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SEC Filings

INTERPUBLIC GROUP OF COMPANIES, INC. filed this Form 8-K on 10/30/2017
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In terms of our agencies, we were led in Q3 by increases at Mediabrands, as well as FCB, Deutsch, and Hill Holliday. Among client sectors, healthcare continued its strong trend in Q3, and we also continued to see notable growth in the auto & transportation and government sectors.
These increases, however, were largely offset in the quarter by continued softness in the client sectors we had called out earlier this year. Consistent with our second quarter, we saw significant reductions in client spend in the CPG sector, and continued weakness in tech & telecom, and in financial services, due largely to cycling through prior-year client losses.
On our second quarter conference call, we called attention to the issue we had begun to see in the project-driven part of the business. During the third quarter, several of our largest clients continued to defer or cancel project spending, which particularly weighed on the growth of our digital and marketing services disciplines.
This was true even as some projects that had been pushed back in the earlier part of the year came onstream during the third quarter. The net of this, however, was a negative to some units that have been among our higher-growth disciplines in recent years.
These same agencies and disciplines generated strong new business wins in the quarter, which should translate to growth as we look forward. On the project front, R/GA won significant new digital assignments during Q3, as did Weber Shandwick in public relations. The pipeline for project assignments remains active, and we know that our offerings are highly competitive.
Another question that we are being asked relates to the fundamentals of our business model and has to do with new entrants into the sector. Despite a great deal of press coverage announcing that consultants are making inroads into our business, we do not see them in any material way in new business, and when we do, we’ve been faring quite well on those opportunities. A notable example was the recent McDonald’s U.S. digital pitch won by Huge against a range of agency and consultant competitors.
Turning to our regional performance, third-quarter U.S. organic growth was 1.3%, and importantly was 2.0% excluding the impact of lower pass-through revenues. In light of the current macro industry environment, that’s an encouraging data point. We see it as an indicator that the business is fundamentally sound in our largest geographic market.
Organic growth of our international markets decreased 70 basis points, compared to a very strong 8% a year ago. Excluding the impact of lower pass-through revenues, international organic revenue was up 70 basis points. We had organic increases in the U.K., Continental Europe and our Other Markets group, while AsiaPac and LatAm decreased.
During Q3 we used $101 million to repurchase 4.7 million shares. Over the trailing 12 months, we utilized approximately $326 million for share repurchases. As of quarter end, we have $240 million remaining on our share repurchase authorization.
Since instituting our return-of-capital programs in 2011, we have returned $3.5 billion to shareholders in dividends and share repurchases, as well as reduced our dilutive share count by 29%.
Turning to our outlook, we continue to be confident of our Company’s long-term position in the marketplace. Our talent and our agency brands are strong, and highly competitive. That said, slower growth through nine months, combined with a challenging comp in Q4, require us to adjust our view for the short term.