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10-K
INTERPUBLIC GROUP OF COMPANIES, INC. filed this Form 10-K on 02/23/2015
Entire Document
 

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)



RESULTS OF OPERATIONS
Consolidated Results of Operations
REVENUE
Our revenue is directly impacted by our ability to win new clients and the retention and spending levels of existing clients. Most of our expenses are recognized ratably throughout the year and are therefore less seasonal than revenue. Our revenue is typically lowest in the first quarter and highest in the fourth quarter. This reflects the seasonal spending of our clients, incentives earned at year end on various contracts and project work completed that is typically recognized during the fourth quarter. In the events marketing business, revenues can fluctuate due to the timing of completed projects, as revenue is typically recognized when the project is complete. We generally act as principal for these projects and accordingly record the gross amount billed to the client as revenue and the related costs incurred as pass-through costs in office and general expenses. 
 
Year ended December 31, 2013
 
Components of Change
 
Year ended December 31, 2014
 
Change
 
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 
Organic
 
Organic
 
Total
Consolidated
$
7,122.3

 
$
(75.5
)
 
$
95.3

 
$
395.0

 
$
7,537.1

 
5.5
 %
 
5.8
%
Domestic
3,972.6

 
0.0

 
24.8

 
186.6

 
4,184.0

 
4.7
 %
 
5.3
%
International
3,149.7

 
(75.5
)
 
70.5

 
208.4

 
3,353.1

 
6.6
 %
 
6.5
%
United Kingdom
568.3

 
30.9

 
29.0

 
60.1

 
688.3

 
10.6
 %
 
21.1
%
Continental Europe
800.6

 
(5.2
)
 
19.7

 
(10.4
)
 
804.7

 
(1.3
)%
 
0.5
%
Asia Pacific
868.9

 
(35.6
)
 
20.1

 
69.1

 
922.5

 
8.0
 %
 
6.2
%
Latin America
464.5

 
(46.0
)
 
1.7

 
50.2

 
470.4

 
10.8
 %
 
1.3
%
Other
447.4

 
(19.6
)
 
0.0

 
39.4

 
467.2

 
8.8
 %
 
4.4
%
During 2014, our revenue increased by $414.8, or 5.8%, compared to 2013, comprised of an organic revenue increase of $395.0, or 5.5%, and the effect of net acquisitions of $95.3, partially offset by an adverse foreign currency rate impact of $75.5. Our organic revenue increase was throughout nearly all geographic regions, attributable to net client wins and net higher spending from existing clients, most notably in the health care and auto and transportation sectors, partially offset by modest declines in the technology and telecom and consumer goods sectors. The organic increase in our domestic market was driven by growth across most disciplines, most notably at our advertising and media businesses and at our digital specialist agencies, partially offset by a decline at our events marketing business. In our international market, the organic revenue increase was primarily in the Asia Pacific region, led by Australia, China and Singapore, in the United Kingdom, in the Latin America region, led by Brazil and Argentina, and in the Other regions, primarily in the Middle East, partially offset by an organic decrease in the Continental Europe region due to a continued challenging economic climate. The international organic revenue increase was driven by growth across all disciplines.
 
Year ended December 31, 2012
 
Components of Change
 
Year ended December 31, 2013
 
Change
 
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 
Organic
 
Organic
 
Total
Consolidated
$
6,956.2

 
$
(80.4
)
 
$
50.3

 
$
196.2

 
$
7,122.3

 
2.8
 %
 
2.4
 %
Domestic
3,803.6

 
0.0

 
26.4

 
142.6

 
3,972.6

 
3.7
 %
 
4.4
 %
International
3,152.6

 
(80.4
)
 
23.9

 
53.6

 
3,149.7

 
1.7
 %
 
(0.1
)%
United Kingdom
572.0

 
(7.0
)
 
(1.2
)
 
4.5

 
568.3

 
0.8
 %
 
(0.6
)%
Continental Europe
823.1

 
23.0

 
2.7

 
(48.2
)
 
800.6

 
(5.9
)%
 
(2.7
)%
Asia Pacific
838.1

 
(43.6
)
 
21.0

 
53.4

 
868.9

 
6.4
 %
 
3.7
 %
Latin America
450.1

 
(32.7
)
 
1.4

 
45.7

 
464.5

 
10.2
 %
 
3.2
 %
Other
469.3

 
(20.1
)
 
0.0

 
(1.8
)
 
447.4

 
(0.4
)%
 
(4.7
)%
During 2013, our revenue increased by $166.1, or 2.4%, compared to 2012, comprised of an organic revenue increase of $196.2, or 2.8%, and the effect of net acquisitions of $50.3, partially offset by an adverse foreign currency rate impact of $80.4. We had growth in the domestic market, with our organic revenue increase primarily attributable to net client wins, most notably in the auto and transportation sector, and net higher spending from existing clients, primarily in the healthcare sector, partially offset by decreases in the technology and telecom sector. In addition, our organic revenue increase in the domestic market was mainly driven by our events marketing and public relations businesses. In our international market, the organic revenue increase was primarily in the Asia Pacific region, led by Australia and China, and in the Latin America region, primarily in Brazil. Also

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