Omnicom Reports First Quarter 2014 Results

Omnicom Group Inc. 
Three Months Ended March 31
(Unaudited)  
(Dollars in Millions, Except Per Share Data)

2014

2014

2013

Non-GAAP^(a)

Reported

Reported

Revenue

$ 3,502.2

$ 3,502.2

$ 3,398.9

EBITA ^{(a) (b)}

414.1

 (a) 

407.1

397.1

Operating income ^(a)

389.7

 (a) 

382.7

371.7

Income tax expense ^(a)

116.5

 (a) 

116.3

109.2

Net Income  -  Omnicom Group Inc.  ^(a)

212.3

 (a) 

205.5

205.1

Less: Net income allocated

to participating securities ^(a)

4.2

4.1

5.4

Net income available for common shares  ^(a)

$    208.1

 (a) 

$    201.4

$    199.7

Net income per common share  -  Omnicom Group Inc.

Diluted ^(a)

$      0.80

$      0.77

$      0.76

(a)

First quarter 2014 "Non-GAAP" figures exclude $7.0 million of pre-tax expenses incurred in connection with Omnicom's proposed merger with Publicis Groupe S.A., which are primarily comprised of professional fees.  The net impact of these items on net income available to common shareholders was $6.7 million.  The impact on diluted earnings per common share was $0.03 per common share during the period presented.  We believe that investors should consider these non-GAAP measures, as they are indicative of our ongoing performance and reflect how management evaluates our operational results.  See page 5 attached to this release for a reconciliation of this non-GAAP financial information to GAAP.

(b)

EBITA (defined as Earnings before interest, taxes and amortization of intangibles) is a non-GAAP measure.   We use EBITA as an additional operating performance measure, which excludes the non-cash amortization expense of acquired intangible assets. We believe that EBITA is a useful measure to evaluate the performance of our businesses.  Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP.  Non-GAAP financial measures reported by us may not be comparable to similarly titled amounts reported by other companies.

Omnicom Group Inc. 
Reconciliation of Results of Operations to 2014 Non-GAAP Financial Measures
Three Months Ended March 31
(Unaudited)  
(Dollars in Millions, Except Per Share Data)

2014

Merger

2014

Reported

Expenses

Non-GAAP

EBITA^{(a) (b)}

$    407.1

 (a) 

$        7.0

$    414.1

Operating income ^(a)

382.7

 (a) 

7.0

389.7

Income tax expense ^(a)

116.3

 (a) 

0.2

116.5

Net Income  -  Omnicom Group Inc.  ^(a)

$    205.5

 (a) 

$        6.8

$    212.3

Less: Net income allocated

to participating securities ^(a)

4.1

0.1

4.2

Net income available for common shares  ^(a)

$    201.4

 (a) 

$        6.7

$    208.1

Net income per common share  -  Omnicom Group Inc.

Diluted ^(a)

$      0.77

$      0.03

$      0.80

(a)

The above table reconciles our reported 2014 results to the "2014 Non GAAP" amounts, which are non-GAAP financial measures. These measures exclude expenses incurred in connection with Omnicom's proposed merger with Publicis Groupe, S.A., which are comprised primarily of professional fees.  We believe that investors should consider the "Non GAAP" measures as they are indicative of our ongoing performance and reflect how management evaluates our operational results. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP.  Non-GAAP financial measures reported by us may not be comparable to similarly titled amounts reported by other companies.

(b)

EBITA (defined as Earnings before interest, taxes and amortization of intangibles) is a non-GAAP measure.   We use EBITA as an additional operating performance measure, which excludes the non-cash amortization expense of acquired intangible assets. We believe that EBITA is a useful measure to evaluate the performance of our businesses.  Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP.  Non-GAAP financial measures reported by us may not be comparable to similarly titled amounts reported by other companies.

Omnicom Group Inc. 
Three Months Ended March 31
(Unaudited)  
(Dollars in Millions, Except Per Share Data)

2014

2013

Reported

Reported

Revenue

$     3,502.2

$     3,398.9

EBITA ^{(a) (b)} 

407.1

397.1

Less: Amortization of Intangibles

24.4

25.4

Operating Income

382.7

371.7

Net Interest Expense

39.0

40.9

Income before income taxes

343.7

330.8

Income tax expense

116.3

109.2

Income from equity method investments

0.6

3.2

Net income

228.0

224.8

Less: Net income allocated to noncontrolling interests

22.5

19.7

Net income -  Omnicom Group Inc.

205.5

205.1

Less: Net income allocated

to participating securities

4.1

5.4

 Net income available for common shares 

$        201.4

$        199.7

Net income per common share  -  Omnicom Group Inc.

Basic

$          0.78

$          0.76

Diluted

$          0.77

$          0.76

Weighted average shares (in millions)

Basic

259.1

261.0

Diluted

261.4

263.2

Dividend declared per common share

$          0.40

$          0.40

(a)

First quarter 2014 amounts include $7.0 million of pre-tax expenses incurred in connection with Omnicom's proposed merger with Publicis Groupe S.A., which are primarily comprised of professional fees.

(b)

EBITA (defined as Earnings before interest, taxes and amortization of intangibles) is a non-GAAP measure.  We use EBITA as an additional operating performance measure, which excludes the non-cash amortization expense of acquired intangible assets. We believe that EBITA is a useful measure to evaluate the performance of our businesses. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP. Non-GAAP financial measures reported by us may not be comparable to similarly titled amounts reported by other companies.