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SEC Filings

10-K
INTERPUBLIC GROUP OF COMPANIES, INC. filed this Form 10-K on 02/22/2016
Entire Document
 
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)

Contingent Acquisition Obligations
The following table details the estimated future contingent acquisition obligations payable in cash as of December 31, 2015.
 
 
2016
 
2017
 
2018
 
2019
 
2020
 
Thereafter
 
Total
Deferred acquisition payments
 
$
53.8

 
$
39.2

 
$
13.1

 
$
13.6

 
$
7.5

 
$
3.1

 
$
130.3

Redeemable noncontrolling interests and call options with affiliates 1
 
48.4

 
70.5

 
43.0

 
6.4

 
5.2

 
11.9

 
185.4

Total contingent acquisition payments
 
102.2

 
109.7

 
56.1

 
20.0

 
12.7

 
15.0

 
315.7

Less: cash compensation expense included above
 
0.2

 
0.2

 
0.1

 
0.1

 
0.1

 
0.0

 
0.7

Total
 
$
102.0

 
$
109.5

 
$
56.0

 
$
19.9

 
$
12.6

 
$
15.0

 
$
315.0

 
1
We have entered into certain acquisitions that contain both redeemable noncontrolling interests and call options with similar terms and conditions. The estimated amounts listed would be paid in the event of exercise at the earliest exercise date. We have certain redeemable noncontrolling interests that are exercisable at the discretion of the noncontrolling equity owners as of December 31, 2015. These estimated payments of $31.0 are included within the total payments expected to be made in 2016, and will continue to be carried forward into 2017 or beyond until exercised or expired. Redeemable noncontrolling interests are included in the table at current exercise price payable in cash, not at applicable redemption value in accordance with the authoritative guidance for classification and measurement of redeemable securities.

The majority of these payments are contingent upon achieving projected operating performance targets and satisfying other conditions specified in the related agreements and are subject to revision in accordance with the terms of the respective agreements. See Note 4 for further information relating to the payment structure of our acquisitions.

Legal Matters
We are involved in various legal proceedings, and subject to investigations, inspections, audits, inquiries and similar actions by governmental authorities, arising in the normal course of business. The types of allegations that arise in connection with such legal proceedings vary in nature, but can include claims related to contract, employment, tax and intellectual property matters. We evaluate all cases each reporting period and record liabilities for losses from legal proceedings when we determine that it is probable that the outcome in a legal proceeding will be unfavorable and the amount, or potential range, of loss can be reasonably estimated. In certain cases, we cannot reasonably estimate the potential loss because, for example, the litigation is in its early stages. While any outcome related to litigation or such governmental proceedings in which we are involved cannot be predicted with certainty, management believes that the outcome of these matters, individually and in the aggregate, will not have a material adverse effect on our financial condition, results of operations or cash flows.
As previously disclosed, on April 10, 2015, a federal judge in Brazil authorized the search of the records of an agency's offices in São Paulo and Brasilia, in connection with an ongoing investigation by Brazilian authorities involving payments potentially connected to local government contracts. The Company had previously investigated the matter and taken a number of remedial and disciplinary actions. The Company is in the process of concluding a settlement related to these matters with government agencies and has provided for such settlement in its Consolidated Financial Statements.

Note 15:  Recent Accounting Standards
Fair Value Measurements
In January 2016, the Financial Accounting Standards Board (the “FASB”) issued amended guidance which updates the fair value presentation requirements for certain financial instruments. Equity investments with readily determinable fair values, other than those accounted for using the equity method of accounting, must now be measured at fair value with changes recorded through current earnings rather than other comprehensive income. This amended guidance will be effective for us beginning January 1, 2018, at which time a cumulative-effect adjustment may be recorded on our Consolidated Balance Sheets. We do not expect the adoption of this amended guidance to have a significant impact on our consolidated Financial Statements.
Deferred Income Taxes
In November 2015, the FASB issued amended guidance which requires all deferred income tax assets and liabilities to be presented as noncurrent on the balance sheet. This amended guidance is effective beginning January 1, 2017, and may be applied retrospectively or prospectively, with early adoption permitted. We have early adopted this amended guidance and applied the presentation prospectively as of December 31, 2015. The adoption did not have a significant impact on our Consolidated Financial Statements. See Note 7 to the Consolidated Financial Statements for additional information related to the adoption of this amended guidance.

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