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SEC Filings

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)



INCOME TAXES
 
Years ended December 31,
 
2015
 
2014
 
2013
Income before income taxes
$
762.2

 
$
720.7

 
$
468.0

Provision for income taxes
$
282.8

 
$
216.5

 
$
181.2

Effective income tax rate
37.1
%
 
30.0
%
 
38.7
%
Our tax rates are affected by many factors, including our worldwide earnings from various countries, changes in legislation and tax characteristics of our income. In 2015, our effective income tax rate of 37.1% was negatively impacted primarily by losses in certain foreign jurisdictions where we receive no tax benefit due to 100% valuation allowances and from the losses on sales of businesses for which we did not receive a full tax benefit. The negative impacts were partially offset by the reversal of valuation allowances in Continental Europe and the recognition of previously unrecognized tax benefits as a result of the settlement of the 2010 U.S. federal income tax audit.
In 2014, our effective income tax rate of 30.0% was positively impacted from changes to our valuations allowances of $66.0. The primary drivers of the net change were associated with a valuation allowance reversal of $124.8 in one jurisdiction partially offset by the establishment of a valuation allowance of $57.2 in another jurisdiction, both in Continental Europe. In addition, our effective income tax rate was negatively impacted by losses in certain foreign jurisdictions where we receive no tax benefit due to 100% valuation allowances.
In 2013, our effective income tax rate of 38.7% was positively impacted by the recognition of losses attributable to worthless securities in a consolidated subsidiary and the recognition of previously unrecognized tax benefits as a result of the settlement of the 2002-2006 New York State audit cycle. Our effective income tax rate was negatively impacted primarily by losses in certain foreign jurisdictions where we receive no tax benefit due to 100% valuation allowances.
See Note 7 to the Consolidated Financial Statements for further information.

EARNINGS PER SHARE
Basic earnings per share available to IPG common stockholders for the years ended December 31, 2015, 2014 and 2013 were $1.11, $1.14 and $0.62 per share, respectively. Diluted earnings per share for the years ended December 31, 2015, 2014 and 2013 were $1.09, $1.12 and $0.61 per share, respectively.
Both basic and diluted earnings per share for the year ended December 31, 2015 included a negative impact of $0.12 per share from the losses on sales of businesses due to completed dispositions and the classification of certain assets as held for sale. Both basic and diluted earnings per share for the year ended December 31, 2014 included a positive impact of $0.16 per share from the net reversal on valuation allowances on deferred tax assets in Continental Europe. Basic and diluted earnings per share for the year ended December 31, 2014 also included a negative impact of $0.01 and $0.02 per share, respectively, from a loss on early extinguishment of debt, net of tax. Basic and diluted earnings per share for the year ended December 31, 2013 included a negative impact of $0.12 and $0.11 per share, respectively, from the effects of restructuring and related costs, net of tax. Basic and diluted earnings per share for the year ended December 31, 2013 also included a negative impact of $0.06 per share from a loss on early extinguishment of debt, net of tax.


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