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SEC Filings

10-K
INTERPUBLIC GROUP OF COMPANIES, INC. filed this Form 10-K on 02/23/2015
Entire Document
 
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)

A summary of our credit facilities is presented below.
 
 
December 31,
 
 
2014
 
2013
 
 
Total
Facility
 
Amount
Outstanding
 
Letters of
Credit
 
Total
Available
 
Total
Facility
 
Amount
Outstanding
 
Letters of
Credit
 
Total
Available
Committed credit agreement
 
$
1,000.0

 
$
0.0

 
$
16.0

 
$
984.0

 
$
1,000.0

 
$
0.0

 
$
14.3

 
$
985.7

Uncommitted credit agreements
 
$
740.3

 
$
107.2

 
$
3.9

 
$
629.2

 
$
700.2

 
$
179.1

 
$
4.2

 
$
516.9

The Credit Agreement is a revolving facility, expiring in December 2018 (the "Credit Agreement"), under which amounts borrowed by us or any of our subsidiaries designated under the Credit Agreement may be repaid and reborrowed, subject to an aggregate lending limit of $1,000.0 or the equivalent in other currencies. The Company has the ability to increase the commitments under the Credit Agreement from time to time by an additional amount of up to $250.0, provided the Company receives commitments for such increases and satisfies certain other conditions. The aggregate available amount of letters of credit outstanding may decrease or increase, subject to a sublimit on letters of credit of $200.0 or the equivalent in other currencies. Our obligations under the Credit Agreement are unsecured.
Under the Credit Agreement, we can elect to receive advances bearing interest based on either the base rate or the Eurocurrency rate (each as defined in the Credit Agreement) plus an applicable margin that is determined based on our credit ratings. As of December 31, 2014, the applicable margin is 0.275% for base rate advances and 1.275% for Eurocurrency rate advances. Letter of credit fees accrue on the average daily aggregate amount of letters of credit outstanding, at a rate equal to the applicable margin for Eurocurrency rate advances, and fronting fees accrue on the aggregate amount of letters of credit outstanding at an annual rate of 0.250%. We also pay a facility fee at an annual rate of 0.225% on the aggregate lending commitment under the Credit Agreement.

We were in compliance with all of our covenants in the Credit Agreement as of December 31, 2014. The financial covenants in the Credit Agreement require that we maintain the following financial covenants listed below as of December 31, 2014 and thereafter.
Interest coverage ratio (not less than): 1
 
5.00x
Leverage ratio (not greater than): 2
 
3.25x
 
1
The interest coverage ratio is defined as EBITDA, as defined in the Credit Agreement, to net interest expense.

2
The leverage ratio is defined as debt as of the last day of such fiscal quarter to EBITDA, as defined in the Credit Agreement, for the four quarters then ended.

Cash Pooling
We aggregate our domestic cash position on a daily basis. Outside the United States we use cash pooling arrangements with banks to help manage our liquidity requirements. In these pooling arrangements, several IPG agencies agree with a single bank that the cash balances of any of the agencies with the bank will be subject to a full right of set-off against amounts the other agencies owe the bank, and the bank provides for overdrafts as long as the net balance for all the agencies does not exceed an agreed-upon level. Typically, each agency pays interest on outstanding overdrafts and receives interest on cash balances. Our Consolidated Balance Sheets reflect cash, net of bank overdrafts, under all of our pooling arrangements, and as of December 31, 2014 and 2013 the amounts netted were $1,590.7 and $1,415.3, respectively.


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