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

Daniel Salmon - BMO Capital Markets U.S. Craig Huber - Michael Nathanson - Nomura Securities Co. Ltd. William Bird - Lazard Capital Markets LLC Meggan Friedman - William Blair & Company L.L.C. Alexia Quadrani - JP Morgan Chase & Co James Dix - Wedbush Securities Inc. John Janedis - UBS Investment Bank Matthew Chesler - Deutsche Bank AG

Good morning, ladies and gentlemen, and welcome to the Omnicom First Quarter 2011 Earnings Release Conference Call. [Operator Instructions] At this time, I'd like to now introduce you to today's conference call host, Executive Vice President, Chief Financial Officer of Omnicom Group, Mr. Randall Weisenburger. Please go ahead.

Thank you for taking the time to listen to our first quarter 2011 earnings call. We hope everyone's had a chance to review our earnings release. We’ve posted to our website both the press release and a presentation covering the information that we'll present this morning. This call is also being simulcast and will be archived on our website. Before we start, I've been asked to remind everyone to read the forward-looking statements and the other information that's included on Page 1 of our investor presentation and to point out that certain of the statements made today may constitute forward-looking statements and that these statements are our present expectations, and actual events or results may differ materially. I'd also like to remind you that during the course of this earnings call, we will discuss some non-GAAP measures in talking about Omnicom's performance. You can find a reconciliation of those measures to the nearest comparable GAAP measures in the presentation accompanying this call. We're going to begin the call with some brief remarks from John Wren. Following John's remarks, we'll review our financial performance for the quarter, and then both John and I will be happy to take questions.

Thank you, Randy. Good morning, everyone. We're pleased with our operating results for the first quarter. These results build on the progress we made during 2010 and also show the strengthening of our business over the last year. This morning, in particular, I want to highlight several areas. First, organic growth. Organic growth in the quarter was up 5.2% over the same period in 2010. This represents the fifth consecutive quarter of positive growth and the last quarter where we face comparisons to the Chrysler business. Excluding its effect, organic growth would have been 6.8%. Second, we completed the Clemenger acquisition in early February. This is one of a series of strategic acquisitions in markets such as Columbia, Russia, India and China that will help us deepen and expand our presence in Asia and developing markets. In addition, our acquisitions of Communispace, Voce and Fanscape help us to expand our digital capabilities in consumer insights, analytics and social media. Each of these acquisitions meets the test of strategic fit and price, and each represents an investment in what we believe are some of the best companies in their respective disciplines and markets. As many of you know, in March, we announced that we have made significant progress in digital through new strategic partnerships with Microsoft, Yahoo! and AOL. This come on the heels of our Google partnership announced in 2010. Each of these partnerships is designed to leverage our skills in areas of brand building, storytelling and creative, with our partner's technological skills, platforms and reach. Our goal with each of these partnerships is to continue to build the strongest competencies for our agencies and deliver innovative and effective tools and ideas to our clients worldwide. Lastly, we continue to make progress towards our goal of returning margins to 2007 levels by 2012. Late last year, we embarked on a review of all of our businesses with the goal of improving margins while also investing in our best growth opportunities. We also challenged each of our companies to identify opportunities to improve margins while continuing to drive growth. I'm happy to report that we made substantial progress disposing and of reorganizing non-strategic and underperforming businesses in our portfolio. Total annual revenue for businesses disposed of to date is approximately $120 million. During the quarter, we did incur charges affecting the P&L as a result of these repositioning activities. We also recognized the gain in connection with the completion of our acquisition of a majority interest in Clemenger. Randy will walk you through these items and their implications on the quarter in more detail during his part of the presentation. Although we are not finished with our review of all the companies in our portfolio, we do not expect to incur significant charges for the remainder of the year. Taken together, these actions demonstrate a focus on executing our core strategies of building our presence in key markets outside the United States, improving our digital competencies and driving margin improvement without hampering growth. Turning to an analysis of revenue by region. In the U.S., we continue to see strong organic growth of 4.1% versus the first quarter of last year and 6.8% excluding Chrysler. As I noted in February, we expect growth for the year to return to more historic levels as we face more difficult year-over-year comps. With that said though, we expect to see solid growth in the U.S. market, as employment and business fundamentals continue to improve. In Europe, organic growth was 2.1%. We saw a strong growth in both the U.K. and France, trends, we believe, will continue. Outside the Eurozone, we also saw solid positive growth. In the Middle East, the recent political turmoil did not have a significant impact on our revenue. In Asia and South America, our investments continue to generate significant positive returns with double-digit growth in each of the regions. The tragic events in Japan contributed to a negative performance in that market for the quarter. However, based upon what we know today, we do not see a significant impact to our operations for the remainder of 2011. Our thoughts are with the people of Japan and the families of our clients and staff who were affected. I want to thank our agencies and employees around the world for their numerous efforts to support the victims of the earthquake and the tsunami. Lastly, I want to note that as part of our continuing efforts to diversify our geographic revenue mix, non-U.S. revenues have increased to 47.6% from 45.5% in the year-ago quarter, even while U.S. revenues continue to grow significantly. Our revenues from markets other than the U.S., U.K. and Euro, now represent over 20% of our revenue for the first time in our history. Our growth is also coming from the spectrum of industries we serve. Revenues are up in every significant industry category, including pharma and healthcare, financial services, food and beverage and consumer products. All these areas performed exceptionally well. Turning to our balance sheet and cash flow. We continue to utilize our free cash flow and cash on hand for acquisition, dividends and share repurchases. In addition to the acquisitions we completed, we repurchased 6.8 million shares and increased our quarterly dividend by 25% during the quarter. Finally, overall, we are pleased with the continued performance of our business. As we talk with our clients, we see significant opportunities to help them execute their plans for growth. As we talk to our agencies, we see an organization that is working aggressively to anticipate trends and develop innovative ideas for our clients. As we look forward for ways to deploy our capital, we continue to see reasonably priced companies in the market or we specialize skills that we believe will continue to further our overall growth strategies. Lastly, but certainly not least, we remain vigilant in seeking to optimize our portfolio to ensure that when we invest, we are doing so in companies that are well positioned for profitable growth. I will now turn the call back to Randy, and he'll take us through the quarter in detail.

Thank you, John. In summary, the first quarter was a solid and busy start to the year. The underlying fundamentals of our business have continued to improve, and our new business efforts have been very successful. As a result, we continue to experience positive organic growth across each of our business disciplines and across all of the industry segments that we serve. In addition, we successfully closed several acquisitions in the quarter that we're very excited about. Before I discuss the results for the quarter, I want to point out that there are a couple of items included in the reported figures that we need to break out so that the numbers are more comparable against the prior period. As we discussed in the Q4 earnings call, as a result of our acquisition of a controlling interest in our long-term affiliate, the Clemenger Group, which is the leading marketing communications group in Australia and New Zealand, in accordance with GAAP, we recorded a gain resulting from the remeasurement of the carrying value of our equity interest to fair value. In addition, we continue to implement the strategic review process that we initiated last year. Our agencies were very busy in the quarter, taking a number of actions, including disposing of several businesses, consolidating several of our smaller operations, as well as certain businesses consolidating several of their locations and taking numerous actions to further increase operating efficiencies. As a result of these repositioning actions, we incurred a cost in the quarter of $131.3 million. There were also a number of disruptive and tragic events that occurred in the quarter that many of our agency personnel and their families had to work through, including the disaster in Japan; the earthquake in Christchurch, New Zealand; the floods in Brisbane, Australia; and the political unrest and turmoil in the Middle East. I commend our agencies in those affected regions for managing what are extremely difficult situations with exceptional skill. Now turning to our financial performance. As I said, it was a very solid quarter and largely in line with our expectations. Year-over-year revenue grew 7.9%, bringing revenue for the quarter to $3.15 billion. Reported EBITDA increased 11.6% to $343 million, and our resulting EBITDA margin was 10.9%, up about 40 basis points from last year. As I mentioned, there were several items in the quarter that impacted our reported earnings. First, the cost associated with the repositioning actions that were executed in the quarter totaled approximately $131.3 million and, second, the remeasurement gain associated with our acquisition of a controlling interest in Clemenger of $123.4 million. The net effect of these two items reduced EBITDA by $7.9 million or about 25 basis points. Our reported operating income, or EBIT, increased 10.7% to $322 million for a year-over-year margin improvement of about 20 basis points. Adjusting for the repositioning costs and the remeasurement gain, our EBIT margin was 10.5%, off about 50 basis points. Net interest expense for the quarter was $32.1 million, up $8 million from Q1 last year and essentially flat from the fourth quarter. The increase versus the first quarter of 2010 was primarily reflective of interest on the $1 billion of 10-year senior notes issued in August of 2010, partially offset by the positive effects for interest rate swaps on our 2016 senior notes and increased interest income. From the tax front, our reported tax rate for the quarter was 25.5%. The reduction in the rate is primarily the result of minimal tax expense associated with the Clemenger remeasurement gain, offset by a lower-than-average tax benefits on certain of the repositioning charges and a $9 million tax charge associated with closing various audit issues for the years 2005, '06 and '07. Going forward, as we outlined at the end of last year, we expect our operating tax rate to be in the 34.2% to 34.4% range. Net income for the quarter increased 23.6% to $201.9 million, and diluted earnings per share in the quarter increased 32.7% to $0.69 per share. The diluted share count for the quarter was 289 million shares, down about 7% from the same period last year. Before we review our financial performance, we added a slide on Page 3 that lays out where the remeasurement gain and the repositioning charges are reflected in our P&L. The repositioning expenses primarily included severance, real estate and other charges related to underperforming businesses that were disposed of, as well as our efforts to correct staffing imbalances and make operating improvements in certain underperforming businesses that we believe are strategically important. We also undertook the consolidation of certain back-office operations and infrastructure for a number of our smaller businesses. The severance charges, which will be cash, totaled approximately $92.8 million and were included in salary and service expense. Additional, primarily non-cash charges related to asset and goodwill write-offs, real estate charges net of gains on dispositions, totaled $38.5 million, were included in office and general expenses. The remeasurement gain of $123.4 million is included as a reduction in office and general expenses. While the bulk of our actions associated with our strategic review activities were completed in the first quarter, we do anticipate several additional dispositions and some additional repositioning expenses later this year. The exact timing is difficult to predict with certainty, but our goal is to complete these actions in the second quarter. Turning to Page 4, we take a closer look at our revenue performance. First, with regard to FX. On a year-over-year basis, the dollar weakened versus most of our major currencies, with the exception of the euro. The net result was a positive FX impact for the quarter of $37 million or about 1.3%. Looking ahead, if rates stay where they are currently, we expect FX to be positive around 4% in the second quarter and then flatten out in the second half of the year. We expect the full year impact to be positive only about 2%. Revenue growth from acquisitions net of dispositions increased revenue by $42 million in the quarter or about 1.4%. A few of the larger transactions were Clemenger and Communispace this quarter and DDB Columbia and OMG Middle East at the end of last year. As I mentioned before, we do expect to complete a couple of additional dispositions before year end. And in all likelihood, we will also close at least a few more acquisitions. With regard to organic growth, we had a very solid quarter. We continued to see year-over-year growth across every industry sector that we serve. Our new business efforts have been strong, and we continue to see economic recovery, although slow, in most of the markets that we operate. As a result, organic revenue growth was 5.2% or $152 million. Fortunately, this was the last quarter before we cycle on the Chrysler loss. Excluding Chrysler, which was just over $47 million in revenue in Q1 of 2010, organic growth was 6.8%. A couple of other items in the quarter worth mentioning. We did experience lost revenue in the quarter as a result of the political turmoil in the Middle East. As a result, growth in the region slowed from strong double digits to single digits. The Middle East region accounts for about 1% of our revenue. Also, as a result of the tragic events that occurred in Japan, we experienced some disruption at the end of the quarter and expect it to continue for the next couple of quarters. Japan accounts for about 1.5% of our revenue. Although it has not yet impacted us, the issues in Japan may also affect spending by Japanese clients outside of Japan over the balance of the year. Turning to our mix of business, brand advertising accounted for 45% of our revenue, and marketing services, 55%. As for their respective growth rates, brand advertising had 4.2% organic growth, and marketing services was up 6.1%. However, with brand advertising, we have to keep in mind the Chrysler loss. Excluding Chrysler, brand advertising had organic growth of about 7%. Within the marketing services category, CRM had 7.1% organic growth. Within this sector, direct and field marketing, branding, research and design all had outstanding performances. Our Events business was flat year-over-year, which we actually believe was quite strong, given in Q1 last year, we had the Winter Olympics. Public Relations had organic growth of 1.9%, and Specialty Communications was up 6.6%. On Slide 6, our geographic mix of business in the quarter was 52% U.S. and 48% international. In the United States, revenue increased $60 million or 3.8%. Acquisitions, net of dispositions, reduced revenue by about $5 million or 0.3% and organic growth was 4.1% or about $65 million. Again, the Chrysler loss had a disproportionate impact on the U.S. numbers given it was almost entirely a U.S. account. Excluding Chrysler, the U.S. had organic growth of 6.8%. International revenue increased $171.6 million or about 12.9%. FX increased revenue by $37 million or 2.8%. Acquisitions, net of dispositions, increased revenue by $47 million, and organic growth was 6.6% or about $87 million. Internationally, in Asia, we had strong performances in China, Singapore, Australia and South Korea. And as I said before, Japan was negative. In Europe, we had good performances in the U.K., France, Russia, Poland and Spain. However, in the other so-called PIIG countries, Portugal, Ireland, Italy and Greece, they continued to be negative, although less negative than last year. And Latin America continues to perform well across the region. Slide 7 shows our mix of business by industry. There were no significant changes in our mix of business in the quarter. And again, this quarter, we experienced positive growth across all of the industry segments that we serve. In the auto industry, while we had low single-digit growth overall, excluding Chrysler, it was up over 26%. In the financial services, technology, healthcare and pharma, food and beverage and consumer products segments led our growth this quarter, each having double-digit growth rates. Turning to Slide 8, cash flow. Our cash performance in the quarter was in line with our expectations. We generated approximately $160 million of free cash flow after CapEx and excluding changes in working capital. Our primary uses of cash during the quarter were dividends to our common shareholders, which totaled $58 million; dividends paid to our non-controlling interests shareholders of $25 million; acquisitions, including earn-out payments, and the purchase of additional interest in controlled subsidiaries, net of proceeds from the sale of investments of approximately $216 million; and share repurchases, net of the proceeds received from stock issuances under our share plans and the related tax benefits, totaled approximately $302 million. Slide 9 shows our current capital structure. Including changes in working capital, our net debt position at the end of the quarter was approximately $1.7 billion, an increase of about $350 million over the last 12 months. That increase was driven predominantly by our stock repurchase activity, which has totaled $1.2 billion over the last 12 months. And our total debt was $3.2 billion, which was effectively unchanged from year end and up about $1 billion year-over-year due to the issuance of the 2020 bonds last August. Our leverage ratio or total debt-to-EBITDA ratio stands at 1.8x, and net debt-to-EBITDA is just under 1x. Our interest coverage ratio remained very strong at 11.9x. Our liquidity continues to be very strong as well. We finished the quarter with cash and undrawn committed credit facilities, totaling about $3.5 billion. We had additional uncommitted facilities available, totaling another $670 million. And finally, on Slide 11, where all the numbers come together, both our return on invested capital and return on equity for the last 12 months increased to 15.7% and 23.3%, respectively, both reapproaching our 20-year averages. And with that, I'm going to now ask the operator to open the call for questions.

[Operator Instructions] And first on the line is Alexia Quadrani with JPMorgan. Alexia Quadrani - JP Morgan Chase & Co: Just a couple of questions. First, looking a bit closer to organic revenue growth in the U.S. in the quarter, is there any sort of unique trends as the quarter progressed that would suggest maybe a bit more of a moderation in the second quarter? And then if you could also touch on PR, and it seems a little bit light. What happened there?

I believe, I mean, what happened in the first quarter without Chrysler there is very consistent on what we expected to happen, and I think what we signaled to the marketplace when we reported in February, that we were going to return to more normal comps, which is we’ll outperform GDP growth. And so we don't see any difficulties. We see the continuation of strong, moderate growth, I think.

I think that's right. We explained in the fourth quarter, sort of that fourth quarter effect, why that drove organic growth exceptionally high in the fourth quarter. Again, excluding Chrysler, organic growth in the U.S. was pretty strong. Alexia Quadrani - JP Morgan Chase & Co: So basically, adjusting for the comps, you would expect sort of the growth rate to sort of continue like what we saw in Q1 into Q2. Is that fair?

No. The only thing I'd caution you with this is that I still see a return to a more normal activity. So we should be able to outperform GDP by a couple of basis points, I mean -- a couple of a hundred basis points, please forgive me. Alexia Quadrani - JP Morgan Chase & Co: And then on public relations, anything there? It just seems a little bit lighter than I would've thought.

I don't think there was anything unusual. It's not a huge number. It does bounce around a little bit from quarter-to-quarter. Alexia Quadrani - JP Morgan Chase & Co: Okay. And then Germany, I think I might have missed Germany. I know it's a big market for you. How did you do there in the quarter?

Germany was lower this quarter than last quarter. I think it was more of a client-driven versus the economy driven. Alexia Quadrani - JP Morgan Chase & Co: Okay. And then lastly, just jumping on to -- you highlighted obviously some one-time-ish charges associated with the closures and divestitures in the quarter. The severance that you pointed out, are those all associated with the divestitures? I mean, are they sort of one-time-ish or are there also some ongoing severance in that number?

Well, it's not all dispositions, as I tried to point out. We did a lot of consolidations, so we consolidated a number of locations. We're trying to centralize some back office services for some of our smaller operations. We consolidated locations within a country with agencies. So there was quite a bit of severance associated with those items as well. A lot of the severance was also in Europe, so it was, I'll say, fairly expensive per headcount. Alexia Quadrani - JP Morgan Chase & Co: But I guess, I'm trying to get a sense of -- you usually you don't break out severance. It's sort of a one-time-ish. So would you say the majority of it is associated with the general restructuring efforts?

Yes.

Yes. Alexia Quadrani - JP Morgan Chase & Co: Okay. And just lastly, you mentioned, you did a great job, I think, giving us detail on sort of the issues in your client base surrounding these global crises we saw in the quarter. But you did mention that what you can't really tell though is, if there's going to be an impact in terms of pull back in spending by Japanese businesses spending rest in the world. I don't know if this is something you can quantify, but do you have any sort of ballpark sense of how much your business is sort of, could potentially fall into that category?

We don't have a number. We can't even gauge it. I mean, there's a few Japanese clients, and we don't know how their production is really going to be affected as you get into the second quarter. I think I feel more comfortable as I look at it over the course of the year though. But by the end of the year, even if there's a quarterly shift somewhere, it should return to normal.

Our next question is from the line of Craig Huber with Access 342. Craig Huber -: Can you speak a little bit about what you're expecting over the second quarter trends over euro and then U.K., looks like in the first quarter U.K. was up a strong 9.1% and euro denominated markets up 2.1%. Are those trends continuing here in the second quarter?

The U.K. was strong all throughout last year as well. Most of the major European markets were fairly strong last year, and the smaller markets were fairly negative. What we expect this year, and it seemed to be the case in the first quarter, is that the negative markets are getting less negative and moving back to, I'll say, zero or probably by the end of the year, move back to sort of at least small single-digit organic growth. I would suspect the markets that have higher growth will moderate. It will move back towards GDP or a couple of hundred basis points above GDP growth rates. Craig Huber -: And then also, can you help us from a modeling perspective, I mean your net acquisitions in the quarter, I guess added 1.4% to the revenues. Given that you haven't -- everything wasn't fully closed in the first quarter, and you've closed on some acquisitions since the first quarter, what should investors expect for acquisitions to add to revenues during the second quarter as a percentage of revenues?

Net of divestitures? Craig Huber -: Yes. Net basis, yes.

Timing is still a bit of an issue. A couple of the acquisitions that we did, Clemenger, in particular, was a larger acquisition, that got done in early February. The dispositions got done later in the quarter. Yes, we have one or two more dispositions, actually it might even be a couple of more than that, that we're hoping to occur in the second quarter, but that timing is far from certain. Craig Huber -: So where would you ballpark then your -- the acquisitions would add to revenues here in the second quarter, 2% or so, or you're not sure?

I think it's probably going to be 1.5% to 2%. Craig Huber -: Okay. And I also want to ask, this margin target, EBITDA margin target for full year 2012 of 13.5%, how much progress do you think you'll make this calendar year towards, I guess, roughly 140, 150 basis points improvement, do we got about a little bit over 1/3 of the way through towards the basis points?

Well, we're endeavoring to improve the margins this year on the way to getting there next year. We've demonstrated a little bit of that in the first quarter. What we're doing is we're going through, as we said, in restructuring and repositioning things for growth. So I feel very comfortable with the 2012 forecast based upon everything that I see now. I don't want to necessarily get into a quarterly forecast of margin improvement while I'm still going through this process. So I'm not being very helpful, but you know that we're endeavoring to improve things along the way.

And the way the P&L works, Craig, as you know, is there's costs associated with getting some of those efficiencies. This quarter, there were large numbers so we broke them out. Generally, those are just ongoing costs. I'm sure we didn't capture all the costs this quarter. These were really the costs associated with these very specific, fairly large restructuring items. Every agency is going through initiatives to get its operations more efficient and streamlined. There's costs associated with that. Craig Huber -: Is it safe to say then for, you expect like more progress towards the basis points improvement in 2012 than you expect here in 2011?

I think, yes.

And next, we move to William Bird with Lazard. William Bird - Lazard Capital Markets LLC: I was wondering if you could talk a little bit about -- just elaborate a little more on organic revenue growth? Excluding Chrysler, do you expect Q2 organic growth to be similar to Q1?

Yes, I think overall, it will be similar to Q1. Yes, these are pretty high organic growth rates, still relative to GDP. What we said last year is that organic growth over time is going to reconnect with GDP. We think we can outpace GDP by 100 to 200 basis points. It's sort of the timing of that reconnection. We thought last year, we stated in the fourth quarter, that we thought the U.S. organic growth rate would slow. As a result of that, we think the European organic growth rate will improve overall. And that's largely going to be the negative countries getting these or less negative or returning to positive as their comps line up. And some of the larger markets that had performed pretty well throughout last year, in all likelihood, their organic growth rates will slow. And I don't think 9% organic growth in the U.K. is probably going to occur at that level, given the current GDP growth rates for a year or two. But our agency is with strong individual performance can certainly prove us wrong, those are kind of macro predictions.

Yes. The only thing I would add to it, Bill, is just two-words question and it's like, I'm happy with what Randy just said. One is the second quarter is the second-largest quarter we face in the year just because of the seasonality of the business, and the second thing is if there is a quarterly impact to disruption coming from some of the Japanese, especially the auto dealers and the like, in all likelihood, that's going to -- we're going to be affected in the second quarter there before we have an opportunity to recover over the course of the rest of the year. William Bird - Lazard Capital Markets LLC: Very helpful. On that topic, at this stage, have you seen any pullback from the U.S. auto companies from any Japanese supply chain disruption?

I'm not doing it day-to-day. We have not seen it, but we've heard discussions around it, a lot of rhetoric. So I don't have any hard numbers yet to tell you. William Bird - Lazard Capital Markets LLC: And given how you account for organic growth, did dispositions have any impact on organic growth, positive or negative?

It wouldn't have, no.

I don't think so. William Bird - Lazard Capital Markets LLC: Do you think it was neutral?

I think it was probably neutral.

Yes, it would have been neutral.

Our next question is from Meggan Friedman with William Blair & Company. Meggan Friedman - William Blair & Company L.L.C.: I wanted to ask a question on the impact of rising commodity prices. Can you talk about how clients are talking about marketing spending plans given these increases? Are the conversations changing as a result of this?

It's a real pressure on a number of our clients, especially some packaged goods clients that we have. We're concerned about the things that they're concerned about in their business. But I think those issues have not resulted in any material changes to their marketing plans because I believe they're all focused very heavily on market share gains. So the two aren't 100% correlated, although there is a lot of conversation. Meggan Friedman - William Blair & Company L.L.C.: Okay, great. Thanks. And then I actually just had one housekeeping question. Did you provide a new business wins number?

I don't think I did, but it was just under $1.1 billion.

Our next question is from Matt Chesler with Deutsche Bank. Matthew Chesler - Deutsche Bank AG: Just want to talk about costs for a moment. Last year, you guys spoke a bit about, I think, catch-up, so to speak, in terms of underlying costs and probably on the salary and services side, in terms of either base salaries or payroll or insurance, and then real estate, all those items that sort of go up year-on-year regardless of what you're doing elsewhere in the business. So excluding the actions that you took this quarter, can you talk a little bit about what you're seeing in terms of costs elsewhere in the business?

I think a lot of the -- there were a couple of things that we talked about last year in trying to manage costs. I think some of the areas of cost that we were able to manage in 2009, I think they came back in 2010, and I think those cost buckets were pretty full in 2010. I think we made quite a bit of progress in 2010 on real estate. I think we'll have a little bit more to go on that with some of the consolidations and the things that we're trying to execute on. I think as far as base compensation costs, I think that's one of the areas that our agencies have to focus heavily on this year to make sure that we put the flexibility back in our cost structures. That's certainly one of the tasks that we've given people to focus on. Matthew Chesler - Deutsche Bank AG: When you talk about the agencies being focused on it this year, to what extent does that involve getting some of your comp levels, particularly at media agencies trued up to competitive levels as of January 1?

I think we're probably in competitive levels now. I certainly don't believe we're under -- yes, I don't think our comp structures are under our competitors. Matthew Chesler - Deutsche Bank AG: Okay. And just in terms of the actions that you're taking on the cost side, what are you -- how do you categorize them geographically split between the U.S. and international, particularly in Europe, and do you have an expectation as you go through this process for the payback period?

I would think most of the activities are in the United States and developed Europe in terms of geographic locations. And I think the payback period we're looking for is throughout this year, but certainly, the largest payoff being 2012 where we see the margin improvement.

And depending upon the cost action, payback on the, I'll say, headcount side, salary side, is generally quite a bit faster in the United States than in Europe. Certainly, when you get into a real estate and operations, your payback's pretty comparable between one market and the other. Matthew Chesler - Deutsche Bank AG: And then just finally, is the split geographically similar in terms of severance relative to the OMG?

No. Severance is much more heavily weighted towards Europe and the international markets.

And our next question is from Michael Nathanson with Nomura. Michael Nathanson - Nomura Securities Co. Ltd.: I have a couple. I just wanted to clarify, when you guys have said GDP, you guys are going to grow 100 basis points, 200 basis points per GDP, that's nominal U.S., right? That's the benchmarks you're pointing to?

Yes. Michael Nathanson - Nomura Securities Co. Ltd.: And then I guess, we won't know until the quarter is all done for everyone, but would you think that if you adjust for Chrysler, 6.8% growth U.S., do you think that's going to be at the end of the first quarter, have a normal run rate for everyone in the quarter? Do you guys think you took share or lost share, have any sense of what the overall market’s looking like in the first quarter for the U.S.?

I don't have any sense of the number. I think our agencies performed pretty well. I think our new business activity over the last couple of quarters, which is what would really drive the organic growth rate this quarter. Current new business wins or losses, really, it affects it more three to six months down the road. I think our agencies have done fairly well. So I suspect we'll be in the mix with everyone else. Michael Nathanson - Nomura Securities Co. Ltd.: Question, the revenue question, people just were surprised by the downgrade from second -- from fourth quarter growth to first quarter. I know there were a lot of one-timers and project numbers and the comp rate was easy. But in terms of what you're looking at, your businesses were -- there were no change to the kind of projection -- your projection of your business versus what you looked at for the fourth quarter?

The fourth quarter organic growth as we explained in the fourth quarter was high because of the fourth quarter effect. I estimated it at roughly 3%. When we looked at the year end -- the fourth quarter revenue effect, there's -- and I've explained it to a lot of different people, there's a number of things that go into that. We think that number was about $100 million at the end of 2009, and we think it was about $200 million at the end of 2010. That $100 million of incremental growth in sort of that one category of revenue was really about 3% or so organic growth in the fourth quarter. That's not a long-term sort of trend issue, that's kind of a one-time “getting back to normal” effect.

Yes, I mean and historically, the way the business has always been, and it's also true of our competitors, is classically the second -- the largest quarter is the fourth quarter. The next largest quarter is the second quarter, followed by the third quarter, followed by the first [ph] quarter. So that's the seasonality of the industry of the business. So there's nothing terribly unusual in doing -- in what happened in the first quarter as it compares to the fourth quarter. Michael Nathanson - Nomura Securities Co. Ltd.: Okay. And then the other question, just last one would be, do you remember what first quarter severance was a year ago? What's kind of a normalized, and I guess nothing's normal, but what was the compare for severance last year for this quarter?

I don't recall, but organic growth was just modestly positive last quarter. I think in 2010, we were just recovering. Sorry, I don't have the number in front of me.

Our next question is from John Janedis with UBS.

I'll follow-up on any numbers we don't have here. John Janedis - UBS Investment Bank: Randy, the U.K. was pretty strong in the face of some macro headwinds. Were there any one-time projects or major wins there? And what are your clients and people on the ground telling you, and is the government a meaningful client?

No, we don't do a lot of government business. We have a little bit, probably everywhere, but it's not a meaningful number for us. The U.K. has been fairly strong for us throughout last year, certainly, stronger than just the economy. So the performance of our underlying agencies has been very good in that market. There's not a specific single item that I can find that's really driving the U.K. to an abnormal level. The items can get, I'll say, relatively small as we start focusing on individual countries, $3 million or something moves the needle a 100 basis points in the U.K. John Janedis - UBS Investment Bank: Okay. And then just somewhat of a follow-up to Mike's question, you called out the severance. Can you help us maybe with a more normalized run rate going forward? And does EBITDA margin target that you've set for next year incorporate maybe all charges in the remeasurement gain, or is it exclusive of those items?

Next year's margin objective? John Janedis - UBS Investment Bank: Yes.

Well, next year's margin objectives was trying to get back to the 2007 levels. So it doesn't reference this year. Did I miss something? John Janedis - UBS Investment Bank: I just wanted to make sure if it includes any kind of severance going forward. That's all in the number, right?

Yes, absolutely.

Yes. John Janedis - UBS Investment Bank: And then just in terms of severance, is it more normalized run rate on a quarterly basis more like 30-ish or...

No, probably more like 15.

Our next question is from James Dix with Wedbush. James Dix - Wedbush Securities Inc.: Just a couple of things. First, has your outlook for Eurozone growth changed at all over the past three months? I mean, there's been some chatter about how various underlying media businesses are doing there, so I was just curious on your take on it. And then a couple items on margin. I think you addressed dispositions’ impact on revenue is being -- organic revenue growth is being minimal. Any impact of dispositions on margin that you saw in the quarter? And then one other thing on margin, are you seeing any differences of note in incremental margins, either across your disciplines or across geographies?

See if I remember them all. For Europe, Europe's I guess playing out over the last few quarters, and this quarter, kind of as I expected. The larger markets recovered earlier, keeping in mind we have a fairly substantial base of multinational clients that are going to focus their resources on what they believe are important markets. So France, Germany, and the U.K. all did fairly well last year, and we think will continue. The smaller markets across Europe, they were hurt by their local economies and I'm sure are probably less of a focus for some of the multinational clients. We felt that those countries that were significantly negative would be, at a minimum, less negative. So they're going to have less of an impact or at least less of a negative impact. So with that reduction, our European growth would improve, basically, is what continue to happen this quarter. The larger markets performed fairly well, and I pointed out the PIGS markets, Spain is actually positive for us this quarter. The other markets were negative but they were less negative than they were last year. So the European growth rates, overall, improved. Trying to get to some of your other questions, you talked about margins by discipline. We've pointed out for a while the Media business, in general, has higher margins and some of our field marketing, shopper marketing businesses have lower margins, field marketing especially, but they have very good returns on equity. They have very little capital committed to those businesses, so they're, frankly, excellent businesses from a return perspective, but their overall EBIT margins are a bit lower. And a couple more, I probably forgot them. James Dix - Wedbush Securities Inc.: Yes, there was just one. Any impact on margins from dispositions for quarter-to-quarter now?

Yes -- well the dispositions, most of them happen late in the quarter. Obviously, we're not trying to dispose of our higher margin businesses, so we do expect some benefit over time from selling those businesses. As far as going back to sort of Bill's question on dispositions with organic growth, the way we calculate organic growth, the revenues from the companies we disposed of would be in that base. To the extent those companies would've had flat growth, it wouldn't have affected us if they would have had negative growth, not having the business -- and we wouldn't have that negative revenue piece but the base is still in it. And we're talking a very small amount of revenue here, annualized revenue, about $120 million, is what's been disposed of to date. So I don't think you can have really much of an impact. If it does, it could be positive, 0.1 point to negative 0.1 point. It would be very, very minor, and the margins again, it will also be fairly minor. It could maybe move the number 0.1 or something. James Dix - Wedbush Securities Inc.: 0.1 on a consolidated basis?

Right, yes. James Dix - Wedbush Securities Inc.: And just one follow-up, you said your free cash flow looks like [ph] the results for the quarter were generally in line with your expectations. I notice they did drop year-over-year, so if you could give just a little color on that, I assume a lot of it had to do with the repositioning, but just also, your outlook for free cash flow growth for the full year as well?

Let's look at the slides. Yes, I think it's basically in the non-cash charges. I think our free cash will continue to perform in line with EBITDA. What I was focusing more on with that comment was the fact that we utilized more than our free cash in the quarter. We generally think that we're going to utilize our free cash for dividends, acquisitions and share repurchases for the quarter, is that we were going to outspend that, as we did this quarter. Acquisitions were fairly high because both the Communispace and Clemenger deals closed in the quarter, and we continue to repurchase shares. We bought, I think it was 6.8 million shares in the quarter, and that's really what I was focused on. James Dix - Wedbush Securities Inc.: Okay. So you expect that to continue, the use of cash being a little higher than the generation?

Right. And our generation's going to continue to be in line with EBITDA.

And we'll go to Dan Salmon with BMO Capital Markets. Daniel Salmon - BMO Capital Markets U.S.: I'll chop it down to just one question than two. I heard a little bit in the marketplace and some of your competitors about a move towards performance-based pricing, particularly at the media agencies, and I was just interested to hear your take on that trend.

I don't really know what you're hearing. There's conversations going -- there have been rumors from my competitors since 1988 on the subject, so I don't see any wholesale change in the way that the fundamentals are there. There’s traded [ph] digital kind of difference in traditional media, but I'm not quite certain of the source of your question.

I think that, maybe it's like the DSP type platforms, we call the trading desk, that's in effect a performance-based model, and certainly, there's increased focused on that versus last year, still a relatively small percentage of what the media companies are buying. Yes, I think that's probably it. People have been talking about performance fees and have experimented with performance fees for a number of years, but the percentage of our revenue that's the actual performance piece remains to be very small. Thank you all very much, and thanks for taking the time to listen to our call. Goodbye.

Goodbye.

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may now disconnect.