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Interpublic Announces Second Quarter and First Half 2019 Results

New York, July 23, 2019 (GLOBE NEWSWIRE) --

  • Second quarter net revenue increase of 9.1% and organic net revenue increase of 3.0%
  • First half net revenue increase of 11.0%; organic net revenue increase was 4.6%
  • Second quarter operating income increase of 6.0% to $264.2 million and EBITA increase of 12.2% to $285.5 million
  • Second quarter operating margin on net revenue of 12.4%; EBITA margin of 13.4%
  • Second quarter diluted earnings per share of $0.43 and $0.46 as adjusted, compared with $0.37 and $0.44 as adjusted a year ago
  • First half diluted earnings per share of $0.41 and $0.57 as adjusted, compared with $0.34 and $0.48 as adjusted a year ago
  • Management confirms that the company is on track to achieve the high-end of the range of its full-year organic net revenue growth target of 2.0% to 3.0% and reaffirms adjusted EBITA1 margin expansion of 40 to 50 basis points

Summary

Revenue

  • Second quarter 2019 net revenue increased 9.1% to $2.13 billion, compared to $1.95 billion in the second quarter of 2018, with an organic net revenue increase (excluding results from Acxiom) of 3.0% compared to the prior-year period. Second quarter 2019 total revenue increased 5.4% to $2.52 billion, compared to $2.39 billion in the second quarter of 2018.
  • First half 2019 net revenue increased 11.0% to $4.13 billion, compared to $3.72 billion in the first half of 2018, with an organic net revenue increase (excluding results from Acxiom) of 4.6% compared to the prior-year period. First half 2019 total revenue increased 7.0% to $4.88 billion, compared to $4.56 billion in the first half of 2018.

Operating Results

  • Operating income in the second quarter of 2019 was $264.2 million, compared to $249.2 million in 2018. Operating margin on net revenue was 12.4% for the second quarter of 2019, compared to 12.8% in 2018, lower due to increased amortization expense this year from the acquisition of Acxiom. EBITA was $285.5 million in the second quarter of 2019 compared to $254.4 million in 2018. EBITA margin on net revenue was 13.4%, compared to 13.1% in 2018.
  • Operating income for the first half of 2019 was $314.4 million, compared to $288.0 million in 2018. Operating margin on net revenue was 7.6% for the first half of 2019, compared to 7.7% in 2018, lower due to increased amortization expense this year from the acquisition of Acxiom and restructuring charges in this year’s first quarter. EBITA was $357.3 million for the first half of 2019 compared to $298.5 million in 2018. Adjusted EBITA1 excluding $31.8 million of restructuring charges from the first quarter of 2019 was $389.1 million in the first half of 2019 compared to $298.5 million in 2018. Adjusted EBITA margin on net revenue was 9.4%, compared to 8.0% in 2018.

Net Results

  • Income tax provision in the second quarter of 2019 was $43.6 million on income before income taxes of $216.5 million.
  • Second quarter 2019 net income available to IPG common stockholders was $169.5 million, resulting in earnings of $0.44 per basic share and $0.43 per diluted share, and earnings of $0.46 per diluted share as adjusted for after-tax amortization of acquired intangibles of $17.1 million, after-tax loss of $6.1 million on the sales of businesses, and a tax benefit of $13.9 million related to the conclusion and settlement of tax examinations of previous years. This compares to adjusted earnings of $0.44 per diluted share a year ago.
  • Income tax provision in the first half of 2019 was $54.1 million on income before income taxes of $217.8 million.
  • First half 2019 net income available to IPG common stockholders was $161.5 million, resulting in earnings of $0.42 per basic share and $0.41 per diluted share, and earnings of $0.57 per diluted share as adjusted for after-tax amortization of acquired intangibles of $34.5 million, after-tax restructuring charges of $24.2 million, after-tax loss of $14.7 million on the sales of businesses, and a tax benefit of $13.9 million related to the conclusion and settlement of tax examinations of previous years. This compares to adjusted earnings of $0.48 per diluted share a year ago.
  • Refer to reconciliations in the back for more detail.

"We are pleased with our financial performance this quarter. Our industry leading organic growth is a tribute to the competitiveness of our offerings and strength of our talent. Our results in the second quarter were led by strong top-and bottom-line performance in media, as well as growth from our global creative networks, and our public relations and digital offerings. Our second quarter was also highlighted by growth across a broad range of client sectors, including healthcare, financial services, consumer goods and retail. Our performance is a reflection of the strength of our offerings, our people and our differentiated strategy. We continue to be pleased with Acxiom, as it has given us an unrivaled industry position in data management capabilities, allowing us to help marketers get the best out of all their data assets,” said Michael I. Roth, Interpublic’s Chairman and CEO.

“At mid-year, we are confident that our performance to date and the current tone of the business have us on track to deliver growth at the high end of the 2-to-3% organic growth target set at the beginning of the year. In addition, we continue to be comfortable with our target for adjusted EBITA margin expansion of 40-50 basis points over last year’s 13.5%. We view our current performance and long-term strategy as the basis for significant shareholder value creation.”

Operating Results

Revenue
Net revenue of $2.13 billion in the second quarter of 2019 increased 9.1% compared with the same period in 2018. During the quarter, the effect of foreign currency translation was negative 2.4%, the impact of net acquisitions was positive 8.5%, and the resulting organic net revenue increase (which excludes results from Acxiom) was 3.0%. This was comprised of an organic net increase of 0.6% in the U.S. and 6.5% internationally, attributable to a combination of net client wins and net higher spending from existing clients. Total revenue of $2.52 billion in the second quarter of 2019 increased 5.4% compared with the same period in 2018.

Net revenue of $4.13 billion in the first half of 2019 increased 11.0% compared with the same period in 2018. During the first half of 2019, the effect of foreign currency translation was negative 2.5%, the impact of net acquisitions was positive 8.9%, and the resulting organic net revenue increase (which excludes results from Acxiom) was 4.6%. This was comprised of an organic net increase of 3.0% in the U.S. and 7.1% internationally, attributable to a combination of net client wins and net higher spending from existing clients. Total revenue of $4.88 billion in the first half of 2019 increased 7.0% compared with the same period in 2018.

Operating Expenses
For the second quarter and first half of 2019, operating expenses increased compared to the same periods in 2018 primarily due to the inclusion of Acxiom.

During the second quarter of 2019, salaries and related expenses were $1.38 billion, an increase of 6.8% compared to the same period in 2018. During the first half of 2019, salaries and related expenses were $2.80 billion, an increase of 6.8% compared to the same period in 2018.

Staff cost ratio, which is total salaries and related expenses as a percentage of net revenue, was 65.0% in the second quarter of 2019 compared to 66.4% in the same period in 2018, and was 67.8% in the first half of 2019 compared to 70.5% in the same period in 2018, primarily driven by leverage in base salaries, benefits and tax and temporary help expenses. The improved ratio was a result of carefully managing our employee base in addition to the inclusion of Acxiom, which had a lower ratio of salaries and related expenses as a percentage of its net revenue.

During the second quarter of 2019, office and other direct expenses were $387.3 million, an increase of 16.2% compared to the same period in 2018. During the first half of 2019, office and other direct expenses were $776.5 million, an increase of 18.2% compared to the same period in 2018.

Office and other direct expenses were 18.2% of net revenue in the second quarter of 2019 compared to 17.1% a year ago, and were 18.8% in the first half of 2019 compared to 17.7% in the same period in 2018. The higher expense ratio is primarily due to the inclusion of Acxiom which has a higher ratio of office and other direct expenses as a percentage of its net revenue, mainly driven by client service costs.

During the second quarter of 2019, selling, general and administrative expenses of $18.1 million decreased 37.2% compared with the same period in 2018 and during the first half of 2019, selling, general and administrative expenses of $59.5 million decreased 6.9% compared to the same period in 2018, primarily attributable to an increase in allocated service fees, mainly as a result of the inclusion of Acxiom, and lower professional fees, partially offset by higher incentive expense.

Selling, general and administrative expenses were 0.8% of net revenue in the second quarter of 2019 compared to 1.5% a year ago, and were 1.4% in the first half of 2019 compared to 1.7% in the same period in 2018.

Depreciation and amortization increased 65.9% to $73.0 million during the second quarter of 2019 compared to a year ago, and increased 60.1% to $144.1 million in the first half of 2019 compared to a year ago, primarily due to the inclusion of Acxiom.

Depreciation and amortization as a percentage of net revenue was 3.4% in the second quarter of 2019 compared to 2.3% the same period in 2018, and was 3.5% in the first half of 2019 compared to 2.4% in the same period in 2018.

During the second quarter and first half of 2019, restructuring charges were $2.1 million and $33.9 million, respectively, due to the implementation of a cost initiative to better align our cost structure with our revenue, primarily related to client losses occurring in 2018.

Non-Operating Results and Tax
Net interest expense increased by $22.5 million to $43.9 million in the second quarter of 2019 from a year ago, and increased by $48.6 million to $85.9 million in the first half of 2019 from a year ago, primarily attributable to the issuance of long-term debt in 2018 in order to finance the Acxiom acquisition.

The income tax provision in the second quarter of 2019 was $43.6 million on income before income taxes of $216.5 million, compared to a provision of $63.6 million on income before income taxes of $211.5 million in the same period in 2018.

The income tax provision in the first half of 2019 was $54.1 million on income before income taxes of $217.8 million, compared to a provision of $76.3 million on income before income taxes of $210.0 million in the same period in 2018.

Balance Sheet
At June 30, 2019, cash and cash equivalents totaled $614.0 million, compared to $673.4 million at December 31, 2018 and $493.2 million at June 30, 2018. Total debt was $3.77 billion at June 30, 2019, compared to $3.73 billion at December 31, 2018.

Common Stock Dividend
During the second quarter of 2019, the company declared and paid a common stock cash dividend of $0.235 per share, for a total of $90.8 million.

For more information concerning the company's financial results, please refer to the accompanying slide presentation available on our website, www.interpublic.com.

1 Adjusted EBITA is earnings before net interest, net other expense, provision for income taxes, and amortization of acquired intangibles, and further adjusted to exclude Q1 2019 restructuring charges. See reconciliation tables in back for further detail.

# # #

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, MAGNA, McCann, Momentum, MRM//McCann, 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) 704-1326

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:

  • potential effects of a challenging economy, for example, on the demand for our advertising and marketing services, on our clients' financial condition and on our business or financial condition;
  • 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 other SEC filings.

 

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED SUMMARY OF EARNINGS
SECOND QUARTER REPORT 2019 AND 2018
(Amounts in Millions except Per Share Data)
(UNAUDITED)
     
    Three Months Ended June 30,
    2019   2018   Fav. (Unfav.)
% Variance
Revenue:          
  Net Revenue $ 2,125.9     $ 1,948.2     9.1 %
  Billable Expenses 394.3     443.6     (11.1) %
Total Revenue 2,520.2     2,391.8     5.4 %
             
Operating Expenses:          
  Salaries and Related Expenses 1,381.2     1,292.9     (6.8) %
  Office and Other Direct Expenses 387.3     333.3     (16.2) %
  Billable Expenses 394.3     443.6     11.1 %
  Cost of Services 2,162.8     2,069.8     (4.5) %
  Selling, General and Administrative Expenses 18.1     28.8     37.2 %
  Depreciation and Amortization 73.0     44.0     (65.9) %
  Restructuring Charges 2.1     0.00     N/A
Total Operating Expenses 2,256.0     2,142.6     (5.3) %
Operating Income 264.2     249.2     6.0 %
             
Expenses and Other Income:          
  Interest Expense (51.6)     (26.1)      
  Interest Income 7.7     4.7      
  Other Expense, Net (3.8)     (16.3)      
Total (Expenses) and Other Income (47.7)     (37.7)      
             
Income Before Income Taxes 216.5     211.5      
  Provision for Income Taxes

 
43.6     63.6      
Income of Consolidated Companies 172.9     147.9      
  Equity in Net Loss of Unconsolidated Affiliates (0.1)     (0.1)      
Net Income 172.8     147.8      
  Net Income Attributable to Noncontrolling Interests (3.3)     (2.0)      
Net Income Available to IPG Common Stockholders $ 169.5     $ 145.8      
           
Earnings Per Share Available to IPG Common Stockholders:          
Basic $ 0.44     $ 0.38      
Diluted $ 0.43     $ 0.37      
           
Weighted-Average Number of Common Shares Outstanding:          
Basic 386.2     383.6      
Diluted 391.2     389.5      
           
Dividends Declared Per Common Share $ 0.235     $ 0.210      

 

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED SUMMARY OF EARNINGS
SECOND QUARTER REPORT 2019 AND 2018
(Amounts in Millions except Per Share Data)
(UNAUDITED)
     
    Six months ended June 30,
    2019   2018   Fav. (Unfav.)
% Variance
Revenue:          
  Net Revenue $ 4,130.7     $ 3,722.2     11.0 %
  Billable Expenses 750.7     838.7     (10.5) %
Total Revenue 4,881.4     4,560.9     7.0 %
             
Operating Expenses:          
  Salaries and Related Expenses 2,802.3     2,623.2     (6.8) %
  Office and Other Direct Expenses 776.5     657.1     (18.2) %
  Billable Expenses 750.7     838.7     10.5 %
  Cost of Services 4,329.5     4,119.0     (5.1) %
  Selling, General and Administrative Expenses 59.5     63.9     6.9 %
  Depreciation and Amortization 144.1     90.0     (60.1) %
  Restructuring Charges 33.9     0.00     N/A
Total Operating Expenses 4,567.0     4,272.9     (6.9) %
Operating Income 314.4     288.0     9.2 %
             
Expenses and Other Income:          
  Interest Expense (101.4)     (46.0)      
  Interest Income 15.5     8.7      
  Other Expense, Net (10.7)     (40.7)      
Total (Expenses) and Other Income (96.6)     (78.0)      
             
Income Before Income Taxes 217.8     210.0      
  Provision for Income Taxes

 
54.1     76.3      
Income of Consolidated Companies 163.7     133.7      
  Equity in Net Loss of Unconsolidated Affiliates (0.4)     (2.0)      
Net Income 163.3     131.7      
  Net Income Attributable to Noncontrolling Interests (1.8)          
Net Income Available to IPG Common Stockholders $ 161.5     $ 131.7      
           
Earnings Per Share Available to IPG Common Stockholders:          
Basic $ 0.42     $ 0.34      
Diluted $ 0.41     $ 0.34      
           
Weighted-Average Number of Common Shares Outstanding:          
Basic 385.4     383.5      
Diluted 390.1     388.9      
           
Dividends Declared Per Common Share $ 0.470     $ 0.420      

 

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED RESULTS
(Amounts in Millions except Per Share Data)
(UNAUDITED)

 
  Three Months Ended June 30, 2019
  As Reported   Amortization of Acquired Intangibles   Net Losses on Sales of Businesses1   Settlement of Certain Tax Positions   Adjusted Results
Net Revenue $ 2,125.9                 $ 2,125.9  
  Billable Expenses 394.3                 394.3  
Total Revenue 2,520.2                 2,520.2  
                   
Cost of Services 2,162.8                 2,162.8  
Selling, General and Administrative Expenses 18.1                 18.1  
Depreciation and Amortization 73.0     $ 21.3             51.7  
Restructuring Charges 2.1                 2.1  
Total Operating Expense 2,256.0     21.3             2,234.7  
                   
Operating Income 264.2     (21.3)             285.5  
Operating Margin on Net Revenue % 12.4 %               13.4 %
                   
Interest Expense, Net (43.9)                 (43.9)  
Other Expense, Net (3.8)         $ (6.1)         2.3  
Total (Expenses) and Other Income (47.7)         (6.1)         (41.6)  
Income Before Income Taxes 216.5     (21.3)     (6.1)         243.9  
Provision for Income Taxes 43.6     4.2         $ 13.9     61.7  
Equity in Net Loss of Unconsolidated Affiliates (0.1)                 (0.1)  
Net Income Attributable to Noncontrolling Interests (3.3)                 (3.3)  
Net Income Available to IPG Common Stockholders $ 169.5     $ (17.1)     $ (6.1)     $ 13.9     $ 178.8  
                   
                   
Weighted-Average Number of Common Shares Outstanding - Basic 386.2                 386.2  
Dilutive effect of stock options and restricted shares 5.0                 5.0  
Weighted-Average Number of Common Shares Outstanding - Diluted 391.2                 391.2  
                   
                   
Earnings per Share Available to IPG Common Stockholders:                  
  Basic $ 0.44     $ (0.04)     $ (0.02)     $ 0.04     $ 0.46  
  Diluted $ 0.43     $ (0.04)     $ (0.02)     $ 0.04     $ 0.46  
                   
1 Includes losses on complete dispositions of businesses and the classification of certain assets as held for sale.
                   
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
RECONCILIATION OF ADJUSTED RESULTS
(Amounts in Millions except Per Share Data)
(UNAUDITED)

 
  Six Months Ended June 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
Net Revenue $ 4,130.7                     $ 4,130.7  
  Billable Expenses 750.7                     750.7  
Total Revenue 4,881.4                     4,881.4  
                       
Cost of Services 4,329.5                     4,329.5  
Selling, General and Administrative Expenses 59.5                     59.5  
Depreciation and Amortization 144.1     $ 42.9                 101.2  
Restructuring Charges 33.9         $ 31.8             2.1  
Total Operating Expense 4,567.0     42.9     31.8             4,492.3  
                       
Operating Income 314.4     (42.9)     (31.8)             389.1  
Operating Margin on Net Revenue % 7.6 %                   9.4 %
                       
Interest Expense, Net (85.9)                     (85.9)  
Other Expense, Net (10.7)             $ (14.7)         4.0  
Total (Expenses) and Other Income (96.6)             (14.7)         (81.9)  
Income Before Income Taxes 217.8     (42.9)     (31.8)     (14.7)         307.2  
Provision for Income Taxes 54.1     8.4     7.6         $ 13.9     84.0  
Equity in Net Loss of Unconsolidated Affiliates (0.4)                     (0.4)  
Net Income Attributable to Noncontrolling Interests (1.8)                     (1.8)  
Net Income Available to IPG Common Stockholders $ 161.5     $ (34.5)     $ (24.2)     $ (14.7)     $ 13.9     $ 221.0  
                       
                       
Weighted-Average Number of Common Shares Outstanding - Basic 385.4                     385.4  
Dilutive effect of stock options and restricted shares 4.7                     4.7  
Weighted-Average Number of Common Shares Outstanding - Diluted 390.1                     390.1  
                       
                       
Earnings per Share Available to IPG Common Stockholders:                      
  Basic $ 0.42     $ (0.09)     $ (0.06)     $ (0.04)     $ 0.04     $ 0.57  
  Diluted $ 0.41     $ (0.09)     $ (0.06)     $ (0.04)     $ 0.04     $ 0.57  
                       
1 Includes losses on complete dispositions of businesses and the classification of certain assets as held for sale.
                       
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
RECONCILIATION OF ADJUSTED RESULTS - ADJUSTED EBITA
(Amounts in Millions)
(UNAUDITED)



 
  Three Months Ended June 30,   Six Months Ended
June 30,
  2019   2018   2019   2018
               
Net Revenue $ 2,125.9     $ 1,948.2     $ 4,130.7     $ 3,722.2  
               
               
EBITA Reconciliation:              
Net Income Available to IPG Common Stockholders $ 169.5     $ 145.8     $ 161.5     $ 131.7  
               
Add Back:              
Provision for Income Taxes 43.6     63.6     54.1     76.3  
Subtract:              
Total (Expenses) and Other Income (47.7)     (37.7)     (96.6)     (78.0)  
Equity in Net Loss of Unconsolidated Affiliates (0.1)     (0.1)     (0.4)     (2.0)  
Net Income Attributable to Noncontrolling Interests (3.3)     (2.0)     (1.8)      
Operating Income 264.2     249.2     314.4     288.0  
               
Add Back:              
Amortization of Acquired Intangibles 21.3     5.2     42.9     10.5  
               
EBITA $ 285.5     $ 254.4     357.3     298.5  
EBITA Margin on Net Revenue % 13.4 %   13.1 %   8.6 %   8.0 %
               
Q1 2019 Restructuring Charges

 
        31.8      
               
Adjusted EBITA         $ 389.1     $ 298.5  
Adjusted EBITA Margin on Net Revenue %         9.4 %   8.0 %
               
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
RECONCILIATION OF ADJUSTED RESULTS
(Amounts in Millions except Per Share Data)
(UNAUDITED)

 
  Three Months Ended June 30, 2018
  As Reported   Amortization of Acquired Intangibles   Net Losses on Sales of Businesses1   Adjusted Results
Net Revenue $ 1,948.2             $ 1,948.2  
Billable Expenses 443.6             443.6  
Total Revenue 2,391.8             2,391.8  
               
Cost of Services 2,069.8             2,069.8  
Selling, General, and Administrative Expenses 28.8             28.8  
Depreciation and Amortization 44.0     $ 5.2         38.8  
Total Operating Expense 2,142.6     5.2         2,137.4  
               
Operating Income 249.2     (5.2)         254.4  
Operating Margin on Net Revenue % 12.8 %           13.1 %
               
Interest Expense, Net (21.4)             (21.4)  
Other Expense, Net (16.3)         $ (19.8)     3.5  
Total (Expenses) and Other Income (37.7)         (19.8)     (17.9)  
Income Before Income Taxes 211.5     (5.2)     (19.8)     236.5  
Provision for Income Taxes 63.6     0.2         63.8  
Equity in Net Loss of Unconsolidated Affiliates (0.1)             (0.1)  
Net Income Attributable to Noncontrolling Interests (2.0)             (2.0)  
Net Income Available to IPG Common Stockholders $ 145.8     $ (5.0)     $ (19.8)     $ 170.6  
               
               
Weighted-Average Number of Common Shares Outstanding - Basic 383.6             383.6  
Dilutive effect of stock options and restricted shares 5.9             5.9  
Weighted-Average Number of Common Shares Outstanding - Diluted 389.5             389.5  
               
               
Earnings per Share Available to IPG Common Stockholders:              
  Basic $ 0.38     $ (0.01)     $ (0.05)     $ 0.44  
  Diluted $ 0.37     $ (0.01)     $ (0.05)     $ 0.44  
               
1 Includes losses on complete dispositions of businesses and the classification of certain assets as held for sale.
               
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
RECONCILIATION OF ADJUSTED RESULTS
(Amounts in Millions except Per Share Data)
(UNAUDITED)

 
  Six Months Ended June 30, 2018
  As Reported   Amortization of Acquired Intangibles   Net Losses on Sales of Businesses1   Adjusted Results
Net Revenue $ 3,722.2             $ 3,722.2  
Billable Expenses 838.7             838.7  
Total Revenue 4,560.9             4,560.9  
               
Cost of Services 4,119.0             4,119.0  
Selling, General, and Administrative Expenses 63.9             63.9  
Depreciation and Amortization 90.0     $ 10.5         79.5  
Total Operating Expense 4,272.9     10.5         4,262.4  
               
Operating Income 288.0     (10.5)         298.5  
Operating Margin on Net Revenue % 7.7 %           8.0 %
               
Interest Expense, Net (37.3)             (37.3)  
Other (Expense) Income, Net (40.7)         $ (44.2)     3.5  
Total (Expenses) and Other Income (78.0)         (44.2)     (33.8)  
Income Before Income Taxes 210.0     (10.5)     (44.2)     264.7  
Provision for Income Taxes 76.3     0.4     0.4     77.1  
Equity in Net Loss of Unconsolidated Affiliates (2.0)             (2.0)  
Net Income Attributable to Noncontrolling Interests              
Net Income Available to IPG Common Stockholders $ 131.7     $ (10.1)     $ (43.8)     $ 185.6  
               
               
Weighted-Average Number of Common Shares Outstanding - Basic 383.5             383.5  
Dilutive effect of stock options and restricted shares 5.4             5.4  
Weighted-Average Number of Common Shares Outstanding - Diluted 388.9             388.9  
               
               
Earnings per Share Available to IPG Common Stockholders:              
  Basic $ 0.34     $ (0.03)     $ (0.11)     $ 0.48  
  Diluted $ 0.34     $ (0.03)     $ (0.11)     $ 0.48  
               
1 Includes losses on complete dispositions of businesses and the classification of certain assets as held for sale.
               
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.