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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)



Segment Results of Operations
As discussed in Note 13 to the Consolidated Financial Statements, we have two reportable segments as of December 31, 2014: IAN and CMG. We also report results for the "Corporate and other" group.

IAN
REVENUE
 
Year ended December 31, 2013
 
Components of Change
 
Year ended December 31, 2014
 
Change
 
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 
Organic
 
Organic
 
Total
Consolidated
$
5,795.6

 
$
(76.7
)
 
$
61.0

 
$
317.4

 
$
6,097.3

 
5.5
%
 
5.2
%
Domestic
3,094.0

 
0.0

 
10.2

 
171.6

 
3,275.8

 
5.5
%
 
5.9
%
International
2,701.6

 
(76.7
)
 
50.8

 
145.8

 
2,821.5

 
5.4
%
 
4.4
%
During 2014, IAN revenue increased by $301.7 compared to 2013, comprised of an organic revenue increase of $317.4 and the effect of net acquisitions of $61.0, partially offset by an adverse foreign currency rate impact of $76.7. The organic revenue increase was primarily 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 a modest decline in the technology and telecom and consumer goods sectors. The organic revenue increase in our domestic market was driven by growth across all our disciplines. The international organic revenue increase was driven by our advertising and media businesses, primarily in the Asia Pacific region, led by Australia and China, in the Latin America region, primarily in Brazil, and in Other regions, primarily in the Middle East.
 
Year ended December 31, 2012
 
Components of Change
 
Year ended December 31, 2013
 
Change
 
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 
Organic
 
Organic
 
Total
Consolidated
$
5,728.5

 
$
(73.2
)
 
$
40.4

 
$
99.9

 
$
5,795.6

 
1.7
%
 
1.2
 %
Domestic
3,020.8

 
0.0

 
26.4

 
46.8

 
3,094.0

 
1.5
%
 
2.4
 %
International
2,707.7

 
(73.2
)
 
14.0

 
53.1

 
2,701.6

 
2.0
%
 
(0.2
)%
During 2013, IAN revenue increased by $67.1 compared to 2012, comprised of an organic revenue increase of $99.9 and the effect of net acquisitions of $40.4, partially offset by an adverse foreign currency rate impact of $73.2. The organic revenue increase in our domestic market was 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 and retail sectors. In our international markets, the organic revenue increase was primarily due to net higher spending from existing clients across most client sectors, primarily in the Asia Pacific region, led by Australia, and in the Latin America region, primarily in Brazil. The international organic revenue increase was partially offset by a decline in the Continental Europe region across most countries in the market.

SEGMENT OPERATING INCOME
 
Years ended December 31,
 
Change
 
2014
 
2013
 
2012
 
2014 vs 2013
 
2013 vs 2012
Segment operating income1
$
777.1

 
$
662.1

 
$
700.2

 
17.4
%
 
(5.4
)%
Operating margin1
12.7
%
 
11.4
%
 
12.2
%
 
 
 
 
 

1
Segment operating income and operating margin exclude restructuring and other reorganization-related charges of approximately $0.7 and $55.4 for the years ended December 31, 2014 and 2013, respectively, and reversals of approximately $0.9 for the year ended December 31, 2012. See "Restructuring and Other Reorganization-Related Charges (Reversals), net" in Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 8 to the Consolidated Financial Statements for further information.

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