10-Q 1 omc-20210930.htm 10-Q omc-20210930
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
_________________________
Commission File Number: 1-10551

OMNICOM GROUP INC.
(Exact name of registrant as specified in its charter)
New York13-1514814
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)
280 Park Avenue, New York, NY
10017
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (212) 415-3600
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
____________________________________________________________
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolsName of each exchange on which registered
Common Stock, $0.15 Par ValueOMCNew York Stock Exchange
0.800% Senior Notes due 2027OMC/27New York Stock Exchange
1.400% Senior Notes due 2031OMC/31New York Stock Exchange
____________________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filer
Smaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No
_________________________
As of October 13, 2021, there were 212,558,522 shares of Omnicom Group Inc. Common Stock outstanding.



OMNICOM GROUP INC.
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2021
TABLE OF CONTENTS
PART I.FINANCIAL INFORMATIONPage
Item 1. 
 
Consolidated Balance Sheets - September 30, 2021 and December 31, 2020
1
 
Consolidated Statements of Income - Three and Nine Months Ended September 30, 2021 and 2020
 
Consolidated Statements of Comprehensive Income - Three and Nine Months Ended
     September 30, 2021 and 2020
Consolidated Statements of Equity - Three and Nine Months Ended September 30, 2021 and 2020
 
Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2021 and 2020
 
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
Item 4.
Controls and Procedures
PART II.OTHER INFORMATION 
Item 1.
Legal Proceedings
Item 1A.
Risk Factors
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
Item 6.
Exhibits
SIGNATURES
FORWARD-LOOKING STATEMENTS
Certain statements in this Quarterly Report on Form 10-Q constitute forward-looking statements, including statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, from time to time, the Company or its representatives have made, or may make, forward-looking statements, orally or in writing. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, based on current beliefs of the Company’s management as well as assumptions made by, and information currently available to, the Company’s management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “should,” “would,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible”, “potential,” “predict,” “project” or similar words, phrases or expressions. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company’s control. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include: the impact of the COVID-19 pandemic, international, national or local economic conditions that could adversely affect the Company or its clients; losses on media purchases and production costs incurred on behalf of clients; reductions in client spending, a slowdown in client payments and a deterioration in the credit markets; the ability to attract new clients and retain existing clients in the manner anticipated; changes in client advertising, marketing and corporate communications requirements; failure to manage potential conflicts of interest between or among clients; unanticipated changes relating to competitive factors in the advertising, marketing and corporate communications industries; the ability to hire and retain key personnel; currency exchange rate fluctuations; reliance on information technology systems; changes in legislation or governmental regulations affecting the Company or its clients; risks associated with assumptions the Company makes in connection with its critical accounting estimates and legal proceedings; and the Company’s international operations, which are subject to the risks of currency repatriation restrictions, social or political conditions and regulatory actions. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that may affect the Company’s business, including those described in Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2020 and in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements.
i



PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
OMNICOM GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions)
September 30, 2021December 31, 2020
(Unaudited)
ASSETS
Current Assets:  
Cash and cash equivalents$4,431.2 $5,600.5 
Accounts receivable, net of allowance for doubtful accounts of $20.8 and $30.4
7,186.2 7,813.4 
Work in process1,249.6 1,101.2 
Other current assets896.0 1,075.0 
Total Current Assets13,763.0 15,590.1 
Property and Equipment at cost, less accumulated depreciation of $1,169.1 and $1,156.7
542.8 585.2 
Operating Lease Right-Of-Use Assets1,100.1 1,223.4 
Equity Method Investments77.8 85.3 
Goodwill9,601.5 9,609.7 
Intangible Assets, net of accumulated amortization of $844.4 and $817.2
278.1 298.5 
Other Assets217.5 255.0 
TOTAL ASSETS$25,580.8 $27,647.2 
LIABILITIES AND EQUITY
Current Liabilities:  
Accounts payable$9,953.8 $11,513.0 
Customer advances1,325.8 1,361.3 
Short-term debt10.2 3.9 
Taxes payable214.9 244.5 
Other current liabilities2,320.5 2,402.4 
Total Current Liabilities13,825.2 15,525.1 
Long-Term Liabilities992.8 970.7 
Long-Term Liability - Operating Leases991.0 1,114.0 
Long-Term Debt5,271.7 5,807.3 
Deferred Tax Liabilities468.3 443.5 
Commitments and Contingent Liabilities (Note 12)
Temporary Equity - Redeemable Noncontrolling Interests280.0 209.7 
Equity:  
Shareholders’ Equity:  
Preferred stock  
Common stock44.6 44.6 
Additional paid-in capital708.6 747.8 
Retained earnings8,730.0 8,190.6 
Accumulated other comprehensive income (loss)(1,307.9)(1,213.8)
Treasury stock, at cost(4,896.3)(4,684.8)
Total Shareholders’ Equity3,279.0 3,084.4 
Noncontrolling interests472.8 492.5 
Total Equity3,751.8 3,576.9 
TOTAL LIABILITIES AND EQUITY$25,580.8 $27,647.2 



The accompanying notes to the consolidated financial statements are an integral part of these statements.
1



OMNICOM GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In millions, except per share amounts)
Three Months Ended September 30,
Nine Months Ended September 30,
2021202020212020
Revenue$3,435.0 $3,206.5 $10,433.6 $9,414.1 
Operating Expenses:
   Salary and service costs2,461.8 2,287.1 7,609.9 6,851.5 
   Occupancy and other costs285.5 273.1 871.0 872.6 
Gain on disposition of subsidiary  (50.5) 
COVID-19 repositioning costs   277.9 
Cost of services2,747.3 2,560.2 8,430.4 8,002.0 
   Selling, general and administrative expenses95.0 90.2 269.9 259.2 
   Depreciation and amortization51.1 54.7 157.9 168.8 
2,893.4 2,705.1 8,858.2 8,430.0 
Operating Profit541.6 501.4 1,575.4 984.1 
Interest Expense50.7 54.4 184.8 166.6 
Interest Income7.0 5.9 20.1 25.1 
Income Before Income Taxes and Income (Loss) From Equity
     Method Investments
497.9 452.9 1,410.7 842.6 
Income Tax Expense120.0 120.9 355.1 240.2 
Income (Loss) From Equity Method Investments2.2 2.9 2.1 (10.1)
Net Income380.1 334.9 1,057.7 592.3 
Net Income Attributed To Noncontrolling Interests24.5 21.6 66.1 45.0 
Net Income - Omnicom Group Inc.$355.6 $313.3 $991.6 $547.3 
Net Income Per Share - Omnicom Group Inc.:   
Basic$1.66 $1.45 $4.61 $2.54 
Diluted$1.65 $1.45 $4.58 $2.53 



















The accompanying notes to the consolidated financial statements are an integral part of these statements.
2



OMNICOM GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(In millions)
Three Months Ended September 30,
Nine Months Ended September 30,
2021202020212020
Net Income$380.1 $334.9 $1,057.7 $592.3 
Other Comprehensive Income (Loss):
Cash flow hedge:
Amortization of loss included in interest expense
1.3 1.3 4.2 4.1 
Income tax effect
(0.4)(0.4)(1.2)(1.2)
0.9 0.9 3.0 2.9 
Defined benefit pension plans and postemployment arrangements:
Amortization of prior service cost
1.1 1.2 3.6 3.7 
Amortization of actuarial losses
3.4 1.8 9.9 5.6 
Income tax effect
(1.7)(0.6)(5.1)(2.6)
2.8 2.4 8.4 6.7 
Foreign currency translation adjustment
(132.2)78.1 (121.1)(210.3)
Other Comprehensive Income (Loss)(128.5)81.4 (109.7)(200.7)
Comprehensive Income251.6 416.3 948.0 391.6 
Comprehensive Income Attributed To Noncontrolling Interests16.5 27.0 50.5 27.3 
Comprehensive Income - Omnicom Group Inc.$235.1 $389.3 $897.5 $364.3 


























The accompanying notes to the consolidated financial statements are an integral part of these statements.
3



OMNICOM GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
(In millions, except per share amounts)
Three Months Ended September 30,
Nine Months Ended September 30,
 2021202020212020
Common Stock, shares issued297.2 297.2 297.2 297.2 
Common Stock, par value$44.6 $44.6 $44.6 $44.6 
Additional Paid-in Capital:
Beginning Balance735.4 801.2 747.8 760.9 
Net change in noncontrolling interests0.3 0.5 26.2 10.4 
Change in temporary equity(6.0)(28.7)(73.0)(8.1)
Share-based compensation18.7 17.6 57.8 52.5 
Stock issued, share-based compensation(39.8)(48.8)(50.2)(73.9)
Ending Balance708.6 741.8 708.6 741.8 
Retained Earnings:
Beginning Balance8,523.7 7,759.3 8,190.6 7,806.3 
Net income355.6 313.3 991.6 547.3 
Common stock dividends declared
(149.3)(140.0)(452.2)(421.0)
Ending Balance8,730.0 7,932.6 8,730.0 7,932.6 
Accumulated Other Comprehensive Income (Loss):
Beginning Balance(1,187.5)(1,456.6)(1,213.8)(1,197.6)
Other comprehensive income (loss)(120.4)76.0 (94.1)(183.0)
Ending Balance(1,307.9)(1,380.6)(1,307.9)(1,380.6)
Treasury Stock:
Beginning Balance(4,767.4)(4,735.5)(4,684.8)(4,560.3)
Stock issued, share-based compensation42.2 49.8 61.7 79.8 
Common stock repurchased(171.1)(13.9)(273.2)(219.1)
Ending Balance(4,896.3)(4,699.6)(4,896.3)(4,699.6)
Shareholders’ Equity3,279.0 2,638.8 3,279.0 2,638.8 
Noncontrolling Interests:
Beginning Balance488.1 448.4 492.5 519.8 
Net income24.5 21.6 66.1 45.0 
Other comprehensive income (loss)(8.0)5.4 (15.6)(17.7)
Dividends to noncontrolling interests(31.2)(22.5)(69.8)(57.7)
Acquisition of noncontrolling interests(0.6)(0.5)(37.7)(37.0)
Increase in noncontrolling interests from business combinations  30.7 37.3 30.7 
Ending Balance472.8 483.1 472.8 483.1 
Total Equity$3,751.8 $3,121.9 $3,751.8 $3,121.9 
Dividends Declared Per Common Share$0.70 $0.65 $2.10 $1.95 





The accompanying notes to the consolidated financial statements are an integral part of these statements.
4



OMNICOM GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
Nine Months Ended September 30,
20212020
Cash Flows from Operating Activities:  
Net income$1,057.7 $592.3 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:  
Depreciation and amortization of right-of-use assets98.1 106.4 
Amortization of intangible assets59.8 62.4 
Amortization of net deferred gain on interest rate swaps(10.2)(6.8)
Share-based compensation57.8 52.5 
Gain on disposition of subsidiary(50.5) 
COVID-19 repositioning costs 277.9 
Other, net36.6 50.6 
Use of operating capital(1,010.7)(1,796.7)
Net Cash Provided By (Used In) Operating Activities238.6 (661.4)
Cash Flows from Investing Activities:  
Capital expenditures(42.6)(50.0)
Acquisition of businesses and interests in affiliates, net of cash acquired
(25.9)(65.4)
Proceeds from disposition of subsidiaries and other, net116.6 6.3 
Net Cash Provided By (Used In) Investing Activities48.1 (109.1)
Cash Flows from Financing Activities:  
Proceeds from borrowings791.7 1,186.6 
Repayment of debt(1,250.0)(600.0)
Change in short-term debt
6.7 13.7 
Dividends paid to common shareholders(443.0)(422.7)
Repurchases of common stock(273.2)(219.1)
Proceeds from stock plans8.5 3.1 
Acquisition of additional noncontrolling interests(6.3)(16.9)
Dividends paid to noncontrolling interest shareholders(69.8)(57.7)
Payment of contingent purchase price obligations(16.8)(25.4)
Other, net(86.2)(49.1)
Net Cash Used In Financing Activities(1,338.4)(187.5)
Effect of foreign exchange rate changes on cash and cash equivalents(117.6)(69.4)
Net Decrease in Cash and Cash Equivalents(1,169.3)(1,027.4)
Cash and Cash Equivalents at the Beginning of Period5,600.5 4,305.7 
Cash and Cash Equivalents at the End of Period$4,431.2 $3,278.3 











The accompanying notes to the consolidated financial statements are an integral part of these statements.
5



OMNICOM GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Presentation of Financial Statements
The terms “Omnicom,” “the Company,” “we,” “our” and “us” each refer to Omnicom Group Inc. and its subsidiaries, unless the context indicates otherwise. The accompanying unaudited consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP or GAAP, for interim financial information and Article 10 of Regulation S-X of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosure have been condensed or omitted.
In our opinion, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation, in all material respects, of the information contained herein. These unaudited consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020, or 2020 10-K. Results for the interim periods are not necessarily indicative of results that may be expected for the year.
Risks and Uncertainties - Ongoing Impact of the COVID-19 Pandemic on our Business
As the impact of the COVID-19 pandemic on the global economy continues to moderate, we experienced an improvement in our business in the third quarter of 2021 as compared to the third quarter of 2020. Revenue for the nine months ended September 30, 2021 increased $1,019.5 million, or 10.8%, compared to the nine months ended September 30, 2020. The increase in revenue primarily reflects increased client spending in all our disciplines and across all our geographic areas compared to the prior year period and the strengthening of most foreign currencies, primarily the British Pound and the Euro, against the U.S. Dollar. The increase in revenue period-over-period was partially offset by a reduction in acquisition revenue, net of disposition revenue reflecting the sale of our wholly owned subsidiary ICON International, or ICON, a specialty media business, in the second quarter of 2021.
Global economic conditions may continue to be volatile as long as the COVID-19 pandemic remains a public health threat, which could negatively impact our clients' spending plans. We expect global economic performance and the performance of our businesses to vary by geography and discipline until the impact of the COVID-19 pandemic on the global economy subsides.
Accounting Changes
On January 1, 2021, we adopted FASB ASU 2019-12, Income Taxes (Topic 740), or ASU 2019-12, which, among other things, amended the rules for recognizing deferred taxes for investments, performing intra-period tax allocations and calculating income taxes in interim periods and reduced complexity in certain areas, including the accounting for transactions that result in a step-up in the tax basis of goodwill and allocating taxes to members of a consolidated group. The adoption of ASU 2019-12 did not have a material effect on our results of operations and financial position.
2. Revenue
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. Our branded networks and agencies operate in all major markets and provide services in the following fundamental disciplines: advertising, customer relationship management, or CRM, public relations, and healthcare. Advertising includes creative services, as well as strategic media planning and buying and data analytics services. Public relations services include corporate communications, crisis management, public affairs and media and media relations services. Healthcare includes advertising and media services to global healthcare clients. In an effort to better capture the expanding scope of our services, effective January 1, 2021, we realigned the classification of certain services primarily within our CRM Consumer Experience discipline. As a result, our CRM discipline has been reclassified into four categories: CRM Precision Marketing, which includes our precision marketing and digital/direct marketing agencies; CRM Commerce and Brand Consulting that is primarily comprised of Omnicom Commerce Group, including our shopper marketing businesses, and our Brand Consulting agencies; CRM Experiential, which includes our experiential marketing agencies and events businesses; and CRM Execution & Support, which includes field marketing, merchandising and point of sale, as well as other specialized marketing and custom communications services. 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. Reclassifications have been made to the prior period revenue by discipline information to conform to the current period presentation.
6



Revenue by discipline was (in millions):
Three Months Ended September 30,
Nine Months Ended September 30,
2021202020212020
Advertising$1,820.6 $1,827.6 $5,838.8 $5,291.0 
CRM Precision Marketing309.4 237.1 872.4 683.1 
CRM Commerce and Brand Consulting231.3 194.2 667.4 602.8 
CRM Experiential132.7 88.1 345.1 297.9 
CRM Execution & Support258.8 235.5 756.3 702.0 
Public Relations359.4 325.6 1,022.8 957.4 
Healthcare322.8 298.4 930.8 879.9 
 $3,435.0 $3,206.5 $10,433.6 $9,414.1 
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 principal geographic markets was (in millions):
Three Months Ended September 30,
Nine Months Ended September 30,
2021202020212020
Americas:
North America$1,821.8 $1,854.7 $5,751.7 $5,516.0 
Latin America72.5 61.6 206.1 187.8 
EMEA:
Europe1,024.3 875.0 3,009.5 2,525.9 
Middle East and Africa58.1 45.2 160.6 135.3 
Asia-Pacific458.3 370.0 1,305.7 1,049.1 
$3,435.0 $3,206.5 $10,433.6 $9,414.1 
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. EMEA is comprised of Europe, the Middle East and Africa. 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 September 30, 2021 and 2020 was $1,705.2 million and $1,762.9 million, respectively, and revenue in the United States for the nine months ended September 30, 2021 and 2020 was $5,414.2 million and $5,244.7 million, respectively.
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):
September 30, 2021December 31, 2020September 30, 2020
Work in process:
   Contract assets and unbilled fees and costs$596.6 $501.1 $648.0 
   Media and production costs653.0 600.1 526.4 
$1,249.6 $1,101.2 $1,174.4 
Contract liabilities:
   Customer advances$1,325.8 $1,361.3 $1,129.5 
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. The contract liability primarily represents 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. No impairment losses to the contract assets were recorded in the three or nine months ended September 30, 2021 and 2020.

7



3. Net Income per Share
The computations of basic and diluted net income per share were (in millions, except per share amounts):
Three Months Ended September 30,
Nine Months Ended September 30,
2021202020212020
Net Income - Omnicom Group Inc.$355.6 $313.3 $991.6 $547.3 
Weighted Average Shares:   
Basic214.0 215.4 215.0 215.6 
Dilutive stock options and restricted shares1.4 0.4 1.4 0.6 
Diluted215.4 215.8 216.4 216.2 
Anti-dilutive stock options and restricted shares0.7 0.8 0.7 0.8 
Net Income per Share - Omnicom Group Inc.:   
Basic$1.66 $1.45 $4.61 $2.54 
Diluted$1.65 $1.45 $4.58 $2.53 
4. Goodwill and Intangible Assets
Goodwill and intangible assets were (in millions):
 September 30, 2021December 31, 2020
Gross
Carrying
Value
Accumulated
Amortization
Net
Carrying
Value
Gross
Carrying
Value
Accumulated
Amortization
Net
Carrying
Value
Goodwill$10,123.9 $(522.4)$9,601.5 $10,141.6 $(531.9)$9,609.7 
Intangible assets:      
Purchased and internally
developed software
$379.8 $(314.6)$65.2 $377.6 $(307.0)$70.6 
Customer related and other742.7 (529.8)212.9 738.1 (510.2)227.9 
 $1,122.5 $(844.4)$278.1 $1,115.7 $(817.2)$298.5 
Changes in goodwill were (in millions):
Nine Months Ended September 30,
20212020
January 1$9,609.7 $9,440.5 
Acquisitions6.9 46.1 
Noncontrolling interests in acquired businesses37.3 32.4 
Contingent purchase price obligations of acquired businesses88.0  
Dispositions(21.7)(3.3)
Foreign currency translation(118.7)(77.3)
September 30
$9,601.5 $9,438.4 
5. Debt
Credit Facilities
We maintain a $2.5 billion multi-currency revolving credit facility, or Credit Facility, that matures on February 14, 2025. Additionally, we have uncommitted credit lines aggregating $915.6 million and the ability to issue up to $2 billion of commercial paper. These facilities provide additional liquidity sources for operating capital and general corporate purposes. At September 30, 2021, there were no outstanding commercial paper issuances or borrowings under the Credit Facility or the uncommitted credit lines.
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. In October 2020, we amended the Credit Facility to increase the maximum Leverage Ratio to 4.0 times through December 31, 2021. At September 30, 2021, we were in compliance with this covenant as our Leverage Ratio was 2.2 times. The Credit Facility does not limit our ability to declare or pay dividends or repurchase our common stock.
8



Short-Term Debt
Short-term debt at September 30, 2021 and December 31, 2020 of $10.2 million and $3.9 million, respectively, represents 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.
Long-Term Debt
Long-term debt was (in millions):
September 30, 2021December 31, 2020
3.625% Senior Notes due 2022
$ $1,250.0 
3.65% Senior Notes due 2024
750.0 750.0 
3.60% Senior Notes due 2026
1,400.0 1,400.0 
€500 Million 0.80% Senior Notes due 2027
579.0 611.5 
2.45% Senior Notes due 2030
600.0 600.0 
4.20% Senior Notes due 2030
600.0 600.0 
€500 Million 1.40% Senior Notes due 2031
579.0 611.5 
2.60% Senior Notes due 2031
800.0  
 5,308.0 5,823.0 
Unamortized discount(8.6)(5.1)
Unamortized debt issuance costs(29.3)(27.0)
Unamortized deferred gain from settlement of interest rate swaps1.6 16.4 
Long-term debt$5,271.7 $5,807.3 
On May 3, 2021, we issued $800 million 2.60% Senior Notes due August 1, 2031, or 2031 Notes. The net proceeds from the issuance, after deducting the underwriting discount and offering expenses, were $791.7 million. The net proceeds plus cash on hand were used to redeem all the outstanding 3.625% Senior Notes due 2022, or 2022 Notes, in May 2021. In connection with the redemption of the 2022 Notes, we recorded a loss on extinguishment of $26.6 million in interest expense.
The 2.45% Senior Notes, the 4.20% Senior Notes and the 2.60% Senior Notes 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 and the 3.60% Senior Notes. These notes are a joint and several liability of Omnicom and OCI, and Omnicom unconditionally guarantees OCI’s obligations with respect to the notes. OCI provides funding for our operations by incurring debt and lending the proceeds to our operating subsidiaries. OCI’s assets primarily consist of cash and cash equivalents and intercompany loans made to our operating subsidiaries, and the related interest receivable. There are no restrictions on the ability of OCI or Omnicom to obtain funds from our subsidiaries through dividends, loans or advances. Such notes are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness.
Omnicom and OCI have, jointly and severally, fully and unconditionally guaranteed the obligations of Omnicom Finance Holdings plc, or OFHP, a U.K.-based wholly owned subsidiary of Omnicom, with respect to the Euro denominated notes due 2027 and 2031. OFHP’s assets consist of its investments in several wholly owned finance companies that function as treasury centers that provide funding for various operating companies in Europe, Brazil, Australia and other countries in the Asia-Pacific region. The finance companies’ assets consist of cash and cash equivalents and intercompany loans that they make or have made to the operating companies in their respective regions and the related interest receivable. There are no restrictions on the ability of Omnicom, OCI or OFHP to obtain funds from their subsidiaries through dividends, loans or advances. The Euro denominated notes and the related guarantees are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness of OFHP and each of Omnicom and OCI, respectively.
6. 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 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. During the second quarter of 2021, we reorganized the management of one of our agency networks, effectively combining certain practice areas into a new reporting unit that primarily comprises our Omnicom Public Relations Group practice area. As a result of the reorganization, the number of operating segments increased from five to six in 2021.
9



The agency networks' regional reporting units comprise three principal regions: the Americas, EMEA and Asia-Pacific. The regional reporting units monitor the performance and are responsible for the agencies in their region. 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):
AmericasEMEAAsia-Pacific
September 30, 2021   
Revenue - Three months ended$1,894.3 $1,082.4 $458.3 
Revenue - Nine months ended5,957.8 3,170.1 1,305.7 
Long-lived assets and goodwill7,567.2 2,991.1 686.1 
September 30, 2020
Revenue - Three months ended$1,916.3 $920.2 $370.0 
Revenue - Nine months ended5,703.8 2,661.2 1,049.1 
Long-lived assets and goodwill7,632.5 3,005.0 642.0 
7. Income Taxes
Our effective tax rate for the nine months ended September 30, 2021 decreased period-over-period to 25.2% from 28.5%. In the second quarter of 2021, we sold ICON International, or ICON, a wholly owned subsidiary. In connection with the sale, we recorded a pre-tax gain of $50.5 million. The lower effective tax rate for 2021 was predominantly the result of a nominal tax applied against the book gain on the sale of ICON resulting from excess tax over book basis. In addition, in the third quarter of 2021, income tax expense was reduced by $11.7 million, primarily from the favorable settlements of uncertain tax positions in certain jurisdictions. The effective tax rate for 2020 reflects an increase due to the non-deductibility in certain jurisdictions of a portion of the COVID-19 repositioning charges recorded in the second quarter of 2020.
At September 30, 2021, our unrecognized tax benefits were $174.6 million. Of this amount, approximately $166.9 million would affect our effective tax rate upon resolution of the uncertain tax positions.
8. Pension and Other Postemployment Benefits
Defined Benefit Pension Plans
The components of net periodic benefit expense were (in millions):
Nine Months Ended September 30,
20212020
Service cost$3.9 $5.6 
Interest cost2.7 5.0 
Expected return on plan assets(0.8)(0.7)
Amortization of prior service cost0.5 0.5 
Amortization of actuarial losses7.0 4.0 
 $13.3 $14.4 
We contributed $0.5 million and $0.9 million to our defined benefit pension plans in the nine months ended September 30, 2021 and 2020, respectively.
Postemployment Arrangements
The components of net periodic benefit expense were (in millions):
Nine Months Ended September 30,
20212020
Service cost$3.6 $3.5 
Interest cost1.6 2.6 
Amortization of prior service cost3.1 3.2 
Amortization of actuarial losses2.9 1.6 
 $11.2 $10.9 

10



9. Disposition of Subsidiary
In the second quarter of 2021, we sold ICON, a specialty media company, to ICON's management team. As a result, we recorded a pre-tax gain of $50.5 million from the sale. As discussed in Note 7, the after-tax gain approximated the pre-tax gain. The disposition of ICON will not have a material impact on our ongoing results of operations or financial position.
10. COVID-19 Repositioning Costs
In the second quarter of 2020, in response to the COVID-19 pandemic, we incurred $277.9 million of repositioning costs to align our cost structure and reduce our workforce and facility requirements.
At September 30, 2021 the remaining liability for the COVID-19 repositioning costs was (in millions):
January 1, 2021$83.8 
Payments(34.6)
September 30, 2021$49.2 
We expect that the liability for the COVID-19 repositioning costs will be substantially paid by the end of 2021.
11. Supplemental Cash Flow Data
The change in operating capital was (in millions):
Nine Months Ended September 30,
20212020
(Increase) decrease in accounts receivable$343.6 $1,435.6 
(Increase) decrease in work in process and other current assets(308.6)121.0 
Increase (decrease) in accounts payable(1,071.3)(3,110.7)
Increase (decrease) in customer advances, taxes payable and other current liabilities(86.2)(216.8)
Change in other assets and liabilities, net111.8 (25.8)
Increase (decrease)$(1,010.7)$(1,796.7)
Income taxes paid$320.2 $249.4 
Interest paid$157.4 $116.5 
Supplemental non-cash information related to leases was (in millions):
Nine Months Ended September 30,
20212020
Net increase in lease liability:
Operating leases$111.2 $114.7 
Finance leases$47.9 $23.5 

12. Commitments and Contingent Liabilities
In the ordinary course of business, we are involved in various legal proceedings. We do not presently expect that these proceedings will have a material adverse effect on our results of operations or financial position.
11



13. Accumulated Other Comprehensive Income (Loss)
Changes in accumulated other comprehensive income (loss), net of income taxes were (in millions):
Cash
Flow
Hedge
Defined Benefit Pension Plans and Postemployment ArrangementsForeign
Currency Translation
Total
Nine Months Ended September 30, 2021
January 1$(20.1)$(123.2)$(1,070.5)$(1,213.8)
Other comprehensive income (loss) before reclassifications
  (105.5)(105.5)
Reclassification from accumulated other comprehensive
   income (loss)
3.0 8.4  11.4 
September 30
$(17.1)$(114.8)$(1,176.0)$(1,307.9)
Nine Months Ended September 30, 2020
January 1$(24.0)$(112.1)$(1,061.5)$(1,197.6)
Other comprehensive income (loss) before reclassifications
  (192.6)(192.6)
Reclassification from accumulated other comprehensive
   income (loss)
2.9 6.7  9.6 
September 30
$(21.1)$(105.4)$(1,254.1)$(1,380.6)
14. Fair Value
Financial assets and liabilities measured at fair value on a recurring basis were (in millions):
September 30, 2021
Level 1Level 2Level 3Total
Assets:    
Cash and cash equivalents$4,431.2  $4,431.2 
Marketable equity investments1.2 1.2 
Foreign currency derivatives$0.1 0.1 
Liabilities:   
Foreign currency derivatives$0.3 $0.3 
Contingent purchase price obligations$146.6 146.6 
December 31, 2020
Level 1Level 2Level 3Total
Assets:    
Cash and cash equivalents$5,600.5  $5,600.5 
Marketable equity investments1.6  1.6 
Foreign currency derivative instruments$0.6 0.6 
Liabilities:
Foreign currency derivatives0.3 0.3 
Contingent purchase price obligations$71.9 71.9 
Changes in contingent purchase price obligations were (in millions):
Nine Months Ended September 30,
20212020
January 1$71.9 $107.7 
Acquisitions92.3 10.0 
Revaluation and interest0.7 2.0 
Payments(16.8)(25.4)
Foreign currency translation(1.5)1.0 
September 30
$146.6 $95.3 
12



The carrying amount and fair value of our financial assets and liabilities were (in millions):
 September 30, 2021December 31, 2020
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Assets:    
Cash and cash equivalents$4,431.2 $4,431.2 $5,600.5 $5,600.5 
Marketable equity securities1.2 1.2 1.6 1.6 
Non-marketable equity securities6.6 6.6 8.9 8.9 
Foreign currency derivatives0.1 0.1 0.6 0.6 
Liabilities:    
Short-term debt$10.2 $10.2 $3.9 $3.9 
Foreign currency derivatives0.3 0.3 0.3 0.3 
Contingent purchase price obligations146.6 146.6 71.9 71.9 
Long-term debt5,217.7 5,669.0 5,807.3 6,380.6 
The estimated fair value