What changed in Omnicom Group's 2023 10-K compared to 2022?

Across the narrative sections we track, Omnicom Group (OMC) added 284 paragraphs, removed 277, and edited 196 between the 2022 and 2023 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+174/−191), Item 1A. Risk Factors (+56/−37), Item 1. Business (+32/−26).

Did Omnicom Group add new Risk Factors in the 2023 10-K?

Yes — Item 1A Risk Factors shows 56 new/edited paragraphs and 37 removed paragraphs versus the 2022 10-K.

What changed in Omnicom Group's MD&A (Item 7) in 2023?

Item 7 Management's Discussion & Analysis shows 174 new/edited paragraphs and 191 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Where does this OMC 10-K diff come from?

The source filings are Omnicom Group's official 2022 and 2023 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in Omnicom Group's 10-K — 2022 vs 2023

Paragraph-level year-over-year comparison of Omnicom Group's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+284 added−277 removedSource: 10-K (2024-02-07) vs 10-K (2023-02-08)

Top changes in Omnicom Group's 2023 10-K

284 paragraphs added · 277 removed · 196 edited across 7 sections

Item 7. Management's Discussion & Analysis+174 / −191 · 118 edited
Item 1A. Risk Factors+56 / −37 · 31 edited
Item 1. Business+32 / −26 · 26 edited
Item 7A. Quantitative and Qualitative Disclosures About Market Risk+17 / −18 · 16 edited
Item 5. Market for Registrant's Common Equity+3 / −3 · 3 edited

Item 1. Business

Business — how the company describes what it does

26 edited+6 added−0 removed15 unchanged

2022 filing

2023 filing

Biggest changeGovernment Regulations We are subject to various local, state and federal laws and regulations in the countries in which we conduct business. Compliance with these laws and regulations in the normal course of business did not have a material effect on our business, results of operations or financial position.

Biggest changeCompliance with these laws and regulations in the normal course of business did not have a material effect on our business, results of operations or financial position. Additional information regarding the impact of government regulations on our business is included in Item 1A. Risk Factors - Regulatory Risks .

All of our global networks integrate their service offerings with the Omnicom branded practice areas, including the Omnicom Health Group, the Omnicom Precision Marketing Group, the Omnicom Commerce Group, the Omnicom Advertising Collective, the Omnicom Public Relations Group, and the Omnicom Brand Consulting Group, as well as our Experiential businesses and Execution & Support businesses, which includes the Omnicom Specialty Marketing Group.

All of our global networks integrate their service offerings with the Omnicom branded practice areas, including Omnicom Health Group, Omnicom Precision Marketing Group, Omnicom Commerce Group, Omnicom Advertising Collective, Omnicom Public Relations Group, and Omnicom Brand Consulting Group, as well as our Experiential businesses and Execution & Support businesses, which includes Omnicom Specialty Marketing Group.

Experiential marketing services include live and digital events and experience design and execution. Execution & Support includes field marketing, digital and physical merchandising, point-of-sale and product placement, 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.

Experiential marketing services include live and digital events and experience design and execution. Execution & Support includes field marketing, digital and physical merchandising, point-of-sale, product placement, 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.

Documents we file with the SEC are available free of charge on our website at http://investor.omnicomgroup.com, as soon as reasonably practicable after such material is filed with the SEC. Any document we file with the SEC is available on the SEC’s website at www.sec.gov.

Additional information about our directors and executive officers will appear in our definitive proxy statement, which is expected to be filed with the United States Securities and Exchange Commission, or SEC, in March 2023. Available Information We file annual, quarterly and current reports and any amendments to those reports, proxy statements and other information with the SEC.

Additional information about our directors and executive officers will appear in our definitive proxy statement, which is expected to be filed with the United States Securities and Exchange Commission, or SEC, in March 2024. Available Information We file annual, quarterly and current reports and any amendments to those reports, proxy statements and other information with the SEC.

The information included on or available through our website is not part of this or any other report we file with the SEC. 3

The information included on or available through our website is not part of this or any other report we file with the SEC.

Annalect and Omni, our proprietary data and analytics platforms, serve as the strategic resource for all of our agencies and networks to share when developing client service strategies across our virtual networks. These platforms provide precision marketing and insights at scale across creative, media and other disciplines.

Annalect and Omni, our proprietary data and analytics platforms, serve as the strategic resource for all of our agencies, practice areas and networks to share when developing client service strategies across our virtual networks. These platforms provide precision marketing and insights at scale across creative, media and other disciplines.

In addition, we pursue selective acquisitions of complementary companies with strong entrepreneurial management teams that currently serve or could serve our existing clients. In addition to collaborating through our client service models, our agencies and networks collaborate across internally developed technology platforms.

In addition, we pursue selective acquisitions of complementary companies with strong entrepreneurial management teams that currently serve or could serve our existing clients. In addition to collaborating through our client service models, our agencies, practice areas and networks collaborate across internally developed technology platforms.

Our social and human capital management priorities include, among other things, adopting codes of conduct and business ethics, providing competitive wages and benefits, comprehensive training programs, succession planning, promoting diversity and inclusion and implementing programs that prioritize the achievement of systemic equity throughout our organization.

Our social and human capital management priorities include, among other things, adopting codes of conduct and business ethics, providing competitive wages and benefits, comprehensive training programs, succession planning, promoting diversity and inclusion and implementing programs that foster the achievement of systemic equity throughout our organization.

The various components of our business, including revenue by discipline and geographic area, and material factors that affected us in the three years ended December 31, 2022, are discussed in the MD&A. Our Clients Our clients operate in virtually every sector of the global economy.

The various components of our business, including revenue by discipline and geographic area, and material factors that affected us in the three years ended December 31, 2023, are discussed in the MD&A. Our Clients Our clients operate in virtually every sector of the global economy.

Tarlowe was named Senior Vice President and Treasurer in May 2019 and previously served as Senior Vice President and Treasurer of Avis Budget Group from 2007 until April 2019. All other executive officers have held their present position for at least five years.

On a global, pan-regional and local basis, our networks, practice areas and agencies provide a comprehensive range of services in the following fundamental disciplines: Advertising & Media, Precision Marketing, Commerce & Brand Consulting, Experiential, Execution & Support, Public Relations and Healthcare.

On a global, pan-regional, and local basis, our networks, practice areas, and agencies provide a comprehensive range of services in the following fundamental disciplines: Advertising & Media, Precision Marketing, Commerce & Branding, Experiential, Execution & Support, Public Relations, and Healthcare.

Healthcare includes corporate communications and advertising and media services to global healthcare and pharmaceutical companies. As a leading global advertising, marketing and corporate communications company, we operate in all major markets. Our geographic markets include: the Americas, which includes North America and Latin America, Europe, the Middle East and Africa (EMEA), and Asia Pacific.

Healthcare includes corporate communications and advertising and media services to global healthcare and pharmaceutical companies. As a leading global advertising, marketing and corporate communications company, we operate in all major markets and have a large client base. Our geographic markets include the Americas, which includes North America and Latin America, Europe, the Middle East and Africa (EMEA), and Asia-Pacific.

Advertising & Media includes creative services across digital and traditional media, strategic media planning and buying, performance media and data analytics services. Precision Marketing includes digital and direct marketing, digital transformation consulting and data and analytics. Commerce & Brand Consulting services include brand and product consulting, strategy and research, retail marketing and ecommerce marketing.

Advertising & Media includes creative services across digital and traditional media, strategic media planning and buying, performance media, and data analytics services. Precision Marketing includes digital and direct marketing, digital transformation consulting and data and analytics. Commerce & Branding services include brand and product consulting, strategy and research, retail, and e-commerce.

In certain countries outside the United States, primarily in Europe, some employees are represented by work councils. See the MD&A for a discussion of the effect of salary and related costs on our results of operations. Our environmental sustainability initiatives focus on efficiency of office space, energy usage and travel.

In certain countries outside the United States, primarily in Europe, some employees are represented by work councils. See the MD&A for a discussion of the effect of salary and related costs on our results of operations. Our environmental sustainability initiatives focus on emissions reductions through efficiency of office space, energy usage, travel and vendor engagement.

For information about our acquisitions and dispositions, see Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, - Acquisitions and Goodwill and Note 5 to the consolidated financial statements.

In each of the three years ended December 31, 2022, none of our acquisitions or dispositions, individually or in the aggregate, was material to our results of operations or financial position.

In each of the three years ended December 31, 2023, none of our acquisitions or dispositions, individually or in the aggregate, were material to our results of operations or financial position.

In many cases, multiple agencies or networks serve different brands, product groups or both within the same client. For example, in 2022, our largest client represented 2.7% of revenue and was served by approximately 90 of our agencies.

In many cases, multiple agencies, practice areas or networks serve different brands, product groups or both within the same client. For example, in 2023, our largest client represented 3.0% of revenue and was served by approximately 150 of our agencies.

At December 31, 2022, we employed approximately 74,200 people worldwide, including 31,500 people in the Americas, 27,500 people in EMEA, and 15,200 people in Asia Pacific. Our largest employee base is the United States, where we employed approximately 25,600 people. None of our regular employees in the United States are represented by a labor union.

At December 31, 2023, we employed approximately 75,900 people worldwide, including 31,200 people in the Americas, 27,400 people in EMEA, and 17,300 people in Asia-Pacific. The United States is our largest employee base, where we employed approximately 24,700 people. None of our regular employees in the United States are represented by a labor union.

The skill sets of our workforce across our agencies and within each discipline are similar. Common to all is the ability to understand a client’s brand or product and its selling proposition and to develop a unique message to communicate the value of the brand or product to the client’s target audience, whether through traditional channels or emerging digital platforms.

Common to all is the ability to understand a client’s brand or product and its selling proposition and to develop a unique message to communicate the value of the brand or product to the client’s target audience, whether through traditional channels or digital platforms.

Driven by our clients’ continuous demand for more effective and efficient marketing activities, we strive to provide an extensive range of advertising, marketing and corporate communications services through various client-centric networks that are organized to meet specific client objectives. 1 Our service offerings include: advertising marketing research branding media planning and buying content marketing retail 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 and post-production services package design digital transformation consulting 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 retail media and ecommerce healthcare marketing and communications search engine marketing instore design shopper marketing interactive marketing social media marketing investor relations sports and event marketing Certain business trends have impacted our business and industry.

Our service offerings include: advertising marketing research branding media planning and buying content marketing retail 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 and post-production services package design digital transformation consulting 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 retail media and e-commerce healthcare marketing and communications search engine marketing instore design shopper marketing interactive marketing social media marketing investor relations sports and event marketing Certain business trends have impacted our business and industry.

Wren was named Chairman of the Board and Chief Executive Officer in May 2018 and previously served as President and Chief Executive Officer from 1997 to May 2018. Mr. Simm was named President and Chief Operating Officer in November 2021 and previously served as Chief Executive Officer of Omnicom Media Group for more than 20 years. Mr.

Tarlowe Senior Vice President and Treasurer 53 Jonathan B. Nelson CEO, Omnicom Digital 56 Mr. Simm was named President and Chief Operating Officer in November 2021 and previously served as Chief Executive Officer of Omnicom Media Group for more than 20 years. Mr.

Our 100 largest clients, many of which represent the largest global companies, represented approximately 53% of revenue and were each served, on average, by approximately 54 of our agencies. Although we have a large and diverse client base, we are not immune to general economic downturns.

Our 100 largest clients, many of which represent the largest global companies, represented approximately 55% of revenue and were each served, on average, by approximately 55 of our agencies.

Additional information regarding the impact of government regulations on our business is included in Item 1A. Risk Factors - Regulatory Risks . 2 Human Capital Resources and Environmental Sustainability Initiatives Our employees are our most important assets. We believe a critical component of our success depends on the ability to attract, develop and retain key personnel.

Human Capital Resources and Environmental Sustainability Initiatives Our employees are our most important assets. We believe a critical component of our success depends on the ability to attract, develop and retain key personnel. The skill sets of our workforce across our agencies and within each discipline share many similarities.

Also, we are committed to joining the Science-Based Target Initiative (SBTi), which publicly audits companies on their emissions reduction efforts. Information About Our Executive Officers At February 1, 2023, our executive officers were: Name Position Age John D. Wren Chairman of the Board and Chief Executive Officer 70 Daryl Simm President and Chief Operating Officer 61 Philip J.

Our emissions reductions strategy, in line with the 1.5 degree Celsius climate scenario, was submitted to and approved by the Science Based Target initiative (SBTi), which publicly audits companies on their emissions reduction efforts. Information About Our Executive Officers At February 1, 2024, our executive officers were: Name Position Age John D.

Angelastro Executive Vice President and Chief Financial Officer 58 Andrew L. Castellaneta Senior Vice President, Chief Accounting Officer 64 Louis F. Januzzi Senior Vice President, General Counsel and Secretary 49 Rochelle M. Tarlowe Senior Vice President and Treasurer 52 Jonathan B. Nelson CEO, Omnicom Digital 55 Mr.

Wren Chairman of the Board and Chief Executive Officer 71 Daryl Simm President and Chief Operating Officer 62 Philip J. Angelastro Executive Vice President and Chief Financial Officer 59 Andrew L. Castellaneta Senior Vice President, Chief Accounting Officer 65 Louis F. Januzzi Senior Vice President, General Counsel and Secretary 50 Rochelle M.

Added

We believe generative AI will have a significant effect on how we provide services to our clients and how we enhance the productivity of our people. As with any new technology, we are working closely with our clients and technology partners to take advantage of the benefits of AI while being mindful of its limitations, risks, and privacy concerns.

Added

We are committed to responsible AI practices and collaboration to harness AI's potential, while evaluating related risks, such as ethical considerations, public perception and reputational concerns, intellectual property protection, regulatory compliance, privacy and data security concerns and our ability to effectively adopt this new emerging technology.

Added

The rapidly developing nature of AI technology makes it difficult to assess the full impact on our business at this time. 1 Driven by our clients’ continuous demand for more effective and efficient marketing activities, we strive to provide an extensive range of advertising, marketing and corporate communications services through various client-centric networks that are organized to meet specific client objectives.

Added

As described in Note 5 to the consolidated financial statements, on January 2, 2024, we acquired Flywheel Digital, the digital commerce business of Ascential plc, for a net cash purchase price of approximately $845 million. Flywheel Digital provides services in e-commerce operations, media execution, and market intelligence.

Added

These services are complemented by a technology platform, which provides near real-time insights to clients. We expect Flywheel Digital to be a separate practice area within Omnicom, and we expect to integrate their services across our Advertising & Media, Precision Marketing and Commerce & Branding disciplines.

Added

Although we have a large and diverse client base, we are not immune to general economic downturns. 2 Government Regulations We are subject to various local, state and federal laws and regulations in the countries in which we conduct business.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

31 edited+25 added−6 removed28 unchanged

2022 filing

2023 filing

Biggest changeDespite our efforts, we may be unsuccessful in ascertaining or evaluating all such risks. As a result, the intended advantages of any given acquisition may not be realized. If we fail to identify certain material risks from one or more acquisitions, our business, results of operations and financial position could be adversely affected.

Biggest changeAs part of the process, we conduct business, legal and financial due diligence to identify and evaluate material risks involved in any particular transaction, including business strategy and operational execution. Despite our efforts, we may be unsuccessful in ascertaining or evaluating all such risks. As a result, the intended advantages of any given acquisition may not be realized.

Our ability to acquire new clients and retain existing clients may, in some cases, be limited by clients’ perceptions of, or policies concerning, conflicts of interest arising from other client relationships.

We make statements about our environmental, social and governance goals and initiatives through information provided on our website, press statements and other communications, including through our Corporate Responsibility Report. Responding to these environmental, social and governance considerations and implementation of these goals and initiatives involves risks and uncertainties and requires ongoing investments.

We make statements about our environmental, social and governance goals and initiatives through 7 information provided on our website, press statements and other communications, including through our Corporate Responsibility Report. Responding to these environmental, social and governance considerations and implementation of these goals and initiatives involves risks and uncertainties and requires ongoing investments.

Any regulatory or judicial action that affects our 6 ability to meet our clients' needs or reduces client spending on our services could have a material adverse effect on our business, results of operations and financial position.

Any regulatory or judicial action that affects our ability to meet our clients’ needs or reduces client spending on our services could have a material adverse effect on our business, results of operations and financial position.

Many governments, regulators, investors, employees, customers and other stakeholders are increasingly focused on environmental, social and governance considerations relating to businesses, including climate change and greenhouse gas emissions, human capital and diversity, equity and inclusion.

Many governments, regulators, investors, employees, customers and other stakeholders are focused on environmental, social and governance considerations relating to businesses, including climate change and greenhouse gas emissions, human capital and diversity, equity and inclusion.

Our principal operating expenses are salary and service costs and occupancy and related costs. Inflationary pressures typically result in increases to our operating expenses. In cases of sustained inflation across several of our major markets, it becomes increasingly difficult to effectively control increases to our costs.

Our principal operating expenses are salary and service costs and occupancy and related costs. Inflationary pressures typically result in increases to our operating expenses. In cases of sustained inflation across several of our major markets, it may become increasingly difficult to effectively control increases to our costs.

These actions could affect our business and reduce demand for certain of our services, which could have a material adverse effect on our business, results of operations and financial position. Expectations relating to environmental, social and governance considerations expose us to potential liabilities, reputational harm and other unforeseen adverse effects on our business.

Any of the foregoing could also affect our business and reduce demand for certain of our services, which could have a material adverse effect on our business, results of operations and financial position. Expectations relating to environmental, social and governance considerations expose us to potential liabilities, reputational harm and other unforeseen adverse effects on our business.

The loss of several of our largest clients could have a material adverse effect on our business, results of operations and financial position. In 2022, our 100 largest clients represented approximately 53% of our revenue.

The loss of several of our largest clients could have a material adverse effect on our business, results of operations and financial position. In 2023, our 100 largest clients represented approximately 55% of our revenue.

Our agencies transact business in more than 50 different currencies. Substantially all of our foreign operations transact business in their local currency and, accordingly, their financial statements are translated into U.S. Dollars. As a result, both adverse and beneficial fluctuations in foreign exchange rates impact our business, results of operations and financial position.

Substantially all of our foreign operations transact business in their local currency and, accordingly, their financial statements are translated into U.S. Dollars. As a result, both adverse and beneficial fluctuations in foreign exchange rates impact our business, results of operations and financial position.

As discussed in Note 2 to the consolidated financial statements, we review the carrying value of goodwill for impairment annually at the end of the second quarter and whenever events or circumstances indicate the carrying value may not be recoverable.

As discussed in Note 2 to the consolidated financial statements, we review the carrying value of goodwill for impairment annually on May 1 and whenever events or circumstances indicate the carrying value may not be recoverable.

Demand for certain of our services may be adversely affected by government measures, including restrictions on travel and business operation and quarantine and stay-at-home orders arising from a recurrence of a pandemic, or similar public health crises.

When a public health crisis arises, demand for certain of our services may be adversely affected by government measures, including restrictions on travel and business operations and quarantine and stay-at-home orders arising from the occurrence of a pandemic, or similar global public health crises.

In addition, our methods of managing the risk of payment default, including obtaining credit insurance, requiring payment in advance, mitigating the potential loss in the marketplace or negotiating with media providers, may be insufficient, less available, or unavailable during a severe economic downturn.

While we use various methods to manage the risk of payment default, including obtaining credit insurance, requiring payment in advance, mitigating the potential loss in the marketplace or negotiating with media providers, these may be insufficient, less available, or unavailable during a severe economic downturn.

The operational and financial performance of our international businesses are affected by global and regional economic conditions, competition for new business and staff, currency exchange rate fluctuations, political conditions, differing tax and regulatory environments and other risks associated with extensive international operations.

The operational and financial performance of our international businesses are affected by global and regional economic conditions, competition for new business and personnel, currency exchange rate fluctuations, political conditions, differing tax and regulatory environments and other risks associated with extensive international operations. We conduct business in numerous high-growth markets and developing countries.

We rely extensively on information technology systems, and cybersecurity incidents could adversely affect us. We rely on information technology systems and infrastructure to connect with our clients, people and others, and to store and process business and financial data.

We rely extensively on information technology systems, and cybersecurity incidents could adversely affect us. We rely on our own and third-party service providers’ information technology systems and infrastructure to connect with our clients, people and others, and to collect, store, transfer, process and use business, personal and financial data.

GAAP or GAAP, we have recorded a significant amount of goodwill related to our acquisitions; a substantial portion of which represents the intangible specialized know-how of the acquired workforce.

In accordance with generally accepted accounting principles in the United States, or U.S. GAAP or GAAP, we have recorded a significant amount of goodwill related to our acquisitions; a substantial portion of which represents the intangible specialized know-how of the acquired workforce.

Regulatory Risks Government regulation and consumer advocates may limit the scope and content of our services, which could affect our ability to meet our clients’ needs, which could have a material adverse effect on our business, results of operations and financial position.

Legal and Regulatory Risks Laws and regulations and actions of consumer advocates may limit the scope and content of our services, affect our ability to meet our clients’ needs, result in third-party claims, litigation, regulatory proceedings or government investigations, or otherwise have a material adverse effect on our business, results of operations and financial position.

In addition, there has been a tendency on the part of businesses to resort to the judicial system to challenge advertising practices and claims, which could cause our clients affected by such actions to reduce their spending on our services, and from time to time we may be subject to claims, lawsuits, regulatory proceedings or government investigations into whether our business practices comport with applicable law.

Such actions would reduce the demand for our services and could result in a reduction in our revenue, which would adversely affect our business, results of operations and financial position. A contraction in the availability of credit may make it more difficult for us to meet our working capital requirements.

Such actions would reduce the demand for our services and could result in a reduction in our revenue, which would adversely affect our business, results of operations and financial position.

The number of employees working from home varies by market and is dependent on local conditions. The increase in the number of employees working from home may increase certain business and process control risks, including increased risk of cybersecurity 5 incidents and exposure of sensitive business and client advertising and marketing information, as well as personal data or information.

The number of personnel working remotely varies by market and is dependent on local conditions. When our employees work remotely, the risk of cybersecurity incidents and attacks and unauthorized exposure of sensitive business and client advertising and marketing information, as well as personal data or information, increases.

Our clients’ businesses, results of operations and financial position could also be adversely impacted by the war in Ukraine, which could impact client spending on our services. 4 The COVID-19 pandemic negatively impacted our business, results of operations and financial position, and the COVID-19 pandemic or other similar public health crises could adversely impact our business, results of operations and financial position in the future.

We cannot predict the impact of the war in Ukraine or other international hostilities on our businesses and operations. 4 Global public health crises or pandemics, such as the COVID -19 pandemic, or other similar health crises could adversely impact our business, results of operations and financial position.

In addition, a disruption in the credit markets could adversely affect our clients liquidity and could cause them to delay payment for our services or take other actions that would negatively affect our working capital.

A contraction or disruption in the credit markets may make it more difficult for us to meet our working capital requirements or refinance maturing debt, or negatively impact our clients’ liquidity that could cause them to delay payment or take other actions that would negatively affect our working capital.

Risks Related to International Operations Currency exchange rate fluctuations have impacted, and in the future could impact, our business, results of operations and financial position. In 2022, our international operations represented approximately 48% of our revenue. We operate in all major international markets including the Euro Zone, the United Kingdom, or the U.K., Australia, Brazil, Canada, China and Japan.

In 2023, our international operations represented approximately 49% of our revenue. We operate in all major international markets including the Euro Zone, the United Kingdom, or the U.K., Australia, Brazil, Canada, China and Japan. Our agencies transact business in more than 50 different currencies.

Risks Related to Acquisitions We may be unsuccessful in evaluating material risks involved in completed and future acquisitions. We regularly evaluate potential acquisitions of businesses that are complementary to our businesses and client needs. As part of the process, we conduct business, legal and financial due diligence to identify and evaluate material risks involved in any particular transaction.

For financial information by geographic region, see Notes 3 and 8 to the consolidated financial statements. Risks Related to Acquisitions We may be unsuccessful in evaluating material risks involved in completed and future acquisitions. We regularly evaluate potential acquisitions of businesses that are complementary to our businesses and client needs, and in some cases, associated technological capabilities and assets.

Our goodwill is an intangible asset that may become impaired, which could have a material adverse effect on our business, results of operations and financial position. In accordance with generally accepted accounting principles in the United States, or U.S.

If we fail to identify certain material risks from one or more acquisitions, our business, results of operations and financial position could be adversely affected. 6 Our goodwill is an intangible asset that may become impaired, which could have a material adverse effect on our business, results of operations and financial position.

During the first quarter of 2022, the war in Ukraine required us to suspend our business operations in Ukraine, and we disposed of all of our businesses in Russia. The war in Ukraine is ongoing and its duration is uncertain.

For example, as a result of the war in Ukraine, in the first quarter of 2022, we suspended our business operations in Ukraine and disposed of all our businesses in Russia. In addition, economic sanctions were imposed on Russia by the United States, United Kingdom, and the European Union. The war in Ukraine is ongoing, and its duration is uncertain.

These third-party service providers are also subject to malicious attacks and cybersecurity threats that could adversely affect us. In addition, during the COVID-19 pandemic many of our employees worked from home for all or part of the time. Currently, many agencies continue to operate on a hybrid work schedule where employees are working from home part of the time.

These third-party service providers are also subject to malicious attacks and cybersecurity threats that could adversely affect our business, results of operations, financial condition and reputation and could result in litigation or regulatory action, as discussed below. 5 Currently, many of our agencies operate in a flexible working environment that allows for partial remote work.

In addition, we conduct business in numerous high-growth markets and developing countries that tend to have longer billing collection cycles, currency repatriation restrictions and commercial laws that can be undeveloped, vague, inconsistently enforced, retroactively applied or frequently changed. The risks associated with our international operations could have a material adverse effect on our business, results of operations and financial position.

In addition, funds transferred to the United States can be adversely or beneficially impacted by changes in foreign currency exchange rates. We operate in high-growth markets and developing countries, which often carry greater risks and uncertainties that could have a material adverse effect on our business, results of operations and financial position.

Increased cybersecurity threats and attacks, including computer viruses, hacking and ransomware attacks, are constantly evolving and pose a risk to our systems and networks. Security breaches, improper use of our systems and unauthorized access to our data and information by employees and others may pose a risk that sensitive data may be exposed to unauthorized persons or to the public.

Cybersecurity threats and attacks, including computer viruses, advanced persistent threats, malware, hacking, ransomware or other destructive or disruptive activities or software, are constantly evolving and pose a risk to our information technology systems and data.

Laws and regulations related to user privacy, use of personal information and Internet tracking technologies have been proposed or enacted in the United States and a number of international markets. These laws and regulations could affect the acceptance of new communications technologies and the use of current communications technologies as advertising media.

These obligations may necessitate changes to our practices and to those of any third parties that process personal data on our behalf. In addition, these laws, rules, and regulations could also affect the acceptance of new communications technologies and the use of current communications technologies as advertising media.

As a global business we face certain risks of doing business internationally, and we are exposed to risks from operating in high-growth markets and developing countries, which could have a material adverse effect on our business, results of operations and financial position.

These laws and regulations are complex and stringent, and any changes and violations could have an adverse effect on our business and reputation. Our business, results of operations and financial position can be adversely affected if we are unable to effectively operate, or manage the risks associated with operating in these markets and countries.

We also have access to sensitive or personal data or information that is subject to privacy laws and regulations. Our systems and processes may be unable to prevent material security breaches, and such breaches could adversely affect our business, results of operations, financial position and reputation. Our third-party service providers, including cloud providers, store, transmit and process data.

Security breaches, improper use of our systems and unauthorized access to our data and information by employees and others may pose a risk that data may be exposed to unauthorized persons. Such occurrences could adversely affect our business, results of operations, financial position and reputation and could result in litigation or regulatory action, as discussed below.

Removed

The war in Ukraine has negatively impacted our business, results of operations and financial position, and could adversely impact our business, results of operations and financial position in the future. Historically, we conducted operations in Russia and Ukraine through local agencies in which we held a majority stake.

Added

Geopolitical events, international hostilities or acts of terrorism could have a material adverse effect on our business, results of operations and financial position.

Removed

We cannot predict the outcome of the war in Ukraine or its impact on the broader region, as the conflict and related government actions are evolving and are beyond our control.

Added

Current or future geopolitical events, international hostilities or acts of terrorism could impact global economies through, among other things, disruption of business operations and demand for client services, disruption in the credit markets, heightened risk of cybersecurity attacks and disruptions to our information technology infrastructure, increased energy costs and labor and supply chain disruptions.

Removed

The extent and duration of the military action, sanctions and resulting market disruptions, which may include increased energy costs and further supply chain disruptions, could be significant and could adversely impact our business, results of operations and financial position in the future.

Added

This could result in suspension of our, or our clients’ businesses in the affected region, which could impact client spending on our services. These actions could have a significant and adverse impact our business, results of operations and financial position in the future.

Removed

The COVID-19 pandemic negatively impacted our business, results of operations and financial position beginning in 2020 and continuing through the first quarter of 2021. Global economic conditions may continue to be uncertain as long as the COVID-19 pandemic, or other similar public health crises, including the emergence of new COVID-19 variants, remain or become a public health threat.

Added

We face cybersecurity risks that threaten the confidentiality, integrity and availability of our information technology systems or data stored on such systems.

Removed

In addition, funds transferred to the United States can be adversely or beneficially impacted by changes in foreign currency exchange rates.

Added

Additionally, hardware, software applications or services that we develop or procure from third parties may contain defects in design or manufacture or other problems that could compromise the confidentiality, integrity or availability of our information technology systems or data stored on such systems.

Removed

Additionally, our operations are subject to the United States Foreign Corrupt Practices Act and other anti-corruption and anti-bribery laws and regulations. These laws and regulations are complex and stringent, and any changes and violations could have an adverse effect on our business and reputation. For financial information by geographic region, see Note 8 to the consolidated financial statements.

Added

There can be no assurance that our cybersecurity risk management program and processes will be fully implemented, complied with or effective in detecting and preventing such threats or protecting our information technology systems or data.

Added

In addition, we make extensive use of third-party service providers, including cloud providers, that store, transmit and process data.

Added

We and certain of our third-party providers regularly experience cyberattacks and other incidents, and we expect such attacks and incidents to continue. For example, we have experienced cybersecurity incidents that resulted in the disruption of our information technology systems and required us to engage third parties to remediate the issues.

Added

While to date no incidents have had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future.

Added

Any attack or incident could result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, negative reputational impacts, and/or significant incident response, system restoration or remediation and future compliance costs, which could materially adversely affect our business, results of operations and financial condition.

Added

We also cannot guarantee that any such costs or losses will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.

Added

We are subject to risks related to our use of generative AI, a new and emerging technology, which is in the early stages of commercial use. We continually evaluate the use of AI in our business processes, and in 2023 we entered into strategic partnerships with leading AI technology companies, enabling enhanced product and service capabilities in generative AI.

Added

In recent years, the use of AI has come under increased scrutiny.

Added

This technology, which is a new and emerging technology in early stages of commercial use, presents a number of risks inherent in its use, including ethical considerations, public perception and reputation concerns, intellectual property protection, regulatory compliance and privacy and data security concerns, all of which could have a material adverse effect on our business, results of operations and financial position.

Added

Further, new laws, guidance and decisions in this area may limit our ability to use AI or decrease its usefulness. As a result, we cannot predict future developments in AI and related impacts to our business and our industry.

Added

If we are unable to successfully adapt to new developments related to, and risks and challenges associated with AI, our business, results of operations and financial position could be negatively impacted. Risks Related to International Operations Currency exchange rate fluctuations have impacted, and in the future could impact, our business, results of operations and financial position.

Added

Such countries tend to have longer billing collection cycles, currency repatriation restrictions and commercial laws that can be undeveloped, vague, inconsistently enforced, retroactively applied or frequently changed. Our operations are also subject to the United States Foreign Corrupt Practices Act and other anti-corruption and anti-bribery laws and regulations.

Added

Regardless of the merit of such claims, lawsuits, proceedings or investigations, defending against them could cost us a significant amount of time and money and result in negative publicity.

Added

Compliance with ever evolving federal, state, and foreign laws relating to the handling of information about individuals involves significant expenditure and resources, and any failure by us or our vendors to comply could materially adversely affect our business, results of operations and financial position.

Added

We, and third-party vendors on our behalf, process information related to individuals, including from and about individuals we may advertise to, actual and prospective clients, employees, and service providers.

Added

We and our vendors are subject to a variety of federal, state, and foreign laws, rules, regulations, industry standards, and other requirements related to privacy, use of personal information, marketing and advertising, and internet tracking technologies. These requirements, and their application, interpretation, and amendments are constantly evolving and developing.

Added

Among other things, such laws generally: require disclosures about the data collection, use, and disclosure practices of covered businesses, and provide individuals expanded rights to access, delete, and correct their personal information, and opt out of certain sales or transfers of personal information.

Added

Our obligations related to data privacy and security are quickly changing in an increasingly stringent fashion, creating some uncertainty as to the future legal framework governing such matters. Preparing for and complying with these obligations requires us to devote significant resources.

Added

Any failure or perceived failure by us, or third parties on which we depend, to comply with data privacy laws, rules, regulations, industry standards and other requirements could result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, negative reputational impacts and future compliance costs, which could materially and adversely affect our business, results of operations and financial condition.

Added

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed3 unchanged

2022 filing

2023 filing

Biggest changeNotes 2 and 16 to the consolidated financial statements provide a description of our lease expense, which comprises a significant component of our occupancy and other costs, and our lease commitments. Item 3. Legal Proceedings In the ordinary course of business, we are involved in various legal proceedings.

Biggest changeNotes 2 and 18 to the consolidated financial statements provide a description of our lease expense, which comprises a significant component of our occupancy and other costs, and our lease commitments. Item 3. Legal Proceedings In the ordinary course of business, we are involved in various legal proceedings.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged

2022 filing

2023 filing

Biggest changeItem 4. Mine Safety Disclosures 7 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 7 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 8 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 27

Biggest changeItem 4. Mine Safety Disclosures 9 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 9 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 9 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 29

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed0 unchanged

2022 filing

2023 filing

Biggest changeCommon stock repurchase activity during the three months ended December 31, 2022 was: 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, 2022 231,261 $63.96 — — November 1 - November 30, 2022 — $0 — — December 1 - December 31, 2022 1,205,736 $78.35 — — 1,436,997 $76.04 — — 7 During the three months ended December 31, 2022, we purchased 1,361,818 shares of common stock in the open market, and withheld 75,179 shares of common stock from employees to satisfy estimated statutory income tax obligations related to the vesting of restricted stock awards and stock option exercises.

Biggest changeCommon stock repurchase activity during the three months ended December 31, 2023 was: 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, 2023 88,013 $74.51 — — November 1 - November 30, 2023 — — — December 1 - December 31, 2023 — — — 88,013 $74.51 — — During the three months ended December 31, 2023, we withheld 88,013 shares of common stock from employees to satisfy estimated statutory income tax obligations related to the vesting of restricted stock awards.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed and trades on the New York Stock Exchange under the symbol OMC. As of February 1, 2023, there were 1,858 shareholders of record.

The value of the stock withheld was based on the closing price of our common stock on the applicable vesting or exercise date. There were no unregistered sales of equity securities during the three months ended December 31, 2022.

The value of the stock withheld was based on the closing price of our common stock on the applicable vesting date. There were no unregistered sales of equity securities during the three months ended December 31, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

118 edited+56 added−73 removed80 unchanged

2022 filing

2023 filing

Biggest changeRevenue by sector was: Year Ended December 31, 2022 2021 Pharmaceuticals and Healthcare 16 % 15 % Food and Beverage 14 % 14 % Technology 10 % 11 % Auto 10 % 10 % Consumer Products 8 % 8 % Financial Services 8 % 7 % Travel and Entertainment 7 % 7 % Retail 6 % 7 % Telecommunications 4 % 5 % Government 4 % 3 % Services 2 % 2 % Oil, Gas and Utilities 2 % 2 % Not-for-Profit 1 % 1 % Education 1 % 1 % Other 7 % 7 % 100 % 100 % Operating Expenses Operating expenses were (in millions): Year Ended December 31, 2022 2021 2022 vs. 2021 $ % of Revenue $ % of Revenue $ Change % Change Revenue $ 14,289.1 $ 14,289.4 $ (0.3) — % Operating Expenses: Salary and service costs: Salary and related service costs 7,197.9 50.4 % 6,971.0 48.8 % 226.9 3.3 % Third-party service costs 3,128.0 21.9 % 3,431.0 24.0 % (303.0) (8.8) % 10,325.9 72.3 % 10,402.0 72.8 % (76.1) (0.7) % Occupancy and other costs 1,168.6 8.2 % 1,148.2 8.0 % 20.4 1.8 % Charges arising from the effects of the war in Ukraine 113.4 0.8 % — 113.4 Gain on sale of subsidiary — (50.5) (0.4) % 50.5 Cost of services 11,607.9 11,499.7 108.2 Selling, general and administrative expenses 378.5 2.6 % 379.7 2.7 % (1.2) (0.3) % Depreciation and amortization 219.4 1.5 % 212.1 1.5 % 7.3 3.4 % 12,205.8 85.4 % 12,091.5 84.6 % 114.3 0.9 % Operating Profit $ 2,083.3 14.6 % $ 2,197.9 15.4 % $ (114.6) (5.2) % Operating expenses in 2022 increased $114.3 million, or 0.9%, to $12,205.8 million year-over-year.

Biggest changeDollar and negative performance in our Experiential discipline, primarily caused by prolonged COVID-19 lockdowns in China. 20 Revenue by Industry Revenue by type of client industry sector was: Full Year 2023 2022 2021 Pharmaceuticals and Healthcare 16 % 16 % 15 % Food and Beverage 15 % 14 % 14 % Auto 12 % 10 % 10 % Technology 8 % 11 % 11 % Consumer Products 8 % 8 % 8 % Financial Services 8 % 7 % 7 % Travel and Entertainment 6 % 7 % 7 % Retail 6 % 6 % 7 % Telecommunications 4 % 5 % 5 % Government 4 % 3 % 3 % Services 3 % 2 % 2 % Oil, Gas and Utilities 2 % 2 % 2 % Not-for-Profit 1 % 1 % 1 % Education 1 % 1 % 1 % Other 6 % 7 % 7 % Total 100 % 100 % 100 % Operating Expenses The period-over-period change in operating expenses was: Full Year 2023 2022 2023 vs. 2022 $ % of Revenue $ % of Revenue $ Change % Change Revenue $ 14,692.2 $ 14,289.1 $ 403.1 2.8 % Operating Expenses: Salary and service costs: Salary and related costs 7,212.8 49.1 % 7,197.9 50.4 % 14.9 0.2 % Third-party service costs 2,917.9 19.9 % 2,585.5 18.1 % 332.4 12.9 % Third-party incidental costs 570.5 3.9 % 542.5 3.8 % 28.0 5.2 % Total salary and service costs 10,701.2 72.8 % 10,325.9 72.3 % 375.3 3.6 % Occupancy and other costs 1,168.8 8.0 % 1,168.6 8.2 % 0.2 — % Real estate and other repositioning costs 191.5 1.3 % — — % 191.5 Charges arising from the effects of the war in Ukraine — — % 113.4 0.8 % (113.4) Gain on disposition of subsidiary (78.8) (0.5) % — — % (78.8) Cost of services 11,982.7 11,607.9 374.8 3.2 % Selling, general and administrative expenses 393.7 2.7 % 378.5 2.6 % 15.2 4.0 % Depreciation and amortization 211.1 1.4 % 219.4 1.5 % (8.3) (3.8) % Total operating expenses 12,587.5 85.7 % 12,205.8 85.4 % 381.7 3.1 % Operating Income $ 2,104.7 14.3 % $ 2,083.3 14.6 % $ 21.4 1.0 % 21 Full Year 2022 2021 2022 vs. 2021 $ % of Revenue $ % of Revenue $ Change % Change Revenue $ 14,289.1 $ 14,289.4 $ (0.3) — % Operating Expenses: Salary and service costs: Salary and related costs 7,197.9 50.4 % 6,971.0 48.8 % 226.9 3.3 % Third-party service costs 2,585.5 18.1 % 2,979.1 20.8 % (393.6) (13.2) % Third-party incidental costs 542.5 3.8 % 451.9 3.2 % 90.6 20.0 % Total salary and service costs 10,325.9 72.3 % 10,402.0 72.8 % (76.1) (0.7) % Occupancy and other costs 1,168.6 8.2 % 1,148.2 8.0 % 20.4 1.8 % Charges arising from the effects of the war in Ukraine 113.4 0.8 % — — % 113.4 Gain on disposition of subsidiary — — % (50.5) (0.4) % 50.5 Cost of services 11,607.9 11,499.7 108.2 0.9 % Selling, general and administrative expenses 378.5 2.6 % 379.7 2.7 % (1.2) (0.3) % Depreciation and amortization 219.4 1.5 % 212.1 1.5 % 7.3 3.4 % Total operating expenses 12,205.8 85.4 % 12,091.5 84.6 % 114.3 0.9 % Operating Income $ 2,083.3 14.6 % $ 2,197.9 15.4 % $ (114.6) (5.2) % We measure cost of services in two distinct categories: salary and service costs and occupancy and other costs.

The reporting unit goodwill balances and debt vary by reporting unit primarily because our three legacy agency networks were acquired at the formation of Omnicom and were accounted for as a pooling of interests that did not result in any additional debt or goodwill being recorded.

The goodwill balances and debt vary by reporting unit primarily because our three legacy agency networks were acquired at the formation of Omnicom and were accounted for as a pooling of interests that did not result in any additional debt or goodwill being recorded.

Readers are encouraged to consider this summary together with our consolidated financial statements and the related notes, including Note 2, for a more complete understanding of the critical accounting policies discussed below. 10 Estimates We prepare our financial statements in conformity with U.S.

Readers are encouraged to consider this summary together with our consolidated financial statements and the related notes, including Note 2, for a more complete understanding of the critical accounting policies discussed below. Estimates We prepare our financial statements in conformity with U.S.

All our global networks integrate their service offerings with the Omnicom branded practice areas, including Omnicom Health Group, Omnicom Precision Marketing Group, Omnicom Commerce Group, Omnicom Advertising Collective, Omnicom Public Relations Group, and Omnicom Brand Consulting Group, as well as our Experiential businesses and Execution & Support businesses, which includes Omnicom Specialty Marketing Group.

Experiential marketing services include live and digital events and experience design and execution. Execution & Support includes field marketing, sales support, digital and physical merchandising, point-of-sale and product placement, 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.

Experiential marketing services include live and digital events and experience design and execution. Execution & Support includes field marketing, digital and physical merchandising, point-of-sale, product placement, 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.

We believe that these actions, in addition to the availability of our Credit Facility, are sufficient to fund our near-term working capital needs and our discretionary spending. Information regarding our Credit Facility is provided in Note 7 to the consolidated financial statements.

We believe that these actions, in addition to the availability of our Credit Facility and Term Loan Facility, are sufficient to fund our near-term working capital needs and our discretionary spending. Information regarding our Credit Facility and Term Loan Facility is provided in Note 7 to the consolidated financial statements.

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.

Credit Markets and Availability of Credit In light of the uncertainty of future economic conditions, we will continue to take actions available to us to respond to changing economic conditions, and we will continue to manage our discretionary expenditures. We will continue to monitor and manage the level of credit made available to our clients.

Credit Markets and Availability of Credit In light of the uncertainty of future economic conditions, we will continue to take actions available to us to respond to changing economic conditions and will continue to manage our discretionary expenditures. We will also continue to monitor and manage the level of credit made available to our clients.

Adverse and beneficial fluctuations in foreign currencies from period to period impact our 9 results of operations and financial position when we translate our financial statements from local foreign currencies to the U.S. Dollar.

Adverse and beneficial fluctuations in foreign currencies from period to period impact our results of operations and financial position when we translate our financial statements from local foreign currencies to the U.S. Dollar.

The long-term debt indentures and the Credit Facility do not contain provisions that require acceleration of cash payments in the event of a downgrade in our credit ratings.

The long-term debt indentures, Credit Facility and Term Loan Facility do not contain provisions that require acceleration of cash payments in the event of a downgrade in our credit ratings.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP. Non-GAAP financial measures reported by us may not be comparable to similarly titled amounts reported by other companies. The following table reconciles the U.S.

However, disruptions in the credit markets may lead to periods of illiquidity in the commercial paper market and higher credit spreads. To mitigate any disruption in the credit markets and to fund our liquidity, we may borrow under the Credit Facility or the uncommitted credit lines or access the capital markets if favorable conditions exist.

However, disruptions in the credit markets may lead to periods of illiquidity in the commercial paper market and higher credit spreads. To mitigate any disruption in the credit markets and to fund our liquidity, we may borrow under the Credit Facility and Term Loan Facility or the uncommitted credit lines or access the capital markets if favorable conditions exist.

At December 31, 2022, our long-term and short-term debt was rated BBB+ and A2 by S&P and Baa1 and P2 by Moody's. Our access to the commercial paper market and the cost of these borrowings are affected by market conditions and our credit ratings.

At December 31, 2023, our long-term and short-term debt was rated BBB+ and A2 by S&P and Baa1 and P2 by Moody's. Our access to the commercial paper market and the cost of these borrowings are affected by market conditions and our credit ratings.

For our reporting units with negative book value, we concluded that the fair value of their total assets was in excess of book value. The minimum decline in fair value that one of our reporting units would need to experience in order to fail the goodwill impairment test was approximately 46%.

Our revenue is primarily derived from the planning and execution of advertising communications and marketing services in the following fundamental disciplines: Advertising & Media, 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.

Our revenue is primarily derived from the planning and execution of advertising communications and marketing services in the following fundamental disciplines: Advertising & Media, Precision Marketing, Commerce & Branding, Experiential, Execution & Support, Public Relations and Healthcare. Our client contracts are primarily fees for service on a rate per hour or per project basis.

In most of our businesses, including advertising, which also includes studio production efforts and media planning and buying services, public relations, healthcare advertising, precision marketing, commerce and brand consulting businesses, we act as an agent and arrange, at the client’s direction, for third parties to perform certain services.

In most of our businesses, including advertising, which also includes studio production efforts and media planning and buying services, public relations, healthcare advertising, precision marketing, commerce and branding, we act as an agent and arrange, at the client’s direction, for third parties to perform certain services.

Such additional financing may not be available on favorable terms, or at all.

Such additional financing may not be available on favorable terms, or at all. 28

Interest expense on debt decreased $21.9 million to $191.3 million in 2022 compared to 2021, primarily as a result of the benefit from the early redemption in May 2021 of all the outstanding $1.25 billion of our 3.625% Senior Notes due 2022, or 2022 Notes, which was partially offset by the issuance of $800 million of our 2.60% Senior Notes due 2031, or 2031 Notes, in May 2021, and the issuance of the £325 million 2.25% Senior Notes due 2033, or Sterling Notes, in November 2021.

Interest expense on debt decreased $21.9 million to $191.3 million in 2022 compared to 2021, primarily as a result of the benefit from the early redemption in May 2021 of all the outstanding $1.250 billion 3.625% Senior Notes due 2022, or 2022 Notes, which was partially offset by the issuance of the 2.60% Senior Notes due 2031 in May 2021, and the issuance of the £325 million 2.25% Senior Notes due 2033 in November 2021.

These institutions generally have credit ratings equal to or better than our credit ratings. In countries where we do not conduct treasury operations, all cash and cash equivalents are held by counterparties that meet specific minimum credit standards. At December 31, 2022, our foreign subsidiaries held approximately $2.1 billion of our total cash and cash equivalents of $4.3 billion.

These institutions generally have credit ratings equal to or better than our credit ratings. In countries where we do not conduct treasury operations, all cash and cash equivalents are held by counterparties that meet specific minimum credit standards. At December 31, 2023, our foreign subsidiaries held approximately $2.2 billion of our total cash and cash equivalents of $4.4 billion.

In the normal course of business, our agencies both gain and lose business from clients each year due to a variety of factors. Under our client-centric approach, we seek to broaden our relationships with all of our clients. In 2022 and 2021, our largest client represented 2.7% and 3.2% of revenue, respectively.

In the normal course of business, our agencies both gain and lose business from clients each year due to a variety of factors. Under our client-centric approach, we seek to broaden our relationships with all of our clients. Our largest client represented 3.0% and 2.7% of revenue for 2023 and 2022, respectively.

Notwithstanding our belief that the assumptions we used for WACC and long-term growth rate in our impairment testing were reasonable, we performed a sensitivity analysis for each of our reporting units.

Notwithstanding our belief that the assumptions we used for WACC and long-term growth rate in our impairment testing were reasonable, we performed a sensitivity analysis for each reporting unit.

For the past ten years, the average historical revenue growth rate of our reporting units and the Average Nominal GDP, or NGDP, growth of the countries comprising the major markets that account for substantially all of our revenue was approximately 3.6% and 3.8% , respectively.

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 various strategic business platforms and agency brands through the expansion of their geographic reach or their service capabilities to better serve our clients.

Our acquisition strategy is focused on acquiring the expertise of an assembled workforce, and in some cases their associated technological capabilities and assets, in order to continue to build upon the core capabilities of our various strategic business platforms and agency brands through the expansion of their geographic reach or their service capabilities to better serve our clients.

We define EBITA as earnings before interest, taxes and amortization of intangible assets, and EBITA Margin as EBITA divided by revenue. EBITA and EBITA Margin are non-GAAP financial measures. We believe that EBITA and EBITA Margin are useful measures for investors to evaluate the performance of our business.

We define EBITA as earnings before interest, taxes, and amortization of intangible assets, and EBITA margin as EBITA divided by revenue. We believe EBITA and EBITA Margin are useful measures for investors to evaluate the performance of our business.

The acquisition revenue and disposition revenue amounts are netted in the table. • Organic growth is calculated by subtracting the foreign exchange rate impact, and the acquisition revenue, net of disposition revenue components from total revenue growth. • The percentage change is calculated by dividing the individual component amount by the prior period revenue base of that component ($14,289.4 million for the Total column).

Interest expense for 2021 includes a loss of $26.6 million on the early redemption of the 2022 Notes. Interest income in 2022 increased $43.4 million to $70.7 million year-over-year, primarily as a result of higher interest rates on our cash balances and our short-term investments. Our effective tax rate for 2022 increased year-over-year to 28.1% from 24.6%.

Goodwill Impairment Review - Conclusion Based on the results of our impairment test, we concluded that our goodwill at June 30, 2022 was not impaired, because the fair value of each of our reporting units was in excess of its respective net book value.

Goodwill Impairment Review - Conclusion Based on the results of our impairment test, we concluded that our goodwill at May 1, 2023 was not impaired, because the fair value of each of our reporting units was in excess of its respective net book value.

For the year ended December 31, 2022, our largest client represented 2.7% of revenue, and our 100 largest clients, which represent many of the world's major marketers, represented approximately 53% of revenue. Our clients operate in virtually every sector of the global economy, with no one industry representing more than 17% of our revenue in 2022.

For the year ended December 31, 2023, our largest client represented 3.0% of revenue, and our 100 largest clients, which represent many of the world's major marketers, represented approximately 55% of revenue. Our clients operate in virtually every sector of the global economy, with no one industry representing more than 17% of our revenue in 2023.

GAAP liquidity measures, reflects one of the key metrics used by us to assess our cash management. Non-GAAP liquidity measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP. Non-GAAP liquidity measures as reported by us may not be comparable to similarly titled amounts reported by other companies.

Substantially all of the cash is available to us, net of any foreign withholding taxes payable upon repatriation to the United States. At December 31, 2022, our net debt position, which we define as total debt, including short-term debt, less cash and cash equivalents and short-term investments increased $873.1 million to $1.3 billion from December 31, 2021.

Substantially all of the cash is available to us, net of any foreign withholding taxes payable upon repatriation to the United States. Our net debt position as of December 31, 2023, which we define as total debt, including short-term debt, less cash and cash equivalents and short-term investments decreased $33.1 million to $1.2 billion from December 31, 2022.

Global economic conditions have a direct impact on our business and financial performance. Adverse global or regional economic conditions pose a risk that our clients may reduce, postpone or cancel spending on advertising, marketing and corporate communications services, which would reduce the demand for our services.

Adverse global economic conditions pose a risk that our clients may reduce, postpone or cancel spending on advertising, marketing and corporate communications services, which would reduce the demand for our services.

The increase in organic revenue was offset by the weakening of substantially all foreign currencies against the U.S. Dollar, especially the British Pound and the Euro, as well as the disposition of our businesses in Russia in the first quarter of 2022. In Latin America, organic revenue increased in most countries in the region, especially Brazil and Colombia.

We considered this history when determining the long-term growth rates used in our annual impairment test at June 30, 2022, and included in the 10-year history is the full year 2020 that reflected the negative impact of the COVID-19 pandemic on the global economy and our revenue.

We considered this history when determining the long-term growth rates used in our annual impairment test at May 1, 2023. Included in the 10-year history are the full year 2020 results that reflected the negative impact of the COVID-19 pandemic on the global economy and our revenue.

The regional reporting units of each agency network are responsible for the agencies in their region. They report to the segment managers and facilitate the administrative and logistical requirements of our key client matrix organization structure for delivering services to clients in their regions.

The regional reporting units and practice areas monitor 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 key client matrix organization structure for delivering services to clients in their regions.

Dollars and the current period constant currency revenue ($14,289.1 million less $14,970.1 million for the Total column). • Acquisition revenue is calculated as if the acquisition occurred twelve months prior to the acquisition date by aggregating the comparable prior period revenue of acquisitions through the acquisition date.

Dollars and the current period constant currency revenue ($14,692.2 million less $14,720.5 million and $14,289.1 million less $14,970.1 million for the Total column for December 31, 2023 and December 31, 2022, respectively). • Acquisition revenue is calculated as if the acquisition occurred twelve months prior to the acquisition date by aggregating the comparable prior period revenue of acquisitions through the acquisition date.

Diluted net income per share - Omnicom Group Inc. decreased to $6.36 in 2022, compared to $6.53 in 2021, due to the factors described above, partially offset by the impact of the reduction in our weighted average common shares outstanding resulting from repurchases of our common stock, net of shares issued for restricted stock awards, stock option exercises and the employee stock purchase plan during the year.

Diluted net income per share - Omnicom Group Inc. increased to $6.91 in 2023, from $6.36 in 2022, due to the factors described above and the impact of the reduction in our weighted average common shares outstanding resulting from the repurchases of our common stock, net of shares issued for stock option exercises and the employee stock purchase plan during the year.

Although our revenue is generally balanced between the United States and international markets and we have a large and diverse client base, we are not immune to general economic downturns.

Although our revenue is generally balanced between the United States and international markets and we have a large and diverse client base, we are not immune to general economic downturns. Global economic conditions have a direct impact on our business and financial performance.

In addition, we have contractual obligations related to our long-term debt (principal and interest payments), recurring business operations, primarily related to lease obligations, and acquisition related obligations. Our principal discretionary cash spending includes dividend payments to common shareholders, capital expenditures, strategic acquisitions and repurchases of our common stock. 24 Cash and cash equivalents decreased $1,035.0 million from December 31, 2021.

The key performance indicators that we focus on are revenue growth and variability of operating expenses. We analyze revenue growth by reviewing the components and mix of the growth, including growth by principal regional market, practice area and marketing discipline, the impact from foreign currency exchange rate changes, growth from acquisitions, net of dispositions, and growth from our largest clients.

We analyze revenue growth by reviewing the components and mix of the growth, including growth by principal regional market, practice area and marketing discipline, the impact from foreign currency exchange rate changes, growth from acquisitions, net of dispositions, and growth from our largest clients.

In 2022, we contributed $8.2 million to our defined benefit plans and paid $10.4 million for our postemployment arrangements.

In 2023, we contributed $8.8 million to our defined benefit plans and paid $10.9 million for our postemployment arrangements.

Based on past performance and current expectations, we believe that our cash and cash equivalents, short-term investments and operating cash flow will be sufficient to meet our non-discretionary cash requirements for the next twelve months. Over the longer term, our Credit Facility is available to fund our working capital and contractual obligations.

Based on past performance and current expectations, we believe that net cash provided by operating activities and cash and cash equivalents will be sufficient to meet our non-discretionary cash requirements for the next twelve months. In addition, and over the longer term, our Credit Facility and Term Loan Facility are available to fund our working capital and contractual obligations.

The estimates used in our goodwill impairment test do not constitute forecasts or projections of future results of operations, but rather are estimates and assumptions based on historical results and assessments of macroeconomic factors affecting our reporting units as of the valuation date.

There were no events through December 31, 2023 that would change our impairment assessment. The estimates used in our goodwill impairment test do not constitute forecasts or projections of future results of operations, but rather are estimates and assumptions based on historical results and assessments of macroeconomic factors affecting our reporting units as of the valuation date.

Operating profit, operating margin and EBITA margin for 2021 were favorably impacted by the $50.5 million gain recorded in connection with the dispositions in the Advertising & Media discipline. Net Interest Expense Net interest expense in 2022 decreased $71.2 million year-over-year to $137.9 million.

Operating profit, operating margin and EBITA margin for 2021 were favorably impacted by the $50.5 million gain recorded in connection with dispositions in the Advertising & Media discipline. 23 Net Interest Expense 2023 vs. 2022 Net interest expense in 2023 decreased $26.1 million year-over-year to $111.8 million.

The assumptions used for the long-term growth rate and WACC in our evaluations as of June 30, 2022 and 2021 were: 2022 2021 Long-Term Growth Rate 3.5% 3.5% WACC 11.1% - 12.0% 9.8% - 10.4% 11 Long -term growth rate represents our estimate of the long-term growth rate for our industry and the markets of the global economy we operate in.

The assumptions used for the long-term growth rate and WACC in our evaluations: May 1, 2023 June 30, 2022 Long-Term Growth Rate 3.5% 3.5% WACC 11.0% - 11.4% 11.1% - 12.0% Long -term growth rate represents our estimate of the long-term growth rate for our industry and the geographic markets we operate in.

Depending on the conditions in the credit markets, we may refinance this debt, or we may use cash from operations, including temporally accessing our Credit Facility, to repay this debt.

Depending on the conditions in the credit markets, we may refinance this debt, or we may use cash from operations and temporarily access our Credit Facility or Term Loan Facility, to repay this debt.

Additional information about acquisitions and goodwill appears in Notes 2, 5 and 6 to the consolidated financial statements. 12 Revenue Recognition Revenue is recognized when a customer obtains control and receives the benefit of the 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).

Revenue Recognition Revenue is recognized when a customer obtains control and receives the benefit of the 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).

Billings related to out-of-pocket costs are included in revenue since we control the goods or services prior to delivery to the client. 13 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.

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.

The results of this sensitivity analysis on our impairment test as of June 30, 2022 revealed that if the WACC increased by 1% and/or the long-term growth rate decreased by 1%, the fair value of each of our reporting units would continue to be in excess of its respective net book value and would pass the impairment test.

The results of this sensitivity analysis on our impairment test as of May 1, 2023 revealed that if the WACC increased by 1% and/or the long-term growth rate decreased by 1%, the fair value of each of our reporting units would continue to be in excess of its respective net book value and would pass the impairment test. 13 We will continue to perform our impairment test each year at May 1, unless events or circumstances trigger the need for an interim impairment test.

Operating profit decreased $114.6 million to $2,083.3 million, operating margin decreased to 14.6% from 15.4%, and EBITA margin decreased to 15.1% from 15.9%. Operating profit, operating margin and EBITA margin for 2022 were negatively impacted by the $113.4 million charges arising from the effects of the war in Ukraine.

Operating profit, operating margin and EBITA margin for 2022 were negatively impacted by the $113.4 million charges arising from the effects of the war in Ukraine.

We do not expect these payments to increase significantly in 2023. • The liability for contingent purchase price payments (earn-outs) is $115.0 million, of which $39.2 million is payable in 2023. • The remaining balance for the transition tax on accumulated foreign earnings imposed by the Tax Cut and Jobs Act of 2017 is $88.8 million, of which $19.9 million is expected to be paid in 2023.

We do not expect these payments to increase significantly in 2024. • The liability for contingent purchase price payments (earn-outs) is $229.5 million, of which $62.4 million is payable in 2024. • The remaining balance for the transition tax on accumulated foreign earnings imposed by the Tax Cut and Jobs Act of 2017 is $68.9 million, of which $27.7 million is payable in 2024.

Goodwill Impairment Review - Estimates and Assumptions 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 for EBITDA (earnings before interest, taxes, depreciation and amortization) and (3) when available, consideration of recent and similar acquisition transactions.

Finally, the expected benefits of our acquisitions are typically shared by multiple agencies in various regions as they work together to integrate the acquired business into our virtual client network strategy. 12 Goodwill Impairment Review - Estimates and Assumptions 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 for EBITDA (earnings before interest, taxes, depreciation and amortization) and (3) when available, consideration of recent and similar acquisition transactions.

Operating expenses are analyzed in the following categories: cost of services, selling, general and administrative expenses, or SG&A, and depreciation and amortization. Results of Operations Revenue in 2022 decreased slightly to $14,289.1 million compared to $14,289.4 million in 2021. Organic growth increased revenue $1,346.3 million, or 9.4%.

Operating expenses are analyzed in the following categories: cost of services, selling, general and administrative expenses, or SG&A, and depreciation and amortization. Financial Performance Worldwide revenue in 2023 increased to $14,692.2 million compared to $14,289.1 million in 2022. Worldwide organic growth increased revenue $584.5 million, or 4.1%.

A large decline in estimated fair value of a reporting unit could result in a non-cash impairment charge and may have an adverse effect on our results of operations and financial position.

A large decline in estimated fair value of a reporting unit could result in a non-cash impairment charge and may have an adverse effect on our results of operations and financial position. Additional information about acquisitions and goodwill appears in Notes 2, 5 and 6 to the consolidated financial statements.

The increase in organic revenue was partially offset by negative performance in Mexico and the weakening of most currencies in the region against the U.S. Dollar.

The increase in organic revenue was offset by the weakening of all currencies in the region against the U.S.

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.

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. 14 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.

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, including group-wide finance and accounting, treasury, legal and governance, human resource oversight and similar costs. SG&A expenses decreased slightly year-over-year. Net interest expense in 2022 decreased $71.2 million year-over-year to $137.9 million.

Operating Expenses - Selling, General & Administrative 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, including group-wide finance and accounting, treasury, legal and governance, human resource oversight and similar costs.

Dollar-denominated commercial paper and issue up to the equivalent of $500 million in British Pounds or Euro under a Euro commercial paper program, or borrow under the Credit Facility or the uncommitted credit lines.

To the extent that our treasury centers require liquidity, they have the ability to issue up to a total of $2 billion of U.S. Dollar-denominated commercial paper and issue up to the equivalent of $500 million in British Pounds or Euro under a Euro commercial paper program, or borrow under the Credit Facility or the uncommitted credit lines.

In Europe, organic revenue increased in substantially all countries and in all disciplines, especially our Advertising & Media discipline, which was led by our media business, our Precision Marketing and Public Relations disciplines, and our Experiential discipline, as it continues to recover from the impact of the pandemic.

In Continental Europe, which includes the Euro Zone and the other European countries, organic growth period to period of 7.2% was led by Italy, France, and Germany across substantially all disciplines. 2022 vs. 2021 Europe In Europe, organic revenue for 2022, increased in substantially all countries and in all disciplines, especially our Advertising & Media discipline, which was led by our media business, our Precision Marketing and Public Relations disciplines, and our Experiential discipline, as it continued to recover from the impact of the pandemic.

The components of net debt were (in millions): December 31, 2022 2021 Short-term debt $ 16.9 $ 9.6 Long-term debt 5,577.2 5,685.7 Total debt 5,594.1 5,695.3 Less: Cash and cash equivalents and short-term investments 4,342.5 5,316.8 Net debt $ 1,251.6 $ 378.5 Net debt is a Non-GAAP liquidity measure. This presentation, together with the comparable U.S.

Net debt: December 31, 2023 2022 Short-term debt $ 10.9 $ 16.9 Long-term debt, including current portion 5,639.6 5,577.2 Total debt 5,650.5 5,594.1 Less: Cash and cash equivalents and short-term investments 4,432.0 4,342.5 Net debt $ 1,218.5 $ 1,251.6 Net debt is a Non-GAAP liquidity measure. This presentation, together with the comparable U.S.

GAAP financial measure of net income - Omnicom Group Inc. to EBITA and EBITA Margin for the periods presented (in millions): Year Ended December 31, 2022 2021 Net Income - Omnicom Group Inc. $ 1,316.5 $ 1,407.8 Net Income Attributed To Noncontrolling Interests 87.3 99.8 Net Income 1,403.8 1,507.6 Income From Equity Method Investments 5.2 7.5 Income Tax Expense 546.8 488.7 Income Before Income Taxes and Income From Equity Method Investments 1,945.4 1,988.8 Interest Expense 208.6 236.4 Interest Income 70.7 27.3 Operating Profit 2,083.3 2,197.9 Add back: Amortization of intangible assets 80.3 80.0 Earnings before interest, taxes and amortization of intangible assets (“EBITA”) $ 2,163.6 $ 2,277.9 Revenue $ 14,289.1 $ 14,289.4 EBITA $ 2,163.6 $ 2,277.9 EBITA Margin % 15.1 % 15.9 % 15 Revenue Revenue in 2022 decreased slightly to $14,289.1 million compared to $14,289.4 million in 2021.

GAAP financial measure of Net Income- Omnicom Group Inc. to EBITA and EBITA Margin: Full Year 2023 2022 2021 Net Income - Omnicom Group Inc. $ 1,391.4 $ 1,316.5 $ 1,407.8 Net Income Attributed To Noncontrolling Interests 81.8 87.3 99.8 Net Income 1,473.2 1,403.8 1,507.6 Income From Equity Method Investments 5.2 5.2 7.5 Income Tax Expense 524.9 546.8 488.7 Income Before Income Taxes and Income From Equity Method Investments 1,992.9 1,945.4 1,988.8 Interest Expense 218.5 208.6 236.4 Interest Income 106.7 70.7 27.3 Operating Income 2,104.7 2,083.3 2,197.9 Add back: Amortization of intangible assets 80.3 80.3 80.0 Earnings before interest, taxes, and amortization of intangible assets (“EBITA”) $ 2,185.0 $ 2,163.6 $ 2,277.9 Revenue $ 14,692.2 $ 14,289.1 $ 14,289.4 EBITA $ 2,185.0 $ 2,163.6 $ 2,277.9 EBITA Margin % 14.9 % 15.1 % 15.9 % 25 LIQUIDITY AND CAPITAL RESOURCES Cash Sources and Requirements Primary sources of short-term liquidity are net cash provided by operating activities and cash and cash equivalents.

We have the ability to fund our day-to-day liquidity, including working capital, by issuing commercial paper or borrowing under the Credit Facility. During 2022 and 2021, there were no issuances of commercial paper or borrowings under the Credit Facility. We can resume issuing commercial paper to fund our day-to-day liquidity when needed.

We have the ability to fund our day-to-day liquidity, including working capital, by issuing commercial paper or borrowing under the Credit Facility and Term Loan Facility. During 2021 and 2022, we did not issue commercial paper.

However, substantially all of our foreign operations transact business in their local currency mitigating the impact of changes in foreign currency exchange rates on our operating margin percentage. Operating expenses in 2022 increased $114.3 million, or 0.9%, to $12,205.8 million year-over-year. Operating expenses for 2022 reflect charges arising from the effects of the war in Ukraine of $113.4 million.

However, substantially all of our foreign operations transact business in their local currency, mitigating the impact of changes in foreign currency exchange rates on our operating margin percentage. 2023 vs. 2022 Operating expenses in 2023 increased 3.1% to $12,587.5 million from $12,205.8 million.

Out-of-pocket costs include, among others: transportation, hotel, meals, shipping and telecommunication charges incurred by us in the course of providing our services.

Out-of-pocket costs include, among others: transportation, hotel, meals, shipping 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.

In Asia-Pacific, organic revenue increased in most disciplines, especially our Advertising & Media discipline, which was led by our media business, and in most of our major markets in the region, particularly Australia, India, Japan, Korea and Malaysia. The increase in organic revenue was offset by the weakening of all currencies in the region against the U.S.

In Asia-Pacific, organic revenue for 2023 increased compared to 2022 across most major markets in the region, especially China, India, Australia, and Japan, and was led by our media business in our Advertising & Media discipline and our Experiential discipline. The organic revenue growth was partially offset by the weakening of certain foreign currencies against the U.S.

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 significant portion of our operating expenses and substantially all these costs comprise the essential components directly linked to the delivery of our services.

As a service business, salary and service costs make up the significant portion 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, third-party service costs, and third-party incidental costs.

Additional information regarding our cash flows can be found in our consolidated statement of cash flows and Note 14 to the consolidated financial statements. At December 31, 2022, we have the following contractual obligations: • We have outstanding fixed-rate debt maturing at various times with an aggregate principal amount of $5.6 billion, of which $750 million is due in 2024.

At December 31, 2023, we have the following contractual obligations: • Outstanding fixed-rate debt maturing at various times with an aggregate principal amount of $5.7 billion, of which $750 million is due in 2024.

Debt Instruments and Related Covenants The 2.45% Senior Notes due 2030, 4.20% Senior Notes due 2030 and 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.

Non-GAAP liquidity measures as reported by us may not be comparable to similarly titled amounts reported by other companies. 27 Debt Instruments and Related Covenants Our 2.45% Senior Notes due 2030, 4.20% Senior Notes due 2030 and 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.

At December 31, 2022, we were in compliance with this covenant as our Leverage Ratio was 2.4 times. The Credit Facility does not limit our ability to declare or pay dividends or repurchase our common stock. Borrowings under the Credit Facility may use LIBOR as the benchmark interest rate.

At December 31, 2023, we were in compliance with this covenant as our Leverage Ratio was 2.3 times. Neither the Credit Facility nor the Term Loan Facility limits our ability to declare or pay dividends or repurchase our common stock.

Changes in foreign exchange rates reduced revenue $681.0 million, or 4.8%, and acquisition revenue, net of disposition revenue, reduced revenue $665.6 million, or 4.7%.

Changes in foreign exchange rates reduced revenue $28.3 million, or 0.2%, and acquisition revenue, net of disposition revenue, reduced revenue $153.1 million, or 1.1%.

The higher effective tax rate for 2022 was predominantly the result of the non-deductibility of the $113.4 million charge recorded in the first quarter of 2022, arising from the effects of the war in Ukraine, as well as an additional increase in income tax expense of $4.8 million related to the disposition of our businesses in Russia.

Income Taxes 2023 vs. 2022 Our effective tax rate for 2023 decreased period-over-period to 26.3% from 28.1%. The higher effective tax rate for 2022 was predominantly the result of the non-deductibility of the $113.4 million charge recorded in the first quarter of 2022, arising from the effects of the war in Ukraine, as discussed below.

Future interest payments on our debt total $868.5 million, of which $159.1 million is payable in 2023. • The liability for our operating and finance lease payments is $1,527.8 million, of which $297.0 million is due in 2023. • The obligation for our defined benefit pension plans is $228.6 million, and the liability for our postemployment arrangements is $130.8 million.

Future interest payments on our debt total $716.7 million, of which $155.4 million is payable in 2024. • The liability for our operating and finance lease payments is $1,492.5 million, of which $309.3 million is due in 2024. 26 • The obligation for our defined benefit pension plans is $224.3 million, and the liability for our postemployment arrangements is $142.2 million.

The increase in net debt primarily resulted from discretionary spending of $1.7 billion and the net effect of foreign exchange rate changes on cash and cash equivalents and our foreign currency denominated debt of $103.4 million, partially offset by cash flow from operating activities of $926.5 million.

These increases were substantially offset by our discretionary spending of $1.5 billion, primarily consisting of our financing and acquisition activities. In addition, the net effect of foreign exchange rate changes on cash and cash equivalents and on our foreign currency denominated debt increased net debt by $21.1 million.

In North America, organic revenue increased across all our disciplines, especially in our Advertising & Media, Precision Marketing and Public Relations disciplines, and was substantially offset by a reduction in acquisition revenue, net of disposition revenue, primarily due to the disposition in the Advertising & Media discipline in the second quarter of 2021.

Acquisitions net of dispositions negatively impacted revenue, primarily as a result of dispositions in the Execution & Support discipline in the first and second quarters of 2023, including the sale of our research businesses, partially offset by acquisitions during the year in the Advertising & Media, Precision Marketing, and Public Relations disciplines. 2022 vs. 2021 In North America, organic revenue increased across all our disciplines for 2022 compared to 2021, especially in our Advertising & Media, Precision Marketing and Public Relations disciplines, and was substantially offset by a reduction in acquisition revenue, net of disposition revenue, primarily due to the disposition in the Advertising & Media discipline in the second quarter of 2021. 19 Latin America 2023 vs. 2022 In Latin America, organic revenue for 2023 increased in all of our disciplines, led by our Advertising & Media discipline, and in substantially all countries in the region.

Dollar period to period, especially the Australian Dollar, Japanese Yen, and Chinese Renminbi. 2022 vs. 2021 In Asia-Pacific, organic revenue increased in most disciplines for 2022 compared to 2021, especially our Advertising & Media discipline, which was led by our media business, and in most of our major markets in the region, particularly Australia, India, Japan, and Korea.

The changes in revenue in 2022, compared to 2021, in our fundamental disciplines were: Advertising & Media decreased $534.6 million, Precision Marketing increased $223.1 million, Commerce and Brand Consulting increased $47.7 million, Experiential increased $99.6 million, Execution & Support decreased $46.6 million, Public Relations increased $154.1 million, and Healthcare increased $56.4 million.

The changes in worldwide revenue in 2023, compared to 2022, in our fundamental disciplines were: Advertising & Media increased $457.3 million, Precision Marketing increased $46.9 million, Commerce & Branding increased $5.6 million, Experiential increased $15.8 million, Execution & Support decreased $189.1 million, Public Relations increased $26.2 million, and Healthcare increased $40.4 million.

Salary and service costs, which tend to fluctuate with changes in revenue, decreased $76.1 million, compared to 2021, reflecting a decrease in third-party service costs of $303.0 million, partially offset by an increase in salary and related service costs of $226.9 million.

Third-party incidental costs for 2023 increased $28.0 million, or 5.2%, to $570.5 million. 2022 vs. 2021 Salary and service costs in 2022, decreased $76.1 million, compared to 2021, reflecting a decrease in third-party service costs of $393.6 million, partially offset by an increase in third-party incidental costs of $90.6 million and an increase in salary and related service costs of $226.9 million.

Certain treasury centers have notional pooling arrangements that are used to manage their cash and set-off foreign exchange imbalances. 25 The arrangements require each treasury center to have its own notional pool account and to maintain a notional positive account balance.

The arrangements require each treasury center to have its own notional pool account and to maintain a notional positive account balance. Additionally, under the terms of the arrangement, set-off of foreign exchange positions are limited to the long and short positions within their own account.

Net income - Omnicom Group Inc. in 2021 increased $462.4 million to $1,407.8 million from $945.4 million in 2020. The year-over-year increase is due to the factors described above.

Net Income and Net Income Per Share - Omnicom Group, Inc. 2023 vs. 2022 Net income - Omnicom Group Inc. in 2023 increased $74.9 million to $1,391.4 million from $1,316.5 million. The year-over-year increase is due to the factors described above.

… 167 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

16 edited+1 added−2 removed8 unchanged

2022 filing

2023 filing

Biggest changeInterest 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 2022, there were no interest rate swaps, and long-term debt at December 31, 2022 consisted entirely of fixed rate debt.

Biggest changeAt December 31, 2023 and 2022, the liability for the swap fair value was $6.6 million and $16.5 million, respectively, and was recorded in long-term liabilities. 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.

We operate in all major international markets including the Euro Zone, the U.K., Australia, Brazil, Canada, China and Japan. Our agencies transact business in more than 50 different currencies.

We operate in all major international markets including the U.K., Euro Zone, Australia, Brazil, Canada, China and Japan. Our agencies transact business in more than 50 different currencies.

In the normal course of business, our agencies enter into contractual commitments with media providers and production companies on behalf of our clients at levels that can substantially exceed the revenue from our services. These commitments are included in accounts payable when the services are delivered by the media providers or production companies.

In the normal course of business, our agencies enter into contractual commitments with media providers and production companies on behalf of our clients at levels that can substantially exceed the revenue from our services. These commitments are 29 included in accounts payable when the services are delivered by the media providers or production companies.

Dollar affect our results of operations and financial position. For the most part, because the revenue and expenses of our foreign operations are denominated in the same local currency, the economic impact on operating margin is minimized. The effects of foreign currency exchange transactions on our results of operations are discussed in Note 2 to the consolidated financial statements.

For the most part, because the revenue and expenses of our foreign operations are denominated in the same local currency, the economic impact on operating margin is minimized. The effects of foreign currency exchange transactions on our results of operations are discussed in Note 2 to the consolidated financial statements.

In these instances, amounts are either promptly settled or hedged with forward foreign exchange contracts. To manage this risk, at December 31, 2022 and 2021, we had outstanding forward foreign exchange contracts with an aggregate notional amount of $40.3 million and $77.3 million, respectively.

In these instances, amounts are either promptly settled or hedged with forward foreign exchange contracts. To manage this risk, at December 31, 2022, we had outstanding forward foreign exchange contracts with an aggregate notional amount of $40.3 million.

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 represented 2.7% of revenue in 2022. However, during periods of economic downturn, the credit profiles of our clients could change.

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 represented 3.0% of revenue in 2023. However, during periods of economic downturn, the credit profiles of our clients could change.

At December 31, 2022 and 2021, the net fair value of the forward foreign contracts was not material (see Note 20 to the consolidated financial statements).

The net fair value of the forward foreign contracts at December 31, 2022, was not material (see Note 22 to the consolidated financial statements). There were no outstanding forward foreign exchange contracts at December 31, 2023.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 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.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 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 net investment hedges to manage the volatility of foreign exchange rates on the investment in our foreign subsidiaries.

In 2022, we entered into fixed-to-fixed cross currency swaps with a notional value of $150 million to hedge a portion of the net investment in our Japanese subsidiaries against volatility in the Yen/U.S. Dollar exchange rate.

We have fixed-to-fixed cross currency swaps with a notional value of $150 million that hedge a portion of the net investment in our Japanese subsidiaries against volatility in the Yen/U.S. Dollar exchange rate. The swaps are designated and qualify as a hedge of a net investment in a foreign subsidiary and are scheduled to mature in 2025 and 2029.

We use net investment hedges to manage the volatility of foreign exchange rates on the investment in our foreign subsidiaries. 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 may 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.

Credit Risk We provide advertising, marketing and corporate communications services to several thousand clients that operate in nearly every sector of the global economy and we grant credit to qualified clients in the normal course of business.

There were no interest rate swaps in 2023 and 2022. Long-term debt at December 31, 2023 and 2022 consisted entirely of fixed-rate debt. Credit Risk We provide advertising, marketing and corporate communications services to several thousand clients that operate in nearly every sector of the global economy, and we grant credit to qualified clients in the normal course of business.

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, 2022 was not significant. 27 Foreign Currency Exchange Risk In 2022, our international operations represented approximately 48% of our revenue. Changes in the value of foreign currencies against the U.S.

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, 2023 was not significant.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.

Financial Statements and Supplementary Data See Item 15, “Exhibits, Financial Statement Schedules.” Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.

These swaps are designated and qualify as a hedge of a net investment in a foreign subsidiary and are scheduled to mature in 2025 and 2029. Changes in the fair value of the swaps are recognized in foreign currency translation and are reported in accumulated other comprehensive income (loss), or AOCI.

Changes in the fair value of the swaps are recognized in foreign currency translation and are reported in accumulated other comprehensive income (loss), or AOCI. Any gain or loss will remain in AOCI until the complete or substantially complete liquidation of our investment in the underlying operations.

Any gain or loss will remain in AOCI until the complete or substantially complete liquidation of our investment in the underlying operations. We have elected to assess the effectiveness of our net investment hedges based on changes in spot exchange rates. We receive net fixed U.S.

We have elected to assess the effectiveness of our net investment hedges based on changes in spot exchange rates. We receive net fixed U.S. Dollar interest payments. In 2023 and 2022, we recorded a reduction of interest expense of $6.6 million and $1.2 million, respectively.

Removed

The VaR model is not intended to represent actual losses but is used as a risk estimation and management tool.

Added

Foreign Currency Exchange Risk In 2023, our international operations represented approximately 49% of our revenue. Changes in the value of foreign currencies against the U.S. Dollar affect our results of operations and financial position.

Removed

Dollar interest payments, and in 2022, we recorded $1.2 million as a reduction of interest expense. At December 31, 2022, the liability for the swap fair value was $16.5 million and is recorded in long-term liabilities.

Top changes in Omnicom Group's 2023 10-K

Item 1. Business

Item 1A. Risk Factors

Item 2. Properties

Item 4. Mine Safety Disclosures

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Other OMC 10-K year-over-year comparisons