25-27BPStudyCovers

PRO FORMA EXPENSES (expressed as a percentage of pro forma net revenues)

AGENCIES WITH REVENUES OF:

<$1.25M $1.25-2.5M $2.5-5M $5-10M $10-25M $25-100M >$100M

Compensation

Payroll Employees

48.2%

50.7%

47.7%

33.3%

40.9%

42.0%

46.2%

2.8%

3.6%

2.4%

"Non-employees" (1099 Prods/outsourced)

3.5%

4.6%

2.9%

3.1%

Total Payroll Benefits Payroll Taxes

36.8%

45.5%

44.8%

49.2%

50.9%

54.2%

50.1%

3.1% 1.5% 3.1% 0.3% 8.0% 1.1% 0.3% 1.1% 2.5% 3.3% 0.2% 3.3% 0.3% 0.1% 0.3% 0.7% 0.3% 1.1% 0.9% 0.1% 1.0% 0.3% 0.5% 0.5% 1.7% 0.2% 0.9% 1.2% 4.7% 78.6% 21.4% 25.1% 12.4% 59.0%

3.0% 1.6% 3.4% 0.2% 8.2% 1.5% 0.4% 1.0% 2.9% 2.8% 0.2% 3.2% 0.3% 0.1% 0.3% 0.6% 0.3% 0.9% 0.8% 0.1% 1.3% 0.3% 0.4% 0.9% 2.1% 0.1% 1.6% 0.8% 7.3% 84.1% 15.9% 23.2% 11.5% 62.5%

2.8% 1.3% 3.4% 0.2% 7.8% 1.4% 0.3% 2.0% 3.7% 3.0% 0.2% 3.0% 0.3% 0.1% 0.2% 0.4% 0.2% 0.8% 0.9% 0.1% 1.2% 0.2% 0.8% 0.7% 2.3% 0.0% 5.8% 1.2%

3.2% 0.7% 1.8% 0.3% 6.2% 1.0% 1.0% 2.1% 4.2% 4.2% 0.4% 3.4% 0.8% 0.1% 0.7% 1.1% 0.5% 1.6% 1.3% 0.0% 0.3% 0.4% 0.8% 1.3% 0.9% 0.1% 1.5% 0.4% 4.6% 67.3% 28.8% 30.7% 15.5% 42.9%

3.3% 1.4% 2.4% 0.3% 7.3% 1.3% 0.5% 1.4% 3.3% 4.0% 0.2% 3.4% 0.5% 0.1% 0.6% 1.0% 0.4% 1.5% 1.4% 0.0% 0.4% 0.3% 0.5% 1.6% 1.2% 0.1% 2.1% 0.2% 7.2% 77.7% 21.2% 26.9% 14.4% 52.8%

3.3% 1.8% 2.9% 0.1% 8.1% 1.0% 0.5% 1.3% 2.8% 3.5% 0.3% 3.3% 0.4% 0.1% 0.6% 1.0% 0.3% 1.3% 1.0% 0.1% 0.3% 0.3% 0.5% 0.6% 1.2% 0.2% 0.7% 0.3% 3.6% 72.2% 26.7% 29.9% 12.9% 52.9%

3.1% 1.5% 3.2% 0.2% 8.0% 1.1% 0.4% 1.0% 2.5% 3.2% 0.3% 3.2% 0.3% 0.1% 0.5% 0.8% 0.3% 1.1% 0.9% 0.2% 0.6% 0.3% 0.4% 0.5% 1.2% 0.2% 0.5% 0.4% 2.9% 74.6% 24.9% 27.0% 12.0% 57.3%

Retirement Insurance

Other

Total Benefits

57.8%

Total Compensation

Selling Travel and Ent./Conventions

Automobile Expense Advertising/Promotions

Total Selling

Operating Occupancy Expenses 1

Office Equipment Expenses

IT Expenses Telephone

Postage

Supplies/Printing

Dues/Subscriptions/Contributions

Taxes/Licenses

Insurance

Professional Fees

Bad Debts

Outside Services Education/Training

Miscellaneous Total Operating Administrative Depreciation

11.6%

Amortization of Intangibles

Officer Life

Interest

Other

16.1% 89.2% 10.8% 26.9%

Total Administrative

TOTAL EXPENSES (PRO FORMA)

PRO FORMA PRE-TAX PROFIT/LOSS

PRO FORMA EBITDA 2

1 For firms that own their building and reported a much lower occupancy expense than peer expense load, we have normalized their occupancy expense. 2 Pro Forma EBITDA reflects normalized income and expenses after discretionary owner expenses are eliminated; excludes all administrative expenses.

Cross Category Comparison

24