<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, 1995
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) 751-7227
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, 1996 was $416,994,008.
There were 23,533,232 shares of Registrant's 33 1/3 cents per share par value
Common Stock outstanding as of March 22, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to shareholders for the year ended
December 31, 1995 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 15, 1996 are incorporated by reference into Part
III.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Registrant hereby amends Item 14 of its 1995 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 1995 and the first quarter of 1996:
<TABLE>
<CAPTION>
DATE OF REPORT DESCRIPTION OF REPORTABLE EVENT
-------------- -------------------------------
<C> <S>
February 29, 1996 Under Item 5, Registrant reported the termination of its
alliance agreements with Publicis Communication.
</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 22 are
incorporated herein by reference in Item 8:
Consolidated Balance Sheets--December 31, 1994 and 1995
Consolidated Statements of Income--Years ended December 31, 1993, 1994 and
1995
Consolidated Statements of Stockholders' Equity--Years ended December 31,
1993, 1994 and 1995
Consolidated Statements of Cash Flows--Years ended December 31, 1993, 1994
and 1995
Notes to Consolidated Financial Statements--December 31, 1995
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
Conseil. Accordingly, the consolidated financial statements of Publicis
Communication and Subsidiaries include the results of operations and financial
position of Publicis.FCB BV and Publicis Conseil.
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 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net income as shown in financial statements (1) $23,186 $12,782 $32,070
- -----------------------------------------------------------------------------------------------------
Amortization of goodwill (2) (2,703) (5,623) (6,803)
- -----------------------------------------------------------------------------------------------------
Italian restructuring reserves not acceptable under U.S. GAAP (3) -- 5,756 (6,017)
- -----------------------------------------------------------------------------------------------------
Tax credit included in income not acceptable under U.S. GAAP (4) -- (2,445) (2,540)
- -----------------------------------------------------------------------------------------------------
$20,483 $10,470 $16,710
----------------------------
</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, results 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 31/12/1995
<PAGE>
PUBLICIS COMMUNICATION
31/12/1995
PAGE 1 : Comparative Consolidated Income Statement.
PAGE 2 : Comparative Consolidated Balance Sheet.
PAGES 3/4 : Consolidated Statement of Change in Financial Statements.
PAGES 5/10 : Notes to the Consolidated Financial Statements.
PAGES 11/13 : List of Consolidated Companies.
<PAGE>
<TABLE>
<CAPTION>
PUBLICIS COMMUNICATION GROUP CONSOLIDATED INCOME STATEMENTS
- -------------------------------------------------------------------------------------------------------------
(in thousands of French Francs) YEAR 1994 YEAR 1995 VAR.
%
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Billings 17 562 073 18 132 852 3.3%
Purchases (14 824 544) (15 196 560)
REVENUES 2 737 529 2 936 293 7.3%
Salaries and Benefits (1 511 421) (1 638 275) 8.4%
Office and General Expenses (776 463) (832 111) 7.2%
TOTAL EXPENSES (2 287 884) (2 470 386) 8.0%
OTHER INCOME 19 924 17 732
OPERATING PROFIT 469 569 483 639 3.0%
Depreciation (105 037) (110 724)
Provision doubtful debts (21 378) (16 258)
Other provisions (17 448) (16 033)
Interest income (expense) (20 785) 14 820
PROFIT BEFORE TAX 304 921 355 445 16.6%
Exceptional costs (29 369) 3 043
Profit sharing - statutory (2 779) (7 263)
Income Tax (110 537) (133 111)
Profit (equity subsidiaries) 46 142 32 747
Extraordinary Loss (80 000)
- -------------------------------------------------------------------------------------------------------------
NET INCOME 128 378 250 861 95.4%
GROUP SHARE 70 738 160 350 126.7%
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PUBLICIS COMMUNICATION GROUP
CONSOLIDATED BALANCE SHEET
(In thousands of French Francs)
- ------------------------------------------------------------------------------
A S S E T S 31.12.1994 31.12.1995
- ------------------------------------------------------------------------------
FIXED ASSETS 1 053 291 1 104 147
============ ---------- ----------
Intangible assets (gross) 629 684 737 923
Depreciation & amortization on intangible assets (19 109) (23 005)
Tangible assets (gross) 643 377 681 858
Depreciation & amortization on tangible assets (408 316) (441 093)
---------- ----------
NET TANGIBLE AND INTANGIBLE ASSETS 845 636 955 683
Investments (non consolidated companies) 23 877 23 781
Investments (equity subsidiaries) 136 180 105 016
Interco loans 35 557 4 896
Other financial assets 34 026 37 106
Provision on financial assets (21 985) (22 335)
---------- ----------
NET FINANCIAL ASSETS 207 655 148 464
---------- ----------
CURRENT ASSETS 3 848 894 4 217 222
============== ---------- ----------
Work in progress 194 103 212 814
Advance payments made 64 020 47 770
Accounts receivable (net) 1 960 956 1 947 957
Interco receivable 16 945 40 351
Other debtors 1 063 543 1 150 283
Cash 549 327 818 047
---------- ----------
OTHER CURRENT ASSETS 70 879 63 710
==================== ---------- ----------
---------- ----------
TOTAL ASSETS 4 973 064 5 385 079
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
L I A B I L I T I E S & E Q U I T Y 31.12.1994 31.12.1995
- ------------------------------------------------------------------------------
TOTAL EQUITY 820 323 1 459 155
============ ---------- ----------
Equity (before net income), Group Share 361 434 872 932
Net income, Group Share 70 738 160 350
---------- ----------
TOTAL EQUITY GROUP SHARE 432 172 1 033 282
Equity (before net income), Non-Group Share 330 511 335 361
Net income, Non-Group Share 57 640 90 512
---------- ----------
TOTAL EQUITY NON-GROUP SHARE 388 151 425 873
---------- ----------
PROVISIONS FOR CONTINGENCIES 320 571 329 476
============================ ---------- ----------
SHORT TERM LIABILITIES 3 758 653 3 535 314
====================== ---------- ----------
Borrowings (not banks) 528 661 123 682
Banks 399 468 494 736
Advance payments from clients 133 197 148 400
Accounts payable 1 465 410 1 470 605
Interco payable 49 950 24 602
Other creditors 1 181 967 1 273 289
---------- ----------
OTHER ACCRUALS 73 517 61 134
============== ---------- ----------
---------- ----------
TOTAL LIABILITIES & EQUITY 4 973 064 5 385 079
- ------------------------------------------------------------------------------
<PAGE>
PUBLICIS COMMUNICATION GROUP P 1/2
CONSOLIDATED STATEMENT OF CHANGE IN FINANCIAL POSITION
( -in thousand FRF)
<TABLE>
<CAPTION>
'000 FRF 1994 1995
<S> <C> <C>
SOURCE OF WORKING CAPITAL
NET INCOME 128 378 250 861
Depreciation 105 037 110 724
Extraordinary loss 80 000 0
-----------------------
Sub-total 313 415 361 585
Equity earnings of affiliates (46 142) (32 746)
Dividends received from affiliates 5 413 50 717
Loan 0 181 137
Other borrowings 144 544 0
Exchange differences & others (7 467) 1 670
=======================
TOTAL SOURCE 409 763 562 363
APPLICATION OF WORKING CAPITAL
Paid out dividends 61 508 52 230
Purchase of interest in affiliated companies 23 011 0
Investments 210 819 120 896
Increase in other fixed assets 102 861 112 169
=======================
TOTAL APPLICATION 398 199 285 295
Increase (decrease) in working capital 11 564 277 068
------ -------
</TABLE>
<PAGE>
PUBLICIS COMMUNICATION GROUP P 2/2
CONSOLIDATED STATEMENT OF CHANGE IN FINANCIAL POSITION
( -in thousand FRF)
<TABLE>
<CAPTION>
'000 FRF 1994 1995
<S> <C> <C>
Increase (decrease) in current assets
- -------------------------------------
Cash (85 994) 268 720
Accounts receivables (net) 166 028 (12 999)
Expenditure billable to clients 68 765 18 711
Other current assets 100 996 94 682
-----------------------
Sub-total 249 795 369 114
Increase (decrease) in current liabilities
- ------------------------------------------
Provision for contingencies 30 028 8 905
Accounts payable 182 097 5 195
Bank borrowings 17 242 95 268
Loans and other borrowings 82 548 (86 116)
Other current liabilities (73 684) 68 794
-----------------------
Sub-total 238 231 92 046
Increase (decrease) in working capital 11 564 277 068
- -------------------------------------- ------ -------
</TABLE>
<PAGE>
PUBLICIS COMMUNICATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31/12/1995
I. CONSOLIDATION PRINCIPLES.
PUBLICIS COMMUNICATION GROUP'S consolidated financial statements as at
December 31, 1995 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.
General :
The accounting policies used as at December 31, 1995 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.
<PAGE>
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 restructuration steps taken up to now allowed this
sector to regain its profitability and will have a favorable impact on the
following years, Media buying goodwill has not been depreciated.
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.
<PAGE>
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 36,66% calculated on the
provision for the French statutory profit sharing.
III) COMMENTS ON THE CONSOLIDATED ACCOUNTS:
-------------------------------------
Companies consolidated:
----------------------
Due to the acquisitions of the Contur Group and Sisyphos agency in Germany
as well as the Hautefeuille Group in France, the 1995 scope of
consolidation has been enlarged.
On a constant basis, Publicis Communication's activities would have grown
by 2%.
Subsidiaries' Contribution in Group activities:
----------------------------------------------
The breakdown of this contribution is as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Billings Net income Group Share (1)
- --------------------------------------------------------------------------------
<S> <C> <C>
France 34% 50%
Europe 60% 30%
USA 6% 20%
---------------------------------------------------
100% 100%
- --------------------------------------------------------------------------------
</TABLE>
(1) Including results of subsidiaries consolidated on an equity basis.
Intangible assets:
-----------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
31/12/1994 Movements 1995 31/12/1995 31/12/1995
------------------------------------------------------------ ----------
(000 FRF) Gross Acquisitions Disposals Exchange Gross Amortization Net
amount and others amount amount
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Goodwill 573 356 105 221 0 (7 218) 671 359 (22) 671 337
Acquired Goodwill 24 289 5 834 0 0 30 123 (970) 29 153
Software & Others 32 039 4 402 0 0 36 441 (22 013) 14 428
- -------------------------------------------------------------------------------------------------------------
TOTAL 629 684 115 457 0 (7 218) 737 923 (23 005) 714 918
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Tangible assets:
---------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
31/12/1994 Movements 1995 31/12/1995 31/12/1995
------------------------------------------------------------------------------- ----------
(000 FRF) Gross Acquisitions Disposals Changes in scope Exchange Gross Amortization Net
amount of consolidation and others amount amount
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Land & buildings 39 243 0 0 0 882 40 125 (12 871) 27 254
Others 604 134 111 390 (70 577) 15 175 (18 389) 641 733 (428 222) 213 511
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL 643 377 111 390 (70 577) 15 175 (17 507) 681 858 (441 093) 240 765
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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 KFRF 92 895.
Publicis Communication owns 4 658 000 True North Communications shares
(20%) whose stock market value was KUSD 86 173 as at December 31st, 1995
and KUSD 94 325 as at February 29th, 1996.
Variation in stockholders' Equity:
---------------------------------
The variation of the stockholders' equity between December 31st, 1994 and
December 31st, 1995 is as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
(000 FRF) TOTAL Group share Minority share
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Equity 31/12/1994 691 945 361 434 330 511
1994 Net Income 128 378 70 738 57 640
-------------------------------------------
Theoritical Equity 31/12/1995 (before 1995 Net Income) 820 323 432 172 388 151
1995 changes:
Capital increase of the mother company 500 000 500 000 0
Dividends distributed (48 461) (12 150) (36 311)
Exchange differences (16 919) (11 794) (5 125)
Changes in companies consolidated and others (46 650) (35 296) (11 354)
- ------------------------------------------------------------------------------------------------------
Total Net Equity 31/12/1995 (before 1995 Net Income) 1 208 293 872 932 335 361
- ------------------------------------------------------------------------------------------------------
</TABLE>
Net Equity of the Group:
-----------------------
The Net Equity of the Group is as follows (000 FRF):
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
<S> <C>
Share capital of the mother company 185 000
Reserves of the mother company 435 143
Consolidated reserves 252 789
- ------------------------------------------------------------------
Group's Net Equity as of 31/12/1995 872 932
- ------------------------------------------------------------------
</TABLE>
<PAGE>
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.
Since this date, Publicis Communication's ownership is as follows:
Publicis SA 79,17%
True North Communications 20,83%
Provision for contingencies:
---------------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
(000 FRF) 31/12/1994 Variation 31/12/1995
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Pensions - Retirement indemnities 113 245 6 293 119 538
Provisions for extraordinary costs - Italy 80 000 (20 775) 59 225
Provisions for litigations 35 903 (1 868) 34 035
Provisions - General risks 13 303 285 13 588
Provisions - Clients risks 37 218 (2 929) 34 289
Other provisions 40 902 27 899 68 801
- -------------------------------------------------------------------------------
TOTAL 320 571 8 905 329 476
- -------------------------------------------------------------------------------
</TABLE>
Income Tax:
----------
In 1995, Publicis Conseil benefited from an Income Tax saving, amounting
to approximately 12.7 million francs, as a result of the fiscal losses
brought by FCAB. As at December 31st, 1995, KF 52 170 ordinary fiscal
losses and differed amortization can be carried forward.
Exceptional Costs:
-----------------
No exceptional item has to be pointed out.
Extraordinary Loss:
------------------
The 80 million francs provision for exceptional restructuration costs and
partial depreciation of Goodwill related to Italy recorded in 1994 by
Publicis FCB Europe has been partially reversed during 1995 for an amount
of 20 million francs.
<PAGE>
Consolidated Cash Flow:
----------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
(000 FRF) 1994 1995 %
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Consolidated Net Income before extraordinary loss 108 378 250 861
Provision for depreciation 105 037 110 724
Cash Flow 313 415 361 585 15%
of which : Group Share 172 881 225 065 30%
- -----------------------------------------------------------------------------
</TABLE>
Employees:
---------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
31/12/1994 31/12/1995 % variation 1994/1995
Actual perimeter Constant perimeter
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
France 1 654 1 816 10% 1%
Europe 2 218 2 487 12% 5%
USA 283 290 2% 2%
- --------------------------------------------------------------------------------------------------
TOTAL 4 155 4 593 11% 3%
- --------------------------------------------------------------------------------------------------
</TABLE>
Contingent Liabilities:
----------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------
(000 FRF) Given
- -----------------------------------------------------------
<S> <C>
Discounted bills not yet matured 3 300
Guarantees 4 443
Pension rights (retirement indemnities) 5 872
Hirer purchase - other lease agreements 5 798
Others 1 559
- -----------------------------------------------------------
TOTAL 20 972
- -----------------------------------------------------------
</TABLE>
<PAGE>
LISTE DES SOCIETES CONSOLIDEES AU 31 DECEMBRE 1995
A- SOCIETES CONSOLIDEES PAR INTEGRATION GLOBALE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
%
Nom des Societes controle Activite Pays Ville
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 - Agences de publicite
PUBLICIS COMMUNICATION 100.00 Financiere France Paris
Publicis Conseil 99.61 Publicite France Paris
FCA/B.M.Z. 100.00 Publicite France Paris
Exclamation 100.00 Publicite France Paris
Loeb et Associes 55.00 Publicite France Paris
Mundocom 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
ID3D 69.88 Publicite France Paris
Extension 100.00 Publicite France Paris
Publicis Design 100.00 Publicite France Paris
Motivom 74.50 Publicite France Paris
CRC 100.00 Publicite France Paris
Media System 99.66 Publicite France Paris
Media System U.K. 100.00 Publicite Grande Bretagne Londres
Jonction 80.00 Publicite France Paris
Verbe 70.00 Publicite France Paris
Publicis Hourra 80.71 Publicite France Lille
Epure 99.67 Publicite France Lille
Publicis Cachemire 66.93 Publicite France Lyon, Clemont-Ferrand
Phreas 99.00 Publicite France Lyon
2eme Communication 51.00 Publicite France Lyon
Publicis Mediterranee 100.00 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 Est / Koufra 63.32 Publicite France Nancy, Dijon, Strasbourg
Publicis Qualigraphie 91.50 Publicite France Rouen, Caen
Reseau Graphic 59.62 Publicite France Rouen
Publicis Atlantique 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 99.80 Publicite France Paris
Hautefeuille Regions 100.00 Publicite France Lyon
Hautefeuille Mediterranee 99.85 Publicite France Nice
Hautefeuille Grenoble 100.00 Publicite France Grenoble
Hautefeuille Besancon 90.00 Publicite France Besancon
O' de Formes 76.00 Publicite France Lyon
O' REP FLB 65.00 Publicite France Lyon
Hautefeuille Annecy 99.85 Publicite France Annecy
Publicis FCB Europe 51.00 Financiere Pays Bas Paris
Publicis-FCB 100.00 Publicite Autriche Vienne
Publicis-FCB 100.00 Publicite Belgique Bruxelles
Cre-Action - Full Option 51.00 Publicite Belgique Bruxelles
Publicis-FCB Direct 100.00 Publicite Belgique Bruxelles
FCA! BMZ 100.00 Publicite Belgique Bruxelles
Publicis FCB 60.00 Publicite Republique Tcheque Prague
Publicis-FCB 100.00 Publicite Danemark Copenhague
Markkinointi Topitorma 45.03 Publicite Finlande Helsinki
FCB SA 100.00 Publicite France Paris
Kenya 53.00 Publicite France Paris
Empir 100.00 Publicite France Paris
Axe Publicite 100.00 Publicite France Paris
Empir Media 100.00 Achat d'espace France Paris
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
%
Nom des Societes controle Activite Pays Ville
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Publicis-FCB Communication 100.00 Financiere Allemagne Dusseldorf
B M Z FCA 64.50 Publicite Allemagne Dusseldorf
More Sales 100.00 Publicite Allemagne Dusseldorf
More Media 90.00 Achat d'espace Allemagne Dusseldorf
Publicis 100.00 Publicite Allemagne Francfort
Mundocom 100.00 Publicite Allemagne Francfort
Mundo Sales 100.00 Publicite Allemagne Francfort
Optimedia 100.00 Achat d'espace Allemagne Dusseldorf
FCB Hamburg 87.00 Publicite Allemagne Hambourg
FCB Direct Marketing 90.00 Publicite Allemagne Hambourg
Publicis Vicom 90.00 Publicite Allemagne Francfort
B R P Unternehmen Kommunikation 51.00 Publicite Allemagne Dusseldorf
Publicis MCD Werbeagentur 74.90 Publicite Allemagne Erlangen, Munich
Publicis MCD Messeagentur 50.00 Publicite Allemagne Erlangen, Munich
Contur 100.00 Publicite Allemagne Friedrichsdorf
Contur Identity Design 100.00 Publicite Allemagne Friedrichsdorf
Contec 100.00 Publicite Allemagne Friedrichsdorf
Sisyphos 51.00 Publicite Allemagne Berlin
Publicis-FCB Magyarorszag 100.00 Publicite Hongrie Budapest
Publicis-FCB 97.50 Publicite Italie Milan, Rome
FCA! BMZ 100.00 Publicite Italie Milan
Optimedia Italia 100.00 Achat d'espace Italie Milan
More Media Sri 70.00 Achat d'espace Italie Milan
Overad 100.00 Financiere Pays-Bas Amsterdam
Publicis-FCB 100.00 Publicite Pays-Bas Amsterdam
Publicis-FCB Eindhoven 100.00 Publicite Pays-Bas Eindhoven
HVR Advertising 100.00 Publicite Pays-Bas La Haye
Mundocom 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 84.93 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 Reklamebyra 91.00 Publicite Norvege Oslo
Park Reklamebyra 100.00 Publicite Norvege Oslo
Sponsor Marketing 55.00 Publicite Norvege Oslo
Rodsten & Werner Film 100.00 Publicite Norvege Oslo
Publicis-FCB Polska 78.00 Publicite Pologne Varsovie
FCB 83.00 Publicite Portugal Lisbonne
Publicis 90.00 Publicite Portugal Lisbonne
BMZ/Park 56.44 Publicite Portugal Lisbonne
Comunicar 90.00 Publicite Portugal Lisbonne
Optimedia 93.00 Achat d'espace Portugal Lisbonne
Publicis-FCB 100.00 Publicite Russie Moscou
Publicis-FCB Arge 100.00 Publicite Espagne Madrid, Barcelone
Optimedia 98.00 Achat d'espace Espagne Madrid
Famer Publicis-FCB Werbeagentur 90.00 Publicite Suisse Zurich
Bureau d'Etudes Publicitaires BEP 100.00 Publicite Suisse Lausanne
M.M.S. 100.00 Publicite Grande-Bretagne Londres
Publicis 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'espace Grande-Bretagne Londres
FCA BMZ International 100.00 Publicite France Paris
Wam 82.00 Publicite France Paris
Lion heart 98.10 Publicite Italie Milan
FCA Amsterdam 85.19 Publicite Pays Bas Amsterdam
FCB Walker 65.70 Publicite Pays Bas Amsterdam
FCA Werner & Messelink 60.00 Publicite Pays Bas Amsterdam
FCA London 100.00 Publicite Grande Bretagne Londres
CID FCA BMZ 75.00 Publicite Espagne Madrid, Barcelona, Seville
Bilbao, Saragosse, Vaience
PUBLICIS BLOOM 96.15 Publicite Etats Unis New York, Dallas
PUBLICIS CENTRE MEDIA 100.00 Achat d'espace France Paris
Credome 99.96 Etudes Medias France Paris
PUBLICIS CONSULTANTS 100.00 Publicite France Paris
Media Finance 100.00 Publicite France Paris
Idees Dialogue Conseil 100.00 Publicite France Paris
Publicis Consultants Nederland 93.00 Publicite Pays Bas Amsterdam
<PAGE>
B- SOCIETES CONSOLIDEES PAR MISE EN EQUIVALENCE
True North Communications 20.00 Publicite Etats-Unis Chicago
Gnomi FCB 40.00 Publicite Grece Athenes
</TABLE>
<PAGE>
[MAZARS LETTERHEAD]
Cabinet Robert Mazars
We have examined the consolidated balance sheet of PUBLICIS COMMUNICATION and
subsidiaries as of December 31, 1995 and the related consolidated statements of
income, stockholders' equity and changes in financial position of the year in
the period ended December 31, 1995. These statements present a new equity
(group share) of 872 932 000 FF and a net income (group share) of 160 350 000
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,
1995, and the result of their operations and the changes in their financial
position for the year in the period ended December 31, 1995, in conformity with
generally accepted accounting principles applied on a consistent basis.
Paris, 22 th April 1996
/s/ Frederic Allilaire /s/ Jose Marette
Frederic ALLILAIRE Jose MARETTE
[MAZARS LETTERHEAD]
<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 28, 1996
True North Communications Inc.
/s/ John J. Rezich
By: _________________________________
John J. Rezich
Controller (Chief Accounting
Officer)
