UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-10551

OMNICOM GROUP INC.

(Exact name of registrant as specified in its charter)

New York	13-1514814
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
280 Park Avenue, New York, NY	10017
(Address of principal executive offices)	(Zip Code)

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

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbols	Name of each exchange on which registered
Common Stock, $0.15 Par Value	OMC	New York Stock Exchange
0.800% Senior Notes due 2027	OMC/27	New York Stock Exchange
1.400% Senior Notes due 2031	OMC/31	New York Stock Exchange
2.250% Senior Notes due 2033	OMC/33	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐	Non-accelerated filer	☐
Smaller reporting company	☐			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of April 11, 2023, there were 199,514,755 shares of Omnicom Group Inc. Common Stock outstanding.

OMNICOM GROUP INC.

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION	Page
Item 1.	Financial Statements
	Consolidated Balance Sheets - March 31, 2023 and December 31, 2022	1
	Consolidated Statements of Income - Three Months Ended March 31, 2023 and 2022	2
	Consolidated Statements of Comprehensive Income - Three Months Ended      March 31, 2023 and 2022	3
	Consolidated Statements of Equity - Three Months Ended March 31, 2023 and 2022	4
	Consolidated Statements of Cash Flows - Three Months Ended March 31, 2023 and 2022	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
	Forward-Looking Statements	14
	Executive Summary	14
	Consolidated Results of Operations	17
	Non-GAAP Financial Measures	22
	Liquidity and Capital Resources	24
	Critical Accounting Estimates	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 6.	Exhibits	28
SIGNATURES		28

i

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

OMNICOM GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions)

	March 31, 2023		December 31, 2022
	(Unaudited)
ASSETS:
Current Assets:
Cash and cash equivalents	$	3,261.5	$	4,281.8
Short-term investments	87.4		60.7
Accounts receivable, net of allowance for doubtful accounts of $23.1 and $24.7	7,062.2		8,097.1
Work in process	1,508.9		1,254.6
Other current assets	975.2		918.8
Total Current Assets	12,895.2		14,613.0
Property and Equipment at cost, less accumulated depreciation of $1,205.6 and $1,167.5	884.0		900.1
Operating Lease Right-Of-Use Assets	1,077.2		1,165.0
Equity Method Investments	66.4		66.2
Goodwill	9,792.6		9,734.3
Intangible Assets, net of accumulated amortization of $834.9 and $819.9	300.3		313.4
Other Assets	221.9		210.5
TOTAL ASSETS	$	25,237.6	$	27,002.5
LIABILITIES AND EQUITY:
Current Liabilities:
Accounts payable	$	9,585.2	$	11,000.2
Customer advances	1,279.6		1,492.3
Short-term debt	18.5		16.9
Taxes payable	334.2		300.0
Other current liabilities	2,247.6		2,243.4
Total Current Liabilities	13,465.1		15,052.8
Long-Term Liabilities	839.9		837.5
Long-Term Liability - Operating Leases	890.7		900.0
Long-Term Debt	5,609.4		5,577.2
Deferred Tax Liabilities	439.6		475.7
Commitments and Contingent Liabilities (Note 12)
Temporary Equity - Redeemable Noncontrolling Interests	361.7		382.9
Equity:
Shareholders’ Equity:
Preferred stock	—		—
Common stock	44.6		44.6
Additional paid-in capital	580.7		571.1
Retained earnings	9,825.5		9,739.3
Accumulated other comprehensive income (loss)	(1,384.5)		(1,437.9)
Treasury stock, at cost	(5,949.7)		(5,665.0)
Total Shareholders’ Equity	3,116.6		3,252.1
Noncontrolling interests	514.6		524.3
Total Equity	3,631.2		3,776.4
TOTAL LIABILITIES AND EQUITY	$	25,237.6	$	27,002.5

The accompanying notes to the consolidated financial statements are an integral part of these statements.

1

OMNICOM GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In millions, except per share amounts)

	Three Months Ended March 31,
	2023		2022
REVENUE	$	3,443.3	$	3,410.3
OPERATING EXPENSES:
Salary and service costs	2,542.9		2,491.8
Occupancy and other costs	291.6		300.2
Real estate repositioning costs	119.2		—
Charges arising from the effects of the war in Ukraine	—		113.4
Cost of services	2,953.7		2,905.4
Selling, general and administrative expenses	89.2		96.7
Depreciation and amortization	53.9		55.2
Total Operating Expenses	3,096.8		3,057.3
OPERATING INCOME	346.5		353.0
Interest Expense	54.9		51.0
Interest Income	35.6		8.2
INCOME BEFORE INCOME TAXES AND INCOME (LOSS) FROM EQUITY METHOD INVESTMENTS	327.2		310.2
Income Tax Expense	83.4		115.5
Income (Loss) From Equity Method Investments	0.1		(0.1)
NET INCOME	243.9		194.6
Net Income Attributed To Noncontrolling Interests	16.4		20.8
NET INCOME - OMNICOM GROUP INC.	$	227.5	$	173.8
Net Income Per Share - Omnicom Group Inc.:
Basic	$	1.13	$	0.83
Diluted	$	1.11	$	0.83
Weighted Average Shares:
Basic	202.2		208.3
Diluted	204.5		209.8

The accompanying notes to the consolidated financial statements are an integral part of these statements.

2

OMNICOM GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In millions)

	Three Months Ended March 31,
	2023		2022
NET INCOME	$	243.9	$	194.6
OTHER COMPREHENSIVE INCOME:
Cash flow hedge:
Amortization of loss included in interest expense	1.4		1.4
Income tax effect	(0.4)		(0.4)
Cash flow hedge, net of tax	1.0		1.0
Defined benefit pension plans and postemployment arrangements:
Amortization of prior service cost	1.1		1.0
Amortization of actuarial losses	0.2		1.6
Income tax effect	(0.9)		(1.3)
Defined benefit pension plans and postemployment arrangements, net of tax	0.4		1.3
Foreign currency translation adjustment	51.8		28.1
Other Comprehensive Income	53.2		30.4
TOTAL COMPREHENSIVE INCOME	297.1		225.0
Comprehensive Income Attributed To Noncontrolling Interests	16.2		21.5
COMPREHENSIVE INCOME - OMNICOM GROUP INC.	$	280.9	$	203.5

The accompanying notes to the consolidated financial statements are an integral part of these statements.

3

OMNICOM GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In millions, except per share amounts)

	Three Months Ended March 31,
	2023		2022
COMMON STOCK:
Common Stock, shares issued	297.2		297.2
Common Stock, par value	$	44.6	$	44.6
ADDITIONAL PAID-IN CAPITAL:
Beginning Balance	571.1		622.0
Net change in noncontrolling interests	(38.5)		(5.6)
Change in temporary equity	21.3		(57.8)
Share-based compensation	20.7		20.0
Stock issued, share-based compensation	6.1		5.9
Ending Balance	580.7		584.5
RETAINED EARNINGS:
Beginning Balance	9,739.3		8,998.8
Net income	227.5		173.8
Common stock dividends declared	(141.3)		(145.3)
Ending Balance	9,825.5		9,027.3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
Beginning Balance	(1,437.9)		(1,252.3)
Other comprehensive income	53.4		29.7
Ending Balance	(1,384.5)		(1,222.6)
TREASURY STOCK:
Beginning Balance	(5,665.0)		(5,142.9)
Stock issued, share-based compensation	20.4		9.1
Common stock repurchased	(305.1)		(300.3)
Ending Balance	(5,949.7)		(5,434.1)
SHAREHOLDERS' EQUITY	3,116.6		2,999.7
NONCONTROLLING INTERESTS:
Beginning Balance	524.3		503.5
Net income	16.4		20.8
Other comprehensive income (loss)	(0.2)		0.7
Dividends to noncontrolling interests	(12.5)		(14.0)
Net change in noncontrolling interests	(13.4)		(9.9)
Increase in noncontrolling interests from business combinations	—		47.8
Ending Balance	514.6		548.9
TOTAL EQUITY	$	3,631.2	$	3,548.6
Dividends Declared Per Common Share	$	0.70	$	0.70

The accompanying notes to the consolidated financial statements are an integral part of these statements.

4

OMNICOM GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In millions)

	Three Months Ended March 31,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	243.9	$	194.6
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization of right-of-use assets	34.6		35.8
Amortization of intangible assets	19.3		$	19.4
Amortization of net deferred loss on interest rate swaps	1.4		1.4
Share-based compensation	20.7		20.0
Real estate repositioning costs	119.2		—
Non-cash charges related to the effects of the war in Ukraine	—		65.8
Other, net	(10.2)		2.7
Use of operating capital	(951.0)		(884.2)
Net Cash Used In Operating Activities	(522.1)		(544.5)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(23.1)		(23.2)
Acquisition of businesses and interests in affiliates, net of cash acquired	—		(246.6)
Other, net	(14.5)		(92.0)
Net Cash Used In Investing Activities	(37.6)		(361.8)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in short-term debt	1.0		2.4
Dividends paid to common shareholders	(142.3)		(147.4)
Repurchases of common stock	(305.1)		(300.3)
Proceeds from stock plans	26.3		13.5
Acquisition of additional noncontrolling interests	(29.2)		(6.3)
Dividends paid to noncontrolling interest shareholders	(12.5)		(14.0)
Payment of contingent purchase price obligations	(9.2)		(6.0)
Other, net	(8.0)		(18.2)
Net Cash Used In Financing Activities	(479.0)		(476.3)
Effect of foreign exchange rate changes on cash and cash equivalents	18.4		(8.7)
Net Decrease in Cash and Cash Equivalents	(1,020.3)		(1,391.3)
Cash and Cash Equivalents at the Beginning of Period	4,281.8		5,316.8
Cash and Cash Equivalents at the End of Period	$	3,261.5	$	3,925.5

The accompanying notes to the consolidated financial statements are an integral part of these statements.

5

OMNICOM GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in tables in millions, except per share data or unless otherwise noted)

1. Presentation of Financial Statements

The terms “Omnicom,” “the Company,” “we,” “our” and “us” each refer to Omnicom Group Inc. and its subsidiaries, unless the context indicates otherwise. The accompanying unaudited consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP or GAAP, for interim financial information and Article 10 of Regulation S-X of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosure have been condensed or omitted.

In our opinion, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation, in all material respects, of the information contained herein. These unaudited consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022, or 2022 10-K. Results for the interim periods are not necessarily indicative of results that may be expected for the year.

Risks and Uncertainties

Current global economic challenges, including the impact of the war in Ukraine, high and persistent inflation, rising interest rates, supply chain disruptions, credit market deterioration, and other macroeconomic factors, could cause economic uncertainty and volatility. The impact of these issues on our business will vary by geographic market and discipline. We monitor economic

conditions closely, as well as client revenue levels and other factors. In response to reductions in revenue, we can take actions to align our cost structure with changes in client demand and manage our working capital. However, there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the current and future adverse economic conditions, reductions in client

revenue, changes in client creditworthiness and other developments.

2. Revenue

Nature of our services

We provide an extensive range of advertising, marketing and corporate communications services through various client-centric networks that are organized to meet specific client objectives. Our networks, 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. 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 and ecommerce. 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. Healthcare includes corporate communications and advertising and media services to global healthcare and pharmaceutical companies. At the core of all our services is the ability to create or develop a client’s marketing or corporate communications message into content that can be delivered to a target audience across different communications mediums.

Economic factors affecting our revenue

Global economic conditions have a direct impact on our revenue. Adverse economic conditions pose a risk that our clients may reduce, postpone or cancel spending for our services, which would impact our revenue.

6

OMNICOM GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in tables in millions, except per share data or unless otherwise noted)

Revenue by discipline was:

	Three Months Ended March 31,
	2023		2022
Advertising & Media	$	1,776.5	$	1,770.2
Precision Marketing	360.0		339.2
Commerce & Brand Consulting	209.6		211.4
Experiential	147.8		139.7
Execution & Support	255.5		277.0
Public Relations	375.5		362.4
Healthcare	318.4		310.4
Revenue	$	3,443.3	$	3,410.3

Effective January 1, 2023, we realigned the classification of certain services primarily within our Commerce & Brand Consulting, Execution & Support, and Experiential disciplines.

Revenue in our geographic markets was:

	Three Months Ended March 31,
	2023		2022
Americas:
North America	$	1,926.8	$	1,839.0
Latin America	74.0		67.7
EMEA:
Europe	951.9		992.0
Middle East and Africa	84.9		81.9
Asia-Pacific	405.7		429.7
Revenue	$	3,443.3	$	3,410.3

The Americas is comprised of North America, which includes the United States, Canada and Puerto Rico, and Latin America, which includes South America and Mexico. EMEA is comprised of Europe, the Middle East and Africa. Asia-Pacific includes Australia, Greater China, India, Japan, Korea, New Zealand, Singapore and other Asian countries. Revenue in the United States for the three months ended March 31, 2023 and 2022 was $1,812.2 million and $1,724.6 million, respectively.

Contract assets and liabilities

Contract assets and contract liabilities were:

	March 31, 2023		December 31, 2022		March 31, 2022
Media and production costs	$	710.9	$	725.1	$	654.3
Contract assets and unbilled fees and costs	798.0		529.5		662.5
Work in process	$	1,508.9	$	1,254.6	$	1,316.8
Contract liabilities:
Customer advances	$	1,279.6	$	1,492.3	$	1,463.8

Work in process represents accrued costs incurred on behalf of customers, including media and production costs, and fees and other third-party costs that have not yet been billed. Media and production costs are billed during the production process in accordance with the terms of the client contract. Contract assets primarily include incentive fees, which are not material and will be billed to clients in accordance with the terms of the client contract. Substantially all unbilled fees and costs will be billed within the next 30 days. There were no impairment losses to the contract assets recorded in the three months ended March 31, 2023 and 2022. Contract liabilities primarily represent advance billings to customers in accordance with the terms of the client contracts, principally for the reimbursement of third-party costs that are generally incurred in the near term.

7

OMNICOM GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in tables in millions, except per share data or unless otherwise noted)

3. Net Income per Share

The computations of basic and diluted net income per share were:

	Three Months Ended March 31,
	2023		2022
Net Income - Omnicom Group Inc.	$	227.5	$	173.8
Weighted Average Shares:
Basic	202.2		208.3
Dilutive stock options and restricted shares	2.3		1.5
Diluted	204.5		209.8
Anti-dilutive stock options and restricted shares	—		0.5
Net Income per Share - Omnicom Group Inc.:
Basic	$1.13		$0.83
Diluted	$1.11		$0.83

4. Goodwill and Intangible Assets

Goodwill:

	Three Months Ended March 31,
	2023		2022
January 1	$	9,734.3	$	9,738.6
Acquisitions	—		215.2
Noncontrolling interests in acquired businesses	—		47.8
Dispositions	(1.4)		(19.4)
Foreign currency translation	59.7		(30.3)
March 31	$	9,792.6	$	9,951.9

There were no goodwill impairment losses recorded in the three months ended March 31, 2023 and 2022, and there are no accumulated goodwill impairment losses.

Intangible assets:

	March 31, 2023						December 31, 2022
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Purchased and internally    developed software	$	374.2	$	(309.8)	$	64.4	$	374.8	$	(309.1)	$	65.7
Customer related and other	761.0		(525.1)		235.9		758.5		(510.8)		247.7
Total Intangible Assets	$	1,135.2	$	(834.9)	$	300.3	$	1,133.3	$	(819.9)	$	313.4

5. Debt

Credit Facilities

We have a $2.5 billion multi-currency revolving credit facility, or Credit Facility, with a termination date of February 14, 2025. In addition, we have the ability to issue up to $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. Certain of our international subsidiaries have uncommitted credit lines that are guaranteed by Omnicom aggregating $588.5 million. These facilities provide additional liquidity sources for operating capital and general corporate purposes. During the three months ended March 31, 2023, there were no borrowings under the Credit Facility, and there were no commercial paper issuances.

The Credit Facility contains a financial covenant that requires us to maintain a Leverage Ratio of consolidated indebtedness to consolidated EBITDA (earnings before interest, taxes, depreciation, amortization and non-cash charges) of no more than 3.5 times for the most recently ended 12-month period. At March 31, 2023, 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.

8

OMNICOM GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in tables in millions, except per share data or unless otherwise noted)

Short-Term Debt

Short-term debt of $18.5 million and $16.9 million at March 31, 2023 and December 31, 2022, respectively, represented bank overdrafts and short-term borrowings primarily of our international subsidiaries. Due to the short-term nature of this debt, carrying value approximates fair value.

Long-Term Debt

Long-term debt was:

	March 31, 2023		December 31, 2022
3.65% Senior Notes due 2024	$	750.0	$	750.0
3.60% Senior Notes due 2026	1,400.0		1,400.0
€500 million 0.80% Senior Notes due 2027	545.3		534.9
2.45% Senior Notes due 2030	600.0		600.0
4.20% Senior Notes due 2030	600.0		600.0
€500 million 1.40% Senior Notes due 2031	545.3		534.9
2.60% Senior Notes due 2031	800.0		800.0
£325 million 2.25% Senior Notes due 2033	402.5		392.0
Long-Term Debt, Gross	5,643.1		5,611.8
Unamortized discount	(8.8)		(9.0)
Unamortized debt issuance costs	(25.3)		(26.2)
Unamortized deferred gain from settlement of interest rate swaps	0.4		0.6
Long-Term Debt	$	5,609.4	$	5,577.2

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.

Omnicom and its wholly owned finance subsidiary, Omnicom Capital Inc., or OCI, are co-obligors under the 3.65% Senior Notes due 2024 and the 3.60% Senior Notes due 2026. These notes are a joint and several liability of Omnicom and OCI, and Omnicom unconditionally guarantees OCI’s obligations with respect to the notes. OCI provides funding for our operations by incurring debt and lending the proceeds to our operating subsidiaries. OCI’s assets primarily consist of cash and cash equivalents and intercompany loans made to our operating subsidiaries, and the related interest receivable. There are no restrictions on the ability of OCI or Omnicom to obtain funds from our subsidiaries through dividends, loans or advances. Such notes are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness.

Omnicom and OCI have, jointly and severally, fully and unconditionally guaranteed the obligations of Omnicom Finance Holdings plc, or OFH, a U.K.-based wholly owned subsidiary of Omnicom, with respect to the €500 million 0.80% Senior Notes due 2027 and the €500 million 1.40% Senior Notes due 2031, collectively the Euro Notes. OFH’s assets consist of its investments in several wholly owned finance companies that function as treasury centers, providing funding for various operating companies in Europe, Australia and other countries in the Asia-Pacific region. The finance companies’ assets consist of cash and cash equivalents and intercompany loans that they make or have made to the operating companies in their respective regions and the related interest receivable. There are no restrictions on the ability of Omnicom, OCI or OFH to obtain funds from their subsidiaries through dividends, loans or advances. The Euro Notes and the related guarantees are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness of OFH and each of Omnicom and OCI, respectively.

Omnicom has fully and unconditionally guaranteed the obligations of Omnicom Capital Holdings plc, or OCH, a U.K.-based wholly owned subsidiary of Omnicom, with respect to the £325 million 2.25% Senior Notes due 2033, or Sterling Notes. OCH’s assets consist of its investments in several wholly owned finance companies that function as treasury centers, providing funding for various operating companies in EMEA, Australia and other countries in the Asia-Pacific region. The finance companies’ assets consist of cash and cash equivalents and intercompany loans that they make or have made to the operating companies in their respective regions and the related interest receivable. There are no restrictions on the ability of Omnicom or OCH to obtain funds from their subsidiaries through dividends, loans or advances. The Sterling Notes and the related guarantee are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness of OCH and Omnicom, respectively.

9

OMNICOM GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in tables in millions, except per share data or unless otherwise noted)

6. Segment Reporting

Our branded agency networks operate in the advertising, marketing and corporate communications services industry, and are organized into agency networks, virtual client networks, regional reporting units and operating groups or practice areas. Our networks, virtual client networks and agencies increasingly share clients and provide clients with integrated services. The main economic components of each agency are employee compensation and related costs and direct service costs and occupancy and other costs which include rent and occupancy costs, technology costs and other overhead expenses. Therefore, given these similarities, we aggregate our six operating segments, which are our agency networks, into one reporting segment.

The agency networks' regional reporting units comprise three regions: the Americas, EMEA and Asia-Pacific. The regional reporting units monitor the performance and are responsible for the agencies in their region. Agencies within the regional reporting units serve similar clients in similar industries and, in many cases, the same clients, and have similar economic characteristics.

Revenue and long-lived assets and goodwill by geographic region were:

	Americas		EMEA		Asia-Pacific
March 31, 2023
Revenue - Three months ended	$	2,000.8	$	1,036.8	$	405.7
Long-lived assets and goodwill	7,642.2		3,377.2		734.4
March 31, 2022
Revenue - Three months ended	$	1,906.7	$	1,073.9	$	429.7
Long-lived assets and goodwill	7,896.2		3,532.6		698.0

7. Income Taxes

Our effective tax rate for the three months ended March 31, 2023 decreased period-over-period to 25.5% from 37.2%. The decrease for the three months ended March 31, 2023 primarily reflects the favorable impact of approximately $10.0 million of previously unrecognized tax benefits, partially offset by approximately $6.0 million related to a lower tax benefit in certain jurisdictions for the real estate repositioning costs in the quarter and the increase in the U.K. statutory tax rate. The effective tax rate for the three months ended March 31, 2022 was negatively impacted by the non-deductibility of the $113.4 million charges 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.

On August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law. The IRA levies a 1% excise tax on net stock repurchases after December 31, 2022. The excise tax is included in treasury stock on our balance sheet and was immaterial. Additionally, the IRA imposes a 15% corporate alternative minimum tax, or CAMT, for tax years beginning after December 31, 2022. The CAMT is not expected to have a material impact on our results of operations or financial position.

Various foreign jurisdictions are in the process of enacting legislation to adopt a minimum effective tax rate described in the Global Anti-Base Erosion, GloBE or Pillar Two, tax model rules issued by the Organization for Economic Co-operation and Development. A minimum effective tax rate of 15% would apply to multinational companies with consolidated revenue above €750 million. Currently, South Korea and Japan are the only countries to have enacted legislation consistent with the GloBE rules. Other countries are expected to adopt GloBE rules in 2023 with effective dates beginning in 2024.

Under the GloBE rules, a company would be required to determine a combined effective tax rate for all entities located in a jurisdiction. If the jurisdictional effective tax rate is less than 15%, a top-up tax generally will be due to bring the jurisdictional effective tax rate up to 15%.

At March 31, 2023, our unrecognized tax benefits were $159.8 million. Of this amount, approximately $154.1 million would affect our effective tax rate upon resolution of the uncertain tax positions.

10

OMNICOM GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in tables in millions, except per share data or unless otherwise noted)

8. Pension and Other Postemployment Benefits

The components of net periodic benefit expense for our defined benefit pension plans and our postemployment arrangements were:

	Defined Benefit Pension Plans				Postemployment Arrangements
	Three Months Ended March 31,				Three Months Ended March 31,
	2023		2022		2023		2022
Service cost	$	0.9	$	0.8	$	0.9	$	1.1
Interest cost	2.3		1.0		1.4		0.7
Expected return on plan assets	(0.2)		(0.3)		—		—
Amortization of prior service cost	0.1		0.1		1.0		0.9
Amortization of actuarial losses	0.2		1.0		—		0.6
Total net periodic benefit expense	$	3.3	$	2.6	$	3.3	$	3.3

We contributed $0.1 million and $0.2 million to our defined benefit pension plans in the three months ended March 31, 2023 and 2022, respectively.

9. Real Estate Repositioning Costs

In connection with the transition to a flexible working environment, a hybrid model which allows for partial remote work, we took certain actions to reduce and reposition our office lease portfolio. In the three months ended March 31, 2023, we recorded a pretax charge of $119.2 million ($91.0 million after-tax), which included an $80.4 million non-cash impairment charge for the operating lease right-of-use, or ROU, assets, $20.0 million for the write-off of the net book value of leasehold improvements at the affected locations, and $18.8 million of other lease obligations that will be paid in less than one year. Substantially all of the operating lease payments related to the ROU assets will be paid out over three years.

10. Charges Arising from the Effects of the War in Ukraine

In 2022, we disposed of our businesses in Russia. In the first quarter of 2022, we recorded pretax charges of $113.4 million, which included cash charges of $47.6 million and primarily consisted of the loss on the disposition of our net investment in our Russian businesses and included charges related to the suspension of operations in Ukraine. All of the charges related to the disposition of our businesses in Russia had been paid as of December 31, 2022, and substantially all of our commitments related to the suspension of operations in Ukraine have been paid as of March 31, 2023.

11. Supplemental Cash Flow Data

The change in operating capital was:

	Three Months Ended March 31,
	2023		2022
(Increase) decrease in accounts receivable	$	1,065.0	$	1,142.2
(Increase) decrease in work in process and other current assets	(295.6)		(248.1)
Increase (decrease) in accounts payable	(1,458.8)		(1,755.4)
Increase (decrease) in customer advances, taxes payable and other current liabilities	(212.9)		12.2
Change in other assets and liabilities, net	(48.7)		(35.1)
Increase (decrease) in operating capital	$	(951.0)	$	(884.2)
Income taxes paid	$	73.6	$	49.9
Interest paid	$	13.7	$	14.1

Non-cash increase in lease liabilities:

Operating leases	$	41.2	$	76.3
Finance leases	$	11.7	$	17.0

11

OMNICOM GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in tables in millions, except per share data or unless otherwise noted)

12. Commitments and Contingent Liabilities

In the ordinary course of business, we are involved in various legal proceedings. We do not presently expect that these proceedings will have a material adverse effect on our results of operations or financial position.

13. Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss), net of income taxes were:

	Cash Flow Hedge		Defined Benefit Pension Plans and Postemployment Arrangements		Foreign Currency Translation		Total
	Three Months Ended March 31, 2023
January 1	$	(12.1)	$	(41.3)	$	(1,384.5)	$	(1,437.9)
Other comprehensive income (loss) before reclassifications	—		—		52.0		52.0
Reclassification from accumulated other comprehensive    income (loss)	1.0		0.4		—		1.4
March 31	$	(11.1)	$	(40.9)	$	(1,332.5)	$	(1,384.5)

	Three Months Ended March 31, 2022
January 1	$	(16.1)	$	(90.4)	$	(1,145.8)	$	(1,252.3)
Other comprehensive income (loss) before reclassifications	—		—		27.4		27.4
Reclassification from accumulated other comprehensive    income (loss)	1.0		1.3		—		2.3
March 31	$	(15.1)	$	(89.1)	$	(1,118.4)	$	(1,222.6)

14. Fair Value

Financial assets and liabilities are recorded at fair value based on the following:

•Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

•Level 2: Unadjusted quoted prices in active markets for similar assets or liabilities; unadjusted quoted prices for identical assets or liabilities in markets that are not active; and model-derived valuations with observable inputs.

•Level 3: Unobservable inputs for the asset or liability.

Financial assets and liabilities measured at fair value on a recurring basis:

	March 31, 2023								December 31, 2022
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	3,261.5					$	3,261.5	$	4,281.8					$	4,281.8
Short-term investments			$	87.4			87.4				$	60.7			60.7
Marketable equity securities	0.9						0.9		0.9						0.9
Liabilities:
Foreign currency derivatives			$	—			$	—			$	0.1			$	0.1
Cross currency swaps - net investment hedge			14.3				14.3				16.5				16.5
Contingent purchase price obligations					$	128.0	128.0						$	115.0	115.0

12

OMNICOM GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in tables in millions, except per share data or unless otherwise noted)

Change in Level 3 fair value measurements:

	Three Months Ended March 31,
	2023		2022
January 1	$	115.0	$	167.1
Acquisitions	21.6		0.5
Revaluation and interest	0.4		0.2
Payments	(9.2)		(6.0)
Foreign currency translation	0.2		(1.2)
March 31	$	128.0	$	160.6

The carrying amount and fair value of our financial assets and liabilities were:

	March 31, 2023				December 31, 2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Cash and cash equivalents	$	3,261.5	$	3,261.5	$	4,281.8	$	4,281.8
Short-term investments	87.4		87.4		60.7		60.7
Marketable equity securities	0.9		0.9		0.9		0.9
Non-marketable equity securities	6.1		6.1		5.6		5.6
Liabilities:
Short-term debt	$	18.5	$	18.5	$	16.9	$	16.9
Foreign currency derivatives	—		—		0.1		0.1
Cross currency swaps - net investment hedge	14.3		14.3		16.5		16.5
Contingent purchase price obligations	128.0		128.0		115.0		115.0
Long-term debt	5,609.4		5,121.9		5,577.2		4,993.4

The estimated fair values of the cross-currency swaps and foreign currency derivative instruments are determined using model-derived valuations, taking into consideration foreign currency rates, interest rates, and counterparty credit risk. The estimated fair value of the contingent purchase price obligations is calculated in accordance with the terms of each acquisition agreement and is discounted. The fair value of long-term debt is based on quoted market prices.

15. Subsequent Events

We have evaluated events subsequent to the balance sheet date and determined that there have not been any events that have occurred that would require additional adjustments to or disclosures in these consolidated financial statements.

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Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q constitute forward-looking statements, including statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, from time to time, the Company or its representatives have made, or may make, forward-looking statements, orally or in writing. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial position, or otherwise, based on current beliefs of the Company’s management as well as assumptions made by, and information currently available to, the Company’s management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “should,” “would,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or similar words, phrases or expressions. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company’s control. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include:

•adverse economic conditions, including those caused by the war in Ukraine, the lingering effects of COVID-19, high and

persistent inflation in countries that comprise our major markets, rising interest rates, and supply chain issues affecting the

distribution of our clients’ products;

•international, national or local economic conditions that could adversely affect the Company or its clients;

•losses on media purchases and production costs incurred on behalf of clients;

•reductions in client spending, a slowdown in client payments and a deterioration or a disruption in the credit markets;

•the ability to attract new clients and retain existing clients in the manner anticipated;

•changes in client advertising, marketing and corporate communications requirements;

•failure to manage potential conflicts of interest between or among clients;

•unanticipated changes related to competitive factors in the advertising, marketing and corporate communications

industries;

•the ability to hire and retain key personnel;

•currency exchange rate fluctuations;

•reliance on information technology systems;

•changes in legislation or governmental regulations affecting the Company or its clients;

•risks associated with assumptions the Company makes in connection with its critical accounting estimates and legal     

proceedings;

•the Company’s international operations, which are subject to the risks of currency repatriation restrictions, social or

political conditions and regulatory environment; and

•risks related to our environmental, social and governance goals and initiatives, including impacts from regulators and

other stakeholders, and the impact of factors outside of our control on such goals and initiatives.

The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that may affect the Company’s business, including those described in Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022, or 2022 10-K, and in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements.

EXECUTIVE SUMMARY

The unaudited consolidated financial statements and related notes to the unaudited consolidated financial statements, including our critical accounting estimates, and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this report, should be read in conjunction with our 2022 10-K. The amounts shown in the following tables are in millions, except share and per share data or unless otherwise noted.

Overview

Given our size and breadth, we manage our business by monitoring several financial indicators. The key performance indicators we focus on are revenue growth, operating income, and EBITA (defined as earnings before interest, taxes and amortization of intangible assets) and EBITA margin (defined as EBITA divided by revenue). We analyze revenue growth by reviewing the components and mix of the growth, including growth by 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. Variability in operating expenses is analyzed in the following categories: cost of services, selling, general and administrative expenses, or SG&A, and depreciation and amortization.

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Financial Performance

Revenue for the quarter ended March 31, 2023 increased slightly to $3,443.3 million, compared to $3,410.3 million in the prior year quarter. Organic revenue growth (defined below) increased $178.7 million, or 5.2%, primarily reflecting increased client spending in all our disciplines and across all our geographic markets compared to the prior year period. Changes in foreign exchange rates reduced revenue $110.0 million, or 3.2%, primarily due to weakening of the British Pound and the Euro against the U.S. Dollar, and acquisition revenue, net of disposition revenue, reduced revenue $35.7 million, or 1.0%. The reduction in acquisition revenue, net of disposition revenue, primarily reflects dispositions in the Execution & Support discipline in the first quarter of 2023 and the disposition of our businesses in Russia in the first quarter of 2022, partially offset by acquisitions in the Precision Marketing discipline in the first quarter of 2022.

The change in revenue in the first quarter of 2023 compared to the prior year period in our fundamental disciplines was: Advertising & Media increased $6.3 million, Precision Marketing increased $20.8 million, Commerce & Brand Consulting decreased $1.8 million, Experiential increased $8.1 million, Execution & Support decreased $21.5 million, Public Relations increased $13.1 million and Healthcare increased $8.0 million.

The change in revenue across our geographic markets was: North America increased $87.8 million, or 4.8%, Latin America increased $6.3 million, or 9.3%, Europe decreased $40.1 million, or 4.0%, the Middle East and Africa increased $3.0 million, or 3.7%, and Asia-Pacific decreased $24.0 million, or 5.6%.

A summary of our consolidated results of operations for the three-month periods ended March 31, 2023 and 2022 is:

	Three Months Ended March 31,
	2023		2022		$ Change		% Change
Revenue	$	3,443.3	$	3,410.3	$	33.0	1.0	%
Operating Income2,3	$	346.5	$	353.0	$	(6.5)	(1.8)	%
Operating Margin2,3	10.1%		10.4%				(0.3)	%
Interest expense, net	$	19.3	$	42.8	$	(23.5)	(54.9)	%
Net Income - Omnicom Group Inc.2,3	$	227.5	$	173.8	$	53.7	30.9	%
Net Income per Share - Omnicom Group Inc.: Diluted2,3	$	1.11	$	0.83	$	0.28	33.7	%
EBITA1,2,3	$	365.8	$	372.4	$	(6.6)	(1.8)	%
EBITA Margin1,2,3	10.6%		10.9%				(0.3)	%

1) See Non-GAAP reconciliation for the calculation of EBITA on page 22.

2) First quarter 2023 operating expenses include $119.2 million ($91.0 million after tax), related to real estate repositioning costs discussed below, which reduced diluted net income per share - Omnicom Group Inc. by $0.45.

3) First quarter 2022 operating expenses include $113.4 million ($118.2 million after tax), related to charges arising from the effects of the war in Ukraine, which reduced diluted net income per share - Omnicom Group Inc. by $0.56.

Our Business

Omnicom is a strategic holding company providing advertising, marketing, and corporate communications services to many of the largest global companies. Our portfolio of companies includes our global networks, BBDO, DDB, TBWA, Omnicom Media

Group, the DAS Group of Companies, and the Communications Consultancy Network. 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.

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. 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, and ecommerce. 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. Healthcare includes corporate communications and advertising and media services to global healthcare and pharmaceutical companies. Our geographic markets include the Americas, which includes North America and Latin America, Europe, the Middle East and Africa (EMEA), and Asia Pacific.

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Our business model was built and continues to evolve around our clients. While our networks, practice areas, and agencies operate under different names and frame their ideas in different disciplines, we organize our services around our clients. Our fundamental business principle is that our clients’ specific marketing requirements are the central focus of how we structure our service offerings and allocate our resources. This client-centric business model requires multiple agencies within Omnicom to collaborate in formal and informal virtual client networks utilizing our key client matrix organization structure. This collaboration allows us to cut across our internal organizational structures to execute our clients’ marketing requirements consistently and comprehensively. We use our client-centric approach to grow our business by expanding our service offerings to existing clients, moving into new markets, and obtaining new clients. 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. Annalect and Omni, our proprietary data and analytics platforms, are the strategic resource for all 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.

As a leading global advertising, marketing and corporate communications company, we operate in all major markets and have a large and diverse client base. For the twelve months ended March 31, 2023, our largest client accounted for 2.7% of our revenue, and our 100 largest clients, which represent many of the world's major marketers, accounted for approximately 52.7% of our revenue. Our clients operate in virtually every sector of the global economy with no one industry representing more than 17% of our revenue for the three months ended March 31, 2023. 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.

Risks and Uncertainties

Current global economic challenges, including the impact of the war in Ukraine, high and persistent inflation, rising interest rates, supply chain disruptions, credit market deterioration, and other macroeconomic factors, could cause economic uncertainty and volatility. The impact of these issues on our business will vary by geographic market and discipline. We closely monitor economic conditions, client revenue levels and other factors. In response to reductions in revenue, we can take actions to align our cost structure with changes in client demand and manage our working capital. However, there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the current and future adverse economic conditions, reductions in client revenue, changes in client creditworthiness, and other developments. Revenue is typically lower in the first and third quarters and higher in the second and fourth quarters, reflecting client spending patterns during the year and additional project work that usually occurs in the fourth quarter. Certain global events targeted by major marketers for advertising expenditures, such as the FIFA World Cup and the Olympics, and certain national events, such as the U.S. election process, may affect our revenue period-over-period in certain businesses. Typically, these events do not have a significant impact on our revenue in any period.

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CONSOLIDATED RESULTS OF OPERATIONS

The results of operations for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 were:

	Three Months Ended March 31,
	2023			2022			$ Change
Revenue	$	3,443.3		$	3,410.3		$	33.0
Operating Expenses:
Salary and service costs	2,542.9			2,491.8			51.1
Occupancy and other costs	291.6			300.2			(8.6)
Real estate repositioning costs1	119.2			—			119.2
Charges arising from the effects of the war in Ukraine2	—			113.4			(113.4)
Cost of services	2,953.7			2,905.4			48.3
Selling, general and administrative expenses	89.2			96.7			(7.5)
Depreciation and amortization	53.9			55.2			(1.3)
Total operating expenses	3,096.8			3,057.3			39.5
Operating Income	346.5			353.0			(6.5)
Interest Expense	54.9			51.0			3.9
Interest Income	35.6			8.2			27.4
Income Before Income Taxes and Income (Loss) From Equity Method Investments	327.2			310.2			17.0
Income Tax Expense	83.4			115.5			(32.1)
Income (Loss) From Equity Method Investments	0.1			(0.1)			0.2
Net Income	243.9			194.6			49.3
Net Income Attributed To Noncontrolling Interests	16.4			20.8			(4.4)
Net Income - Omnicom Group Inc.1,2	$	227.5		$	173.8		$	53.7
Net Income Per Share - Omnicom Group Inc.:
Basic	$	1.13		$	0.83		$	0.30
Diluted1,2	$	1.11		$	0.83		$	0.28
Revenue	$	3,443.3		$	3,410.3		$	33.0
Operating Margin %	10.1		%	10.4		%
EBITA	$	365.8		$	372.4		$	(6.6)
EBITA Margin %	10.6		%	10.9		%

1) First quarter 2023 operating expenses include $119.2 million ($91.0 million after tax), related to real estate repositioning costs discussed below, which reduced diluted net income per share - Omnicom Group Inc. by $0.45.

2) First quarter 2022 operating expenses include $113.4 million ($118.2 million after tax), related to the charge arising from the effects of the war in Ukraine, which reduced diluted net income per share - Omnicom Group Inc. by $0.56.

Revenue

The components of revenue change for thethree months ended March 31, 2023 in the United States (“Domestic”) and the remainder of the world (“International”) were:

	Total				Domestic				International
	$		%		$		%		$		%
Three months ended March 31, 2022	$	3,410.3			$	1,724.6			$	1,685.7
Components of revenue change:
Foreign exchange rate impact	(110.0)		(3.2)	%	—		—	%	(110.0)		(6.5)	%
Acquisition revenue, net of disposition revenue	(35.7)		(1.0)	%	0.3		—	%	(36.0)		(2.1)	%
Organic growth	178.7		5.2	%	87.3		5.1	%	91.4		5.4	%
Three months ended March 31, 2023	$	3,443.3	1.0	%	$	1,812.2	5.1	%	$	1,631.1	(3.2)	%

The components and percentages are calculated as follows:

•Foreign exchange rate impact is calculated by translating the current period’s local currency revenue using the prior period average exchange rates to derive current period constant currency revenue (in this case $3,553.3 million for the Total column). The foreign exchange impact is the difference between the current period revenue in U.S. Dollars and the current period constant currency revenue ($3,443.3 million less $3,553.3 million for the Total column).

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•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. As a result, acquisition revenue excludes the positive or negative difference between our current period revenue subsequent to the acquisition date and the comparable prior period revenue and the positive or negative growth after the acquisition is attributed to organic growth. Disposition revenue is calculated as if the disposition occurred twelve months prior to the disposition date by aggregating the comparable prior period revenue of dispositions through the disposition date. 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 ($3,410.3 million for the Total column).

Changes in the value of foreign currencies against the U.S. Dollar affect our results of operations and financial position. For the most part, because the revenue and expense of our foreign operations are both denominated in the same local currency, the economic impact on operating margin is minimized. Assuming exchange rates at April 14, 2023 remain unchanged, we expect the impact of changes in foreign exchange rates to reduce revenue in the second quarter by approximately 0.5% and to be flat for the year. Based on our acquisition and disposition activity through April 14, 2023 we expect that the net impact will reduce revenue by 1.0% for the second quarter of 2023 and 1.0% for the full year.

Revenue by Discipline

To monitor the changing needs of our clients and to further expand the scope of our services to key clients, we monitor revenue across a broad range of disciplines and group them into the following categories: Advertising & Media, Precision Marketing, Commerce & Brand Consulting, Experiential, Execution & Support, Public Relations, and Healthcare.

The change in revenue period-over-period and organic growth by discipline was:

	Three Months Ended March 31,
	2023				2022				2023 vs. 2022
	$		% of Revenue		$		% of Revenue		$ Change		% Organic Growth
Advertising & Media	$	1,776.5	51.6	%	$	1,770.2	51.9	%	$	6.3	5.1	%
Precision Marketing	360.0		10.5	%	339.2		10.0	%	20.8		7.0	%
Commerce & Brand Consulting	209.6		6.1	%	211.4		6.2	%	(1.8)		3.3	%
Experiential	147.8		4.3	%	139.7		4.1	%	8.1		8.4	%
Execution & Support	255.5		7.4	%	277.0		8.1	%	(21.5)		3.6	%
Public Relations	375.5		10.9	%	362.4		10.6	%	13.1		5.8	%
Healthcare	318.4		9.2	%	310.4		9.1	%	8.0		4.8	%
Revenue	$	3,443.3			$	3,410.3