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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)



From time to time, we evaluate market conditions and financing alternatives for opportunities to raise additional funds or otherwise improve our liquidity profile, enhance our financial flexibility and manage market risk. Our ability to access the capital markets depends on a number of factors, which include those specific to us, such as our credit rating, and those related to the financial markets, such as the amount or terms of available credit. There can be no guarantee that we would be able to access new sources of liquidity on commercially reasonable terms, or at all.

Funding Requirements
Our most significant funding requirements include our operations, non-cancelable operating lease obligations, capital expenditures, acquisitions, common stock dividends, taxes, debt service and contributions to pension and postretirement plans. Additionally, we may be required to make payments to minority shareholders in certain subsidiaries if they exercise their options to sell us their equity interests.
Notable funding requirements include:
Acquisitions – We paid cash of $28.6, which was net of cash acquired of $9.2, for acquisitions completed in 2015. We also paid cash of $71.5 in deferred payments for prior-year acquisitions as well as ownership increases in our consolidated subsidiaries. In addition to potential cash expenditures for new acquisitions, we expect to pay approximately $54.0 in 2016 related to prior-year acquisitions. We may also be required to pay approximately $47.0 in 2016 related to put options held by minority shareholders if exercised. We will continue to evaluate strategic opportunities to grow and continue to strengthen our market position, particularly in our digital and marketing services offerings, and to expand our presence in high-growth and key strategic world markets.
Dividends – During 2015, we paid four quarterly cash dividends of $0.12 per share on our common stock, which corresponded to an aggregate dividend payment of $195.5. On February 12, 2016, we announced that our Board of Directors (the "Board") had declared a common stock cash dividend of $0.15 per share, payable on March 15, 2016 to holders of record as of the close of business on March 1, 2016. Assuming we pay a quarterly dividend of $0.15 per share and there is no significant change in the number of outstanding shares as of December 31, 2015, we would expect to pay approximately $242.0 over the next twelve months.
Contributions to pension plans – Our funding policy regarding our pension plans is to make contributions necessary to satisfy minimum pension funding requirements, plus such additional contributions as we consider appropriate to improve the funded status of our plans. During 2015, we contributed $3.2 and $21.6 of cash to our domestic and foreign pension plans, respectively. For 2016, we expect to contribute approximately $21.0 of cash to our foreign pension plans. We expect to make no contributions to our domestic pension plan in 2016.

The following summarizes our estimated contractual cash obligations and commitments as of December 31, 2015 and their effect on our liquidity and cash flow in future periods.
 
Years ended December 31,
 
Thereafter
 
Total
 
2016
 
2017
 
2018
 
2019
 
2020
 
Long-term debt 1
$
1.9

 
$
323.3

 
$
1.8

 
$
1.8

 
$
0.9

 
$
1,282.5

 
$
1,612.2

Interest payments on long-term debt 1
58.5

 
57.8

 
51.8

 
51.8

 
51.4

 
116.0

 
387.3

Non-cancelable operating lease obligations 2
317.6

 
298.5

 
271.4

 
245.4

 
224.5

 
909.0

 
2,266.4

Contingent acquisition payments 3
102.2

 
109.7

 
56.1

 
20.0

 
12.7

 
15.0

 
315.7

Uncertain tax positions 4
29.0

 
108.4

 
58.5

 
19.3

 
3.8

 
7.9

 
226.9

Total
$
509.2

 
$
897.7

 
$
439.6

 
$
338.3

 
$
293.3

 
$
2,330.4

 
$
4,808.5

 
1
Amounts represent maturity at book value and interest payments based on contractual obligations. We may redeem all or some of the 2.25% Senior Notes due 2017, the 4.00% Senior Notes due 2022, the 3.75% Senior Notes due 2023 and the 4.20% Senior Notes due 2024 at the greater of the principal amount of the notes to be redeemed or a "make-whole" amount, plus, in each case, accrued and unpaid interest to the date of redemption.
2
Non-cancelable operating lease obligations are presented net of future receipts on contractual sublease arrangements.
3
We have structured certain acquisitions with additional contingent purchase price obligations based on factors including future performance of the acquired entity. See Note 4 and Note 14 to the Consolidated Financial Statements for further information.
4
The amounts presented are estimates due to inherent uncertainty of tax settlements, including the ability to offset liabilities with tax loss carryforwards.

Share Repurchase Program
In February 2015, our Board authorized a new share repurchase program to repurchase from time to time up to $300.0, excluding fees, of our common stock (the "2015 Share Repurchase Program"), which was in addition to the remaining amount

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