Randall Weisenburger, Executive Vice President and Chief Financial Officer John Wren, President Chief Executive Officer

Alexia Quadrani - Bear Stearns William Bird - Citigroup Troy Mastin - William Blair & Company Lauren Fine - Merrill Lynch Jason Helfstein - CIBC World Markets Craig Huber - Lehman Brothers Debra Schwartz - Credit Suisse Paul Ginocchio - Deutsche Bank Securities Operator Ladies and gentlemen, good morning and welcome to the Omnicom Q2 2006 Earnings Release Conference Call. [Operator instructions]. At this time, I would now like to introduce you to today's conference call host, Executive Vice President and Chief Financial Officer of Omnicom Group, Mr. Randall Weisenburger. Please go ahead. Randall Weisenburger - Executive Vice President, Chief Financial Officer: Thank you. Thank you all for taking the time to listen to our Q2 2006 Earnings Call. We hope everyone has had a chance to review our earnings release. We have also posted to our website both the press release and a presentation covering the information that we will present this morning. This call is also being simulcast and will be archived on our website. Before we get started, I have been asked to remind everyone to read the forward-looking statements and other information that is included on page one of our investor presentation and to point out that certain of the statements discussed today may constitute forward-looking statements and that these statements are our present expectations and actual events or results may differ. We are going to begin the call with some brief remarks from John Wren. Following John’s remarks, we will review our financial performance for the quarter and the six-month period in more detail and then both John and I will be happy to take questions at the end. John Wren - President, Chief Executive Officer: Good morning, thanks for joining the call. We are very pleased with the company's performance for the second quarter and for the six months. Revenue for the quarter continued to be strong across the board, in the US, North America, South America, Europe, Africa, and Asia. The only two major markets now reporting year-over-year growth for the quarter were Spain, which was up against tough comps from 2005 and anticipated client spending was delayed I think to the second half, it will be fine for the year, and in Japan where growth was down due to a specific client issue and the restructuring of our TBWA business. Our strategy in general is moving along faster than we expected. Specifically during the quarter, we were able to improve our positions in both China and India with the announcement of DDB’s relationship with CITIC, and in India, we have made some acquisitions, but we expect to announce new leadership for the group in early September. New business, which is always impossible to predict but is the focus of each one of our companies continues to be very strong and we expect this trend to continue into the second half of this year. From an operating margin point of view, which Randy will cover, we continue to make progress in line with our objectives, continuing to control our cost and we are also continuing to increase on our investment in the training and development of our staff. Randy will take you through numbers as is our custom, in more detail, and then as he suggested we will answer your questions. Thanks.

Thanks John. As John noted, we are very pleased with performance of our agencies both from a financial perspective and the success that they have had in gaining market share. Revenue in the second quarter increased $208 million to $2.82 billion, that was an increase of 7.9%. As a result, revenue for the first six months increased 7.3% to $5.39 billion. Operating income for the quarter was $417.4 million, up 9.3%, that’s an operating margin of about 14.8%, which was about a 20 basis point increase from last year. For the six months, operating income increased 9.8% to $701.9 million, and the operating margin was 13%, that that was up about 30 basis points from last year. The primary drivers of our margin improvement in the quarter was a continued improvement in the utilization of our facilities, which includes both real estate and equipment as well as improved performance in our general and administrative cost controls. There are two anomalies in the six months year-over-year comparisons that we would like to remind you of. The first as you may recall in Q1 of 2005, we recorded a pre-tax gain of $6.9 million primarily related to the sale of a business in Australia and New Zealand, and this year also in the first quarter, with the adoption of 123-R we will require to record a cumulative pre-tax adjustment of $3.6 million to provide for an estimate of forfeitures of all unvested employees stock based compensation awards as of January 1st 2006. Since we had already been expensing stock options for the past several years, this adjustment was fairly insignificant. Adjusting for both of these items, our year over year operating income increased 10.4% and our operating margin increased from 12.6% to 13% or about 40 basis points. Net interest expense for the quarter was $25.5 million that was an increase of $11.2 million versus Q2 of last year and for the six months net interest was 40.7 million, that’s up $14.3 million compared to last year. The primary driver of the year over year increase in net interest expense was our issuance of a billion dollar ten-year fixed rate note at the end of Q1. The notes bear a coupon of 5.9% per annum will have an all-in-cost including the amortization of issuance cost of approximately 6.1% per annum. In Q2 the increased interest expense from the notes was approximately $15.1 million. The increase in interest expense in the quarter was somewhat offset by interest income earned by increased cash balances which resulted from a combination of the proceeds from the notes and improved working capital management in the quarter. As we said at the time of the issuance, we anticipate using the proceeds to refinance portions of our various convertible bonds. In the interim, we used about half of the proceeds to accelerate the planned repurchase of shares from the back half of 2006 to the beginning of Q2. Since the issuance of the notes, approximately $132 million of our 2,033 convertible bond issue was put back to the company and retired at the end of Q2. On the tax front, our tax rate for the quarter was 33.6%. This was a year over year decrease of about 20 basis points. For the six-month period the rate also decreased from the prior year, absent the impact of the Q1 2006 123-R adjustment and the tax charge associated with the business we sold in Q1 2005, our year-to-date tax rate would have been 33.6% this year versus 33.7% last year. Net income for the quarter increased 8.1% to $244.1 million bringing the six months year-to-date net income to $409.7 million, that was an increase of 8.9% over the six month period ended June 30, 2005. Fully diluted earnings per share for the quarter increase 14.5% to $1.42 and for the six months, diluted earnings per share increased 14.1% to $2.34 per share. Analyzing our revenue growth, organic growth continued to be very strong in the quarter coming down at 7.2% and accounting for $187.3 million of our revenue growth. For the six months, organic growth accounted for $395.1 million or 7.9% of our overall revenue growth. Due to some significant movements in currency rates over the course of Q2 FX ended up slightly positive adding $3.8 million to our revenue in the quarter or about 1/10th of 1%. However FX was still quite negative for the six months reducing our revenue by approximately $61.4 million or 1.2%. FX in the quarter was a bit unusual and the effect was split by market. For example, the European markets and the UK were marginally negative while Canada and Latin America were significantly positive. If FX remained at their current level for the balance of the quarter the FX impact on our revenue in Q3 would be positive in about the 1% range. However, FX rates are currently quite volatile so these numbers are likely to change several times between now and quarter end. Acquisition revenue was positive in the quarter adding $16.5 million to our revenue or about 6/10th of 1%, bringing the year-to-date total to $33.8 million. One thing to note, in the beginning of Q3, we completed the divestiture of a non-strategic health care business we had called Cyrex, the business had revenue over the last 12 months of about $70 million. As a result of the divestiture and based on the acquisitions we have closed to date, acquisition revenue in Q3 would be marginally negative. However, we do expect to close several more acquisitions in the normal course which is likely to result in acquisition revenue being at least marginally positive in Q3 and Q4. For example, yesterday we announced that we had signed an agreement to acquire a leading field marketing business in India which we anticipate will close within the next several days. As for our mix of business in the quarter, traditional media advertising accounted for 43.2% of our revenue and marketing and services 56.8%, as for the respective growth rates, traditional media advertising grew 5.7% in the quarter and 5.5% for the six months, and marketing and services which was driven by the continuing strong performance of our CRM and healthcare businesses and the improving performance of our PR businesses grew 9.7% in the quarter bringing the six months growth rate up to 8.8%. Breaking down marketing and services revenue for the quarter, CRM was approximately 34.7% of our revenue, PR 10.2%, and Specialty Communications 11.9%. As for their respective total growth rate, CRM continued to be very strong at 9.6% in the quarter and 9.8% for the six months. PR performed well, improving to 8.9% growth in the quarter and bringing the six-month growth rate up to 5.2%, and Specialty Communications increased 10.8% in the quarter bringing the six month rate up to 8.9%. Our geographic mix of business in the quarter was 54.4% US and 45.6% international. In the United States total revenue growth for the quarter was $107.7 million or 7.5%. Acquisition growth totaled $16.6 million, and organic growth totaled $91.1 million. International revenue increased $99.9 million or 8.4%, our acquisition growth was marginally negative, I think it was about $100,000 or so. Organic growth due to continued strong performance in Latin America combined with very good performance in the UK, Germany, and France was $96.2 million, and FX as I mentioned had a positive impact of $3.8 million. Our cash performance in the quarter was also very strong, in addition to our normal operating cash sources, this quarter our working capital performance was also quite strong, however to be consistent, our working capital is generally a source of free cash while as we grow due to large swings in these number day-to-day and period-to-period. We believe analyzing our cash flow excluding changes in working capital is most appropriate. As for our primary use of cash, there are four CapEx which is generally limited to furniture and fixtures, leasehold improvements, PCs and servers totaled $73 million for the six months. Dividend payments which are currently running at $0.25 per share per quarter totaled $89.8 million for the six months. Acquisitions including earnout payments on prior acquisitions totaled $138.5 million. And share repurchases which in the quarter we repurchased about 6.6 million shares for a total of $600 million, year-to-date repurchases to about 10.9 million shares for a total of $958.6 million. We also received $153.5 million of proceeds from auction exercises and stocks sold under employee stock purchase plan bringing in net repurchase amount for the six month period to $805 million. And finally as results of our repurchase activity we continued to reduce our weighted average diluted share cap which for the quarter was approximately 172 million shares. I think we also finished the quarter at about 172 million shares. Now with that we’ll now turn over the call for questions.

Thank you very much. [Operator instructions]. Our question comes from the line of Alexia Quadrani with Bear Stearns, please go ahead. Alexia Quadrani - Bear Stearns: Hi, good morning and thank you. I have a couple of questions. First I guess one for John, any sense of your -- with the clients you’re beginning to talk with about the second half of the year, any sense of their becoming more conservative in their outlook maybe about their advertising spending plans in light of potential slowing of the economy. And then the second question, on the nice bounce back we saw in the public relations business in the quarter, do you think do you think that’s sustainable, do you know what drove that bounce back in the quarter? Thank you. John D. Wren: The clients have all been conservative I think, for the last several years. I don’t foresee based upon my conversations to date, people changing their plans at all because revenue growth is the focus of most of the blue-chip companies that I have conversations with. So I’m always cautious, we are always cautious in the way that -- that we approach the market but between market share gains and growth from existing clients we don’t see any trends which are terribly alarming. The people that are struggling the most probably are the US car makers, and our largest client -- we were operating under a multiyear contract which I think extends to the end of 2008 -- 2009, so that revenue is fairly predictable from our perspective -- al lot of work to do obviously, but a steady state of affairs for us. The second question -- public relations, it seems to be solid growth across the board. We have no reason to believe -- we haven’t see a slowdown as of the end of July but we are in the process of gathering second half forecast from our company, so we are not in the position to be predictive -- specific to your question.

We had said on earlier calls that we actually thought that our business was doing better than what the numbers were indicating, you know, based on our conversations with the business leaders. You know, even in Q2 we thought the business was doing better than what the obviously numbers were, and we expected to see some of that come through in later quarters which so far in Q2 it did, but I think the performance in the quarter was more along the lines of what we had expected. Alexia Quadrani - Bear Stearns: And Randy you had -- that the new business trend seemed healthy, we don’t see a lot of it in the trade because I’m sure the trade missed a bulk of it, but do you -- we don’t see the same headlines recently, we saw the Q3 and Q4 last year. Do you get -- just as strong as it was in the second half of last year, we are just not seeing a lot of the big wins in the headlines?

I think generally that’s right, we did just over $1.3 billion in Q2 you know, last year we had a couple very large accounts in Q3, yeah those large accounts are you -- know, that doesn’t happen very often, so they’re obviously going to skew the numbers when they do happen. But our base business which is really sort of the three R's -- it’s really the hard work of a lot of people around the world, you know that’s seems to be coming at a -- you know at a very regular pace. John D. Wren: There is quite a bit of conversation that’s going on in private, Alexi, in terms of some major advertisers who have not put their accounts in review, but they are evaluating their partnership in a long-term basis and it’s just not being done with -- that you’ve seen the past. Alexia Quadrani - Bear Stearns: Okay, thank you very much

Thank you.

Thanks, and we have a question now from the line of William Bird with Citigroup, please go ahead. William Bird - Citigroup: I was wondering if you could elaborate little bit more on your strategy in China and we’re just wondering how larger Asia Pacific revenues are today if you were to gross up equity investments and you know large would you expect it to be if you look say, 4 -- 5 years? Thank you. John D. Wren: The gross up, I let you think about that in a second. It’s a focus of ours Bill, I mean admittedly we are not as strong as one of our competitors in China and India, that’s something we addressed by the creation of Omnicom Asia and the placement out there of Michael Birkin a year ago. We have made significant progress, I think China, for instance overall revenue basis is up 50% in the quarter. We are also about to improve our position where we have a very skilled leader who right after Labor Day we will announce his joining our company, is helping us through India in terms changing our relationships and improving our situation. I expect those markets to grow faster then the overall world and that’s a trend that’s going to continue I think for the foreseeable future. We have work to do and we are in the process of doing it. We can have significant growth there if we’re successful in just obtaining the work from our existing 5,000 clients who we are servicing in other parts of the world. So I am very bullish at the focus, I think I was out there three times in the first half and then had numerous meetings and other things -- at a far increased space than what we’ve seen in my activities have been in the past and that’s largely because there have been things to do. So it’s getting a lot of attention. We have -- I think a lot of up side, and its really down to the quality of our offering in the marketplace and we are focused on it.

Your gross up question is kind of a tough one to answer -- off the cuff, you know looking at some brief numbers -- and don’t hold me on this, I think its just shy of $1 billion --. William Bird - Citigroup: Is it a gross --.

-- and maybe its -- it’s a little bit around $1 billion. John D. Wren: But that’s not reflected in what we report, because there are significant partnerships that we have, one is 46%, you know that’s the --

Yeah, taking an example, things like Clemenger BBDO, which is an affiliate, it’s not taking into consideration -- you know relationship like we have with the (inaudible) or something, these are companies -- the only companies I am talking about grossing up here are companies that we have significant equity space in just not enough to consolidate. William Bird - Citigroup: Thank you.

Thank you

Thanks, and we have a question now from the line of Troy Mastin with William Blair & Company. Please go ahead. Troy Mastin - William Blair & Company: Thank you, good morning. I wanted to first ask if you are noticing that you getting any incremental traction versus independence, versus the quarter or a year ago particularly in the interactive arena. If you are, any idea why and if there was just something that you’ve done organizationally and maybe this is something that clients have changes the way they’re focusing their business?

I think we have been getting -- yeah and we have been getting quite a bit of traction over the last couple of years in the interactive area versus, I will say the independence. I think more and more clients are looking for their interactive work, to be integrated in their overall campaign, that’s the way we really designed the bulk of our interactive agencies, they are lined up with our agencies -- you know, by discipline. We don’t really view the internet so much as a discipline but more as a medium for our various agencies to work their skills. I think that traction continues. John D. Wren: There is a short term and a long term here Troy. The short term you will be able to distinguish, I think what you would refer to as independence versus the independently name brands that even we have. I think if we go out a few years, increasingly this is becoming integrated in mainstream, what were mainstream types of accounts. And I think that is very much the future just in the same way, you know if you go back, the introduction of television you know, those were all print agencies which the successful ones converted to be able to do print and TV. What technology does is collapses the security panel which you have to respond, but the industry has seen the introduction of new media before and I think we have a young, very stable, very, very talented creative group throughout every one of our disciplines and they will get it. Troy Mastin - William Blair & Company: And then one quick follow-up, any discernable impact in the quarter gross up either positive or negative? John D. Wren: Discernible, no -- was there some impact? Probably. This is the same way -- have an impact -- blah blah-blah-blah-blah. I don’t think it changes the overall annual spending of most clients, it may be up slightly in the year of a World Cup or an Olympics, but most of the things we do and most of the clients we serve, it doesn’t move the needle that much.

We also may see some movement with some of the larger multinationals -- from countries you know, you may have seen some movement from US to Europe in the quarter but again it’s very difficult to isolate. Troy Mastin - William Blair & Company: Thank you.

Thanks, and we have a question now from the line of Lauren Fine with Merrill Lynch, please go ahead. Lauren Fine - Merrill Lynch: Great, thank you, just a couple of questions. First of all are you still on the market during shareholder purchases? John D. Wren: No, we don’t -- I don’t know how you can respond to that --

We haven’t bought shares recently. Lauren Fine - Merrill Lynch: Okay. And do you still have some capacity and ability and interest to do it during the second half of the year?

Sure, obviously, to a far lesser extent than we did in the first half of the year. Lauren Fine - Merrill Lynch: Okay. And then I’m wondering if you could on the divestiture that you just made, give us a sense of the level of profitability in terms of is this margin pretty consistent with the overall margin as we go to adjust models for that?

I don’t think its big enough to adjust models for -- margins, we’re definitely below our average. Lauren Fine - Merrill Lynch: And then you can just may be give us some little bit more color on geographic trends in terms of some of the major European countries -- Asian countries, and then I have one follow-up after that. John D. Wren: Europe with the exception of Greece and Spain as I mentioned -- well, I mentioned Spain -- rather than significant for this -- we’re strong for the Q2 in a row. I am not 100% sure at this moment if that’s because of our individual country performance versus the economic growth in those market places. But we are doing the right things in winning business. South America continuous to be strong, all of Asia continues to be strong and North America is a steady state. I don’t know that I’m -- I mean it’s a pretty broad based situation at this point in terms of what we are seeing.

Yeah, I mean the performance in the quarter was pretty broad -- pretty evenly distributed with a couple of anomalies as John mentioned, there was restructuring of a business in Japan, yeah, there is isolated you know -- client shifts or client changes that had some impact but in Europe in particular, you know France, UK and Germany were all quite strong, a little bit of that you know may have been World Cup, you know revenue movement that’s why I made the comment before its very hard for us to isolate what’s you know, what’s a shift like that versus what comes out of you know, of a agency performance versus the economy. John D. Wren: Well, in terms of preliminary look and revised forecast for the second half and this is very preliminary, we don’t see weakness, we see continue strength. Lauren Fine - Merrill Lynch: Great -- and one last question would be July convertible date coming up, can you give us any sense of what you are thinking in terms of any sweetener that you might offer?

As we have mentioned before there is a maximum amount of sweetener that we would be able to pay without triggering taxes. We’re evaluating what that number is exactly. Our plan is to go back and have a meeting with our finance committee later this week and put out an announcement probably on Thursday. John D. Wren: I guess the original plan and what we are prepared for is we don’t have any intentions at this point of triggering the creation of a new bond and we certainly have the capacity to repatriate or to take back anything that we -- anybody --

Yeah, we did the fixed rate bond operating thinking that we would probably refinance around a billion dollars worth of the converts, about $132 million of the 2033 converts -- you know we took back and retired, we have disconverted and then in February, we have frankly very similar -- it’s the 2031 Convert which is very similar if not identical to the 2032 convert, we have less room from a tax perspective on that bond than on this bond. So, you know it will probably end up being balance between the two of them. Lauren Fine - Merrill Lynch: Okay, thank you. John D. Wren: Thank you.

Thanks. We have a question now from the line of Jason Helfstein with CIBC, please go ahead. Jason Helfstein - CIBC World Markets: Thanks, two questions. John, based on your historical experience, when you have seen clients reducing spending in the past, is it typical to see more money coming out of branded and then money moving into marketing services and the reason I asked that is you know, looking at this year clearly the mixed shift is moving much more toward marketing services this year than it was last year, I think last year was like 55% of the growth and this year its like 70% of growth -- in the in Q2, so just perhaps talk about what we’ve seen in the past when clients have cut back spending, whether the money shift around, and then, Randy, just one question on the cash flow, there was the $153 million, the excess tax benefits -- no I’m sorry, the share transaction under employee stock plans, just talk about what drove that number? Thanks. John D. Wren: I’ll go first. I don’t necessarily think that there is a historical correction in for what you are currently seeing. Normally if there was a recession you would see removed from branded advertising to marketing services because it was a clear -– you will want to move inventory off the shelves, but we are not in that situation at the moment and I don’t see that as a governing trend at the moment. We certainly built the company that can absorb that if that is the case which is the beauty of our marketing services position. I think technology shifts in budgets, being able to identify ROI with specific marketing programs is a trend that has existed and will continue to exist. So while the river is rising on both the general media advertising side I think it’s rising a little bit faster in terms of marketing services, and that’s why we’ve balanced our portfolio the way that we have. We also enjoy in the three principle networks that we have in terms of the advertising side of the equation, I think arguably I think our competitors would say the same, the very best you know, the A-players in terms of quality, creativity and all the rest. So whatever the overall market trends are, we fully anticipate that we would gain more market share if people were really shifting away from brands to you know -- in allocating or looking forward to see who their partner should be going forward in this kind of an environment. So we are well positioned to service our clients geographically and by product line across all of their needs and the trends and the movements quarter-by-quarter, year-by-year, 12 months trailing -- I think the shift increasingly is going to be towards marketing services. But I do see overall growth and I do see advertising and the value of brands in differentiating what your brand is versus somebody else, a key part of the mix going forward, an essential part of the mix -- shares dollar with marketing service efforts.

Two things to add to that, that are worth noting especially on a -- the year-to-year basis -- we planned this out last year, we are seeing more and more integrated campaigns. Last year we thought saw a lot of the digital was getting captured in our traditional media advertising agencies as they became more integrated. We also shifted our digital media buying and planning businesses under OMG. So you had some increased growth in what shows up on our system as traditional media advertising, last year. So we actually felt last year that what appeared like traditional media advertising growth was a little bit stronger than maybe the way our systems calculated. The other thing that is interesting with marketing services growth is we tend to capture a greater percentage of the client' spend in most forms of marketing services versus traditional media advertising. So when client spend may not be growing as fast, we capture a bigger percentage of total spending than again on the advertising front. So both of those I think help us a little bit. On the cash flow side, you asked about share transaction. The $153.5 million is a combination of stock option exercises, so it’s the strike price on option exercises as well as shares purchased under our employee stock purchase program. I would guess as the you know, the stock rebounded you know, probably increased on option exercises, you also had -- a lot on our options … although we haven’t issued a lot of options since 2003 I think, maybe even 2002, the older plans had ten year life. Some of the newer plans only have a seven-year life. So I would assume that it was you know, people you know, kind of a normal cycle of people exercising some of those options. Jason Helfstein - CIBC World Markets: Okay, just one quick follow up. Can you talk about -- you did talk geographically, overall just for example, Europe was big except for Greece and France, you said Germany was strong, do you have any color as far as by discipline, was branded stronger in those countries, or was it more marketing services, just the mix as far for Europe? Thanks.

You know, we don’t really… we could, but we don’t try to distinguish that market by market. I would imagine you know, CRM is very strong and it’s advertising is 43%, that’s 35% of our business. But increasingly as Randy said, these are integrated activities. When you get down into some of the smaller markets, the numbers compared to the US tend to be very small. What we are attempting to do hundred percent of the time is to gain as much share of a particular leading client as we possibly can, and we don’t necessarily break down when you get into those markets, the granular disciplines, because it is not of real interest to us. We want to know that we are the most important provider to… this blue chip company or that blue chip company; we don’t try to sell them CRM versus branded advertising. We are more agnostic to that, we are looking at the clients' issues and what they are trying to accomplish. And so I can’t truly answer your question with any accuracy. Jason Helfstein - CIBC World Markets: Okay, thank you very much for the detail.

Thank you.

I assume we have a question now from the line of Craig Huber with Lehman Brothers please go ahead. Craig Huber - Lehman Brothers: Good morning, thank you. Can you just discuss what your new client went into the second quarter, just rattle off the key -- maybe that didn’t get down to the trade press. I have another follow up too, thanks.

I am not sure what got out into the trade press.

Right.

And what didn’t, because frankly I don’t really follow it. A couple; Six Flags was one, Georgia Lottery was one, HD DVD was one. Those are you know, three of the, I'd say, bigger wins that might be a little bit more obscure -- in Madrid, the healthcare side, (inaudible) from BNG’s, we had some increased business from Sara Lee, H&R Block from the media side.

Sure. I mean if you would, I mean just by way of clarity on this one, we operate about 100 countries. The trade press in New York and in London, if you know, whatever your sources are, are advertising sources of the information. That’s 43% of our business globally, that 43% is in the 100 countries not simply covered by those three trades. Those are the attention grabbing headlines based in America that should read. The business, the growth, the client wins are coming from across the spectrum of our world, not simply in those markets. They are more reflective of what a Digitas t would do than Omnicom would do because of the size and the dimension of the company. So I'm not saying it’s not useful, it’s just completely inadequate when you try to understand your business wins, and because of this step there’s a lot of accounts that spend $20 million or $30 million a year as opposed to $500 million a year, so there is an awful lot in a very, very long list that goes into what we have been able to accomplish and what we continue to accomplish.

And there is a awful lot of you know, $500,000 and smaller accounts.

If you go to PR and some of the market…

Each quarter we have put together a net new business report that is probably the better part of 80 or 90 pages.

And most names, we can’t pronounce!

Yeah, I mean we kind of -- when you ask for large numbers you inevitably end up with US based brand names, but the bulk of the work is really done by the 1000 plus agencies in the 100 countries and you know, they are banging it out everyday growing their business.

Now the proof in the pudding is if you look at reported wins across all other competition within the sector and then you look at their subsequent organic growth, it’s a clear demonstration, if you try to put the trend together or something informative together that what you are reading doesn’t seem to translate into what’s happening to a lot of our companies. Craig Huber - Lehman Brothers: And then also if I could switch gears, do you see anything different out there positive or negative within a public -- competitor out there? Thanks.

It would be really inappropriate for us to discuss in the public because we don’t have in depth knowledge of really you know, what’s going on within the company, so if you’d respect -- I’m not trying to be difficult, I pass on trying to answer the question. Craig Huber - Lehman Brothers: All right, that’s fair enough. And then also on the margin front, you’ve had very good success since the beginning of last year raising your margins, quarter after quarter, do you see anything in your cost front or your organic growth that you talked about the second half or you are changing that pattern for margins in the second half? Thanks.

Well, we don’t intentionally don’t predict margins only because we believe that if we work to drive behavior then some of that behavior may not be what we desire for the long run as opposed for the next half. Our objective is to continue to improve our margins and we are on a path to do that. The better our utilization gets, the more important the incremental new business wins we have until we absorb existing capacity and you’d have to make new investments in real estate and other things, so we have been very conservative in watching our cost space and very, I think aggressive in terms of trying to win new business. The trends are there for us to continue to meet our objectives of continually improving margins, over time. What we are going to do is you know, what we believe is sensibly and we are always looking out three to five years when we make decisions. So once we have had margin improvements in the first half and we expect that to continue, we also increase our spending in things like training and development at the same time and we’ve increased our expenditures by putting a corporate infrastructure out in Asia which harms margins currently, but we think is going to benefit the growth of the company in the near and long term. So we are managing the business way beyond what the next three or six months are in terms of these decisions and if they’re right decisions they really benefit the consistent performance of the company and if they’re wrong, we correct them. Craig Huber - Lehman Brothers: Great, thank you.

Thank you. We are getting pretty close to the market open, so we will take or two more calls depending on how long they take, one or two more questions depending on how long they take.

All right, great. Your next question then comes from Debra Schwartz with Credit Suisse. Please go ahead. Debra Schwartz - Credit Suisse: Great, thank you. I was just wondering, can you give us some more color on expenses in the quarter, or maybe if you could breakdown salaries versus other or possibly if you could give us some more granularity, talk about the salaries and benefits versus incentive comp growth in the quarter, that’d be helpful.

Salaries attracting revenue…

Yeah, I think our total compensation expenses are you know, pretty much tracking revenue growth. You know, maybe it has had over our revenue growth for the six months, but not much. As far as the incentive comp goes you know, the cash incentive comp is you know, up pretty significantly and equity based incentive comp is down. We expense options and as we mentioned we haven’t done a lot on the options front since the year 2002 when it comes down into that compensations getting rotated into other forms of compensation.

On our total you know, compensation cost, we are pretty keenly interested in on the mix, trying to drive the flexible part of that you know, the bonus and incentives that we accrue up, and we don’t have any governance on that other than the overall performance of the business because ultimately that’s our flexibility in terms of locating our objectives. People have to perform in order to get paid their bonuses and if they perform, they get their bonuses. But you know, so the outline is managed a bit differently than say, real estate and other fixed costs. You know, so we try to make comp as variable and we have been trying to do that for the last several years as we moved away from in 2002, the issuance of a lot of stock, our focus continues to be cash.

What else make some of the analyses that you’d like to do or that I would more traditionally do if I were analyzing, say a manufacturing firm or some other firm, all of our investment spending for the future basically comes through the comp line. So when we staff up or put a team in place in China, in India, in Asia, that’s all coming through the comp line versus you know, some of the other investment line or if we increase our spending and you know, employee training and development program, that all runs through the comp line, because it’s basically all people based and it’s all you know, current cost, even things like Sarbanes-Oxley. You know, the vast majority of those costs are labor-based costs, so it’s really coming through that compensation line. So the fact that compensations that we are not getting obvious leverage out of compensation through the PN&L is not that we are not necessarily getting some leverage, on direct labor, that’s -- and we don’t really split things up quite that way, but it’s been observed by the investment spending that we are doing for the future. Debra Schwartz - Credit Suisse: Okay, that was helpful. And then actually Randy, can you tell us how much you’re still spending on maintenance -- cost --?

You know, I think our -- cost is still you know, they are well over $100 million a year, probably. That’s the internal cost.

We have had the flexibility, but we haven’t taken advantage of it, of not coming to -- reporting unit, but we still we do, so that’s the cost that was imposed on us but we have not knocked away from it because we think they’re positive, I think they’re positive discipline associated with some of the work that we do there. Debra Schwartz - Credit Suisse: All right, thank you.

Thank you.

Thanks, and we do have a question and from the line of Paul Ginocchio with Deutsche Bank, please go ahead.

This would be the last question.

Very good. Paul Ginocchio - Deutsche Bank Securities: Thanks for taking the question. Looking at the US, the third quarter for the last two years has been your best organic growth quarter, and just looking at the current trends from that first quarter, the second quarter, we saw a slight deceleration. There’s the comp -- the third quarter more difficult, or is that not the right way to think about it? Thank you.

Yeah, I think there is over the last four years, there has been a smoothing. You know, if you go back to the '90s, the third quarter was always you know, the lightest quarter, it still is the lightest quarter in terms of overall growth largely because it’s based in places like Europe just simply close down for the month of August. But what I think the anomaly is you know, I’ve gotten reduced, I think we have -- so we are looking at this more or less as a normal quarter for growth, we don’t see any significant aberrations at this moment or any moment.

Yeah, I don’t think you want to look at the quarters on a sequential basis. Q1 and Q3 are historically our smaller quarters with Q2 and Q4 being you know, more forward with straight fee based, retainer based contract which they’re certainly not -- all of our you know, we have all kinds of different forms of payment, but there is somewhat of a trend towards that where it’s much smoother over the course of the year. We should get some flattening or smoothing of those revenues over time which would mean greater growth in Q1 and Q3 relative to Q2 and Q4. You know, I think we’ve probably been experiencing that in Q3 for the last several years as John pointed out you know, probably had a little bit of that in Q1 as well, although I think to a lesser extent. Paul Ginocchio - Deutsche Bank Securities: Okay, great. Thanks very much.

-- company that you know, that you can look and say sequential growth. You know, we are a large group, globally and the growth rate, we also look at growth rate you know, annually as well. We can’t control the months or a day that a client is going to do something, but we do have a view as to what their annual spending is going to be. Paul Ginocchio - Deutsche Bank Securities: I’m sorry, to say that in US it’s not -- you haven’t seen really -- as you said at the beginning of the call, there’s really no discernible trends in spending patterns?

Not as they distinguish them from prior trends, no. Paul Ginocchio - Deutsche Bank Securities: Great, thank you.

Thank you. And we will thank you everyone one more time for taking the time to listen to our call, and we will do this again, next quarter.

Right.

Bye-bye.

Okay, thank you. And ladies and gentlemen, that does conclude our conference for today. Thanks for your participation, and for using AT&T’s Executive Teleconference. You may now disconnect.