(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbols | Name of each exchange on which registered | ||||||
☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||||||||||||
Smaller reporting company | Emerging growth company |
Page | ||||||||
PART I | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 1B. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
PART II | ||||||||
Item 5. | ||||||||
Item 7. | ||||||||
Item 7A. | ||||||||
Item 8. | ||||||||
Item 9. | ||||||||
Item 9A. | ||||||||
Item 9B. | ||||||||
Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspection | |||||||
PART III | ||||||||
PART IV | ||||||||
Item 15. | ||||||||
advertising | investor relations | ||||||||||
branding | marketing research | ||||||||||
content marketing | media planning and buying | ||||||||||
corporate social responsibility consulting | merchandising and point of sale | ||||||||||
crisis communications | mobile marketing | ||||||||||
custom publishing | multi-cultural marketing | ||||||||||
data analytics | non-profit marketing | ||||||||||
database management | organizational communications | ||||||||||
digital/direct marketing | package design | ||||||||||
digital transformation | product placement | ||||||||||
entertainment marketing | promotional marketing |
experiential marketing | public affairs | ||||||||||
field marketing | public relations | ||||||||||
financial/corporate business-to-business advertising | retail marketing | ||||||||||
graphic arts/digital imaging | sales support | ||||||||||
healthcare marketing and communications | search engine marketing | ||||||||||
instore design | shopper marketing | ||||||||||
interactive marketing | social media marketing | ||||||||||
sports and event marketing |
Name | Position | Age | ||||||
John D. Wren | Chairman of the Board and Chief Executive Officer | 69 | ||||||
Daryl Simm | President and Chief Operating Officer | 60 | ||||||
Philip J. Angelastro | Executive Vice President and Chief Financial Officer | 57 | ||||||
Michael J. O’Brien | Executive Vice President, General Counsel and Secretary | 60 | ||||||
Andrew L. Castellaneta | Senior Vice President, Chief Accounting Officer | 63 | ||||||
Peter L. Swiecicki | Senior Vice President, Finance and Controller | 63 | ||||||
Rochelle M. Tarlowe | Senior Vice President and Treasurer | 51 | ||||||
Jonathan B. Nelson | CEO, Omnicom Digital | 54 |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
October 1 - October 31, 2021 | 78,719 | $74.45 | — | — | ||||||||||||||||||||||
November 1 - November 30, 2021 | 407,529 | $68.37 | — | — | ||||||||||||||||||||||
December 1 - December 31, 2021 | 3,106,633 | $70.95 | — | — | ||||||||||||||||||||||
3,592,881 | $70.73 | — | — |
2021 | 2020 | ||||||||||
Long-Term Growth Rate | 3.5% | 3.0% | |||||||||
WACC | 9.8% - 10.4% | 10.6% - 10.8% |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Revenue | $ | 14,289.4 | $ | 13,171.1 | |||||||
Operating Expenses: | |||||||||||
Salary and service costs | 10,402.0 | 9,572.8 | |||||||||
Occupancy and other costs | 1,148.2 | 1,138.5 | |||||||||
Gain on disposition of subsidiary | (50.5) | — | |||||||||
COVID-19 repositioning costs | — | 277.9 | |||||||||
Cost of services | 11,499.7 | 10,989.2 | |||||||||
Selling, general and administrative expenses | 379.7 | 360.5 | |||||||||
Depreciation and amortization | 212.1 | 222.6 | |||||||||
12,091.5 | 11,572.3 | ||||||||||
Operating Profit | 2,197.9 | 1,598.8 | |||||||||
Operating Margin - % | 15.4 | % | 12.1 | % | |||||||
Interest Expense | 236.4 | 221.8 | |||||||||
Interest Income | 27.3 | 32.3 | |||||||||
Income Before Income Taxes and Income (Loss) From Equity Method Investments | 1,988.8 | 1,409.3 | |||||||||
Income Tax Expense | 488.7 | 381.7 | |||||||||
Income (Loss) From Equity Method Investments | 7.5 | (6.8) | |||||||||
Net Income | 1,507.6 | 1,020.8 | |||||||||
Net Income Attributed To Noncontrolling Interests | 99.8 | 75.4 | |||||||||
Net Income - Omnicom Group Inc. | $ | 1,407.8 | $ | 945.4 |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Net Income - Omnicom Group Inc. | $ | 1,407.8 | $ | 945.4 | |||||||
Net Income Attributed To Noncontrolling Interests | 99.8 | 75.4 | |||||||||
Net Income | 1,507.6 | 1,020.8 | |||||||||
Income (Loss) From Equity Method Investments | 7.5 | (6.8) | |||||||||
Income Tax Expense | 488.7 | 381.7 | |||||||||
Income Before Income Taxes and Income (Loss) From Equity Method Investments | 1,988.8 | 1,409.3 | |||||||||
Interest Expense | 236.4 | 221.8 | |||||||||
Interest Income | 27.3 | 32.3 | |||||||||
Operating Profit | 2,197.9 | 1,598.8 | |||||||||
Add back: Amortization of intangible assets | 80.0 | 83.1 | |||||||||
Earnings before interest, taxes and amortization of intangible assets (“EBITA”) | $ | 2,277.9 | $ | 1,681.9 | |||||||
Revenue | $ | 14,289.4 | $ | 13,171.1 | |||||||
EBITA | $ | 2,277.9 | $ | 1,681.9 | |||||||
EBITA Margin - % | 15.9 | % | 12.8 | % |
Total | Domestic | International | |||||||||||||||||||||||||||||||||
$ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||
December 31, 2020 | $ | 13,171.1 | $ | 7,186.1 | $ | 5,985.0 | |||||||||||||||||||||||||||||
Components of revenue change: | |||||||||||||||||||||||||||||||||||
Foreign exchange rate impact | 288.2 | 2.2 | % | — | — | % | 288.2 | 4.8 | % | ||||||||||||||||||||||||||
Acquisition revenue, net of disposition revenue | (516.5) | (3.9) | % | (524.8) | (7.3) | % | 8.3 | 0.1 | % | ||||||||||||||||||||||||||
Organic growth | 1,346.6 | 10.2 | % | 584.6 | 8.1 | % | 762.0 | 12.7 | % | ||||||||||||||||||||||||||
December 31, 2021 | $ | 14,289.4 | 8.5 | % | $ | 7,245.9 | 0.8 | % | $ | 7,043.5 | 17.7 | % |
Year Ended December 31, | |||||||||||||||||||||||
2021 | 2020 | $ Change | % Organic Growth | ||||||||||||||||||||
Americas: | |||||||||||||||||||||||
North America | $ | 7,709.7 | $ | 7,577.1 | $ | 132.6 | 8.3 | % | |||||||||||||||
Latin America | 296.1 | 275.4 | 20.7 | 9.4 | % | ||||||||||||||||||
EMEA: | |||||||||||||||||||||||
Europe | 4,219.6 | 3,607.7 | 611.9 | 11.9 | % | ||||||||||||||||||
Middle East and Africa | 267.6 | 207.2 | 60.4 | 26.4 | % | ||||||||||||||||||
Asia-Pacific | 1,796.4 | 1,503.7 | 292.7 | 13.7 | % | ||||||||||||||||||
$ | 14,289.4 | $ | 13,171.1 | $ | 1,118.3 | 10.2 | % |
Year Ended December 31, | |||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 vs. 2020 | 2021 | ||||||||||||||||||||||||||||||||
$ | % of Revenue | $ | % of Revenue | $ Change | % Organic Growth | ||||||||||||||||||||||||||||||
Advertising | $ | 7,959.3 | 55.7 | % | $ | 7,511.4 | 57.0 | % | $ | 447.9 | 10.7 | % | |||||||||||||||||||||||
Precision Marketing | 1,194.8 | 8.4 | % | 944.6 | 7.2 | % | 250.2 | 19.0 | % | ||||||||||||||||||||||||||
Commerce & Brand Consulting | 910.7 | 6.4 | % | 821.8 | 6.2 | % | 88.9 | 9.9 | % | ||||||||||||||||||||||||||
Experiential | 545.9 | 3.8 | % | 426.8 | 3.2 | % | 119.1 | 27.0 | % | ||||||||||||||||||||||||||
Execution & Support | 1,026.6 | 7.2 | % | 961.3 | 7.3 | % | 65.3 | 4.2 | % | ||||||||||||||||||||||||||
Public Relations | 1,391.7 | 9.7 | % | 1,310.9 | 10.0 | % | 80.8 | 6.3 | % | ||||||||||||||||||||||||||
Healthcare | 1,260.4 | 8.8 | % | 1,194.3 | 9.1 | % | 66.1 | 4.0 | % | ||||||||||||||||||||||||||
$ | 14,289.4 | $ | 13,171.1 | $ | 1,118.3 | 10.2 | % |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Pharmaceuticals and Healthcare | 15 | % | 16 | % | |||||||
Food and Beverage | 14 | % | 14 | % | |||||||
Technology | 11 | % | 9 | % | |||||||
Auto | 10 | % | 10 | % | |||||||
Consumer Products | 8 | % | 8 | % | |||||||
Financial Services | 7 | % | 8 | % | |||||||
Travel and Entertainment | 7 | % | 7 | % | |||||||
Retail | 7 | % | 7 | % | |||||||
Telecommunications | 5 | % | 6 | % | |||||||
Government | 3 | % | 3 | % | |||||||
Services | 2 | % | 2 | % | |||||||
Oil, Gas and Utilities | 2 | % | 1 | % | |||||||
Not-for-Profit | 1 | % | 1 | % | |||||||
Education | 1 | % | 1 | % | |||||||
Other | 7 | % | 7 | % | |||||||
100 | % | 100 | % |
Year Ended December 31, | |||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 vs. 2020 | |||||||||||||||||||||||||||||||||
$ | % of Revenue | $ | % of Revenue | $ Change | % Change | ||||||||||||||||||||||||||||||
Revenue | $ | 14,289.4 | $ | 13,171.1 | $ | 1,118.3 | 8.5 | % | |||||||||||||||||||||||||||
Operating Expenses: | |||||||||||||||||||||||||||||||||||
Salary and service costs: | |||||||||||||||||||||||||||||||||||
Salary and related service costs | 6,971.0 | 48.8 | % | 6,250.9 | 47.5 | % | 720.1 | 11.5 | % | ||||||||||||||||||||||||||
Third-party service costs | 3,431.0 | 24.0 | % | 3,321.9 | 25.2 | % | 109.1 | 3.3 | % | ||||||||||||||||||||||||||
10,402.0 | 72.8 | % | 9,572.8 | 72.7 | % | 829.2 | 8.7 | % | |||||||||||||||||||||||||||
Occupancy and other costs | 1,148.2 | 8.0 | % | 1,138.5 | 8.6 | % | 9.7 | 0.9 | % | ||||||||||||||||||||||||||
Gain on sale of subsidiary | (50.5) | (0.4) | % | — | — | % | (50.5) | ||||||||||||||||||||||||||||
COVID-19 repositioning costs | — | — | % | 277.9 | 2.1 | % | (277.9) | ||||||||||||||||||||||||||||
Cost of services | 11,499.7 | 10,989.2 | 510.5 | ||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 379.7 | 2.7 | % | 360.5 | 2.7 | % | 19.2 | 5.3 | % | ||||||||||||||||||||||||||
Depreciation and amortization | 212.1 | 1.5 | % | 222.6 | 1.7 | % | (10.5) | (4.7) | % | ||||||||||||||||||||||||||
12,091.5 | 84.6 | % | 11,572.3 | 87.9 | % | 519.2 | 4.5 | % | |||||||||||||||||||||||||||
Operating Profit | $ | 2,197.9 | 15.4 | % | $ | 1,598.8 | 12.1 | % | $ | 599.1 | 37.5 | % | |||||||||||||||||||||||
Year Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Revenue | $ | 13,171.1 | $ | 14,953.7 | |||||||
Operating Expenses: | |||||||||||
Salary and service costs | 9,572.8 | 10,972.2 | |||||||||
Occupancy and other costs | 1,138.5 | 1,221.8 | |||||||||
COVID-19 Repositioning Costs | 277.9 | — | |||||||||
Cost of services | 10,989.2 | 12,194.0 | |||||||||
Selling, general and administrative expenses | 360.5 | 405.9 | |||||||||
Depreciation and amortization | 222.6 | 231.5 | |||||||||
11,572.3 | 12,831.4 | ||||||||||
Operating Profit | 1,598.8 | 2,122.3 | |||||||||
Operating Margin - % | 12.1 | % | 14.2 | % | |||||||
Interest Expense | 221.8 | 244.3 | |||||||||
Interest Income | 32.3 | 60.3 | |||||||||
Income Before Income Taxes and Income (Loss) From Equity Method Investments | 1,409.3 | 1,938.3 | |||||||||
Income Tax Expense | 381.7 | 504.4 | |||||||||
Income (Loss) From Equity Method Investments | (6.8) | 2.0 | |||||||||
Net Income | 1,020.8 | 1,435.9 | |||||||||
Net Income Attributed To Noncontrolling Interests | 75.4 | 96.8 | |||||||||
Net Income - Omnicom Group Inc. | $ | 945.4 | $ | 1,339.1 |
Year Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Net Income - Omnicom Group Inc. | $ | 945.4 | $ | 1,339.1 | |||||||
Net Income Attributed To Noncontrolling Interests | 75.4 | 96.8 | |||||||||
Net Income | 1,020.8 | 1,435.9 | |||||||||
Income (Loss) From Equity Method Investments | (6.8) | 2.0 | |||||||||
Income Tax Expense | 381.7 | 504.4 | |||||||||
Income Before Income Taxes and Income (Loss) From Equity Method Investments | 1,409.3 | 1,938.3 | |||||||||
Interest Expense | 221.8 | 244.3 | |||||||||
Interest Income | 32.3 | 60.3 | |||||||||
Operating Profit | 1,598.8 | 2,122.3 | |||||||||
Add back: Amortization of intangible assets | 83.1 | 83.8 | |||||||||
Earnings before interest, taxes and amortization of intangible assets (“EBITA”) | $ | 1,681.9 | $ | 2,206.1 | |||||||
Revenue | $ | 13,171.1 | $ | 14,953.7 | |||||||
EBITA | $ | 1,681.9 | $ | 2,206.1 | |||||||
EBITA Margin - % | 12.8 | % | 14.8 | % |
Total | Domestic | International | |||||||||||||||||||||||||||||||||
$ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||
December 31, 2019 | $ | 14,953.7 | $ | 8,033.0 | $ | 6,920.7 | |||||||||||||||||||||||||||||
Components of revenue change: | |||||||||||||||||||||||||||||||||||
Foreign exchange rate impact | (60.9) | (0.4) | % | — | — | % | (60.9) | (0.9) | % | ||||||||||||||||||||||||||
Acquisition revenue, net of disposition revenue | (56.7) | (0.4) | % | (36.8) | (0.5) | % | (19.9) | (0.3) | % | ||||||||||||||||||||||||||
Organic growth | (1,665.0) | (11.1) | % | (810.1) | (10.1) | % | (854.9) | (12.4) | % | ||||||||||||||||||||||||||
December 31, 2020 | $ | 13,171.1 | (11.9) | % | $ | 7,186.1 | (10.5) | % | $ | 5,985.0 | (13.5) | % |
Year Ended December 31, | |||||||||||||||||||||||
2020 | 2019 | $ Change | % Organic Growth | ||||||||||||||||||||
Americas: | |||||||||||||||||||||||
North America | $ | 7,577.1 | $ | 8,478.8 | $ | (901.7) | (10.1) | % | |||||||||||||||
Latin America | 275.4 | 403.4 | (128.0) | (15.1) | % | ||||||||||||||||||
EMEA: | |||||||||||||||||||||||
Europe | 3,607.7 | 4,107.4 | (499.7) | (12.4) | % | ||||||||||||||||||
Middle East and Africa | 207.2 | 314.6 | (107.4) | (32.3) | % | ||||||||||||||||||
Asia-Pacific | 1,503.7 | 1,649.5 | (145.8) | (8.5) | % | ||||||||||||||||||
$ | 13,171.1 | $ | 14,953.7 | $ | (1,782.6) | (11.1) | % |
Year Ended December 31, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 vs. 2019 | 2020 | ||||||||||||||||||||||||||||||||
$ | % of Revenue | $ | % of Revenue | $ Change | % Organic Growth | ||||||||||||||||||||||||||||||
Advertising | $ | 7,511.4 | 57.0 | % | $ | 8,664.2 | 57.9 | % | $ | (1,152.8) | (12.3) | % | |||||||||||||||||||||||
Precision Marketing | 944.6 | 7.2 | % | 927.2 | 6.2 | % | 17.4 | (0.4) | % | ||||||||||||||||||||||||||
Commerce & Brand Consulting | 821.8 | 6.2 | % | 971.8 | 6.5 | % | (150.0) | (14.8) | % | ||||||||||||||||||||||||||
Experiential | 426.8 | 3.2 | % | 670.0 | 4.5 | % | (243.2) | (35.4) | % | ||||||||||||||||||||||||||
Execution & Support | 961.3 | 7.3 | % | 1,177.2 | 7.9 | % | (215.9) | (16.4) | % | ||||||||||||||||||||||||||
Public Relations | 1,310.9 | 10.0 | % | 1,386.7 | 9.3 | % | (75.8) | (4.1) | % | ||||||||||||||||||||||||||
Healthcare | 1,194.3 | 9.1 | % | 1,156.6 | 7.7 | % | 37.7 | 3.2 | % | ||||||||||||||||||||||||||
$ | 13,171.1 | $ | 14,953.7 | $ | (1,782.6) | (11.1) | % |
Year Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Pharmaceuticals and Healthcare | 16 | % | 14 | % | |||||||
Food and Beverage | 14 | % | 14 | % | |||||||
Auto | 10 | % | 10 | % | |||||||
Technology | 9 | % | 7 | % | |||||||
Consumer Products | 8 | % | 9 | % | |||||||
Financial Services | 8 | % | 8 | % | |||||||
Travel and Entertainment | 7 | % | 9 | % | |||||||
Retail | 7 | % | 7 | % | |||||||
Telecommunications | 6 | % | 6 | % | |||||||
Government | 3 | % | 2 | % | |||||||
Services | 2 | % | 2 | % | |||||||
Oil, Gas and Utilities | 1 | % | 2 | % | |||||||
Not-for-Profit | 1 | % | 1 | % | |||||||
Education | 1 | % | 1 | % | |||||||
Other | 7 | % | 8 | % | |||||||
100 | % | 100 | % |
Year Ended December 31, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 vs. 2019 | |||||||||||||||||||||||||||||||||
$ | % of Revenue | $ | % of Revenue | $ Change | % Change | ||||||||||||||||||||||||||||||
Revenue | $ | 13,171.1 | $ | 14,953.7 | $ | (1,782.6) | (11.9) | % | |||||||||||||||||||||||||||
Operating Expenses: | |||||||||||||||||||||||||||||||||||
Salary and service costs: | |||||||||||||||||||||||||||||||||||
Salary and related service costs | 6,250.9 | 47.5 | % | 6,895.2 | 46.1 | % | (644.3) | (9.3) | % | ||||||||||||||||||||||||||
Third-party service costs | 3,321.9 | 25.2 | % | 4,077.0 | 27.3 | % | (755.1) | (18.5) | % | ||||||||||||||||||||||||||
9,572.8 | 72.7 | % | 10,972.2 | 73.4 | % | (1,399.4) | (12.8) | % | |||||||||||||||||||||||||||
Occupancy and other costs | 1,138.5 | 8.6 | % | 1,221.8 | 8.2 | % | (83.3) | (6.8) | % | ||||||||||||||||||||||||||
COVID-19 repositioning costs | 277.9 | 2.1 | % | — | — | % | (277.9) | — | % | ||||||||||||||||||||||||||
Cost of services | 10,989.2 | 83.4 | % | 12,194.0 | 81.5 | % | (1,204.8) | (9.9) | % | ||||||||||||||||||||||||||
Selling, general and administrative expenses | 360.5 | 2.7 | % | 405.9 | 2.7 | % | (45.4) | (11.2) | % | ||||||||||||||||||||||||||
Depreciation and amortization | 222.6 | 1.7 | % | 231.5 | 1.5 | % | (8.9) | (3.8) | % | ||||||||||||||||||||||||||
11,572.3 | 87.9 | % | 12,831.4 | 85.8 | % | (1,259.1) | (9.8) | % | |||||||||||||||||||||||||||
Operating Profit | $ | 1,598.8 | 12.1 | % | $ | 2,122.3 | 14.2 | % | $ | (523.5) | (24.7) | % |
COVID-19 Repositioning Costs | Impairment Charges - Underperforming Assets | Pandemic Relief Reimbursements Under Government Programs | Total | ||||||||||||||||||||
Increase (decrease) to income before income taxes | $ | (277.9) | $ | (55.8) | $ | 162.6 | $ | (171.1) | |||||||||||||||
Increase (decrease) in income tax expense | (54.8) | (8.7) | 39.2 | (24.3) | |||||||||||||||||||
Increase (decrease) in net income Omnicom Group Inc. | $ | (223.1) | $ | (47.1) | $ | 123.4 | $ | (146.8) |
Sources | |||||||||||
Cash flow from operations | $ | 1,945.4 | |||||||||
Less: Increase in operating capital | (160.5) | ||||||||||
Principal cash sources | 1,784.9 | ||||||||||
Uses | |||||||||||
Capital expenditures | $ | (665.8) | |||||||||
Dividends paid to common shareholders | (592.3) | ||||||||||
Dividends paid to noncontrolling interest shareholders | (113.1) | ||||||||||
Acquisition payments, including payment of contingent purchase price obligations and acquisition of additional noncontrolling interests, net of proceeds from sale of investments | (202.0) | ||||||||||
Repurchases of common stock, net of proceeds from stock plans | (518.2) | ||||||||||
Principal cash uses | (2,091.4) | ||||||||||
Principal cash uses in excess of principal cash sources | (306.5) | ||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents | (128.9) | ||||||||||
Other net financing and investing activities | (8.8) | ||||||||||
Increase in operating capital | 160.5 | ||||||||||
Decrease in cash and cash equivalents | $ | (283.7) |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Short-term debt | $ | 9.6 | $ | 3.9 | |||||||
Long-term debt | 5,685.7 | 5,807.3 | |||||||||
Total debt | 5,695.3 | 5,811.2 | |||||||||
Less: Cash and cash equivalents | 5,316.8 | 5,600.5 | |||||||||
Net debt | $ | 378.5 | $ | 210.7 |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Average amount outstanding during the year | $ | 2.2 | $ | 50.1 | $ | 272.3 | |||||||||||
Maximum amount outstanding during the year | $ | 250.0 | $ | 401.2 | $ | 825.0 | |||||||||||
Average days outstanding | 1.1 | 4.6 | 4.0 | ||||||||||||||
Weighted average interest rate | 0.15 | % | 1.52 | % | 2.40 | % |
(a)(1) | Financial Statements: | Page | ||||||
Consolidated Balance Sheets at December 31, 2021 and 2020 | ||||||||
Consolidated Statements of Income for the Three Years Ended December 31, 2021 | ||||||||
Consolidated Statements of Comprehensive Income for the Three Years Ended December 31, 2021 | ||||||||
Consolidated Statements of Equity for the Three Years Ended December 31, 2021 | ||||||||
Consolidated Statements of Cash Flows for the Three Years Ended December 31, 2021 | ||||||||
(a)(2) | Financial Statement Schedules: | |||||||
Schedule II - Valuation and Qualifying Accounts for the Three Years Ended December 31, 2021 | ||||||||
All other schedules are omitted because they are not applicable. |
(a)(3) | Exhibits: | ||||
Exhibit Number | Description | ||||
3(i) | |||||
3(ii) | |||||
4.1 | |||||
4.2 | |||||
4.3 |
10.1 | |||||
10.2 | |||||
10.3 | |||||
10.4 | |||||
10.5 | Standard form of the Director Indemnification Agreement (Exhibit 10.25 to our Annual Report on Form 10-K (File No. 1-10551) for the year ended December 31, 1989 and incorporated herein by reference). | ||||
10.6 | |||||
10.7 | |||||
10.8 | |||||
10.9 | |||||
10.10 | |||||
10.11 | |||||
10.12 | |||||
10.13 | |||||
10.14 | |||||
10.15 | |||||
10.16 | |||||
10.17 | |||||
10.18 |
10.19 | |||||
10.20 | |||||
10.21 | |||||
10.22 | |||||
10.23 | |||||
10.24 | |||||
10.25 | |||||
21 | |||||
23 | |||||
31.1 | |||||
31.2 | |||||
32 | |||||
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | ||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | ||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
OMNICOM GROUP INC. | ||||||||
February 9, 2022 | BY: | /s/ PHILIP J. ANGELASTRO | ||||||
Philip J. Angelastro Executive Vice President and Chief Financial Officer |
Signature | Title | Date | ||||||
/s/ JOHN D. WREN | Chairman and Chief Executive Officer and Director (Principal Executive Officer) | February 9, 2022 | ||||||
John D. Wren | ||||||||
/s/ PHILIP J. ANGELASTRO | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | February 9, 2022 | ||||||
Philip J. Angelastro | ||||||||
/s/ ANDREW L. CASTELLANETA | Senior Vice President, Chief Accounting Officer (Principal Accounting Officer) | February 9, 2022 | ||||||
Andrew L. Castellaneta | ||||||||
/s/ MARY C. CHOKSI | Director | February 9, 2022 | ||||||
Mary C. Choksi | ||||||||
/s/ LEONARD S. COLEMAN, JR. | Director | February 9, 2022 | ||||||
Leonard S. Coleman, Jr. | ||||||||
/s/ SUSAN S. DENISON | Director | February 9, 2022 | ||||||
Susan S. Denison | ||||||||
/s/ RONNIE S. HAWKINS | Director | February 9, 2022 | ||||||
Ronnie S. Hawkins | ||||||||
/s/ DEBORAH J. KISSIRE | Director | February 9, 2022 | ||||||
Deborah J. Kissire | ||||||||
/s/ GRACIA C. MARTORE | Director | February 9, 2022 | ||||||
Gracia C. Martore | ||||||||
/s/ LINDA JOHNSON RICE | Director | February 9, 2022 | ||||||
Linda Johnson Rice | ||||||||
/s/ VALERIE M. WILLIAMS | Director | February 9, 2022 | ||||||
Valerie M. Williams |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
ASSETS | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance for doubtful accounts of $ | |||||||||||
Work in process | |||||||||||
Other current assets | |||||||||||
Total Current Assets | |||||||||||
Property and Equipment at cost, less accumulated depreciation of $ | |||||||||||
Operating Lease Right-Of-Use Assets | |||||||||||
Equity Method Investments | |||||||||||
Goodwill | |||||||||||
Intangible Assets, net of accumulated amortization of $ | |||||||||||
Other Assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Current Liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Customer advances | |||||||||||
Short-term debt | |||||||||||
Taxes payable | |||||||||||
Other current liabilities | |||||||||||
Total Current Liabilities | |||||||||||
Long-Term Liabilities | |||||||||||
Long-Term Liability - Operating Leases | |||||||||||
Long-Term Debt | |||||||||||
Deferred Tax Liabilities | |||||||||||
Commitments and Contingent Liabilities (Note 18) | |||||||||||
Temporary Equity - Redeemable Noncontrolling Interests | |||||||||||
Equity: | |||||||||||
Shareholders’ Equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ issued, | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive income (loss) | ( | ( | |||||||||
Treasury stock, at cost, | ( | ( | |||||||||
Total Shareholders’ Equity | |||||||||||
Noncontrolling interests | |||||||||||
Total Equity | |||||||||||
TOTAL LIABILITIES AND EQUITY | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Revenue | $ | $ | $ | ||||||||||||||
Operating Expenses: | |||||||||||||||||
Salary and service costs | |||||||||||||||||
Occupancy and other costs | |||||||||||||||||
Gain on disposition of subsidiary | ( | ||||||||||||||||
COVID-19 repositioning costs | |||||||||||||||||
Cost of services | |||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Operating Profit | |||||||||||||||||
Interest Expense | |||||||||||||||||
Interest Income | |||||||||||||||||
Income Before Income Taxes and Income (Loss) From Equity Method Investments | |||||||||||||||||
Income Tax Expense | |||||||||||||||||
Income (Loss) From Equity Method Investments | ( | ||||||||||||||||
Net Income | |||||||||||||||||
Net Income Attributed To Noncontrolling Interests | |||||||||||||||||
Net Income - Omnicom Group Inc. | $ | $ | $ | ||||||||||||||
Net Income Per Share - Omnicom Group Inc.: | |||||||||||||||||
Basic | $ | $ | $ | ||||||||||||||
Diluted | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Net Income | $ | $ | $ | ||||||||||||||
Other Comprehensive Income (Loss): | |||||||||||||||||
Cash flow hedge: | |||||||||||||||||
Amortization of loss included in interest expense | |||||||||||||||||
Income tax effect | ( | ( | ( | ||||||||||||||
Defined benefit pension plans and postemployment arrangements: | |||||||||||||||||
Unrecognized actuarial gains (losses) and prior service cost for the period | ( | ( | |||||||||||||||
Amortization of prior service cost and actuarial losses | |||||||||||||||||
Income tax effect | ( | ||||||||||||||||
( | ( | ||||||||||||||||
Foreign currency translation adjustment | ( | ( | |||||||||||||||
Other Comprehensive Income ( Loss) | ( | ( | |||||||||||||||
Comprehensive Income | |||||||||||||||||
Comprehensive Income Attributed To Noncontrolling Interests | |||||||||||||||||
Comprehensive Income - Omnicom Group Inc. | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Common Stock, shares | |||||||||||||||||
Common Stock, par value | $ | $ | $ | ||||||||||||||
Additional Paid-in Capital: | |||||||||||||||||
Beginning balance | |||||||||||||||||
Acquisition of noncontrolling interests | ( | ( | |||||||||||||||
Change in temporary equity | ( | ||||||||||||||||
Share-based compensation | |||||||||||||||||
Stock issued, share-based compensation | ( | ( | ( | ||||||||||||||
Ending balance | |||||||||||||||||
Retained Earnings: | |||||||||||||||||
Beginning balance | |||||||||||||||||
Cumulative effect of accounting change | |||||||||||||||||
Net income | |||||||||||||||||
Common stock dividends declared | ( | ( | ( | ||||||||||||||
Ending balance | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss): | |||||||||||||||||
Beginning balance | ( | ( | ( | ||||||||||||||
Cumulative effect of accounting change | ( | ||||||||||||||||
Other comprehensive income (loss) | ( | ( | |||||||||||||||
Ending balance | ( | ( | ( | ||||||||||||||
Treasury Stock: | |||||||||||||||||
Beginning balance | ( | ( | ( | ||||||||||||||
Stock issued, share-based compensation | |||||||||||||||||
Common stock repurchased | ( | ( | ( | ||||||||||||||
Ending balance | ( | ( | ( | ||||||||||||||
Shareholders’ Equity | |||||||||||||||||
Noncontrolling Interests: | |||||||||||||||||
Beginning balance | |||||||||||||||||
Net income | |||||||||||||||||
Other comprehensive income (loss) | ( | ( | |||||||||||||||
Dividends to noncontrolling interests | ( | ( | ( | ||||||||||||||
Acquisition of noncontrolling interests | ( | ( | ( | ||||||||||||||
Increase in noncontrolling interests from business combinations | |||||||||||||||||
Ending balance | |||||||||||||||||
Total Equity | $ | $ | $ | ||||||||||||||
Dividends Declared Per Common Share | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Cash Flows from Operating Activities: | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization of right-of-use assets | |||||||||||||||||
Amortization of intangible assets | |||||||||||||||||
Amortization of net deferred gain on interest rate swaps | ( | ( | ( | ||||||||||||||
Share-based compensation | |||||||||||||||||
Gain on disposition of subsidiary | ( | ||||||||||||||||
COVID-19 repositioning costs | |||||||||||||||||
Other, net | |||||||||||||||||
Increase in operating capital | |||||||||||||||||
Net Cash Provided By Operating Activities | |||||||||||||||||
Cash Flows from Investing Activities: | |||||||||||||||||
Capital expenditures | ( | ( | ( | ||||||||||||||
Acquisition of businesses and interests in affiliates, net of cash acquired | ( | ( | ( | ||||||||||||||
Proceeds from disposition of subsidiaries | |||||||||||||||||
Proceeds from sale of investments and other | |||||||||||||||||
Net Cash Used In Investing Activities | ( | ( | ( | ||||||||||||||
Cash Flows from Financing Activities: | |||||||||||||||||
Proceeds from borrowings | |||||||||||||||||
Repayment of debt | ( | ( | ( | ||||||||||||||
Change in short-term debt | ( | ||||||||||||||||
Dividends paid to common shareholders | ( | ( | ( | ||||||||||||||
Repurchases of common stock | ( | ( | ( | ||||||||||||||
Proceeds from stock plans | |||||||||||||||||
Acquisition of additional noncontrolling interests | ( | ( | ( | ||||||||||||||
Dividends paid to noncontrolling interest shareholders | ( | ( | ( | ||||||||||||||
Payment of contingent purchase price obligations | ( | ( | ( | ||||||||||||||
Other, net | ( | ( | ( | ||||||||||||||
Net Cash Used In Financing Activities | ( | ( | ( | ||||||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents | ( | ||||||||||||||||
Net Increase (Decrease) in Cash and Cash Equivalents | ( | ||||||||||||||||
Cash and Cash Equivalents at the Beginning of Year | |||||||||||||||||
Cash and Cash Equivalents at the End of Year | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Advertising | $ | $ | $ | ||||||||||||||
Precision Marketing | |||||||||||||||||
Commerce & Brand Consulting | |||||||||||||||||
Experiential | |||||||||||||||||
Execution & Support | |||||||||||||||||
Public Relations | |||||||||||||||||
Healthcare | |||||||||||||||||
$ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Americas: | |||||||||||||||||
North America | $ | $ | $ | ||||||||||||||
Latin America | |||||||||||||||||
EMEA: | |||||||||||||||||
Europe | |||||||||||||||||
Middle East and Africa | |||||||||||||||||
Asia-Pacific | |||||||||||||||||
$ | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Work in process: | |||||||||||
Contract assets and unbilled fees and costs | $ | $ | |||||||||
Media and production costs | |||||||||||
$ | $ | ||||||||||
Contract liabilities: | |||||||||||
Customer advances | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Net income available for common shares: | |||||||||||||||||
Net income - Omnicom Group Inc. | $ | $ | $ | ||||||||||||||
Weighted average shares: | |||||||||||||||||
Basic | |||||||||||||||||
Dilutive stock options and restricted shares | |||||||||||||||||
Diluted | |||||||||||||||||
Anti-dilutive stock options and restricted shares | |||||||||||||||||
Net income per share - Omnicom Group Inc.: | |||||||||||||||||
Basic | $ | $ | $ | ||||||||||||||
Diluted | $ | $ | $ |
December 31, | |||||||||||||||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||||||||||||||
Gross Carrying Value | Accumulated Amortization | Net Carrying Value | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | ||||||||||||||||||||||||||||||
Goodwill | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Intangible assets: | |||||||||||||||||||||||||||||||||||
Purchased and internally developed software | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Customer related and other | ( | ( | |||||||||||||||||||||||||||||||||
$ | $ | ( | $ | $ | $ | ( | $ |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
January 1 | $ | $ | |||||||||
Acquisitions | |||||||||||
Noncontrolling interests in acquired businesses | |||||||||||
Contingent purchase price obligations of acquired businesses | |||||||||||
Dispositions | ( | ( | |||||||||
Foreign currency translation | ( | ||||||||||
December 31 | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
$ | $ | ||||||||||
€ | |||||||||||
€ | |||||||||||
£ | |||||||||||
Unamortized discount | ( | ( | |||||||||
Unamortized debt issuance costs | ( | ( | |||||||||
Unamortized deferred gain from settlement of interest rate swaps | |||||||||||
$ | $ |
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
$ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Long-term debt | $ | $ | $ | ||||||||||||||
Early redemption payments and other fees | |||||||||||||||||
Pension and other interest | |||||||||||||||||
Interest rate swaps | ( | ( | ( | ||||||||||||||
$ | $ | $ |
Americas | EMEA | Asia-Pacific | |||||||||||||||
December 31, 2021 | |||||||||||||||||
Revenue | $ | $ | $ | ||||||||||||||
Long-lived assets and goodwill | |||||||||||||||||
December 31, 2020 | |||||||||||||||||
Revenue | $ | $ | $ | ||||||||||||||
Long-lived assets and goodwill | |||||||||||||||||
December 31, 2019 | |||||||||||||||||
Revenue | $ | $ | $ | ||||||||||||||
Long-lived assets and goodwill |
Year Ended December 31, | |||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||||||||||||||||||||
Shares | Weighted Average Exercise Price | Shares | Weighted Average Exercise Price | Shares | Weighted Average Exercise Price | ||||||||||||||||||||||||||||||
January 1 | $ | $ | $ | ||||||||||||||||||||||||||||||||
Granted | $ | ||||||||||||||||||||||||||||||||||
Exercised | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Forfeited | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||
December 31 | $ | $ | $ | ||||||||||||||||||||||||||||||||
Exercisable December 31 | $ | $ | $ |
Options Outstanding | Options Exercisable | |||||||||||||||||||||||||||||||||||||
Exercise Price Range | Shares | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | Shares | Weighted Average Exercise Price | |||||||||||||||||||||||||||||||||
$ | to | $ | $ | |||||||||||||||||||||||||||||||||||
$ | to | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
January 1 | |||||||||||||||||
Granted | |||||||||||||||||
Vested | ( | ( | ( | ||||||||||||||
Forfeited | ( | ( | ( | ||||||||||||||
December 31 | |||||||||||||||||
Weighted average grant date fair value of shares granted in the period | $ | $ | $ | ||||||||||||||
Weighted average grant date fair value at December 31 | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||||||||||||||||||||
Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | ||||||||||||||||||||||||||||||
January 1 | $ | $ | $ | ||||||||||||||||||||||||||||||||
Granted | $ | $ | $ | ||||||||||||||||||||||||||||||||
Distributed | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||
December 31 | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Domestic | $ | $ | $ | ||||||||||||||
International | |||||||||||||||||
$ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Current: | |||||||||||||||||
U.S. federal | $ | $ | $ | ||||||||||||||
U.S. state and local | |||||||||||||||||
International | |||||||||||||||||
Deferred: | |||||||||||||||||
U.S. federal | ( | ||||||||||||||||
U.S. state and local | ( | ( | ( | ||||||||||||||
International | ( | ( | |||||||||||||||
( | ( | ||||||||||||||||
$ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Statutory U.S. federal income tax rate | % | % | % | ||||||||||||||
U.S. state and local income taxes, net of U.S. federal income tax benefit | |||||||||||||||||
Impact of foreign operations | |||||||||||||||||
Other | ( | ||||||||||||||||
Effective tax rate | % | % | % |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Deferred tax assets: | |||||||||||
Compensation | $ | $ | |||||||||
Tax loss and credit carryforwards | |||||||||||
Basis differences from acquisitions | |||||||||||
Basis differences from short-term assets and liabilities | |||||||||||
Other | ( | ( | |||||||||
Deferred tax assets | |||||||||||
Valuation allowance | ( | ( | |||||||||
Net deferred tax assets | $ | $ | |||||||||
Deferred tax liabilities: | |||||||||||
Goodwill and intangible assets | $ | $ | |||||||||
Unremitted foreign earnings | |||||||||||
Basis differences from investments | ( | ||||||||||
Financial instruments | |||||||||||
Deferred tax liabilities | $ | $ | |||||||||
Long-term deferred tax assets | $ | $ | |||||||||
Long-term deferred tax liabilities | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
January 1 | $ | $ | |||||||||
Additions: | |||||||||||
Current year tax positions | |||||||||||
Prior year tax positions | |||||||||||
Reduction of prior year tax positions | ( | ( | |||||||||
Settlements | ( | ( | |||||||||
Foreign currency translation | ( | ( | |||||||||
December 31 | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Service cost | $ | $ | $ | ||||||||||||||
Interest cost | |||||||||||||||||
Expected return on plan assets | ( | ( | ( | ||||||||||||||
Amortization of prior service cost | |||||||||||||||||
Amortization of actuarial loss | |||||||||||||||||
$ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Discount rate | % | % | % | ||||||||||||||
Compensation increases | % | % | % | ||||||||||||||
Expected return on plan assets | % | % | % |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Benefit Obligation: | |||||||||||
January 1 | $ | $ | |||||||||
Service cost | |||||||||||
Interest cost | |||||||||||
Amendments, curtailments and settlements | ( | ( | |||||||||
Actuarial (gain) loss | ( | ||||||||||
Benefits paid | ( | ( | |||||||||
Foreign currency translation | ( | ( | |||||||||
December 31 | $ | $ | |||||||||
Fair Value of Plan Assets: | |||||||||||
January 1 | $ | $ | |||||||||
Actual return on plan assets | |||||||||||
Employer contributions | |||||||||||
Benefits paid | ( | ( | |||||||||
Foreign currency translation and other | ( | ( | |||||||||
December 31 | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Funded Status | $ | ( | $ | ( | |||||||
Other assets | $ | $ | |||||||||
Other current liabilities | ( | ( | |||||||||
Long-term liabilities | ( | ( | |||||||||
$ | ( | $ | ( |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Benefit obligation | $ | ( | $ | ( | |||||||
Plan assets | |||||||||||
$ | ( | $ | ( |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Discount rate | % | % | |||||||||
Compensation increases | % | % |
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 - 2031 |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Service cost | $ | $ | $ | ||||||||||||||
Interest cost | |||||||||||||||||
Amortization of prior service cost | |||||||||||||||||
Amortization of actuarial loss | |||||||||||||||||
$ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Discount rate | % | % | % | ||||||||||||||
Compensation increases | % | % | % |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
January 1 | $ | $ | |||||||||
Service cost | |||||||||||
Interest cost | |||||||||||
Amendments | ( | ||||||||||
Actuarial (gain) loss | ( | ||||||||||
Benefits paid | ( | ( | |||||||||
December 31 | $ | $ |
Other current liabilities | $ | $ | |||||||||
Long-term liabilities | |||||||||||
$ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Discount rate | % | % | |||||||||
Compensation increases | % | % |
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2027 - 2031 |
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2021 | 2020 | 2019 | |||||||||||||||
(Increase) decrease in accounts receivable | $ | ( | $ | $ | ( | ||||||||||||
(Increase) decrease in work in process and other current assets | ( | ( | |||||||||||||||
Increase (decrease) in accounts payable | ( | ||||||||||||||||
Increase (decrease) in customer advances, taxes payable and other current liabilities | |||||||||||||||||
Change in other assets and liabilities, net | ( | ||||||||||||||||
Increase in operating capital | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Income taxes paid | $ | $ | $ | ||||||||||||||
Interest paid | $ | $ | $ |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Operating leases | $ | $ | |||||||||
Finance leases | $ | $ |
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2021 | 2020 | 2019 | |||||||||||||||
Net income attributed to Omnicom Group Inc. | $ | $ | $ | ||||||||||||||
Net transfers (to) from noncontrolling interests | ( | ( | |||||||||||||||
Change from net income attributed to Omnicom Group Inc. and transfers (to) from noncontrolling interests | $ | $ | $ |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Operating lease cost | $ | $ | |||||||||
Variable lease cost | |||||||||||
Short-term lease cost | |||||||||||
Sublease income | ( | ( | |||||||||
$ | $ | ||||||||||
Finance lease cost: | |||||||||||
Depreciation of ROU assets | $ | $ | |||||||||
Interest | |||||||||||
$ | $ | ||||||||||
Total lease cost | $ | $ |
Operating Leases | Finance Leases | ||||||||||
2022 | $ | $ | |||||||||
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Thereafter | |||||||||||
Total lease payments | |||||||||||
Less: Imputed interest | |||||||||||
Present value of lease liability | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Operating lease ROU assets | $ | $ | |||||||||
Lease liability: | |||||||||||
Other current liabilities | $ | $ | |||||||||
Long-term liability - operating leases | |||||||||||
$ | $ | ||||||||||
2021 | 2020 | ||||||||||
Property and equipment - owned | $ | $ | |||||||||
Equipment under finance leases | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
$ | $ |
Cash Flow Hedge | Defined Benefit Pension Plans and Postemployment Arrangements | Foreign Currency Translation | Total | ||||||||||||||||||||
January 1, 2020 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | ( | ||||||||||||||||||||
Reclassification from accumulated other comprehensive income (loss) | |||||||||||||||||||||||
December 31, 2020 | ( | ( | ( | ( | |||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | |||||||||||||||||||||
Reclassification from accumulated other comprehensive income (loss) | |||||||||||||||||||||||
December 31, 2021 | $ | ( | $ | ( | $ | ( | $ | ( |
December 31, 2021 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | $ | |||||||||||||||||||||
Marketable equity securities | |||||||||||||||||||||||
Foreign currency derivatives | $ | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Foreign currency derivatives | $ | $ | |||||||||||||||||||||
Contingent purchase price obligations | $ | ||||||||||||||||||||||
December 31, 2020 | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | $ | |||||||||||||||||||||
Marketable equity securities | |||||||||||||||||||||||
Foreign currency derivatives | $ | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Foreign currency derivatives | |||||||||||||||||||||||
Contingent purchase price obligations | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
January 1 | $ | $ | |||||||||
Acquisitions | |||||||||||
Revaluation and interest | ( | ||||||||||
Payments | ( | ( | |||||||||
Foreign currency translation | ( | ||||||||||
December 31 | $ | $ |
December 31, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Marketable equity securities | |||||||||||||||||||||||
Non-marketable equity securities | |||||||||||||||||||||||
Foreign currency derivatives | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Short-term debt | $ | $ | $ | $ | |||||||||||||||||||
Foreign currency derivatives | |||||||||||||||||||||||
Contingent purchase price obligations | |||||||||||||||||||||||
Long-term debt |
Description | Balance Beginning of Period | Charged to Costs and Expenses | Removal of Uncollectible Receivables | Translation Adjustment Increase (Decrease) | Balance End of Period | ||||||||||||||||||||||||
Valuation accounts deducted from assets: | |||||||||||||||||||||||||||||
Allowance for Doubtful Accounts: | |||||||||||||||||||||||||||||
December 31, 2021 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
December 31, 2020 | ( | ||||||||||||||||||||||||||||
December 31, 2019 | ( |
Company | Jurisdiction of Incorporation | Percentage of Voting Securities Owned by Registrant | Number of US subsidiaries | Number of Non-US subsidiaries | ||||||||||||||||||||||
Omnicom APIMA Holdings Limited | Hong Kong | 100% | — | 70 | ||||||||||||||||||||||
Omnicom Capital Inc. | Connecticut | 100% | 1 | 5 | ||||||||||||||||||||||
Omnicom Europe Limited | United Kingdom | 100% | 4 | 457 | ||||||||||||||||||||||
Omnicom Finance Holdings plc | United Kingdom | 100% | — | 2 | ||||||||||||||||||||||
Omnicom Capital Holdings plc | United Kingdom | 100% | — | 5 | ||||||||||||||||||||||
Omnicom Group (Asia Pacific) Pte. Ltd. | Singapore | 100% | — | 32 | ||||||||||||||||||||||
BBDO Worldwide Inc. | New York | 100% | 24 | 146 | ||||||||||||||||||||||
DDB Worldwide Communications Group LLC | New York | 100% | 9 | 33 | ||||||||||||||||||||||
TBWA Worldwide Inc. | New York | 100% | 5 | 13 | ||||||||||||||||||||||
DAS Holdings Inc. | Delaware | 100% | 50 | 6 | ||||||||||||||||||||||
Omnicom Media Group Holdings Inc. | Delaware | 100% | 20 | 8 | ||||||||||||||||||||||
Date: | February 9, 2022 | /s/ JOHN D. WREN | ||||||
John D. Wren Chairman and Chief Executive Officer |
Date: | February 9, 2022 | /s/ PHILIP J. ANGELASTRO | ||||||
Philip J. Angelastro Executive Vice President and Chief Financial Officer |
Date: | February 9, 2022 | ||||||||||
/s/ JOHN D. WREN | |||||||||||
Name: | John D. Wren | ||||||||||
Title: | Chairman and Chief Executive Officer |
/s/ PHILIP J. ANGELASTRO | |||||||||||
Name: | Philip J. Angelastro | ||||||||||
Title: | Executive Vice President and Chief Financial Officer |
Audit Information |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Location | New York, NY |
Auditor Firm ID | 185 |
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Consolidated Balance Sheets (Parenthetical) [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 21.7 | $ 30.4 |
Property and Equipment, accumulated depreciation | 1,165.7 | 1,156.7 |
Intangible assets, accumulated amortization | $ 856.5 | $ 817.2 |
Preferred stock, par value | $ 1.00 | $ 1.00 |
Preferred stock, shares authorized | 7.5 | 7.5 |
Preferred stock, shares issued | 0.0 | 0.0 |
Common stock, par value | $ 0.15 | $ 0.15 |
Common stock, shares authorized | 1,000.0 | 1,000.0 |
Common stock, shares issued | 297.2 | 297.2 |
Common stock, shares outstanding | 209.1 | 215.0 |
Treasury stock, shares | 88.1 | 82.2 |
Presentation of Financial Statements |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Presentation of Financial Statements [Abstract] | |
Presentation of Financial Statements | 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 consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP or GAAP. All intercompany balances and transactions have been eliminated. We prepare our financial statements in conformity with U.S. GAAP and are required to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates and assumptions. Impact of the COVID-19 Pandemic on our Business As the impact of the COVID-19 pandemic on the global economy moderated, we experienced an improvement in our business in 2021 as compared to 2020. In 2021, revenue increased $1,118.3 million, or 8.5%, compared to 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 year-over-year 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. In response to the impact of the COVID-19 pandemic, in the second quarter of 2020, we took actions to align our cost structure and reduce our workforce and facility requirements. As a result, we recorded a pre-tax charge of $277.9 million, which was partially offset by the benefit related to pandemic relief reimbursements of $162.6 million under government programs in several countries. 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.
|
Significant Accounting Policies |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Revenue Recognition. Revenue is recognized when a customer obtains control of promised goods or services (the performance obligation) in an amount that reflects the consideration we expect to receive in exchange for those goods or services (the transaction price). We measure revenue by estimating the transaction price based on the consideration specified in the client arrangement. Revenue is recognized as the performance obligations are satisfied. Our revenue is primarily derived from the planning and execution of advertising communications and marketing services in the following fundamental disciplines: Advertising, Precision Marketing, Commerce & Brand Consulting, Experiential, Execution & Support, Public Relations and Healthcare. Our client contracts are primarily fees for service on a rate per hour or per project basis. Revenue is recorded net of sales, use and value added taxes. Performance Obligations. In substantially all our disciplines, the performance obligation is to provide advisory and consulting services at an agreed-upon level of effort to accomplish the specified engagement. Our client contracts are comprised of diverse arrangements involving fees based on any one or a combination of the following: an agreed fee or rate per hour for the level of effort expended by our employees; commissions based on the client’s spending for media purchased from third parties; qualitative or quantitative incentive provisions specified in the contract; and reimbursement for third-party costs that we are required to include in revenue when we control the vendor services related to these costs and we act as principal. The transaction price of a contract is allocated to each distinct performance obligation based on its relative stand-alone selling price and is recognized as revenue when, or as, the customer receives the benefit of the performance obligation. Clients typically receive and consume the benefit of our services as they are performed. Substantially all our client contracts provide that we are compensated for services performed to date and allow for cancellation by either party on short notice, typically 90 days, without penalty. Generally, our short-term contracts, which normally take 30 to 90 days to complete, are performed by a single agency and consist of a single performance obligation. As a result, we do not consider the underlying services as separate or distinct performance obligations because our services are highly interrelated, occur in close proximity, and the integration of the various components of a marketing message is essential to overall service. In certain of our long-term client contracts, which have a term of up to one year, the performance obligation is a stand-ready obligation, because we provide a constant level of similar services over the term of the contract. In other long-term contracts, when our services are not a stand-ready obligation, we consider our services distinct performance obligations and allocate the transaction price to each separate performance obligation based on its stand-alone selling price, including contracts for strategic media planning and buying services, which are considered to be multiple performance obligations, and we allocate the transaction price to each distinct service based on the staffing plan and the stand-alone selling price. In substantially all of our creative services contracts, we have distinct performance obligations for our services, including certain creative services contracts where we act as an agent and arrange, at the client’s direction, for third parties to perform studio production efforts. Revenue Recognition Methods. A substantial portion of our revenue is recognized over time, as the services are performed, because the client receives and consumes the benefit of our performance throughout the contract period, or we create an asset with no alternative use and are contractually entitled to payment for our performance to date in the event the client terminates the contract for convenience. For these client contracts, other than when we have a stand-ready obligation to perform services, revenue is recognized over time using input measures that correspond to the level of staff effort expended to satisfy the performance obligation on a rate per hour or equivalent basis. For client contracts when we have a stand-ready obligation to perform services on an ongoing basis over the life of the contract, typically for periods up to one year, where the scope of these arrangements is broad and there are no significant gaps in performing the services, we recognize revenue using a time-based measure resulting in a straight-line revenue recognition. From time to time, there may be changes in the client service requirements during the term of a contract and the changes could be significant. These changes are typically negotiated as new contracts covering the additional requirements and the associated costs, as well as additional fees for the incremental work to be performed. To a lesser extent, for certain other contracts where our performance obligations are satisfied in phases, we recognize revenue over time using certain output measures based on the measurement of the value transferred to the customer, including milestones achieved. Where the transaction price or a portion of the transaction price is derived from commissions based on a percentage of purchased media from third parties, the performance obligation is not satisfied until the media is run and we have an enforceable contract providing a right to payment. Accordingly, revenue for commissions is recognized at a point in time, typically when the media is run, including when it is not subject to cancellation by the client or media vendor. Principal vs. Agent. In substantially all our businesses, we incur third-party costs on behalf of clients, including direct costs and incidental, or out-of-pocket costs. Third-party direct costs incurred in connection with the creation and delivery of advertising or marketing communication services include, among others: purchased media, studio production services, specialized talent, including artists and other freelance labor, event marketing supplies, materials and services, promotional items, market research and third-party data and other related expenditures. Out-of-pocket costs include, among others: transportation, hotel, meals and telecommunication charges incurred by us in the course of providing our services. Billings related to out-of-pocket costs are included in revenue since we control the goods or services prior to delivery to the client. However, the inclusion of billings related to third-party direct costs in revenue depends on whether we act as a principal or as an agent in the client arrangement. In most of our businesses, including advertising, which also includes studio production efforts and media planning and buying services, public relations, healthcare advertising and most of our Experiential businesses, we act as an agent and arrange, at the client’s direction, for third parties to perform certain services. In these cases, we do not control the goods or services prior to the transfer to the client. As a result, revenue is recorded net of these costs, equal to the amount retained for our fee or commission. In certain businesses we may act as principal when contracting for third-party services on behalf of our clients. In our events business and most of our Execution & Support businesses, including field marketing and certain specialty marketing businesses, we act as principal because we control the specified goods or services before they are transferred to the client and we are responsible for providing the specified goods or services, or we are responsible for directing and integrating third-party vendors to fulfill our performance obligation at the agreed upon contractual price. In such arrangements, we also take pricing risk under the terms of the client contract. In certain specialty media buying businesses, we act as principal when we control the buying process for the purchase of the media and contract directly with the media vendor. In these arrangements, we assume the pricing risk under the terms of the client contract. When we act as principal, we include billable amounts related to third-party costs in the transaction price and record revenue over time at the gross amount billed, including out-of-pocket costs, consistent with the manner that we recognize revenue for the underlying services contract. However, in media buying contracts where we act as principal, we recognize revenue at a point in time, typically when the media is run, including when it is not subject to cancellation by the client or media vendor. Variable Consideration. Some of our client arrangements include variable consideration provisions, which include performance incentives, tiered commission structures and vendor rebates in certain markets outside of the United States. Variable consideration is estimated and included in total consideration at contract inception based on either the expected value method or the most likely outcome method. These estimates are based on historical award experience, anticipated performance and other factors known at the time. Performance incentives are typically recognized in revenue over time. Variable consideration for our media businesses in certain international markets includes rebate revenue and is recognized when it is probable that the media will be run, including when it is not subject to cancellation by the client. In addition, when we receive rebates or credits from vendors for transactions entered into on behalf of clients, they are remitted to the clients in accordance with contractual requirements or retained by us based on the terms of the client contract or local law. Amounts passed on to clients are recorded as a liability and amounts retained by us are recorded as revenue when earned, typically when the media is run. Operating Expenses. Operating expenses include cost of services, selling, general and administrative expenses, or SG&A, and depreciation and amortization. We measure cost of services in two distinct categories: salary and service costs and occupancy and other costs. As a service business, salary and service costs make up the vast majority of our operating expenses and substantially all these costs comprise the essential components directly linked to the delivery of our services. Salary and service costs include employee compensation and benefits, freelance labor and service costs, which primarily include third-party supplier costs and out-of-pocket costs. Occupancy and other costs consist of the indirect costs related to the delivery of our services, including office rent and other occupancy costs, equipment rent, technology costs, general office and other expenses. SG&A expenses primarily consist of third-party marketing costs, professional fees and compensation and benefits and occupancy and other costs of our corporate and executive offices, which includes group-wide finance and accounting, treasury, legal and governance, human resource oversight and similar costs. Receipt of reimbursements under government programs for certain operating expenses are recorded as a reduction to the related operating expense. Cash and Cash Equivalents. Cash and cash equivalents include cash in banks and highly liquid interest-bearing time deposits with original maturities of three months or less. Due to the short-term nature of these investments, carrying value approximates fair value. We have a policy governing counterparty credit risk for financial institutions that hold our cash and cash equivalents and we have deposit limits for each institution. Work in Process. 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. Substantially all unbilled fees and costs will be billed within the next 30 days. Property and Equipment. Property and equipment are carried at cost and are depreciated over the estimated useful lives of the assets using the straight-line method ranging from: to five years for equipment, to ten years for furniture, and up to 40 years for office buildings. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the estimated useful life of the asset. Assets under finance leases are amortized on a straight-line basis over the lease term. Equity Method Investments. Investments in companies where we exercise significant influence over the operating and financial policies of the investee and own less than 50% of the equity are accounted for using the equity method. Our proportionate share of the net income or loss of equity method investments is included in results of operations and any dividends received reduce the carrying value of the investment. The excess of the cost of our investment over our proportionate share of the fair value of the net assets of the investee at the acquisition date is recognized as goodwill and included in the carrying amount of the investment. Goodwill in the equity method investments is not amortized. Gains and losses from changes in our ownership interests are recorded in results of operations until control is achieved. In circumstances where a change in our ownership interest results in obtaining control, the existing carrying value of the investment is remeasured to the acquisition date fair value and any gain or loss is recognized in results of operations. We periodically review the carrying value of the equity method investments to determine if there has been an other-than-temporary decline in carrying value. A variety of factors are considered when determining if a decline in carrying value is other-than-temporary, including the financial condition and business prospects of the investee, as well as our investment intent. Marketable Equity Securities. Marketable equity securities are measured at fair value and changes in fair value are recognized in results of operations. Non-Marketable Equity Securities. Non-marketable equity securities do not have a readily determinable fair value and are measured at cost, less any impairment, and are adjusted for observable changes in fair value from transactions for identical or similar securities of the same issuer. Business Combinations. Business combinations are accounted for using the acquisition method, and accordingly, the assets acquired, including identified intangible assets, liabilities assumed and any noncontrolling interest in the acquired business are recorded at acquisition date fair value. In circumstances where control is obtained and less than 100% of a business is acquired, goodwill is recorded as if 100% were acquired. Acquisition-related costs, including advisory, legal, accounting, valuation and other costs are expensed as incurred. Certain acquisitions include an initial payment at closing and provide for future additional contingent purchase price payments (earn-outs), which are recorded as a liability at the acquisition date fair value using the discount rate in effect on the acquisition date. Subsequent changes in the fair value of the liability are recorded in results of operations. Amounts earned under the contingent purchase price arrangements may be subject to a maximum and payment is not contingent upon future employment. The results of operations of acquired businesses are included in results of operations from the acquisition date. Goodwill and Intangible Assets. Goodwill represents the excess of the acquisition cost over the fair value of the net assets acquired. Goodwill is not amortized but is periodically reviewed for impairment. Intangible assets comprise customer relationships, including the related customer contracts and trade names, and purchased and internally developed software and are amortized over their estimated useful lives ranging from to twelve years. We consider a number of factors in determining the useful lives and amortization method, including the pattern in which the economic benefits are consumed, as well as trade name recognition and customer attrition. There is no estimated residual value for the intangible assets. We review the carrying value of goodwill for impairment annually at June 30 and whenever events or circumstances indicate the carrying value may not be recoverable. The impairment evaluation compares the fair value of each reporting unit, which we identified as our six agency networks, to its carrying value, including goodwill. If the fair value of the reporting unit is equal to or greater than its carrying value, goodwill is not impaired. Goodwill is impaired when the carrying value of the reporting unit exceeds its fair value. Goodwill is written down to its fair value through a non-cash expense recorded in results of operations in the period the impairment is identified. We identified our regional reporting units as components of our operating segments, which are our six agency networks. The regional reporting units and practice areas of each agency network monitor the performance and are responsible for the agencies in their region. The regional reporting units report to the segment managers and facilitate the administrative and logistical requirements of our client-centric strategy for delivering services to clients in their regions. We have concluded that, for each of our operating segments, their regional reporting units had similar economic characteristics and should be aggregated for purposes of testing goodwill for impairment at the operating segment level. Our conclusion was based on a detailed analysis of the aggregation criteria set forth in FASB ASC Topic 280, Segment Reporting, and the guidance set forth in FASB ASC Topic 350, Intangibles - Goodwill and Other. Consistent with our fundamental business strategy, the agencies within our regional reporting units serve similar clients in similar industries, and in many cases the same clients. 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 that are generally limited to personal computers, servers and off-the-shelf software and other overhead costs. Finally, the expected benefits of our acquisitions are typically shared by multiple agencies in various regions as they work together to integrate the acquired agency into our client service strategy. We use the following valuation methodologies to determine the fair value of our reporting units: (1) the income approach, which utilizes discounted expected future cash flows, (2) comparative market participant multiples of EBITDA (earnings before interest, taxes, depreciation and amortization) and (3) when available, consideration of recent and similar acquisition transactions. Based on the results of the annual impairment test, we concluded that at June 30, 2021 and 2020 goodwill was not impaired because either the fair value of each reporting unit was substantially in excess of its respective net book value, or for reporting units with a negative book value, fair value of assets exceeds total assets. Subsequent to the annual impairment test of goodwill at June 30, 2021, there have been no events or circumstances that triggered the need for an interim impairment test. Debt Issuance Costs. Debt issuance costs are capitalized and amortized in interest expense over the life of the related debt and are presented as a reduction to the carrying amount of debt. Temporary Equity - Redeemable Noncontrolling Interests. Owners of noncontrolling equity interests in some of our subsidiaries have the right in certain circumstances to require us to purchase all or a portion of their equity interests at fair value as defined in the applicable agreements. The intent of the parties is to approximate fair value at the time of redemption by using a multiple of earnings that is consistent with generally accepted valuation practices used by market participants in our industry. These contingent redemption rights are embedded in the equity security at issuance, are not free-standing instruments, do not represent a de facto financing and are not under our control. Treasury Stock. Repurchases of our common stock are accounted for at cost and are recorded as treasury stock. Reissued treasury stock, primarily in connection with share-based compensation plans, is accounted for at average cost. Gains or losses on reissued treasury stock arising from the difference between the average cost and the fair value of the award are recorded in additional paid-in capital and do not affect results of operations. Noncontrolling Interests. Noncontrolling interests represent equity interests in certain subsidiaries held by third parties. Noncontrolling interests are presented as a component of equity and the proportionate share of net income attributed to the noncontrolling interests is recorded in results of operations. Changes in noncontrolling interests that do not result in a loss of control are accounted for in equity. Gains and losses resulting from a loss of control are recorded in results of operations. Foreign Currency Translation and Transactions. Substantially all of our foreign subsidiaries use their local currency as their functional currency. Assets and liabilities are translated into U.S. Dollars at the exchange rate on the balance sheet date and revenue and expenses are translated at the average exchange rate for the period. Translation adjustments are recorded in accumulated other comprehensive income. Net foreign currency transaction gains and losses are recorded in results of operations. In 2021, 2020 and 2019, we recorded losses of $3.3 million, $4.8 million and $11.2 million, respectively. Share-Based Compensation. Share-based compensation for restricted stock and stock option awards is measured at the grant date fair value. The fair value of restricted stock awards is determined and fixed using the closing price of our common stock on the grant date and is recorded in additional paid-in capital. The fair value of stock option awards is determined using the Black-Scholes option valuation model. For awards with a service only vesting condition, compensation expense is recognized on a straight-line basis over the requisite service period. For awards with a performance vesting condition, compensation expense is recognized on a graded-vesting basis. Typically, all share-based awards are settled with treasury stock. See Note 10 for additional information regarding our specific award plans. Salary Continuation Agreements. Arrangements with certain present and former employees provide for continuing payments for periods up to ten years after cessation of full-time employment in consideration for agreement by the employees not to compete with us and to render consulting services during the postemployment period. Such payments, which are subject to certain limitations, including our operating performance during the postemployment period, represent the fair value of the services rendered and are expensed in such periods. Severance. The liability for one-time termination benefits, such as severance pay or benefit payouts, is measured and recognized at fair value in the period the liability is incurred. Subsequent changes to the liability are recognized in results of operations in the period of change. Defined Benefit Pension Plans and Postemployment Arrangements. The funded status of our defined benefit plans is recorded as an asset or liability. Funded status is the difference between the fair value of plan assets and the benefit obligation at December 31, the measurement date, determined on a plan-by-plan basis. The benefit obligation for the defined benefit plans is the projected benefit obligation, or PBO, which represents the actuarial present value of benefits expected to be paid upon retirement based on estimated future compensation levels. The fair value of plan assets represents the current market value. Overfunded plans, where the fair value of plan assets exceeds the benefit obligation, are aggregated and recorded as a prepaid pension asset equal to the excess. Underfunded plans, where the benefit obligation exceeds the fair value of plan assets, are aggregated and recorded as a liability equal to the excess. The benefit obligation liability for our postemployment arrangements is the PBO and these arrangements are not funded. The current portion of the benefit obligation for the defined benefit plans and postemployment arrangements, which represents the actuarial present value of benefits payable in the next twelve months that exceed the fair value of plan assets, is recorded in other current liabilities and the long-term portion is recorded in long-term liabilities. Deferred Compensation. Some of our subsidiaries have deferred compensation arrangements with certain executives that provide for payments over varying terms upon retirement, cessation of employment or death. The cost of these arrangements is accrued during the employee’s service period. Income Taxes. We use the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of taxes payable for the current period and the deferred taxes recognized during the period. Deferred income taxes reflect the temporary difference between assets and liabilities that are recognized for financial reporting purposes and income tax purposes and are recorded as noncurrent. Deferred income taxes are measured using the enacted tax rates that are assumed to be in effect when the differences reverse. Valuation allowances are recorded where it is more likely than not that all or a portion of a deferred tax asset will not be realized. In assessing the need for a valuation allowance, we evaluate factors such as prior earnings history, expected future earnings, carry-back and carry-forward periods and tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset. Interest and penalties related to tax positions taken in our tax returns are recorded in income tax expense. We record a liability for uncertain tax positions that reflects the treatment of certain tax positions taken in our tax returns, or planned to be taken in future tax returns, which have not been reflected in income tax expense. Until these positions are sustained by the taxing authorities or the statute of limitations concerning such issues lapses, we do not generally recognize the tax benefits resulting from such positions. Net Income Per Share. Basic net income per share is based on the weighted average number of common shares outstanding during the period. Diluted net income per share is based on the weighted average number of common shares outstanding, plus the dilutive effect of common share equivalents, which include outstanding stock options and restricted stock awards. Leases. At the inception of a contract we assess whether the contract is, or contains, a lease. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of the criteria. Substantially all our operating leases are leases for office space, and substantially all our finance leases are leases for office furniture and technology equipment. For all leases a right-of-use, or ROU, asset and lease liability are recognized at the lease commencement date. The lease liability represents the present value of the lease payments under the lease. The ROU asset is initially measured at cost, which includes the initial lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All ROU assets are reviewed for impairment. The lease liability is initially measured as the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, our secured incremental borrowing rate for the same term as the underlying lease. For real estate and certain equipment operating leases, we use our secured incremental borrowing rate. For finance leases, we use the rate implicit in the lease or our secured incremental borrowing rate if the implicit lease rate cannot be determined. Lease payments included in the measurement of the lease liability comprise: the fixed noncancelable lease payments, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will not be terminated early. Lease components, including fixed payments for real estate taxes and insurance for office space leases, are included in the measurement of the initial lease liability. Office space leases may contain variable lease payments, which include payments based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement. Additional payments based on the change in an index or rate, or payments based on a change in our portion of the operating expenses, including real estate taxes and insurance, are recorded as a period expense when incurred. Lease modifications result in remeasurement of the lease liability. Operating lease expense is recognized on a straight-line basis over the lease term. Lease expense may include variable lease payments incurred in the period that were not included in the initial lease liability. Finance lease expense consists of the amortization of the ROU asset on a straight-line basis over the lease term and interest expense determined on an amortized cost basis. Finance lease payments are allocated between a reduction of the lease liability and interest expense. Concentration of Credit Risk. We provide advertising, marketing and corporate communications services to several thousand clients that operate in nearly every industry sector of the global economy, and we grant credit to qualified clients in the normal course of business. Due to the diversified nature of our client base, we do not believe that we are exposed to a concentration of credit risk as our largest client accounted for 3.2% of revenue in 2021. Derivative Financial Instruments. All derivative instruments, including certain derivative instruments embedded in other contracts, are recorded at fair value. Derivatives qualify for hedge accounting if: the hedging instrument is designated as a hedge, the hedged exposure is specifically identifiable and exposes us to risk, and a change in fair value of the derivative financial instrument and an opposite change in the fair value of the hedged exposure have a high degree of correlation. The method of assessing hedge effectiveness and measuring hedge ineffectiveness is formally documented. Hedge effectiveness is assessed, and hedge ineffectiveness is measured at least quarterly throughout the designated hedge period. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged asset, liability or firm commitment through results of operations or recognized in other comprehensive income until the hedged item is recognized in results of operations. We do not use derivatives for trading or speculative purposes. Using derivatives exposes us to the risk that counterparties to the derivative contracts will fail to meet their contractual obligations. We manage that risk through careful selection and ongoing evaluation of the counterparty financial institutions based on specific minimum credit standards and other factors. Fair Value. We apply the fair value measurement guidance in FASB ASC Topic 820, Fair Value Measurements and Disclosures, for our financial assets and liabilities that are required to be measured at fair value and for our nonfinancial assets and liabilities that are not required to be measured at fair value on a recurring basis, which includes goodwill and other identifiable intangible assets. 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 - Unadjusted quoted prices in active markets for identical assets or liabilities. •Level 2 - Unadjusted quoted prices in active markets for similar assets or liabilities; unadjusted quoted prices for identical assets or liabilities in markets that are not active; and model-derived valuations with observable inputs. •Level 3 - Unobservable inputs for the asset or liability. We use unadjusted quoted market prices to determine the fair value of our financial assets and liabilities and classify such items in Level 1. We use unadjusted quoted market prices for similar assets and liabilities in active markets and model-derived valuations and classify such items in Level 2. In determining the fair value of financial assets and liabilities, we consider certain market valuation adjustments that market participants would consider in determining fair value, including: counterparty credit risk adjustments applied to financial assets and liabilities, taking into account the actual credit risk of the counterparty when valuing assets measured at fair value and credit risk adjustments applied to reflect our credit risk when valuing liabilities measured at fair value. Reclassifications. Certain reclassifications have been made to the prior year financial information to conform to the current year presentation.
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Revenue |
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Revenue | 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 networks and agencies provide a comprehensive range of services in the following fundamental disciplines: Advertising, Precision Marketing, Commerce & Brand Consulting, Experiential, Execution & Support, Public Relations and Healthcare. Advertising includes creative services across digital and traditional media, strategic media planning and buying, and data analytics services. Precision Marketing includes digital and direct marketing, digital transformation and data and analytics. Commerce & Brand Consulting services include brand consulting, strategy and research, and retail ecommerce. Experiential marketing services include live and digital events and experience design and execution. Execution & Support includes field marketing, sales support, digital and physical merchandising and point-of-sale, as well as other specialized marketing and custom communications 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 and pharmaceutical clients. 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. Revenue by discipline was (in millions):
Primarily as a result of the COVID-19 pandemic, revenue for 2020 as compared to 2019 decreased in all our major markets and all disciplines except for Healthcare and Precision Marketing. 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 geographic markets was (in millions):
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 in 2021 and 2020 was $7,245.9 million and $7,186.1 million, respectively. The sale of ICON impacted revenue in the United States in 2021. 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):
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. There were no impairment losses to the contract assets recorded in 2021 or 2020.
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Net Income per Share |
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Net Income per Share | Net Income per ShareThe computations of basic and diluted net income per share were (in millions, except per share amounts):
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Business Combinations |
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Business Combinations [Abstract] | |
Business Combinations | Business Combinations In 2021, we completed five acquisitions that increased goodwill by $285.9 million. In addition, during 2021, we acquired additional equity interests in certain majority owned subsidiaries, which are accounted for as equity transactions, and no additional goodwill was recorded. None of the acquisitions in 2021, either individually or in the aggregate, was material to our results of operations or financial position. The evaluation of potential acquisitions is based on various factors, including specialized know-how, reputation, geographic coverage, competitive position and service offerings, as well as our experience and judgment. Our acquisition strategy is focused on acquiring the expertise of an assembled workforce in order to continue to build upon the core capabilities of our strategic business platforms and agency brands, through the expansion of their geographic area or their service capabilities to better serve our clients. Certain acquisitions include an initial payment at closing and provide for future additional contingent purchase price payments (earn-outs), which are derived using the performance of the acquired company and are based on predetermined formulas. At December 31, 2021 and 2020, contingent purchase price obligations were $167.1 million and $71.9 million, respectively, of which $43.1 million and $32.1 million, respectively, are included in other current liabilities. For each acquisition, we undertake a detailed review to identify other intangible assets that are required to be valued separately. We use several market participant measurements to determine fair value. This approach includes consideration of similar and recent transactions, as well as utilizing discounted expected cash flow methodologies, and when available and as appropriate, we use comparative market multiples to supplement our analysis. As is typical for most service businesses, a substantial portion of the intangible asset value we acquire is the specialized know-how of the workforce, which is treated as part of goodwill and is not valued separately. A significant portion of the identifiable intangible assets acquired is derived from customer relationships, including the related customer contracts, as well as trade names. One of the primary drivers in executing our acquisition strategy is the existence of, or the ability to, expand our existing client relationships. The expected benefits of our acquisitions are typically shared across multiple agencies and regions.
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and intangible assets were (in millions):
Changes in goodwill were (in millions):
No goodwill impairment losses were recorded in 2021 or 2020, and there are no accumulated goodwill impairment losses.
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Debt |
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Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Credit Facility and Credit Lines We maintain a $2.5 billion multi-currency revolving credit facility, or Credit Facility, that matures on February 14, 2025. In addition, we have uncommitted credit lines aggregating $863.9 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 December 31, 2021, there were no borrowings under the Credit Facility or the uncommitted credit lines, and there were no outstanding commercial paper issuances. 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 December 31, 2021, we were in compliance with this covenant as our Leverage Ratio was 2.3 times. The Credit Facility does not limit our ability to declare or pay dividends or repurchase our common stock. Short-Term Debt At December 31, 2021 and 2020, short-term debt of $9.6 million and $3.9 million, respectively, represented bank overdrafts and short-term borrowings primarily of our international subsidiaries. The weighted average interest rate was 1.6% and 3.5%, respectively. Due to the short-term nature of this debt, carrying value approximates fair value. Long-Term Debt Long-term debt was (in millions):
On May 3, 2021, we issued $800 million 2.60% Senior Notes due 2031. 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 in May 2021. In connection with the early redemption, we recorded a loss on extinguishment of $26.6 million in interest expense. On November 22, 2021, Omnicom Capital Holdings plc, or OCH, a U.K.-based wholly owned subsidiary of Omnicom, issued £325 million 2.25% Senior Notes due 2033, or the Sterling Notes. The U.S. Dollar equivalent of the net proceeds from the issuance, after deducting the underwriting discount and offering expenses, was $429.6 million. The 2.45% Senior Notes due 2030, the 4.20% Senior Notes due 2030 and the 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. 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. 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 OFH, a U.K.-based wholly owned subsidiary of Omnicom, with respect to the €500 million 0.80% Senior Notes due 2027 and the €500 million 1.40% Senior Notes due 2031, collectively the Euro Notes. OFH’s assets consist of its investments in several wholly owned finance companies that function as treasury centers, which 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 OFH to obtain funds from their subsidiaries through dividends, loans or advances. The Euro 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 OFH and each of Omnicom and OCI, respectively. Omnicom has fully and unconditionally guaranteed the obligations of OCH, with respect to the Sterling Notes. OCH’s assets consist of its investments in several wholly owned finance companies that function as treasury centers, which provide funding for various operating companies in EMEA, 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 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. At December 31, 2021, the maturities of our long-term debt were (in millions):
Interest Expense Interest expense is composed of (in millions):
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Segment Reporting |
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Segment Reporting | 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. In June 2021, we combined certain practice areas into a new reporting unit that primarily comprises the Omnicom Public Relations Group and assigned a segment manager to that reporting unit. As a result, the number of operating segments increased from five to six. 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):
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Equity Method Investments |
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Equity Method Investments [Abstract] | |
Equity Method Investments | Equity Method InvestmentsIncome (loss) from our equity method investments in 2021, 2020 and 2019 was $7.5 million, $(6.8) million and $2.0 million, respectively. At December 31, 2021 and 2020, our proportionate share in the net assets of the equity method investments was $26.0 million and $30.1 million, respectively. Equity method investments are not material to our results of operations or financial position; therefore, summarized financial information is not required to be presented. |
Share-Based Compensation Plans |
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Share-Based Compensation Plans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation Plans | Share-Based Compensation Plans Share-based incentive awards are granted to employees under the 2021 Incentive Award Plan, or the 2021 Plan, which was approved by the shareholders in May 2021. The 2021 Plan is administered by the Compensation Committee of the Board of Directors, or the Compensation Committee. Awards include stock options, restricted stock and other stock awards. The maximum number of shares of common stock that can be granted under the 2021 Plan is 14.7 million shares plus any shares awarded under the 2021 Plan and any prior plan that have been forfeited or have expired. All awards reduce the number of shares available for grant on a one-for-one basis. The terms of each award and the exercise date are determined by the Compensation Committee. The 2021 Plan does not permit the holder of an award to elect cash settlement under any circumstances. At December 31, 2021, there were 10,157,026 shares available for grant under the 2021 Plan. Share-based compensation expense in 2021, 2020 and 2019 was $84.7 million, $70.8 million and $72.5 million, respectively. At December 31, 2021, unamortized share-based compensation that will be expensed over the next years is $198.2 million. We record a deferred tax asset for the share-based compensation expense recognized for financial reporting purposes that has not been deducted on our income tax return. Excess tax benefits and deficiencies represent the difference between the actual compensation deduction for tax purposes, which is calculated as the difference between the grant date price of the award, and the price of our common stock on the vesting or exercise date. Any excess tax benefit or deficiency related to share-based compensation is recorded in results of operations, as a component of income tax expense, upon vesting of restricted stock awards or exercise of stock options. In 2021, we recognized a tax benefit of $2.9 million, and in 2020, we recognized a tax deficiency of $3.6 million. Stock Options The exercise price of stock option awards cannot be less than 100% of the market price of our common stock on the grant date and have a maximum contractual life of 10 years. Stock option activity was:
At December 31, 2021, options outstanding and exercisable were:
The 2021 option award grant date fair value of $8.47 was determined using the Black-Scholes option valuation model. The assumptions used, without adjusting for forfeitures and lack of liquidity were: expected life of 8 years, risk free interest rate of 1.4%, expected volatility of 23%, and dividend yield of 4.6%. On the grant date, the exercise price of the award was greater than the closing price of our common stock. Restricted Stock Restricted stock activity was:
Generally, restricted shares vest ratably over five years from the grant date provided the employee remains employed by us. Restricted shares may not be sold, transferred, pledged or otherwise encumbered until the forfeiture restrictions lapse. Under most circumstances, the employee forfeits the shares if employment ceases prior to the end of the restriction period. Performance Restricted Stock Units The Compensation Committee grants certain employees performance restricted stock units, or PRSU. Each PRSU represents the right to receive one share of common stock on vesting. The ultimate number of PRSUs received by the employee depends on the Company's average return on equity over a three year period compared to the average return on equity of a peer group of principal competitors over the same period. The PRSUs vest three years from the grant date. The PRSUs have a service and performance vesting condition and compensation expense is recognized on a graded-vesting basis. Over the performance period, compensation expense is adjusted upward or downward based on our estimate of the probability of achieving the performance target for the portion of the awards subject to the performance vesting condition. We have assumed that all the PRSUs will vest. PRSU activity was:
Employee Stock Purchase Plan The employee stock purchase plan, or ESPP, enables employees to purchase our common stock through payroll deductions over each plan quarter at 95% of the market price on the last trading day of the plan quarter. Purchases are limited to 10% of eligible compensation as defined by the Employee Retirement Income Security Act of 1974, or ERISA. In 2021, 2020 and 2019, employees purchased 73,250 shares, 91,605 shares and 76,040 shares, respectively. All shares purchased were treasury stock, for which we received $5.0 million, $5.2 million and $5.6 million, respectively. At December 31, 2021, there were 8,434,456 shares available under the ESPP.
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Income Taxes |
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Income Taxes | Income Taxes The components of income before income taxes were (in millions):
Income tax expense (benefit) was (in millions):
The reconciliation from the statutory U.S. federal income tax rate to our effective tax rate is:
Our effective tax rate for 2021 decreased year-over-year to 24.6% from 27.1%. In connection with the sale of ICON in the second quarter of 2021, we recorded a pre-tax gain of $50.5 million. The lower effective tax rate for 2021 was predominantly the result of $32.8 million of favorable settlements of uncertain tax positions in certain domestic jurisdictions, as well as a nominal tax applied against the book gain on the sale of ICON resulting from excess tax over book basis. 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. The Tax Cuts and Jobs Act of 2017, or the Tax Act, imposed a one-time tax, the transition tax, on the accumulated earnings of foreign subsidiaries. At December 31, 2021 and 2020, the remaining transition tax liability was $100.4 million and $112.0 million, respectively. The transition tax is expected to be fully paid by 2026. The Tax Act also implemented a territorial tax system that allows us to repatriate earnings of our foreign subsidiaries without incurring additional U.S. tax by providing a 100% dividend exemption. While a territorial tax system limits U.S. federal income tax to domestic source income, foreign source income is subject to tax in the appropriate foreign jurisdiction at the local rate, which in certain jurisdictions may be higher than the U.S. federal statutory income tax rate of 21%. Therefore, the foreign tax rate differential will cause our effective tax rate to be higher than the U.S. federal statutory income tax rate. The international tax rate differentials in 2021 and 2020 are primarily attributed to our earnings in Germany, Australia, France, Japan and Brazil being taxed at higher rates than the U.S. statutory tax rate. We have elected to account for any tax on the global intangible low-taxed income, or GILTI, in the period in which it is incurred. In 2021 and 2020, we provided $8.8 million and $3.0 million, respectively, for tax impacts of GILTI. Income tax expense in 2021, 2020 and 2019 includes $2.1 million, $3.8 million and $2.2 million, respectively, of interest, net of tax benefit, and penalties related to tax positions taken on our tax returns that have not been settled as of December 31, 2021. At December 31, 2021 and 2020, accrued interest and penalties were $10.7 million and $23.5 million, respectively. The components of deferred tax assets and liabilities and balance sheet classification were (in millions):
We have concluded that it is more likely than not that we will be able to realize our net deferred tax assets in future periods because results of future operations are expected to generate sufficient taxable income. The valuation allowance of $18.0 million and $15.9 million at December 31, 2021 and 2020, respectively, relates to tax losses and tax credit carryforwards in the U.S. and in international jurisdictions. Tax loss and credit carryforwards for which there is no valuation allowance are available for periods ranging from 2022 to 2041, which is longer than the forecasted utilization of such carryforwards. A reconciliation of our unrecognized tax benefits is (in millions):
The majority of the liability for uncertain tax positions is recorded in long-term liabilities. At December 31, 2021 and 2020, approximately $157.3 million and $174.0 million, respectively, of the liability for uncertain tax positions would affect our effective tax rate upon resolution of the uncertain tax positions. We file a consolidated U.S. federal income tax return and income tax returns in various state and local jurisdictions. Our subsidiaries file tax returns in various foreign jurisdictions. Our principal foreign jurisdictions include the United Kingdom, France and Germany. The Internal Revenue Service has completed its examination of our U.S. federal tax returns through 2017. Tax returns in the United Kingdom, France and Germany have been examined through 2018, 2017 and 2009, respectively.
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Pension and Other Postemployment Benefits |
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Pension and Other Postemployment Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Postemployment Benefits | Pension and Other Postemployment Benefits Defined Contribution Plans Our domestic and international subsidiaries provide retirement benefits for their employees primarily through defined contribution profit sharing and savings plans. Contributions to the plans vary by subsidiary and have generally been in amounts up to the maximum percentage of total eligible compensation of participating employees that is deductible for income tax purposes. Contribution expense in 2021, 2020 and 2019 was $115.5 million, $108.1 million and $115.2 million, respectively. Defined Benefit Pension Plans Two of our U.S. businesses and several of our non-U.S. businesses sponsor noncontributory defined benefit pension plans. These plans provide benefits to employees based on formulas recognizing length of service and earnings. The U.S. plans cover approximately 700 participants, are closed to new participants and do not accrue future benefit credits. The non-U.S. plans, which include plans required by local law, cover approximately 7,600 participants and are not subject to ERISA. We have a Senior Executive Restrictive Covenant and Retention Plan, or Retention Plan, for certain executive officers selected by the Compensation Committee. The Retention Plan is a non-qualified deferred compensation severance plan that was adopted to secure non-competition, non-solicitation, non-disparagement and ongoing consulting services from such executive officers and to strengthen the retention aspect of executive officer compensation. The Retention Plan provides annual payments upon termination following at least seven years of service with Omnicom or its subsidiaries to the participants or to their beneficiaries. A participant’s annual benefit is payable for 15 consecutive calendar years following termination, but in no event prior to age 55. The annual benefit is equal to the lesser of (i) the participant’s final average pay times an applicable percentage, which is based upon the executive’s years of service as an executive officer, not to exceed 35% or (ii) $1.5 million adjusted for cost-of-living, beginning with the second annual payment, not to exceed 2.5% per year. The Retention Plan is not funded and benefits are paid when due. The components of net periodic benefit expense were (in millions):
Included in accumulated other comprehensive income at December 31, 2021 and 2020 were unrecognized costs for actuarial losses and prior service cost of $67.2 million ($46.8 million net of income taxes) and $96.5 million ($67.6 million net of income taxes), respectively, that have not yet been recognized in net periodic benefit cost. The unrecognized costs for actuarial gains and losses and prior service cost included in accumulated other comprehensive income and expected to be recognized in net periodic benefit cost in 2022 is $6.3 million. The weighted average assumptions used to determine net periodic benefit expense were:
The expected long-term rate of return for plan assets for the U.S. plans is based on several factors, including current and expected asset allocations, historical and expected returns on various asset classes and current and future market conditions. A total return investment approach using a mix of equities and fixed income investments maximizes the long-term return. This strategy is intended to minimize plan expense by achieving long-term returns in excess of the growth in plan liabilities over time. The discount rate used to compute net periodic benefit cost is based on yields of available high-quality bonds and reflects the expected cash flow as of the measurement date. The expected returns on plan assets and discount rates for the non-U.S. plans are based on local factors, including each plan’s investment approach, local interest rates and plan participant profiles. Experience gains and losses and the effects of changes in actuarial assumptions are generally amortized over a period no longer than the expected average future service of active employees. Our funding policy is to contribute amounts sufficient to meet minimum funding requirements in accordance with the applicable employee benefit and tax laws that the plans are subject to, plus such additional amounts as we may determine to be appropriate. In 2021 and 2020, we contributed $6.4 million and $9.1 million, respectively, to the defined benefit pension plans. We do not expect the contributions for 2022 to differ materially from the 2021 contributions. The change in benefit obligation and fair value of plan assets of the defined benefit pension plans were (in millions):
The funded status and balance sheet classification of the defined benefit pension plans were (in millions):
At December 31, 2021 and 2020, the accumulated benefit obligation for our defined benefit pension plans was $226.6 million and $243.9 million, respectively. Plans with benefit obligations in excess of plan assets were (in millions):
The weighted average assumptions used to determine the benefit obligation were:
At December 31, 2021, the estimated benefits expected to be paid over the next 10 years are (in millions):
Postemployment Arrangements We have executive retirement agreements under which benefits will be paid to participants or to their beneficiaries over periods up to ten years beginning after cessation of full-time employment. Our postemployment arrangements are unfunded and benefits are paid when due. The components of net periodic benefit expense were (in millions):
Included in accumulated other comprehensive income at December 31, 2021 and 2020 were unrecognized costs for actuarial losses and prior service cost of $56.7 million ($39.5 million net of income taxes) and $73.8 million ($51.8 million net of income taxes), respectively, that have not yet been recognized in the net periodic benefit cost. The unrecognized costs for actuarial gains and losses and prior service cost included in accumulated other comprehensive income and expected to be recognized in net periodic benefit cost in 2022 is $6.3 million. The weighted average assumptions used to determine net periodic benefit expense were:
Experience gains and losses and effects of changes in actuarial assumptions are amortized over a period no longer than the expected average future service of active employees. At December 31, 2021 and 2020, the benefit obligation and balance sheet classification were (in millions):
The weighted average assumptions used to determine the benefit obligation were: At December 31, 2021, the estimated benefits expected to be paid over the next 10 years are (in millions):
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Disposition of Subsidiary |
12 Months Ended |
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Dec. 31, 2021 | |
Disposition of Subsidiary [Abstract] | |
Disposition of Subsidiary | Disposition of SubsidiaryIn 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 11, 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. |
Supplemental Cash Flow Data |
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Supplemental Cash Flow Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Data | Supplemental Cash Flow Data The change in operating capital was (in millions):
Supplemental financial information (in millions):
Non-cash increase in lease liabilities (in millions):
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Noncontrolling Interests |
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Noncontrolling Interests [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interests | Noncontrolling InterestsChanges in the ownership interests in our less than 100% owned subsidiaries were (in millions):
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases and Property and Equipment Leases The components of lease cost were (in millions):
The maturities of our lease liabilities at December 31, 2021 were (in millions):
The balance sheet classification of our operating leases was (in millions):
Operating leases for office space and equipment at December 31, 2021 and 2020, had a weighted average remaining lease term of 7.5 and 7.9 years, respectively, and a weighted average discount rate of 3.2% and 3.7%, respectively. Property and Equipment Property and equipment at December 31 were (in millions):
Finance leases at December 31, 2021 and 2020, had a weighted average remaining lease term of 3.1 years and 3.0 years, respectively, and a weighted average discount rate of 4.3% and 4.2%, respectively.
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Temporary Equity - Redeemable Noncontrolling Interests |
12 Months Ended |
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Dec. 31, 2021 | |
Temporary Equity - Redeemable Noncontrolling Interests [Abstract] | |
Temporary Equity - Redeemable Noncontrolling Interests | Temporary Equity - Redeemable Noncontrolling InterestsOwners of noncontrolling equity interests in some of our subsidiaries have the right in certain circumstances to require us to purchase all or a portion of their equity interest at fair value as defined in the applicable agreements. Assuming that the subsidiaries perform over the relevant periods at their current profit levels, at December 31, 2021 the aggregate estimated maximum amount we could be required to pay in future periods is $345.3 million, of which $107.5 million is currently exercisable by the holders. If these rights are exercised, there would be an increase in net income attributable to Omnicom as a result of our increased ownership interest and the reduction of net income attributable to noncontrolling interests. The ultimate amount paid could be significantly different because the redemption amount depends on the future results of operations of the subject businesses, the timing of the exercise of these rights and changes in foreign currency exchange rates. |
Commitments and Contingent Liabilities |
12 Months Ended |
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Dec. 31, 2021 | |
Commitments and Contingent Liabilities [Abstract] | |
Commitments and Contingent Liabilities | Commitments and Contingent LiabilitiesIn the ordinary course of business, we are involved in various legal proceedings. We do not expect that these proceedings will have a material adverse effect on our results of operations or financial position. |
Accumulated Other Comprehensive Income |
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Accumulated Other Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive IncomeChanges in accumulated other comprehensive income (loss), net of income taxes were (in millions):
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Fair Value |
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Fair Value [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair ValueFinancial assets and liabilities measured at fair value on a recurring basis were (in millions):
Changes in contingent purchase price obligations were (in millions):
The carrying amount and fair value of our financial assets and liabilities were (in millions):
The estimated fair value of the foreign currency derivative instruments is determined using model-derived valuations, taking into consideration foreign currency 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. The fair value of long-term debt is based on quoted market prices.
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Derivative Instruments and Hedging Activities |
12 Months Ended |
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Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities We manage our exposure to foreign exchange rate risk and interest rate risk through various strategies, including the use of derivative financial instruments. We use forward foreign exchange contracts as economic hedges to manage the cash flow volatility arising from foreign exchange rate fluctuations. We do not use derivatives for trading or speculative purposes. Using derivatives exposes us to the risk that counterparties to the derivative contracts will fail to meet their contractual obligations. We manage that risk through careful selection and ongoing evaluation of the counterparty financial institutions based on specific minimum credit standards and other factors. We evaluate the effects of changes in foreign currency exchange rates, interest rates and other relevant market risks on our derivatives. We periodically determine the potential loss from market risk on our derivatives by performing a value-at-risk, or VaR, analysis. VaR is a statistical model that uses historical currency exchange rate data to measure the potential impact on future earnings of our derivative financial instruments assuming normal market conditions. The VaR model is not intended to represent actual losses but is used as a risk estimation and management tool. Based on the results of the model, we estimate with 95% confidence a maximum one-day change in the net fair value of our derivative financial instruments at December 31, 2021 was not significant. Foreign Currency Exchange Risk As an integral part of our global treasury operations, we centralize our cash and use notional multicurrency pools to manage the foreign currency exchange risk that arises from imbalances between subsidiaries and their respective treasury centers. In addition, there are circumstances where revenue and expense transactions are not denominated in the same currency. In these instances, amounts are either promptly settled or hedged with forward foreign exchange contracts. To manage this risk, we had outstanding forward foreign exchange contracts with an aggregate notional amount of $77.3 million and $169.6 million at December 31, 2021 and 2020, respectively. Foreign currency derivatives are designated as fair value hedges; therefore, any gain or loss in fair value incurred on those instruments is recorded in results of operations and is generally offset by decreases or increases in the fair value of the underlying exposure. By using these financial instruments, we reduce financial risk of adverse foreign exchange changes by foregoing any gain which might occur if the markets move favorably. The terms of our forward foreign exchange contracts are generally less than 90 days. Interest Rate Risk We may use interest rate swaps to manage our interest cost and structure our long-term debt portfolio to achieve a mix of fixed rate and floating rate debt. During 2021, there were no interest rate swaps and, at December 31, 2021, long-term debt consisted entirely of fixed-rate debt.
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New Accounting Standards |
12 Months Ended |
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Dec. 31, 2021 | |
New Accounting Standards [Abstract] | |
New Accounting Standards | New Accounting StandardsIn October 2021, the FASB issued ASU 2021-08, Accounting for Contract Assets and Contract Liabilities From Contracts With Customers, or ASU 2021-08, that requires acquiring companies to apply ASC 606 to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination consistent with those recorded by the acquiring company. ASU 2021-08 is effective January 1, 2023, and early adoption is permitted. Contracts with customers in the advertising and marketing business are typically short duration contracts. To the extent we acquire companies in the advertising and marketing communications business, we do not expect this standard to have a material impact on our results of operations or financial position. However, we are still in the process of assessing the impact of ASU 2021-08 on our results of operations and financial position. |
Subsequent Events |
12 Months Ended |
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Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsWe have evaluated events subsequent to the balance sheet date and determined there have not been any events that have occurred that would require adjustment to or disclosure in the consolidated financial statements. |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS |
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS For the Three Years Ended December 31, 2021 (In millions)
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Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2021 | |
Significant Accounting Policies [Abstract] | |
Revenue Recognition, Policy | Revenue Recognition. Revenue is recognized when a customer obtains control of promised goods or services (the performance obligation) in an amount that reflects the consideration we expect to receive in exchange for those goods or services (the transaction price). We measure revenue by estimating the transaction price based on the consideration specified in the client arrangement. Revenue is recognized as the performance obligations are satisfied. Our revenue is primarily derived from the planning and execution of advertising communications and marketing services in the following fundamental disciplines: Advertising, Precision Marketing, Commerce & Brand Consulting, Experiential, Execution & Support, Public Relations and Healthcare. Our client contracts are primarily fees for service on a rate per hour or per project basis. Revenue is recorded net of sales, use and value added taxes. Performance Obligations. In substantially all our disciplines, the performance obligation is to provide advisory and consulting services at an agreed-upon level of effort to accomplish the specified engagement. Our client contracts are comprised of diverse arrangements involving fees based on any one or a combination of the following: an agreed fee or rate per hour for the level of effort expended by our employees; commissions based on the client’s spending for media purchased from third parties; qualitative or quantitative incentive provisions specified in the contract; and reimbursement for third-party costs that we are required to include in revenue when we control the vendor services related to these costs and we act as principal. The transaction price of a contract is allocated to each distinct performance obligation based on its relative stand-alone selling price and is recognized as revenue when, or as, the customer receives the benefit of the performance obligation. Clients typically receive and consume the benefit of our services as they are performed. Substantially all our client contracts provide that we are compensated for services performed to date and allow for cancellation by either party on short notice, typically 90 days, without penalty. Generally, our short-term contracts, which normally take 30 to 90 days to complete, are performed by a single agency and consist of a single performance obligation. As a result, we do not consider the underlying services as separate or distinct performance obligations because our services are highly interrelated, occur in close proximity, and the integration of the various components of a marketing message is essential to overall service. In certain of our long-term client contracts, which have a term of up to one year, the performance obligation is a stand-ready obligation, because we provide a constant level of similar services over the term of the contract. In other long-term contracts, when our services are not a stand-ready obligation, we consider our services distinct performance obligations and allocate the transaction price to each separate performance obligation based on its stand-alone selling price, including contracts for strategic media planning and buying services, which are considered to be multiple performance obligations, and we allocate the transaction price to each distinct service based on the staffing plan and the stand-alone selling price. In substantially all of our creative services contracts, we have distinct performance obligations for our services, including certain creative services contracts where we act as an agent and arrange, at the client’s direction, for third parties to perform studio production efforts. Revenue Recognition Methods. A substantial portion of our revenue is recognized over time, as the services are performed, because the client receives and consumes the benefit of our performance throughout the contract period, or we create an asset with no alternative use and are contractually entitled to payment for our performance to date in the event the client terminates the contract for convenience. For these client contracts, other than when we have a stand-ready obligation to perform services, revenue is recognized over time using input measures that correspond to the level of staff effort expended to satisfy the performance obligation on a rate per hour or equivalent basis. For client contracts when we have a stand-ready obligation to perform services on an ongoing basis over the life of the contract, typically for periods up to one year, where the scope of these arrangements is broad and there are no significant gaps in performing the services, we recognize revenue using a time-based measure resulting in a straight-line revenue recognition. From time to time, there may be changes in the client service requirements during the term of a contract and the changes could be significant. These changes are typically negotiated as new contracts covering the additional requirements and the associated costs, as well as additional fees for the incremental work to be performed. To a lesser extent, for certain other contracts where our performance obligations are satisfied in phases, we recognize revenue over time using certain output measures based on the measurement of the value transferred to the customer, including milestones achieved. Where the transaction price or a portion of the transaction price is derived from commissions based on a percentage of purchased media from third parties, the performance obligation is not satisfied until the media is run and we have an enforceable contract providing a right to payment. Accordingly, revenue for commissions is recognized at a point in time, typically when the media is run, including when it is not subject to cancellation by the client or media vendor. Principal vs. Agent. In substantially all our businesses, we incur third-party costs on behalf of clients, including direct costs and incidental, or out-of-pocket costs. Third-party direct costs incurred in connection with the creation and delivery of advertising or marketing communication services include, among others: purchased media, studio production services, specialized talent, including artists and other freelance labor, event marketing supplies, materials and services, promotional items, market research and third-party data and other related expenditures. Out-of-pocket costs include, among others: transportation, hotel, meals and telecommunication charges incurred by us in the course of providing our services. Billings related to out-of-pocket costs are included in revenue since we control the goods or services prior to delivery to the client. However, the inclusion of billings related to third-party direct costs in revenue depends on whether we act as a principal or as an agent in the client arrangement. In most of our businesses, including advertising, which also includes studio production efforts and media planning and buying services, public relations, healthcare advertising and most of our Experiential businesses, we act as an agent and arrange, at the client’s direction, for third parties to perform certain services. In these cases, we do not control the goods or services prior to the transfer to the client. As a result, revenue is recorded net of these costs, equal to the amount retained for our fee or commission. In certain businesses we may act as principal when contracting for third-party services on behalf of our clients. In our events business and most of our Execution & Support businesses, including field marketing and certain specialty marketing businesses, we act as principal because we control the specified goods or services before they are transferred to the client and we are responsible for providing the specified goods or services, or we are responsible for directing and integrating third-party vendors to fulfill our performance obligation at the agreed upon contractual price. In such arrangements, we also take pricing risk under the terms of the client contract. In certain specialty media buying businesses, we act as principal when we control the buying process for the purchase of the media and contract directly with the media vendor. In these arrangements, we assume the pricing risk under the terms of the client contract. When we act as principal, we include billable amounts related to third-party costs in the transaction price and record revenue over time at the gross amount billed, including out-of-pocket costs, consistent with the manner that we recognize revenue for the underlying services contract. However, in media buying contracts where we act as principal, we recognize revenue at a point in time, typically when the media is run, including when it is not subject to cancellation by the client or media vendor. Variable Consideration. Some of our client arrangements include variable consideration provisions, which include performance incentives, tiered commission structures and vendor rebates in certain markets outside of the United States. Variable consideration is estimated and included in total consideration at contract inception based on either the expected value method or the most likely outcome method. These estimates are based on historical award experience, anticipated performance and other factors known at the time. Performance incentives are typically recognized in revenue over time. Variable consideration for our media businesses in certain international markets includes rebate revenue and is recognized when it is probable that the media will be run, including when it is not subject to cancellation by the client. In addition, when we receive rebates or credits from vendors for transactions entered into on behalf of clients, they are remitted to the clients in accordance with contractual requirements or retained by us based on the terms of the client contract or local law. Amounts passed on to clients are recorded as a liability and amounts retained by us are recorded as revenue when earned, typically when the media is run.
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Operating Expenses, Policy | Operating Expenses. Operating expenses include cost of services, selling, general and administrative expenses, or SG&A, and depreciation and amortization. We measure cost of services in two distinct categories: salary and service costs and occupancy and other costs. As a service business, salary and service costs make up the vast majority of our operating expenses and substantially all these costs comprise the essential components directly linked to the delivery of our services. Salary and service costs include employee compensation and benefits, freelance labor and service costs, which primarily include third-party supplier costs and out-of-pocket costs. Occupancy and other costs consist of the indirect costs related to the delivery of our services, including office rent and other occupancy costs, equipment rent, technology costs, general office and other expenses. SG&A expenses primarily consist of third-party marketing costs, professional fees and compensation and benefits and occupancy and other costs of our corporate and executive offices, which includes group-wide finance and accounting, treasury, legal and governance, human resource oversight and similar costs. Receipt of reimbursements under government programs for certain operating expenses are recorded as a reduction to the related operating expense. |
Cash and Cash Equivalents, Policy | Cash and Cash Equivalents. Cash and cash equivalents include cash in banks and highly liquid interest-bearing time deposits with original maturities of three months or less. Due to the short-term nature of these investments, carrying value approximates fair value. We have a policy governing counterparty credit risk for financial institutions that hold our cash and cash equivalents and we have deposit limits for each institution. |
Work in Process, Policy | Work in Process. 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. Substantially all unbilled fees and costs will be billed within the next 30 days. |
Property and Equipment, Policy | Property and Equipment. Property and equipment are carried at cost and are depreciated over the estimated useful lives of the assets using the straight-line method ranging from: to five years for equipment, to ten years for furniture, and up to 40 years for office buildings. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the estimated useful life of the asset. Assets under finance leases are amortized on a straight-line basis over the lease term. |
Equity Method Investments, Policy | Equity Method Investments. Investments in companies where we exercise significant influence over the operating and financial policies of the investee and own less than 50% of the equity are accounted for using the equity method. Our proportionate share of the net income or loss of equity method investments is included in results of operations and any dividends received reduce the carrying value of the investment. The excess of the cost of our investment over our proportionate share of the fair value of the net assets of the investee at the acquisition date is recognized as goodwill and included in the carrying amount of the investment. Goodwill in the equity method investments is not amortized. Gains and losses from changes in our ownership interests are recorded in results of operations until control is achieved. In circumstances where a change in our ownership interest results in obtaining control, the existing carrying value of the investment is remeasured to the acquisition date fair value and any gain or loss is recognized in results of operations. We periodically review the carrying value of the equity method investments to determine if there has been an other-than-temporary decline in carrying value. A variety of factors are considered when determining if a decline in carrying value is other-than-temporary, including the financial condition and business prospects of the investee, as well as our investment intent. |
Equity Securities Investments, Policy | Marketable Equity Securities. Marketable equity securities are measured at fair value and changes in fair value are recognized in results of operations. Non-Marketable Equity Securities. Non-marketable equity securities do not have a readily determinable fair value and are measured at cost, less any impairment, and are adjusted for observable changes in fair value from transactions for identical or similar securities of the same issuer.
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Business Combinations, Policy | Business Combinations. Business combinations are accounted for using the acquisition method, and accordingly, the assets acquired, including identified intangible assets, liabilities assumed and any noncontrolling interest in the acquired business are recorded at acquisition date fair value. In circumstances where control is obtained and less than 100% of a business is acquired, goodwill is recorded as if 100% were acquired. Acquisition-related costs, including advisory, legal, accounting, valuation and other costs are expensed as incurred. Certain acquisitions include an initial payment at closing and provide for future additional contingent purchase price payments (earn-outs), which are recorded as a liability at the acquisition date fair value using the discount rate in effect on the acquisition date. Subsequent changes in the fair value of the liability are recorded in results of operations. Amounts earned under the contingent purchase price arrangements may be subject to a maximum and payment is not contingent upon future employment. The results of operations of acquired businesses are included in results of operations from the acquisition date. |
Goodwill and Intangible Assets, Policy | Goodwill and Intangible Assets. Goodwill represents the excess of the acquisition cost over the fair value of the net assets acquired. Goodwill is not amortized but is periodically reviewed for impairment. Intangible assets comprise customer relationships, including the related customer contracts and trade names, and purchased and internally developed software and are amortized over their estimated useful lives ranging from to twelve years. We consider a number of factors in determining the useful lives and amortization method, including the pattern in which the economic benefits are consumed, as well as trade name recognition and customer attrition. There is no estimated residual value for the intangible assets. We review the carrying value of goodwill for impairment annually at June 30 and whenever events or circumstances indicate the carrying value may not be recoverable. The impairment evaluation compares the fair value of each reporting unit, which we identified as our six agency networks, to its carrying value, including goodwill. If the fair value of the reporting unit is equal to or greater than its carrying value, goodwill is not impaired. Goodwill is impaired when the carrying value of the reporting unit exceeds its fair value. Goodwill is written down to its fair value through a non-cash expense recorded in results of operations in the period the impairment is identified. We identified our regional reporting units as components of our operating segments, which are our six agency networks. The regional reporting units and practice areas of each agency network monitor the performance and are responsible for the agencies in their region. The regional reporting units report to the segment managers and facilitate the administrative and logistical requirements of our client-centric strategy for delivering services to clients in their regions. We have concluded that, for each of our operating segments, their regional reporting units had similar economic characteristics and should be aggregated for purposes of testing goodwill for impairment at the operating segment level. Our conclusion was based on a detailed analysis of the aggregation criteria set forth in FASB ASC Topic 280, Segment Reporting, and the guidance set forth in FASB ASC Topic 350, Intangibles - Goodwill and Other. Consistent with our fundamental business strategy, the agencies within our regional reporting units serve similar clients in similar industries, and in many cases the same clients. 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 that are generally limited to personal computers, servers and off-the-shelf software and other overhead costs. Finally, the expected benefits of our acquisitions are typically shared by multiple agencies in various regions as they work together to integrate the acquired agency into our client service strategy. We use the following valuation methodologies to determine the fair value of our reporting units: (1) the income approach, which utilizes discounted expected future cash flows, (2) comparative market participant multiples of EBITDA (earnings before interest, taxes, depreciation and amortization) and (3) when available, consideration of recent and similar acquisition transactions. Based on the results of the annual impairment test, we concluded that at June 30, 2021 and 2020 goodwill was not impaired because either the fair value of each reporting unit was substantially in excess of its respective net book value, or for reporting units with a negative book value, fair value of assets exceeds total assets. Subsequent to the annual impairment test of goodwill at June 30, 2021, there have been no events or circumstances that triggered the need for an interim impairment test.
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Debt Issuance Costs, Policy | Debt Issuance Costs. Debt issuance costs are capitalized and amortized in interest expense over the life of the related debt and are presented as a reduction to the carrying amount of debt. |
Temporary Equity - Redeemable Noncontrolling Interests, Policy | Temporary Equity - Redeemable Noncontrolling Interests. Owners of noncontrolling equity interests in some of our subsidiaries have the right in certain circumstances to require us to purchase all or a portion of their equity interests at fair value as defined in the applicable agreements. The intent of the parties is to approximate fair value at the time of redemption by using a multiple of earnings that is consistent with generally accepted valuation practices used by market participants in our industry. These contingent redemption rights are embedded in the equity security at issuance, are not free-standing instruments, do not represent a de facto financing and are not under our control. |
Treasury Stock, Policy | Treasury Stock. Repurchases of our common stock are accounted for at cost and are recorded as treasury stock. Reissued treasury stock, primarily in connection with share-based compensation plans, is accounted for at average cost. Gains or losses on reissued treasury stock arising from the difference between the average cost and the fair value of the award are recorded in additional paid-in capital and do not affect results of operations. |
Noncontrolling Interests, Policy | Noncontrolling Interests. Noncontrolling interests represent equity interests in certain subsidiaries held by third parties. Noncontrolling interests are presented as a component of equity and the proportionate share of net income attributed to the noncontrolling interests is recorded in results of operations. Changes in noncontrolling interests that do not result in a loss of control are accounted for in equity. Gains and losses resulting from a loss of control are recorded in results of operations. |
Foreign Currency Translation and Transactions, Policy | Foreign Currency Translation and Transactions. Substantially all of our foreign subsidiaries use their local currency as their functional currency. Assets and liabilities are translated into U.S. Dollars at the exchange rate on the balance sheet date and revenue and expenses are translated at the average exchange rate for the period. Translation adjustments are recorded in accumulated other comprehensive income. Net foreign currency transaction gains and losses are recorded in results of operations. In 2021, 2020 and 2019, we recorded losses of $3.3 million, $4.8 million and $11.2 million, respectively. |
Share-Based Compensation, Policy | Share-Based Compensation. Share-based compensation for restricted stock and stock option awards is measured at the grant date fair value. The fair value of restricted stock awards is determined and fixed using the closing price of our common stock on the grant date and is recorded in additional paid-in capital. The fair value of stock option awards is determined using the Black-Scholes option valuation model. For awards with a service only vesting condition, compensation expense is recognized on a straight-line basis over the requisite service period. For awards with a performance vesting condition, compensation expense is recognized on a graded-vesting basis. Typically, all share-based awards are settled with treasury stock. See Note 10 for additional information regarding our specific award plans. |
Salary Continuation Agreements, Policy | Salary Continuation Agreements. Arrangements with certain present and former employees provide for continuing payments for periods up to ten years after cessation of full-time employment in consideration for agreement by the employees not to compete with us and to render consulting services during the postemployment period. Such payments, which are subject to certain limitations, including our operating performance during the postemployment period, represent the fair value of the services rendered and are expensed in such periods. |
Severance, Policy | Severance. The liability for one-time termination benefits, such as severance pay or benefit payouts, is measured and recognized at fair value in the period the liability is incurred. Subsequent changes to the liability are recognized in results of operations in the period of change. |
Defined Benefit Pension Plans and Postemployment Arrangements, Policy | Defined Benefit Pension Plans and Postemployment Arrangements. The funded status of our defined benefit plans is recorded as an asset or liability. Funded status is the difference between the fair value of plan assets and the benefit obligation at December 31, the measurement date, determined on a plan-by-plan basis. The benefit obligation for the defined benefit plans is the projected benefit obligation, or PBO, which represents the actuarial present value of benefits expected to be paid upon retirement based on estimated future compensation levels. The fair value of plan assets represents the current market value. Overfunded plans, where the fair value of plan assets exceeds the benefit obligation, are aggregated and recorded as a prepaid pension asset equal to the excess. Underfunded plans, where the benefit obligation exceeds the fair value of plan assets, are aggregated and recorded as a liability equal to the excess. The benefit obligation liability for our postemployment arrangements is the PBO and these arrangements are not funded. The current portion of the benefit obligation for the defined benefit plans and postemployment arrangements, which represents the actuarial present value of benefits payable in the next twelve months that exceed the fair value of plan assets, is recorded in other current liabilities and the long-term portion is recorded in long-term liabilities. |
Deferred Compensation, Policy | Deferred Compensation. Some of our subsidiaries have deferred compensation arrangements with certain executives that provide for payments over varying terms upon retirement, cessation of employment or death. The cost of these arrangements is accrued during the employee’s service period. |
Income Taxes, Policy | Income Taxes. We use the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of taxes payable for the current period and the deferred taxes recognized during the period. Deferred income taxes reflect the temporary difference between assets and liabilities that are recognized for financial reporting purposes and income tax purposes and are recorded as noncurrent. Deferred income taxes are measured using the enacted tax rates that are assumed to be in effect when the differences reverse. Valuation allowances are recorded where it is more likely than not that all or a portion of a deferred tax asset will not be realized. In assessing the need for a valuation allowance, we evaluate factors such as prior earnings history, expected future earnings, carry-back and carry-forward periods and tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset. Interest and penalties related to tax positions taken in our tax returns are recorded in income tax expense. We record a liability for uncertain tax positions that reflects the treatment of certain tax positions taken in our tax returns, or planned to be taken in future tax returns, which have not been reflected in income tax expense. Until these positions are sustained by the taxing authorities or the statute of limitations concerning such issues lapses, we do not generally recognize the tax benefits resulting from such positions.
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Net Income Per Share, Policy | Net Income Per Share. Basic net income per share is based on the weighted average number of common shares outstanding during the period. Diluted net income per share is based on the weighted average number of common shares outstanding, plus the dilutive effect of common share equivalents, which include outstanding stock options and restricted stock awards. |
Leases, Policy | Leases. At the inception of a contract we assess whether the contract is, or contains, a lease. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of the criteria. Substantially all our operating leases are leases for office space, and substantially all our finance leases are leases for office furniture and technology equipment. For all leases a right-of-use, or ROU, asset and lease liability are recognized at the lease commencement date. The lease liability represents the present value of the lease payments under the lease. The ROU asset is initially measured at cost, which includes the initial lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All ROU assets are reviewed for impairment. The lease liability is initially measured as the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, our secured incremental borrowing rate for the same term as the underlying lease. For real estate and certain equipment operating leases, we use our secured incremental borrowing rate. For finance leases, we use the rate implicit in the lease or our secured incremental borrowing rate if the implicit lease rate cannot be determined. Lease payments included in the measurement of the lease liability comprise: the fixed noncancelable lease payments, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will not be terminated early. Lease components, including fixed payments for real estate taxes and insurance for office space leases, are included in the measurement of the initial lease liability. Office space leases may contain variable lease payments, which include payments based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement. Additional payments based on the change in an index or rate, or payments based on a change in our portion of the operating expenses, including real estate taxes and insurance, are recorded as a period expense when incurred. Lease modifications result in remeasurement of the lease liability. Operating lease expense is recognized on a straight-line basis over the lease term. Lease expense may include variable lease payments incurred in the period that were not included in the initial lease liability. Finance lease expense consists of the amortization of the ROU asset on a straight-line basis over the lease term and interest expense determined on an amortized cost basis. Finance lease payments are allocated between a reduction of the lease liability and interest expense.
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Concentration of Credit Risk, Policy | Concentration of Credit Risk. We provide advertising, marketing and corporate communications services to several thousand clients that operate in nearly every industry sector of the global economy, and we grant credit to qualified clients in the normal course of business. Due to the diversified nature of our client base, we do not believe that we are exposed to a concentration of credit risk as our largest client accounted for 3.2% of revenue in 2021. |
Derivative Financial Instruments, Policy | Derivative Financial Instruments. All derivative instruments, including certain derivative instruments embedded in other contracts, are recorded at fair value. Derivatives qualify for hedge accounting if: the hedging instrument is designated as a hedge, the hedged exposure is specifically identifiable and exposes us to risk, and a change in fair value of the derivative financial instrument and an opposite change in the fair value of the hedged exposure have a high degree of correlation. The method of assessing hedge effectiveness and measuring hedge ineffectiveness is formally documented. Hedge effectiveness is assessed, and hedge ineffectiveness is measured at least quarterly throughout the designated hedge period. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged asset, liability or firm commitment through results of operations or recognized in other comprehensive income until the hedged item is recognized in results of operations. We do not use derivatives for trading or speculative purposes. Using derivatives exposes us to the risk that counterparties to the derivative contracts will fail to meet their contractual obligations. We manage that risk through careful selection and ongoing evaluation of the counterparty financial institutions based on specific minimum credit standards and other factors. |
Fair Value, Policy | Fair Value. We apply the fair value measurement guidance in FASB ASC Topic 820, Fair Value Measurements and Disclosures, for our financial assets and liabilities that are required to be measured at fair value and for our nonfinancial assets and liabilities that are not required to be measured at fair value on a recurring basis, which includes goodwill and other identifiable intangible assets. 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 - Unadjusted quoted prices in active markets for identical assets or liabilities. •Level 2 - Unadjusted quoted prices in active markets for similar assets or liabilities; unadjusted quoted prices for identical assets or liabilities in markets that are not active; and model-derived valuations with observable inputs. •Level 3 - Unobservable inputs for the asset or liability. We use unadjusted quoted market prices to determine the fair value of our financial assets and liabilities and classify such items in Level 1. We use unadjusted quoted market prices for similar assets and liabilities in active markets and model-derived valuations and classify such items in Level 2. In determining the fair value of financial assets and liabilities, we consider certain market valuation adjustments that market participants would consider in determining fair value, including: counterparty credit risk adjustments applied to financial assets and liabilities, taking into account the actual credit risk of the counterparty when valuing assets measured at fair value and credit risk adjustments applied to reflect our credit risk when valuing liabilities measured at fair value.
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Reclassifications, Policy | Reclassifications. Certain reclassifications have been made to the prior year financial information to conform to the current year presentation. |
Revenue (Tables) |
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Work in Process and Contract Liabilities | Work in process and contract liabilities were (in millions):
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Disaggregation of Revenue | Revenue in our geographic markets was (in millions):
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Disaggregation of Revenue | Revenue by discipline was (in millions):
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Net Income per Share (Tables) |
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Net Income per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computations of Basic and Diluted Net Income per Share | The computations of basic and diluted net income per share were (in millions, except per share amounts):
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Goodwill and Intangible Assets (Tables) |
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Goodwill and Intangible Assets | Goodwill and intangible assets were (in millions):
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Changes in Goodwill | Changes in goodwill were (in millions):
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Debt (Tables) |
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Long-Term Debt | Long-term debt was (in millions):
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Maturities of Long-Term Debt | At December 31, 2021, the maturities of our long-term debt were (in millions):
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Components of Interest Expense | Interest expense is composed of (in millions):
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Segment Reporting (Tables) |
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Revenue and Long-Lived Assets and Goodwill by Geographic Region | Revenue and long-lived assets and goodwill by geographic region were (in millions):
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Share-Based Compensation Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation Plans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option Activity | Stock option activity was:
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Options Outstanding and Exercisable | At December 31, 2021, options outstanding and exercisable were:
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Restricted Stock Activity | Restricted stock activity was:
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Performance Restricted Stock Units Activity | PRSU activity was:
|
Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Before Income Taxes | The components of income before income taxes were (in millions):
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Income Tax Expense (Benefit) | Income tax expense (benefit) was (in millions):
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Reconciliation from the Statutory U.S. Federal Income Tax Rate to Effective Tax Rate | The reconciliation from the statutory U.S. federal income tax rate to our effective tax rate is:
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Components of Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities and balance sheet classification were (in millions):
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Reconciliation of Unrecognized Tax Benefits | A reconciliation of our unrecognized tax benefits is (in millions):
|
Pension and Other Postemployment Benefits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Pension Plans [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Expense | The components of net periodic benefit expense were (in millions):
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Weighted Average Assumptions Used to Determine Net Periodic Benefit Expense | The weighted average assumptions used to determine net periodic benefit expense were:
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Change in Benefit Obligation, Fair Value of Plan Assets, Funded Status and Balance Sheet Classification of Defined Benefit Pension Plans | The change in benefit obligation and fair value of plan assets of the defined benefit pension plans were (in millions):
The funded status and balance sheet classification of the defined benefit pension plans were (in millions):
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Plans with Benefit Obligations in Excess of Plan Assets | Plans with benefit obligations in excess of plan assets were (in millions):
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Weighted Average Assumptions Used to Determine Benefit Obligation | The weighted average assumptions used to determine the benefit obligation were:
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Estimated Future Benefit Payments | At December 31, 2021, the estimated benefits expected to be paid over the next 10 years are (in millions):
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Postemployment Arrangements [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Expense | The components of net periodic benefit expense were (in millions):
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Weighted Average Assumptions Used to Determine Net Periodic Benefit Expense | The weighted average assumptions used to determine net periodic benefit expense were:
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Change in Benefit Obligation, Fair Value of Plan Assets, Funded Status and Balance Sheet Classification of Defined Benefit Pension Plans | At December 31, 2021 and 2020, the benefit obligation and balance sheet classification were (in millions):
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Weighted Average Assumptions Used to Determine Benefit Obligation | The weighted average assumptions used to determine the benefit obligation were:
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Estimated Future Benefit Payments | At December 31, 2021, the estimated benefits expected to be paid over the next 10 years are (in millions):
|
Supplemental Cash Flow Data (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in Operating Capital | The change in operating capital was (in millions):
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Supplemental Financial Information and Non-Cash Increases in Lease Liabilities | Supplemental financial information (in millions):
Non-cash increase in lease liabilities (in millions):
|
Noncontrolling Interests (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interests [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Ownership Interests in Less than 100% Owned Subsidiaries | Changes in the ownership interests in our less than 100% owned subsidiaries were (in millions):
|
Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Cost | The components of lease cost were (in millions):
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Maturity of Lease Liabilities for Operating Leases | The maturities of our lease liabilities at December 31, 2021 were (in millions):
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Maturity of Lease Liabilities for Finance Leases | The maturities of our lease liabilities at December 31, 2021 were (in millions):
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Balance Sheet Classification and Weighted Average Remaining Lease Term and Weighted Average Discount Rate Related to Operating Leases | The balance sheet classification of our operating leases was (in millions):
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Property and Equipment | Property and equipment at December 31 were (in millions):
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Accumulated Other Comprehensive Income (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income (loss), net of income taxes were (in millions):
|
Fair Value (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis were (in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Contingent Purchase Price Obligations | Changes in contingent purchase price obligations were (in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Amount and Fair Value of Financial Assets and Liabilities | The carrying amount and fair value of our financial assets and liabilities were (in millions):
|
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS For the Three Years Ended December 31, 2021 (In millions)
|
Presentation of Financial Statements (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Presentation of Financial Statements [Abstract] | |||
COVID-19 repositioning costs | $ 0.0 | $ 277.9 | $ 0.0 |
Salary and service costs, reimbursements and tax credits under government programs | $ 162.6 |
Significant Accounting Policies (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Net foreign currency transaction gains (losses) | $ (3.3) | $ (4.8) | $ (11.2) |
Percentage of revenue from largest client | 3.20% | ||
Minimum [Member] | |||
Identifiable intangible assets, useful life | 5 years | ||
Maximum [Member] | |||
Identifiable intangible assets, useful life | 12 years | ||
Furniture [Member] | Minimum [Member] | |||
Property and Equipment, useful life | 7 years | ||
Furniture [Member] | Maximum [Member] | |||
Property and Equipment, useful life | 10 years | ||
Equipment [Member] | Minimum [Member] | |||
Property and Equipment, useful life | 3 years | ||
Equipment [Member] | Maximum [Member] | |||
Property and Equipment, useful life | 5 years |
Net Income per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Net Income per Share [Abstract] | |||
Net income - Omnicom Group Inc. | $ 1,407.8 | $ 945.4 | $ 1,339.1 |
Weighted average shares: | |||
Basic | 214.3 | 215.6 | 219.8 |
Dilutive stock options and restricted shares | 1.3 | 0.6 | 1.1 |
Diluted | 215.6 | 216.2 | 220.9 |
Anti-dilutive stock options and restricted shares | 4.7 | 0.8 | 0.9 |
Net income per share - Omnicom Group Inc.: | |||
Basic | $ 6.57 | $ 4.38 | $ 6.09 |
Diluted | $ 6.53 | $ 4.37 | $ 6.06 |
Business Combinations (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Business Combinations [Abstract] | ||
Goodwill, Acquisitions | $ 285.9 | |
Liability for contingent purchase price obligations | 167.1 | $ 71.9 |
Liability for contingent purchase price obligations, current | $ 43.1 | $ 32.1 |
Segment Reporting (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Revenue and Long-Lived Assets and Goodwill by Geographic Region | |||
Revenue | $ 14,289.4 | $ 13,171.1 | $ 14,953.7 |
Americas | |||
Revenue and Long-Lived Assets and Goodwill by Geographic Region | |||
Revenue | 8,005.8 | 7,852.5 | 8,882.2 |
Long-lived assets and goodwill | 7,629.2 | 7,610.9 | 7,782.0 |
EMEA | |||
Revenue and Long-Lived Assets and Goodwill by Geographic Region | |||
Revenue | 4,487.2 | 3,814.9 | 4,422.0 |
Long-lived assets and goodwill | 3,615.5 | 3,142.3 | 3,061.3 |
Asia-Pacific | |||
Revenue and Long-Lived Assets and Goodwill by Geographic Region | |||
Revenue | 1,796.4 | 1,503.7 | 1,649.5 |
Long-lived assets and goodwill | $ 689.0 | $ 665.1 | $ 658.9 |
Equity Method Investments (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Equity Method Investments [Abstract] | |||
Income (Loss) From Equity Method Investments | $ 7.5 | $ (6.8) | $ 2.0 |
Equity method investments, share of net assets | $ 26.0 | $ 30.1 |
Disposition of Subsidiary (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Disposition of Subsidiary [Abstract] | |||
Gain on disposition of subsidiary | $ 50.5 | $ 0.0 | $ 0.0 |
Supplemental Cash Flow Data (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Change in Operating Capital [Abstract] | |||
(Increase) decrease in accounts receivable | $ (989.1) | $ 141.2 | $ (156.6) |
(Increase) decrease in work in process and other current assets | (281.7) | 293.0 | (99.8) |
Increase (decrease) in accounts payable | 921.3 | (428.6) | 276.3 |
Increase (decrease) in customer advances, taxes payable and other current liabilities | 338.8 | 65.9 | 87.2 |
Change in other assets and liabilities, net | 171.2 | (40.6) | 18.0 |
Increase in operating capital | 160.5 | 30.9 | 125.1 |
Income taxes paid | 454.4 | 376.5 | 361.0 |
Interest paid | 219.3 | 205.5 | $ 246.3 |
Operating leases, Net increase in lease liability | 123.3 | 133.9 | |
Finance leases, Net increase in lease liability | $ 67.4 | $ 32.1 |
Noncontrolling Interests (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Changes in Ownership Interests in Less Than 100% Owned Subsidiaries [Abstract] | |||
Net income attributed to Omnicom Group Inc. | $ 1,407.8 | $ 945.4 | $ 1,339.1 |
Net transfers (to) from noncontrolling interests | (12.2) | 5.8 | (22.3) |
Change from net income attributed to Omnicom Group Inc. and transfers (to) from noncontrolling interests | $ 1,395.6 | $ 951.2 | $ 1,316.8 |
Temporary Equity - Redeemable Noncontrolling Interests (Details) - USD ($) $ in Millions |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Temporary Equity - Redeemable Noncontrolling Interests [Abstract] | ||
Redeemable noncontrolling interest | $ 345.3 | $ 209.7 |
Redeemable noncontrolling interests, currently exercisable | $ 107.5 |
Derivative Instruments and Hedging Activities (Details) - Foreign Exchange Contract [Member] - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Derivative instrument, terms | The terms of our forward foreign exchange contracts are generally less than 90 days. | |
Designated as Hedging Instrument [Member] | Fair Value Hedge [Member] | ||
Foreign currency derivatives, notional amount | $ 77.3 | $ 169.6 |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - SEC Schedule, 12-09, Allowance, Credit Loss [Member] - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Valuation accounts deducted from assets: | |||
Balance Beginning of Period | $ 30.4 | $ 21.5 | $ 26.8 |
Charged to Costs and Expenses | 4.7 | 23.5 | 8.5 |
Removal of Uncollectible Receivables | (12.7) | (15.0) | (13.8) |
Translation Adjustment Increase (Decrease) | (0.7) | 0.4 | 0.0 |
Balance End of Period | $ 21.7 | $ 30.4 | $ 21.5 |
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