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The Interpublic Group of Companies, Inc. (IPG)

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Previous Close19.00
Open19.07
Bid18.87 x 1200
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52 Week Range11.63 - 25.20
Volume3,336,328
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Market Cap7.35B
Beta (5Y Monthly)1.00
PE Ratio (TTM)13.01
EPS (TTM)N/A
Earnings DateN/A
Forward Dividend & Yield1.02 (5.37%)
Ex-Dividend DateAug 31, 2020
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  • Interpublic Announces Third Quarter and First Nine Months 2020 Results
    GlobeNewswire

    Interpublic Announces Third Quarter and First Nine Months 2020 Results

    New York, Oct. 21, 2020 (GLOBE NEWSWIRE) --   * Third quarter reported net revenue of $1.95 billion, a decrease of 5.2% from a year ago, with organic net revenue decrease of 3.7%, due to impact of COVID-19 macroeconomic disruption * Third quarter organic change of net revenue was negative 2.4% in the US and was negative 6.0% in International markets * First nine months reported net revenue decrease of 6.7%, and organic net revenue decrease of 4.5% * Third quarter reported net income was $279.7 million, including restructuring charges, and adjusted EBITA was $317.2 million before restructuring charges * Third quarter adjusted EBITA margin of 16.2% before restructuring charges * Third quarter diluted earnings per share of $0.71 and diluted earnings per share of $0.53 as adjusted * First nine months diluted earnings per share of $0.61 and diluted earnings per share of $0.87 as adjusted * Management continued a program of structural operating cost reduction, resulting in restructuring charges in the quarter of $47.3 million * Management highlights exceptional base of talent, continued investment in offerings, and sustained industry leadership Michael Roth, Chairman and CEO, IPG:“At IPG, we continue to stay focused on the safety, health and well-being of our employees, clients, and key partners. In light of the very challenging environment, we are proud of our results in the quarter, and the work our people are doing under such challenging and extraordinary circumstances. This level of performance demonstrates how effectively our companies and our people have adjusted to new ways of working.”“During the quarter, we continued to stay close to clients, and invest in our offerings, while managing operating expenses to revenue. Unquestionably, there will be enduring consumer changes because of the pandemic, including the mass shift to ecommerce, the emergence of digital consumer experience, and a deeper accountability for brand authenticity and purpose. At IPG, we are distinctively well-resourced with outstanding talent and tools to help marketers re-think and re-imagine their brands. Our new business pipeline continues to be active, and has begun to recover relative to earlier this year. We continue our program of structural operating cost reduction to lower our expense base, and raise our margin potential going forward. Our balance sheet and liquidity continue to be further areas of strength.”“Looking forward to our important fourth quarter, visibility remains unclear for as long as COVID-19 is disrupting everyday life and macroeconomic conditions. As always, we will be disciplined in how we manage the business, aligning expenses closely to any changes in revenue. We look forward to returning to our strong trajectory of organic revenue and profit growth as a macro recovery takes hold. We are thankful for the continued close partnership with our clients, and proud of our employees around the world for their outstanding work and productivity despite all the challenges brought by the pandemic.”SummaryRevenue * Third quarter 2020 net revenue was $1.95 billion, compared to $2.06 billion in the third quarter of 2019. During the quarter, the organic net revenue decrease was 3.7%, while the effect of foreign currency translation was negative 0.3%, and the impact of net dispositions was negative 1.2%. Third quarter 2020 total revenue, which includes billable expenses, was $2.13 billion, compared to $2.44 billion in 2019. * First nine months 2020 net revenue was $5.78 billion, compared to $6.19 billion in the first nine months of 2019. During the first nine months of 2020, the organic net revenue decrease was 4.5%, while the effect of foreign currency translation was negative 1.2%, and the impact of net dispositions was negative 1.0%. First nine months 2020 total revenue, which includes billable expenses, was $6.51 billion, compared to $7.32 billion in 2019.Operating Results * Operating income in the third quarter of 2020 was $248.6 million, including restructuring charges of $47.3 million, compared to $280.3 million in 2019. Adjusted EBITA was $317.2 million before restructuring charges in the third quarter of 2020, compared to adjusted EBITA of $302.0 million for the same period in 2019. Adjusted EBITA margin on net revenue was 16.2% before restructuring charges, compared to adjusted EBITA margin of 14.7% in 2019. * Operating income in the first nine months of 2020 was $365.0 million, including restructuring charges of $159.9 million, compared to $594.7 million in 2019. Adjusted EBITA was $589.3 million before restructuring charges in the first nine months of 2020, compared to $691.1 million for the same period in 2019. Adjusted EBITA margin on net revenue was 10.2% before restructuring charges, compared to 11.2% for the same period in 2019. * In the third quarter and first nine months of 2020, the Company recognized restructuring charges of $47.3 million and $159.9 million, respectively. We expect that our restructuring actions in this year's second and third quarters will together result in annualized structural operating expense savings of $110 to $130 million. * Refer to reconciliations on page 12 for further detail.Net Results * Income tax benefit in the third quarter of 2020 was $86.3 million on income before income taxes of $192.6 million, primarily due to an income tax benefit of $136.2 million related to the finalization and settlement of the U.S. Federal income tax audit from years 2006 through 2016. * Third quarter 2020 net income available to IPG common stockholders was $279.7 million, resulting in earnings of $0.72 and $0.71 per basic and diluted share, respectively, compared to $0.43 and $0.42 for the same period in 2019. Adjusted earnings were $0.53 per diluted share, compared to adjusted earnings of $0.49 per diluted share a year ago. Third quarter 2020 adjusted earnings excludes after-tax amortization of acquired intangibles of $17.0 million, after-tax restructuring charges of $36.5 million, an after-tax loss of $6.5 million on the sales of businesses and a net positive impact of $132.6 million from discrete tax items. * Income tax benefit in the first nine months of 2020 was $50.1 million on income before income taxes of $187.7 million, primarily due to an income tax benefit of $136.2 million  related to the finalization and settlement of the U.S. Federal income tax audit from years 2006 through 2016. * First nine months 2020 net income available to IPG common stockholders was $238.8 million, resulting in earnings of $0.61 per basic and diluted share, compared to $0.85 and $0.84 per basic and diluted share, respectively, for the same period in 2019. Adjusted earnings were $0.87 per diluted share compared to adjusted earnings of $1.05 per diluted share a year ago. First nine months 2020 adjusted earnings excludes after-tax amortization of acquired intangibles of $51.7 million, after-tax restructuring charges of $123.7 million, an after-tax loss of $48.8 million on the sales of businesses and a net positive impact of $122.6 million from discrete tax items. * Refer to reconciliations on pages 10 through 14 for further detail.Operating ResultsRevenue Net revenue of $1.95 billion in the third quarter of 2020 decreased 5.2% compared with the same period in 2019. During the quarter, the effect of foreign currency translation was negative 0.3%, the impact of net dispositions was negative 1.2%, and the resulting organic net revenue decrease was 3.7%. Total revenue, which includes billable expenses, was $2.13 billion in the third quarter of 2020, compared to $2.44 billion in 2019.Net revenue of $5.78 billion in the first nine months of 2020 decreased 6.7% compared with the same period in 2019. During the first nine months of 2020, the effect of foreign currency translation was negative 1.2%, the impact of net dispositions was negative 1.0%, and the resulting organic net revenue decrease was 4.5%. Total revenue, which includes billable expenses, was $6.51 billion in the first nine months of 2020, compared to $7.32 billion in 2019.Operating Expenses For the third quarter and first nine months of 2020, total operating expenses, excluding billable expenses, decreased by 4.2% and 3.3%, respectively, and excluding 2020 and first-quarter 2019 restructuring charges, 6.9% and 5.6%, respectively.Salaries and related expenses decreased 4.8% to $1.27 billion during the third quarter of 2020, compared to $1.33 billion for the same period in 2019. The decrease was primarily driven by reductions in base salaries, benefits and tax and lower temporary help in response to the declines in net revenue, primarily due to the effects of the COVID-19 pandemic on economic conditions. The cumulative decreases were partially offset by increased severance and incentive expenses. The increase in incentive expense for the quarter is related to better than projected performance in the quarter as well as timing related adjustments in the comparable prior-year quarter. During the first nine months of 2020, salaries and related expenses decreased 3.3% to $4.00 billion, compared to $4.14 billion for the same period in 2019, primarily driven by factors similar to those noted above for the third quarter of 2020.  Office and other direct expenses decreased as a percentage of net revenue to 15.8% during the third quarter of 2020, compared to 17.8% a year ago, and decreased as a percentage of net revenue to 17.4% during the first nine months of 2020, compared to 18.5% a year ago. The decreases were mainly due to decreases in travel and entertainment expenses and new business and promotion expenses as well as lower occupancy expense and professional consulting fees, partially offset by an increase in bad debt expense and a year-over-year change in contingent acquisition obligations.Selling, general and administrative expenses remained flat as a percentage of net revenue for the third quarter of 2020, compared to the same period in 2019. For the first nine months of 2020, selling, general and administrative expenses decreased as a percentage of net revenue to 0.6%, compared to 1.1% a year ago, primarily attributable to a decrease in employee insurance expense, as well as a decrease in travel and entertainment expenses.Depreciation and amortization slightly increased as a percentage of net revenue to 3.6% during the third quarter of 2020, compared to 3.3% a year ago, and increased as a percentage of net revenue to 3.8% during the first nine months of 2020, compared to 3.4% a year ago.  Restructuring charges in the third quarter and first nine months of 2020 were $47.3 million and $159.9 million, respectively, related to actions taken, with the objective of lowering our operating expenses structurally and permanently relative to revenue and accelerating the transformation of our business. With these actions, the Company is exiting approximately 900,000 square feet of leased space in approximately 60 locations around the world and reducing its global workforce by approximately 2%. Most of these actions are based on our recent experience and learning in the COVID-19 pandemic and a resulting review of our operations, which continues, to address certain operating expenses such as occupancy expense and salaries and related expenses. This compares to restructuring charges of $33.9 million in the first nine months of 2019.Non-Operating Results and Tax Net interest expense increased by $4.5 million to $44.7 million in the third quarter of 2020 from a year ago, and decreased by $3.4 million to $122.7 million in the first nine months of 2020 from a year ago.Other expense, net was $11.3 million in the third quarter of 2020 and $54.6 million in the first nine months of 2020, which primarily included losses on the sales of certain small, non-strategic businesses. The income tax benefit in the third quarter of 2020 was $86.3 million on income before income taxes of $192.6 million, primarily due to an income tax benefit of $136.2 million related to the finalization and settlement of the U.S. Federal income tax audit from years 2006 through 2016. This compares to an income tax provision of $64.6 million for the third quarter of 2019 on income before income taxes of $232.7 million. The income tax benefit in the first nine months of 2020 was $50.1 million on income before income taxes of $187.7 million, primarily driven by the same factor noted above for the third quarter of 2020. This compares to an income tax provision of $118.7 million in the first nine months of 2019 on income before income taxes of $450.5 million. Balance Sheet At September 30, 2020, cash and cash equivalents totaled $1.63 billion, compared to $1.19 billion at December 31, 2019 and $520.5 million on September 30, 2019. Total debt was $3.96 billion at September 30, 2020, compared to $3.33 billion at December 31, 2019. The increase in debt is primarily due to our issuance of $650.0 million in aggregate principal amount of senior notes on March 30, 2020. Common Stock Dividend During the third quarter of 2020, the Company declared and paid a common stock cash dividend of $0.255 per share, for a total of $99.4 million.For further information regarding the Company's financial results as well as certain non-GAAP measures including organic net revenue growth, Adjusted EBITA, adjusted EBITA before restructuring charges and adjusted earnings per diluted share, and the reconciliations thereof, please refer to pages 10 to 14 and our Investor Presentation filed on Form 8-K herewith and available on our website, www.interpublic.com. About Interpublic Interpublic is values-based, data-fueled, and creatively-driven. Major global brands include Acxiom, Craft, FCB (Foote, Cone & Belding), FutureBrand, Golin, Huge, Initiative, Jack Morton, Kinesso, MAGNA, McCann, Mediahub, Momentum, MRM, MullenLowe Group, Octagon, R/GA, UM and Weber Shandwick. Other leading brands include Avrett Free Ginsberg, Campbell Ewald, Carmichael Lynch, Deutsch, Hill Holliday, ID Media and The Martin Agency. For more information, please visit www.interpublic.com. Contact Information Tom Cunningham (Press) (212) 704-1326Jerry Leshne (Analysts, Investors) (212) 704-1439Cautionary StatementThis release contains forward-looking statements. Statements in this release that are not historical facts, including statements about management’s beliefs and expectations, constitute forward-looking statements. These statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined under item 1A, Risk Factors, in our most recent Annual Report on Form 10-K and our quarterly reports on Form 10-Q and our other filings with the Securities and Exchange Commission ("SEC"). Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, the following: * * the effects of a challenging economy on the demand for our advertising and marketing services, on our clients' financial condition and on our business or financial condition; * the outbreak of the novel coronavirus (COVID-19), including the measures to contain its spread, and the impact on the economy and demand for our services, which may precipitate or exacerbate other risks and uncertainties; * our ability to attract new clients and retain existing clients; * our ability to retain and attract key employees; * risks associated with assumptions we make in connection with our critical accounting estimates, including changes in assumptions associated with any effects of a weakened economy; * potential adverse effects if we are required to recognize impairment charges or other adverse accounting-related developments; * risks associated with the effects of global, national and regional economic and political conditions, including counterparty risks and fluctuations in economic growth rates, interest rates and currency exchange rates; * developments from changes in the regulatory and legal environment for advertising and marketing and communications services companies around the world; and * failure to realize the anticipated benefits on the acquisition of the Acxiom business.Investors should carefully consider these factors and the additional risk factors outlined in more detail under Item 1A, Risk Factors, in our most recent Annual Report on Form 10-K and our quarterly reports on Form 10-Q and our other SEC filings. THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED SUMMARY OF EARNINGS THIRD QUARTER REPORT 2020 AND 2019 (Amounts in Millions except Per Share Data) (UNAUDITED)       Three Months Ended September 30,   2020 2019 Fav. (Unfav.) % Variance Revenue:       Net Revenue$1,954.6   $2,061.4   (5.2)%  Billable Expenses170.9   376.7   (54.6)% Total Revenue2,125.5   2,438.1   (12.8)%         Operating Expenses:       Salaries and Related Expenses1,269.9   1,334.4   4.8 %  Office and Other Direct Expenses307.9   367.9   16.3 %  Billable Expenses170.9   376.7   54.6 %  Cost of Services1,748.7   2,079.0   15.9 %  Selling, General and Administrative Expenses9.9   9.8   (1.0)%  Depreciation and Amortization 71.0   69.0   (2.9)%  Restructuring Charges47.3   0.0   >(100)% Total Operating Expenses1,876.9   2,157.8   13.0 % Operating Income248.6   280.3   (11.3)%         Expenses and Other Income:       Interest Expense(50.8)  (49.7)     Interest Income6.1   9.5      Other Expense, Net(11.3)  (7.4)    Total (Expenses) and Other Income(56.0)  (47.6)            Income Before Income Taxes192.6   232.7      (Benefit of) Provision for Income Taxes(86.3)  64.6     Income of Consolidated Companies278.9   168.1      Equity in Net (Loss) Income of Unconsolidated Affiliates(0.4)  0.3     Net Income 278.5   168.4      Net Loss (Income) Attributable to Noncontrolling Interests1.2   (2.8)    Net Income Available to IPG Common Stockholders$279.7   $165.6            Earnings Per Share Available to IPG Common Stockholders:      Basic$0.72   $0.43     Diluted$0.71   $0.42            Weighted-Average Number of Common Shares Outstanding:      Basic389.6   386.7     Diluted393.9   391.8            Dividends Declared Per Common Share$0.255   $0.235     THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED SUMMARY OF EARNINGS THIRD QUARTER REPORT 2020 AND 2019 (Amounts in Millions except Per Share Data) (UNAUDITED)       Nine Months Ended September 30,   2020 2019 Fav. (Unfav.) % Variance Revenue:       Net Revenue$5,780.1   $6,192.1   (6.7)%  Billable Expenses730.9   1,127.4   (35.2)% Total Revenue6,511.0   7,319.5   (11.0)%         Operating Expenses:       Salaries and Related Expenses3,998.8   4,136.7   3.3 %  Office and Other Direct Expenses1,003.1   1,144.4   12.3 %  Billable Expenses730.9   1,127.4   35.2 %  Cost of Services5,732.8   6,408.5   10.5 %  Selling, General and Administrative Expenses36.4   69.3   47.5 %  Depreciation and Amortization 216.9   213.1   (1.8)%  Restructuring Charges159.9   33.9   >(100)% Total Operating Expenses6,146.0   6,724.8   8.6 % Operating Income365.0   594.7   (38.6)%         Expenses and Other Income:       Interest Expense(145.4)  (151.1)     Interest Income22.7   25.0      Other Expense, Net(54.6)  (18.1)    Total (Expenses) and Other Income(177.3)  (144.2)            Income Before Income Taxes187.7   450.5      (Benefit of) Provision for Income Taxes(50.1)  118.7     Income of Consolidated Companies237.8   331.8      Equity in Net Loss of Unconsolidated Affiliates(0.6)  (0.1)    Net Income237.2   331.7      Net Loss (Income) Attributable to Noncontrolling Interests1.6   (4.6)    Net Income Available to IPG Common Stockholders$238.8   $327.1             Earnings Per Share Available to IPG Common Stockholders:      Basic$0.61   $0.85     Diluted$0.61   $0.84            Weighted-Average Number of Common Shares Outstanding:      Basic388.9   385.8     Diluted392.6   390.3            Dividends Declared Per Common Share$0.765   $0.705     THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES U.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS (Amounts in Millions except Per Share Data) (UNAUDITED)  Three Months Ended September 30, 2020  As Reported Amortization of Acquired Intangibles  Restructuring Charges Net Losses on Sales of Businesses1 Net Impact of Various Discrete Tax Items2 Adjusted    Results (Non-GAAP) Operating Income and Adjusted EBITA before Restructuring Charges3$248.6   $(21.3)  $(47.3)      $317.2                Total (Expenses) and Other Income4(56.0)      $(8.6)    (47.4)  Income Before Income Taxes192.6   (21.3)  (47.3)  (8.6)    269.8   (Benefit of) Provision for Income Taxes(86.3)  4.3   10.8   2.1   $132.6   63.5   Equity in Net Loss of Unconsolidated Affiliates(0.4)          (0.4)  Net Loss Attributable to Noncontrolling Interests1.2           1.2   Net Income Available to IPG Common Stockholders$279.7   $(17.0)  $(36.5)  $(6.5)  $132.6   $207.1                             Weighted-Average Number of Common Shares Outstanding - Basic389.6           389.6   Dilutive effect of stock options and restricted shares4.3           4.3   Weighted-Average Number of Common Shares Outstanding - Diluted393.9           393.9                             Earnings per Share Available to IPG Common Stockholders5:              Basic$0.72   $(0.04)  $(0.09)  $(0.02)  $0.34   $0.53     Diluted$0.71   $(0.04)  $(0.09)  $(0.02)  $0.34   $0.53                1 Includes losses on complete dispositions of businesses and the classification of certain assets as held for sale. 2 Includes a tax benefit of $136.2 related to the finalization and settlement of the U.S. Federal income tax audit for years 2006 through 2016 partially offset by $3.6 of tax expense related to the estimated costs associated with our change in our APB 23 assertion for certain foreign subsidiaries. 3 Refer to non-GAAP reconciliation of Adjusted EBITA before Restructuring Charges on page 12. 4  Consists of non-operating expenses including interest expense, net  and other expense, net. 5 Earnings per share may not add due to rounding. Note: Management believes the resulting comparisons provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES U.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS (Amounts in Millions except Per Share Data) (UNAUDITED)  Nine Months Ended September 30, 2020  As Reported Amortization of Acquired Intangibles  Restructuring Charges Net Losses on Sales of Businesses1 Net Impact of Various Discrete Tax Items2 Adjusted Results   (Non-GAAP) Operating Income and Adjusted EBITA before Restructuring Charges3$365.0   $(64.4)  $(159.9)      $589.3                Total (Expenses) and Other Income4(177.3)      $(51.8)    (125.5)  Income Before Income Taxes187.7   (64.4)  (159.9)  (51.8)    463.8   (Benefit of) Provision for Income Taxes(50.1)  12.7   36.2   3.0   $122.6   124.4   Equity in Net Loss of Unconsolidated Affiliates(0.6)          (0.6)  Net Loss Attributable to Noncontrolling Interests1.6           1.6   Net Income Available to IPG Common Stockholders$238.8   $(51.7)  $(123.7)  $(48.8)  $122.6   $340.4                             Weighted-Average Number of Common Shares Outstanding - Basic388.9           388.9   Dilutive effect of stock options and restricted shares3.7           3.7   Weighted-Average Number of Common Shares Outstanding - Diluted392.6           392.6                             Earnings per Share Available to IPG Common Stockholders5:              Basic$0.61   $(0.13)  $(0.32)  $(0.13)  $0.32   $0.88     Diluted$0.61   $(0.13)  $(0.32)  $(0.12)  $0.31   $0.87                1 Includes losses on complete dispositions of businesses and the classification of certain assets as held for sale. 2  Includes a tax benefit of $136.2 related to the finalization and settlement of the U.S. Federal income tax audit for years 2006 through 2016 partially offset by $13.6 of tax expense related to the estimated costs associated with our change in our APB 23 assertion for certain foreign subsidiaries. 3 Refer to non-GAAP reconciliation of Adjusted EBITA before Restructuring Charges on page 12. 4  Consists of non-operating expenses including interest expense, net and other expense, net. 5 Earnings per share may not add due to rounding. Note: Management believes the resulting comparisons provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES U.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS (Amounts in Millions) (UNAUDITED)    Three Months Ended September 30, Nine Months Ended September 30,  2020 2019 2020 2019          Net Revenue$1,954.6   $2,061.4   $5,780.1   $6,192.1                     Non-GAAP Reconciliation:         Net Income Available to IPG Common Stockholders$279.7   $165.6   $238.8   $327.1            Add Back:         (Benefit of) Provision for Income Taxes(86.3)  64.6   (50.1)  118.7   Subtract:         Total (Expenses) and Other Income(56.0)  (47.6)  (177.3)  (144.2)  Equity in Net (Loss) Income of Unconsolidated Affiliates(0.4)  0.3   (0.6)  (0.1)  Net Loss (Income) Attributable to Noncontrolling Interests1.2   (2.8)  1.6   (4.6)  Operating Income248.6   280.3   365.0   594.7            Add Back:         Amortization of Acquired Intangibles21.3   21.7   64.4   64.6            Adjusted EBITA$269.9   $302.0   $429.4   $659.3   Adjusted EBITA Margin on Net Revenue %13.8 % 14.7 % 7.4 % 10.6 %          Restructuring Charges1 47.3   N/A 159.9   31.8            Adjusted EBITA before Restructuring Charges$317.2   N/A $589.3   $691.1   Adjusted EBITA before Restructuring Charges Margin on Net Revenue %16.2 % N/A 10.2 % 11.2 %          1 In the second and third quarters of 2020, the Company took restructuring actions to lower our operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business. The adjustment of $31.8 for restructuring charges for the nine months ended September 30, 2019 only includes restructuring charges from the the first quarter of 2019, which relate to a cost initiative to better align our cost structure with our revenue due to client losses occurred in 2018. Note: Management believes the resulting comparisons provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES U.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS (Amounts in Millions except Per Share Data) (UNAUDITED)    Three Months Ended September 30, 2019  As Reported Amortization of Acquired Intangibles  Net Losses on Sales of Businesses1 Adjusted Results   (Non-GAAP) Operating Income and Adjusted EBITA2$280.3   $(21.7)    $302.0            Total (Expenses) and Other Income3(47.6)    $(7.7)  (39.9)  Income Before Income Taxes 232.7   (21.7)  (7.7)  262.1   Provision for Income Taxes64.6   4.2   —   68.8   Equity in Net Income of Unconsolidated Affiliates0.3       0.3   Net Income Attributable to Noncontrolling Interests(2.8)      (2.8)  Net Income Available to IPG Common Stockholders$165.6   $(17.5)  $(7.7)  $190.8                     Weighted-Average Number of Common Shares Outstanding - Basic386.7       386.7   Dilutive effect of stock options and restricted shares5.1       5.1   Weighted-Average Number of Common Shares Outstanding - Diluted391.8       391.8                     Earnings per Share Available to IPG Common Stockholders4:          Basic$0.43   $(0.05)  $(0.02)  $0.49     Diluted$0.42   $(0.04)  $(0.02)  $0.49            1 Includes losses on complete dispositions of businesses and the classification of certain assets as held for sale. 2 Refer to non-GAAP reconciliation of Adjusted EBITA on page 12. 3 Consists of non-operating expenses including interest expense, net and other expense, net. 4 Earnings per share may not add due to rounding. Note: Management believes the resulting comparisons provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES U.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS (Amounts in Millions except Per Share Data) (UNAUDITED)    Nine Months Ended September 30, 2019  As Reported Amortization of Acquired Intangibles  Q1 2019 Restructuring Charges Net Losses on Sales of Businesses1 Settlement of Certain Tax Positions Adjusted Results     (Non-GAAP) Operating Income and Adjusted EBITA before Restructuring Charges2 $594.7   $(64.6)  $(31.8)      $691.1                Total (Expenses) and Other Income3 (144.2)      $(22.3)    (121.9)  Income Before Income Taxes 450.5   (64.6)  (31.8)  (22.3)    569.2   Provision for Income Taxes118.7   12.6   7.6   —   $13.9   152.8   Equity in Net Loss of Unconsolidated Affiliates(0.1)          (0.1)  Net Income Attributable to Noncontrolling Interests(4.6)          (4.6)  Net Income Available to IPG Common Stockholders$327.1   $(52.0)  $(24.2)  $(22.3)  $13.9   $411.7                             Weighted-Average Number of Common Shares Outstanding - Basic385.8           385.8   Dilutive effect of stock options and restricted shares4.5           4.5   Weighted-Average Number of Common Shares Outstanding - Diluted390.3           390.3                             Earnings per Share Available to IPG Common Stockholders4:              Basic$0.85   $(0.13)  $(0.06)  $(0.06)  $0.04   $1.07     Diluted$0.84   $(0.13)  $(0.06)  $(0.06)  $0.04   $1.05                1 Includes losses on complete dispositions of businesses and the classification of certain assets as held for sale. 2 Refer to non-GAAP reconciliation of Adjusted EBITA before Restructuring Charges on page 12. 3 Consists of non-operating expenses including interest expense, net and other expense, net. 4 Earnings per share may not add due to rounding. Note: Management believes the resulting comparisons provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance.

  • Interpublic Group Announces CEO Succession
    GlobeNewswire

    Interpublic Group Announces CEO Succession

    Philippe Krakowsky Elected Chief Executive Officer of Interpublic Group Effective January 1, 2021 IPG Chairman and CEO Michael I. Roth to Assume Role of Executive ChairmanNew York, Oct. 21, 2020 (GLOBE NEWSWIRE) --  Interpublic Group (NYSE: IPG) Board of Directors announced today that it has named Philippe Krakowsky as IPG Chief Executive Officer and a member of the Board of Directors, effective January 1, 2021. Michael I. Roth, the current Chairman and Chief Executive Officer will remain in his current role until January 1, 2021 when he will become Executive Chairman of the Board. Mr. Krakowsky is currently the Executive Vice President and Chief Operating Officer of IPG and the Chairman of IPG Mediabrands, with direct oversight of several IPG companies."Philippe is the right CEO for the next era at IPG," said Roth. "He is a brilliant strategist and effective leader who has played a key role in developing our open architecture client service model, as well as modernizing our data, marketing services and media solutions. Our partnership over the years has been a key factor in our long-term success with both clients and our people.” “Through his multiple experiences running businesses and corporate functions at IPG, Philippe has built an outstanding track record of delivering growth for clients and IPG. In working with him for these past 18 years, I’ve seen firsthand that Philippe is a values-driven leader who is well-positioned to lead IPG and our clients into a new era of marketing. He cares about people and leads with his head and his heart,” Roth added.Roth joined the IPG board in 2002 and chaired its Audit Committee until his appointment as Executive Chairman and co-CEO in 2004, and CEO in 2005. During his tenure as CEO, Roth righted the company’s financial course and made IPG an industry leader through organizational and financial restructuring, building a culture of collaboration, and ensuring IPG remained ahead of its peers through the early adoption of data-centric and digital-first tools across the entire organization.  As a result, in each of the past five years, IPG’s growth rate has outperformed the industry average, and total shareholder return has topped IPG’s peer group over trailing one-, three-, five-, and 10-year periods, marking a reliable level of achievement and progress during a time that saw significant change in the industry with constantly evolving market dynamics. Roth’s tenure is also highlighted by his commitment and investment towards diversity and inclusion as a cornerstone of the organization. Under Roth’s leadership, IPG made diversity and inclusion a key aspect of how IPG’s leadership team and individual businesses are graded and introduced ambitious goals to create long-term culture change. Since Roth began implementing IPG’s formal diversity and inclusion programs, the company has seen important shifts in its workforce for people of color and women; however, as Roth has consistently said, “There is still much work to be done on this front.”“Michael’s leadership of IPG has been and continues to be outstanding. He has substantially transformed the company and ushered in a new era of modern marketing solutions," said David Thomas, Presiding Director of the IPG Board of Directors.  "He has taken bold strategic actions to reposition IPG for the future, focusing the company on the right business lines, growing digital and data capabilities organically and through acquisition, all while advancing diversity and employee engagement and setting the industry standard for growth and margin expansion. As Executive Chairman of IPG, Michael will work closely with the Board and with Philippe in his new role and with senior company executives on continuing to manage through changes related to COVID-19 and help shape the future of IPG.”"Having led one of the great turnarounds in American business, and establishing a strong foundation for its future, Michael has transformed IPG into an industry leader, and the Board is confident that Philippe is the right CEO for IPG’s next phase of continued value creation for all of our stakeholders," Thomas continued.  "Working with Michael, our multi-year succession process found in Philippe a leader with empathy, operational and management skills, a respect for talent and a vision for a digital-and-data-first marketing company – all of which will guide IPG at this fast-moving time.” “Philippe operates at that rare intersection of courage, drive and emotional intelligence. He looks to the future and sets ambitious goals for the company and its leaders – and he succeeds because he is a true collaborator who shares success with the team and uplifts them during the hard days. He’s been a strategic partner to me over the past 18 years, helping make IPG the company it is today,” added Roth. “It’s an honor to be elected as the next Chief Executive Officer of IPG, and I appreciate the confidence that Michael and the Board have placed in me,” said Krakowsky.  “With our people, agency brands, technology companies, and culture, we are uniquely positioned to help our clients solve their toughest business challenges. I am looking forward to working with our fifty-thousand people and all our clients around the world at this unique time, where we are seeing changes in media and consumer behavior accelerate at incredible speed. We have great opportunities ahead to help clients deepen their relationships with their customers, doing so efficiently, creatively and at-scale.”Krakowsky, 58, is Executive Vice President and Chief Operating Officer for IPG, where he works with the CEO to manage business operations across Interpublic. Philippe is also the Chairman of Mediabrands and oversees IPG’s independent companies Acxiom, Carmichael Lynch, Deutsch, Hill Holliday, Huge, Kinesso, Matterkind and R/GA. During his 18 years at IPG, Philippe has also overseen communications, business development, strategy and talent functions, and he remains the Chief Strategy Officer for IPG. Prior to being named COO at IPG, Philippe also held the role of CEO of Mediabrands, leading the 10,500-person unit that oversees marketing investment for many of the world’s most iconic brands. He has served on the boards of several IPG companies, including Huge and the IPG-backed O’Keefe Reinhard & Paul; he mentors start-ups as part of R/GA’s Accelerator; and he served as interim CEO of FCB for much of 2013, during the agency’s leadership transition. Originally from Mexico, Philippe holds an A.B. from Harvard University. He started his career as part of a team that built and ultimately sold an artificial intelligence software company to Apple Computer. About Interpublic Interpublic is values-based, data-fueled, and creatively-driven. Major global brands include Acxiom, Craft, FCB (Foote, Cone & Belding), FutureBrand, Golin, Huge, Initiative, Jack Morton, Kinesso, MAGNA, McCann, Mediahub, Momentum, MRM, MullenLowe Group, Octagon, R/GA, UM and Weber Shandwick. Other leading brands include Avrett Free Ginsberg, Campbell Ewald, Carmichael Lynch, Deutsch, Hill Holliday, ID Media and The Martin Agency. For more information, please visit www.interpublic.com. Contact Information Tom Cunningham (Press) (212) 704-1326Jerry Leshne (Analysts, Investors) (212) 704-1439

  • GlobeNewswire

    Interpublic Announces Leadership Succession at McCann Worldgroup

    Bill Kolb Named Chairman and CEO, Harris Diamond to Retire at Year EndNew York, Oct. 15, 2020 (GLOBE NEWSWIRE) --   Interpublic Group (NYSE: IPG) announced today senior leadership succession at its McCann Worldgroup unit. Bill Kolb has been named Chairman and CEO, succeeding Harris Diamond, who will be retiring at the end of the year.“Bill understands the business needs of our clients, across a range of industries, disciplines and geographies. Bill, along with the exceptional talent we have in place across the organization, gives me confidence that we will continue to build on the progress and success we’ve seen at Worldgroup,” said Michael I. Roth, Chairman and CEO of IPG. “Bill’s long and successful history at McCann spans over two decades, and uniquely positions him to develop the Worldgroup model for the future. With the transition support of Harris, we’re confident the company can continue to deliver on its vision of being the world’s top creatively-driven marketing services organization.”Kolb, 57, who most recently served as McCann Worldgroup’s Chief Operating Officer, is a recognized global leader in marketing and integrated communications, both in growing a diversified range of marketing services and in providing them as collaborative growth capabilities to many of the world’s leading brands. Prior to his role as COO, Kolb served as Global President, Diversified Agencies, driving key practice areas and disciplines, including technology and innovation, health, and data analytics across all of McCann Worldgroup’s networks. He first joined McCann Worldgroup in 2000 working across Momentum, MRM and McCann and holding various top-level roles ranging from CFO to CEO. In addition, he has been instrumental in the inception and growth of Commonwealth//McCann, the agency handling the global Chevrolet account, and the development and expansion of MRM, the award-winning customer relationship agency. Prior to McCann, his career included positions in the publishing, finance, real estate and oil industries. Kolb said, “Having been a part of McCann Worldgroup for over 20 years, I have seen the remarkable things our people are capable of, around the world, and could not be more honored to step into this role. Our vision of helping brands play a meaningful role in people’s lives, powered by creativity, has not only fueled our recent success, it’s an ambition that has never been more relevant. Working with the exceptional senior team that we have in place, I look forward to continuing to enhance McCann’s great legacy.”Roth said of Diamond, “During Harris’s time at McCann, the agency has built a strong record of success and recognition from its clients, the industry and the media. He has also empowered one of the strongest leadership teams in the business, which will ensure this transition is a seamless process. In his almost 20 years with IPG, Harris has shaped and built key parts of our organization and helped drive progress across the company. On behalf of IPG, I thank him for all of his contributions and wish him much success as he moves into the next chapter of his outstanding career.” Diamond joined McCann Worldgroup in 2012 from IPG’s multidiscipline Constituency Management Group (CMG) where he served as CEO.  Harris first joined IPG when he became CEO of Weber Shandwick in 2001 following the IPG acquisition of BSMG, a leading public relations firm, where he was a founding partner and CEO, and combined it with Weber Shandwick.“After 35 years of building a PR business and leading several global marketing communications networks at IPG, it’s time for me to look at new horizons. I am proud of all that the McCann Worldgroup team has accomplished and pleased that Bill will take the reins of McCann and drive us forward.” said Diamond.  “I owe a tremendous debt of thanks to so many clients and colleagues, particularly the senior teams at McCann Worldgroup, Weber Shandwick, CMG, and IPG who have truly been, to the extent I have been successful, keys to that success.”Under Diamond’s leadership at McCann Worldgroup, the network has been recognized by Adweek as the 2019 Global Agency of the Year and named to Fast Company’s prestigious list of the World’s Most Innovative Companies for 2020. The network was named Network of the Year at the 2019 Cannes Lions International Festival of Creativity and ranked 1 on the 2018, 2019, and 2020 Global Effie Effectiveness Index and Harris was recognized by Ad Age as “Executive of the Year.” In the public relations field, Harris was named “PR Agency Executive of the Decade” by The Holmes Report in 2010 and has been cited by PR Week as one of “The 20 most influential communicators” of the past two decades and one of the “100 most influential PR people in the 20th Century.” About Interpublic Interpublic is values-based, data-fueled, and creatively-driven. Major global brands include Acxiom, Craft, FCB (Foote, Cone & Belding), FutureBrand, Golin, Huge, Initiative, Jack Morton, Kinesso, MAGNA, McCann, Mediahub, Momentum, MRM, MullenLowe Group, Octagon, R/GA, UM and Weber Shandwick. Other leading brands include Avrett Free Ginsberg, Campbell Ewald, Carmichael Lynch, Deutsch, Hill Holliday, ID Media and The Martin Agency. For more information, please visit www.interpublic.com.About McCann WorldgroupMcCann Worldgroup, part of the Interpublic Group (NYSE: IPG), is a leading global marketing solutions network whose professionals are united across 100+ countries by a single vision: To help brands play a meaningful role in people's lives. McCann Worldgroup was named "Global Agency of the Year" by Adweek magazine, “Network of the Year” by the Cannes Lions, the world's most creatively-effective marketing services company by the Effie Awards (for three consecutive years), "Global Network of the Year" by Campaign Magazine and “Network of The Year” by The Webby Awards. Fast Company named McCann Worldgroup to its list of The World’s Most Innovative Companies. The network comprises McCann (advertising), MRM (science/technology/relationship marketing), Momentum Worldwide (total brand experience), McCann Health (professional/dtc communications), and CRAFT (production). Contact InformationTom Cunningham (Press for IPG) (212) 704-1326Jeremy Miller (Press for McCann Worldgroup) (646) 865-3858Jerry Leshne (Analysts, Investors) (212) 704-1439