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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
_______________________

 
FORM 8-K

_______________________


CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 
Date of report (Date of earliest event reported): April 21, 2017
 
The Interpublic Group of Companies, Inc.
(Exact Name of Registrant as Specified in Charter)
 Delaware
1-6686
13-1024020
(State or Other Jurisdiction
of Incorporation)
(Commission File
Number)
(IRS Employer
Identification No.)
 
 
 
909 Third Avenue, New York, New York
10022
(Address of Principal Executive Offices)
(Zip Code)
 
 
Registrant’s telephone number, including area code: 212-704-1200
 
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
  
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o





Item 2.02. Results of Operations and Financial Condition.

On April 21, 2017, The Interpublic Group of Companies, Inc. (i) issued a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated by reference herein, announcing its results for the first quarter of 2017, (ii) held a conference call to discuss the foregoing results and (iii) posted an investor presentation, a copy of which is attached hereto as Exhibit 99.2 and incorporated by reference herein, on its website in connection with the conference call.

Item 9.01. Financial Statements and Exhibits.

Exhibit 99.1: Press release dated April 21, 2017 (furnished pursuant to Item 2.02)

Exhibit 99.2: Investor presentation dated April 21, 2017 (furnished pursuant to Item 2.02)






SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
THE INTERPUBLIC GROUP OF COMPANIES, INC.
Date: April 21, 2017
By:        /s/ Andrew Bonzani                           
 
Name:   Andrew Bonzani
Title:     Senior Vice President, General Counsel and Secretary








Exhibit


https://cdn.kscope.io/d995dbbd69714fc0872026c72176702d-ipglogo2015a05.jpg

FOR IMMEDIATE RELEASE
 
New York, NY (April 21, 2017)


Interpublic Announces First Quarter 2017 Results

•
First quarter reported revenue increase of 0.7% and organic revenue increase of 2.7%; effect of FX on reported growth was negative 1.0% and impact of net divestitures was negative 1.0%
•
Operating income increase of 29% to $29.7 million, compared to $23.0 million a year ago, in seasonally small first quarter
•
Reported diluted earnings per share was $0.05, compared to $0.01 per basic and diluted share in the prior year period
•
Management confirms that the company remains well-positioned to achieve 2017 financial targets

Summary

Revenue
•
First quarter 2017 revenue increased 0.7% to $1.75 billion, compared to $1.74 billion in the first quarter of 2016, with an organic revenue increase of 2.7% compared to the prior-year period. This was comprised of an organic increase of 2.9% in the U.S. and 2.2% internationally.

Operating Results
•
Operating income in the first quarter of 2017 was $29.7 million, compared to $23.0 million in 2016.
•
Operating margin was 1.7% for the first quarter of 2017, compared to 1.3% in 2016.

Net Results
•
Income tax benefit in the first quarter of 2017 was $2.1 million on income before income taxes of $14.8 million.
•
First quarter 2017 net income available to IPG common stockholders was $21.5 million, resulting in earnings of $0.05 per basic and diluted share. This compares to net income available to IPG common stockholders a year ago of $5.4 million, resulting in earnings of $0.01 per basic and diluted share.

"Against very challenging comparisons, we showed solid organic revenue growth in the quarter, with contributions from across our agencies and all marketing disciplines. Operating margin increased

Interpublic Group 909 Third Avenue New York, NY 10022 212-704-1200 tel 212-704-1201 fax



40 basis points compared to last year’s first quarter. Underlying this performance is the excellence of our people. Outstanding consumer insights, industry-leading creativity, top tier digital capabilities, and the delivery of efficient and precisely targeted communications have all become hallmarks of the agencies in our portfolio. By continuing to deliver integrated ‘open architecture’ solutions and increasing investment in our holistic data platform, we will ensure that we stay highly relevant in today’s complex marketing landscape," said Michael I. Roth, Interpublic's Chairman and CEO.

“The first quarter is seasonally small for us, but our first quarter results are consistent with the view we had coming into the year, and the tone of the business remains sound. We therefore believe we are well positioned to achieve our full year targets of organic revenue in the 3% to 4% range, as well as to improve operating margin by an additional 50 basis points relative to 2016 levels. Combined with the strength of our balance sheet and our commitment to capital return, that means there is significant potential at IPG for further value creation and enhanced shareholder value,” concluded Mr. Roth.

Operating Results

Revenue
Revenue of $1.75 billion in the first quarter of 2017 increased 0.7% compared with the same period in 2016. During the quarter, the effect of foreign currency translation was negative 1.0%, the impact of net divestitures was negative 1.0%, and the resulting organic revenue increase was 2.7%.

Operating Expenses
Total operating expenses increased 0.3% in the first quarter of 2017 from a year ago, compared with revenue growth of 0.7%.

During the first quarter of 2017, salaries and related expenses were $1.28 billion, an increase of 0.5% compared to the same period in 2016.

Staff cost ratio, which is total salaries and related expenses as a percentage of total revenue, was 72.7% in the first quarter of 2017 compared to 72.8% in the same period in 2016.

During the first quarter of 2017, office and general expenses were $448.8 million, a decrease of 0.3% compared to the same period in 2016.

Office and general expenses were 25.6% of total revenue in the first quarter of 2017 compared to with 25.8% a year ago.


Interpublic Group 909 Third Avenue New York, NY 10022 212-704-1200 tel 212-704-1201 fax



Non-Operating Results and Tax
Net interest expense of $15.7 million decreased by $1.1 million in the first quarter of 2017 compared to the same period in 2016.

The income tax benefit in the first quarter of 2017 was $2.1 million on income before income taxes of $14.8 million, compared to a benefit of $15.6 million on loss before income taxes of $13.0 million in the same period in 2016. Our income tax benefit was driven by our mix of profit and loss by tax jurisdiction around the world and the excess tax benefit of share-based compensation, against our seasonally small first quarter pre-tax earnings.

Balance Sheet
At March 31, 2017, cash, cash equivalents and marketable securities totaled $778.1 million, compared to $1.10 billion at December 31, 2016 and $680.3 million at March 31, 2016. Total debt was $1.92 billion at March 31, 2017, compared to $1.69 billion at December 31, 2016.

Share Repurchase Program and Common Stock Dividend
During the first quarter of 2017, the company repurchased 2.3 million shares of its common stock at an aggregate cost of $55.0 million and an average price of $23.85 per share, including fees.

During the first quarter of 2017, the company declared and paid a common stock cash dividend of $0.18 per share, for a total of $70.9 million.

For more information concerning the company's financial results, please refer to the accompanying slide presentation available on our website, www.interpublic.com.

# # #
About Interpublic
Interpublic is one of the world's leading organizations of advertising agencies and marketing services companies. Major global brands include BPN, Craft, FCB (Foote, Cone & Belding), FutureBrand, Golin, Huge, Initiative, Jack Morton Worldwide, MAGNA, McCann, Momentum, MRM//McCann, MullenLowe Group, Octagon, R/GA, UM and Weber Shandwick. Other leading brands include Avrett Free Ginsberg, Campbell Ewald, Carmichael Lynch, Deutsch, Hill Holliday, ID Media and The Martin Agency. For more information, please visit www.interpublic.com.

# # #
Contact Information
Tom Cunningham
(Press)
(212) 704-1326

Jerry Leshne
(Analysts, Investors)
(212) 704-1439

Interpublic Group 909 Third Avenue New York, NY 10022 212-704-1200 tel 212-704-1201 fax



Cautionary Statement

This release contains forward-looking statements. Statements in this release that are not historical facts, including statements about management's beliefs and expectations, constitute forward-looking statements. These statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined under Item 1A, Risk Factors, in our most recent Annual Report on Form 10-K. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, the following:

•
potential effects of a challenging economy, for example, on the demand for our advertising and marketing services, on our clients' financial condition and on our business or financial condition;
•
our ability to attract new clients and retain existing clients;
•
our ability to retain and attract key employees;
•
risks associated with assumptions we make in connection with our critical accounting estimates, including changes in assumptions associated with any effects of a weakened economy;
•
potential adverse effects if we are required to recognize impairment charges or other adverse accounting-related developments;
•
risks associated with the effects of global, national and regional economic and political conditions, including counterparty risks and fluctuations in economic growth rates, interest rates and currency exchange rates; and
•
developments from changes in the regulatory and legal environment for advertising and marketing and communications services companies around the world.

Investors should carefully consider these factors and the additional risk factors outlined in more detail under Item 1A, Risk Factors, in our most recent Annual Report on Form 10-K.

Interpublic Group 909 Third Avenue New York, NY 10022 212-704-1200 tel 212-704-1201 fax



THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED SUMMARY OF EARNINGS
FIRST QUARTER REPORT 2017 AND 2016
(Amounts in Millions except Per Share Data)
(UNAUDITED)
 
 
 
 
 
Three months ended March 31,
 
 
2017
 
2016
 
Fav. (Unfav.)
% Variance
Revenue:
 
 
 
 
 
 
United States
$
1,111.8

 
$
1,091.2

 
1.9
 %
 
International
642.1

 
650.8

 
(1.3
)%
Total Revenue
1,753.9

 
1,742.0

 
0.7
 %
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
Salaries and Related Expenses
1,275.4

 
1,268.8

 
(0.5
)%
 
Office and General Expenses
448.8

 
450.2

 
0.3
 %
Total Operating Expenses
1,724.2

 
1,719.0

 
(0.3
)%
Operating Income
29.7

 
23.0

 
29.1
 %
Operating Margin %
1.7
%
 
1.3
%
 
 
 
 
 
 
 
 
 
Expenses and Other Income:
 
 
 
 
 
 
Interest Expense
(20.9
)
 
(22.6
)
 
 
 
Interest Income
5.2

 
5.8

 
 
 
Other Income (Expense), Net
0.8

 
(19.2
)
 
 
Total (Expenses) and Other Income
(14.9
)
 
(36.0
)
 
 
 
 
 
 
 
 
 
Income (Loss) Before Income Taxes
14.8

 
(13.0
)
 
 
Benefit of Income Taxes
(2.1
)
 
(15.6
)
 
 
Income of Consolidated Companies
16.9

 
2.6

 
 
 
Equity in Net Income of Unconsolidated Affiliates
1.2

 
0.1

 
 
Net Income
18.1

 
2.7

 
 
 
Net Loss Attributable to Noncontrolling Interests
3.4

 
2.7

 
 
Net Income Available to IPG Common Stockholders
$
21.5

 
$
5.4

 
 
 
 
 
 
 
 
Earnings Per Share Available to IPG Common Stockholders:
 
 
 
 
 
Basic
$
0.05

 
$
0.01

 
 
Diluted
$
0.05

 
$
0.01

 
 
 
 
 
 
 
 
Weighted-Average Number of Common Shares Outstanding:
 
 
 
 
 
Basic
391.7

 
400.6

 
 
Diluted
399.3

 
409.3

 
 
 
 
 
 
 
 
Dividends Declared Per Common Share
$
0.18

 
$
0.15

 
 
 
 
 
 
 
 
 
 
 
 
 
 




Interpublic Group 909 Third Avenue New York, NY 10022 212-704-1200 tel 212-704-1201 fax



 
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED RESULTS
(Amounts in Millions except Per Share Data)
(UNAUDITED)

 
 
 
 
 
Three Months Ended March 31, 2016
 
 
As Reported
 
Losses on Sales of Businesses
 
Valuation Allowance Reversals
 
Adjusted Results 1
 
(Loss) Income Before Income Taxes
$
(13.0
)
 
$
(16.3
)
 
 
 
$
3.3

 
Benefit of Income Taxes
15.6

 
0.4

 
$
12.2

 
3.0

 
Equity in Net Income of Unconsolidated Affiliates
0.1

 
 
 
 
 
0.1

 
Net Loss Attributable to Noncontrolling Interests
2.7

 
 
 
 
 
2.7

 
Net Income Available to IPG Common Stockholders
$
5.4

 
$
(15.9
)
 
$
12.2

 
$
9.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-Average Number of Common Shares Outstanding - Basic
400.6

 
 
 
 
 
400.6

 
Add: Effect of Dilutive Securities
 
 
 
 
 
 
 
 
   Restricted Stock, Stock Options and Other Equity Awards
8.7

 
 
 
 
 
8.7

 
Weighted-Average Number of Common Shares Outstanding - Diluted
409.3

 
 
 
 
 
409.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings Per Share Available to IPG Common Stockholders:
 
 
 
 
 
 
 
 
  Basic
$
0.01

 
$
(0.04
)
 
$
0.03

 
$
0.02

 
  Diluted
$
0.01

 
$
(0.04
)
 
$
0.03

 
$
0.02

 
 
 
 
 
 
 
 
 
 
1 The effect of the adoption of the Financial Accounting Standards Board Accounting Standards Update 2016-09, which was previously included in this table in 2016, has now been removed as the effect of the adoption is reflected in both periods.
 



Interpublic Group 909 Third Avenue New York, NY 10022 212-704-1200 tel 212-704-1201 fax

investordeckq12017final
FIRST QUARTER 2017 EARNINGS CONFERENCE CALL April 21, 2017

 
Overview – First Quarter 2017 Page 2 See reconciliations of organic revenue change on page 15 and diluted EPS on page 17. • Total revenue growth was 0.7%, organic growth was 2.7%  U.S. organic growth was 2.9%  International organic growth was 2.2% • Operating income was $30 million, an improvement of $7 million from a year ago, in seasonally small Q1 • Operating margin was 1.7%, an improvement of 40 basis points • Diluted EPS was $0.05, compared with diluted EPS of $0.01 a year ago ($0.02 as adjusted in Q1 2016)

 
Operating Performance (Amounts in Millions, except per share amounts) Page 3 2017 2016 Revenue 1,753.9$ 1,742.0$ Salaries and Related Expenses 1,275.4 1,268.8 Office and General Expenses 448.8 450.2 Operating Income 29.7 23.0 Interest Expense (20.9) (22.6) Interest Income 5.2 5.8 Other Income (Expense), net 0.8 (19.2) Income (Loss) Before Income Taxes 14.8 (13.0) Benefit of Income Taxes (2.1) (15.6) Equity in Net Income of Unconsolidated Affiliates 1.2 0.1 Net Income 18.1 2.7 Net Loss Attributable to Noncontrolling Interests 3.4 2.7 21.5$ 5.4$ Earnings per Share Available to IPG Common Stockholders Basic 0.05$ 0.01$ Diluted 0.05$ 0.01$ Weighted-Average Number of Common Shares Outstanding Basic 391.7 400.6 Diluted 399.3 409.3 Dividends Declared per Common Share 0.18$ 0.15$ Three Months Ended March 31, Net Income Available to IPG Common Stockholders (1) Our financial statements now reflect the early adoption of FASB ASU 2017-07, which resulted in a reclassification of $0.8 and $2.1 for the quarters ended March 31, 2017 and 2016, respectively, reducing Salaries and related expenses and increasing Other income (expense), net in each period presented. (1) (1)

 
2017 2016 Total Organic IAN 1,407.6$ 1,401.6$ 0.4% 2.2% CMG 346.3$ 340.4$ 1.7 4.6 Change Three Months Ended March 31, $ % Change March 31, 2016 1,742.0$ Total change 11.9 0.7% Foreign currency (17.1) (1.0%) Net acquisitions/(divestitures) (17.2) (1.0%) Organic 46.2 2.7% March 31, 2017 1,753.9$ Three Months Ended Revenue ($ in Millions) Page 4 See reconciliation of segment organic revenue change on page 15. Integrated Agency Networks (“IAN”): McCann Worldgroup, FCB (Foote, Cone & Belding), MullenLowe Group, IPG Mediabrands, our digital specialist agencies and our domestic integrated agencies Constituency Management Group (“CMG”): Weber Shandwick, Golin, Jack Morton, FutureBrand, Octagon and our other marketing service specialists

 
Total Organic United States 1.9% 2.9% International (1.3%) 2.2% United Kingdom (10.3%) 0.2% Continental Europe (0.9%) 6.7% Asia Pacific (1.8%) (2.7%) Latin America 4.7% 3.7% All Other Markets 10.9% 7.8% Worldwide 0.7% 2.7% Three Months Ended March 31, 2017 Geographic Revenue Change Page 5 “All Other Markets” includes Canada, Africa and the Middle East. See reconciliation of organic revenue change on page 15.

 
(0.9%) 0.9% 3.8% 3.7% (10.8%) 7.0% 6.1% 0.7% 2.8% 5.5% 6.1% 5.0% 4.0% (12.0%) (10.0%) (8.0%) (6.0%) (4.0%) (2.0%) 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Q4-05 Q4-06 Q4-07 Q4-08 Q4-09 Q4-10 Q4-11 Q4-12 Q4-13 Q4-14 Q4-15 Q4-16 Organic Revenue Growth Page 6 See reconciliation on page 16. Trailing Twelve Months Q1-17

 
Salaries & Related 2017 2016 $ Total Organic Three Months Ended March 31, 1,275.4$ 1,268.8$ 6.6$ 0.5% 2.9% % of Revenue 72.7% 72.8% Office & General 2017 2016 $ Total Organic Three Months Ended March 31, 448.8$ 450.2$ (1.4)$ (0.3%) 2.3% % of Revenue 25.6% 25.8% Change Change Operating Expenses ($ in Millions) Page 7 See reconciliation of organic measures on page 15.

 
(1.7%) 1.7% 5.3% 8.5% 5.7% 8.4% 9.8% 9.8% 8.4% 10.5% 11.5% 12.0% 12.1% 9.3% (3.0%) (1.0%) 1.0% 3.0% 5.0% 7.0% 9.0% 11.0% 13.0% Q4-05 Q4-06 Q4-07 Q4-08 Q4-09 Q4-10 Q4-11 Q4-12 Q4-13 Q4-14 Q4-15 Q4-16 Operating Margin Page 8 Trailing Twelve Months Q1-17 ($ in Millions) For the twelve months ended December 31, 2013, reported operating income of $598.3 includes our Q4 2013 restructuring charge of $60.6. Excluding this charge, adjusted operating income was $658.9, and adjusted operating margin is represented in green.

 
2017 2016 NET INCOME 18$ 3$ OPERATING ACTIVITIES Depreciation & amortization 72 63 Deferred taxes (14) (28) (Gains) losses on sales of businesses (1) 16 Other non-cash items 13 29 Change in working capital, net (439) (695) Change in other non-current assets & liabilities (21) (42) Net cash used in Operating Activities (372) (654) INVESTING ACTIVITIES Capital expenditures (25) (27) Acquisitions, net of cash acquired (3) (27) Other investing activities (5) (6) Net cash used in Investing Activities (33) (60) FINANCING ACTIVITIES Net increase (decrease) in short-term borrowings 225 (20) Exercise of stock options 8 4 Common stock dividends (71) (60) Repurchase of common stock (55) (54) Tax payments for employee shares withheld (37) (20) Distributions to noncontrolling interests (6) (4) Net cash provided by (used in) Financing Activities 64 (154) Currency Effect 20 37 Decrease in Cash, Cash Equivalents and Restricted Cash (321)$ (831)$ Three Months Ended March 31, Cash Flow ($ in Millions) Page 9

 
March 31, December 31, March 31, 2017 2016 2016 CURRENT ASSETS: Cash and cash equivalents 775.0$ 1,097.6$ 673.4$ Marketable securities 3.1 3.0 6.9 Accounts receivable, net 3,641.5 4,389.7 3,718.9 Expenditures billable to clients 1,742.7 1,518.1 1,774.2 Assets held for sale 108.7 203.2 20.3 Other current assets 318.5 226.4 292.3 Total current assets 6,589.5$ 7,438.0$ 6,486.0$ CURRENT LIABILITIES: Accounts payable 5,672.6$ 6,303.6$ 5,797.4$ Accrued liabilities 572.0 794.0 592.8 Short-term borrowings 310.8 85.7 119.4 Current portion of long-term debt 324.1 323.9 2.0 Liabilities held for sale 111.2 198.8 27.8 Total current liabilities 6,990.7$ 7,706.0$ 6,539.4$ Balance Sheet – Current Portion ($ in Millions) Page 10 (1) Our 2.25% Senior Notes are due November 15, 2017. (1)

 
$2,325 $2,102 $1,908 $1,701 $1,738 $1,623 $1,641 $1,706 $1,745 $1,690 $1,917 $1,000 $1,500 $2,000 $2,500 $3,000 12/31/2007 12/31/2008 12/31/2009 12/31/2010 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 3/31/2017 $2,411 Total Debt (1) ($ in Millions) Page 11 (2) (1) Includes current portion of long-term debt, short-term borrowings and long-term debt. (2) Includes our November 2012 debt issuances of $800 aggregate principal amount of Senior Notes, which pre-funded our plan to redeem a similar amount of debt in 2013.

 
Summary Page 12 • Q1 a solid start on FY-17 performance objectives • Continuing traction from key strategic initiatives  Quality of our agency offerings, creative talent, embedded and specialty digital, and “open architecture” solutions  Strength in high-growth disciplines  Effective expense management • Focus on additional margin improvement • Financial strength continues to be a source of value creation  Solid investment grade ratings across the board  Raised dividend and authorized new share repurchase program (as previously announced in February)

 
Appendix

 
Q1 Q2 Q3 Q4 YTD 2017 Depreciation and amortization of fixed assets and intangible assets 41.0$ 41.0$ Amortization of restricted stock and other non-cash compensation 29.7 29.7 Net amortization of bond discounts and deferred financing costs 1.4 1.4 Q1 Q2 Q3 Q4 FY 2016 Depreciation and amortization of fixed assets and intangible assets 38.0$ 39.8$ 39.7$ 42.7$ 160.2$ Amortization of restricted stock and other non-cash compensation 23.1 16.8 19.1 26.6 85.6 Net amortization of bond discounts and deferred financing costs 1.4 1.4 1.4 1.4 5.6 2017 2016 Depreciation and Amortization ($ in Millions) Page 14

 
Three Months Ended March 31, 2016 Foreign Currency Net Acquisitions / (Divestitures) Three Months Ended March 31, 2017 Organic Total Segment Revenue IAN 1,401.6$ (9.8)$ (14.9)$ 30.7$ 1,407.6$ 2.2% 0.4% CMG 340.4 (7.3) (2.3) 15.5 346.3 4.6% 1.7% Total 1,742.0$ (17.1)$ (17.2)$ 46.2$ 1,753.9$ 2.7% 0.7% Geographic United States 1,091.2$ -$ (11.0)$ 31.6$ 1,111.8$ 2.9% 1.9% International 650.8 (17.1) (6.2) 14.6 642.1 2.2% (1.3%) United Kingdom 165.6 (22.6) 5.2 0.3 148.5 0.2% (10.3%) Continental Europe 147.6 (4.9) (6.3) 9.9 146.3 6.7% (0.9%) Asia Pacific 182.1 0.3 1.5 (5.0) 178.9 (2.7%) (1.8%) Latin America 65.3 7.3 (6.6) 2.4 68.4 3.7% 4.7% All Other Markets 90.2 2.8 - 7.0 100.0 7.8% 10.9% Worldwide 1,742.0$ (17.1)$ (17.2)$ 46.2$ 1,753.9$ 2.7% 0.7% Expenses Salaries & Related 1,268.8$ (13.8)$ (16.0)$ 36.4$ 1,275.4$ 2.9% 0.5% Office & General 450.2 (5.0) (6.9) 10.5 448.8 2.3% (0.3%) Total 1,719.0$ (18.8)$ (22.9)$ 46.9$ 1,724.2$ 2.7% 0.3% Components of Change Change Organic Reconciliation of Organic Measures ($ in Millions) Page 15

 
Last Twelve Months Ending Beginning of Period Revenue Foreign Currency Net Acquisitions / (Divestitures) Organic End of Period Revenue 12/31/05 6,387.0$ 40.4$ (107.4)$ (56.2)$ 6,263.8$ 3/31/06 6,323.8 (10.9) (132.6) 81.5 6,261.8 6/30/06 6,418.4 (8.8) (157.5) (68.5) 6,183.6 9/30/06 6,335.9 (13.9) (140.4) 15.6 6,197.2 12/31/06 6,263.8 20.7 (165.5) 57.8 6,176.8 3/31/07 6,261.8 78.4 (147.2) 16.0 6,209.0 6/30/07 6,183.6 102.4 (124.7) 166.6 6,327.9 9/30/07 6,197.2 137.3 (110.9) 209.2 6,432.8 12/31/07 6,176.8 197.5 (70.7) 233.1 6,536.7 3/31/08 6,209.0 217.8 (45.9) 280.6 6,661.5 6/30/08 6,327.9 244.8 (12.6) 282.4 6,842.5 9/30/08 6,432.8 237.4 32.8 317.2 7,020.2 12/31/08 6,536.7 71.5 87.6 243.0 6,938.8 3/31/09 6,661.5 (88.3) 114.7 91.9 6,779.8 6/30/09 6,842.5 (286.2) 139.2 (275.3) 6,420.2 9/30/09 7,020.2 (390.1) 115.2 (636.4) 6,108.9 12/31/09 6,938.8 (251.6) 69.1 (748.9) 6,007.4 3/31/10 6,779.8 (88.2) 36.0 (705.4) 6,022.2 6/30/10 6,420.2 59.1 2.0 (316.9) 6,164.4 9/30/10 6,108.9 117.7 9.6 60.1 6,296.3 12/31/10 6,007.4 63.3 17.0 419.6 6,507.3 3/31/11 6,022.2 21.0 18.2 583.7 6,645.1 6/30/11 6,164.4 61.5 12.4 535.8 6,774.1 9/30/11 6,296.3 119.1 (7.7) 539.5 6,947.2 12/31/11 6,507.3 122.2 (8.6) 393.7 7,014.6 3/31/12 6,645.1 92.9 (1.4) 310.0 7,046.6 6/30/12 6,774.1 (14.3) 14.5 247.3 7,021.6 9/30/12 6,947.2 (117.2) 39.7 95.8 6,965.5 12/31/12 7,014.6 (147.6) 41.8 47.4 6,956.2 3/31/13 7,046.6 (143.7) 48.2 41.3 6,992.4 6/30/13 7,021.6 (111.4) 56.9 65.8 7,032.9 9/30/13 6,965.5 (80.3) 49.5 128.2 7,062.9 12/31/13 6,956.2 (80.4) 50.3 196.2 7,122.3 3/31/14 6,992.4 (89.9) 51.2 263.1 7,216.8 6/30/14 7,032.9 (80.6) 51.6 308.1 7,312.0 9/30/14 7,062.9 (53.5) 74.3 369.0 7,452.7 12/31/14 7,122.3 (75.5) 95.3 395.0 7,537.1 3/31/15 7,216.8 (125.7) 98.4 386.1 7,575.6 6/30/15 7,312.0 (223.5) 85.3 426.5 7,600.3 9/30/15 7,452.7 (336.2) 58.3 449.9 7,624.7 12/31/15 7,537.1 (408.5) 23.7 461.5 7,613.8 3/31/16 7,575.6 (388.5) 11.9 480.8 7,679.8 6/30/16 7,600.3 (315.6) 10.8 426.1 7,721.6 9/30/16 7,624.7 (237.5) 16.4 374.7 7,778.3 12/31/16 7,613.8 (159.7) 15.3 377.2 7,846.6 3/31/17 7,679.8 (124.9) (7.4) 311.0 7,858.5 Components of Change During the Period Reconciliation of Organic Revenue Growth ($ in Millions) Page 16

 
As Reported Losses on Sales of Businesses Valuation Allowance Reversals Adjusted Results (Loss) Income Before Income Taxes (13.0)$ (16.3)$ 3.3$ Benefit of Income Taxes 15.6 0.4 12.2$ 3.0 Equity in Net Income of Unconsolidated Affiliates 0.1 0.1 Net Loss Attributable to Noncontrolling Interests 2.7 2.7 5.4$ (15.9)$ 12.2$ 9.1$ Weighted-Average Number of Common Shares Outstanding - Basic 400.6 400.6 Add: Effect of Dilutive Securities Restricted Stock, Stock Options and Other Equity Aw ards 8.7 8.7 Weighted-Average Number of Common Shares Outstanding - Diluted 409.3 409.3 Earnings Per Share Available to IPG Common Stockholders - Basic 0.01$ (0.04)$ 0.03$ 0.02$ Earnings Per Share Available to IPG Common Stockholders - Diluted 0.01$ (0.04)$ 0.03$ 0.02$ Three Months Ended March 31, 2016 Net lncome Available to IPG Common Stockholders - Basic and Diluted (1) The following table reconciles our reported results to our adjusted non-GAAP results that excludes the losses on sales of businesses in our international markets, primarily in Continental Europe, and valuation allowance reversals as a result of the classification of certain assets as held for sale. The losses on sales of businesses amount includes losses on completed dispositions and the classification of certain assets as held for sale during the first quarter of 2016. The effect of the adoption of the Financial Accounting Standards Board Accounting Standards Update 2016-09, which was previously included in this table in 2016, has now been removed as the effect of the adoption is included in both periods presented within this presentation. Management believes the resulting comparisons provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. Reconciliation of Adjusted Results (1) (Amounts in Millions, except per share amounts) Page 17

 
Metrics Update

 
SALARIES & RELATED Trailing Twelve Months (% of revenue) Base, Benefits & Tax Incentive Expense Severance Expense Temporary Help OFFICE & GENERAL Trailing Twelve Months (% of revenue) Professional Fees Occupancy Expense (ex-D&A) T&E, Office Supplies & Telecom All Other O&G FINANCIAL Available Liquidity $1.0 Billion 5-Year Credit Facility Covenants Category Metric Metrics Update Page 19

 
63.9% 64.2% 64.2% 60.0% 62.0% 64.0% 66.0% 3/31/2016 12/31/2016 3/31/2017 % of Revenue, Trailing Twelve Months Salaries & Related Expenses Page 20

 
2017 2016 1.2% 1.4% 0.0% 1.0% 2.0% 3.0% Severance Expense 4.1% 4.0% 0.0% 2.0% 4.0% 6.0% Temporary Help 4.8% 4.6% 0.0% 2.0% 4.0% 6.0% Incentive Expense 60.3% 59.4% 50.0% 55.0% 60.0% 65.0% Base, Benefits & Tax Salaries & Related Expenses (% of Revenue) Page 21 Three Months Ended March 31 “All Other Salaries & Related,” not shown, was 2.3% and 3.4% for the three months ended March 31, 2017 and 2016, respectively.

 
24.5% 23.8% 23.8% 21.0% 23.0% 25.0% 27.0% 3/31/2016 12/31/2016 3/31/2017 % of Revenue, Trailing Twelve Months Office & General Expenses Page 22

 
1.6% 1.8% 0.0% 1.0% 2.0% 3.0% Professional Fees 7.3% 7.2% 4.0% 6.0% 8.0% 10.0% Occupancy Expense (ex-D&A) 13.4% 13.4% 10.0% 12.0% 14.0% 16.0% All Other O&G 3.3% 3.4% 2.0% 3.0% 4.0% 5.0% T&E, Office Supplies & Telecom Office & General Expenses (% of Revenue) Page 23 Three Months Ended March 31 “All Other O&G” primarily 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. 2017 2016

 
$680 $675 $895 $1,101 $778 $996 $995 $995 $995 $992 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 3/31/2016 6/30/2016 9/30/2016 12/31/2016 3/31/2017 Cash, Cash Equivalents and Short-Term Marketable Securities Available Committed Credit Facility Available Liquidity ($ in Millions) Page 24 Cash, Cash Equivalents and Short-Term Marketable Securities + Available Committed Credit Facility

 
Last Twelve Months Ending March 31, 2017 I. Interest Coverage Ratio (not less than): 5.00x Actual Interest Coverage Ratio: 18.89x II. Leverage Ratio (not greater than): 3.50x Actual Leverage Ratio: 1.59x Interest Coverage Ratio - Interest Expense Reconciliation Last Twelve Months Ending March 31, 2017 Interest Expense: $88.9 - Interest income 19.5 - Other 5.7 Net interest expense : $63.7 EBITDA Reconciliation Last Twelve Months Ending March 31, 2017 Operating Income: $947.7 + Depreciation and amortization 255.4 EBITDA : $1,203.1 Covenants (1) Calculated as defined in the Credit Agreement. $1.0 Billion 5-Year Credit Facility Covenants ($ in Millions) Page 25 (1) (1)

 
Cautionary Statement Page 26 This investor presentation contains forward-looking statements. Statements in this investor presentation that are not historical facts, including statements about management’s beliefs and expectations, constitute forward-looking statements. These statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined in our most recent Annual Report on Form 10-K under Item 1A, Risk Factors. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, the following: ➔ potential effects of a challenging economy, for example, on the demand for our advertising and marketing services, on our clients’ financial condition and on our business or financial condition; ➔ our ability to attract new clients and retain existing clients; ➔ our ability to retain and attract key employees; ➔ risks associated with assumptions we make in connection with our critical accounting estimates, including changes in assumptions associated with any effects of a weakened economy; ➔ potential adverse effects if we are required to recognize impairment charges or other adverse accounting-related developments; ➔ risks associated with the effects of global, national and regional economic and political conditions, including counterparty risks and fluctuations in economic growth rates, interest rates and currency exchange rates; and ➔ developments from changes in the regulatory and legal environment for advertising and marketing and communications services companies around the world. Investors should carefully consider these factors and the additional risk factors outlined in more detail in our most recent Annual Report on Form 10-K under Item 1A, Risk Factors.