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10-K
INTERPUBLIC GROUP OF COMPANIES, INC. filed this Form 10-K on 02/22/2016
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 the retention and spending levels of existing clients and by our ability to win new 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. When we act as principal for these projects, we record the gross amount billed to the client as revenue, and the related costs are incurred as pass-through costs in office and general expenses.
 
Year ended December 31, 2014
 
Components of Change
 
Year ended December 31, 2015
 
Change
 
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 
Organic
 
Organic
 
Total
Consolidated
$
7,537.1

 
$
(408.5
)
 
$
23.7

 
$
461.5

 
$
7,613.8

 
6.1
%
 
1.0
 %
Domestic
4,184.0

 
0.0

 
7.8

 
283.7

 
4,475.5

 
6.8
%
 
7.0
 %
International
3,353.1

 
(408.5
)
 
15.9

 
177.8

 
3,138.3

 
5.3
%
 
(6.4
)%
United Kingdom
688.3

 
(49.8
)
 
3.7

 
45.5

 
687.7

 
6.6
%
 
(0.1
)%
Continental Europe
804.7

 
(132.3
)
 
13.3

 
11.5

 
697.2

 
1.4
%
 
(13.4
)%
Asia Pacific
922.5

 
(82.3
)
 
0.5

 
76.2

 
916.9

 
8.3
%
 
(0.6
)%
Latin America
470.4

 
(105.0
)
 
(3.9
)
 
22.0

 
383.5

 
4.7
%
 
(18.5
)%
Other
467.2

 
(39.1
)
 
2.3

 
22.6

 
453.0

 
4.8
%
 
(3.0
)%
During 2015, our revenue increased by $76.7, or 1.0%, compared to 2014, comprised of an organic revenue increase of $461.5, or 6.1%, and the effect of net acquisitions of $23.7, largely offset by an adverse foreign currency rate impact of $408.5. Our organic revenue increase was throughout all geographic regions, attributable to a combination of net client wins and higher spending in most client sectors, notably in the technology and telecom and healthcare sectors. The organic increase in our domestic market was driven by growth across most disciplines, most notably at our advertising and media businesses, our digital specialist agencies and our public relations agencies. In our international markets, the organic revenue increase was driven by growth across all disciplines, most notably at our advertising business in the Asia Pacific region, predominantly in China, India and Singapore, and in the United Kingdom. Also contributing to our international organic revenue increase were our digital specialist agencies and public relations businesses across all regions.
 
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 healthcare 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. The international organic revenue increase was driven by growth across all disciplines and nearly all geographic regions, most notably 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

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