OMC » Topics » OMNICOM GROUP INC. AND SUBSIDIARIES

These excerpts taken from the OMC 10-Q filed Apr 25, 2008.
OMNICOM GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except per share data)
(Unaudited)

  Three Months Ended March 31,
  2008
2007
REVENUE $3,195.4   $2,840.6  
OPERATING EXPENSES:        
         Salary and service costs 2,326.9   2,050.6  
         Office and general expenses 517.7   474.5  
 
 
 
  2,844.6   2,525.1  
 
 
 
OPERATING PROFIT 350.8   315.5  
         
NET INTEREST EXPENSE:        
         Interest expense 25.4   27.8  
         Interest income (14.4 ) (9.5 )
 
 
 
  11.0   18.3  
 
 
 
INCOME BEFORE INCOME TAXES 339.8   297.2  
INCOME TAXES 115.2   100.5  
 
 
 
INCOME AFTER INCOME TAXES 224.6   196.7  
EQUITY IN EARNINGS OF AFFILIATES 8.1   5.2  
MINORITY INTERESTS (24.0 ) (18.9 )
 
 
 
NET INCOME $  208.7   $  183.0  
 
 
 
 
NET INCOME PER COMMON SHARE:        
         Basic $    0.65   $    0.55  
         Diluted $    0.65   $    0.55  
 
DIVIDENDS DECLARED PER COMMON SHARE $  0.150   $  0.125  

OMNICOM GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions)
(Unaudited)

  Three Months Ended March 31,
 
 
2008
2007
 

Cash flows from operating activities:        
 Net income $     208.7   $  183.0  
         Adjustments to reconcile net income to net cash used in operating activities:        
         Depreciation and amortization of tangible assets 45.0   38.5  
         Amortization of intangible assets 12.2   9.3  
         Minority interests 24.0   18.9  
         Earnings of affiliates (in excess of) less than dividends received (0.7 ) 0.5  
         Provision for losses on accounts receivable 1.3   1.2  
         Amortization of stock-based compensation 15.2   18.4  
         Excess tax benefit on stock-based compensation (4.1 ) (9.6 )
         Changes in assets and liabilities providing (requiring) cash, net of acquisitions:        
                 Decrease in accounts receivable 587.6   362.7  
                 Increase in billable production orders in process (109.2 ) (75.4 )
                 Increase in prepaid expenses and other current assets (170.7 ) (76.5 )
                 Net change in other assets and liabilities (61.7 ) 21.8  
                 Increase (decrease) in advanced billings 83.1   (10.1 )
                 Net (decrease) increase in accrued and deferred taxes (10.7 ) 41.4  
                 Decrease in accounts payable (1,127.6 ) (870.4 )
 
 
 
                         Net cash used in operating activities (507.6 ) (346.3 )
 
 
 
 
Cash flows from investing activities:        
         Capital expenditures (42.2 ) (34.9 )
         Net payments for purchases of equity interests in subsidiaries and        
                 affiliates, net of cash acquired (89.0 ) (19.4 )
         Purchases of short-term investments (8.0 ) (19.5 )
         Proceeds from sales of short-term investments 4.3   172.0  
 
 
 
                         Net cash (used in) provided by investing activities (134.9 ) 98.2  
 
 
 
 
Cash flows from financing activities:        
         Increase in short-term borrowings 7.4   1.5  
         Dividends paid (49.1 ) (42.6 )
         Purchase of treasury shares (316.0 ) (451.8 )
         Proceeds from employee stock plans 33.2   48.2  
         Excess tax benefit on stock-based compensation 4.1   9.6  
         Other, net (20.1 ) (16.7 )
 
 
 
                         Net cash used in financing activities (340.5 ) (451.8 )
 
 
 
 
Effect of exchange rate changes on cash and cash equivalents 3.7   (11.3 )
 
 
 
                         Net decrease in cash and cash equivalents (979.3 ) (711.2 )
Cash and cash equivalents at beginning of period 1,793.2   1,739.5  
 
 
 
Cash and cash equivalents at end of period $     813.9   $1,028.3  
 
 
 
 
Supplemental disclosures:        
         Income taxes paid $     106.5   $     48.1  
         Interest paid $       12.5   $       0.6  

OMNICOM GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 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 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. Certain amounts in prior periods have been reclassified to conform to our current presentation. 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 consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2007 (the “2007 Form 10-K”).
 
2.      Earnings per Share
 
  Basic earnings per share is based upon the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed on the same basis, including, if dilutive, common share equivalents which include outstanding options and restricted shares.
 
  For purposes of computing diluted earnings per share, 2.3 million and 4.4 million common share equivalents were assumed to be outstanding for the three months ended March 31, 2008 and 2007, respectively. For the three months ended March 31, 2008, 4.7 million shares attributable to outstanding stock options were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.
 
  The number of shares used in our earnings per share computations were as follows (shares in millions):

  Three Months Ended March 31,
  2008
2007
Basic EPS Computation 318.6 331.1
Diluted EPS Computation 320.9 335.5

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EXCERPTS ON THIS PAGE:

10-Q (3 sections)
Apr 25, 2008
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