<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A AMENDMENT NO. 1
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the Transition period from _________to _________
COMMISSION FILE NO. 1-5029
TRUE NORTH COMMUNICATIONS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-1088161
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
101 EAST ERIE STREET, CHICAGO, ILLINOIS 60611-2897
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
REGISTRANT'S TELEPHONE NUMBER: (312) 751-7000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
Common stock, par value New York Stock Exchange
33 1/3 cents per share
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference or included in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
The aggregate market value of Common Stock, 33 1/3 cents par value, held by
non-affiliates of the Registrant, as of March 22, 1995 was $350,169,761.
There were 22,967,530 shares of Registrant's 33 1/3 cents per share par value
Common Stock outstanding as of March 22, 1995.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to shareholders for the year ended
December 31, 1994 are incorporated by reference into Parts I and II of this
report.
Portions of the Registrant's Proxy Statement relating to its annual meeting
of shareholders held on May 17, 1995 are incorporated by reference into Part
III.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Registrant hereby amends Item 14 of its 1994 Annual Report on Form 10-K to
include the audited financial statements of Publicis Communication, a 50% or
less owned foreign affiliate of Registrant.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Item 14(a)--List of Financial Statements.................................. 5
Auditors' Report on Supplemental Note................................... 6
Item 14(a)(1)--Supplemental Note to Consolidated Financial Statements:
A. Valuation Accounts................................................... 7
Item 14(a)(2)--Schedules
Are not submitted because they are not required or because the required
information is included in the financial statements or notes thereto.
Item 14(a)(3)--Index of Exhibits
The index of exhibits immediately precedes the exhibits filed with the
Securities and Exchange Commission.
Exhibits 10.1 and 10.2 included in this index are the management
contracts and compensatory plans or arrangements required to be filed
as exhibits hereto pursuant to the requirements of Item 601 of
Regulation S-X.
Item 14(b)--Reports on Form 8-K
</TABLE>
Registrant filed the following reports on Form 8-K during the fourth quarter
of 1994 and the first quarter of 1995:
<TABLE>
<CAPTION>
DATE OF REPORT DESCRIPTION OF REPORTABLE EVENT
-------------- -------------------------------
<C> <S>
December 12, 1994 Under Item 5, Registrant announced that, effective December
19, 1994, its name changed to True North Communications Inc.
In addition, Registrant disclosed that its Board of
Directors approved a 100% stock dividend to be paid on
February 17, 1995 to shareholders of record on January 6,
1995.
February 13, 1995 Under Item 5, Registrant announced developments in its
ongoing dispute with its European joint venture partner,
Publicis Communication. These matters are more fully
discussed and updated in the Outlook section of "Discussion
and Analysis of Financial Condition and Results of
Operations" on page 5 of Registrant's 1994 Annual Report to
Shareholders.
February 17, 1995 Under Item 5, Registrant reported that the previously
announced 100% stock dividend was distributed on February
17, 1995 to shareholders of record on January 6, 1995.
</TABLE>
<PAGE>
FORM 10-K--ITEM 14(a)
TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES LIST OF FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of the Registrant and the
Independent Public Accountant's Report covering these financial statements,
appearing in the Registrant's 1994 Annual Report on pages 6 through 19 are
incorporated herein by reference in Item 8:
Consolidated Balance Sheets--December 31, 1993 and 1994
Consolidated Statements of Income--Years ended December 31, 1992, 1993 and
1994
Consolidated Statements of Stockholders' Equity--Years ended December 31,
1992, 1993 and 1994
Consolidated Statements of Cash Flows--Years ended December 31, 1992, 1993
and 1994
Notes to Consolidated Financial Statements--December 31, 1994
All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under
the related instructions, or are inapplicable, or the information called for
therein is included elsewhere in the financial statements or related notes
thereto contained in or incorporated by reference into this Report.
Accordingly, such schedules have been omitted.
Publicis Communication owns 51% of Publicis.FCB BV and 80% of Publicis
Conscel. Accordingly, the consolidated financial statements of Publicis
Communication and Subsidiaries include the results of operations and financial
position of Publicis.FCB BV and Publicis Conscel.
These financial statements have been prepared and audited based upon
accounting and auditing standards and practices acceptable for external
financial reporting purposes in France. These practices and standards can vary
from U.S. accounting practice. Following is a reconciliation prepared by
Registrant of reported net income to net income which would be reported under
U.S. generally accepted accounting principles (amounts in thousands):
<TABLE>
<CAPTION>
-----------------
1993 1994
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Net income as shown in financial statements (1) $23,186 $12,782
- ------------------------------------------------------------------------------------------
Amortization of goodwill (2) (2,703) (5,623)
- ------------------------------------------------------------------------------------------
Italian restructuring reserves not acceptable under U.S. GAAP (3) -- 5,756
- ------------------------------------------------------------------------------------------
Tax credit included in income not acceptable under U.S. GAAP (4) -- (2,445)
- ------------------------------------------------------------------------------------------
$20,483 $10,470
-----------------
</TABLE>
Notes:
1. Net income as reported was computed using the average exchange rates for the
year.
2. Certain elements of goodwill are charged directly to equity or income in the
year it arises, or are not otherwise amortized for French financial reporting
purposes. The goodwill amortization expense adjustment was computed using
forty years as the estimated useful life for each of the related goodwill
components.
3. Under French generally accepted accounting principles, restructuring actions
taken in 1995 up to the date of the audit opinion must be recorded in the
1994 financial statements. Application of EITF 94-3 to these financial
statements result in this adjustment which, under U.S. generally accepted
accounting principles, will result in a 1995 charge to earnings of an
equivalent amount (allowing for currency exchange fluctuations). Of the total
amount of this adjustment, $1,273 relates to management and staff severance
actions taken in 1995, $1,637 relates to the 1995 abandonment of excess lease
space, $472 relates to the 1995 closure of a sale promotion agency, and
$2,374 relates to legal and other associated restructuring costs incurred in
1995.
4. Under French generally accepted accounting principles, the utilization of tax
credit carryforwards of acquired companies are reflected in earnings. Under
U.S. generally accepted accounting principles, this amount is accounted for
as a reduction of the initial purchase price and related goodwill.
<PAGE>
PUBLICIS COMMUNICATION
CONSOLIDATED FINANCIAL
STATEMENTS 31/12/1994
<PAGE>
PUBLICIS COMMUNICATION
31/12/1994
PAGE 1 Comparative Consolidated Income Statement.
PAGE 2 Comparative Consolidated Balance Sheet.
PAGES 3/4 Consolidated Statement of Change in Financial Statements.
PAGES 5/12 Notes to the Consolidated Financial Statements.
PAGES 13/15 List of Consolidated Companies.
<PAGE>
<TABLE>
<CAPTION>
PUBLICIS COMMUNICATION GROUP CONSOLIDATED INCOME STATEMENTS
- ----------------------------------------------------------------------------------------------------
(in thousands of French Francs) Year 1993 Year 1994 VAR.
%
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Billings 15 838 009 17 562 073 10.9%
Purchases (13 384 466) (14 824 544)
REVENUES 2 453 543 2 737 529 11.6%
Salaries and Benefits (1 351 001) (1 511 421) 11.9%
Office and General Expenses (682 202) (776 463) 13.8%
TOTAL EXPENSES (2 033 203) (2 287 884) 12.5%
OTHER INCOME 17 502 19 924
OPERATING PROFIT 437 842 469 569 7.2%
Depreciation (88 999) (105 037)
Provision doubtful debts (20 692) (21 378)
Other provisions (21 073) (17 448)
Interest income (expense) 9 991 (20 785)
PROFIT BEFORE TAX 317 069 304 921 -3.8%
Exceptional costs (23 113) (29 369)
Profit sharing - statutory (7 488) (2 779)
Income Tax (112 322) (110 537)
Profit (equity subsidiaries) 42 118 46 142
- ----------------------------------------------------------------------------------------------------
NET INCOME BEFORE EXTRAORDINARY LOSS 216 264 208 378 -3.6%
GROUP SHARE BEFORE EXTRAORDINARY LOSS 131 659 111 538 -15.3%
====================================================================================================
Extraordinary Loss (80 000)
NET INCOME 216 264 128 378
GROUP SHARE 131 659 70 738
- ----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PUBLICIS COMMUNICATION GROUP
CONSOLIDATED BALANCE SHEET
(In thousands of French Francs)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS 31.12.1993 31.12.1994
- --------------------------------------------------------------------------
FIXED ASSETS 897 999 1 053 291
============ ------------- -------------
Intangible assets (gross) 507 556 629 684
Depreciation & amortization on
intangible assets (23 001) (19 109)
Tangible assets (gross) 576 455 643 377
Depreciation & amortization on
tangible assets (340 230) (408 316)
------------- -------------
NET TANGIBLE AND INTANGIBLE
ASSETS 720 780 845 636
Investments (non-consolidated
companies) 3 813 23 877
Investments (equity subsidiaries) 126 160 136 180
Interco loans 24 099 35 557
Other financial assets 26 066 34 026
Provision on financial assets (2 919) (21 985)
------------- -------------
NET FINANCIAL ASSETS 177 219 207 655
------------- -------------
CURRENT ASSETS 3 624 053 3 848 894
============== ------------- -------------
Work in progress 125 338 194 103
Advance payments made 168 468 64 020
Accounts receivable (net) 1 794 928 1 960 956
Interco receivable 10 473 16 945
Other debtors 889 525 1 063 543
Cash 635 321 549 327
------------- -------------
OTHER CURRENT ASSETS 45 925 70 879
==================== ------------- -------------
------------- -------------
TOTAL ASSETS 4 567 977 4 973 064
- --------------------------------------------------------------------------
LIABILITIES & EQUITY 31.12.1993 31.12.1994
- --------------------------------------------------------------------------
TOTAL EQUITY 878 010 820 323
============ ------------- -------------
Equity (before net income),
Group Share 369 647 361 434
Net income, Group Share 131 659 70 738
------------- -------------
TOTAL NET EQUITY NET INCOME 501 306 432 172
Equity (before net income),
Non-Group Share 292 099 330 511
Net income, Non-Group Share 84 605 57 640
------------- -------------
TOTAL NET INCOME 376 704 388 151
------------- -------------
PROVISIONS FOR CONTINGENCIES 210 543 320 571
============================ ------------- -------------
SHORT TERM LIABILITIES 3 409 291 3 758 653
====================== ------------- -------------
Borrowings (not banks) 301 569 528 661
Banks 382 226 399 468
Advance payments from clients 172 547 133 197
Accounts payable 1 283 313 1 465 410
Interco payable 82 955 49 950
Other creditors 1 186 681 1 181 967
------------- -------------
OTHER ACCRUALS 70 133 73 517
------------- -------------
------------- -------------
TOTAL LIABILITIES & EQUITY 4 567 977 4 973 064
- --------------------------------------------------------------------------
</TABLE>
<PAGE>
PUBLICIS COMMUNICATION GROUP P 1/2
CONSOLIDATED STATEMENT OF CHANGE IN FINANCIAL POSITION
(US GAAP-in thousands FRF)
'000 FRF 1993 1994
SOURCE OF WORKING CAPITAL
- -------------------------
NET INCOME 216 264 128 378
Depreciation 88 999 185 037
--------------------------
SUB-TOTAL 305 263 313 415
Equity earnings of affiliates (42 117) (46 142)
Dividends received from affiliates 6 968 5 413
Loan 130 610 144 544
Other borrowings 40 000 (20 000)
Exchange differences & others (11 147) (7 467)
==========================
TOTAL SOURCE 429 577 389 763
APPLICATION OF WORKING CAPITAL
- ------------------------------
Paid out dividends 55 113 61 508
Purchase of interest in affiliated companies 0 23 011
Investments 343 902 210 819
Increase in other fixed assets 62 452 102 861
==========================
TOTAL APPLICATION 461 467 398 199
INCREASE (DECREASE) IN WORKING CAPITAL (31 890) (8 436)
------- ------
<PAGE>
PUBLICIS COMMUNICATION GROUP P 2/2
CONSOLIDATED STATEMENT OF CHANGE IN FINANCIAL POSITION
(US GAAP--in thousand FRF)
<TABLE>
<CAPTION>
'000 FRF 1993 1994
<S> <C> <C>
INCREASE (DECREASE) IN CURRENT ASSETS
- -------------------------------------
Cash (43 473) (85 994)
Accounts receivables (net) (878 971) 166 028
Expenditure billable to clients (23 239) 68 765
Other current assets 305 829 100 996
----------------------------
Sub-total (639 854) 249,795
INCREASE (DECREASE) IN CURRENT LIABILITIES
- ------------------------------------------
Provision for contingencies 40 380 30 028
Accounts payable (700 918) 182 097
Bank borrowings (141 213) 17 242
Loans and other borrowings (10 504) 102 548
Other current liabilities 204 291 (73 684)
----------------------------
Sub-total (607 964) 258,231
INCREASE (DECREASE) IN WORKING CAPITAL (31 890) (8 436)
- -------------------------------------- ------- ------
</TABLE>
<PAGE>
PUBLICIS COMMUNICATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31/12/1994.
PREAMBLE:
The accounts of the FCA! Group, acquired in December 1993 are consolidated
within Publicis Communication since January 1st 1994.
The economical restructuration of the FCA! Group carried out during the year
1994 entailed:
- - a combination of its French advertising agencies with those of Publicis
Conseil and of its media buying subsidiary with Publicis Centre Media;
- - the insertion of its European activities within the BMZ network;
- - in the USA, the merger of its subsidiary Bloom with Publicis New York.
These internal operations have no impact on the profit and loss account nor on
the net equity of the Group.
The assessed Goodwill of the FCA! Group was immediately written-off against net
equity as at December 31st, 1993.
I. CONSOLIDATION PRINCIPLES.
------------------------
PUBLICIS COMMUNICATION GROUP'S consolidated financial statements as at
December 31, 1994 have been prepared in accordance with the French
legislation and are in conformity with generally accepted international
accounting principles.
The consolidated financial statements include the accounts of the Company's
wholly owned and majority owned domestic and international subsidiaries. The
subsidiary companies with less than 50% ownership are consolidated on an
equity basis.
The company translates the financial statements of its international
subsidiaries into French Francs using official exchange rates as of
December 31.
II. SUMMARY OF MAJOR ACCOUNTING POLICIES.
------------------------------------
COMPANIES CONSOLIDATED:
----------------------
Since January 1st, 1994 the FCA! Group has been included within the Publicis
Communication's scope of consolidation, after various mergers and
restructurations. It is, therefore, very difficult and almost impossible to
make a comparison with 1993 consolidated figures. However, on a constant
basis, Publicis Communication's activities would have grown by 1%.
<PAGE>
GENERAL:
- -------
The accounting policies used as at December 31, 1994 are identical to those used
in preparing the consolidated financial statements of the Publicis Group.
TANGIBLE AND INTANGIBLE ASSETS:
- ------------------------------
Tangible assets are valued at cost and the depreciation is calculated according
to the most suitable method in order to take into account the economical
criteria. Listed below are the methods most currently used within the Publicis
Communication Group:
Building : 20 years straightline
Leasehold property and improvements : 10 years straightline
Furniture and Equipment : 5-10 years straightline
Motor Vehicles : 4 years straightline
Premiums paid to acquire marketable leasehold property and the cost of acquired
goodwill are not amortized except in cases where the estimated market value is
considered to be inferior to the acquisition cost.
GOODWILL:
- --------
The excess costs over the net book value of subsidiaries, after reallocating
potential capital gains to the assets concerned, by their nature, are
considered:
- on the one hand, to be intangible assets, justified by elements such as:
market shares, trade marks, clients' lists, brands ... Usually they are not
amortized. However, each year, a careful examination is made to determine
their market value. If their market value is durably inferior to their
acquisition cost, a provision for depreciation is made.
- on the other hand, to be unidentified elements amortized over a maximum
period of 40 years.
In any case, all goodwill of small value are immediately depreciated at 100%.
The application of the Sapin Law to a full year period has strongly affected the
profitability of our Media buying activities, and could endanger the actual
value of goodwill raised on these companies.
However, given that the long term effects of the Sapin Law are not completely
known and that the restructuration steps taken up to now should improve this
sector's future profitability, Media buying goodwill amounting to 50 million
francs, has not been depreciated this year.
<PAGE>
Nevertheless, if this sector does not recover rapidly, we will have to register
an exceptional depreciation of media buying goodwill.
WORK IN PROGRESS:
- ----------------
Work in progress is valued at the lower of cost and net realisable value.
BILLINGS:
- --------
Since March 31, 1993, the Sapin Law has been changing the accounting principles
applicable to Media Buying activities. In order to be able to show comparable
Billings with last year and to be in line with the principles applied by our
foreign competitors, our consolidated Media Revenues raised in France have been
capitalised using the international multiple of 6,67.
RETIREMENT INDEMNITIES:
- ----------------------
FRENCH SUBSIDIARIES:
- -------------------
Retirement indemnities acquired by employees over 60 years of age appear, with
their related social charges, in the provision for contingencies. The yearly
movements in the provision for the retirement indemnities shown on the Balance
Sheet are accounted for in the yearly expenses.
Probable retirement indemnities acquired by employees between 55 and 60 years of
age, with their related social charges, are shown in the Contingent Liabilities.
Probable retirement indemnities, acquired by employees under 55 years of age are
not taken into account due to the high turnover in our profession.
FOREIGN SUBSIDIARIES:
- --------------------
Retirement indemnities are accrued for in accordance with the laws and
regulations specific to each country.
INCOME TAX:
- ----------
All actual and deferred Income Taxes payable are accounted for. Deferred Income
Tax assets or potential fiscal credits are not recognised with the exception of
a latent fiscal credit of 33-1/3% calculated on the provision for the French
statutory profit sharing.
<PAGE>
III) COMMENTS ON THE CONSOLIDATED ACCOUNTS:
-------------------------------------
SUBSIDIARIES' CONTRIBUTION IN GROUP ACTIVITIES:
----------------------------------------------
The breakdown of this contribution is as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
<S> <C> <C>
Billings Net Income before
Extraordinary items
Group Share (1)
- -------------------------------------------------------------------------------
- France 35% 16%
- Europe 58% 45%
- United States 7% 39%
-------------------------------------------------
100% 100%
- -------------------------------------------------------------------------------
(1) Including results of subsidiaries consolidated on an equity basis.
TANGIBLE ASSETS:
---------------
- -------------------------------------------------------------------------------------------------------------------------
31/12/1993 Movements 1994 31/12/1994 31/12/1994
Gross Acquisitions Disposals Changes in Exchange Gross Amortization Net
Amount scope of and Others Amount Amount
consolidation
- -------------------------------------------------------------------------------------------------------------------------
Land & Buildings 38 300 943 39 243 (11 047) 28 196
Others 538 155 104 966 (98 871) 66 414 (6 530) 604 134 (397 269) 206 865
- -------------------------------------------------------------------------------------------------------------------------
TOTAL 576 455 104 966 (98 871) 66 414 (5 587) 643 377 (408 316) 235 061
- -------------------------------------------------------------------------------------------------------------------------
INTANGIBLE ASSETS:
-----------------
- -------------------------------------------------------------------------------------------------------------------------
31/12/1993 Movements 1994 31/12/1994 31/12/1994
Gross Acquisitions Disposals Exchange Gross Amortization Net
Amount and Others Amount Amount
- -------------------------------------------------------------------------------------------------------------------------
Goodwill 468 409 130 675 (27 001) 1 273 573 356 0 573 356
Acquired Goodwill 21 379 3 360 (450) 0 24 289 (136) 24 153
Software & Others 17 768 11 397 (121) 2 995 32 039 (18 973) 13 066
- -------------------------------------------------------------------------------------------------------------------------
TOTAL 508 556 145 432 (27 572) 4 268 629 684 (19 109) 610 575
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
COMPANIES ON AN EQUITY BASIS:
- ----------------------------
True North Communications, listed on the New York Stock Exchange is included in
investments on an equity basis for an amount of KF 124 822. Publicis
Communication owns 2 329 000 True North Communications shares (20,39%) whose
stock market value was K USD 100 147 as at December 31st, 1994 and K USD 74 528
as at February 28th, 1995.
VARIATION IN STOCKHOLDERS' EQUITY
- ---------------------------------
The variation of the stockholders' equity between December 31st, 1993 and
December 31st, 1994 is as follows: (in thousands of FF)
- --------------------------------------------------------------------------------
Thousands of FF Total Group Minority
Share Share
- --------------------------------------------------------------------------------
Net Equity 31/12/93 661 746 369 647 292 099
1993 Net Income 216 264 131 659 84 605
------- ------- -------
Theoritical Equity 31/12/94
(before 1994 Net Income) 878 010 501 306 376 704
Movements in 1994 affecting the equity:
Dividends distributed (56 762) (29 700) (27 062)
Exchange differences (7 414) (8 950) 1 536
Goodwill (1) (83 854) (83 854) 0
Changes in cos consolidated and Others (38 035) (17 368) (20 667)
- --------------------------------------------------------------------------------
TOTAL NET EQUITY 31/12/1994 (BEFORE
1994 NET INCOME) 691 945 361 434 330 511
- --------------------------------------------------------------------------------
(1) As at December 31st, 1993, the assessed amount of Goodwill (ie. 300 million
Francs) related to the FCA acquisition was immediately written-off against
net equity.
In 1994, the final amount of this goodwill was calculated and the new
Goodwill, amounting to KF 56 884 was also written-off against net equity.
Is also included in "Goodwill" an amount of KF 23 011 related to the
acquisition, in 1994, of True North Communications new shares, made in
order to maintain our ownership level in this company.
In the same way as the Goodwill raised when signing the Alliance, this 1994
Goodwill was also written-off against net equity.
<PAGE>
NET EQUITY OF THE GROUP:
- -----------------------
The Net Equity of the Group is as follows: (in thousands of FF)
- --------------------------------------------------------------------------------
Share Capital of the mother company (1) 135 000
Reserves of the mother company (21 288)
Consolidated reserves 247 722
- --------------------------------------------------------------------------------
Group's Net Equity as of 31/12/1994 361 434
- --------------------------------------------------------------------------------
(1) As at December 31st, 1994 Publicis Communication's shareholders were:
Publicis SA 74,07%
True North Communications 25,93%
CAPITAL INCREASE:
- -----------------
In January 1995, a 500 million francs capital increase was made by issuing 500
000 shares, each share having a face value of 100 francs and a share issue
premium of 900 francs. True North Communications only subscribed up to 35
million francs and Publicis SA the remaining balance, part of it by
incorporating its loan 318,8 million francs which is shown under "Financial
Debts other than Banks" in the Balance Sheet as at 31/12/1994. After the capital
increase, Publicis Communication's ownership is as follows:
Publicis SA 79,17%
True North Communications 20,83%
PROVISION FOR CONTINGENCIES:
- ---------------------------
- --------------------------------------------------------------------------------
(in thousands of FF) 31/12/1993 Variation 31/12/1994
- --------------------------------------------------------------------------------
Pensions-Retirement indemnities 106 590 6 655 113 245
Provision for extraordinary
costs-Italy 0 80 000 80 000
Provisions for litigations 28 349 7 554 35 903
Provisions-General risks 13 947 (644) 13 303
Provisions-Clients risks 26 773 10 445 37 218
Other provisions 34 884 6 018 40 902
- --------------------------------------------------------------------------------
TOTAL 210 543 110 028 320 571
- --------------------------------------------------------------------------------
<PAGE>
INCOME TAX:
- ----------
In 1994, Publicis Conseil benefited from an Income Tax saving, amounting to
approximately 15 million francs, as a result of the fiscal losses brought by
FCAB. As at December 31st, 1994, KF 87 471 ordinary fiscal losses and KF 93 384
long term fiscal losses can be carried forward.
EXCEPTIONAL COSTS:
- -----------------
They mainly include restructuration costs.
EXTRAORDINARY LOSS:
- ------------------
Publicis FCB Europe has recorded a provision for exceptional restructuration
costs and a partial depreciation of Goodwill of FF 80 000 on its Italian
activities. Its impact on the Net Income Group Share is KFF 40 800.
CONSOLIDATED CASH FLOW:
- ----------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
(in thousands of FF) 1993 1994 %
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Consolidated Net Income before extraordinary loss 216 264 208 378
Provision for depreciation 88 999 105 037
Cash Flow 305 263 313 415 +3%
of which: Group Share 181 464 172 881 -5%
- -------------------------------------------------------------------------------
</TABLE>
EMPLOYEES:
- ---------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
% variation % variation
31/12/1993 31/12/1994 1993/1994 1993/1994
Actual Constant
Perimeter Perimeter
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
France 1 431 1 654 16% -3%
Europe 2 212 2 218 0% -2%
USA 54 283 424% -28%
- -------------------------------------------------------------------------------
Total 3 697 4 155 12% -3%
- -------------------------------------------------------------------------------
</TABLE>
<PAGE>
CONTINGENT LIABILITIES:
- ----------------------
- --------------------------------------------------------------------------------
(in thousands of FF) Given
- --------------------------------------------------------------------------------
Discounted bills not yet matured 4 867
Guarantees 4 029
Pension rights (retirement indemnities) 4 663
Hirer purchase-other lease agreements 7 435
Others 4 521
- --------------------------------------------------------------------------------
TOTAL 25 515
- --------------------------------------------------------------------------------
<PAGE>
LISTE DES SOCIETES CONSOLIDEES AU 31 DECEMBRE 1994
/ SOCIETES CONSOLIDEES PAR INTEGRATION GLOBALE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
| Nom des Societes % controle Activite Pays Villes |
- ------------------------------------------------------------------------------------------------------------------------
1--AGENCIES DE PUBLICITE
<S> <C> <C> <C> <C>
PUBLICIS COMMUNICATION 100.00 Financiere France Paris
PUBLICIS CONSEIL 99.61 Publicite France Paris
Loeb et associes 55.00 Publicite France Paris
FCA!/B.M.Z. 100.00 Publicite France Paris
Idees Dialogue Conseil 90.00 Publicite France Paris
Intelligences 100.00 Publicite France Paris
Mundoprint 100.00 Publicite France Paris
Interplans Edition 100.00 Publicite France Paris
Procis 89.40 Publicite France Paris
Publicis Direct 65.50 Publicite France Paris
TV Mission 77.80 Publicite France Paris
ID3D 69.88 Publicite France Paris
Extension 100.00 Publicite France Paris
Publicis Consultants 100.00 Publicite France Paris
Publicis Design 100.00 Publicite France Paris
Media-System 99.66 Publicite France Paris
Media-Finance 72.00 Publicite France Paris
Media-System Est 50.00 Publicite France Strasbourg
Media-System U.K. Ltd. 100.00 Publicite Grande Bretagne Londres
Jonction 80.00 Publicite France Paris
Publicis Hourra 80.78 Publicite France Lille
Epure 89.94 Publicite France Lille
Publicis Edico 80.98 Publicite France Lyon, Clermont-Ferrand
Publicis Mediterranee 99.95 Publicite France Marseille
Publicis Soleil 50.25 Publicite France Toulouse, Montpellier
Publicis Grand Angle 76.94 Publicite France Brest, Nantes, Rennes
Positif 99.80 Publicite France Brest
Publicis Grand Ouest 99.90 Publicite France Nantes, Rennes
Publicis Grand Est 96.42 Publicite France Nancy, Dijon, Strasbourg
Publicis Qualigraphie 83.00 Publicite France Rouen, Caen
Reseau Graphic 52.00 Publicite France Rouen
Publicis Altantique 95.10 Publicite France Bordeaux
Expression 51.00 Publicite France Bordeaux
Racines Grand Centre 66.00 Publicite France Tours
SKT 70.00 Publicite France Paris
Exaudi 99.00 Publicite France Paris
Koufra 50.00 Publicite France Strasbourg
CRC 74.80 Publicite France Paris
Motivom 74.50 Publicite France Paris
Exclamation 95.00 Publicite France Paris
PUBLICIS BLOOM 96.15 Publicite Etats-Unis New-York, Dallas
PUBLICIS FCB EUROPE 51.00 Financiere Pays-Bas Amsterdam, Paris
Publicis FCB Wien 100.00 Publicite Autriche Vienne
Publicis FCB Belgique 100.00 Publicite Belgique Bruxelles
Linea Organisation Full Option 51.00 Publicite Belgique Bruxelles
Cre-Action 51.00 Publicite Belgique Bruxelles
Publicis FCB Direct 100.00 Publicite Belgique Bruxelles
FCA / B.M.Z. 100.00 Publicite Belgique Bruxelles
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
| Nom des Societes % controle Activite Pays Villes |
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Publicis FCB 100.00 Publicite Danemark Copenhague
Markkinointi Topitorma 45.03 Publicite Finlande Helsinski
FCB Paris 100.00 Publicite France Paris
Kenya 51.00 Publicite France Paris
Empir 100.00 Publicite France Paris
Axe Publicite 100.00 Publicite France Paris
Empir Media 100.00 Achat d'espaces France Paris
Publicis FCB Communication Germany 100.00 Financiere Allemagne Dusseldorf
BMZ/FCA 64.50 Publicite Allemagne Dusseldorf
More Media 90.00 Publicite Allemagne Dusseldorf
Promofrance 100.00 Publicite Allemagne Francfort
Optimedia 100.00 Achat d'espaces Allemagne Dusseldorf
FCB Direct 100.00 Publicite Allemagne Hambourg
FCB Hambourg 87.00 Publicite Allemagne Hambourg
Publicis Vicom Werbeagentur 90.00 Publicite Allemagne Francfort
B.R.P. Unternehmen Kommunikation 51.00 Publicite Allemagne Dusseldorf
Publicis M.C. &. D. Werbeagentur 50.00 Publicite Allemagne Erlangen, Munich
Publicis M.C. &. D. Messeagentur 50.00 Publicite Allemagne Erlangen, Munich
Publicis Werbeagentur 100.00 Publicite Allemagne Francfort
Mundocom Germany 100.00 Publicite Allemagne Francfort
Publicis FCB Hungary 100.00 Publicite Hongrie Budapest
Publicis FCB Communication Italia 100.00 Financiere Italie Milan
Publicis FCB 95.00 Publicite Italie Milan, Rome
BMZ Italia 100.00 Publicite Italie Milan
Optimedia 100.00 Achat d'espaces Italie Milan
Highmedia 70.00 Achat d'espaces Italie Milan
Solaris 100.00 Publicite Italie Milan
Overad 100.00 Financiere Pays-Bas Amsterdam
Publicis/FCB Prad 100.00 Publicite Pays-Bas Amsterdam
Publicis/FCB Prad 100.00 Publicite Pays-Bas Eindhoven
HVR / B.M.Z. 100.00 Publicite Pays-Bas La Haye
Mundocom A.A.C. 100.00 Publicite Pays-Bas Amsterdam, Eindhoven
Kern Habbema & Yap 53.00 Publicite Pays-Bas Amsterdam
Overad Property 100.00 Financiere Pays-Bas Amsterdam
Publicis FCB Norway 50.02 Publicite Norvege Oslo
Publicis FCB Direct 91.00 Publicite Norvege Oslo
Strategic Marketing 91.00 Publicite Norvege Oslo
Basic 91.00 Publicite Norvege Oslo
Publicis FCB Reclamebyra 91.00 Publicite Norvege Oslo
Park Reclamebyra 91.00 Publicite Norvege Oslo
Sponsor Marketing 65.00 Publicite Norvege Oslo
Rodstern Werner Film 100.00 Publicite Norvege Oslo
Publicis FCB Poland 78.00 Publicite Pologne Varsovie
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
| Nom des Societes % controle Activite Pays Villes |
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FCB Publicidade 83.00 Publicite Portugal Lisbonne
Publicis Ciesa 90.00 Publicite Portugal Lisbonne
BMZ/Park 68.00 Publicite Portugal Lisbonne
Comunicar 90.00 Publicite Portugal Lisbonne
Optimedia 93.00 Achat d'espaces Portugal Lisbonne
Publicis FCB Arge 100.00 Publicite Espagne Madrid, Barcelone
Optimedia 98.00 Achat d'espaces Espagne Madrid
Farner Publicis FCB Werbeagentur 90.00 Publicite Suisse Zurich
Bureau d'Etudes Publicitaires B.E.P. 100.00 Publicite Suisse Lausanne
MMS 100.00 Publicite Grande Bretagne Londres
Publicis Ltd 100.00 Publicite Grande Bretagne Londres
FCB Advertising 100.00 Publicite Grande Bretagne Londres
FCB Impact 100.00 Publicite Grande Bretagne Londres
Mundocom 100.00 Publicite Grande Bretagne Londres
Optimedia International 100.00 Achat d'espaces Grande Bretagne Londres
PUBLICIS CENTRE MEDIA 99.94 Achat d'espaces France Paris
Credome 99.96 Etudes medias France Paris
Optimedia 100.00 Achat d'espaces France Paris
FCA BMZ International 60.00 Publicite France Paris
Wam 99.76 Publicite France Paris
FCA Sabbatini Baldoni Panzeri 98.10 Publicite Italie Milan
FCA Amsterdam 80.85 Publicite Pays Bas Amsterdam
FCA Walker 57.00 Publicite Pays Bas Amsterdam
FCA Werner & Messelink 61.00 Publicite Pays Bas Amsterdam
FCA London 90.05 Publicite Grande Bretagne Londres
B / SOCIETES CONSOLIDEES PAR MISE EN EQUIVALENCE
FCB Communications 20.39 Publicite Etats-Unis Chicago
Gnomi FCB 40.00 Publicite Grece Athenes
Marianne 32.80 Publicite France Paris
CID FCA 25.00 Publicite Espagne Madrid, Barcelone, Seville,
Valence, Saragosse, Bilbao
</TABLE>
<PAGE>
LOGO OF MAZARS
CABINET ROBERT MAZARS
We have examined the consolidated balance sheet of PUBLICIS COMMUNICATION and
subsidiaries as of December 31, 1994 and the related consolidated statements of
income, stockholders' equity and changes in financial position for the year in
the period ended December 31, 1994. These statements present a net equity (group
share) of 361.434.000 FF and a net income (group share) of 70.738.000 FF. Our
examination was made in accordance with generally accepted auditing standards
and, accordingly, include such tests of the accounting records and other
auditing procedures that we considered necessary in the circumstances.
In our opinion, the financial statements referred to above present fairly the
financial position of PUBLICIS COMMUNICATION and subsidiaries as of December 31,
1994, and the result of their operations and the changes in their financial
position for the year in the period ended December 31, 1994, in conformity with
generally accepted accounting principles applied on a consistent basis.
Paris, 6th June 1995
Signature of Frederic Allilaire Signature of Jose Marette
/s/ Frederic ALLILAIRE /s/ Jose MARETTE
Tour Fiat, Paris-La Defense 6 135, bd Haussmann Paris 8e
Adresse postale : Tour Fiat . Cedex 16 . 92084 Paris-La Defense . Telephone :
(1) 47 96 62 00 . Telecopie : (1) 47 96 62 62
Allemagne . Argentine . Australie . Belgique . Canada . Espagne . Etats-Unis .
France . Grande-Bretagne . Grece . Hong-Kong
Hongrie . Irlande . Italie . Japon . Luxembourg . Maroc . Pays-Bas . Pologne .
Portugal . Republique Tcheque . Suisse . Slovaquie .Ukraine
SOCIETE ANONYME A DIRECTOIRE ET CONSEIL DE SURVEILLANCE D'EXPERTISE COMPTABLE
(CONSEIL REGIONAL DE PARIS) ET DE COMMISSARIAT AUX COMPTES (COMPAGNIE REGIONALE
DE PARIS)
CAPITAL DE 5 031 000 F . RCS PARIS 650 500 390 . CODE APE 741 C . SIEGE SOCIAL :
135, BOULEVARD HAUSSMANN PARIS 8e
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
Date: June 16, 1995
True North Communications Inc.
/s/ John J. Rezich
By: _________________________________
John J. Rezich
Controller (Chief Accounting
Officer)
