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SEC Filings

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)




Net Interest Expense
For 2014, net interest expense decreased by $40.5 as compared to 2013, primarily due to lower borrowing costs in the current year. Cash interest expense decreased primarily due to the redemption of our 6.25% Senior Unsecured Notes due 2014 (the "6.25% Notes") in the second quarter of 2014 and redemption of our 10.00% Senior Unsecured Notes due 2017 (the "10.00% Notes") in the third quarter of 2013, partially offset by the issuance of our 4.20% Senior Notes due 2024 (the "4.20% Notes") in the second quarter of 2014. Non-cash interest expense decreased as compared to 2013 primarily due to the write-off of unamortized debt issuance costs during 2013 as part of the amendment of our credit agreement as well as the redemption of the 6.25% Notes and 10.00% Notes.
For 2013, net interest expense decreased by $6.0 as compared to 2012, primarily due to a decrease in debt obligations in 2013. Cash interest expense decreased primarily due to the retirement of our 4.75% Convertible Senior Notes due 2023 (the "4.75% Notes") in the first quarter of 2013 and redemption of our 10.00% Notes in the third quarter of 2013, which were refinanced with debt issued at lower rates in 2012. Non-cash interest expense increased primarily as a result of the retirement of our 4.75% Notes and our 4.25% Convertible Senior Notes due 2023 (the "4.25% Notes") in the first quarter of 2013 and first quarter of 2012, respectively. At retirement, the premiums associated with these Notes, which had reduced interest expense in prior periods, were fully amortized.

Other (Expense) Income, net
Results of operations include certain items that are not directly associated with our revenue-producing operations.
 
Years ended December 31,
 
2014
 
2013
 
2012
Loss on early extinguishment of debt
$
(10.4
)
 
$
(45.2
)
 
$
0.0

Gains on sales of businesses and investments, net
0.8

 
1.5

 
88.2

Vendor discounts and credit adjustments
3.3

 
8.6

 
15.3

Other (expense) income, net
(3.9
)
 
2.8

 
(3.0
)
Total other (expense) income, net
$
(10.2
)
 
$
(32.3
)
 
$
100.5

Loss on Early Extinguishment of Debt – During 2014, we recorded a charge of $10.4 related to the redemption of our 6.25% Notes. During 2013, we recorded a charge of $45.2 related to the redemption of our 10.00% Notes. See Note 2 to the Consolidated Financial Statements for further information.
Gains on Sales of Businesses and Investments, net – During 2014, we recognized gains from the sale of a business located in the Continental Europe region within our IAN segment and the sale of investments in our Rabbi Trusts, which were partially offset by a loss from the sale of a business in the domestic market within our IAN segment. During 2013, we recognized gains from the sale of marketable securities in the Asia Pacific region within our IAN segment and the sale of investments in our Rabbi Trusts, which were partially offset by a loss from the sale of a business in the United Kingdom within our IAN segment. During 2012, we recognized gains from the sale of remaining holdings in Facebook and a business in an international market within our CMG segment, which were partially offset by losses from the sale of businesses within our IAN segment, as well as an adjustment relating to a reserve for a change in estimate in connection with a business disposed of in a prior year.
Vendor Discounts and Credit Adjustments In connection with the liabilities related to vendor discounts and credits established as part of the restatement we presented in our 2004 Annual Report on Form 10-K, these adjustments reflect the reversal of certain of these liabilities primarily where the statute of limitations has lapsed, or as a result of differences resulting from settlements with clients or vendors.
Other (Expense) Income, net – During 2014, we recorded an other-than-temporary impairment on an investment in an unconsolidated affiliate in the Asia Pacific region within our IAN segment. During 2013, other income (expense), net primarily included a non-cash gain on re-measurement to fair value of an equity interest in an affiliate, located in the Asia Pacific region within our CMG segment, upon acquiring a controlling interest.







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