Shub Mukherjee - VP, Investor Relations, Executive Finance John Wren - President, Chief Executive Officer, Director Phil Angelastro - Chief Financial Officer, Executive Vice President.

Peter Stabler - Wells Fargo Securities Alexia Quadrani - JPMorgan Craig Huber - Huber Research Partners Dan Salmon - BMO Capital Markets John Janedis - Jefferies Ben Swinburne - Morgan Stanley Tim Nollen - Macquarie.

Operator:.

Good morning. Thank you for taking the time to listen to our Third Quarter 2015 Earnings Call. On the call with me today is John Wren, President and Chief Executive Officer; and Phil Angelastro, Chief Financial Officer. We hope everyone has had a chance to review our earnings release.

We have posted on our website at www.omnicomgroup.com, this morning's press release, along with the presentation which covers the information that we will review. This call is also being simulcast and will be archived on our website.

Before we start, I have been asked to remind everyone to read the forward-looking statements and other information that we have included at the end 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 that actual events or results may differ materially.

I would also like to remind you that during the course of the call, we will discuss some non-GAAP measures in talking about Omnicom's performance. You can find the reconciliation of those measures to the nearest comparable GAAP measures in the presentation material.

We are going to begin this morning's call with an overview of our business from John Wren. Then, Phil Angelastro will review our financial results. Then we will open up the line for your questions..

Thank you, Shub. Good morning and thanks for joining us this morning. I am pleased to speak to you about our third quarter 2015 business results. As I am sure you have seen, Omnicom had a strong quarter with organic growth up 6.1%, ahead of our expectations.

Margins and net income were in line with our expectations and overall our operations continued to show steady progress in the face of challenging macroeconomic conditions and volatile markets. As we had anticipated, we continue to face significant currency headwinds in the quarter. FX reduced our revenues by 7% or $272 million in the quarter.

On a year-to-date basis, the strong U.S. dollar versus other currencies reduced our revenue by 7% or $773 million. EPS for the quarter was $0.97, up from $0.95 in the prior year or about 2%. On a constant currency basis, EPS would have increased by approximately an additional 9% for the quarter and 8% for the year.

Looking forward, we expect currency effects to moderate in the fourth quarter and into next year. Phil will provide more details about the impact of foreign exchange by market and on our future results later in the call.

Turning now to organic revenue growth, North America increased in excess of 6%, reflecting strong performances and brand advertising media and our specialty healthcare business. The U.K. was up 9%, which was broad based across our operations. Our U.K.

business has consistently performed well, which reflects the high caliber and diverse group agencies we have in that market. Overall growth in Continental Europe was 4.5%. In the Euro markets, Germany was up mid-single digits, Spain also outperformed while France and the Netherlands weighed on our results.

Outside the euro countries, Russia and Poland performed well and most other markets were positive. Moving to Asia-Pacific, organic growth was in excess of 8%, with solid performance throughout the region. While our operations in China slowed a bit to mid-single digits, we remain bullish and see a long runway of growth ahead.

We continue to see strong marketing spend in such categories as telecommunications, travel and personal care. Latin America was our most difficult region in the quarter, with organic revenue declining almost 7%. Mexico and Argentina had double-digit growth, but this growth was offset by Brazil, which is our largest market in the region.

Brazil's performance was affected by both, the economy as well as difficult year-over-year comps. While the current political and economic situation in Brazil is concerning, there are opportunities to invest in growth. The 2016 Summer Olympics should mitigate some of the risks in the short-term.

Our performance this quarter and for the year is reflective of the strategies we have in place to drive our growth. These strategies help us meet rapidly changing needs of our clients by giving them access to the best people and the latest technologies when and where they need them. First is attracting, retaining and developing top talent.

Next, expanding our global footprint and moving into new service areas. Third is leveraging our data and analytic capabilities. Finally, we continue to deliver breakthrough creative ideas and solutions based upon meaningful consumer insights across all marketing disciplines and communications.

This morning I would like to discuss our progress against these strategies and also provide some updates, provide an update on the media reviews and address recent industry concerns on topics of viewability and fraud in online advertising and transparency. At Omnicom, we have always strived to be a great place for great people to work.

It has been a priority to attract and retain the best talent and make sure they are continuously learning and being challenged. Our agencies and networks do an excellent job of training and developing our people within the context of their specific disciplines. Omnicom further supports this through advanced management programs at Omnicom University.

We just completed the 21st year of Omnicom University in the United States and have expanded the program to China and Europe. This summer for the first time, we hosted a joint education session with one of our large multinational clients, which was a huge success.

Another aspect of achieving our talent development goals is creating a diverse and inclusive workforce. Diversity at Omnicom and backgrounds, experiences and perspectives is critical to ensuring we have the best talent. It is not just a word or concept to us.

We have put diversity into action by creating groups, programs scholarships that promote diversity and inclusion. One barometer we use to measure our success is our performance and award shows. Once again our agencies and networks continued their tradition of being the most creatively awarded companies in the world.

Let me just mention a few highlights from the Spikes Advertising Festival, held recently in Singapore, which is considered Con of Asia. BBDO received top honor, winning network of the year for the second year in a row. DDB placed third, BBDO and DDB have finished being top three networks for seven consecutive years. Colenso BBDO won agency of the year.

All told, 40 agencies in 12 countries contributed to nearly 150 Spike awards. I want to congratulate all of our people for their outstanding work. During the quarter, we continued to expand our capabilities through internal investments in our agencies and service platforms, specifically in the areas of production, technology and content development.

Today's market complexity, demands our agencies to produce evermore creative content that can be distributed quickly across different devices, channels and markets.

To meet the increasing needs of our clients, you may recall last year, Omnicom formed eg+ worldwide, a global implementation and production agency and since then it has expanded capabilities in various markets.

With over 1,400 employees in 14 countries, eg has become a leader in leveraging the latest technologies to help global brands, implement and localized creative content across video, digital and print media channels.

The result is a broader and deeper service offering that fuses the best talent and the latest technologies and our efforts in this area will continue to expand and provide value to our clients. Turning to the media accounts and review, most of the high profile reviews should be decided by Thanksgiving.

As I discussed on our last call, we have been very selective in choosing which media assignments to pursue and have elected not to participate several reviews, including Citibank, Coke, Cody and L'Oreal. In terms of our progress, we have done pretty well.

We have added new media business from well-known advertisers such as SC Johnson and Bacardi globally, Wells Fargo in the United States. We have also successfully defended a number of accounts such as J.C. Penney and GlaxoSmithKline, adding significant assignments from Novartis.

These and a number of other win brought in billings of over $1.4 billion so far. At this point, we still have an opportunity to gain additional business as the remaining pictures come to a conclusion. Annalect played a key role in each of our wins.

As a result of our investments early on in Annalect and its data management platforms, we picked up a significant share of the new business in digital, specifically around data and analytics. Annalect is embedded in our accountings and is truly a differentiating asset for us.

Turning now to look at some of the issues facing our industry, the growing scale of programmatic and online video advertising has led to valid concerns over fraud and viewability of online ads. In other words, how much of an ad is seen by an actual consumer and for how long. One key factor in this area is independent verification.

Marketers and agencies are pushing publishers and rightly so, to prove the ads are being seen by real people are effective in driving sales. We believe that third-party verification is a fundamental requirement. Publishers should not create their own homework.

For our part, since 2013, we have been providing third-party verification services in the U.S. our clients' programmatic and digital network buyers. This has been invaluable and giving us the data and visibility we need to adjust publisher pricing based upon viewability rates.

To ensure that our clients receive the value they expect, we recognize that digital publishers face a complex environment due to the very nature of their content or the device it is being delivered on. In light of this, our digital media leadership active on joint industry efforts such as IAC and tag [ph] to shape measurement banners.

This is especially important for ads delivered on mobile devices, where standards are only now being discussed. In sum, the echo system is complex, but the goal is simple, to make sure advertises get what they pay for and we are working towards practical solutions to help move the entire industry forward.

Finally I also want to touch on the subject from earlier this year. The joint task force of NA, forays to create U.S. media transparency standards. We have been actively involved in this work over the past months and we are pleased with the progress in terms of collaboration and understanding between the advertiser and agency members.

We expect principles will be issued shortly and we support any constructive steps that increase advertiser confidence across our industry while encouraging competition and innovations.

In our conversations with our clients, advertises were seeking more choices today in terms of service or performance requirements, but this only underscores the industry's obligation to strict contract compliance, which includes the return of any media rebates in the United States and disclosure of all of our services and various equity interests we may have.

From an Omnicom standpoint, this is a fundamental to the essential trust between client and agency that our business is built on.

Before concluding my prepared remarks, I would like to say that while I am pleased with our strategic and financial performance, the remainder of 2015 has numerous economic and political challenges from Brazil, China and the Middle East as well as potential actions by the Federal Reserve and other central banks.

With one quarter left to the year I am confident that we are on track to achieve our revenue and margin targets for full-year. I will now turn the call over to Phil, and he will take a closer look at the quarter's results. Phil..

Thank you, John. Good morning. John said, our business has continued to deliver against their financial and strategic objectives and meeting the needs of their clients. For the third quarter, our organic revenue growth of 6.1%, once again exceeded our expectations as the U.S. continued its strong performance and we experienced solid growth in the U.K.

and Canada and across most of our Asia-Pacific markets as well as in several of the European markets. Our underlying business has continued a solid performance. Exchange rates continue to create a considerable headwind on our international revenue.

Again this quarter, FX was negative in all of our significant foreign markets, reducing our total revenue by 7.2% or $272 million. When accounting for the small net positive impact from our acquisitions net of dispositions, revenue for the quarter was about $3.7 billion, down 1.1% versus Q3 of last year.

We will go over our revenue growth in detail in a few minutes. Turning to EBITDA and operating income, EBITDA for the third quarter of 2015 decreased by $6 million to $455 million versus $461 million in Q3 of last year.

As you would expect, exchange rates also had a significant negative impact on our total EBITDA for the quarter and more significant than in the first six months of the year.

While the vast majority of our expenses are denominated in the same local currencies as our revenues, essentially serving as a natural hedge in a few of our higher-margin markets including Canada, Australia Brazil, FX had a larger negative impact this quarter than earlier in the year and through the first nine months of 2015.

FX reduced our overall EBITDA margin by roughly 18 basis points. However, helping to offset the FX headwinds on EBITDA has been our focus on maintaining flexibility in our cost structure and our continued efforts to increase efficiencies throughout the organization.

Our initiatives have had a positive impact and we expect they will continue to make our operations more efficient as we extend them throughout the organization. As a result, for the third quarter our EBITDA margin of 12.3% was unchanged versus Q3 of 2014.

Moving to operating income, it decreased by $5 million to $428 million for the quarter and was also negatively impacted by FX. Our operating margin of 11.6% remained flat as compared to Q3 2014, similar to our EBITDA margin.

Net interest expense for the quarter was $35.9 million, up $4.5 million versus Q3 of 2014 and was relatively flat, up about $1.3 million from the second quarter of this year.

Versus Q3 of last year, the additional interest expense related to the issuance last October of $750 million of our 10-year senior notes was partially offset by the benefit of the floating interest rate swaps we entered into during Q3 of 2014.

Additionally, our interest income on our cash balances held by our international treasury centers decrease, primarily driven by negative FX translation.

Versus the previous quarter, the increase in net interest expense of $1.3 million was a result of a decrease in the interest benefit from the floating interest rate swap as well as a reduction in interest income. Our quarterly tax rate of 32.8% continues to be in line with our current tax rate expectations for 2015.

Earnings from our affiliates of $3.2 million, is down $2.6 million this quarter related to reduction in the contribution of certain international affiliates, which were negatively impacted by FX.

The allocation of earnings for the minority shareholders and our less than fully owned subsidiaries decreased $2.4 million to $27.4 million, also due to the impact of FX, because a significant portion of our less than fully owned subsidiaries are located outside the U.S.

In general, excluding the impact of FX, the underlying performance of these businesses remained strong. As a result, net income for the quarter was $239 million. That is down 1.8% or $4.5 million versus our Q3 results last year.

Now turning to Slide 3, the remaining net income available for common shareholders for the quarter after the allocation of $2.5 million of net income to participating securities, which for us are the dividend-paying unvested restricted shares held by our employees was $236.8 million.

You can also see that our diluted share count for the quarter was 244.4 million shares. That is down 3.2% versus last year, driven by our share buyback activity in prior periods. The resulting diluted EPS for the quarter was $0.97 per share, an increase of $0.02 or 2.1% versus Q3 of 2014.

On Slide 4 through Slide 6 we provide the summary P&L, EPS and other information for the year-to-date period. The brief highlights are organic revenue growth was 5.5% during the first nine months of the year. The FX headwind was even larger, decreasing revenue by 7%.

Net of the impact of our recent acquisitions and dispositions $20 million, revenue declined on a year-to-date basis by 1.3% to just under $11 billion. Our FX also negatively impacted EBITDA, which decreased 1.1% to $1.425 billion. Our year-to-date EBITDA margin of 13% was unchanged when compared to last year.

Turning to taxes on Page 5, our effective tax rate for 2015 of 32.8% is in line with our current expectations for our annualized rate and reflects the impact of the legal restructuring of our European entities, which was largely completed earlier this year.

Keep in mind that the reported 2014 tax expense and tax reflect the impact of the $11 million tax benefit we recognized in Q2 2014 related to merger expenses that were incurred in 2013, and which became deductible after the termination of the merger.

Because of this, we have presented the prior year's nine-month results of including and excluding the tax benefit.

On Page 6, you can see our nine-month diluted EPS was $3.06 per share, which is up $0.11 or 3.7% versus 2014's reported figure of $2.95 per share and up $0.15 or 5.2% versus EPS when excluding the impact of the tax benefit that was recorded in Q2 of 2014. On Slide 7, we turn the discussion to our revenue performance.

First, as I mentioned a few minutes ago, this quarter we continue to see organic growth across most of our regions and service offerings. However, the effects of FX continue to more than offset the performance of our business. On a year-over-year basis, in the third quarter, the U.S. dollar strengthened against every one of our major currencies.

This decreased our revenue for the quarter by $272 million or 7.2%. The decline in the value of the Euro represent approximately one-third of the overall FX impact.

During the third quarter, we also saw significant decreases, due to declines in the pound, the Australian and Canadian dollars and both, the Brazilian real and the Russian ruble declined by approximately 40% versus the third quarter of last year. This latest cycle of currencies weakening against the U.S.

dollars started to impact us in the latter part of 2014. As we cycle pass the one-year mark, currencies stay where they currently are, the FX headwinds may begin to subside.

Based on our recent projections, FX could negatively impact our revenues by approximately 4.5% during the fourth quarter, which would bring the full-year reduction to a little under $1 billion or approximately 6.3%. Revenue from acquisitions net of dispositions increased revenue marginally.

While we have recently added businesses both, domestically and internationally, we have made some strategic dispositions over the past year as well. Finally, organic growth was a positive $228 million or 6.1% this quarter.

Much as we experience in the second quarter, we had another quarter with solid organic growth across most of our major markets with the notable exceptions being France and Netherland, which continue to struggle, and Brazil, which is facing a difficult economic environment and difficult comp and we again had good growth across our disciplines, most notably healthcare, with the exception being PR which was down for the quarter, but remains up for the year.

The primary drivers of our growth this quarter included are media and brand advertising businesses, which had strong performances this quarter, our full-service healthcare businesses which continue to see the positive impact of that new business wins over the past year or so, the continued outstanding performance of our U.K.

operations, recovery in certain Euro markets, driven by Germany and Spain, the performance of our emerging markets this quarter including strong results in South Africa, Malaysia, Singapore and Thailand. Despite the recent market turbulence in China, we also posted positive organic there. Slide 8 covers our year-to-date revenue performance.

The impact of FX reduced revenue by over $750 million over the first three quarters of 2015 or 7%, while organic growth over that same period was 5.5%. On Slide 9, we present our regional mix of business.

During the quarter, the split of revenue was 60% from North America, 11% from the U.K., 16% for the rest of Europe and 10% for Asia-Pacific, with the remaining revenue coming from our Latin America and Africa and the Middle East regions. Turning to Slide 10, North America, both the U.S.

and Canada turned in solid performances and we had organic revenue growth of 6.3%. Turning to international, as I just mentioned, U.K. had another strong performance this quarter. The rest of Europe was up 4.5% led by Germany and Spain.

Our businesses in France continue to face challenges with negative organic growth, while the Netherlands also continues to lag behind.

As we mentioned during the Q2 call, our presence in Greece is very small, accounting for less than one one-then of 1% of our consolidated revenue, so while our businesses in the market declined this quarter as we had anticipated, the impact overall was negligible.

The Asia-Pacific region was up 8.6% with most markets performing well, including Australia, China, Malaysia, Singapore and Thailand. One region that lagged was Latin America, which was down 6.9% organically. While Mexico had another positive quarter, it was overshadowed by a reduction in Brazil.

In Brazil, the decline resulted from the weakening of the overall economy as well as difficult comp when compared to the fairly strong performance we had in Q3 of 2014. Finally, our Africa and Middle East region was up marginally in the quarter. Slide 11 shows our mix of business for the quarter.

Once again, they were just about split equally between advertising services and marketing services. As for the respect of organic growth rates, advertising services were up 9.9% or $183 million. Marketing services were up 2.3% or $44 million. Within marketing services, CRM was up 2.8%, maintaining year-to-date growth of over 3%.

The trend for the quarter for the vast majority of our subcategories within the CRM discipline is up year-over-year, with the exception being our sales promotion businesses.

PR was down 1.5% in the quarter, but is still positive year-to-date and specialty communications was up about 5.4% with nearly double-digit organic growth in our full-service healthcare businesses, which was partially offset by a decrease in our other specialty agencies.

Year-to-date, our healthcare business is up about 8% organically, driven primarily by new business wins. On slide 12, we present our mix of business by industry sector. Comparing our year-to-date revenue in 2015, the last year's figures, you can see there were no meaningful changes in this mix by industry.

Turning to our cash flow performance on Slide 13, in the first nine months of the year, we generated over $1.1 billion of free cash flow excluding changes in working capital.

As for our primary uses of cash on Slide 14, dividends paid to our common shareholders $374 million, were up when compared to last year as a result of the 25% increase in our quarterly dividend during 2014. Dividends paid for non-controlling interest shareholders totaled $87 million. Capital expenditures were $146 million.

As we have mentioned previously, CapEx was up from the last year due to an increase in leasehold improvements related to some recent real estate consolidation initiatives.

Acquisitions including earn-out payments net of the proceeds received from the sale of investment totaled $86 million and stock repurchases net of the proceeds received from stock issuances under our employee share plan totaled $474 million. All-in, we outspent our free cash flow by about $55 million for the first nine months of this year.

Turning to Slide 15, focusing first on our capital structure, our total debt of $4.6 billion is up about $48 million from the second quarter. The increase is entirely due to the change in the fair value of our debt carrying value related to the in-the-money amount of our interest rate swaps as required on the U.S. GAAP.

Our net debt position at the end of the quarter was $3.2 billion. The increase in our net debt of about $224 million over the past 12 months using period end spot rates was driven primarily by the negative impact of FX translation on our cash balances over the last 12 months of approximately $373 million.

The impact of the fair value adjustment to our debt carrying value related to our floating rate swap, which totaled $86 million, the use of cash in excess of our free cash flow of $42 million in miscellaneous and other items, which was partially offset by a positive contribution from operating capital of $315 million.

Although our net debt has increased over the past year, our ratios remained very strong. Our total debt to EBITDA was 2.1 times and our net debt to EBITDA ratio was 1.4 times. Our interest coverage ratio improved to $12.6 times.

Turning to Slide 16, we continue to successfully manage and build the company through a combination of strategic acquisitions and well focused internal development initiatives. For the last 12 months, our return on invested capital increased 17.9% and our return on equity increased to 39.6%.

Finally, on Slide 17, we track our cumulative return of cash to shareholders since 2004.

The line on the top of the chart shows our cumulative net income for 2004 through the third quarter, which totaled $10.8 billion and the bar show the cumulative return of cash to shareholders, including both dividends and net share repurchases, the sum of which during the same period totaled $11.6 billion for a cumulative payout ratio of 107%.

That concludes our prepared remarks, please note that we have included a number of other supplemental slides in the presentation materials for your review. At this point, we are going to ask the operator to open the call for questions. Thank you..

[Operator Instructions] Our first question today comes from the line of Peter Stabler, representing Wells Fargo Securities. Please go ahead..

Good morning. One for John and one for Phil. John, there are some investors who are concerned that technology is enabling marketers to take more of their advertising duties in-house, so effectively reducing the scope of work available for agencies, I am wondering if you could comment on that.

Then Phil, could you help us understand Accuen's contribution to organic growth in the quarter. Thanks very much..

Sure. Good morning, Peter. That concern is true, but advertisers have taken various functions in-house for a very long time. We live with that situation and it has not impacted our ability to grow in other areas or grow with them or collaborate with them on the areas that they decide to take in-house.

With respect to programmatic, we continue to see growth throughout and especially and even with clients that have taken certain aspects of this in-house. We sit beside them and we do other things. We complement their services, so it is not - that of all the concerns we have it is not a very, very impactful one..

On your second question, Peter, the contribution this quarter from Accuen was about $25 million growth year-over-year for the quarter, so a little bit less than the second quarter. Third quarter is typically a smaller quarter than the second and/or the fourth.

The rate of growth has slowed a bit versus last year and the third quarter I think the number was about $40 million. We expect given Accuen has been around for just about two years now, we expect that as the numbers get bigger in the base, the rate growth was going slow a little bit. We are happy with the performance.

Our clients are happy with the product that they are getting and we expect it to be good business going forward as well..

Thanks very much..

Our next question today comes from the line of Alexia Quadrani with JPMorgan. Please go ahead..

Thank you. I guess my first question is on organic revenue growth, which has been so strong in the last few quarters including this one.

I know you have a lot less visibility always in Q4 given sort of the project business, but any other variables that we should consider that might suggest this impressive growth might be a bit more muted in Q4 then I have a follow-up..

Our internal targets are to reach 6.1 in the fourth quarter there. They are more in line with we had set for the year, so that is number one. Number two as you said, and I think I have said for the last almost consistently for the 20 years on the third-quarter calls. There is so much project business in the fourth quarter.

It is the quarter, where we have the least amount of visibility between now and 12.31, because we do not know how clients - what their budgets are and what they are going to do with them just yet..

Yes. That number, we typically have found to be in the neighborhood of the $150 million to $200 million in potential year-end project work closing out budgets on the client side etcetera.

We typically do not get none of it and we typically may not get all of it, but sitting here today we do not have a lot of visibility into what that number is going to be for the fourth quarter, so as John and said we are going to stick with our assumptions for the year as they relate specifically to the fourth quarter..

Then just your thoughts on profitability here, I know your style has always been to sort of optimize margins and honestly maximize in any one given quarter and that is how it has proven to be great strategy historically.

I guess my question though is, given the organic revenue growth has outperformed at least our expectations and then trending a little bit above average. Perhaps you could give us some more color in terms of what are the puts and takes of sort of what is leaving the margins flat and why we are not seeing extension.

I know obviously foreign exchange is part of it.

I guess, what else is sort of limiting the margin expansion given the top-line growth?.

I think FX actually in the third quarter was a little counterintuitive for us relative to the first half of the year.

as I have said earlier the year-to-date impact of FX was about 18 basis points, but in the third quarter, which again is a relatively small quarter, FX impacted those - in excess of about 30 basis points, so we are a little surprised by that, but you that is really just the math of where the FX impacts was.

We have got a lot of corporate costs primarily in U.S. and some of our higher-margin markets outside the U.S.

were impacted a little bit more heavily by FX this quarter and overall percentage or proportion of the total pie, so we think we have done a pretty good job to get back to the margins we delivered overall for the third quarter, which was where our internal targets were coming out, but FX certainly has been a big challenge for us this year on top-line and I think in the third quarter it had a little bit higher than expected impact on our overall operating costs and our operating margins.

I think we are comfortable with the performance. I think, we look at fourth quarter if FX rates stay where they are now, we would expect revenues to be down about 4.5%. FX had started to come down, say, late September, early October of '14.

That is when the dollar really started to strengthen significantly, but the Euro and Pound actually did not start to weaken relative to the dollar on a reported basis until early in 2015, so we expect to see some of the weakness in the fourth quarter relative to the euro and the pound, which are biggest international markets.

I think from a margin perspective, our expectation is the same. We are going to continue to internally drive towards maintaining margins and overcoming whatever FX has in store for us in the fourth quarter..

Thank you..

Our next question today comes from line of Craig Huber with Huber Research Partners. Please go ahead..

Yes. Good morning. Thank you.

John, I know it is really early here, but just the various conversations you are having with your clients out there, is there anything that you are sensing out there that the rate of growth on an organic basis as you look out into, say, the first half of next year is going be materially different or lower than the 5.5% you guys have reported year-to-date?.

I do not have any specific information yet. Clients are really focused on finishing out this year and we won't start those dialogs probably until late November, the beginning of December.

Every one of the CEOs that I talk to remain cautious and somewhat conservative, because of all the macroeconomic issues there are once you get outside the United States, so it is a little too early to give you more color depth on that question..

Then, John, also in the third quarter, what were your net new billings, so now you generally can try to get $1 billion.

What was it for the third quarter?.

Yes. It was just on $1 billion, probably close to $950 million for the quarter..

Okay. Lastly can you just give us a little more flavor on the countries outside the U.S.

with the cost and the revenues are not perfectly match, just give us a sense what regions or countries that is hurting your margins please - FX?.

Brazil?.

Yes. It is not really - just to clarify, Craig, it is not really an issue of the cost and the revenues not matching on it. We probably have a couple of exceptions here and there. It is not necessarily a region that is an exception as far as the revenue and costs being denominated in the same local currency.

It is really just a matter of mix, so some of our high margin markets Canada, Australia, Brazil and actually Russia - or Brazil and Russia given the currency impact is a much smaller than they were last year. When we have high-margin markets that are impacted significantly by FX, we had less revenue and less EBIT.

The less EBIT over what is a large U.S. dollars driven denominator ends up having slightly lower margins, because there was less EBIT from those markets where the currency negative was larger than the proportion of the total.

Hopefully that clarifies it for you, but it is back to - it is kind of - yes it is not always intuitive, it is not always in a straight line how FX impacts each of our international operations..

Got it. Thank you..

Our next question comes from the line of Dan Salmon with BMO Capital Markets. Please go ahead..

Good morning, everyone. John you took some time out of your prepared remarks to comment around the role of independent verification, in particular noting publishers cannot create their own homework.

Of course the advertisers and their agents have some conflicts in this sort of dealings as well, so I was hoping you could expand a little bit on what type of services you feel Omnicom is doing well providing to the advertisers within that's sort of a traditional construct and where you see the role of companies like Nielsen really truly independent measurement companies today and then maybe also a follow-up comment on how you view the comScore and Rentrak merger, especially in light of the fact that one of your competitors remains a minority investor there if not a Board member?.

Sure. Just one clarification, when it comes to verification or any of these a media ownership, we do not have any of those conflicts with our clients. It is very important to make sure that everybody understands what Omnicom owns and does not own. In terms of the verification services that I mentioned, we pay for those.

They have been embedded in our performance Accuen type of revenue associated with clients, where we will promise our results.

To make sure that a result is accurate, we have gone out since 2013 and hired third-party verification people to come in and tell us, gee, what is the view of ability, where is the audience coming from, you look like you are reaching enough people, but are they are really out of the market or they are coming from India or some place that you do not even sell your product, so we have gone through that exercise to legitimize our efforts in this area and it expands all the time.

We believe that the time has come to agree industry standards and select third-party verification firms that clients are comfortable with and the providers are comfortable with and make them part of the normal practices that occur between client and agencies as we performs these duties.

There are firm that you mentioned Nielsen Scott, a fabulous business and do all sort of wonderful things.

I do not know specifically what it is working on in this area, especially mobile and comScore and Rentrak, is a great firm we have relationships with them and we get certain data and information from them as well, irrespective of the fact that WPP owns 20% of them, so if this is a process - but I think the time has come because of the amount of spending that clients are directing toward digital channels to really agree these areas and publishers, they are the one selling the content.

We believe that they need to step up and provide third-party verification..

Great. Thank you..

Our next question is from the line of John Janedis representing Jefferies. Please go ahead..

Thank you.

Phil, the buyback pace slowed a bit in the third quarter, so I wanted to ask should we assume that there are some assets you are looking and maybe the $100 million-plus range and the billings do not close, you would look to increase the buyback?.

Yes. I think certainly our capital allocation strategy has not changed. I will start with that.

We are going to continue to look for acquisitions that right fit our strategic requirements and we are going to be aggressive in trying to find those assets and help us to grow the business where we think it makes sense, but to the extent that the right opportunities aren't available or we are not successful in reaching a deal that makes sense for us and frankly for the seller for the long-term, we are going to put that money to use in terms of buybacks.

That approach has not changed. We are in the process of negotiating some deals. The pipeline is strong at the moment.

We are not certain ultimately where we are going to get to in each of these cases, but there are some transactions work, we are certainly evaluating, and we are going to continue to evaluate and frankly that is no different than any quarter.

Given we are headed into the fourth quarter here, either we are going to spend some of this, say, excess free cash that we have found some acquisitions and if we do not we will hold through to our pattern of a putting that cash to use in the way of buybacks prior to closing out the year..

That is helpful. Thanks.

Maybe follow-up to Alexia's question, I know there a lot of moving pieces, but with the FX moderating and the cost initiatives kicking in, should margins start to ramp into next year assuming organic growth remains healthy or have you deferred some investment given the FX pressures?.

I do not think we have deferred any investment certainly no investments that we have felt are necessary to continue to build on the foundation to provide for stable and consistent growth into the future, but we are always looking for ways to be more efficient. We have got some initiatives that have started to give us some traction.

We think we are pretty efficient already, but we know we can be more efficient and there are more opportunities to take some cost out of the business.

I do not think we are ready yet to commit to what our expected growth rate as in '16 or what our expected margins are in '16, but we think as we continue to grow and as we continue to push these initiatives, we are going to find some ways that to find some leverage in the business, yes..

Just maybe one quick organic expense question, can you give us organic expense growth for the third quarter maybe ex-currently?.

Organic expense growth, I am not sure. We do not really track expenses on an organic basis. If you give me a minute, I can you give an idea what the constant dollar numbers were or major line items. I think, on a constant dollar basis, salary and service was just over $3 billion and office in general was just over $480 million..

Thanks so much..

Sure..

Our next question is from the line of Ben Swinburne with Morgan Stanley. Please go ahead..

Thank you. Two for John and one for Philip, John, can you just talk about the European markets which performed well. I think this was your best euro quarter going back all the way till 2010. Last quarter was showing improvement too.

I know you called out some countries that are holding you back, but are you more confident in the euro outlook as you go from here given what you have see in the last six months?.

Yes is the short the answer. We just had our Board meeting last week in Berlin, and we had the opportunity to visit with all of our German subsidiaries. They were very confident. The German economy is very, very strong. That is why we called it out. Spain has really turned it around compared to what it was in the past.

We did not call out Italy although in the quarter it had year-over-year growth. The reason we did not call it out is because we still have a quarter to go, so we are a little bit cautious.

France has been almost flat for the first six months, because it has [ph] been a little negative in the last quarter and then Netherlands has been an issue for us for the last almost two years, so the big markets in Europe, overall showing signs of progress.

I can say with the exception of the Netherlands, but at some point that will flatten down as well and will drain from the growth in the strong markets. Yes. I think it is Europe still has a long way to go, but our performance has been pretty steady and we are continuing to make progress..

Yes - good progress actually in certainly smaller markets, so tempered with that, but the non-euro markets our businesses have actually continued to perform well there as well..

In the small markets, we have also taken actions to refocus and resize our offerings..

Then I just had two questions related the broad topic of digital, John, a little over year ago at Adweek you announced a pretty big Facebook partnership.

I just was curious if you could give us kind of at the 12-month mark, how that is going? If you integrating Atlas as you expected any surprises positive or negative and then kind of related hopefully related for Phil, if you look at your salary and services margin as a percent of revenue, I think since 2012 that has been going up about 50-bips a year.

You talked about currency this year. I am guessing digital is a factor there as well. I am just wondering if there is anything we are missing that might be driving that up as a percent of rev that we do not talk about.

As we think about going forward whether that is just something you expect to continue or any visibility on what is happening there beyond currently would be really helpful? Thank you..

Sure. Well, with respect to Facebook, we did announced last year at this time and our relationship with them is very, very positive. We find them extremely cooperative and we utilize their services. We have had growth in our spending with Facebook. It is not a limit to Facebook.

We also have very strong relationships with the other major players, Google, we have experienced a lot of growth and Twitter. Our relationship with Twitter has expanding recently, so we are growing with them in most instances and our relationships are solid across the Board I think..

Back to the second question, so salary and service we expect there are more valuable and flexible than our office in general cost. We would expect them to grow a bit as our revenue grows.

I think, in this year, we found through, 930, our headcount numbers were up a bit, primarily probably in the U.S., a little bit U.K., so the number we expect to kind of grow with our revenues. Office in general, which are more fixed in nature.

We expect them to, as a percentage of revenue which is how we look at the numbers, we would expect them to decline over time.

Given some of the initiatives we have especially in the area of real estate, we would expect to continue to pursue those opportunities to reduce those costs and keep them as low as possible, so I think the trends is what we would expect to see..

Okay. Thank you..

Yes. I think, we are on right about to turn that the market is going to open, so I think if we could do one more question..

Okay. Our final question today will come from the line of Tim Nollen with Macquarie. Please go ahead..

Thanks very much for fitting me in. I just had one other issue you mentioned question about viewability and measurement. I wonder if you have any comment on your slated scourge of your ad blocking.

There has been a lot of back and forth and I just wonder what your view is on what happened to the ad blocking, what the impact is to you and agencies and also to the various media? Thanks..

Ad blocking is a large question for advertising, because almost center staged. The ANA last week - we have taken the view although we watch it, that if you - the customer is in control.

Never been more evident than it is today and customers will embrace and ads-supported content model when they understand what it is we are trying to communicate and the quality - creative, so I tend to agree with some CMOs which are basically said we focus on great work that consumers will be interested in will pass and we will get pass the ad blocking concerns that are in the marketplace.

It is an ongoing battle. People do not have to sit there and suffer things that are not of interested them and then so incumbent upon us to improve the product and the battle though is going on some high-quality publishers are already requiring users to disable their ad blockers in order to gain access to their content.

We will see what happens in that battle, so everybody is front and center [ph]. We are certainly addressing ourselves good by focusing on the work and the content that we provide to the consumer..

Thanks a lot..

Okay. Thank you all for joining the call. We appreciate it..

Ladies and gentlemen, that does conclude our conference for today. We thank you for your participation and using the AT&T Executive TeleConference. You may now disconnect..