8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): July 25, 2006

OMNICOM GROUP INC.
(Exact Name of Registrant as Specified in Charter)

New York
(State or Other Jurisdiction
of Incorporation) 1-10551
(Commission
File Number) 13-1514814
(IRS Employer
Identification No.)

437 Madison Avenue, New York, NY
(Address of Principal Executive Offices) 10022
 (Zip Code)

Registrants’ telephone number, including area code: (212) 415-3600

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

        Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

|_| Written communications pursuant to Rule 425 under Securities Act (17 CFR 230.425)

|_| Soliciting material pursuant to Rule 14a-12 under Securities Act (17 CFR 240.14a-12)

|_| Pre-commencement communications pursuant to Rule 14(d)-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

|_| Pre-commencement communications pursuant to Rule 13(c) under the Exchange Act

Item 2.02 Results of Operations and Financial Condition.

        On July 25, 2006, Omnicom Group Inc. (“Omnicom”) issued an earnings release reporting its financial results for the three and six months ended June 30, 2006. A copy of this earnings release is attached as Exhibit 99.1 hereto. Following the issuance of this earnings release, Omnicom hosted an earnings call in which its financial results for the three and six months ended June 30, 2006 were discussed. The investor presentation materials used for the call are attached as Exhibit 99.2 hereto.

        On July 25, 2006, Omnicom posted the materials attached as Exhibits 99.1 and 99.2 on its web site (www.omnicomgroup.com).

        As discussed on page 1 of Exhibit 99.2, the investor presentation contains forward-looking statements within the meaning of the federal securities laws. These statements are present expectations, and are subject to the limitations listed therein and in Omnicom’s other SEC reports, including that actual events or results may differ materially from those in the forward-looking statements.

        The foregoing information (including the exhibits hereto) is being furnished under “Item 2.02 Results of Operations and Financial Condition” and “Item 7.01 Regulation FD Disclosure.” Such information (including the exhibits hereto) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

        The filing of this Report and the furnishing of this information pursuant to Items 2.02 and 7.01 (including the investor presentation) do not mean that such information is material or that disclosure of such information is required.

Item 7.01 Regulation FD Disclosure.

        See “Item 2.02 Results of Operations and Financial Condition” above.

Item 9.01. Financial Statements and Exhibits.

        (c) Exhibits.

Exhibit Number	Description
99.1	Earnings release dated July 25, 2006.
99.2	Investor presentation materials dated July 25, 2006.

 
 

- -2-

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

OMNICOM GROUP INC.
By:	/s/ Philip J. Angelastro
	Philip J. Angelastro
	Name: Philip J. Angelastro Title: Senior Vice President Finance and Controller

Date: July 25, 2006

EXHIBIT INDEX

Exhibit Number	Description
99.1	Earnings release dated July 25, 2006.
99.2	Investor presentation materials dated July 25, 2006.

 

- -3-

EX-99.1

FOR IMMEDIATE RELEASE

Contact: Randall Weisenburger
212-415-3393

Exhibit 99.1

Omnicom Reports Second Quarter 2006 Results

NEW YORK, JULY 25, 2006 — Omnicom Group Inc. (NYSE-OMC) today announced that net income for the second quarter of 2006 increased 8% to $244.1 million from $225.8 million in the second quarter of 2005. Diluted earnings per share in the second quarter of 2006 increased 15% to $1.42 per share from $1.24 per share in the second quarter of 2005.

Worldwide revenue increased 8% to $2,823.4 million from $2,615.8 million in the second quarter of 2005. Domestic revenue for the second quarter of 2006 increased 8% to $1,535.4 million compared to $1,427.7 million in the second quarter of 2005. International revenue increased 8% to $1,288.0 million compared to $1,188.1 million in the second quarter of 2005.

Net income for the six months ended June 30, 2006 increased 9% to $409.7 million from $376.3 million in the same period in 2005. Diluted earnings per share for the six months ended June 30, 2006 increased 14% to $2.34 per share in 2006 from $2.05 per share in the same period in 2005.

Worldwide revenue for the six months ended June 30, 2006 increased 7% to $5,386.3 million from $5,018.8 million in the same period in 2005. Domestic revenue for the six months ended June 30, 2006 increased 8% to $2,968.4 million from $2,739.8 million in the same period in 2005. International revenue for the six months ended June 30, 2006 increased 6% to $2,417.9 million from $2,279.0 million in the same period in 2005.

437 Madison Avenue, New York, N.Y. 10022. (212) 415-3600 Telex 428245 Fax (212) 415-3530

Omnicom Group Inc. (NYSE-OMC) (www.omnicomgroup.com) is a leading global marketing and corporate communications company. Omnicom's branded networks and numerous specialty firms provide advertising, strategic media planning and buying, direct and promotional marketing, public relations and other specialty communications services to over 5,000 clients in more than 100 countries.

For a live webcast and/or a replay of our second quarter earnings conference call, go to www.omnicomgroup.com/InvestorRelations.

Omnicom Group Inc.

(Unaudited)
(In Millions of Dollars, Except Per Share Data)

Three Months Ended June 30,	2006		2005
Revenue	$    2,823.4		$2,615.8
Operating expenses	2,406.0		2,233.8
Operating profit	417.4		382.0
Net interest expense	25.5		14.3
Income before income taxes	391.9		367.7
Income taxes	131.7		124.3
Income after income taxes	260.2		243.4
Equity in earnings of affiliates	6.3		5.0
Minority interests	(22.4	)	(22.6	)
Net income	$        244.1		$        225.8
Net income per common share
Basic	$          1.43		$          1.24
Diluted	$          1.42		$          1.24
Weighted average shares (in millions)
Basic	170.2		181.4
Diluted	172.0		182.8
Dividend declared per share	$        0.250		$        0.225

Omnicom Group Inc.

(Unaudited)
(In Millions of Dollars, Except Per Share Data)

Six Months Ended June 30,	2006 (1)		2005
Revenue	$     5,386.3		$     5,018.8
Operating expenses	4,684.4		4,379.5
Operating profit	701.9		639.3
Net interest expense	40.7		26.4
Income before income taxes	661.2		612.9
Income taxes	222.6		210.5
Income after income taxes	438.6		402.4
Equity in earnings of affiliates	11.2		10.2
Minority interests	(40.1	)	(36.3	)
Net income	$        409.7		$        376.3
Net income per common share
Basic	$          2.36		$          2.07
Diluted	$          2.34		$          2.05
Weighted average shares (in millions)
Basic	173.6		182.0
Diluted	175.2		183.5
Dividend declared per share	$        0.500		$        0.450

(1) Included in operating profit and net income for the six months ended June 30, 2006 is a benefit of $3.6 million and $2.0 million, respectively, resulting from the cumulative effect of the adoption of SFAS 123(R) and the requirement to provide an estimate for forfeitures on all unvested stock-based compensation awards, as of January 1, 2006.

EX-99.2

OmnicomGroup

SECOND QUARTER 2006 RESULTS

Investor Presentation

July 25, 2006

Exhibit 99.2

The following materials have been prepared for use in the July 25, 2006 conference call on Omnicom’s results of
operations for the quarter ended June 30, 2006. The call will be archived on the Internet at
http://www.omnicomgroup.com/financialwebcasts.

Forward-Looking Statements
Certain of the statements in this document constitute forward-looking statements within the meaning of the Private
Securities Litigation Act of 1995. These statements relate to future events or future financial performance and involve
known and unknown risks and other factors that may cause our actual or our industry’s results, levels of activity or
achievement to be materially different from those expressed or implied by any forward-looking statements. These risks
and uncertainties include, but are not limited to, our future financial condition and results of operations, changes in
general economic conditions, competitive factors, changes in client communication requirements, the hiring and
retention of human resources and our international operations, which are subject to the risks of currency fluctuations and
exchange controls. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,”
“could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential” or “continue”
or the negative of those terms or other comparable terminology. These statements are present expectations. Actual
events or results may differ materially. We undertake no obligation to update or revise any forward-looking statement.

Other Information
All dollar amounts are in millions except for EPS. The following financial information contained in this document has not
been audited, although some of it has been derived from Omnicom’s historical financial statements, including its audited
financial statements. In addition, industry, operational and other non-financial data contained in this document have been
derived from sources we believe to be reliable, but we have not independently verified such information, and we do not,
nor does any other person, assume responsibility for the accuracy or completeness of that information.

The inclusion of information in this presentation does not mean that such information is material or that disclosure of
such information is required.

1

2006 vs. 2005 P&L Summary

2

2006

2005

%

2006

2005

%

Revenue

2,823.4

$

2,615.8

$

7.9%

5,386.3

$  

5,018.8

$

7.3%

Operating Income

417.4

382.0

9.3%

701.9

639.3

9.8%

% Margin

14.8%

14.6%

13.0%

12.7%

Net Interest Expense

25.5

14.3

40.7

26.4

Profit Before Tax

391.9

367.7

6.6%

661.2

612.9

7.9%

% Margin

13.9%

14.1%

12.3%

12.2%

Taxes

131.7

124.3

222.6

210.5

% Tax Rate

33.6%

33.8%

33.7%

34.3%

Profit After Tax

260.2

243.4

6.9%

438.6

402.4

9.0%

Equity in Affiliates

6.3

5.0

11.2

10.2

Minority Interest

(22.4)

(22.6)

(40.1)

(36.3)

Net Income

244.1

$   

225.8

$   

8.1%

409.7

$     

376.3

$   

8.9%

Second Quarter

Year to Date

2006 vs. 2005 Earnings Per Share

Earnings per Share:

Basic

Diluted

  Growth Rate, Diluted

Weighted Average Shares (millions):

Basic

Diluted

Dividend Declared Per Share

$  1.43

1.42

14.5

170.2

172.0

$0.250

2005

2006

Second Quarter

$  1.24

1.24

181.4182.8

$0.225

$  2.36

2.34

14.1

173.6

175.2

$0.500

2005

2006

Year to Date

$  2.07

2.05

182.0183.5

$0.450

%

%

3

2006 Total Revenue Growth

(a)

To calculate the FX impact, we first convert the current period’s local currency revenue using the average exchange rates from the
equivalent prior period to arrive at constant currency revenue.  The FX impact equals the difference between the current period
revenue in U.S. dollars and the current period revenue in constant currency.

(b)

Acquisition revenue is the aggregate of the applicable prior period revenue of the acquired businesses.  Netted against this number
is the revenue of any business included in the prior period reported revenue that was disposed of subsequent to the prior period.

(c)

Organic revenue is calculated by subtracting both the acquisition revenue and the FX impact from total revenue growth.

$

%

$

%

Prior Period Revenue

2,615.8

$  

5,018.8

$   

Foreign Exchange (FX) Impact (a)

3.8

0.1%

(61.4)

-1.2%

Acquisition Revenue (b)

16.5

0.6%

33.8

0.7%

Organic Revenue (c)

187.3

7.2%

395.1

7.9%

Current Period Revenue

2,823.4

$  

7.9%

5,386.3

$   

7.3%

Second Quarter

Year to Date

4

2006RevenueByDiscipline

(a)  “Growth” is the year-over-year growth from the prior period.  

Advertising

43.2%

PR

10.2%

CRM

34.7%

Specialty

11.9%

Advertising

43.2%

PR

10.2%

CRM

34.7%

  Specialty

11.9%

Year to
Date

Second Quarter

2006

$ Mix

% Growth

(a)

$ Mix

% Growth

(a)

Advertising

1,219.3

5.7%

####

Advertising

2,324.3

5.5%

CRM

978.6

9.6%

####

CRM

1,870.4

9.8%

PR

288.6

8.9%

####

PR

548.4

5.2%

Specialty

336.9

10.8%

####

Specialty

643.2

8.9%

5

Second Quarter

2006

2006 Revenue By Geography

United
States

55.1%

UK

10.7%

Euro

Markets

19.6%

Other

14.6%

Year to Date

United
States

54.4%

UK

10.8%

Euro

Markets

20.2%

Other

14.6%

^(a)  “Growth” is the year-over-year growth from the prior period.  

$ Mix

$ Growth

(a)

$ Mix

$ Growth

(a)

United States

1,535.4

$   

107.7

$        

United States

2,968.4

$   

228.6

$        

Organic

91.1

Organic

195.1

Acquisition

16.6

Acquisition

33.5

International

1,288.0

$   

99.9

$         

International

2,417.9

$   

138.9

$        

Organic

96.2

Organic

200.0

Acquisition

(0.1)

Acquisition

0.3

FX

3.8

FX

(61.4)

$ Mix

% Growth

(a)

$ Mix

% Growth

(a)

United States

1,535.4

$     

7.5%

United States

2,968.4

$      

8.3%

Euro Currency Markets

570.1

3.8%

Euro Currency Markets

1,053.9

-0.1%

United Kingdom

304.0

12.8%

United Kingdom

577.7

8.0%

Other

413.9

12.1%

Other

786.3

14.2%

6

Cash Flow – GAAP Presentation (condensed)

2006

2005

Net Income

409.7

$     

376.3

$     

  Stock-Based Compensation Expense

33.9

47.4

  Windfall Tax Benefit on Stock Compensation

-

14.0

  Depreciation and Amortization

90.3

85.5

  Other Non-Cash Items to Reconcile to Net Cash Provided by Operations

37.4

27.1

  Other Changes in Working Capital

(374.6)

(1,120.5)

  Excess Tax Benefit on Stock Compensation

(10.1)

-

Net Cash Provided by (Used in) Operations

186.6

(570.2)

  Capital Expenditures

(73.0)

(67.2)

  Acquisitions

(138.5)

(132.4)

  Proceeds from Sale of Businesses

-

29.3

  Repayment of LT Notes Receivable

13.5

72.1

  Other Investing Activities, net

332.4

552.1

Net Cash Provided by Investing Activities

134.4

453.9

  Dividends

(89.8)

(82.4)

  Proceeds from Issuance of Debt

995.8

0.4

  Repayment of Debt

(134.1)

(188.6)

  Stock Repurchases

(958.6)

(524.0)

  Share Transactions Under Employee Stock Plans

153.5

34.2

  Excess Tax Benefit on Stock Compensation

10.1

-

  Other Financing Activities

(42.7)

67.3

Net Cash Used in Financing Activities

(65.8)

(693.1)

Effect of exchange rate changes on cash and cash equivalents

1.0

(12.7)

Net Increase (Decrease) in Cash and Cash Equivalents

256.2

$     

(822.1)

$   

6 Months Ended June 30,

7

Current Credit Picture

(a) “Operating Income (EBIT)” and “Net Interest Expense”  calculations shown are the latest twelve month (“LTM”)  figures for the periods specified.

      Although our bank agreements reference EBITDA, we have used EBIT for this presentation because EBITDA is a non-GAAP measure.

(b)  Holders of our Convertible Notes Due 6/15/33 were offered a supplemental interest payment not to put the notes to us and to consent to certain

      amendments to the notes. Holders of $427.1 million of notes consented to the amendments and were paid the supplemental interest thus

      creating the Convertible Notes Due 7/1/38.  Holders of $40.4 million of notes did not put or consent to the amendments and the notes

      remained unchanged.  The remaining holders of  $132.5 million of notes put the notes to us for repurchase.

2006

2005

Operating Income (EBIT)

(a)

$

1,402

$

1,282

Net Interest Expense

(a)

$

73.5

$

45.2

EBIT / Net Interest

19.1

x

28.4

x

Net Debt / EBIT

1.5

x

1.7

x

Debt:

Bank Loans (Due Less Than 1 Year)

$

17

$

132

CP Issued Under $2.4B - 5 Year Revolver Due 6/23/11

-

-

Convertible Notes Due 2/7/31

847

847

Convertible Notes Due 7/31/32

892

892

Convertible Notes Due 6/15/33

(b)

40

600

Convertible Notes Due 7/1/38

(b)

427

-

10 Year Notes Due 4/15/16

995

-

Other Debt

19

20

Total Debt

$

3,237

$

2,491

Cash and Short Term Investments

1,135

365

Net Debt

$

2,102

$

2,126

LTM ended June 30,

8

Current Liquidity Picture

(a)

Credit facility expires June 23, 2011.

(b)

Represents uncommitted facilities in the U.S., U.K. and Canada. These amounts are excluded from our available
liquidity for purposes of this presentation.

Total Amount

Of Facility

Outstanding

Available

Committed Facilities

5 Year Revolver

(a)

2,400

$         

-

$         

2,400

$   

Other Committed Credit Facilities

16

16

-

Total Committed Facilities

2,416

16

2,400

Uncommitted Facilities

(b)

345

-

-

(b)

Total Credit Facilities

2,761

$         

16

$            

2,400

$   

Cash and Short Term Investments

1,135

Total Liquidity Available

3,535

$   

As of June 30, 2006

9

Acquisitions Summary

10

Acquisition Related Expenditures

Note: See appendix for subsidiary acquisition profiles.

Includes acquisitions of a majority interest in new agencies resulting in their consolidation.

Includes acquisitions of additional equity interests in existing affiliate agencies resulting in their majority ownership and consolidation.

Includes acquisitions of less than a majority interest in agencies in which Omnicom did not have a prior equity interest and the acquisition
of additional interests in existing affiliated agencies that did not result in majority ownership.

Includes the acquisition of additional equity interests in already consolidated subsidiary agencies.

Includes additional consideration paid for acquisitions completed in prior periods.  

(a)

(b)

(c)

(d)

(e)

New Subsidiary Acquisitions

(a)

36

$   

Affiliates to Subsidiaries

(b)

-

Affiliates

(c)

3

Existing Subsidiaries

(d)

18

Earn-outs

(e)

94

Total Acquisition Expenditures

151

$

6 Months YTD 2006

11

Potential Earn-out Obligations

The following is a calculation of future earn-out obligations as of
June 30, 2006, assuming that the underlying acquired agencies
continue to perform at their current levels: ^(a)

(a)

The ultimate payments will vary as they are dependent on future events and changes in FX rates.

12

2006

2007

2008

2009

Thereafter

Total

44

$   

146

$  

105

$  

55

$   

55

$         

405

$  

Potential Obligations

(a)  The ultimate payments will vary as they are dependent on future events and changes in FX rates.

In conjunction with certain transactions Omnicom has agreed to
acquire (at the sellers’ option) additional equity interests. If these rights
are exercised, there would likely be an increase in our net income as a
result of our increased ownership and the reduction of minority interest
expense.  The following is a calculation of  these potential future
obligations (as of June 30, 2006), assuming these underlying acquired
agencies continue to perform at their current levels: ^(a)

Currently

Exercisable

Not Currently

Exercisable

Total

Subsidiary Agencies

131

$           

82

$            

213

$         

Affiliated Agencies

48

7

55

Total

179

$           

89

$            

268

$         

13

Second Quarter Acquisitions

Entertainment Marketing Partners

Entertainment Marketing Partners ("EMP") is an entertainment-
based media and marketing solutions company. EMP provides
clients with access to the entertainment community through
relationships with studios, networks and production companies,
sports leagues around the world, and video game developers.

EMP is located in Los Angeles and New York City and will become
part of Ketchum Public Relations.

14

Second Quarter Acquisitions

Harrison & Wolf

Harrison & Wolf  (H&W) is a corporate communications agency
providing strategic consultancy, contract publishing, advertising
and corporate design services.

The agency is located in Paris, France and  will be part of the
Corporate Communications Group of TBWA.

15

Second Quarter Acquisitions

EVB

EVB is a full-service advertising agency that specializes in using
immersive content to create engaging brand experiences. EVB's
consumer-centric approach blends strategy with entertainment
and interactivity to develop new marketing campaigns that
generate brand awareness, deepen consumer relationships and
instill long-term brand loyalty.

EVB is located in San Francisco, California and will be part of the
DAS Group of Companies.

16