working capital expenditures, acquisitions and repurchases of our common stock.

The 2.45 % Senior Notes due 2030, 4.20 % Senior Notes due 2030, 2.60 % Senior Notes due 2031 and 5.30 % Senior Notes due 2034 are senior unsecured obligations of Omnicom that rank equal in right of payment with all existing and future unsecured senior indebtedness.

Omnicom and its wholly owned finance subsidiary, Omnicom Capital Inc., or OCI, are co-obligors under the 3.65 % Senior Notes due 2024 and the 3.60 % Senior Notes due 2026.

13 unchanged sentences

There are no restrictions on the ability of Omnicom or OCH to obtain funds from their subsidiaries through dividends, loans, or advances.

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.

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.

Segment Reporting

Our branded agency networks operate in the advertising, marketing and corporate communications services industry, and are organized into agency networks, virtual client networks, regional reporting units and operating groups or practice areas.

Our branded agency networks provide data-inspired, creative marketing and sales solutions, and are organized into agency networks, virtual client networks, regional reporting units and operating groups or practice areas.

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

7 unchanged sentences

Americas EMEA Asia-Pacific

June 30, 2024

September 30, 2024

Revenue - Three months ended

$ 2,253.7 $ 1,144.1 $ 484.8

Revenue - Six months ended

Revenue - Nine months ended

$ 6,645.9 $ 3,397.0 $ 1,324.0

Long-lived assets and goodwill $ 8,181.3 $ 3,933.0 $ 726.0

June 30, 2023

September 30, 2023

Revenue - Three months ended

$ 2,082.6 $ 1,068.4 $ 427.1

Revenue - Six months ended

Revenue - Nine months ended

$ 6,146.8 $ 3,213.4 $ 1,271.1

Long-lived assets and goodwill $ 7,742.2 $ 3,355.4 $ 695.4

Our effective tax rate for the six months ended June 30, 2024 decreased period-over-period to 26.0 % from 26.4 %.

The effective tax rate for six months ended June 30, 2024 includes the favorable impact from the resolution of certain non-U.S.

Our effective tax rate for the nine months ended September 30, 2024 was flat period-over-period at 26.3 %.

The effective tax rate for the nine months ended September 30, 2024 includes the favorable impact from the resolution of certain non-U.S.

tax positions of $ 7.5 million.

The effective tax rate for the six months ended June 30, 2023 includes an increase of approximately $ 10.7 million in income tax expense related to a lower tax benefit in certain jurisdictions for the real estate and other repositioning costs in the period and an increase in the U.K.

The effective tax rate for the nine months ended September 30, 2023 includes an increase of approximately $ 10.7 million in income tax expense related to a lower tax benefit in certain jurisdictions for the real estate and other repositioning costs in the period and an increase in the U.K.

statutory tax rate, partially offset by approximately $ 10.0 million of favorable impacts from the resolution of certain non-U.S.

6 unchanged sentences

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

At June 30, 2024, our unrecognized tax benefits were $ 176.7 million.

At September 30, 2024, our unrecognized tax benefits were $ 179.3 million.

Of this amount, approximately $ 172.7 million would affect our effective tax rate upon resolution of the uncertain tax positions.

3 unchanged sentences

Postemployment Arrangements

Six Months Ended June 30, Six Months Ended June 30,

Nine Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

5 unchanged sentences

Total net periodic benefit expense $ 7.3 $ 10.4 $ 10.2 $ 9.8

In the six months ended June 30, 2024 and 2023, we contributed $ 0.1 million and $ 0.3 million to our defined benefit pension plans, respectively.

In the nine months ended September 30, 2024 and 2023, we contributed $ 1.2 million and $ 0.3 million to our defined benefit pension plans, respectively.

Real Estate and Other Repositioning Costs

In connection with our strategic initiatives, for the three and six months ended June 30, 2024, operating expenses included $ 57.8 million ($ 42.9 million after-tax) in the second quarter of 2024 primarily reflecting severance actions related to ongoing efficiency initiatives including strategic agency consolidation in our smaller international markets and the launch of our centralized production strategy.

There were no significant real estate repositioning charges during the three and six months ended June 30, 2024.

In connection with our strategic initiatives, for the nine months ended September 30, 2024, operating expenses included $ 57.8 million ($ 42.9 million after-tax) in the second quarter of 2024, primarily reflecting severance actions related to ongoing efficiency initiatives including strategic agency consolidation in our smaller international markets and the launch of our centralized production strategy.

There were no real estate and other repositioning charges during the three months ended September 30, 2024.

In connection with the transition to a flexible working environment, a hybrid model which 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 three and six months ended June 30, 2023, operating expenses included $ 72.3 million ($ 54.5 million after-tax) primarily related to severance actions in the second quarter of 2023 and $ 191.5 million ($ 145.5 million after-tax), respectively, related to non-cash impairment charges for the operating lease right-of-use, or ROU, assets, severance charges, and other exit costs.

As a result, for the nine months ended September 30, 2023, operating expenses included $ 191.5 million ($ 145.5 million after-tax), related to non-cash impairment charges for the operating lease right-of-use, or ROU, assets, severance charges, and other exit costs.

There were no real estate and other repositioning charges during the three months ended September 30, 2023.

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

Disposition of Subsidiaries

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

As a result, for the three and six months ended June 30, 2023, we recorded a pretax gain of $ 78.8 million.

In April 2023, we disposed of certain research businesses included in our Execution & Support discipline for net proceeds of $ 180.5 million.

As a result, we recorded a pretax gain of $ 78.8 million in the second quarter of 2023.

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

1 unchanged sentence

Change in operating capital:

Six Months Ended June 30,

Nine Months Ended September 30,

(Increase) decrease in accounts receivable $ 383.4 $ 713.1

17 unchanged sentences

Currency Translation Total

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

January 1 $ ( 8.1 ) $ ( 42.7 ) $ ( 1,286.8 ) $ ( 1,337.6 )

3 unchanged sentences

$ ( 5.3 ) $ ( 41.6 ) $ ( 1,227.4 ) $ ( 1,274.3 )

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

January 1 $ ( 12.1 ) $ ( 41.3 ) $ ( 1,384.5 ) $ ( 1,437.9 )

10 unchanged sentences

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

1 unchanged sentence

Marketable equity securities 1.0 1.0 0.9 0.9

Cross currency swaps - net

investment hedge $ 11.5 11.5 $ — —

Foreign currency derivatives $ 0.3 0.3 $ — —

Cross currency swaps - net

2 unchanged sentences

Changes in contingent purchase price obligations:

Six Months Ended June 30,

Nine Months Ended September 30,

January 1 $ 229.5 $ 115.0

5 unchanged sentences

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Value Carrying

1 unchanged sentence

Marketable equity securities 1.0 1.0 0.9 0.9

Cross currency swaps - net investment hedge 11.5 11.5 — —

Non-marketable equity securities 11.2 11.2 6.7 6.7

Foreign currency derivatives 0.3 0.3 — —

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

2 unchanged sentences

Long-term debt 6,930.1 6,676.3 5,639.6 5,237.8

The estimated fair values of the cross-currency swaps are determined using model-derived valuations, taking into consideration foreign currency rates, interest rates, and counterparty credit risk.

The estimated fair value of the foreign currency derivatives and the cross-currency swaps are determined using model-derived valuations, taking into consideration foreign currency rates, interest rates, and counterparty credit risk.

The estimated fair value of the contingent purchase price obligations is calculated in accordance with the terms of each acquisition agreement and is discounted.

1 unchanged sentence

Subsequent Events

We have evaluated events subsequent to the balance sheet date and determined that there have not been any events that have occurred that would require additional adjustments to, or disclosures in, these consolidated financial statements.

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-Q

Item 1. Financial Statements