New York, Feb. 10, 2021 (GLOBE NEWSWIRE) --
Philippe Krakowsky, CEO of IPG:
"Our focus remains on mitigating the impact of the health crisis on our clients, our business, and most important, our people. Their achievements have been remarkable, and I want to express our admiration for their resilience, and our appreciation for their ongoing commitment and effort.”
“As expected, our results this quarter continue to reflect the effect of the pandemic. Under challenging conditions, we reported a solid fourth quarter, especially in the U.S., and full year performance that once again should place us at the top of our sector. We continued to be disciplined with respect to expenses, proactive and strategic in our approach to structural cost actions, while simultaneously investing in our business during the year to accelerate areas of strongest opportunity and growth. That investment continues to result in differentiated capabilities and forward-looking offerings, which are in demand and driving success in the marketplace.”
“Heading into 2021, we are confident of the strength and competitiveness of our offerings, the talent within our group, and the value that our services can deliver by ensuring that clients' businesses and brands thrive in the digital economy. Our commitment to a strong balance sheet and financial flexibility remains a key priority, and the action by our Board announced today to increase our dividend further speaks to confidence in the forward trajectory of our company. While visibility into the full year remains challenging, due to exceptional macroeconomic circumstances, we fully expect to return to positive organic growth over the course of the year, and to post full-year 2021 growth consistent with the industry, on top of IPG’s 2020 outperformance relative to our peer group. Along with that growth, we expect to continue to build on our long-term record of improving profitability and sustained value creation.”
Summary
Revenue
Operating Results
Net Results
Operating Results
RevenueDuring the fourth quarter of 2020, net revenue of $2.28 billion decreased 6.1% compared to the same period in 2019. During the quarter, the effect of foreign currency translation was positive 0.1%, the impact of net divestitures was negative 0.8%, and the resulting organic revenue decrease was 5.4%. Total revenue of $2.55 billion in the fourth quarter of 2020 decreased 12.1% compared to 2019.
For the full year 2020, net revenue of $8.06 billion decreased 6.5% compared to the same period in 2019. During the year, the effect of foreign currency translation was negative 0.8%, the impact of net divestitures was negative 0.9%, and the resulting organic revenue decrease was 4.8%. Total revenue of $9.06 billion decreased 11.4% during the full year 2020 compared to 2019.
Operating ExpensesFor the fourth quarter of 2020, total operating expenses, excluding billable expenses and including restructuring charges, increased by 6.1%, and excluding restructuring charges decreased by 6.9%, compared to a net revenue decrease of 6.1% for the same period. For the full year 2020, total operating expenses, excluding billable expenses and including restructuring charges, decreased by 0.8%, and excluding restructuring charges decreased by 5.9%, compared to a net revenue decrease of 6.5% from a year ago.
Staff cost ratio, which is total salaries and related expenses as a percentage of net revenue, was 58.9% in the fourth quarter of 2020, which remained flat compared to the same period in 2019. For the full year 2020, staff cost ratio was 66.3%, compared to 64.6% in the same period in 2019. During the fourth quarter of 2020, salaries and related expenses were $1.35 billion, a decrease of 6.0% compared to the same period in 2019. For the full year 2020, salaries and related expenses were $5.35 billion, a decrease of 4.0% compared to 2019. The decrease was primarily driven by reductions in base salaries, benefits and tax and lower incentive and temporary help expenses in response to the declines in net revenue, which were primarily due to the impact of the COVID-19 pandemic on economic conditions. The decreases were partially offset by increased severance expense.
For the fourth quarter and full year 2020, office and other direct expenses as a percentage of net revenue decreased to 16.0% and 17.0%, respectively, from 17.3% and 18.1%, respectively, for the same periods in 2019. During the fourth quarter of 2020, office and other direct expenses were $364.8 million, a decrease of 13.1% compared to the same period in 2019. For the full year 2020, office and other direct expenses were $1.37 billion, a decrease of 12.5% compared to 2019. The decrease in office and other direct expenses was 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.
For the fourth quarter of 2020, selling, general and administrative expenses as a percentage of net revenue was 1.0%, which remained flat compared to the same period in 2019. For the full year 2020 selling, general and administrative expenses as a percentage of net revenue decreased to 0.7%, from 1.1% in 2019. During the fourth quarter of 2020, selling, general and administrative expenses were $22.4 million, a decrease of 8.6% compared to the same period in 2019. For the full year 2020, selling, general and administrative expenses were $58.8 million, a decrease of 37.3% compared to 2019. The decrease was primarily attributable to a decrease in employee insurance expense, resulting from fewer insurance claims as well as lower incentive expense and travel and entertainment expenses.
For the fourth quarter and full year 2020, depreciation and amortization as a percentage of net revenue was 3.2% and 3.6%, respectively, compared to 2.7% and 3.2%, respectively, for the same periods in 2019. During the fourth quarter of 2020, depreciation and amortization was $73.7 million, an increase of 12.7% compared to the same period in 2019. For the full year 2020, depreciation and amortization was $290.6 million, an increase of 4.3% compared to 2019.
During the fourth quarter and full year 2020, restructuring charges were $253.9 million and $413.8 million, respectively, due to actions taken, with the objective of lowering our operating expenses structurally and permanently relative to revenue and accelerating the transformation of our business. The non-cash component of these charges was $169.9 million and $265.6 million for the fourth quarter and full year 2020, respectively. The majority of our charges reflect our actions to exit leased space totaling approximately 1.7 million square feet over the course of the year, in approximately 120 locations around the world.
Non-Operating Results and TaxNet interest expense increased by $1.3 million to $40.0 million in the fourth quarter of 2020 from a year ago. Full year 2020 net interest expense decreased by $2.1 million to $162.7 million from a year ago.
Other expense, net was $9.8 million for the fourth quarter of 2020 and $64.4 million for the full year 2020, which primarily included losses on the sales of certain small, non-strategic businesses.
The income tax provision in the fourth quarter of 2020 was $58.1 million on income before income taxes of $173.6 million, compared to a provision of $86.1 million on income before income taxes of $427.8 million in the same period in 2019. The income tax provision for the full year 2020 was $8.0 million on income before income taxes of $361.3 million, compared to a provision of $204.8 million on income before income taxes of $878.3 million in 2019. The decrease in the provision for the full year 2020 is primarily due to an income tax benefit related to the finalization and settlement of the U.S. Federal income tax audit of the years 2006 through 2016.
The effective tax rate for the fourth quarter of 2020 was 33.5% compared to 20.1% for the same period in 2019. Excluding the impacts of amortization of acquired intangibles, restructuring charges, and losses on the sales of businesses, the effective tax rate for the fourth quarter of 2020 was 26.1% compared to 24.5% in 2019 as similarly adjusted. The effective tax rate for the full year 2020 was 2.2% compared to 23.3% for the same period in 2019. Excluding the impacts of amortization of acquired intangibles, restructuring charges, net losses on the sales of businesses, and the net positive impact of various discrete tax items, the effective tax rate for the full year 2020 was 26.5% compared to 25.8% in 2019 as similarly adjusted.
Balance SheetAt December 31, 2020, cash and cash equivalents totaled $2.51 billion, compared to $1.19 billion at December 31, 2019. Total debt was $3.47 billion at December 31, 2020, compared to $3.33 billion at December 31, 2019.
Common Stock DividendDuring the fourth quarter of 2020, the Company declared and paid a common stock cash dividend of $0.255 per share, for a total of $99.5 million. During 2020, the Company paid four quarterly cash dividends of $0.255 per share on our common stock, which corresponded to aggregate dividend payments of $398.1 million for the full year.
On February 10, 2021, the Company also announced that its Board of Directors has declared a common stock cash dividend of $0.27 per share, payable quarterly to holders of record on an ongoing basis.
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 11 to 15 and our Investor Presentation filed on Form 8-K herewith and available on our website, www.interpublic.com.
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About InterpublicInterpublic 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, Matterkind, 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 InformationTom Cunningham (Press) (212) 704-1326
Jerry Leshne (Analysts, Investors) (212) 704-1439
Cautionary Statement
This 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 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:
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 other SEC filings.
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED SUMMARY OF EARNINGS FOURTH QUARTER REPORT 2020 AND 2019 (Amounts in Millions except Per Share Data) (UNAUDITED) | |||||||||||
Three Months Ended December 31, | |||||||||||
2020 | 2019 | Fav. (Unfav.) % Variance | |||||||||
Revenue: | |||||||||||
Net Revenue | $ | 2,284.4 | $ | 2,433.0 | (6.1) | % | |||||
Billable Expenses | 265.6 | 468.8 | (43.3) | % | |||||||
Total Revenue | 2,550.0 | 2,901.8 | (12.1) | % | |||||||
Operating Expenses: | |||||||||||
Salaries and Related Expenses | 1,346.2 | 1,432.1 | 6.0 | % | |||||||
Office and Other Direct Expenses | 364.8 | 419.7 | 13.1 | % | |||||||
Billable Expenses | 265.6 | 468.8 | 43.3 | % | |||||||
Cost of Services | 1,976.6 | 2,320.6 | 14.8 | % | |||||||
Selling, General and Administrative Expenses | 22.4 | 24.5 | 8.6 | % | |||||||
Depreciation and Amortization | 73.7 | 65.4 | (12.7) | % | |||||||
Restructuring Charges | 253.9 | 0.0 | >(100)% | ||||||||
Total Operating Expenses | 2,326.6 | 2,410.5 | 3.5 | % | |||||||
Operating Income | 223.4 | 491.3 | (54.5) | % | |||||||
Expenses and Other Income: | |||||||||||
Interest Expense | (46.8) | (48.2) | |||||||||
Interest Income | 6.8 | 9.5 | |||||||||
Other Expense, Net | (9.8) | (24.8) | |||||||||
Total (Expenses) and Other Income | (49.8) | (63.5) | |||||||||
Income Before Income Taxes | 173.6 | 427.8 | |||||||||
Provision for Income Taxes | 58.1 | 86.1 | |||||||||
Income of Consolidated Companies | 115.5 | 341.7 | |||||||||
Equity in Net Income of Unconsolidated Affiliates | 1.5 | 0.5 | |||||||||
Net Income | 117.0 | 342.2 | |||||||||
Net Income Attributable to Noncontrolling Interests | (4.7) | (13.3) | |||||||||
Net Income Available to IPG Common Stockholders | $ | 112.3 | $ | 328.9 | |||||||
Earnings Per Share Available to IPG Common Stockholders: | |||||||||||
Basic | $ | 0.29 | $ | 0.85 | |||||||
Diluted | $ | 0.28 | $ | 0.84 | |||||||
Weighted-Average Number of Common Shares Outstanding: | |||||||||||
Basic | 390.5 | 386.9 | |||||||||
Diluted | 396.1 | 393.3 | |||||||||
Dividends Declared Per Common Share | $ | 0.255 | $ | 0.235 | |||||||
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED SUMMARY OF EARNINGS ANNUAL REPORT 2020 AND 2019 (Amounts in Millions except Per Share Data) (UNAUDITED) | |||||||||||
Twelve Months Ended December 31, | |||||||||||
2020 | 2019 | Fav. (Unfav.) % Variance | |||||||||
Revenue: | |||||||||||
Net Revenue | $ | 8,064.5 | $ | 8,625.1 | (6.5) | % | |||||
Billable Expenses | 996.5 | 1,596.2 | (37.6) | % | |||||||
Total Revenue | 9,061.0 | 10,221.3 | (11.4) | % | |||||||
Operating Expenses: | |||||||||||
Salaries and Related Expenses | 5,345.0 | 5,568.8 | 4.0 | % | |||||||
Office and Other Direct Expenses | 1,367.9 | 1,564.1 | 12.5 | % | |||||||
Billable Expenses | 996.5 | 1,596.2 | 37.6 | % | |||||||
Cost of Services | 7,709.4 | 8,729.1 | 11.7 | % | |||||||
Selling, General and Administrative Expenses | 58.8 | 93.8 | 37.3 | % | |||||||
Depreciation and Amortization | 290.6 | 278.5 | (4.3) | % | |||||||
Restructuring Charges | 413.8 | 33.9 | >(100)% | ||||||||
Total Operating Expenses | 8,472.6 | 9,135.3 | 7.3 | % | |||||||
Operating Income | 588.4 | 1,086.0 | (45.8) | % | |||||||
Expenses and Other Income: | |||||||||||
Interest Expense | (192.2) | (199.3) | |||||||||
Interest Income | 29.5 | 34.5 | |||||||||
Other Expense, Net | (64.4) | (42.9) | |||||||||
Total (Expenses) and Other Income | (227.1) | (207.7) | |||||||||
Income Before Income Taxes | 361.3 | 878.3 | |||||||||
Provision for Income Taxes | 8.0 | 204.8 | |||||||||
Income of Consolidated Companies | 353.3 | 673.5 | |||||||||
Equity in Net Income of Unconsolidated Affiliates | 0.9 | 0.4 | |||||||||
Net Income | 354.2 | 673.9 | |||||||||
Net Income Attributable to Noncontrolling Interests | (3.1) | (17.9) | |||||||||
Net Income Attributable to IPG Common Stockholders | $ | 351.1 | $ | 656.0 | |||||||
Earnings Per Share Available to IPG Common Stockholders: | |||||||||||
Basic | $ | 0.90 | $ | 1.70 | |||||||
Diluted | $ | 0.89 | $ | 1.68 | |||||||
Weighted-Average Number of Common Shares Outstanding: | |||||||||||
Basic | 389.4 | 386.1 | |||||||||
Diluted | 393.2 | 391.2 | |||||||||
Dividends Declared Per Common Share | $ | 1.020 | $ | 0.940 |
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 December 31, 2020 | |||||||||||||||||||
As Reported | Amortization of Acquired Intangibles | Restructuring Charges | Net Losses on Sales of Businesses 1 | Adjusted Results (Non-GAAP) | |||||||||||||||
Operating Income and Adjusted EBITA before Restructuring Charges 2 | $ | 223.4 | $ | (21.5) | $ | (253.9) | $ | 498.8 | |||||||||||
Total (Expenses) and Other Income 3 | (49.8) | $ | (15.2) | (34.6) | |||||||||||||||
Income Before Income Taxes | 173.6 | (21.5) | (253.9) | (15.2) | 464.2 | ||||||||||||||
Provision for Income Taxes | 58.1 | 4.2 | 56.9 | 2.0 | 121.2 | ||||||||||||||
Effective Tax Rate | 33.5 | % | 26.1 | % | |||||||||||||||
Equity in Net Income of Unconsolidated Affiliates | 1.5 | 1.5 | |||||||||||||||||
Net Income Attributable to Noncontrolling Interests | (4.7) | (4.7) | |||||||||||||||||
Net Income Available to IPG Common Stockholders | $ | 112.3 | $ | (17.3) | $ | (197.0) | $ | (13.2) | $ | 339.8 | |||||||||
Weighted-Average Number of Common Shares Outstanding - Basic | 390.5 | 390.5 | |||||||||||||||||
Dilutive effect of stock options and restricted shares | 5.6 | 5.6 | |||||||||||||||||
Weighted-Average Number of Common Shares Outstanding - Diluted | 396.1 | 396.1 | |||||||||||||||||
Earnings Per Share Available to IPG Common Stockholders 4: | |||||||||||||||||||
Basic | $ | 0.29 | $ | (0.04) | $ | (0.50) | $ | (0.03) | $ | 0.87 | |||||||||
Diluted | $ | 0.28 | $ | (0.04) | $ | (0.50) | $ | (0.03) | $ | 0.86 | |||||||||
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 13. | |||||||||||||||||||
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) | |||||||||||||||||||||||
Twelve Months Ended December 31, 2020 | |||||||||||||||||||||||
As Reported | Amortization of Acquired Intangibles | Restructuring Charges | Net Losses on Sales of Businesses 1 | Net Impact of Various Discrete Tax Items 2 | Adjusted Results (Non-GAAP) | ||||||||||||||||||
Operating Income and Adjusted EBITA before Restructuring Charges 3 | $ | 588.4 | $ | (85.9) | $ | (413.8) | $ | 1,088.1 | |||||||||||||||
Total (Expenses) and Other Income 4 | (227.1) | $ | (67.0) | (160.1) | |||||||||||||||||||
Income Before Income Taxes | 361.3 | (85.9) | (413.8) | (67.0) | 928.0 | ||||||||||||||||||
Provision for Income Taxes | 8.0 | 16.9 | 93.1 | 5.0 | $ | 122.6 | 245.6 | ||||||||||||||||
Effective Tax Rate | 2.2 | % | 26.5 | % | |||||||||||||||||||
Equity in Net Income of Unconsolidated Affiliates | 0.9 | 0.9 | |||||||||||||||||||||
Net Income Attributable to Noncontrolling Interests | (3.1) | (3.1) | |||||||||||||||||||||
Net Income Available to IPG Common Stockholders | $ | 351.1 | $ | (69.0) | $ | (320.7) | $ | (62.0) | $ | 122.6 | $ | 680.2 | |||||||||||
Weighted-Average Number of Common Shares Outstanding - Basic | 389.4 | 389.4 | |||||||||||||||||||||
Dilutive effect of stock options and restricted shares | 3.8 | 3.8 | |||||||||||||||||||||
Weighted-Average Number of Common Shares Outstanding - Diluted | 393.2 | 393.2 | |||||||||||||||||||||
Earnings Per Share Available to IPG Common Stockholders 5: | |||||||||||||||||||||||
Basic | $ | 0.90 | $ | (0.18) | $ | (0.82) | $ | (0.16) | $ | 0.31 | $ | 1.75 | |||||||||||
Diluted | $ | 0.89 | $ | (0.18) | $ | (0.82) | $ | (0.16) | $ | 0.31 | $ | 1.73 | |||||||||||
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 13. | |||||||||||||||||||||||
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 December 31, | Twelve Months Ended December 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net Revenue | $ | 2,284.4 | $ | 2,433.0 | $ | 8,064.5 | $ | 8,625.1 | |||||||
Non-GAAP Reconciliation: | |||||||||||||||
Net Income Available to IPG Common Stockholders | $ | 112.3 | $ | 328.9 | $ | 351.1 | $ | 656.0 | |||||||
Add Back: | |||||||||||||||
Provision for Income Taxes | 58.1 | 86.1 | 8.0 | 204.8 | |||||||||||
Subtract: | |||||||||||||||
Total (Expenses) and Other Income | (49.8) | (63.5) | (227.1) | (207.7) | |||||||||||
Equity in Net Income of Unconsolidated Affiliates | 1.5 | 0.5 | 0.9 | 0.4 | |||||||||||
Net Income Attributable to Noncontrolling Interests | (4.7) | (13.3) | (3.1) | (17.9) | |||||||||||
Operating Income | 223.4 | 491.3 | 588.4 | 1,086.0 | |||||||||||
Add Back: | |||||||||||||||
Amortization of Acquired Intangibles | 21.5 | 21.4 | 85.9 | 86.0 | |||||||||||
Adjusted EBITA | 244.9 | 512.7 | 674.3 | 1,172.0 | |||||||||||
Adjusted EBITA Margin on Net Revenue % | 10.7 | % | 21.1 | % | 8.4 | % | 13.6 | % | |||||||
Restructuring Charges 1 | 253.9 | N/A | 413.8 | 31.8 | |||||||||||
Adjusted EBITA before Restructuring Charges | $ | 498.8 | N/A | $ | 1,088.1 | $ | 1,203.8 | ||||||||
Adjusted EBITA before Restructuring Charges Margin on Net Revenue % | 21.8 | % | N/A | 13.5 | % | 14.0 | % | ||||||||
1 In the second, third and fourth 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 during the first quarter of 2019, which relate to a cost initiative to better align our cost structure with our revenue due to client losses occurring 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 December 31, 2019 | |||||||||||||||||||
As Reported | Amortization of Acquired Intangibles | Net Losses on Sales of Businesses 1 | Tax Valuation Allowance Reversals | Adjusted Results (Non-GAAP) | |||||||||||||||
Operating Income and Adjusted EBITA 2 | $ | 491.3 | $ | (21.4) | $ | 512.7 | |||||||||||||
Total (Expenses) and Other Income 3 | (63.5) | $ | (24.0) | (39.5) | |||||||||||||||
Income Before Income Taxes | 427.8 | (21.4) | (24.0) | 473.2 | |||||||||||||||
Provision for Income Taxes | 86.1 | 4.2 | 0.4 | $ | 25.3 | 116.0 | |||||||||||||
Effective Tax Rate | 20.1 | % | 24.5 | % | |||||||||||||||
Equity in Net Income of Unconsolidated Affiliates | 0.5 | 0.5 | |||||||||||||||||
Net Income Attributable to Noncontrolling Interests | (13.3) | (13.3) | |||||||||||||||||
Net Income Available to IPG Common Stockholders | $ | 328.9 | $ | (17.2) | $ | (23.6) | $ | 25.3 | $ | 344.4 | |||||||||
Weighted-Average Number of Common Shares Outstanding - Basic | 386.9 | 386.9 | |||||||||||||||||
Dilutive effect of stock options and restricted shares | 6.4 | 6.4 | |||||||||||||||||
Weighted-Average Number of Common Shares Outstanding - Diluted | 393.3 | 393.3 | |||||||||||||||||
Earnings Per Share Available to IPG Common Stockholders 4: | |||||||||||||||||||
Basic | $ | 0.85 | $ | (0.04) | $ | (0.06) | $ | 0.07 | $ | 0.89 | |||||||||
Diluted | $ | 0.84 | $ | (0.04) | $ | (0.06) | $ | 0.06 | $ | 0.88 | |||||||||
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 13. | |||||||||||||||||||
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 SUBSIDIARIESU.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS(Amounts in Millions except Per Share Data) (UNAUDITED) | |||||||||||||||||||||||
Twelve Months Ended December 31, 2019 | |||||||||||||||||||||||
As Reported | Amortization of Acquired Intangibles | Q1 2019 Restructuring Charges | Net Losses on Sales of Businesses 1 | Net Impact of Various Discrete Tax Items 2 | Adjusted Results (Non-GAAP) | ||||||||||||||||||
Operating Income and Adjusted EBITA before Restructuring Charges 3 | $ | 1,086.0 | $ | (86.0) | $ | (31.8) | $ | 1,203.8 | |||||||||||||||
Total (Expenses) and Other Income 4 | (207.7) | $ | (46.3) | (161.4) | |||||||||||||||||||
Income Before Income Taxes | 878.3 | (86.0) | (31.8) | (46.3) | 1,042.4 | ||||||||||||||||||
Provision for Income Taxes | 204.8 | 16.9 | 7.6 | 0.4 | $ | 39.2 | 268.9 | ||||||||||||||||
Effective Tax Rate | 23.3 | % | 25.8 | % | |||||||||||||||||||
Equity in Net Income of Unconsolidated Affiliates | 0.4 | 0.4 | |||||||||||||||||||||
Net Income Attributable to Noncontrolling Interests | (17.9) | (17.9) | |||||||||||||||||||||
Net Income Available to IPG Common Stockholders | $ | 656.0 | $ | (69.1) | $ | (24.2) | $ | (45.9) | $ | 39.2 | $ | 756.0 | |||||||||||
Weighted-Average Number of Common Shares Outstanding - Basic | 386.1 | 386.1 | |||||||||||||||||||||
Dilutive effect of stock options and restricted shares | 5.1 | 5.1 | |||||||||||||||||||||
Weighted-Average Number of Common Shares Outstanding - Diluted | 391.2 | 391.2 | |||||||||||||||||||||
Earnings Per Share Available to IPG Common Stockholders 5: | |||||||||||||||||||||||
Basic | $ | 1.70 | $ | (0.18) | $ | (0.06) | $ | (0.12) | $ | 0.10 | $ | 1.96 | |||||||||||
Diluted | $ | 1.68 | $ | (0.18) | $ | (0.06) | $ | (0.12) | $ | 0.10 | $ | 1.93 | |||||||||||
1 Includes losses on complete dispositions of businesses and the classification of certain assets as held for sale. | |||||||||||||||||||||||
2 Includes $13.9 related to the settlement of certain tax positions in the second quarter of 2019 and $25.3 related to tax valuation allowance reversals in the fourth quarter of 2019. | |||||||||||||||||||||||
3 Refer to non-GAAP reconciliation of Adjusted EBITA before Restructuring Charges on page 13. | |||||||||||||||||||||||
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. |
Source: Interpublic Group of Companies, Inc. (The)