<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
Form 10-Q
Quarterly Report Under Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the quarter ended June 30, 1998
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 Identification No.)
incorporation of organization)
101 East Erie Street, Chicago, Illinois 60611
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number: (312) 425-6500
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, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No ____
There were 44,706,424 shares of the Registrant's 33 1/3 cents per share par
value Common Stock outstanding as of August 10, 1998.
<PAGE>
TRUE NORTH COMMUNICATIONS INC.
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements and Exhibits
Consolidated Condensed Statements of Income for the
Three Months Ended June 30, 1997 and 1998 3
Consolidated Condensed Statements of Income for the
Six Months Ended June 30, 1997 and 1998 4
Consolidated Condensed Balance Sheets as of June 30, 1997,
December 31, 1997, and June 30, 1998 5
Consolidated Condensed Statements of Cash Flows for the
Six Months Ended June 30, 1997 and 1998 6
Notes to Consolidated Condensed Financial Statements for
the Six Months Ended June 30, 1997 and 1998 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 13
</TABLE>
2
<PAGE>
TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three months ended June 30,
---------------------------
1997 1998
----------- ------------
<S> <C> <C>
Revenues $301,308 $311,467
----------- ------------
Operating Expenses:
Salaries and employee benefits $189,081 $190,356
Office and general 88,755 87,671
----------- ------------
Total operating expenses $277,836 $278,027
----------- ------------
Operating Income $ 23,472 $ 33,440
Other Income (Expense) (4,156) (4,132)
----------- ------------
Pretax Income $ 19,316 $ 29,308
Provision For Taxes 9,680 13,613
----------- ------------
$ 9,636 $ 15,695
Minority Interest (Expense) (200) (1,250)
Equity Income 5,217 3,255
----------- ------------
Net Income (Loss) $ 14,653 $ 17,700
=========== ============
Earnings Per Share:
Basic $ 0.34 $ 0.40
=========== ============
Diluted $ 0.33 $ 0.38
=========== ============
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Six months ended June 30,
-------------------------
1997 1998
-------- --------
<S> <C> <C>
Revenues $567,543 $591,536
-------- --------
Operating Expenses:
Salaries and employee benefits $360,668 $374,995
Office and general 180,121 171,472
-------- --------
Total operating expenses $540,809 $546,467
-------- --------
Operating Income $ 26,734 $ 45,069
Other Income (Expense) (6,037) (7,488)
-------- ---------
Pretax Income $ 20,697 $ 37,581
Provision For Taxes 12,426 17,671
-------- --------
$ 8,271 $ 19,910
Minority Interest (Expense) (216) (2,303)
Equity Income 5,618 3,788
-------- --------
Net Income (Loss) $ 13,673 $ 21,395
======== ========
Earnings Per Share:
Basic $ 0.32 $ 0.48
======== ========
Diluted $ 0.31 $ 0.46
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(Amounts in thousands)
<TABLE>
<CAPTION>
June 30 Dec. 31 June 30
1997 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 80,178 $ 109,033 $ 87,996
Accounts receivable, net 924,940 797,254 802,940
Other current assets 120,826 91,594 106,056
----------- ----------- -----------
Total current assets $ 1,125,944 $ 997,881 $ 996,992
----------- ----------- -----------
NONCURRENT ASSETS:
Property and equipment $ 123,722 $ 124,322 $ 120,780
Goodwill 330,754 332,807 366,691
Investment in affiliated companies 177,339 170,197 173,589
Other noncurrent assets 49,599 49,215 65,329
----------- ----------- -----------
Total noncurrent assets $ 681,414 $ 676,541 $ 726,389
----------- ----------- -----------
Total assets $ 1,807,358 $ 1,674,422 $ 1,723,381
=========== =========== ===========
CURRENT LIABILITIES:
Accounts payable $ 1,028,540 $ 945,285 $ 940,790
Short-term bank borrowings 119,958 88,008 79,583
Liability for federal & foreign taxes 8,984 13,676 2,081
Current portion of long-term debt 23,916 14,352 29,523
Accrued expenses 101,025 170,962 127,068
----------- ----------- -----------
Total current liabilities $ 1,282,423 $ 1,232,283 $ 1,179,045
----------- ----------- -----------
NONCURRENT LIABILITIES:
Long-term debt $ 69,911 $ 35,915 $ 117,076
Liability for deferred compensation 51,067 63,276 62,105
Other noncurrent liabilities 69,567 75,121 60,818
----------- ----------- -----------
Total noncurrent liabilities $ 190,545 $ 174,312 $ 239,999
----------- ----------- -----------
STOCKHOLDERS' EQUITY:
Common stock $ 14,283 $ 14,732 $ 14,931
Paid-in capital 195,317 204,070 216,870
Retained earnings 140,248 68,951 77,029
Less-Treasury stock (5,155) (5,155) (5,155)
Deferred compensation (450) (150) 0
Unrealized gain on Doubleclick investment 0 0 18,302
Cumulative translation adjustment (9,853) (14,621) (17,640)
----------- ----------- -----------
Total stockholders' equity $ 334,390 $ 267,827 $ 304,337
----------- ----------- -----------
Total liabilities and stockholders'
equity $ 1,807,358 $ 1,674,422 $ 1,723,381
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)
<TABLE>
<CAPTION>
Six months ended
June 30,
--------------------
1997 1998
-------- --------
<S> <C> <C>
Cash flows provided (used) by operating activities:
Net income $ 13,673 $ 21,395
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization 24,445 23,911
Equity in earnings of affiliated companies (5,618) (3,788)
Dividends received from affiliates 431 200
Other non-cash charges 9,340 3,198
Changes in assets and liabilities, net of acquisitions:
Receivables (88,085) (2,919)
Other current assets (22,839) (15,525)
Accounts payable 105,670 (4,731)
Accrued expenses (30,426) (69,975)
-------- --------
Net cash provided (used) by operating activities $ 6,591 $(48,234)
-------- --------
Cash flows used in investing activities:
Payments for purchase of property and equipment $(19,480) $(15,588)
Payments for acquisitions of businesses (67,257) (32,376)
-------- --------
Net cash used in investing activities $(86,737) $(47,964)
-------- --------
Cash flows provided by (used for) financing activities:
Payments of long-term debt $(23,624) $(12,463)
Additions to long-term debt 40,330 100,214
Increase (decrease) in short-term bank borrowings 18,517 (8,825)
Proceeds from issuances of common stock 9,494 10,479
Cash dividends paid (7,472) (13,317)
Payments for purchases of common stock (6,612) --
-------- --------
Net cash provided by (used for) financing activities $ 30,633 $ 76,088
-------- --------
Effects of exchange rates on cash $ (497) $ (927)
-------- --------
Net increase (decrease) in cash $(50,010) $(21,037)
Cash, at beginning of year 130,188 109,033
-------- --------
Cash, at end of period $ 80,178 $ 87,996
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE>
TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1998
(Amounts in thousands, except per share amounts)
(Unaudited)
Note 1 - Basis of Presentation
The consolidated condensed financial statements included herein have been
prepared by the Company without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission, and include all adjustments which the
Company considers necessary for a fair presentation. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. The consolidated condensed
financial statements should be read in conjunction with the financial statements
and notes thereto included in the Company's latest Annual Report on Form 10-K.
Revenues and net income for the first six months of the year should not be
considered reliable indicators of revenues or net income for the entire year
because the Registrant's business is cyclical.
Note 2 - Adoption of New Accounting Standard
Effective January 1, 1998, True North Communications Inc. adopted Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive Income".
This statement requires that all items recognized under the accounting standards
as components of comprehensive income be reported in a financial statement that
is displayed with the same prominence as other financial statements. This
statement also requires that an entity classify items of other comprehensive
income by their nature in a financial statement. For example, other
comprehensive income may include foreign currency translation adjustments,
minimum pension liability adjustments, and unrealized gains and losses on
marketable securities classified as available for sale. Annual financial
statements for prior periods will be reclassified, as required. The Company's
total comprehensive income for the three and six months ended June 30, 1997 and
1998 were as follows:
<TABLE>
<CAPTION>
Three Months Six Months
--------------------- -------------------
1997 1998 1997 1998
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net income (loss) $14,653 $17,700 $13,673 $21,395
Foreign currency translation adjustment (1,814) (499) (3,031) (3,019)
Unrealized gain on marketable securities
classified as available for sale, net of tax -- 6,220 -- 18,302
------- ------- ------- -------
Total comprehensive income $12,839 $23,421 $10,642 $36,678
======= ======= ======= =======
</TABLE>
7
<PAGE>
Note 3 - Earnings Per Share
Basic earnings per share are computed using the weighted average number of
common shares outstanding during the year. Diluted earnings per share are
computed using the weighted average number of common shares outstanding during
the year and include the potential issuance of shares under True North's stock
option plans. The following table summarizes the differences in the number of
shares used in both calculations for the three and six months ended June 30,
1997 and 1998:
<TABLE>
<CAPTION>
Three Months Six Months
---------------- ----------------
1997 1998 1997 1998
------ ------ ------ ------
<S> <C> <C> <C> <C>
Basic 42,739 44,460 42,643 44,296
====== ====== ====== ======
Diluted 43,768 46,767 43,722 46,349
====== ====== ====== ======
</TABLE>
Note 4 - Restructuring Reserve Activity
During the first six months of 1998, the following activity took place
with respect to the restructuring reserves established by the Company in the
fourth quarter of 1997:
<TABLE>
<CAPTION>
Restructuring Long-term Restructuring
Reserve at Cash Obligations Reserve at
12/31/97 Payments Secured 6/30/98
------------- -------- ----------- -------------
<S> <C> <C> <C> <C>
Anticipated loss on sublease $10,939 $ (2,219) $ (569) $ 8,151
Severance and other exit costs 33,893 (14,961) (4,316) 14,616
Merger-related transaction costs 12,313 (11,464) -- 849
------- -------- ------- -------
$57,145 $(28,644) $(4,885) $23,616
======= ======== ======= =======
</TABLE>
These restructuring activities included plans for the elimination of 604
positions within the Company. As of December 31, 1997, 296 employees had been
terminated in accordance with the plans. During the first six months of 1998 an
additional 239 employees were terminated in accordance with the plans. The
Company expects that the remaining terminations will be accomplished in 1998.
In addition, the Company expects that it will be able to secure subleases for
those leased facilities that it identified in its restructuring plans as not
being needed for its current operations.
8
<PAGE>
TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
Results of Operations--Quarter Ended June 30
- --------------------------------------------
Revenues increased 3.4% to $311,467 in 1998 from $301,308 in 1997. U.S.
revenues increased 1.5% to $223,046 and international revenues increased 8.3% to
$88,421. The small increase in U.S. revenues is due to: (1) as a result of its
acquisition of Bozell, Jacobs, Kenyon, & Eckhardt, Inc. ("BJK&E") in the latter
half of 1997, the Company ended its relationship with a client in the automotive
industry due to a conflict with a BJK&E client, and, (2) during 1997 the Company
lost a client in the banking business and the creative assignment for a client
in the restaurant business. The increase in international revenues is
principally due to acquisitions offset by unfavorable currency translation and
businesses sold as a result of the 1997 separation agreement with Publicis
Communication. Excluding acquisitions, divestitures, and the unfavorable impact
of foreign currency translation, consolidated revenues would have increased
approximately 2.1% between years.
During the latter part of 1997 and in 1998, the Company purchased several
agencies in the United States, Europe, Latin America and the Pacific Rim. These
acquisitions contributed $15,821 and $3,481 to the Company's revenues and pretax
income, respectively.
Salaries and benefits expenses increased $1,275 or 0.7% to $190,356 in 1998
compared to the 3.4% increase in consolidated revenues. Acquisitions accounted
for $8,365 of 1998 consolidated salaries and benefits expense. Excluding the
impacts of acquisitions and divestitures, this category of expense decreased
1.2% between years.
Office and general expenses declined $1,084 or 1.2% between years. Excluding
the impacts of acquisitions and divestitures, this category of expense declined
2.7% from 29.3% of 1997 revenues to 28.3% of 1998 revenues due to the Company's
ongoing efforts to improve its operating income.
The components of "Other Expense" in both years were as follows:
<TABLE>
<CAPTION>
1997 1998
---- ----
<S> <C> <C>
Interest expense $ 5,220 $5,880
Interest (income) (1,503) (838)
Gain on sale of French subsidiary -- (910)
Unrealized (gain) loss on Shandwick investment 439 --
------- -------
$ 4,156 $ 4,132
======= =======
</TABLE>
Net interest expense increased between years due to the fact that the Company is
carrying higher average debt levels in 1998 resulting from its acquisition
program and the cash costs of its ongoing restructuring activities.
9
<PAGE>
The effective tax rate improved from 50.1% in 1997 to 46.4% in 1998. The primary
reason for this improvement is that the Company has actively expanded its
profitable European operations resulting in a reduction in the effective tax
rate of its foreign operations.
Minority interest expense was $200 in 1997 compared to $1,250 in 1998. The
increase is principally due to the Company's fourth quarter 1997 acquisition of
a 60% interest in a highly profitable agency in Brazil and improvements in the
operating results of True North Technologies, Inc. and certain European agencies
in its Bozell Worldwide network.
Equity income declined from $5,217 in 1997 to $3,255 in 1998. The decline
results from the fact that, pursuant to its 1997 separation agreement with
Publicis Communication, the Company exchanged its 49% interest in a joint
venture with Publicis Communication for agencies in France, Greece, Portugal and
the United Kingdom.
Results of Operations -- Six Months Ended June 30
- -------------------------------------------------
Revenues increased 4.2% to $591,536 in 1998 from $567,543 in 1997. U.S. revenues
decreased 1.5% to $428,766 and international revenues increased 23.1% to
$162,770. The decline in U.S. revenues is due to: (1) as a result of its
acquisition of BJK&E in the latter half of 1997, the Company ended its
relationship with a client in the automotive industry due to a conflict with a
BJK&E client, and, (2) during 1997 the Company lost a client in the banking
business and the creative assignment for a client in the restaurant business.
The increase in international revenues is principally due to acquisitions offset
by unfavorable currency translation and businesses sold as a result of the 1997
separation agreement with Publicis Communication. Excluding acquisitions,
divestitures, and the unfavorable impact of foreign currency translation,
consolidated revenues would have increased approximately 0.8% between years.
During the latter part of 1997 and in 1998, the Company purchased several
agencies in the United States, Europe, Latin America and the Pacific Rim. These
acquisitions contributed $42,011 and $5,018 to the Company's revenues and pretax
income, respectively.
Salaries and benefits expenses increased $14,307 or 4.0% to $374,995 in 1998
compared to the 4.2% increase in consolidated revenues. Acquisitions accounted
for $24,232 of 1998 consolidated salaries and benefits expense. Excluding the
impacts of acquisitions and divestitures, this category of expense decreased
0.1% between years.
Office and general expenses declined $8,649 or 4.8% between years. Office and
general expenses in the first quarter of 1997 include a charge of $6,850 related
principally to the write-off of costs associated with the closure of a Poppe-
Tyson operation. The after-tax impact of this charge to 1997 earnings was a loss
of $5,574. Excluding this charge and the impacts of acquisitions and
divestitures, this category of expense declined 5.4% from 30.3% of 1997 revenues
to 28.9% of 1998 revenues due to the Company's ongoing efforts to improve its
operating income.
10
<PAGE>
The components of "Other Expense" in both years were as follows:
<TABLE>
<CAPTION>
1997 1998
------- -------
<S> <C> <C>
Interest expense $ 9,726 $10,511
Interest (income) (3,652) (2,113)
Gain on sale of French subsidiary -- (910)
Unrealized (gain) loss on Shandwick investment (37) --
------- -------
$ 6,037 $ 7,488
======= =======
</TABLE>
Net interest expense increased between years due to the fact that the Company is
carrying higher average debt levels in 1998 resulting from its acquisition
program and the cash costs of its ongoing restructuring activities.
Minority interest expense was $216 in 1997 compared to $2,303 in 1998. The
increase is principally due to the Company's fourth quarter 1997 acquisition of
a 60% interest in a highly profitable agency in Brazil and improvements in the
operating results of True North Technologies, Inc. and certain European agencies
in its Bozell Worldwide network.
Liquidity and Capital Resources
- -------------------------------
As more fully explained below, the decreases in "Cash and cash equivalents" and
"Accrued Expenses", and the increases in "Accounts receivable", "Other current
assets", and "Long-term debt" from the beginning of the year reflect the
cyclical nature of the advertising business and are inter-related.
The increase in "Accounts Receivable" from the beginning of the year reflects
the fact that client spending on media placements was higher in June as compared
to December of the previous calendar year.
The decrease in accrued expenses from the beginning of the year is caused by the
payment of bonuses and contributions to profit sharing plans which are accrued
throughout the previous calendar year. The decrease in 1998 was also due to the
payment of $28,644 in costs which had been accrued as part of the Company's 1997
fourth quarter restructuring charge (see Note 4 to the consolidated condensed
financial statements).
The increase in "Other current assets" is due to the production of client
commercials which will be shown during the summer months. The costs related to
these commercials are billed to clients during the third quarter when the
commercials are completed. Commercial production activity in the last month of
the year is typically low.
The decrease in "Cash and cash equivalents" and the increase in "Long-term debt"
reflect the higher level of commercial production activity, as well as the
slowing of accounts receivable collections during the first six months of the
year. In addition, as disclosed in Note 4 to the consolidated condensed
financial statements, the Company paid out $28,644 in costs which had been
accrued as part of its fourth quarter 1997 restructuring charge.
During the second quarter of 1998, the Company entered into a Revolving Credit
Agreement ("the Agreement") totaling $250 million with several banks. The
Agreement, designed to improve True North's access to long-term financing,
replaces the True North Communications Inc. Revolving Credit Agreement dated
December 21, 1995 totaling $90 million, the True North Communications Inc.
Revolving Credit Agreement dated January 14, 1997 totaling $60 million, and the
BJK&E Loan and Security Agreement dated June 22, 1994 totaling $80 million. The
Agreement is divided into two tranches; a $75 million 364-day facility and a
$175 million five-year
11
<PAGE>
facility. Under this agreement the Company has the option to borrow at LIBOR
plus thirty basis points, Prime, or under a competitive bid provision. At June
30, 1998, the Company classified $100 million of borrowings under the Agreement
as "Long-term debt".
The Company continues to contemplate strategic acquisitions to enhance its
worldwide network. During the first six months of 1998, the Company completed
the acquisition of agencies in the United States and Europe. In addition, it
made contingent payments related to acquisitions made in prior years. These
payments were financed by the issuance of additional short-term borrowings.
True North owns approximately 5% of the outstanding common stock of Doubleclick
Inc., a provider of Internet advertising solutions. During the first quarter of
1998, Doubleclick Inc. participated in an initial public offering of its common
stock. At June 30, 1998, the fair market value of True North's investment in
this company (which True North has identified as "available for sale") exceeded
its book value of $5,000 by $33,722. As a result, True North recorded the
unrealized gain, net of applicable taxes as a component of equity in the caption
"Unrealized gain on Doubleclick investment".
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders - None
On May 23, 1998, Registrant held its Annual Meeting of Stockholders to consider
and vote upon the following matters:
1. A proposal to elect eleven directors to serve until the next Annual Meeting
of Stockholders, or until their successors are duly elected and qualified:
<TABLE>
<CAPTION>
FOR WITHHELD
- -------------------------------------------------------------------------------
<S> <C> <C>
Bruce Mason 34,741,365 477,036
- -------------------------------------------------------------------------------
Charles D. Peebler, Jr. 34,757,675 460,726
- -------------------------------------------------------------------------------
Richard S. Braddock 34,757,383 461,018
- -------------------------------------------------------------------------------
David A. Bell 34,761,385 457,016
- -------------------------------------------------------------------------------
Donald M. Elliman, Jr. 34,843,185 375,216
- -------------------------------------------------------------------------------
W. Grant Gregory 34,761,385 457,016
- -------------------------------------------------------------------------------
Leo-Arthur Kelmenson 34,761,275 457,126
- -------------------------------------------------------------------------------
Richard P. Mayer 34,839,941 378,430
- -------------------------------------------------------------------------------
Michael M. Murphy 34,839,941 378,460
- -------------------------------------------------------------------------------
J. Brendan Ryan 34,839,777 378,624
- -------------------------------------------------------------------------------
Stephen T. Vehslage 34,839,585 378,816
- -------------------------------------------------------------------------------
</TABLE>
No other person received any votes for election as director.
12
<PAGE>
2. A proposal to approve the Earnings Performance Plan component of the True
North Performance Program:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------
<S> <C> <C>
34,601,318 990,566 197,145
- --------------------------------------------------------------------------------
</TABLE>
4. A proposal to approve certain changes to the Variable Incentive Compensation
component of the True North Performance Program:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------
<S> <C> <C>
33,779,564 1,601,693 407,772
- --------------------------------------------------------------------------------
</TABLE>
5. A proposal to ratify the appointment of Arthur Andersen LLP as independent
auditors for 1998:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------
<S> <C> <C>
35,492,730 189,585 106,714
- --------------------------------------------------------------------------------
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits -
27. Financial Data Schedule.
(b) Reports on Form 8-K - None.
13
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
TRUE NORTH COMMUNICATIONS INC.
(Registrant)
Donald L. Seeley
------------------------------------------------
(Signature)
Donald L. Seeley
Executive Vice President
Chief Financial Officer
Date: August 12, 1998
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONSOLIDATED CONDENSED BALANCE SHEET AS OF JUNE 30, 1998 AND CONSOLIDATED
CONDENSED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1998 INCLUDED IN
THE COMPANY'S FORM 10-Q, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 87,996
<SECURITIES> 0
<RECEIVABLES> 814,348
<ALLOWANCES> 11,408
<INVENTORY> 0
<CURRENT-ASSETS> 996,992
<PP&E> 310,070
<DEPRECIATION> 189,290
<TOTAL-ASSETS> 1,723,381
<CURRENT-LIABILITIES> 1,179,045
<BONDS> 117,076
0
0
<COMMON> 226,646
<OTHER-SE> 77,691
<TOTAL-LIABILITY-AND-EQUITY> 1,723,381
<SALES> 591,536
<TOTAL-REVENUES> 591,536
<CGS> 0
<TOTAL-COSTS> 546,467
<OTHER-EXPENSES> (3,023)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,511
<INCOME-PRETAX> 37,581
<INCOME-TAX> 17,671
<INCOME-CONTINUING> 21,395
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,395
<EPS-PRIMARY> 0.48
<EPS-DILUTED> 0.46
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONSOLIDATED CONDENSED BALANCE SHEET AS OF JUNE 30, 1997 AND CONSOLIDATED
CONDENSED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1997 INCLUDED IN
THE COMPANY'S FORM 10-Q, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS. THIS DATA HAS BEEN RESTATED AS A RESULT OF REGISTRANT'S
POOLING-OF-INTEREST TRANSACTION WHICH WAS CONSUMMATED IN THE FOURTH QUARTER OF
1997.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
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0
0
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</TABLE>
