IPG
    Print Page  Close Window

SEC Filings

10-K
INTERPUBLIC GROUP OF COMPANIES, INC. filed this Form 10-K on 02/21/2017
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, 2016.
 
 
2017
 
2018
 
2019
 
2020
 
2021
 
Thereafter
 
Total
Deferred acquisition payments
 
$
76.9

 
$
31.6

 
$
25.1

 
$
8.9

 
$
26.9

 
$
11.4

 
$
180.8

Redeemable noncontrolling interests and call options with affiliates 1
 
34.7

 
76.5

 
32.9

 
3.9

 
3.1

 
4.2

 
155.3

Total contingent acquisition payments
 
$
111.6

 
$
108.1

 
$
58.0

 
$
12.8

 
$
30.0

 
$
15.6

 
$
336.1

 
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, 2016. These estimated payments of $25.9 are included within the total payments expected to be made in 2017, and will continue to be carried forward into 2018 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
In the normal course of business, we are involved in various legal proceedings, and subject to investigations, inspections, audits, inquiries and similar actions by governmental authorities. 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.
The Company confirmed that one of its standalone domestic agencies has been contacted by the Department of Justice Antitrust Division for documents regarding video production practices and is cooperating with the government.

Note 14:  Recent Accounting Standards
Accounting pronouncements not listed below were assessed and determined to be not applicable or are expected to have minimal impact on our Consolidated Financial Statements.
Cash Flow Classification
In August 2016, the FASB issued amended guidance which eliminates the diversity in practice related to the classification of certain cash receipts and payments in the Statement of Cash Flows by adding or clarifying guidance on eight specific cash flow issues. We have early adopted this amended guidance retrospectively as of the quarter ended December 31, 2016, which primarily resulted in a change in classification of debt extinguishment costs on the Consolidated Statement of Cash Flows from an operating activity to a financing activity.
Financial Instrument Credit Losses
In June 2016, the FASB issued amended guidance on the accounting for credit losses on certain types of financial instruments, including trade receivables. The new model uses a forward-looking expected loss method, as opposed to the incurred loss method in current U.S. GAAP, which will generally result in earlier recognition of allowances for losses. This amended guidance is effective beginning January 1, 2020, with early adoption permitted as early as January 1, 2019. We are currently assessing the impact the adoption of the amended guidance will have on our Consolidated Financial Statements.

71