CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | ||
In Millions | Jun. 30, 2009
| Dec. 31, 2008
|
CURRENT ASSETS: | ||
Cash and cash equivalents | 399.9 | 1097.3 |
Short-term investments at market | 12 | 15.1 |
Accounts receivable, net of allowance for doubtful accounts of $58.9 and $59.9 | 4940.3 | 5775.5 |
Work in process | 614.1 | 672 |
Other current assets | 933.5 | 1,005 |
Total Current Assets | 6899.8 | 8564.9 |
PROPERTY, PLANT AND EQUIPMENT, at cost, less accumulated depreciation of $1,109.1 and $1,031.1 | 704.8 | 719.6 |
EQUITY METHOD INVESTMENTS | 315.2 | 297.3 |
GOODWILL | 7446.6 | 7220.2 |
INTANGIBLE ASSETS, net of accumulated amortization of $296.6 and $278.4 | 215 | 221 |
DEFERRED TAX ASSETS | 31.9 | 45.2 |
OTHER ASSETS | 272.1 | 250.2 |
TOTAL ASSETS | 15885.4 | 17318.4 |
CURRENT LIABILITIES: | ||
Accounts payable | 5893.5 | 6881.2 |
Customer advances | 934.3 | 1005.5 |
Current portion of long-term debt | 2.1 | 2.7 |
Short-term borrowings | 42 | 16.2 |
Taxes payable | 66.6 | 201.1 |
Other current liabilities | 1390.4 | 1647.5 |
Total Current Liabilities | 8328.9 | 9754.2 |
LONG-TERM DEBT | 1213.2 | 1012.8 |
CONVERTIBLE DEBT | 1200.3 | 2041.5 |
OTHER LONG-TERM LIABILITIES | 459.4 | 444.4 |
LONG-TERM DEFERRED TAX LIABILITIES | 402.8 | 312.1 |
COMMITMENTS AND CONTINGENCIES (see Note 11) | ||
REDEEMABLE EQUITY - NONCONTROLLING INTERESTS | 193.9 | 0 |
Shareholders' Equity: | ||
Preferred stock | 0 | 0 |
Common stock | 59.6 | 59.6 |
Additional paid-in capital | 1448.7 | 1,629 |
Retained earnings | 6,164 | 5859.6 |
Accumulated other comprehensive income (loss) | -32.9 | -247.3 |
Treasury stock, at cost | 3779.9 | 3778.1 |
Total shareholders' equity | 3859.5 | 3522.8 |
Noncontrolling Interests | 227.4 | 230.6 |
Total Equity | 4086.9 | 3753.4 |
TOTAL LIABILITIES AND EQUITY | 15885.4 | 17318.4 |
1_CONDENSED CONSOLIDATED BALANC
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | ||
In Millions | Jun. 30, 2009
| Dec. 31, 2008
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) [Abstract] | ||
Allowance for doubtful accounts | 58.9 | 59.9 |
Accumulated depreciation | 1109.1 | 1031.1 |
Accumulated amortization of intangible assets | 296.6 | 278.4 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) | ||||
In Millions | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
REVENUE | 2870.7 | 3476.9 | 5617.3 | 6672.3 |
OPERATING EXPENSES | 2472.6 | 2960.1 | 4936.8 | 5804.7 |
OPERATING INCOME | 398.1 | 516.8 | 680.5 | 867.6 |
INTEREST EXPENSE | 27.4 | 31.4 | 54.2 | 56.8 |
INTEREST INCOME | 5.5 | 12.7 | 10.9 | 27.1 |
INCOME BEFORE INCOME TAXES AND INCOME FROM EQUITY METHOD INVESTMENTS | 376.2 | 498.1 | 637.2 | 837.9 |
INCOME TAX EXPENSE | 129.7 | 167.2 | 218.4 | 282.4 |
INCOME FROM EQUITY METHOD INVESTMENTS | 7.3 | 11 | 13.2 | 19.1 |
NET INCOME | 253.8 | 341.9 | 432 | 574.6 |
LESS: NET INCOME ATTRIBUTED TO NONCONTROLLING INTERESTS | 20.4 | 34.9 | 34.1 | 59 |
NET INCOME - OMNICOM GROUP INC. | 233.4 | $307 | 397.9 | 515.6 |
NET INCOME PER COMMON SHARE - OMNICOM GROUP INC.: | ||||
Basic | 0.75 | 0.96 | 1.28 | 1.6 |
Diluted | 0.75 | 0.95 | 1.27 | 1.59 |
DIVIDENDS DECLARED PER COMMON SHARE | 0.15 | 0.15 | 0.3 | 0.3 |
2_CONDENSED CONSOLIDATED STATEM
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | ||
In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Cash flows from operating activities: | ||
NET INCOME | $432 | 574.6 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation | 87.2 | 90.9 |
Amortization of intangible assets | 26.5 | 24.8 |
Income from equity method of investments, net of dividends received | 3.2 | 6.5 |
Provision for doubtful accounts | 9.2 | 6.1 |
Share-based compensation | 35.7 | 27.8 |
Excess tax benefit from share-based compensation | 0 | 9.6 |
Decrease in operating capital | 478 | 799.6 |
Net cash provided by (used in) operating activities | 109.4 | -91.5 |
Cash flows from investing activities: | ||
Payments to acquire property, plant and equipment | -63.3 | -92.7 |
Payments to acquire businesses and interests in affiliates, net of cash acquired | (61) | -210.1 |
Payments to acquire short-term investments | -6.3 | -9.8 |
Proceeds from sale of short-term investments | 8.8 | 9.6 |
Net cash used in investing activities | -121.8 | (303) |
Cash flows from financing activities: | ||
Proceeds from short-term debt | 24.5 | 10.7 |
Proceeds from borrowings | 200.7 | 2.3 |
Repayments of convertible debt | (842) | 0 |
Payments of dividends | -93.5 | -97.3 |
Payments for repurchase of common stock | -8.6 | -407.8 |
Proceeds from stock plans | 6.1 | 63.7 |
Excess tax benefit on share-based compensation | 0 | 9.6 |
Other, net | -53.7 | (61) |
Net cash used in financing activities | -766.5 | -479.8 |
Effect of exchange rate changes on cash and cash equivalents | 81.5 | -3.1 |
Net decrease in cash and cash equivalents | -697.4 | -877.4 |
Cash and cash equivalents at beginning of period | 1097.3 | 1793.2 |
Cash and cash equivalents at end of period | 399.9 | 915.8 |
Basis of Presentation
Basis of Presentation | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The terms Omnicom, we, our and us each refer to Omnicom Group Inc. and our subsidiaries, unless the context indicates otherwise. The unaudited condensed consolidated financial statements were prepared pursuant to Securities and Exchange Commission (SEC) rules. Certain information and footnote disclosure required in financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP or GAAP) have been condensed or omitted pursuant to these rules. In January 2009, the SEC adopted a final rule requiring filers to adopt Extensible Business Reporting Language (XBRL) as the internet standard for providing financial information to the SEC. Under the rule, large accelerated filers are required to furnish their basic financial statements for the period ending after June 15, 2009 to the SEC in XBRL format. XBRL uses a standard taxonomy of predefined data labels for financial statement captions. We adapted our financial statement presentation to the current XBRL taxonomy. As a result, the titles of certain captions in our basic financial statements have changed and certain prior period amounts have been reclassified to conform to the current period presentation. In our opinion, the accompanying financial statements reflect all adjustments, consisting of normally recurring accruals, considered necessary for a fair presentation, in all material respects, of the information contained therein. Results of operations for the interim period are not necessarily indicative of results that may be expected for the year. These statements should be read in conjunction with our Annual Report on Form10-K for the year ended December 31, 2008 (the 2008 10-K) as revised by our Current Report on Form 8-K filed on June 24, 2009 (see Note 2, below). |
Retrospective Adoption of New A
Retrospective Adoption of New Accounting Standards and New Accounting Pronouncements | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Retrospective Adoption of New Accounting Standards and New Accounting Pronouncements [Abstract] | |
Retrospective Adoption of New Accounting Standards and New Accounting Pronouncements | 2. Retrospective Adoption of New Accounting Standards and New Accounting Pronouncements On June 24, 2009, we filed a Current Report on Form 8-K in which we made adjustments to our consolidated financial statements and related notes included in our 2008 10-K by retrospectively adopting the following new accounting pronouncements: Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements an amendment of ARB No. 51 (SFAS 160); FASB Staff Position (FSP) EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (FSP EITF 03-6-1); and FSP APB 14-1, Accounting for Convertible Debt That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (FSP APB 14-1). All periods and amounts presented in the consolidated financial statements and related notes included in our 2008 10-K have been retrospectively adjusted in accordance with these pronouncements. As a result of the adoption of SFAS 160, we reclassified $230.6 million of minority interest at December 31, 2008 to noncontrolling interests within the equity section of our condensed consolidated balance sheets. We also modified the format of our condensed consolidated statements of income and cash flows to conform to the disclosure requirements of SFAS 160. FSP EITF 03-6-1 provides that all outstanding unvested share-based payments that contain rights to non-forfeitable dividends participate in the undistributed earnings with the common shareholders and are therefore participating securities. Companies with participating securities are required to apply the two-class method in calculating basic and diluted earnings per share. On adoption of FSP 03-6-1, we retrospectively restated basic and diluted Net Income per Common Share Omnicom Group Inc. for each period presented. FSP APB 14-1 provides that issuers of instruments that fall within its scope should separately account for the liability and equity components of those instruments by allocating the proceeds at the date of issuance of the instrument between the liability component and the embedded conversion option (the equity component) by first determining the carrying amount of the liability. Our outstanding Convertible Notes came under the scope of FSP APB 14-1 when they were amended in 2004 to eliminate our right to settle a portion of the Convertible Notes in cash upon conversion. Each convertible note has substantive rights to unilaterally put the convertible notes for redemption on certain specified dates. To calculate the fair value of the liability, we estimated the expected life of each series of our convertible debt and computed the fair value of the liability excluding the embedded conversion option and giving effect to other substantive features, such as put and call options. Since our convertible debt was issued at par (no discount) and by its terms does not pay a coupon interest rate, the holder has no economic incentive to hold our convertible debt, and unless a non-contractual supplemental interest payment is offered by us, the holder would exercise his or her put right at the |
Net Income per Common Share - O
Net Income per Common Share - Omnicom Group Inc. | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Net Income per Common Share - Omnicom Group Inc. [Abstract] | |
Net Income per Common Share - Omnicom Group Inc. | 3. Net Income per Common Share - Omnicom Group Inc. Basic net income per common share - Omnicom Group Inc. is based upon the weighted average number of common shares outstanding during the period. Diluted net income per common share - Omnicom Group Inc. is computed on the same basis, including, if dilutive, common share equivalents which include outstanding options and restricted shares. As discussed in Note 2, we retrospectively adopted FSP EITF 03-6-1. FSP EITF 03-6-1 requires retrospective application to all prior period net income per common share calculations. FSP EITF 03-6-1 provides that all outstanding unvested share-based payments that contain rights to non-forfeitable dividends participate in the undistributed earnings with the common shareholders and are therefore participating securities. Companies with participating securities are required to apply the two-class method in calculating basic and diluted net income per common share. Our restricted stock awards are considered participating securities because they receive non-forfeitable dividends at the same rate as our common stock. In accordance with EITF 03-6-1, the computation of basic and diluted net income per common share is reduced for a presumed hypothetical distribution of earnings to the holders of our unvested restricted stock. The effect of applying FSP EITF 03-6-1 reduced the fully diluted net income per common share - Omnicom Group Inc. for the six months ended June 30, 2008 to $1.59 from $1.61 and for the three months ended June 30, 2008 to $0.95 from $0.96. The computations of basic and diluted net income per common share - Omnicom Group Inc. were (in millions, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2009 2008 2009 2008 Earnings Available for Common Shares: Net income - Omnicom Group Inc. $ 233.4 $ 307.0 $ 397.9 $ 515.6 Earnings allocated to participating securities (2.6 ) (3.1 ) (4.8 ) (5.7 ) Earnings available for common shares $ 230.8 $ 303.9 $ 393.1 $ 509.9 Weighted Average Shares: Basic 308.1 317.5 307.8 317.9 Diluted 308.6 319.6 308.5 319.8 Net Income per Common Share - Omnicom Group Inc.: Basic $ 0.75 $ 0.96 $ 1.28 $ 1.60 Diluted 0.75 0.95 1.27 1.59 For purposes of computing diluted net income per common share - Omnicom Group Inc., 0.5 million and 2.1 million common share equivalents were assumed to be outstanding for the three months ended June 30, 2009 and 2008, respectively and 0.7 million and 1.9 million common share equivalents were assumed to be outstanding for the six months ended June 30, 2009 and 2008, respectively. For the three months ended June 30, 2009, 18.7 million shares attributed to outstanding |
Comprehensive Income
Comprehensive Income | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Comprehensive Income [Abstract] | |
Comprehensive Income | 4. Comprehensive Income Total comprehensive income and its components were (dollars in millions): Three Months Ended June 30, Six Months Ended June 30, 2009 2008 2009 2008 Net Income $ 253.8 $ 341.9 $ 432.0 $ 574.6 Foreign currency translation adjustment, net of income taxes of $183.0 and $7.1 for the three months and $113.5 and $44.8 for the six months ended June 30, 2009 and 2008, respectively 339.8 13.1 210.6 83.1 Financial instruments, including unrealized gain (loss) on available-for-sale securities, net of income taxes of $1.8 million for the three months ended June 30, 2009 and $3.5 and $(3.6) for the six months ended June 30, 2009 and 2008, respectively 2.6 0.1 5.2 (5.4 ) Defined benefit plans and postemployment arrangements adjustment, net of income taxes of $0.5 and $0.3 for the three months and $0.9 and $0.8 for the six months ended June 30, 2009 and 2008, respectively 0.8 0.6 1.5 1.2 Comprehensive income 597.0 355.7 649.3 653.5 Less: comprehensive income attributed to noncontrolling interests 33.5 33.6 37.1 70.5 Comprehensive income - Omnicom Group Inc. $ 563.5 $ 322.1 $ 612.2 $ 583.0 |
Debt
Debt | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Debt [Abstract] | |
Debt | 5. Debt Short-Term Borrowings: Short-term borrowings of $42.0 million at June 30, 2009 are primarily comprised of bank overdrafts of our international subsidiaries. The bank overdrafts are treated as unsecured loans pursuant to our bank agreements. At December 31, 2008, short-term borrowings were $16.2 million. Lines of Credit: We have a $2.5 billion credit facility expiring on June 23, 2011. We have the ability to classify borrowings under this facility as long-term debt. Our credit facility provides back- up liquidity in the event that any of our convertible notes are put back to us, as well as support for our commercial paper. At June 30, 2009, there were $200.0 million of borrowings outstanding under this facility. This amount is included in long-term debt on our condensed consolidated balance sheet. The gross amount of borrowings and repayments under the credit facility during the first six months of 2009 was approximately $16 billion, with an average term of approximately 11 days. The gross amount of commercial paper issued and redeemed under our commercial paper program during the first six months of 2009 was approximately $5.7 billion, with an average term of approximately 4 days. Depending on market conditions at the time, we either issue commercial paper or borrow under our credit facility or on our uncommitted lines of credit to manage short-term cash requirements primarily related to changes in our day-to-day working capital requirements. Long-Term Debt and Convertible Debt: On February 9, 2009, holders of $841.2 million aggregate principal amount of our Liquid Yield Option Notes due February 7, 2031 (the 2031 Notes) put their notes to us for purchase at par and $5.8 million of the 2031 Notes remain outstanding. We borrowed $814.4 million under our credit facility and received $26.8 million from unaffiliated equity investors in a partnership we control to fund the purchase of the 2031 Notes. We repurchased and retired $295.2 million aggregate principal amount of the 2031 Notes that had been put. We loaned the partnership $493.4 million and contributed $25.8 million as our equity investment. The partnership used the proceeds from the loan which it combined with the total contributed equity to purchase the remaining $546.0 million aggregate principal amount of the 2031 Notes that were put. The partnership purchased the 2031 Notes intending to sell such notes back into the marketplace over the next 12 months if market conditions warrant. The partnership is consolidated in accordance with Accounting Research Bulletin No. 51, Consolidated Financial Statements, as amended, and FASB Interpretation No. 46 (R), Consolidation of Variable Interest Entities, and as a result, all of the 2031 Notes held by the partnership are eliminated in consolidation. On February 12, 2009, we paid a supplemental interest payment of $50.00 per $1,000 principal amount of notes to holders of our 2031 Notes. The partnership that financed the purchase of $546.0 million of our 2031 Notes on our behalf was paid a supplemental interest payment of $27.3 million and the other noteholders who did not put their notes were paid |
Segment Reporting
Segment Reporting | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Segment Reporting [Abstract] | |
Segment Reporting | 6. Segment Reporting Our wholly and partially owned agencies operate within the advertising, marketing and corporate communications services industry. These agencies are organized into agency networks, virtual client networks, regional reporting units and operating groups. Consistent with the fundamentals of our business strategy, our agencies serve similar clients, in similar industries and, in many cases, the same clients across a variety of geographic regions. In addition, our agency networks have similar economic characteristics and similar long-term operating margins, as the main economic components of each agency are the salary and service costs associated with providing professional services, the office and general costs associated with office space and occupancy, and the provision of technology requirements which are generally limited to personal computers, servers and off-the-shelf software. Therefore, given these similarities and in accordance with the provisions of Statement of Financial Accounting Standard (SFAS) No. 131, Disclosures about Segments of an Enterprise and Related Information, most specifically paragraph 17, we aggregate our operating segments, which are our five agency networks, into one reporting segment. A summary of our revenue and long-lived assets and goodwill by geographic area as of June 30, 2009 and 2008 is presented below (dollars in millions): Americas EMEA Asia/Australia 2009 Revenue-three months ended $ 1,685.4 $ 1,004.0 $ 181.3 Revenue-six months ended 3,366.1 1,906.4 344.8 Long-Lived Assets and Goodwill 5,525.1 2,502.4 123.9 2008 Revenue-three months ended $ 1,952.6 $ 1,304.0 $ 220.3 Revenue-six months ended 3,795.5 2,456.6 411.2 Long-Lived Assets and Goodwill 5,398.8 2,820.3 123.6 The Americas is composed of the U.S., Canada and Latin American countries. EMEA is composed of various Euro currency countries, the United Kingdom, the Middle-East and Africa and other European countries that have not adopted the European Union Monetary standard. Asia/Australia is composed of China, Japan, Korea, Singapore, India, Australia and other Asian countries. |
Share-Based Compensation Plans
Share-Based Compensation Plans | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Share-Based Compensation Plans [Absract] | |
Share-Based Compensation Plans | 7. Share-Based Compensation Plans Pre-tax share-based employee compensation expense for the six months ended June 30, 2009 and 2008 was $35.7 million and $27.8 million, respectively. On March 31, 2009, an additional 22,045,000 options were granted under the 2007 Incentive Award Plan, increasing our options outstanding to 44.2 million. The options were granted with an exercise price equal to the closing price on the date of grant of $23.40 and have a contractual life of 10 years. The fair value of the option grant was $3.51 as determined as of the date of the grant using the Black-Scholes option valuation model and will be amortized over the vesting period of 3 years. The Black-Scholes assumptions (without adjusting for the risk of forfeiture and lack of liquidity) were: Expected option lives 5.0 years Risk free interest rate 1.7 % Expected volatility 19.6 % Dividend yield 2.5 % |
Income Taxes
Income Taxes | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Income Taxes [Abstract] | |
Income Taxes | 8. Income Taxes At June 30, 2009, the total liability for uncertain tax positions recorded on our balance sheet and included in other long-term liabilities was $79.3 million. Of this amount, approximately $64.1 million would affect our effective tax rate upon resolution of the uncertain tax positions. During the second quarter, an uncertain tax position for a foreign subsidiary was resolved. This resolution, which we did not expect to occur until sometime in 2010 or 2011, resulted in an increase of $12.9 million in both income tax expense and our liability for uncertain tax positions, including interest. During the second quarter, in accordance with APB 23, Accounting for Income Taxes - Special Areas (APB 23), we recorded an increase in our deferred tax assets and a reduction in income tax expense of $11.0 million resulting from the recognition of income tax credits from a foreign jurisdiction. The Internal Revenue Service has completed its examination of our federal income tax returns through 2004 and has commenced an examination of our federal tax returns from 2005 through 2007. On February 17, 2009, The American Recovery and Reinvestment Act of 2009 (the Act) was signed into law. The Act provides an election where qualifying cancellation of indebtedness income can be deferred and included in taxable income ratably over the five taxable years beginning in 2014 and ending in 2018. During the first quarter of 2009 we retired $295.2 million of our 2031 Notes. The retirement of these 2031 Notes will result in a tax liability of approximately $73 million. This amount was previously recorded on our balance sheet in our deferred tax liabilities and in accordance with the Act, we expect to pay it during the deferral period beginning in 2014 through 2018. |
Pension and Other Postretiremen
Pension and Other Postretirement Plans | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Pension and Other Postretirement Plans [Abstract] | |
Pension and Other Postretirement Plans | 9. Pension and Other Postemployment Plans Defined Benefit Plans The components of net periodic benefit cost for the six months ended June 30, 2009 and 2008 were (dollars in millions): 2009 2008 Service cost $ 2.5 $ 3.3 Interest cost 2.8 3.0 Expected return on plan assets (1.5 ) (2.2 ) Amortization of prior service cost 1.3 1.1 Amortization of actuarial (gains) losses 0.6 0.5 Curtailments and settlements 1.4 Total $ 7.1 $ 5.7 We contributed approximately $2.1 million and $1.6 million to our defined benefit plans for the six months ended June 30, 2009 and 2008, respectively. Postemployment Arrangements The components of net periodic benefit cost for the six months ended June 30, 2009 and 2008 were (dollars in millions): 2009 2008 Service cost $ 0.9 $ 1.0 Interest cost 2.0 2.1 Expected return N/A N/A Amortization of prior service cost 0.3 0.2 Amortization of actuarial (gains) losses 0.4 0.3 Total $ 3.6 $ 3.6 |
Supplemental Financial Data
Supplemental Financial Data | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Supplemental Financial Data [Abstract] | |
Supplemental Financial Data | 10. Supplemental Financial Data The components of operating expenses for the three and six months ended June 30, 2009 and 2008 were (dollars in millions): Three Months Ended June 30, Six Months Ended June 30, 2009 2008 2009 2008 Salary and service costs $ 2,011.8 $ 2,416.3 $ 4,025.6 $ 4,743.2 Office and general expenses 460.8 543.8 911.2 1,061.5 Total operating expenses $ 2,472.6 $ 2,960.1 $ 4,936.8 $ 5,804.7 Supplemental cash flow data for the six months ended June 30, 2009 and 2008 were (dollars in millions): 2009 2008 Income taxes paid $ 168.6 $ 236.4 Interest paid $ 50.3 $ 53.9 |
Commitments and Contingencies
Commitments and Contingencies | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies Beginning on June 13, 2002, several putative class actions were filed against us and certain of our senior executives in the United States District Court for the Southern District of New York. The actions have since been consolidated under the caption In re Omnicom Group Inc. Securities Litigation, No. 02-CV-4483 (RCC), on behalf of a proposed class of purchasers of our common stock between February 20, 2001 and June 11, 2002. The consolidated complaint alleges, among other things, that our public filings and other public statements during that period contained false and misleading statements or omitted to state material information relating to (1) our calculation of the organic growth component of period-to-period revenue growth, (2) our valuation of and accounting for certain internet investments made by our Communicade Group, which we contributed to Seneca Investments LLC in 2001, and (3) the existence and amount of certain contingent future obligations in respect of acquisitions. The complaint seeks an unspecified amount of compensatory damages plus costs and attorneys fees. Defendants moved to dismiss the complaint and on March 28, 2005, the court dismissed portions (1) and (3) of the complaint detailed above. The courts decision denying the defendants motion to dismiss the remainder of the complaint did not address the ultimate merits of the case, but only the sufficiency of the pleading. Defendants have answered the complaint. Discovery concluded in the second quarter of 2007. On April 30, 2007, the court granted plaintiffs motion for class certification, certifying the class proposed by plaintiffs. In the third quarter of 2007 defendants filed a motion for summary judgment on plaintiffs remaining claim. On January 28, 2008, the court granted defendants motion in its entirety, dismissing all claims and directing the court to close the case. On February 4, 2008, the plaintiffs filed a notice of intent to appeal that decision to the United States Court of Appeals for the Second Circuit. The appeal has been fully briefed and oral argument before the Court of Appeals occurred on May 5, 2009. The defendants continue to believe that the allegations against them are baseless and intend to vigorously oppose plaintiffs appeal. Currently, we are unable to determine the outcome of the appeal and the effect on our financial position or results of operations. The outcome of any of these matters is inherently uncertain and may be affected by future events. Accordingly, there can be no assurance as to the ultimate effect of these matters. We are also involved from time to time in various legal proceedings in the ordinary course of business. We do not presently expect that these proceedings will have a material adverse effect on our consolidated financial position or results of operations. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | 12. Fair Value of Financial Instruments We apply the fair value measurement requirements of SFAS No.157, Fair Value Measurements (SFAS 157) for our financial assets and liabilities. SFAS 157 provides that the measurement of fair value requires the use of techniques based on observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. The inputs create the following fair value hierarchy. Level 1 - Quoted prices for identical instruments in active markets. Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations where inputs are observable or where significant value drivers are observable. Level 3 - Instruments where significant value drivers are unobservable to third parties. When available, we use quoted market prices to determine fair value and classify such items in Level 1. In some cases, we use quoted market prices for similar instruments in active markets and classify such items in Level 2. The following table presents certain information for our financial assets and liabilities that are measured at fair value on a recurring basis at June 30, 2009 (dollars in millions): Level 1 Level 2 Level 3 Total Assets: Available-for-sale securities $ 26.0 $ 26.0 Liabilities: Forward foreign exchange contracts $ (1.0 ) $ (1.0 ) Available-for-sale securities are included in other assets and forward foreign exchange contracts are included in other current liabilities on our condensed consolidated balance sheet at June 30, 2009. On January 1, 2009 as required, we adopted SFAS 157 for our nonfinancial assets and liabilities that are not required to be measured at fair value on a recurring basis. Our nonfinancial assets and liabilities include goodwill and our identifiable intangible assets. The adoption of SFAS 157 for our nonfinancial assets and liabilities did not have a significant effect on our results of operations or financial condition. The following table presents the carrying amounts and fair values of our financial instruments at June 30, 2009 (dollars in millions). Amounts in parentheses represent liabilities. Carrying Amount Fair Value Cash and cash equivalents $ 399.9 $ 399.9 Short-term investments 12.0 12.0 Available-for-sale securities 26.0 26.0 Cost method investments 31.6 31.6 Long-term debt and convertible debt (2,415.6 ) (2,397.0 ) Financial commitments: Forward foreign exchange contracts (1.0 ) (1.0 ) Guarantees (0.3 ) The following methods and assumptions were used to estimate the fair value of each class of financial instruments |
Subsequent Events
Subsequent Events | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events We have evaluated events subsequent to the balance sheet date through August 6, 2009, the filing date of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 and determined there have not been any events that have occurred that would require adjustment to our unaudited condensed consolidated financial statements. The following events occurred subsequent to the balance sheet date and have not been recognized in the financial statements. Debt Issuance On July 1, 2009, we issued $500 million principal amount of 6.25% Senior Notes due July 15, 2019. The proceeds from the issuance before deducting underwriting commissions and offering expenses were $496.7 million. The notes were issued by Omnicom Group Inc. and two of its wholly owned finance subsidiaries, Omnicom Capital Inc. and Omnicom Finance Inc., as co-obligors. The notes are senior unsecured notes that rank in equal right of payment with all existing and future unsecured indebtedness and as a joint and several liability of the issuer and the co-obligors. We plan to use the net proceeds to pay down borrowings under our credit facility and for general corporate purposes, which could include capital transactions, purchases of treasury shares, working capital expenditures, acquisitions or refinancing other debt. In connection with the issuance of the notes, we entered into a same-day forward treasury lock agreement to hedge the variability in the expected future cash flows attributable to the risk associated with a change in the designated benchmark treasury rate that was used to price the notes. This agreement was designated as a hedge for accounting purposes. In anticipation of pricing the notes on June 24, 2009, we entered into the hedge on that day. Simultaneously with the pricing of the notes, we terminated and settled the hedge and realized a $2.9 million loss that is included in comprehensive income for the three months ended June 30, 2009 and will be amortized over the term of the notes. 2032 Notes On July 29, 2009, we offered to pay a supplemental interest payment of $30.00 per $1,000 principal amount of notes to holders of our Liquid Yield Option Notes due July 31, 2032 (2032 Notes) who did not put their notes back to us. A total of $474.3 million of the 2032 Notes were put back to us for repurchase and a total of $252.7 million of our 2032 Notes remain outstanding. On August 6, 2009, we paid a supplemental interest payment of $7.6 million to noteholders who did not put their notes back to us. The supplemental interest payment will be amortized ratably over a twelve-month period to the next put date in accordance with Emerging Issues Task Force (EITF) No. 96-19, Debtors Accounting for a Modification or Exchange of Debt Instruments (EITF 96-19). |
Document Information
Document Information | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | 2009-06-30 |
Entity Information
Entity Information (USD $) | |
In Millions | 6 Months Ended
Jun. 30, 2009 |
Entity Information [Line Items] | |
Entity Registrant Name | OMNICOM GROUP INC. |
Entity Central Index Key | 0000029989 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Public Float | $9,810 |
Entity Listings [Line Items] | |
Entity Common Stock, Shares Outstanding | 310.8 |