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SEC Filings

10-Q
INTERPUBLIC GROUP OF COMPANIES, INC. filed this Form 10-Q on 04/21/2017
Entire Document
 

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


The following table details our staff cost ratio.
 
Three months ended
March 31,
 
2017
 
2016
Salaries and related expenses
72.7
%
 
72.8
%
Base salaries, benefits and tax
60.3
%
 
59.4
%
Incentive expense
4.8
%
 
4.6
%
Severance expense
1.2
%
 
1.4
%
Temporary help
4.1
%
 
4.0
%
All other salaries and related expenses
2.3
%
 
3.4
%
Office and General Expenses
 
 
 
Components of Change
 
 
 
Change
 
2016
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 
Organic
 
2017
Organic
 
Total
Three months ended March 31,
$
450.2

 
$
(5.0
)
 
$
(6.9
)
 
$
10.5

 
$
448.8

 
2.3
%
 
(0.3
)%
Office and general expenses in the first quarter of 2017 decreased by $1.4 compared to the first quarter of 2016, comprised of an organic increase of $10.5, offset by the effect of net divestitures of $6.9 and a favorable foreign currency rate impact of $5.0. The organic increase was attributable to higher occupancy costs and higher production expenses related to pass-through costs, which are also reflected in revenue, as compared to the prior-year period, partially offset by lower adjustments to contingent acquisition obligations. Our office and general expense ratio, defined as office and general expenses as a percentage of total consolidated revenue, decreased in the first quarter of 2017 to 25.6% from 25.8%, when compared to the prior-year period.
The following table details our office and general expense ratio.
 
Three months ended
March 31,
 
2017
 
2016
Office and general expenses
25.6
%
 
25.8
%
Professional fees
1.6
%
 
1.8
%
Occupancy expense (excluding depreciation and amortization)
7.3
%
 
7.2
%
Travel & entertainment, office supplies and telecommunications
3.3
%
 
3.4
%
All other office and general expenses 1
13.4
%
 
13.4
%
 
1
Includes production expenses and, to a lesser extent, depreciation and amortization, bad debt expense, adjustments to contingent acquisition obligations, foreign currency losses (gains), spending to support new business activity, net restructuring and other reorganization-related charges (reversals), long-lived asset impairments and other expenses.

EXPENSES AND OTHER INCOME
 
Three months ended
March 31,
 
2017
 
2016
Cash interest on debt obligations
$
(18.6
)
 
$
(19.3
)
Non-cash interest
(2.3
)
 
(3.3
)
Interest expense
(20.9
)
 
(22.6
)
Interest income
5.2

 
5.8

Net interest expense
(15.7
)
 
(16.8
)
Other income (expense), net
0.8

 
(19.2
)
Total (expenses) and other income
$
(14.9
)
 
$
(36.0
)

20