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SEC Filings

8-K
INTERPUBLIC GROUP OF COMPANIES, INC. filed this Form 8-K on 10/30/2017
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region’s largest market. We continued to see very strong growth in Mexico, Argentina, Chile and Colombia.
In our Other Markets group, organic growth was 3.4%, which was due to growth in Canada and South Africa.

Moving on to slide 6, we chart the longer view of our organic revenue change on a trailing-12-month basis. The most recent data point is 2.3%.
On slide 7, we turn to operating expenses.
In the quarter, our total operating expenses decreased by 1.8% from a year ago, under our reported revenue decrease of 1.0%.
Our ratio of total salaries & related expenses to revenue was 64.5%. Compared to a year ago, we de-levered on our expense for base payroll, benefits and tax, due to decelerating revenue growth, and also due to the decrease in pass-through revenues, which are offset in our O&G expense. Going the other way, however, we had strong leverage on our expense for incentives.
Total headcount at quarter-end was approximately 50,400, which is flat from a year ago.
In our office & general expenses, our ratio of total O&G to revenue was 24.0%, an improvement of 130 basis points from a year ago, the result of lower pass-through expenses.

Slide 8 depicts our operating margin history on a trailing-12-month basis. The most recent data point is 12.1%.
Slide 9 is provided for the clarity of our year-over-year earnings per share comparison:
This is the adjustment from diluted earnings per share of $0.37 as reported in the quarter to $0.31 per share as adjusted.
As you can see, our pre-tax results include a below-the-line loss of $8.7 million, related to the sale of small, non-strategic agencies. We had a small tax benefit against the loss, which is shown here. The net impact was a loss of $0.02 per diluted share. Moving to the right side on this slide, our tax provision reflects the benefit of significant federal tax credits in the quarter, $31 million, or $0.08 per share.
For the nine months we are adjusting similarly, from $0.66 as reported to an adjusted $0.63 per share.

Slide 10 is our cash flow for the nine months.
Cash used in operations was $139 million, compared with $27 million a year ago. You’ll recall that our cash flow is highly seasonal. We typically use cash in operations over the first nine months of the year, followed by a sizeable cash inflow in our fourth quarter. While our working capital results can be volatile from year to year, note that, before working capital changes, cash from operations generated $474 million this year compared with a similar level, $465 million, last year.
Investing activities used $141 million over the first nine months, mainly in cap-ex.
Our financing activities used $113 million, chiefly for share repurchases of common stock and our dividend, partially offset by an increase in our short-term borrowings.
Our net decrease in cash for the period was $392 million, compared with $611 million a year ago.

Moving on to slide 11, the current portion of our balance sheet, we ended the third quarter with $705 million in cash, compared with $892 million a year ago. The comparison to December 31 reflects that our cash level is seasonal and tends to peak at year end.

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