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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
                 For the fiscal year ended December 31, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 1-6686
https://cdn.kscope.io/54aa9c1f63e6b54b0b5acd7c7faa3dec-ipg-20201231_g1.jpg
THE INTERPUBLIC GROUP OF COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Delaware13-1024020
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
909 Third Avenue, New York, New York 10022
(Address of principal executive offices) (Zip Code)
(212)704-1200
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.10 per shareIPGThe New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý    No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨    No ý
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý    No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer ¨
Non-accelerated filer ¨Smaller reporting company 
Emerging growth company 
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. ¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting firm that prepared or issued its audit report.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No ý
As of June 30, 2020, the aggregate market value of the shares of the registrant’s common stock held by non-affiliates was approximately $6.5 billion. The number of shares of the registrant’s common stock outstanding as of February 11, 2021 was 390,677,929.




DOCUMENTS INCORPORATED BY REFERENCE
The following sections of the Proxy Statement for the Annual Meeting of Stockholders to be held on May 27, 2021 are incorporated by reference in Part III: “Election of Directors,” “Director Selection Process,” “Code of Conduct,” “Committees of the Board of Directors,” “Audit Committee,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “Executive Compensation,” “Non-Management Director Compensation,” “Compensation Discussion and Analysis,” “Compensation and Leadership Talent Committee Report,” “Outstanding Shares and Ownership of Common Stock,” “Securities Authorized for Issuance under Equity Compensation Plans,” “Transactions with Related Persons,” “Director Independence” and “Appointment of Registered Public Accounting Firm.”



TABLE OF CONTENTS
 Page
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Item 15.
Item 16.




STATEMENT REGARDING FORWARD-LOOKING DISCLOSURE

This annual report on Form 10-K contains forward-looking statements. Statements in this report that are not historical facts, including statements about management’s beliefs and expectations, constitute forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” “continue” or comparable terminology are intended to identify 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 this report. 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:
the effects of a challenging economy on the demand for our advertising and marketing services, on our clients’ financial condition and on our business or financial condition;
the impacts of the novel coronavirus (COVID-19) pandemic and the measures to contain its spread, including social distancing efforts and restrictions on businesses, social activities and travel, any failure to realize anticipated benefits from the rollout of COVID-19 vaccination campaigns and the resulting impact on the economy, our clients and demand for our services, which may precipitate or exacerbate other risks and uncertainties;
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;
developments from changes in the regulatory and legal environment for advertising and marketing and communications services companies around the world, including laws and regulations related to data protection and consumer privacy; and
failure to fully realize the anticipated benefits of the our 2020 restructuring actions and other cost-savings initiatives.
Investors should carefully consider these factors and the additional risk factors outlined in more detail under Item 1A, Risk Factors, in this report.

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Table of Contents

PART I

Item 1.Business
The Interpublic Group of Companies, Inc. ("Interpublic," the "Company," "IPG," "we," "us" or "our") was incorporated in Delaware in September 1930 under the name of McCann-Erickson Incorporated as the successor to the advertising agency businesses founded in 1902 by A.W. Erickson and in 1911 by Harrison K. McCann. The Company has operated under the Interpublic name since January 1961.

About Us
We are one of the world’s premier global advertising and marketing services companies. With approximately 50,200 employees and operations in all major world markets, our companies specialize in consumer advertising, digital marketing, communications planning and media buying, public relations, specialized communications disciplines and data management. Our agencies create customized marketing solutions for clients that range in scale from large global marketers to regional and local clients. Comprehensive global services are critical to effectively serve our multinational and local clients in markets throughout the world as they seek to build brands, increase sales of their products and services, and gain market share.
The work we produce for our clients is specific to their unique needs. Our solutions vary from project-based activity involving one agency to long-term, fully integrated campaigns created by multiple IPG agencies working together. With operations in over 100 countries, we can operate in a single region or deliver global integrated programs.
The role of our holding company is to provide resources and support to ensure that our agencies can best meet clients’ needs and to selectively facilitate collaborative client service among our agencies. Based in New York City, our holding company sets company-wide financial objectives and corporate strategy, establishes financial management and operational controls, guides personnel policy, directs collaborative inter-agency programs, conducts investor relations, manages environmental, social and governance (ESG) programs, provides enterprise risk management and oversees mergers and acquisitions. In addition, we provide certain centralized functional services that offer our companies operational efficiencies, including accounting and finance, executive compensation management and recruitment assistance, employee benefits, marketing information retrieval and analysis, internal audit, legal services, real estate expertise and travel services.

Our Brands
Interpublic is home to some of the world’s best-known and most innovative communications specialists. We have three global networks: McCann Worldgroup, Foote, Cone & Belding ("FCB") and MullenLowe Group, which provide integrated, large-scale advertising and marketing solutions for clients. Our Media, Data and Technology offerings are comprised of Mediabrands' global media services, Acxiom's data and technology capabilities, Kinesso's data-driven marketing solutions, and Matterkind, an innovative media investment offering. We also have a range of best-in-class global specialized communications assets as well as premier domestic integrated and global digital agencies that are industry leaders.
Media, Data and Technology offerings provide strategic media planning and buying services as well as data management and leading marketing technology services. Our media services agencies manage tens of billions of dollars in marketing investment on behalf of their clients, providing strategic counsel and advisory services to navigate the fast-evolving consumer and media landscape. Full-service global media agencies within the Mediabrands network include UM and Initiative. Additional leading brands and specialist business units include IPG Media Lab, MAGNA, Orion Holdings, Rapport and Reprise. Media solutions are developed and executed through integrated, data-driven marketing strategies. Acxiom, which IPG acquired in 2018, provides the data foundation for many of the world’s largest and most sophisticated marketers. Acxiom's solutions help clients organize, cleanse and store data in a responsible and ethical manner and enhance our ability to provide data-driven marketing insights to our clients. Kinesso, the marketing technology company IPG launched in October 2019, provides the tools and services required to help marketers make traditional and addressable media activation faster, better and more effective through the use of data. In May 2020, we launched Matterkind, an innovative offering that optimizes client media investment, holistically and in real time, across all addressable media channels.
McCann Worldgroup is a leading global marketing solutions network united across 100+ countries by a single vision: to help brands play a meaningful role in people's lives. McCann was recognized by the Effies as the world's most creatively-effective marketing services company in 2020. The network is comprised of McCann (advertising), MRM (science/technology/relationship marketing), Momentum Worldwide (total brand experience), McCann Health (professional/dtc communications), and CRAFT (production). McCann is aligned with our marketing services agencies including Weber Shandwick (public relations) and FutureBrand (consulting/design).
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FCB is a global marketing communications company, named Adweek's Global Network of the Year for 2020. Based on an understanding of diversified markets and cultures, FCB focuses on creating “Never Finished” ideas for clients that reflect each brand’s past and anticipate its future. FCB also offers a range of best-in-class, integrated and specialist marketing capabilities: FCB Health, one of the world’s most awarded healthcare marketing networks; shopper-first agency FCB/RED; experiential agency FCBX; production studios Lord + Thomas and FuelContent; CRM agency FCB/SIX; and digital agency New Honor Society.
MullenLowe Group is a creatively driven integrated marketing communications network with a strong entrepreneurial heritage and challenger mentality. A global creative boutique of distinctive diverse agencies, MullenLowe Group is networked in more than 65 markets. Within the Group's distinctive hyperbundled-operating model, global specializations include expertise in brand strategy, and through-the-line advertising with MullenLowe; digital transformation with MullenLowe Profero; media and communications planning and buying with Mediahub; customer experience activation with MullenLowe Open; and consumer and corporate PR with MullenLowe PR and MullenLowe salt. The group is focused on delivering an “Unfair Share of Attention” for clients and is consistently ranked among the most awarded creative and effective agency networks in the world. Mediahub was named Ad Age Media Agency of the Year in 2020.
Our IPG DXTRA group, the rebranded Constituency Management Group (CMG), is a global collective of 27 marketing specialty brands, anchored across Weber Shandwick, Golin, Octagon, Jack Morton and FutureBrand. IPG DXTRA companies bring together unique combinations of in-demand skills and expertise for clients, including experiential, public relations, crisis and issues management, sponsorships, innovation, brand, influencer, digital, social and analytics in categories as diverse as sports, healthcare, entertainment, CPG, luxury, tech and financial services. DXTRA has exceptional global marketing specialists across a range of disciplines, including industry-leading public relations agencies such as Weber Shandwick, Golin, DeVries Global, Axis, and Current Global have expertise in every significant area of communication management. Jack Morton is a global brand experience agency, and FutureBrand is a leading brand consultancy. Octagon is a global sports, entertainment and lifestyle marketing agency.
Our domestic integrated independent and digital specialist agencies include some of advertising's most recognizable and storied agency brands, including Carmichael Lynch, Deutsch, Hill Holliday, Huge, and R/GA. The marketing programs created by these agencies incorporate all media channels, CRM, public relations and other digital marketing activities and have helped build some of the most powerful brands in the United States, across all sectors and industries.
We list approximately 100 of our companies on our website under the "Our Companies" section, with descriptions, capabilities and office locations for each. To learn more about our broad range of capabilities, visit our website at www.interpublic.com. Information on our website is not part of this report.

Market Strategy
We operate in a media landscape that continues to evolve at a rapid pace. Media channels continue to fragment, and clients face an increasingly complex consumer environment. To stay ahead of these challenges and to achieve our objectives, we have made and continue to make investments in creative, strategic and technology talent in areas including fast-growth digital marketing channels, high-growth geographic regions and strategic world markets. In addition, we consistently review opportunities within our Company to enhance our operations through acquisitions and strategic alliances and internal programs that encourage intra-company collaboration. As appropriate, we also develop relationships with technology and emerging media companies that are building leading-edge marketing tools that complement our agencies' skill sets and capabilities.
In recent years, we have taken several major strategic steps to position our agencies as leaders in the global advertising and communications market. These include:
Investment in leading talent: We believe our continued ability to attract and develop top talent and to be the industry’s employer of choice for an increasingly diverse workforce have been key differentiators for IPG. We continue to acquire and develop top strategic, creative and digital talent from a range of backgrounds.
Growing digital capabilities: Our investments in talent and technology - organically growing digital capabilities such as search, social, user experience (UX), content creation, analytics, and mobile across the portfolio - promise to drive further growth in this dynamic sector of our business. We continue to internationalize our powerful digital specialist agencies.
Data-fueled offerings: Media and marketing is increasingly centered around the ability to manage data to create deeper direct customer relationships. Acxiom provides the tools to help our clients connect with individual consumers at scale. Kinesso furthers this vision by bringing together top data and technology talent with addressable media experts to develop software that amplifies clients' marketing and leverages Acxiom’s assets and capabilities.
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Investments in emerging and strategic markets: We strengthen our position in global markets by driving organic growth as well as completing strategic acquisitions.
Integrated marketing solutions: A differentiating aspect of our business is our utilization of “open architecture” solutions that integrate the best talent from throughout the organization to fulfill the needs of our clients.

Together, these steps have built a culture of strategic creativity and high performance across IPG. Despite the challenges faced by our industry, clients and workforce, in 2020 we once again delivered sector-leading performance. This result demonstrates the continued competitiveness of our offerings, the value of our long-term strategy, and the strength of our culture, which is especially significant during such unprecedented times.
In 2020, at the agency level, IPG continues to be recognized for having many of the industry’s most vibrant brands. Two of our agencies were named as Adweek Agencies of the Year; FCB was named Global Agency of the Year and The Martin Agency was named U.S Agency of the Year. Six of our agencies were honored by Ad Age on its A-List and related rankings, and once again our company led the industry in terms of number of agencies recognized on the trade publication’s prestigious annual ranking of the industry’s top marketing and communications agencies. At the inaugural Campaign U.S. Agency of the Year Awards, held in 2020, IPG took home eight honors, more than the number of awards won by all other holding companies combined; these awards, which are judged by clients, recognize inspired leadership, creative excellence, outstanding business performance and overall achievements for both agencies and individuals.
Data-fueled Offerings
IPG decided to incorporate data expertise into the core of the Company. Understanding data and its power is critical to the current and future success of our Company. We believe an ethical and conscious approach that respects consumer privacy, and promotes brand safety, will be crucial as we navigate increased regulation in the digital media space.
Going forward, we intend to continue to enhance the technology layer within our offerings and to build tech-enabled marketing solutions, informed by a holistic understanding of audiences. This will allow us to deliver personalized user experiences and more accountable marketing for brands. Ultimately, our vision for IPG is to be a key partner in ensuring that clients’ businesses thrive in the digital economy.
Emerging Economies and Strategic Regions
We continue to invest and expand our presence in emerging and strategic geographic regions. Over the last decade, we have made significant investments in Brazil, India and China, further strengthening our position in these important developing markets. Our operations in India are best-in-class, and we will continue to invest in partnerships and talent in this key market. We also hold a majority stake in the Middle East Communication Networks (“MCN”), among the region's premier marketing services companies. MCN is headquartered in Dubai, with offices across 12 countries. In China, where we operate with most of our global networks and across the full spectrum of marketing services, we continue to invest organically in the talent of our agency brands and opportunistically acquire specialty offerings. Additional areas of investment include key strategic markets in North America, the United Kingdom, Europe, Asia Pacific, Latin America and Africa.
Diversity, Equity and Inclusion
IPG and our agencies are committed to diversity and inclusion, and we reinforce these values through a comprehensive set of award-winning programs. These include business resource groups that develop career building programs, as well as training around topics like unconscious bias. We seek to ensure accountability by tying executive compensation directly to the ability of our leaders to hire, promote and retain diverse talent, and we regularly measure the inclusiveness of our culture with a company-wide climate for inclusion survey.
We began our formal programs over a decade ago. Since then, IPG has seen notable improvements in the diversity of our workforce, and further progress is a management priority. In 2020, IPG became the first advertising holding company to release race and gender composition of its leadership based on its EEO-1 report, and we are committed to continuous transparency in this area. We believe that an environment that encourages respect and trust is key to a creative business like ours, and that a competitive advantage comes with having a variety of perspectives and beliefs in our workforce.
Acquisition Strategy
A disciplined acquisition strategy, focused on high-growth capabilities and regions of the world, is one component of growing our services in today's rapidly-changing marketing services and media landscape. When an outstanding resource or a
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strong tactical fit becomes available, we have been opportunistic over the years in making tuck-in, niche acquisitions that enhance our service offerings.
In recent years, IPG has acquired agencies across the marketing spectrum, including firms specializing in data and tech, e-commerce, mobile marketing, social media, healthcare communications and public relations, as well as agencies with full-service capabilities. These acquired agencies have been integrated into one of our global networks or specialist agencies.
Our People
Because of the service character of our business, the quality of personnel is of crucial importance to our continuing success, and our employees, including creative, digital, research, media and account specialists, and their skills and relationships with clients, are among our most valuable assets. We conduct extensive employee training and development throughout our agencies and benchmark our compensation programs against those of our industry for their competitiveness and effectiveness in recruitment and retention. There is keen competition for qualified employees.
As of December 31, 2020, we employed approximately 50,200 people, of which approximately 21,100 were employed in the United States.
As of December 31, 2020 1
Total50,200
Domestic21,100
International29,100
     United Kingdom4,600
     Continental Europe6,200
     Asia Pacific9,000
     Latin America5,400
     Other4,000
1Numbers are approximate and may not total due to rounding
We employ a balanced approach in managing our human capital resources. Depending on where a human-capital management function is most effective or efficient, processes are either managed at the holding company or designated to our operating units to adopt strategies appropriate for their client sector, workforce makeup, talent requirements and business demands.
The holding company retains oversight of all human capital resources and activities, setting standards and providing support and policy guidance and sharing programs. At the corporate center, centralized human capital management processes include development of human resources governance and policy; executive compensation for senior leaders across the Company; benefits programs; succession planning focusing on the performance, development and retention of the Company’s senior-most executives and key roles in the operating units; and executive development.
IPG sets specific standards for human capital management and, on a yearly basis, assesses each operating unit’s performance in managing and developing its workforce. We undertake human capital initiatives with an aim of ensuring that employees have the high level of competence and commitment our businesses need to succeed. We formally assess our operating units against their efforts in the areas of people development, diversity and inclusion, performance management, talent acquisition and organization development in order to drive or support the units’ strategic business and growth goals. Accordingly, the operating units create and deploy skills-training programs, management training, employee goal-setting and feedback platforms, applicant-tracking systems, new-employee onboarding processes, and other programs intended to enhance the performance and engagement of the workforce.
As discussed above under Market Strategy — Diversity, Equity and Inclusion, diversity, equity and inclusion are essential priorities for IPG. Our goal is that our talent represents the diversity of our communities and consumers, with a corporate culture that drives belonging, well-being and growth. We believe that such a workplace will enable us to provide cultural insights to help our clients make authentic and responsible connections with their customers. The programs we provide in support of diversity, equity and inclusion include events, training and curated and bespoke content, research and tools, to foster awareness and action on an array of critical issues that we believe are vital for the recruitment, retention, advancement, well-being and belonging for people who are part of under-represented groups. We also foster business resource groups that offer programs on all facets of diversity and inclusion in support of specific communities of employees.
The events of the past year have highlighted the importance of providing emotional as well as material support to our employees in these demanding times. In response to the ongoing COVID-19 public health crisis, we provided increased support for our people through one-on-one and group therapy sessions, self-care workshops and management training. And, as we
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learned what we believed was working well for IPG, we offered counsel to our clients to address their own employee concerns during this time. During a period of heightened worldwide racial strife and unrest, we continued our active focus on inclusivity and equality. We released statistics around race and gender in our executive leadership; our Diversity and Inclusion team hosted neighborhood chats and ally conversations for employees globally, and we created bespoke resources for our employees like our “Inclusive at Work” website, which contains a “Racial Equality Center,” a “Manager’s Guide to Initial Responses to Racial Turmoil,” a “Guide to Personal Pronouns” and other resources.
Impact of COVID-19
In March 2020, the World Health Organization categorized the novel coronavirus ("COVID-19") as a pandemic, and it continues to spread extensively throughout the United States and the rest of the world. The outbreak of COVID-19 and public and private sector measures to reduce its transmission, such as forced business closures and limits on operations, the imposition of social distancing and orders to work-from-home, stay-at-home and shelter-in-place, have adversely impacted our business and demand for our services. Some businesses have adjusted, reduced or suspended operating activities, which has negatively impacted the markets we serve. We continue to believe that our focus on our strategic strengths, which include talent, our differentiated go-to-market strategy, data management capabilities, and the relevance of our offerings, position us well to navigate a rapidly changing marketplace. The effects of the COVID-19 pandemic have negatively impacted and will likely continue to negatively impact our results of operations, cash flows and financial position; however, the extent of the impact will vary depending on the duration and severity of the economic and operational impacts of COVID-19 as well as the effectiveness of mass vaccination and other public health efforts to mitigate the impact of the pandemic.
At the outset of the COVID-19 pandemic, we responded swiftly in support of our people, our clients and our communities. To protect our employees, and to do our part in stopping the spread of COVID-19, within days, 95 percent of our global workforce moved to a remote work environment. The majority of our worldwide workforce continues to work from home. We recognized the importance of regular communication to reassure employees and to keep them updated on our plans as the pandemic unfolded, and IPG was recognized with top honors at the Corporate Content Awards North America for its outstanding communication during the pandemic. We adopted an approach of “organized flexibility” to facilitate the new working environments and take into account the need of many employees to work during non-traditional hours and juggle home lives and work responsibilities.
We believe we have had significant success in maintaining and continuing to advance the quality of our services notwithstanding extensive changes required by the pandemic. With respect to managing costs, we undertook multiple initiatives, which continue, to align our expenses with changes in revenue. The steps we have taken across our agencies and corporate group include deferred merit increases, freezes on hiring and temporary labor, major cuts in non-essential spending, staff reductions, furloughs in markets where that option is available and salary reductions, including voluntary salary reductions for our senior corporate management team.
Starting in the second quarter of 2020 and continuing through the year, the Company also took restructuring actions to lower our operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business. Most of these actions are based on our recent experience and learning in the COVID-19 pandemic and a resulting review of our operations. Notably, we foresee a greater role for work-from-home in a hybrid office-home model to deliver and support our services in a post-COVID world.
We discuss these restructuring actions as well as steps to strengthen our financial position that we undertook in 2020 in more detail in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”).
Financial Objectives
Our financial goals include competitive organic net revenue growth and expansion of Adjusted EBITA margin, as defined and discussed within the Non-GAAP Financial Measure section of the MD&A, which we expect will further strengthen our balance sheet and total liquidity and increase value to our shareholders. Accordingly, we remain focused on meeting the evolving needs of our clients while concurrently managing our cost structure. Our disciplined approach to our balance sheet and liquidity provides us with a solid financial foundation and financial flexibility to manage and grow our business. We believe that our strategy and execution position us to meet our financial goals and to deliver long-term shareholder value.
Financial Reporting Segments
We have two reportable segments, which are Integrated Agency Networks (“IAN”) and IPG DXTRA. IAN is comprised of McCann Worldgroup, FCB, MullenLowe Group, Media, Data Services and Tech which includes Mediabrands, Acxiom, Kinesso and Matterkind, our digital specialist agencies and our domestic integrated agencies. IPG DXTRA is comprised of a number of our specialist marketing services offerings in public relations, sports and experiential marketing and branding. We also report results for the “Corporate and other” group. See Note 15 in Item 8, Financial Statements and Supplementary Data, for further information.
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Sources of Revenue
Our revenues are primarily derived from the planning and execution of multi-channel advertising, marketing and communications programs around the world. Our revenues are directly dependent upon the advertising, marketing and corporate communications requirements of our existing clients and our ability to win new clients. Most of our client contracts are individually negotiated, and, accordingly, the terms of client engagements and the bases on which we earn commissions and fees vary significantly. As is customary in the industry, our contracts generally provide for termination by either party on relatively short notice, usually 30 to 90 days, although our data management contracts typically have non-cancelable terms of more than one year.
Revenues for the creation and production of advertising or the planning and placement of media are determined primarily on a negotiated fee basis and, to a lesser extent, on a commission basis. Fees are usually calculated to reflect hourly rates plus proportional overhead and a mark-up. Many clients include an incentive compensation component in their total compensation package. This provides added revenue based on achieving mutually agreed-upon qualitative or quantitative metrics within specified time periods. Commissions are earned based on services provided.
We also generate revenue from data and technology offerings and in negotiated fees from our public relations, sales promotion, experiential marketing, sports and entertainment marketing, and corporate and brand identity services.
In most of our businesses, our agencies enter into commitments to pay production and media costs on behalf of clients, as is customary in the advertising and marketing industries. To the extent possible, we pay production and media charges after we have received funds from our clients, and in some instances we agree with the provider that we will only be liable to pay the production and media costs after the client has paid us for the charges. Generally, we act as the client’s agent rather than the primary obligor in these arrangements.
Our revenue is typically lowest in the first quarter and highest in the fourth quarter.
 Consolidated Total Revenues for the Three Months Ended
 202020192018
(Amounts in Millions) % of Total% of Total% of Total
March 31$2,359.8 26.0%$2,361.2 23.0%$2,169.1 22.3%
June 302,025.7 22.4%2,520.2 24.7%2,391.8 24.6%
September 302,125.5 23.5%2,438.1 23.9%2,297.5 23.7%
December 312,550.0 28.1%2,901.8 28.4%2,856.0 29.4%
$9,061.0 $10,221.3 $9,714.4 

Clients
Our large and diverse client base includes many of the most recognizable companies and brands throughout the world. Our holding company structure allows us to maintain a diversified client base across and within a full range of industry sectors. In the aggregate, our top ten clients based on net revenue accounted for approximately 20% of net revenue in 2020 and 17% in 2019. Our largest client accounted for approximately 3% of net revenue in both 2020 and 2019. Based on net revenue for the year ended December 31, 2020, our largest client sectors (in alphabetical order) were financial services, healthcare and technology and telecom. We represent several different clients, brands or divisions within each of these sectors in a number of geographic markets, as well as provide services across multiple advertising and marketing disciplines, in each case through more than one of our agency brands. Representation of a client rarely means that we handle advertising for all brands or product lines of the client in all geographical locations. Any client may transfer its business from one of our agencies to another one of our agencies or to a competing agency, and a client may change its marketing budget at any time.
We operate in a highly competitive advertising and marketing communications industry. Our operating companies compete against other large multinational advertising and marketing communications companies as well as numerous independent and niche agencies and new forms of market participants to win new clients and maintain existing client relationships.
Regulatory Environment
The advertising and marketing services that our agencies provide are subject to governmental regulation and other action in all of the jurisdictions in which the Company operates. While these governmental regulations and other actions can impact the Company’s operations, the specific marketing regulations we may face in a given market do not as a general matter significantly impact the Company’s overall service offerings or the nature in which we provide these services.
Governments, government agencies and industry self-regulatory bodies have adopted laws, regulations and standards, and judicial bodies have issued rulings, that directly or indirectly affect the form and content of advertising, public relations and other marketing activities we produce or conduct on behalf of our clients. These laws, regulations and other actions include
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content-related rules with respect to specific products and services, restrictions on media scheduling and placement, and labeling or warning requirements with respect to certain products, for example pharmaceuticals, alcoholic beverages, cigarettes and other tobacco products, and food and nutritional supplements. We are also subject to rules related to marketing directed to certain groups, such as children.
Digital marketing services are a dynamic and growing sector of our business. Our service offerings in this area are covered by laws and regulations concerning user privacy, use of personal information, data protection and online tracking technologies. We are also subject to laws and regulations that govern whether and how we can transfer, process or receive certain data that we use in our operations, including data shared between countries or regions in which we operate. While we maintain policies and operational procedures to promote effective privacy protection and data management, existing and proposed laws and regulations in this area, such as the General Data Protection Regulation (“GDPR”) in the European Union, the California Consumer Privacy Act (“CCPA”) that recently went into effect and other different forms of privacy legislation under consideration across the markets in which we operate, can impact the development, efficacy and profitability of internet-based and other digital marketing. Limitations on the scheduling, content or delivery of direct marketing activities can likewise impact the activities of our agencies offering those services.
With agencies and clients located in over 100 countries worldwide, we are also subject to laws governing our international operations. These include broad anti-corruption laws such as the U.S. Foreign Corrupt Practices Act ("FCPA") and the U.K. Bribery Act (2010), which generally prohibit the making or offering of improper payments to government officials and political figures. Export controls and economic sanctions regimes, such as those maintained by the U.S. government and comparable ones by the U.K., the member states of the European Union and the U.N., impose limitations on the Company’s ability to operate in certain geographic regions or to seek or service certain potential clients. Likewise, our Treasury operations must comply with exchange controls, restrictions on currency repatriation and the control requirements of applicable anti-money-laundering statutes.
Available Information
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to these reports are available, free of charge, on our website at www.interpublic.com under the "For Investors" section, as soon as reasonably practicable after we electronically file such reports with, or furnish them to, the U.S. Securities and Exchange Commission ("SEC") at www.sec.gov.
Our Corporate Governance Guidelines, Interpublic Group Code of Conduct and the charters for each of the Audit Committee, Compensation and Leadership Talent Committee, and Corporate Governance Committee are available, free of charge, on our website at www.interpublic.com in the "Corporate Governance" subsection of the "About" section, or by writing to The Interpublic Group of Companies, Inc., 909 Third Avenue, New York, New York 10022, Attention: Secretary. Information on our website is not part of this report.

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Executive Officers of IPG
NameAgeOffice
Philippe Krakowsky 1
58Chief Executive Officer
Michael I. Roth 1
75Executive Chairman of the Board
Ellen Johnson55Executive Vice President and Chief Financial Officer
Andrew Bonzani57Executive Vice President and General Counsel
Christopher F. Carroll54Senior Vice President, Controller and Chief Accounting Officer
1Also a Director
There is no family relationship among any of the executive officers.
Mr. Krakowsky is Chief Executive Officer of IPG, a role he assumed on January 1, 2021. He is also a member of IPG’s Board of Directors. Prior to being named IPG's CEO, Mr. Krakowsky served as the company’s Chief Operating Officer beginning in September 2019, managing business operations across Interpublic, with direct oversight of IPG’s independent companies including Carmichael Lynch, Deutsch, Hill Holliday, Huge and R/GA and IPG's Media, Data and Technology offerings including IPG Mediabrands, Acxiom, Kinesso and Matterkind. During that time, Mr. Krakowsky was also Chairman of IPG Mediabrands. Over the course of his nearly two-decade tenure at IPG, Mr. Krakowsky has also led the strategy, talent, communications and business development functions for the holding company. Before taking on the COO role at IPG, Mr. Krakowsky spent a number of years as CEO of Mediabrands, leading the 10,500-person media investment unit, as well as served as interim-CEO of FCB. From February 2011 until assuming the role of COO, Mr. Krakowsky was also IPG’s Chief Strategy and Talent Officer, where he oversaw key functions that have been vital to the company’s development and growth.
Mr. Roth became Executive Chairman of the Board, effective January 1. 2021. Prior to that time, Mr. Roth served as Chairman of the Board and Chief Executive Officer from January 2005 to December 31, 2020, and as Chairman of the Board from July 2004 to January 2005. Mr. Roth served as Chairman and Chief Executive Officer of The MONY Group Inc. from February 1994 to June 2004. Mr. Roth has been a member of the Board of Directors of IPG since February 2002. He is also non-executive chairman of the board of Pitney Bowes Inc. and a director of Ryman Hospitality Properties.
Ms. Johnson became Executive Vice President and Chief Financial Officer of the Company, effective January 1, 2020. Prior to that time, Ms. Johnson served as Senior Vice President of Finance and Treasurer from February 2013 to December 31, 2020, and as Senior Vice President and Treasurer from October 2004 to February 2013. She served as Executive Vice President, Chief Financial Officer of The Partnership, a division of IPG from May 2004 to October 2004, and prior to that, served as Assistant Treasurer, International from February 2000 to May 2004.
Mr. Bonzani was hired as Senior Vice President, General Counsel and Secretary in April 2012. He was promoted to Executive Vice President, General Counsel and Secretary in February 2019 and now serves as Executive Vice President and General Counsel as of February 2021. Prior to joining IPG, Mr. Bonzani worked at IBM for 18 years, holding a number of positions in the legal department, most recently as Vice President, Assistant General Counsel and Secretary from July 2008 to March 2012.
Mr. Carroll was named Senior Vice President, Controller and Chief Accounting Officer in April 2006. In 2017, Mr. Carroll assumed additional responsibilities as Chief Financial Officer for DXTRA. Mr. Carroll served as Senior Vice President and Controller of McCann Worldgroup from November 2005 to March 2006. Prior to joining us, Mr. Carroll served in various Chief Accounting Officer and Controller roles, as well as a Financial Vice President at Lucent Technologies, Inc. and began his professional career at PricewaterhouseCoopers from October 1991 to September 2000.

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Item 1A.Risk Factors
We are subject to a variety of possible risks that could adversely impact our revenues, results of operations or financial condition. Some of these risks relate to general economic and financial conditions, while others are more specific to us and the industry in which we operate. The following factors set out potential risks we have identified that could adversely affect us. The risks described below may not be the only risks we face. Additional risks that we do not yet know of, or that we currently think are immaterial, could also have a negative impact on our business operations or financial condition. See also Statement Regarding Forward-Looking Disclosure.
Risks Related to the Global Market and the Economy
The COVID-19 pandemic has adversely impacted our business, financial condition and results of operations, and the extent of the continuing impact is highly uncertain and cannot be predicted.
The global spread of COVID-19 has created significant worldwide operational volatility, uncertainty and disruption. The COVID-19 pandemic has adversely impacted our business, financial condition and results of operations, and the extent of the continuing impact will depend on numerous evolving factors, which are highly uncertain, rapidly changing and cannot be predicted, including:
the duration, severity and scope of the pandemic;
governmental, business and individual actions that have been and continue to be taken in response to the outbreak, including travel restrictions, quarantines, social distancing, work-at-home, stay-at-home and shelter-in-place orders and shut-downs;
the effectiveness and timing of COVID-19 vaccination campaigns, or any perceived limitations of or setbacks in these efforts;
the impact of the pandemic on the financial markets and economic activity generally;
the effect of the pandemic on our clients and other business partners;
our ability to access usual sources of liquidity on reasonable terms;
our ability to comply with the financial covenant in our Credit Agreement if the material economic downturn results in increased indebtedness or substantially lower EBITDA;
potential goodwill or other impairment charges;
our ability to achieve the benefits of the 2020 restructuring plan and other cost-saving initiatives;
increased cybersecurity risks as a result of remote working conditions;
our ability during the pandemic to provide our services, including the health and wellbeing of our employees; and
the ability of our clients to pay for our services during and following the pandemic.
The COVID-19 pandemic has significantly increased financial and economic volatility and uncertainty. The continued downturn in the economy has had, and we expect will continue to have, a negative impact on many of our clients. Some clients have responded to the weak economic and financial conditions by reducing their marketing budgets, thereby decreasing the market and demand for our services. In addition, many businesses have adjusted, reduced or suspended operating activities, which has negatively impacted the markets we serve. All of the foregoing has impacted, and will likely continue to impact, our business, financial condition, results of operations and forward-looking expectations.
Furthermore, modified processes, procedures and controls have been required to respond to the changes in our business environment, as the majority of our employees have continued to work from home and many onsite locations remain closed. The significant increase in remote working of our employees may exacerbate certain risks to our business, including the increased demand for information technology resources, increased risk of malicious technology-related events, such as cyberattacks and phishing attacks, and increased risk of improper dissemination of personal, proprietary or confidential information.
The potential effects of COVID-19 could also heighten the risks disclosed in many of our other risk factors that are included below, including as a result of, but not limited to, the factors listed above.
Our results of operations are highly susceptible to unfavorable economic conditions.
We are exposed to risks associated with weak or uncertain regional or global economic conditions and disruption in the financial markets. Following the severe downturn in most markets following the outbreak of the COVID-19 pandemic, the global economy continues to be challenging. Economic downturns or uncertainty about the strength of the global economy generally, or economic conditions in certain regions or market sectors, and caution on the part of marketers, can have an effect
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on the demand for advertising and marketing communication services. In addition, market conditions can be and have been adversely affected by natural and human disruptions, such as natural disasters, public health crises, severe weather events, military conflict or civil unrest. Our industry can be affected more severely than other sectors by an economic downturn and can recover more slowly than the economy in general. In the past, including in connection with the outbreak of the COVID-19 pandemic, some clients have responded to weak economic and financial conditions by reducing their marketing budgets, which include discretionary components that are easier to reduce in the short term than other operating expenses. This pattern may recur in the future. Furthermore, unexpected revenue shortfalls can result in misalignments of costs and revenues, resulting in a negative impact to our operating margins. If our business is significantly adversely affected by unfavorable economic conditions or other market disruptions that adversely affect client spending, the negative impact on our revenue could pose a challenge to our operating income and cash generation from operations.
Risks Related to Our Industry and Operations
We operate in a highly competitive industry.
The advertising and marketing communications business is highly competitive and constantly changing. Our agencies and media services compete with other agencies and other providers of creative, marketing or media services to maintain existing client relationships and to win new business. Our competitors include not only other large multinational advertising and marketing communications companies, but also smaller entities that operate in local or regional markets as well as new forms of market participants.
Competitive challenges also arise from rapidly-evolving and new technologies in the marketing and advertising space, creating opportunities for new and existing competitors and a need for continued significant investment in tools, technologies and process improvements. As data-driven marketing solutions become increasingly core to the success of our brands, any failure to keep up with rapidly changing technologies and standards in this space could harm our competitive position.
The client’s perception of the quality of our agencies’ creative work, its confidence in our ability to protect the confidentiality of their and their customers’ data and its relationships with key personnel at the Company or our agencies are important factors that affect our competitive position. An agency’s ability to serve clients, particularly large international clients, on a broad geographic basis and across a range of services and technologies may also be an important competitive consideration. On the other hand, because an agency’s principal asset is its people and freedom of entry into the industry is almost unlimited, our relationships with clients can be affected by the departure of key personnel and a small agency is, on occasion, able to take all or some portion of a client’s account from a much larger competitor.
Clients may terminate or reduce their relationships with us on short notice.
Many companies put their advertising and marketing communications business up for competitive review from time to time, and we have won and lost client accounts in the past as a result of such periodic competitions. Our clients may choose to terminate their contracts, or reduce their relationships with us, on a relatively short time frame and for any reason. A relatively small number of clients contribute a significant portion of our revenue. In the aggregate, our top ten clients based on net revenue accounted for approximately 20% of net revenue in 2020. A substantial decline in a large client’s advertising and marketing spending, or the loss of a significant part of its business, could have a material adverse effect upon our business and results of operations.
Our ability to attract new clients and to retain existing clients may also, in some cases, be limited by clients’ policies or perceptions about conflicts of interest, or our own exclusivity arrangements with certain clients. These policies can, in some cases, prevent one agency, or even different agencies under our ownership, from performing similar services for competing products or companies.
We may lose or fail to attract and retain key employees and management personnel.
Our employees, including creative, digital, research, media and account specialists, and their skills and relationships with clients, are among our most valuable assets. An important aspect of our competitiveness is our ability to identify and develop the appropriate talent and to attract and retain key employees and management personnel. Our ability to do so is influenced by a variety of factors, including the compensation we award and factors which may be beyond our control. Changes to U.S. or other immigration policies or travel restrictions imposed as a result of public health, political or security concerns that restrain the flow of professional talent may inhibit our ability to staff our offices or projects. In addition, the advertising and marketing services industry is characterized by a high degree of employee mobility and significant use of third-party or temporary workers to staff new, growing or temporary assignments. If we were to fail to attract key personnel or lose them to competitors or clients, or fail to manage our workforce effectively, our business and results of operations could be adversely affected.
If our clients experience financial distress, or seek to change or delay payment terms, it could negatively affect our own financial position and results.
We have a large and diverse client base, and at any given time, one or more of our clients may experience financial difficulty, file for bankruptcy protection or go out of business. Unfavorable economic and financial conditions, such as those
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resulting from the COVID-19 pandemic, could result in an increase in client financial difficulties that affect us. The direct impact on us could include reduced revenues and write-offs of accounts receivable and expenditures billable to clients, and if these effects were severe, the indirect impact could include impairments of intangible assets, credit facility covenant violations and reduced liquidity.
Furthermore, in most of our businesses, our agencies enter into commitments to pay production and media costs on behalf of clients. The amounts involved substantially exceed our revenues and primarily affect the level of accounts receivable, expenditures billable to clients, accounts payable and accrued liabilities. To the extent possible, we pay production and media charges only after we have received funds from our clients. However, if clients are unable to pay for commitments that we have entered into on their behalf, or if clients seek to significantly delay or otherwise alter payment terms, there could be an adverse effect on our working capital, which would negatively impact our operating cash flow.
International business risks could adversely affect our operations.
We are a global business, with agencies operating in over 100 countries, including every significant world market. Operations outside the United States represent a significant portion of our net revenues, approximately 35% in 2020. These operations are exposed to risks that include local legislation, currency variation, exchange control restrictions, local labor and employment laws that hinder workforce flexibility, large-scale local or regional public health crises, and other difficult social, political or economic conditions. We also must comply with applicable U.S., local and other international anti-corruption laws, including the FCPA and the U.K. Anti-Bribery Act (2010), which can be comprehensive, complex and stringent, in all jurisdictions where we operate, certain of which present heightened compliance challenges. Export controls and economic sanctions, such as those maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, can impose limitations on our ability to operate in certain geographic regions or to seek or service certain potential clients. These restrictions can place us at a competitive disadvantage with respect to those competitors who may not be subject to comparable restrictions. Failure to comply or to implement business practices that sufficiently prevent corruption or violation of sanctions laws could result in significant remediation expense and expose us to significant civil and criminal penalties and reputational harm.
Given our substantial operations in the United Kingdom and Continental Europe, we face continued uncertainty surrounding the implementation and consequences of the United Kingdom’s exit from the European Union, commonly referred to as “Brexit.” Under the withdrawal agreement negotiated between the U.K. and the E.U., the U.K. as of January 31, 2020, is no longer a member of the European Union. In December 2020 the U.K. and the E.U. reached agreement on the new rules that govern the relationship between them as of January 1, 2021. As the parties implement and adjust to their new relationship, it is possible that Brexit and changes resulting from Brexit will cause increased regulatory and legal complexities, large exchange rate fluctuations and negative economic impacts. These impacts and any increased restrictions on the free movement of labor, capital, goods and services between the United Kingdom and the remaining members of the European Union, could create uncertainty surrounding our business, including our relationships with existing and future clients, suppliers and employees, and have an adverse effect on our business, financial results and operations.
In addition, in developing countries or regions, we may face further risks, such as slower receipt of payments, nationalization, social and economic instability, currency repatriation restrictions and undeveloped or inconsistently enforced commercial laws. These risks may limit our ability to grow our business and effectively manage our operations in those countries.
We are subject to industry regulations and other legal or reputational risks that could restrict our activities or negatively impact our performance or financial condition.
Our industry is subject to government regulation and other governmental action, both domestic and foreign. Advertisers and consumer groups may challenge advertising through legislation, regulation, judicial actions or otherwise, for example on the grounds that the advertising is false and deceptive or injurious to public welfare. Our business is also subject to specific rules, prohibitions, media restrictions, labeling disclosures and warning requirements applicable to advertising for certain products.
Existing and proposed laws and regulations, in particular in the European Union and the United States, concerning user privacy, use of personal information and on-line tracking technologies could affect the efficacy and profitability of internet-based, digital and targeted marketing. We are also subject to laws and regulations that govern whether and how we can transfer, process or receive certain data that we use in our operations. The European Union, for example, has recently tightened its rules on the transferability of data to the United States. Collection, processing, and storage of biometric identifiers has come under increasing regulation and is the subject of class action litigation. The costs of compliance with these laws and regulations may increase in the future as a result of the implementation of new laws or regulations, such as the GDPR and the CCPA, or changes in interpretations of current ones, such as the interpretation of existing consumer protection laws as imposing restrictions on the online collection, storage and use of personal data. Any failure on our part to comply with these legal requirements, or their application in an unanticipated manner, could harm our business and result in penalties or significant legal liability.
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The imposition of restrictions on certain technologies by private market participants in response to privacy concerns could also have a negative impact on our digital business. If we are unable to transfer data between countries and regions in which we operate, or if we are prohibited from sharing data among our products and services, it could affect the manner in which we provide our services or adversely affect our financial results.
Legislators, agencies and other governmental units may also continue to initiate proposals to ban the advertising of specific products, such as alcohol, tobacco or marijuana products, and to impose taxes on or deny deductions for advertising, which, if successful, may hinder our ability to accomplish our clients’ goals and have an adverse effect on advertising expenditures and, consequently, on our revenues. Governmental action, including judicial rulings, on the relative responsibilities of clients and their marketing agencies for the content of their marketing can also impact our operations. Furthermore, we could suffer reputational risk as a result of governmental or legal action or from undertaking work that may be challenged by consumer groups or considered controversial.
We rely extensively on information technology systems and could face cybersecurity risks.
We rely extensively and increasingly on information technologies and infrastructure to manage our business, including digital storage of marketing strategies and client information, develop new business opportunities and digital products, and process business transactions. Our business operations depend on the secure processing, storage, and transmission of confidential and sensitive information over the internet and through interconnected systems. The incidence of malicious technology-related events, such as cyberattacks, computer hacking, computer viruses, worms or other destructive or disruptive software, phishing attacks and other attempts to gain access to confidential or personal data, denial of service attacks or other malicious activities is on the rise worldwide and highlights the need for continual and effective cybersecurity awareness and education. We are increasingly the target of hackers, denial of service attacks, malicious code, and other threat actors, which can result in the unauthorized access, misuse, loss, or destruction of data (including confidential and sensitive data), unavailability of services, or other adverse events.
Our business, which increasingly involves the collection, use and transmission of customer data, may make us and our agencies attractive targets for malicious third-party attempts to access this data. Power outages, equipment failure, natural disasters (including extreme weather), terrorist activities or human error may also affect our systems and result in disruption of our services or loss or improper disclosure of personal data, business information, including intellectual property, or other confidential information. We utilize in-house and third parties, including third-party “cloud” computing services, to perform key operational functions, including the storage, transfer or processing of data. System failures or network disruptions or breaches in the systems of such in-house or third parties could adversely affect our reputation or business. We maintain, and we require our third-party service providers to maintain, security controls designed to ensure the confidentiality, integrity, and availability of our systems and the confidential and sensitive information we maintain and process. Despite our best efforts, however, the threat landscape is constantly evolving. A cybersecurity incident or data breach affecting the confidentiality, integrity, or availability of the information we process, our data systems, or those operated on our behalf by third-party service providers could adversely affect our ability to manage our risk exposure and could significantly harm our business. We operate in many respects on a decentralized basis, with a large number of agencies and legal entities, and the resulting size, diversity and disparity of our technology systems and complications in implementing standardized technologies and procedures could increase our potential vulnerability to such breakdowns, malicious intrusions or attacks.
Data privacy or cybersecurity breaches, as well as improper use of social media, by employees and others may pose a risk that sensitive data, such as personally identifiable information, strategic plans and trade secrets, could be exposed to third parties or to the general public. Any such breaches or breakdowns could expose us to legal liability, be expensive to remedy, result in a loss of our or our clients’ or vendors’ proprietary information and damage our reputation. Efforts to develop, implement and maintain security measures are costly, may not be successful in preventing these events from occurring and require ongoing monitoring and updating as technologies and cyberattack techniques change frequently, or are not recognized until successful and efforts to overcome security measures become more sophisticated. We operate worldwide, and the legal rules governing data transfers are often complex, conflicting, unclear or ever-changing. Increased privacy and cybersecurity requirements may increase our operating costs and negatively impact our business.
We face risks associated with our acquisitions and other investments.
We regularly undertake acquisitions and other investments that we believe will enhance our service offerings to our clients, such as our acquisition of Acxiom in 2018. These transactions can involve significant challenges and risks, including that the transaction does not advance our business strategy or fails to produce a satisfactory return on our investment. Our customary business, legal and financial due diligence with the goal of identifying and evaluating the material risks involved may be unsuccessful in ascertaining or evaluating all such risks. Though we typically structure our acquisitions to provide for future contingent purchase payments that are based on the future performance of the acquired entity, our forecasts of the investment’s future performance also factor into the initial consideration. When actual financial results differ, our returns on the investment could be adversely affected.
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We may also experience difficulty integrating new employees, businesses, assets or systems into our organization, including with respect to our internal policies and required controls. We may face reputational and legal risks in situations where we have a significant minority investment but limited control over the investment's operations. Furthermore, it may take longer than anticipated to realize the expected benefits from these transactions, or those benefits may ultimately be smaller than anticipated or may not be realized at all. Talent is among our most valuable assets, and we also may not realize the intended benefits of a transaction if we fail to retain targeted personnel. Acquisition and integration activity may also divert management’s attention and other corporate resources from other business needs. If we fail to realize the intended advantages of any given investment or acquisition, or if we do not identify or correctly measure the associated risks and liabilities, our results of operations and financial position could be adversely affected.
The costs of compliance with sustainability or other environmental, social responsibility or governance (ESG) laws, regulations or policies, including investor and client-driven policies and standards, could adversely affect our business.
As a non–location–specific, non–manufacturing service business we have to date been sheltered from or able to mitigate many direct impacts from climate change and related laws and regulations. We are, however, increasingly impacted by the effects of climate change and laws and regulations related to other sustainability concerns, and, we could incur related costs indirectly through our clients or investors. Increasingly our clients request that we comply with their own social responsibility, sustainability or other business policies or standards, which may be more restrictive than current laws and regulations, before they commence, or continue, doing business with us, and ESG issues are increasingly a focus of the investor community. For example, some clients and investors are requesting that we commit to a net-zero carbon emissions goal and timeframe. Our compliance with these policies and related certification requirements could be costly, and our failure to comply could adversely affect our business relationships or reputation. If large shareholders were to reduce their ownership stakes in our Company as a result of dissatisfaction with our policies or efforts in this area, there could be negative impact on our stock price, and we could also suffer reputational harm. Further, if clients’ costs are adversely affected by climate change or related laws and regulations, this could negatively impact their spending on our advertising and marketing services. We could also face increased prices from our own suppliers that face climate change-related costs and seek to pass on their increased costs to their customers.
Risks Related to Our Financial Condition and Results
Our financial condition could be adversely affected if our available liquidity is insufficient.
Agency operating cash flows have a significant impact on our liquidity, and we maintain a commercial paper program, a committed corporate credit facility and uncommitted lines of credit to increase flexibility in support of our operating needs. If any of these sources were unavailable or insufficient, our liquidity and ability to adequately fund our operations could be adversely affected. Furthermore, if our business or financial needs lead us to seek new or additional sources of liquidity, including in the capital markets, there can be no guarantee that we would be able to access any new sources of liquidity on commercially reasonable terms or at all.
Under our commercial paper program, we are authorized to issue short-term debt up to an aggregate amount outstanding at any time of $1.5 billion, which we use for working capital and general corporate purposes. Borrowings under the commercial paper program are supported by our $1.5 billion committed corporate credit facility (the “Credit Agreement”). If credit under the Credit Agreement or our ability to access the commercial paper market were unavailable or insufficient, our liquidity could be adversely affected.
The Credit Agreement contains a leverage ratio and other, non-financial, covenants, and events like a material economic downturn could adversely affect our ability to comply with them. For example, compliance with the financial covenant would be more difficult to achieve if we were to experience increased indebtedness or substantially lower revenues, including as a result of economic downturns, client losses or a substantial increase in client defaults. If we were unable to comply with any of the covenants contained in the Credit Agreement, we could be required to seek an amendment or waiver from our lenders, and our costs under these agreements could increase. If we were unable to obtain a necessary amendment or waiver, the Credit Agreement could be terminated, any outstanding amounts could be subject to acceleration, and we could lose access to certain uncommitted financing arrangements and commercial paper.
For further discussion of our liquidity profile and outlook, see Liquidity and Capital Resources in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
In connection with the Acxiom acquisition, we incurred a substantial amount of additional debt.
On October 1, 2018, we completed the acquisition of Acxiom for approximately $2.3 billion, including customary closing adjustments. The indebtedness we incurred to fund the Acxiom acquisition significantly increased our outstanding debt levels and will require us to dedicate a substantial portion of our cash flow to servicing this debt. As of December 31, 2020, we had an aggregate principal amount of $750.0 million of senior notes set to mature within two years. If we are unable to generate sufficient funds to meet our obligations under our credit facilities or the debt securities we issued in connection with the
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acquisition, we may be required to refinance, restructure or otherwise amend some or all of our obligations, sell assets or raise additional cash through the sale of our common stock or convertible securities, and there could be a negative impact on our credit ratings. We cannot assure you that we would be able to obtain refinancing on terms as favorable as our current financing or that any restructuring, sales of assets or issuances of equity can be accomplished or, if accomplished, would raise sufficient funds to meet our obligations. If we were to raise additional funds through the issuance of equity or convertible securities, that issuance could also result in substantial dilution to existing stockholders.
Downgrades of our credit ratings could adversely affect us.
Because ratings are an important factor influencing our ability to access capital and the terms of any new indebtedness, including covenants and interest rates, we could be adversely affected if our credit ratings were downgraded or if they were significantly weaker than those of our competitors. Our access to the commercial paper market is contingent on our maintenance of sufficient short-term debt ratings, and any downgrades to those ratings could increase our borrowing costs and reduce the market capacity for, or our ability to issue, commercial paper. Our clients and vendors may also consider our credit profile when negotiating contract terms, and if they were to change the terms on which they deal with us, it could have an adverse effect on our liquidity.
Our earnings would be adversely affected if we were required to recognize asset impairment charges or increase our deferred tax valuation allowances.
We evaluate all of our long-lived assets (including goodwill, other intangible assets, fixed assets and operating lease right-of-use assets), investments and deferred tax assets for possible impairment or realizability annually or whenever there is an indication that they are impaired or not realizable. If certain criteria are met, we are required to record an impairment charge or valuation allowance.
As of December 31, 2020, we had substantial amounts of long-lived assets, deferred tax assets and investments on our Consolidated Balance Sheet, including approximately $4.9 billion of goodwill. Future events, including our financial performance, market valuation of us or market multiples of comparable companies, loss of a significant client’s business or strategic decisions, could cause us to conclude that impairment indicators exist and that the asset values associated with long-lived assets, deferred tax assets and investments may have become impaired. Any significant impairment loss would have an adverse impact on our reported earnings in the period in which the charge is recognized. For further discussion of goodwill and other intangible assets, as well as our sensitivity analysis of our valuation of these assets, see Critical Accounting Estimates in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Our financial results are exposed to exchange rate risk.
Because a significant portion of our business is denominated in currencies other than the U.S. Dollar, such as the Argentine Peso, Brazilian Real, Indian Rupee, Mexican Peso and South African Rand, fluctuations in exchange rates between the U.S. Dollar and such currencies, including the persistent strength of the U.S. Dollar in recent periods, may adversely affect our financial results.
We may not be able to meet our performance targets and milestones.
From time to time, we communicate to the public certain targets and milestones for our financial and operating performance that are intended to provide metrics against which to evaluate our performance. They should not be understood as predictions or guidance about our expected performance. Our ability to meet any target or milestone is subject to inherent risks and uncertainties, and we caution investors against placing undue reliance on them. See Statement Regarding Forward-Looking Disclosure.


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Item 1B.Unresolved Staff Comments
None.

Item 2.Properties
Substantially all of our office space is leased from third parties. Certain leases are subject to rent reviews or contain escalation clauses, and certain of our leases require the payment of various operating expenses, which may also be subject to escalation. Physical properties include leasehold improvements, furniture, fixtures and equipment located in our offices. Beginning in the second quarter of 2020 and continuing through the fourth quarter, we took restructuring actions to lower our operating expenses based on our recent experience and learning in the COVID-19 pandemic and a resulting review of our operations. These actions reduced our global real estate footprint by approximately 15% or 1,700,000 square feet. We believe that facilities leased or owned by us are adequate for the purposes for which they are currently used and are well maintained. See Note 3 in Item 8, Financial Statements and Supplementary Data for further information on our lease commitments and the discussion under “2020 Restructuring Plan” in our Item 7 MD&A for further detail on our 2020 restructuring actions.

Item 3.Legal Proceedings
We are involved in various legal proceedings, and subject to investigations, inspections, audits, inquiries and similar actions by governmental authorities, arising in the normal course of our business. 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. While any outcome related to litigation or such governmental proceedings in which we are involved cannot be predicted with certainty, we believe 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. See Note 16 in Item 8, Financial Statements and Supplementary Data for further information relating to our legal matters.

Item 4.Mine Safety Disclosures
Not applicable.

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PART II

Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock is listed and traded on the New York Stock Exchange under the symbol “IPG”. As of February 11, 2021, there were approximately 9,000 registered holders of our outstanding common stock.
We announced on February 10, 2021 that our Board of Directors (the "Board") had declared a common stock cash dividend of $0.27 per share, payable on March 15, 2021 to holders of record as of the close of business on March 1, 2021. Although it is the Board's current intention to declare and pay future dividends, there can be no assurance that such additional dividends will in fact be declared and paid. Any and the amount of any such declaration is at the discretion of the Board and will depend upon factors such as our earnings, financial position and cash requirements.

Equity Compensation Plans
See Item 12 for information about our equity compensation plans.
Transfer Agent and Registrar for Common Stock
The transfer agent and registrar for our common stock is:
Computershare Shareowner Services LLC
480 Washington Boulevard
29th Floor
Jersey City, New Jersey 07310
Telephone: (877) 363-6398

Sales of Unregistered Securities
Not applicable.

Repurchases of Equity Securities
The following table provides information regarding our purchases of our equity securities during the period from October 1, 2020 to December 31, 2020.
Total Number of
Shares (or Units)
Purchased
Average Price Paid
per Share (or Unit)
Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs
Maximum Number (or
Approximate Dollar Value)
of Shares (or Units)
that May Yet Be Purchased
Under the Plans or
Programs 1
October 1 - 31— $— — $338,421,933 
November 1 - 30— $— — $338,421,933 
December 1 - 31— $— — $338,421,933 
Total— $— — 
1In February 2017, the Board authorized a share repurchase program to repurchase from time to time up to $300.0 million, excluding fees, of our common stock (the "2017 Share Repurchase Program"). In February 2018, the Board authorized a share repurchase program to repurchase from time to time up to $300.0 million, excluding fees, of our common stock, which was in addition to any amounts remaining under the 2017 Share Repurchase Program. On July 2, 2018, in connection with the announcement of the Acxiom acquisition, we announced that share repurchases will be suspended for a period of time in order to reduce the increased debt levels incurred in conjunction with the acquisition, and no shares were repurchased pursuant to the share repurchase programs in the periods reflected. There are no expiration dates associated with the share repurchase programs.
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Item 6.Selected Financial Data
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES
Selected Financial Data
(Amounts in Millions, Except Per Share Amounts and Ratios)
Years ended December 31,
Statement of Operations Data20202019
2018 1
20172016
Revenue:
Net revenue$8,064.5 $8,625.1 $8,031.6 $7,473.5 $7,452.3 
Billable expenses996.5 1,596.2 1,682.8 1,574.1 1,603.9 
Total Revenue9,061.0 10,221.3 9,714.4 9,047.6 $9,056.2 
Operating Expenses:
Salaries and related expenses5,345.0 5,568.8 5,298.3 4,990.7 4,942.2 
Office and other direct expenses1,367.9 1,564.1 1,355.1 1,269.2 1,274.6 
Billable expenses996.5 1,596.2 1,682.8 1,574.1 1,603.9 
Cost of services7,709.4 8,729.1 8,336.2 7,834.0 7,820.7 
Selling, general and administrative expenses 2
58.8 93.8 166.5 118.5 138.6 
Depreciation and amortization 3
290.6 278.5 202.9 157.1 160.2 
     Restructuring charges 4
413.8 33.9 0.0 (0.4)0.3 
Total operating expenses8,472.6 9,135.3 8,705.6 8,109.2 8,119.8 
Operating income588.4 1,086.0 1,008.8 938.4 936.4 
Provision for income taxes 5
8.0 204.8 199.2 271.3 196.9 
Net income 6
354.2 673.9 637.7 570.4 629.0 
Net income available to IPG common stockholders 6
351.1 656.0 618.9 554.4 605.0 
Earnings per share available to IPG common stockholders:
Basic 7
$0.90 $1.70 $1.61 $1.42 $1.52 
Diluted 7
$0.89 $1.68 $1.59 $1.40 $1.48 
Weighted-average number of common shares outstanding:
Basic 389.4 386.1 383.3 389.6 397.9 
Diluted 393.2 391.2 389.0 397.3 408.0 
Dividends declared per common share$1.02 $0.94 $0.84 $0.72 $0.60 
Other Financial Data
Net cash provided by operating activities$1,847.2 $1,529.2 $565.1 $881.8 $512.8 
As of December 31,
Balance Sheet Data20202019201820172016
Cash and cash equivalents and marketable securities$2,510.9 $1,192.2 $673.5 $791.0 $1,100.6 
Total assets 18,042.7 17,751.9 15,620.3 12,704.7 12,511.8 
Total debt 3,466.3 3,326.3 3,734.0 1,372.5 1,690.3 
Total liabilities 15,005.7 14,761.6 13,019.6 10,206.3 10,168.6 
Total stockholders’ equity2,943.9 2,825.6 2,432.8 2,246.3 2,090.4 
1On October 1, 2018, the Company completed its acquisition of Acxiom. See Note 6 in Item 8, Financial Statements and Supplementary Data, for further detail on the acquisition.
2The year ended December 31, 2018 included transaction costs directly related to the acquisition of Acxiom of $35.0.
3The years ended December 31, 2020, 2019, 2018, 2017 and 2016 included amortization of acquired intangibles of $85.9, $86.0, $37.6, $21.1 and $21.9, respectively.
4Starting in the second quarter of 2020 and continuing through the year, the Company took restructuring actions to lower our operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business. In the first quarter of 2019, the Company implemented a cost initiative to better align our cost structure with our revenue primarily related to specific client losses occurring in 2018. See Note 11 in Item 8, Financial Statements and Supplementary Data, for further detail regarding the restructuring charges.
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5The year ended December 31, 2020 included a net benefit of $122.6 related to the net impact of various discrete tax items, a benefit of $5.0 related to net losses on the sales of businesses, a benefit of $16.9 related to amortization of acquired intangibles, and a benefit of $93.1 related to restructuring charges. The year ended December 31, 2019 included a benefit of $16.9 related to amortization of acquired intangibles, a benefit of $7.6 related to Q1 2019 restructuring charges, a benefit of $0.4 related to net losses on the sale of businesses, and a benefit of $39.2 related to the net impact of various discrete tax items. The year ended December 31, 2018 included a benefit of $12.1 from transaction costs directly related to the acquisition of Acxiom, a benefit of $23.4 related to the net impact of various discrete tax items, and a benefit of $4.8 related to amortization of acquired intangibles. The year ended December 31, 2017 primarily included a benefit of $36.0 related to the net effect of the Tax Cuts and Jobs Act. The year ended December 31, 2016 primarily included a net reversal of valuation allowances of $12.2, a benefit of $23.4 related to the conclusion and settlement of a tax examination of previous years and a benefit of $44.6 related to refunds to be claimed on future amended U.S. federal returns.
6The years ended December 31, 2020, 2019, 2018, 2017 and 2016 included after-tax losses of $62.0, $45.9, $59.7, $16.7 and $39.0, respectively, on sales of businesses. The year ended December 31, 2018 included after-tax transaction costs directly related to the acquisition of Acxiom of $36.5.
7Refer to "Earnings Per Share" in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, for further detail on the basic and diluted earnings per share impacts for the years ended December 31, 2020, 2019, and 2018. Basic and diluted earnings per share for the year ended December 31, 2017 included negative impacts of $0.05 from the amortization of acquired intangibles, and negative impacts of $0.04 from losses on sales of businesses and the classification of certain assets as held for sale, offset by net positive impacts of $0.09 as a result of the Tax Act. Basic and diluted earnings per share for the year ended December 31, 2016 included a positive impact of $0.20 per share from various discrete tax items, partially offset by a negative impact of $0.10 per share from losses on sales of businesses and the classification of certain assets as held for sale and $0.05 from the amortization of acquired intangibles.



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Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Amounts in Millions, Except Per Share Amounts)
Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help you understand The Interpublic Group of Companies, Inc. and its subsidiaries (the "Company," "IPG," "we," "us" or "our"). MD&A should be read in conjunction with our Consolidated Financial Statements and the accompanying notes included in this report. Our MD&A includes the following sections:
EXECUTIVE SUMMARY provides a discussion about our strategic outlook, factors influencing our business and an overview of our results of operations and liquidity.
RESULTS OF OPERATIONS provides an analysis of the consolidated and segment results of operations for 2020 compared to 2019 and 2019 compared to 2018.
LIQUIDITY AND CAPITAL RESOURCES provides an overview of our cash flows, funding requirements, contractual obligations, financing and sources of funds, and debt credit ratings.
CRITICAL ACCOUNTING ESTIMATES provides a discussion of our accounting policies that require critical judgment, assumptions and estimates.
RECENT ACCOUNTING STANDARDS, by reference to Note 17 to the Consolidated Financial Statements, provides a discussion of certain accounting standards that have been adopted during 2020 or that have not yet been required to be implemented and may be applicable to our future operations.
NON-GAAP FINANCIAL MEASURE provides a reconciliation of non-GAAP financial measure with the most directly comparable generally accepted accounting principles in the United States ("U.S. GAAP") financial measures and sets forth the reasons we believe that presentation of the non-GAAP financial measure contained therein provides useful information to investors regarding our results of operations and financial condition.

EXECUTIVE SUMMARY
Impact of COVID-19
In March 2020, the World Health Organization categorized the novel coronavirus ("COVID-19") as a pandemic, and it continues to spread extensively throughout the United States and the rest of the world. The outbreak of COVID-19 and public and private sector measures to reduce its transmission, such as forced business closures and limits on operations, the imposition of social distancing and orders to work-from-home, stay-at-home and shelter-in-place, have adversely impacted our business and demand for our services. Some businesses have adjusted, reduced or suspended operating activities, which has negatively impacted the markets we serve. We continue to believe that our focus on our strategic strengths, which include talent, our differentiated go-to-market strategy, data management capabilities, and the relevance of our offerings, position us well to navigate a rapidly changing marketplace. The effects of the COVID-19 pandemic have negatively impacted and will likely continue to negatively impact our results of operations, cash flows and financial position; however, the extent of the impact will vary depending on the duration and severity of the economic and operational impacts of COVID-19 as well as the effectiveness of mass vaccination and other public health efforts to mitigate the impact of the pandemic.
We have taken steps to protect the safety of our employees, and to support their working arrangements, with a majority of our worldwide workforce continuing to work from home. We believe we have had significant success in maintaining and continuing to advance the quality of our services notwithstanding extensive changes required by the pandemic. With respect to managing costs, we undertook multiple initiatives, which continue, to align our expenses with changes in revenue. The steps we have taken across our agencies and corporate group include deferred merit increases, freezes on hiring and temporary labor, major cuts in non-essential spending, staff reductions, furloughs in markets where that option is available and salary reductions, including voluntary salary reductions for our senior corporate management team.
Starting in the second quarter of 2020 and continuing through the year, the Company took restructuring actions to lower our operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business (the “2020 Plan”). Most of these actions are based on our recent experience and learning in the COVID-19 pandemic and a resulting review of our operations, which continues, to address certain operating expenses such as occupancy expense and salaries and related expenses. Notably, we foresee a greater role for work-from-home in a hybrid office-home model to deliver and support our services in a post-COVID world. In addition, we remain committed to and have intensified our efforts around cash flow discipline, including the identification of significant capital expenditures that can be deferred, and working capital management.
We saw the effects of COVID-19 on client spending throughout the year, beginning in March, first in the Asia Pacific region in the first quarter and subsequently in the U.S., Europe and other markets. Growth in our retail and healthcare sector clients was offset by broad-based declines across most other sectors due to economic conditions, though more so in our second
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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
quarter than our third and fourth quarters, with the greatest declines in our experiential and events businesses. We saw continued negative impacts on our fourth-quarter results as clients continue to respond to the current economic conditions by reducing their marketing budgets, which affected the demand for our services. We expect many of these trends will continue in 2021, with prospects for general economic recovery and improved financial performance in the second half of the year depending on the progression of the pandemic and the efficacy and speed of vaccination efforts globally. See Item 1A, Risk Factors, in this Annual Report on Form 10-K.
We have also taken steps to strengthen our financial position during this period of heightened uncertainty, as discussed in more detail under the “Liquidity and Capital Resources” section in this Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"). On March 30, 2020, we issued $650.0 aggregate principal amount of 4.75% senior unsecured notes due 2030 (the “4.75% Senior Notes”) and on March 27, 2020, we entered into a new $500.0 364-day revolving credit facility. On July 28, 2020, we entered into amendments to our committed corporate credit facility and our new 364-day credit facility to increase our flexibility under the maximum leverage ratio covenant in each facility. We believe these steps will further enhance our financial resources as we navigate the period ahead.
Our Business
We are one of the world’s premier global advertising and marketing services companies. Our companies specialize in consumer advertising, digital marketing, media planning and buying, public relations, specialized communications disciplines and data management. Our agencies create customized marketing programs for clients that range in scale from large global marketers to regional and local clients. Comprehensive global services are critical to effectively serve our multinational and local clients in markets throughout the world as they seek to build brands, increase sales of their products and services, and gain market share.
We operate in a media landscape that continues to evolve at a rapid pace. Media channels continue to fragment, and clients face an increasingly complex consumer environment. To stay ahead of these challenges and to achieve our objectives, we have made and continue to make investments in creative, strategic and technology talent in areas including fast-growth digital marketing channels, high-growth geographic regions and strategic world markets. We consistently review opportunities within our Company to enhance our operations through acquisitions and strategic alliances and internal programs that encourage intra-company collaboration. As appropriate, we also develop relationships with technology and emerging media companies that are building leading-edge marketing tools that complement our agencies' skill sets and capabilities.
Our financial goals include competitive organic net revenue growth and expansion of Adjusted EBITA margin, as defined and discussed within the Non-GAAP Financial Measure section of this MD&A, which we expect will further strengthen our balance sheet and total liquidity and increase value to our shareholders. Accordingly, we remain focused on meeting the evolving needs of our clients while concurrently managing our cost structure. We continually seek greater efficiency in the delivery of our services, focusing on more effective resource utilization, including the productivity of our employees, real estate, information technology and shared services, such as finance, human resources and legal. The improvements we have made and continue to make in our financial reporting and business information systems in recent years allow us more timely and actionable insights from our global operations. Our disciplined approach to our balance sheet and liquidity provides us with a solid financial foundation and financial flexibility to manage and grow our business. We believe that our strategy and execution position us to meet our financial goals and to deliver long-term shareholder value.
Our Financial Information
When we analyze period-to-period changes in our operating performance, we determine the portion of the change that is attributable to changes in foreign currency rates and the net effect of acquisitions and divestitures, and the remainder we call organic change, which indicates how our underlying business performed. We exclude the impact of billable expenses in analyzing our operating performance as the fluctuations from period to period are not indicative of the performance of our underlying businesses and have no impact on our operating income or net income.
The change in our operating performance attributable to changes in foreign currency rates is determined by converting the prior-period reported results using the current-period exchange rates and comparing these prior-period adjusted amounts to the prior-period reported results. Although the U.S. Dollar is our reporting currency, a substantial portion of our revenues and expenses are generated in foreign currencies. Therefore, our reported results are affected by fluctuations in the currencies in which we conduct our international businesses. Our exposure is mitigated as the majority of our revenues and expenses in any given market are generally denominated in the same currency. Both positive and negative currency fluctuations against the U.S. Dollar affect our consolidated results of operations, and the magnitude of the foreign currency impact to our operations related to each geographic region depends on the significance and operating performance of the region. The foreign currencies that most adversely impacted our results during the year ended December 31, 2020 were the Brazilian Real, Argentine Peso, Mexican Peso, Indian Rupee and South African Rand.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
For purposes of analyzing changes in our operating performance attributable to the net effect of acquisitions and divestitures, transactions are treated as if they occurred on the first day of the quarter during which the transaction occurred. During the past few years, we have acquired companies that we believe will enhance our offerings and disposed of businesses that are not consistent with our strategic plan.
The metrics that we use to evaluate our financial performance include organic change in net revenue as well as the change in certain operating expenses, and the components thereof, expressed as a percentage of consolidated net revenue, as well as Adjusted EBITA. These metrics are also used by management to assess the financial performance of our reportable segments, Integrated Agency Networks ("IAN") and IPG DXTRA ("DXTRA"). In certain of our discussions, we analyze net revenue by geographic region and by business sector, in which we focus on our top 500 clients, which typically constitute approximately 80% to 85% of our annual consolidated net revenues.
The Consolidated Financial Statements and MD&A presented herein reflect the latest estimates and assumptions made by us that affect the reported amounts of assets and liabilities and related disclosures as of the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting periods presented. We believe we have used reasonable estimates and assumptions to assess the fair values of the Company’s goodwill, long-lived assets and indefinite-lived intangible assets; assessment of the annual effective tax rate; valuation of deferred income taxes and the allowance for expected credit losses on future uncollectible accounts receivable. If actual market conditions vary significantly from those currently projected, these estimates and assumptions could materially change resulting in adjustments to the carrying values of our assets and liabilities.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)

The following table presents a summary of our financial performance for the years ended December 31, 2020, 2019 and 2018.
Years ended December 31,Change
 2020 vs 20192019 vs 2018
Statement of Operations Data202020192018% Increase/
(Decrease)
% Increase/
(Decrease)
REVENUE:
Net revenue$8,064.5 $8,625.1 $8,031.6 (6.5)%7.4 %
Billable expenses996.5 1,596.2 1,682.8 (37.6)%(5.1)%
Total revenue$9,061.0 $10,221.3 $9,714.4 (11.4)%5.2 %
OPERATING INCOME 1, 2
$588.4 $1,086.0 $1,008.8 (45.8)%7.7 %
Adjusted EBITA 1, 2, 3
$674.3 $1,172.0 $1,046.4 (42.5)%12.0 %
NET INCOME AVAILABLE TO IPG COMMON STOCKHOLDERS$351.1 $656.0 $618.9 
Earnings per share available to IPG common stockholders:
Basic 1, 2
$0.90 $1.70 $1.61 
Diluted 1, 2
$0.89 $1.68 $1.59 
Operating Ratios
Organic change in net revenue(4.8)%3.3 %5.5 %
Operating margin on net revenue 1, 2
7.3 %12.6 %12.6 %
Operating margin on total revenue 1, 2
6.5 %10.6 %10.4 %
Adjusted EBITA margin on net revenue 1, 2, 3
8.4 %13.6 %13.0 %
Expenses as a % of net revenue:
Salaries and related expenses66.3 %64.6 %66.0 %
Office and other direct expenses17.0 %18.1 %16.9 %
Selling, general and administrative expenses 1
0.7 %1.1 %2.1 %
Depreciation and amortization3.6 %3.2 %2.5 %
Restructuring charges 2
5.1 %0.4 %0.0 %
1In 2018, results include transaction costs of $35.0 related to the Acxiom acquisition.
2In 2020, results include restructuring charges of $413.8. In 2019, results include restructuring charges of $33.9. See "Restructuring Charges" in MD&A and Note 11 of Item 8, Financial Statements and Supplementary Data for further information.
3Adjusted EBITA is a financial measure that is not defined by U.S. GAAP. Adjusted EBITA is calculated as net income available to IPG common stockholder before provision for incomes taxes, total (expenses) and other income, equity in net income (loss) of unconsolidated affiliates, net income attributable to noncontrolling interests and amortization of acquired intangibles. Refer to the Non-GAAP Financial Measure section of this MD&A for additional information and for a reconciliation to U.S. GAAP measures.
Our organic net revenue decrease of 4.8% for the year ended December 31, 2020 was primarily due to the impact of the COVID-19 pandemic on advertising, marketing and media spending in the auto and transportation, technology and telecom, consumer goods and financial services sectors, partially offset by a combination of net client wins and net higher spending from existing clients in the healthcare and retail sectors. During the year ended December 31, 2020, our Adjusted EBITA margin on net revenue decreased to 8.4% from 13.6% in the prior-year period. The decrease was primarily due to restructuring charges taken to lower our leased real estate, a result of the increased role in our operations of work from home arrangements for our workforce, in response to the global health crisis, discussed in the "Results of Operations" section.
Our organic net revenue increase of 3.3% for the year ended December 31, 2019 was driven by growth across nearly all geographic regions, attributable to a combination of net higher spending from existing clients and net client wins, most notably in the financial services, healthcare, retail and technology and telecom sectors, partially offset by a decrease in the auto and transportation sector. During the year ended December 31, 2019, our Adjusted EBITA margin on net revenue grew to 13.6%
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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
from 13.0% in the prior-year period as the increase in net revenue outpaced the overall increase in our operating expense, excluding billable expenses and amortization of acquired intangibles.

RESULTS OF OPERATIONS
Consolidated Results of Operations
Net Revenue
Our net revenue is directly impacted by the retention and spending levels of existing clients and by our ability to win new clients. Most of our expenses are recognized ratably throughout the year and are therefore less seasonal than revenue. Our net revenue is typically lowest in the first quarter and highest in the fourth quarter, reflecting the seasonal spending of our clients.
 Year ended December 31, 2019Components of ChangeYear ended December 31, 2020Change
 Foreign
Currency
Net
Acquisitions/
(Divestitures)
OrganicOrganicTotal
Consolidated$8,625.1 $(68.5)$(79.1)$(413.0)$8,064.5 (4.8)%(6.5)%
Domestic5,386.1 0.0 (20.9)(153.8)5,211.4 (2.9)%(3.2)%
International3,239.0 (68.5)(58.2)(259.2)2,853.1 (8.0)%(11.9)%
United Kingdom727.0 2.4 1.7 (66.8)664.3 (9.2)%(8.6)%
Continental Europe742.4 5.9 (31.9)(32.8)683.6 (4.4)%(7.9)%
Asia Pacific858.3 (7.9)(23.4)(116.5)710.5 (13.6)%(17.2)%
Latin America389.9 (63.8)(4.1)1.4 323.4 0.4 %(17.1)%
Other521.4 (5.1)(0.5)(44.5)471.3 (8.5)%(9.6)%
The organic decrease in our domestic market was primarily due to the impact of the pandemic on the economy at our sports and experiential marketing businesses, primarily due to sports and other event cancellations, and on our discretionary digital project-based offerings. The decreases were partially offset by growth at our advertising and media businesses. In our international markets, the organic decrease was primarily driven by the revenue declines at our advertising and sports and experiential marketing businesses and public relations agencies, primarily in the Asia Pacific and United Kingdom regions as well as the revenue declines at our media businesses, primarily in the Continental Europe and Asia Pacific regions.
 Year ended December 31, 2018Components of ChangeYear ended December 31, 2019Change
 Foreign
Currency
Net
Acquisitions/
(Divestitures)
OrganicOrganicTotal
Consolidated$8,031.6 $(143.1)$467.8 $268.8 $8,625.1 3.3 %7.4 %
Domestic4,825.0 0.0 469.9 91.2 5,386.1 1.9 %11.6 %
International3,206.6 (143.1)(2.1)177.6 3,239.0 5.5 %1.0 %
United Kingdom711.7 (32.0)20.8 26.5 727.0 3.7 %2.1 %
Continental Europe737.5 (40.6)(8.4)53.9 742.4 7.3 %0.7 %
Asia Pacific896.8 (26.2)(9.9)(2.4)858.3 (0.3)%(4.3)%
Latin America350.1 (34.4)(2.1)76.3 389.9 21.8 %11.4 %
Other510.5 (9.9)(2.5)23.3 521.4 4.6 %2.1 %
The organic increase in our domestic market was primarily driven by growth at our advertising and media businesses as well as our data management business. In our international markets, the organic increase was primarily driven by strong performance at our media businesses throughout all geographic regions. In addition, the organic increase was also driven by growth at our advertising businesses and our public relations agencies as well as at our digital specialist agencies in Latin America. Consolidated net acquisitions primarily includes net revenue during the first nine months ended September 30, 2019 from Acxiom, which we acquired on October 1, 2018, partially offset by divestitures, mostly in our domestic market, Asia Pacific and Continental Europe regions.
Refer to the segment discussion later in this MD&A for information on changes in revenue by segment.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
Salaries and Related Expenses
Years ended December 31,Change
2020 vs 20192019 vs 2018
 202020192018% Increase/ (Decrease)% Increase/ (Decrease)
Salaries and related expenses$5,345.0 $5,568.8 $5,298.3 (4.0)%5.1 %
As a % of net revenue:
Salaries and related expenses66.3 %64.6 %66.0 %
Base salaries, benefits and tax55.9 %54.5 %54.9 %
Incentive expense3.8 %4.0 %4.4 %
Severance expense1.5 %0.6 %0.9 %
Temporary help3.8 %4.1 %4.2 %
All other salaries and related expenses1.3 %1.4 %1.6 %
Salaries and related expenses decreased by 4.0% compared to our net revenue decline of 6.5% during the year ended December 31, 2020 as compared to the prior-year period. The decrease was primarily driven by reductions in base salaries, benefits and tax and lower incentive and temporary help expenses in response to the decline in net revenue, which was primarily due to the impact of the COVID-19 pandemic on economic conditions. The overall decreases were partially offset by increased severance expense.
Net revenue growth of 7.4% outpaced the increase in salaries and related expenses of 5.1% during the year ended December 31, 2019 as compared to the prior-year period, primarily due to base salaries, benefits and tax, and temporary help expenses increasing at rates less than net revenue growth. The improved ratio was also attributable to the inclusion of Acxiom, for the full year in 2019, which has a lower ratio of salaries and related expenses as a percentage of its net revenue as well as a result of carefully managing our employee costs.

Office and Other Direct Expenses
Years ended December 31,Change
 2020 vs 20192019 vs 2018
 202020192018% Increase/ (Decrease)% Increase/ (Decrease)
Office and other direct expenses$1,367.9 $1,564.1 $1,355.1 (12.5)%15.4 %
As a % of net revenue:
Office and other direct expenses17.0 %18.1 %16.9 %
Occupancy expense6.2 %6.3 %6.5 %
All other office and other direct expenses 1
10.8 %11.8 %10.4 %
1Includes production expenses, travel and entertainment, professional fees, spending to support new business activity, telecommunications, office supplies, bad debt expense, adjustments to contingent acquisition obligations, foreign currency losses (gains) and other expenses.
Office and other direct expenses decreased by 12.5% compared to our net revenue decrease of 6.5% during the year ended December 31, 2020 as compared to the prior-year period. The decrease in office and other direct expenses was mainly due to decreases in travel and entertainment expenses and new business and promotion expenses as well as lower occupancy expense and professional consulting fees, partially offset by an increase in bad debt expense.
Office and other direct expenses increased by 15.4% compared to net revenue growth of 7.4% during the year ended December 31, 2019 as compared to the prior-year period. The increase in office and other direct expenses was mainly due to the inclusion of Acxiom, for the full year in 2019, which has a higher ratio of office and other direct expenses as a percentage of its net revenue, primarily driven by client service costs and professional fees. Additionally, contributing to the increase was a year-over-year change in contingent acquisition obligations, partially offset by leverage on occupancy expense.

Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A") are primarily the unallocated expenses of our Corporate and other group, as detailed further in the segment discussion later in this MD&A, excluding depreciation and amortization. SG&A as a
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(Amounts in Millions, Except Per Share Amounts)
percentage of net revenue decreased to 0.7% in 2020 from 1.1% in the prior-year period, primarily attributable to a decrease in employee insurance expense as well as lower incentive expense and a decrease in travel and entertainment expenses. SG&A as a percentage of net revenue decreased to 1.1% in 2019 from 2.1% in the prior-year period, primarily attributable to lower professional fees, mainly driven by transaction costs related to the Acxiom acquisition in 2018 and an increase in allocated service fees from Selling, General and Administrative expenses to Cost of Services, mainly as a result of the inclusion of Acxiom.
Depreciation and Amortization
Depreciation and amortization as a percentage of net revenue was 3.6% in 2020, 3.2% in 2019 and 2.5% in 2018. The increases in 2019 compared to the prior-year period was primarily due to the inclusion of Acxiom. For the years ended December 31, 2020, 2019 and 2018, amortization of acquired intangibles was $85.9, $86.0 and $37.6, respectively.
Restructuring Charges
Years ended December 31,
202020192018
Severance and termination costs$140.4 $22.0 $0.0 
Lease restructuring costs256.0 11.9 0.0 
Other restructuring costs17.4 0.0 0.0 
Total restructuring charges$413.8 $33.9 $0.0 
2020 Restructuring Plan
Beginning in the second quarter of 2020, the Company took restructuring actions to lower its operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business (the “2020 Plan”). These actions continued through the fourth quarter and most are based on our recent experience and learning in the COVID-19 pandemic and a resulting review of our operations to address certain operating expenses such as occupancy expense and salaries and related expenses.
A summary of the restructuring activities related to the 2020 Plan is as follows:
2020 Plan
Restructuring ExpenseNon-Cash ItemsCash PaymentsLiability at December 31, 2020
Severance and termination costs$140.4 $4.5 $61.3 $74.6 
Lease impairment costs256.0 256.0 0.0 0.0 
Other17.4 5.1 12.3 0.0 
Total
$413.8 $265.6 $73.6 $74.6 

Our charges for restructuring actions for the year ended December 31, 2020 totaled $413.8 and were designed to reduce our expenses, such as occupancy expense and salaries and related expenses, relative to our net revenue on an ongoing basis. These actions, taken during the second, third and fourth quarters, reduced our global real estate footprint by approximately 15% or 1,700,000 square feet and, further, downsized selected levels of management and staff with severance costs for 1,520 employees or approximately 3%. Of the total charges for the year ended December 31, 2020, $265.6 or 64%, is non-cash, mainly representing the impairment of right-of-use assets of operating leases. We expect to realize approximately $160.0 of annualized cost savings associated with the actions taken as part of the 2020 Restructuring Plan.
Net restructuring charges were comprised of $317.9 at IAN and $78.8 at DXTRA for the year ended December 31, 2020, which include non-cash lease impairment costs of $190.4 and $59.8, respectively.
Lease impairment costs, which relate to the office spaces that were vacated as part of the 2020 Plan, included impairments of operating lease right-of-use assets and associated leasehold improvements, furniture and asset retirement obligations. Lease impairments were calculated based on estimated fair values using market participant assumptions including forecasted net discounted cash flows related to the operating lease right-of-use assets.
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(Amounts in Millions, Except Per Share Amounts)
2019 Restructuring Plan
In the first quarter of 2019, the Company implemented a cost initiative (the “2019 Plan”) to better align our cost structure with our revenue primarily related to specific client losses occurring in 2018. All restructuring actions were identified and initiated by the end of the first quarter of 2019, with all actions substantially completed by the end of the second quarter of 2019, and there have not been any restructuring adjustments.

EXPENSES AND OTHER INCOME
 Years ended December 31,
 202020192018
Cash interest on debt obligations$(186.3)$(188.3)$(118.4)
Non-cash interest(5.9)(11.0)(4.6)
Interest expense(192.2)(199.3)(123.0)
Interest income29.5 34.5 21.8 
Net interest expense(162.7)(164.8)(101.2)
Other expense, net(64.4)(42.9)(69.6)
Total (expenses) and other income$(227.1)$(207.7)$(170.8)
Net Interest Expense
For 2020, net interest expense remained relatively flat as compared to the prior-year period. For 2019, net interest expense increased by $63.6 as compared to 2018, primarily attributable to increased cash interest expense from the issuance of $2,500.0 of long-term debt in September and October of 2018 in order to finance the acquisition of Acxiom, partially offset by an increase in interest income, primarily due to higher cash balances in international markets.

Other Expense, Net
Results of operations include certain items that are not directly associated with our revenue-producing operations.
 Years ended December 31,
 202020192018
Net losses on sales of businesses$(67.0)$(43.4)$(61.9)
Other2.6 0.5 (7.7)
Total other expense, net$(64.4)$(42.9)$(69.6)
Net losses on sales of businesses – During 2020 and 2019, the amounts recognized were related to sales of businesses and the classification of certain assets and liabilities, consisting primarily of cash, as held for sale within our IAN and DXTRA reportable segments. During 2018, the amounts recognized were related to sales of businesses and the classification of certain assets and liabilities, consisting primarily of cash, as held for sale within our IAN reportable segment. The businesses held for sale as of year-end primarily represent unprofitable, non-strategic agencies which are expected to be sold within the next twelve months. The sales of businesses and the classification of certain assets and liabilities as held for sale included cash, net of proceeds, of $62.9, $6.7 and $30.8 for the years ended 2020, 2019 and 2018, respectively, which is classified within the Other Investing Activities line in our Consolidated Statements of Cash Flows in Item 8, Financial Statements and Supplementary Data.
Other – During 2020, the amounts recognized were primarily a result of gains on remeasurement of equity interests arising from a change in ownership. During 2019, the amounts recognized were primarily a result of changes in fair market value of equity investments, partially offset by the sale of an equity investment. During 2018, the amounts recognized were primarily a result of transaction-related costs from the Acxiom acquisition, partially offset by changes in fair market value of equity investments.

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(Amounts in Millions, Except Per Share Amounts)
INCOME TAXES
 Years ended December 31,
 202020192018
Income before income taxes$361.3 $878.3 $838.0 
Provision for income taxes$8.0 $204.8 $199.2 
Effective income tax rate2.2 %23.3 %23.8 %

Effective Tax Rate
Our tax rates are affected by many factors, including our worldwide earnings from various countries, changes in legislation and tax characteristics of our income.
In 2020, our effective income tax rate of 2.2% was positively impacted by the settlement of the U.S. Federal income tax audit of the years 2006 to 2016, partially offset by losses in certain foreign jurisdictions where we received no tax benefit due to 100% valuation allowances, by net losses on sales of businesses and the classification of certain assets as held for sale for which we received minimal tax benefit and by tax expense associated with the change to our assertion regarding the permanent reinvestment of undistributed earnings attributable to certain foreign subsidiaries.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted and signed into law. The CARES Act includes several provisions for corporations including increasing the amount of deductible interest, allowing companies to carryback certain net operating losses (“NOLs”) and increasing the amount of NOLs that corporations can use to offset income. The CARES Act did not materially affect our quarter or year-to-date income tax provision, deferred tax assets and liabilities, or related taxes payable. 
In the second quarter of 2020, in response to changes in non-U.S. tax law, a decision was made to change our indefinite reinvestment assertion on a $120.0 of undistributed foreign earnings of specific subsidiaries. We recorded $10.4 of income tax costs associated with this change to our assertion.
In the third quarter of 2020, in response to restructuring actions taken within foreign subsidiaries, a decision was made to change our indefinite reinvestment assertion on a $46.0 of undistributed foreign earnings of specific subsidiaries. We recorded $3.2 of income tax costs associated with this change to our assertion.
On July 29, 2020, the Internal Revenue Service notified the Company that the U.S. Federal income tax audit of years 2006 through 2016 has been finalized and settled. As a result, we recognized an income tax benefit of $136.2 in the third quarter of 2020.
In 2019, our effective income tax rate of 23.3% was positively impacted by the reversal of valuation allowances primarily in Continental Europe, by the settlement of state income tax audits and by excess tax benefits on employee share-based payments. The effective tax rate was negatively impacted by losses in certain foreign jurisdictions where we receive no tax benefit due to 100% valuation allowances, net losses on sales of businesses and the classification of certain assets as held for sale, for which we received minimal tax benefit.
In 2018, our effective income tax rate of 23.8% was positively impacted by U.S. tax incentives, foreign tax credits from a distribution of unremitted earnings, the net reversal of valuation allowance in Continental Europe and research and development credits. The effective income tax rate was negatively impacted by losses in certain foreign jurisdictions where we received no tax benefit due to 100% valuation allowances, non-deductible losses on sales of businesses and assets held for sale, by tax expense associated with the change to our assertion regarding the permanent reinvestment of undistributed earnings attributable to certain foreign subsidiaries, and by tax expense related to the true-up of our December 31, 2017 tax reform estimates as permitted by SEC Staff issued Accounting Bulletin No. 118 (“SAB 118”).
Public Law 115-97, commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act") was signed into law on December 22, 2017. The Tax Act legislated many new tax provisions which impacted our operations. At December 31, 2017, provisional amounts were recorded as permitted by SAB 118. The impact of the Tax Act as required by SAB 118, resulted in a net tax expense of $13.4 in 2018, which was primarily attributable to our estimate of the tax imposed on the deemed repatriation of unremitted foreign earnings.
The Company has historically asserted that its unremitted foreign earnings are permanently reinvested, and therefore did not record income taxes on such amounts. In light of increased debt and associated servicing commitments in connection with the Acxiom acquisition that was consummated on October 1, 2018, the Company re-evaluated its global cash needs and as a result determined that approximately $435.0 of undistributed foreign earnings from certain international entities were no longer subject to the permanent reinvestment assertion. We recorded a tax expense of $10.8 in 2018 representing our estimate of the
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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
tax costs associated with this change to our assertion. We did not change our permanent reinvestment assertion with respect to any other international entities as we used the related historical earnings and profits to fund international operations and investments.
The Tax Act imposed a new tax on certain foreign earnings generated in 2018 and forward. These global intangible low-taxed income ("GILTI") tax rules are complex. U.S. GAAP allows us to choose an accounting policy which treats the U.S. tax under GILTI provisions as either a current expense, as incurred, or as a component of the Company’s measurement of deferred taxes. The Company elected to account for the GILTI tax as a current expense.
See Note 9 in Item 8, Financial Statements and Supplementary Data for further information.

EARNINGS PER SHARE
Basic earnings per share available to IPG common stockholders for the years ended December 31, 2020, 2019 and 2018 were $0.90, $1.70 and $1.61 per share, respectively. Diluted earnings per share available to IPG common stockholders for the years ended December 31, 2020, 2019 and 2018 were $0.89, $1.68 and $1.59 per share, respectively.
Basic and diluted earnings per share for the year ended December 31, 2020 included a negative impact of $0.18 from the amortization of acquired intangibles, a negative impact of $0.82 from restructuring charges, a negative impact of $0.16 from net losses on sales of businesses and the classification of certain assets as held for sale, partially offset by a net positive impact of $0.31 from various discrete tax items.
Basic and diluted earnings per share for the year ended December 31, 2019 included a negative impact of $0.18 from the amortization of acquired intangibles, a negative impact of $0.06 from first-quarter restructuring charges, a negative impact of $0.12 from net losses on sales of businesses and the classification of certain assets as held for sale, for which we received minimal tax benefit, partially offset by a net positive impact of $0.10 from various discrete tax items.
Basic and diluted earnings per share for the year ended December 31, 2018 included negative impacts of $0.16 and $0.15, respectively, from net losses on sales of businesses and the classification of certain assets as held for sale primarily in our international markets, negative impacts of $0.10 and $0.09, respectively, from transaction costs directly related to the acquisition of Acxiom, and negative impacts of $0.09 and $0.08, respectively, from the amortization of acquired intangibles, partially offset by net positive impacts of $0.06 and $0.06, respectively, from various discrete tax items.

Segment Results of Operations
As discussed in Note 15 to the Consolidated Financial Statements, we have two reportable segments as of December 31, 2020: IAN and DXTRA. We also report results for the "Corporate and other" group. Segment information for the prior period has been recast to conform to the current-period presentation.

IAN
Net Revenue
 Year ended December 31, 2019Components of ChangeYear ended December 31, 2020Change
 Foreign
Currency
Net
Acquisitions/
(Divestitures)
OrganicOrganicTotal
Consolidated$7,328.8 $(66.9)$(73.3)$(267.2)$6,921.4 (3.6)%(5.6)%
Domestic4,538.1 0.0 (18.0)(68.4)4,451.7 (1.5)%(1.9)%
International2,790.7 (66.9)(55.3)(198.8)2,469.7 (7.1)%(11.5)%
The organic decrease was mainly attributable to lower spending from existing clients, primarily related to the impact of the COVID-19 pandemic. The revenue decrease was in the auto and transportation, technology and telecom, consumer goods, and financial services sectors, partially offset by net client wins and net higher spending from existing clients in the healthcare and retail sectors. The organic decrease in our domestic market was primarily driven by the impact of the pandemic on the economy at discretionary-based digital service offerings partially offset by growth at our advertising and media businesses. In our international markets, the organic decrease was mainly driven by our advertising businesses, primarily in the Asia Pacific and United Kingdom regions, as well as the revenue declines at our media businesses, primarily in the Continental Europe and Asia Pacific regions.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
 Year ended December 31, 2018Components of ChangeYear ended December 31, 2019Change
 Foreign
Currency
Net
Acquisitions/
(Divestitures) 1
OrganicOrganic
Total 1
Consolidated$6,720.9 $(124.5)$465.5 $266.9 $7,328.8 4.0 %9.0 %
Domestic3,953.8 0.0 471.6 112.7 4,538.1 2.9 %14.8 %
International2,767.1 (124.5)(6.1)154.2 2,790.7 5.6 %0.9 %
The organic increase was attributable to a combination of net higher spending from existing clients and net client wins, most notably in the financial services, healthcare, retail and technology and telecom sectors, partially offset by a decrease in the auto and transportation sector. The organic increase in our domestic market was primarily driven by growth at our advertising and media businesses as well as our data management business. In our international markets, the organic increase was primarily driven by strong performance at our media businesses throughout all geographic regions. In addition, the organic increase was also driven by growth at our advertising businesses and our digital specialist agencies in Latin America. Consolidated net acquisitions primarily includes net revenue during the first nine months ended September 30, 2019 from Acxiom, which we acquired on October 1, 2018, partially offset by divestitures, mostly in our domestic market, Asia Pacific and Continental Europe regions.

Segment EBITA
 Years ended December 31,Change
 2020201920182020 vs 20192019 vs 2018
Segment EBITA 1
$699.1 $1,115.7 $1,038.8 (37.3)%7.4 %
Segment EBITA margin on net revenue 1
10.1 %15.2 %15.5 %
1Segment EBITA and Segment EBITA margin on net revenue include $317.9 and $27.0 of restructuring charges in the year ended December 31, 2020 and 2019, respectively. See "Restructuring Charges" in MD&A and Note 11 of Item 8, Financial Statements and Supplementary Data for further information.
Segment EBITA margin decreased during 2020 when compared to 2019, mainly due to the decrease in net revenue of 5.6%, the organic component of which is discussed in detail above, primarily related to the impact of the COVID-19 pandemic. Operating expense, excluding billable expenses and amortization of acquired intangibles, remained flat as compared to the prior-year period mainly due to an increase in restructuring charges, partially offset by decreases in salaries and related expenses and office and other direct expenses. The decrease in salaries and related expenses was primarily driven by reductions in base salaries, benefits and tax, lower temporary help and incentive expenses in response to the declines in net revenue, primarily due to the effects of the COVID-19 pandemic on economic conditions. The overall decreases were partially offset by increased severance. The decrease in office and other direct expenses was primarily driven by decreases in travel and entertainment expenses and new business and promotion expenses as well as lower occupancy expense and professional fees, partially offset by an increase in bad debt expense and a year-over-year change in contingent acquisition obligations. During the full-year of 2020, Segment EBITA included restructuring charges of $317.9 as compared to $27.0 during the full-year of 2019. Depreciation and amortization, excluding amortization of acquired intangibles, as a percentage of net revenue increased to 2.6% in 2020 from 2.2% in the prior-year period.
Segment EBITA margin decreased during 2019 when compared to 2018, as the increase in operating expenses, excluding billable expenses and amortization of acquired intangibles, outpaced the net revenue growth of 9.0%, the organic component of which was discussed in detail above. The Segment EBITA margin decrease of 0.3% included restructuring charges of $27.0, or 0.4% as a percentage of net revenue, during 2019 to better align our cost structure with our revenue. The comparison was also adversely impacted due to higher allocated service fees, from our Selling, General and Administrative expenses, to Cost of Services, mainly as a result of the inclusion of Acxiom. Net revenue growth outpaced the increase in salaries and related expenses as compared to the prior-year period, primarily driven by lower percentages of its net revenue in base salaries, benefits and tax, temporary help expenses and incentive expense. The improved salaries and related expenses ratio was also attributable to the inclusion of Acxiom, which has a lower ratio of salaries and related expenses as a percentage of its net revenue as well as a result of carefully managing our employee costs. The increase in office and other direct expenses outpaced the growth in net revenue as compared to the prior-year period, mainly due to the inclusion of Acxiom, which has a higher ratio of office and other direct expense as a percentage of its net revenue, driven by client service costs and professional fees. However, overall office and other direct expenses primarily benefited from leverage on occupancy expense. Depreciation and amortization, excluding amortization of acquired intangibles, as a percentage of net revenue increased to 2.2% in 2019 from 2.0% in the prior-year period, primarily due to the inclusion of Acxiom.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
DXTRA
Net Revenue
 Year ended December 31, 2019Components of ChangeYear ended December 31, 2020Change
 Foreign
Currency
Net
Acquisitions/
(Divestitures)
OrganicOrganicTotal
Consolidated$1,296.3 $(1.6)$(5.8)$(145.8)$1,143.1 (11.2)%(11.8)%
Domestic848.0 0.0 (2.9)(85.4)759.7 (10.1)%(10.4)%
International448.3 (1.6)(2.9)(60.4)383.4 (13.5)%(14.5)%
The organic decrease was mainly attributable to lower spending from existing clients, primarily related to the COVID-19 pandemic. The revenue decrease was in the auto and transportation, technology and telecom and financial services sectors, partially offset by a combination of net client wins and net higher spending from existing clients in the healthcare and food and beverage sectors. The organic decrease in our domestic market was primarily driven by our sports and experiential marketing businesses, primarily due to sports and other event cancellations. In our international markets, the organic decrease was mainly driven by our public relations agencies and sports and experiential marketing businesses, primarily in the Asia Pacific and United Kingdom regions.
 Year ended December 31, 2018Components of ChangeYear ended December 31, 2019Change
 Foreign
Currency
Net
Acquisitions/
(Divestitures)
OrganicOrganicTotal
Consolidated$1,310.7 $(18.6)$2.3 $1.9 $1,296.3 0.1 %(1.1)%
Domestic871.2 0.0 (1.7)(21.5)848.0 (2.5)%(2.7)%
International439.5 (18.6)4.0 23.4 448.3 5.3 %2.0 %
The organic increase was primarily attributable to net client wins and net higher spending from existing clients, most notably in the healthcare and food and beverage sectors, partially offset by a decrease in the auto and transportation sector. The organic decrease in our domestic market was primarily due to revenue decline at our public relations agencies, partially offset by growth at our sports marketing business. The international organic increase was driven by growth across all geographic regions and disciplines, primarily at our public relations agencies, most notably in the United Kingdom and Continental Europe regions, and sports marketing business, most notably in the Asia Pacific region.

Segment EBITA
 Years ended December 31,Change
 2020201920182020 vs 20192019 vs 2018
Segment EBITA 1
$56.5 $158.1 $183.6 (64.3)%(13.9)%
Segment EBITA margin 1
4.9 %12.2 %14.0 %
1Segment EBITA and Segment EBITA margin on net revenue include $78.8 and $6.2 of restructuring charges in the year ended December 31, 2020 and 2019, respectively. See "Restructuring Charges" in MD&A and Note 11 of Item 8, Financial Statements and Supplementary Data for further information.
Segment EBITA margin decreased during 2020 when compared to 2019, as the decrease in net revenue of 11.8% exceeded the overall decrease in operating expenses, including restructuring charges and excluding billable expenses and amortization of acquired intangibles. The decrease in salaries and related expenses was primarily driven by reductions in base salaries, benefits and tax, lower temporary help and incentive expenses in response to the declines in net revenue, primarily due to the impact of the COVID-19 pandemic on economic conditions. The overall decrease was partially offset by an increase in severance expense. The decrease in office and other direct expenses was primarily driven by decreases in travel and entertainment expenses and new business and promotion expenses as well as lower occupancy expense. During the full-year of 2020, segment EBITA included restructuring charges of $78.8 as compared to $6.2 during the full-year of 2019. Depreciation and amortization, excluding amortization of acquired intangibles, as a percentage of net revenue increased to 1.8% in 2020 from 1.6% in the prior-year period.
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(Amounts in Millions, Except Per Share Amounts)
Segment EBITA margin decreased during 2019 compared to 2018, mainly due to the decrease in net revenue of 1.1%, the organic component of which is discussed in detail above, and the slight increase in operating expenses, primarily driven by the restructuring charges of $6.2 in 2019, higher salaries and related expenses to support business growth and an increase in year-over-year change in contingent acquisition obligations, partially offset by lower incentive expense. Depreciation and amortization, excluding amortization of acquired intangibles, as a percentage of net revenue remained flat as compared to the prior-year period.

CORPORATE AND OTHER
Our corporate and other segment is primarily comprised of selling, general and administrative expenses including corporate office expenses as well as shared service center and certain other centrally managed expenses that are not fully allocated to operating divisions; salaries, long-term incentives, annual bonuses and other miscellaneous benefits for corporate office employees; professional fees related to internal control compliance, financial statement audits and legal, information technology and other consulting services that are engaged and managed through the corporate office; and rental expense for properties occupied by corporate office employees. A portion of centrally managed expenses is allocated to operating divisions based on a formula that uses the planned revenues of each of the operating units. Amounts allocated also include specific charges for information technology-related projects, which are allocated based on utilization.
Corporate and other expenses decreased by $20.5 to $81.3 during the year ended December 31, 2020 as compared to 2019, primarily attributable to a decrease in selling, general and administrative expenses, which was discussed in the Results of Operations section, partially offset by an increase in restructuring charges. Corporate and other expenses in 2019 decreased by $74.2 to $101.8 compared to 2018, primarily attributable to lower professional fees, mainly driven by transaction costs of $35.0 related to the Acxiom acquisition in 2018 and an increase in allocated service fees from Selling, General and Administrative expenses to Cost of Services, mainly as a result of the inclusion of Acxiom.
During the year ended December 31, 2020 and 2019, corporate and other expense includes $17.1 and $0.7 of restructuring charges, respectively. See "Restructuring Charges" in MD&A and Note 11 of Item 8, Financial Statements and Supplementary Data for further information.

LIQUIDITY AND CAPITAL RESOURCES
CASH FLOW OVERVIEW
The following tables summarize key financial data relating to our liquidity, capital resources and uses of capital.
 Years ended December 31,
Cash Flow Data202020192018
Net income, adjusted to reconcile to net cash provided by operating activities 1
$1,088.9 $1,123.6 $1,013.0 
Net cash provided by (used in) working capital 2
900.1 442.8 (431.1)
Changes in other non-current assets and liabilities(141.8)(37.2)(16.8)
Net cash provided by operating activities$1,847.2 $1,529.2 $565.1 
Net cash used in investing activities(216.2)(161.7)(2,491.5)
Net cash (used in) provided by financing activities(346.2)(843.0)1,853.2 
1Reflects net income adjusted primarily for depreciation and amortization of fixed assets and intangible assets, non-cash restructuring charges, amortization of restricted stock and other non-cash compensation, net losses on sales of businesses, provision for uncollectible receivables and deferred income taxes.
2Reflects changes in accounts receivable, other current assets, accounts payable, accrued liabilities and contract liabilities. 
Operating Activities
Due to the seasonality of our business, we typically use cash from working capital in the first nine months of a year, with the largest impact in the first quarter, and generate cash from working capital in the fourth quarter, driven by the seasonally strong media spending by our clients. Quarterly and annual working capital results are impacted by the fluctuating annual media spending budgets of our clients as well as their changing media spending patterns throughout each year across various countries.
The timing of media buying on behalf of our clients across various countries affects our working capital and operating cash flow and can be volatile. In most of our businesses, our agencies enter into commitments to pay production and media costs on behalf of clients. To the extent possible, we pay production and media charges after we have received funds from our clients. The amounts involved, which substantially exceed our revenues, primarily affect the level of accounts receivable, accounts
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(Amounts in Millions, Except Per Share Amounts)
payable, accrued liabilities and contract liabilities. Our assets include both cash received and accounts receivable from clients for these pass-through arrangements, while our liabilities include amounts owed on behalf of clients to media and production suppliers. Our accrued liabilities are also affected by the timing of certain other payments. For example, while annual cash incentive awards are accrued throughout the year, they are generally paid during the first quarter of the subsequent year.
Net cash provided by operating activities during 2020 was $1,847.2, which was an increase of $318.0 as compared to 2019, and the comparison includes $900.1 generated from working capital in 2020, compared with $442.8 generated from working capital in 2019. Working capital in 2020 was primarily impacted by the variation in the timing of collections and payments around the reporting period, which was favorable in 2020 as compared to 2019.
Net cash provided by operating activities during 2019 was $1,529.2, which was an increase of $964.1 as compared to 2018, and the comparison includes $442.8 generated from working capital in 2019, compared with $431.1 used in working capital in 2018. Working capital in 2019 was primarily impacted by the variation in the timing of collections and payments around the reporting period, of which the timing that was unfavorable in late 2018 compared to 2017 was a benefit in 2019, as well as the spending levels and pattern of our clients as compared to 2018.
Investing Activities
Net cash used in investing activities during 2020 consisted primarily of payments for capital expenditures of $167.5, related mostly to computer hardware and software and leasehold improvements.
Net cash used in investing activities during 2019 consisted primarily of payments for capital expenditures of 198.5, related mostly to leasehold improvements and computer hardware and software.
Financing Activities
Net cash used in financing activities during 2020 was driven by repayment of long-term debt of $503.7 and the payment of dividends of $398.1, partially offset by proceeds of $646.2, net of discount of $3.8, from the issuance of our 4.75% Senior Notes due March 30, 2030 (the “4.75% Senior Notes").
Net cash used in financing activities during 2019 was driven by repayment of long-term debt of $403.3 and the payment of dividends of $363.1.
Foreign Exchange Rate Changes
The effect of foreign exchange rate changes on cash, cash equivalents and restricted cash included in the Consolidated Statements of Cash Flows resulted in a net increase of $31.0 in 2020. This increase was primarily a result of several foreign currencies strengthening compared to the U.S. dollar, including the Euro and the Australian Dollar.
The effect of foreign exchange rate changes on cash, cash equivalents and restricted cash included in the Consolidated Statements of Cash Flows resulted in a net decrease of $6.0 in 2019.

LIQUIDITY OUTLOOK
We expect our cash flow from operations and existing cash and cash equivalents to be sufficient to meet our anticipated operating requirements at a minimum for the next twelve months. We also have a commercial paper program, a committed corporate credit facility, a 364-Day credit facility that matures on March 26, 2021, and uncommitted lines of credit to support our operating needs. Borrowings under our commercial paper program are supported by our committed corporate credit agreement. We continue to maintain a disciplined approach to managing liquidity, with flexibility over significant uses of cash, including our capital expenditures, cash used for new acquisitions, our common stock repurchase program and our common stock dividends.
From time to time, we evaluate market conditions and financing alternatives for opportunities to raise additional funds or otherwise improve our liquidity profile, enhance our financial flexibility and manage market risk. Our ability to access the capital markets depends on a number of factors, which include those specific to us, such as our credit ratings, and those related to the financial markets, such as the amount or terms of available credit. Particularly in light of the current market conditions, there can be no guarantee that we would be able to access new sources of liquidity, or continue to access existing sources of liquidity, on commercially reasonable terms, or at all.
Funding Requirements
Our most significant funding requirements include our operations, non-cancelable operating lease obligations, capital expenditures, acquisitions, common stock dividends, taxes and debt service. Additionally, we may be required to make payments to minority shareholders in certain subsidiaries if they exercise their options to sell us their equity interests.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
Notable funding requirements include:
Debt service – Our 3.75% Senior Notes in aggregate principal amount of $500.0 mature on October 1, 2021. We expect to use available cash on hand as well as additional short-term borrowings as needed to fund the principal repayment. Our 3.50% Senior Notes in aggregate principal amount of $500.0 matured on October 1, 2020 and we used available cash, including the proceeds from the offering of our 4.75% Senior Notes, to fund the principal repayment. As of December 31, 2020, we had outstanding short-term borrowings of $48.0 from our uncommitted lines of credit used primarily to fund short-term working capital needs. The remainder of our debt is primarily long-term, with maturities scheduled from 2022 through 2048.
Acquisitions – We paid cash of $5.6, net of cash acquired of $2.9, for acquisitions completed in 2020. We also paid deferred payments of $48.8 for prior acquisitions as well as ownership increases in our consolidated subsidiaries. In addition to potential cash expenditures for new acquisitions, we expect to pay approximately $48.0 over the next twelve months related to all completed acquisitions as of December 31, 2020. We may also be required to pay approximately $14.0 related to put options held by minority shareholders if exercised, over the next twelve months. We will continue to evaluate strategic opportunities to grow and continue to strengthen our market position, particularly in our digital and marketing services offerings, and to expand our presence in high-growth and key strategic world markets.
Dividends – During 2020, we paid four quarterly cash dividends of $0.255 per share on our common stock, which corresponded to aggregate dividend payments of $398.1. On February 10, 2021, we announced that our Board of Directors (the "Board") had declared a common stock cash dividend of $0.27 per share, payable on March 15, 2021 to holders of record as of the close of business on March 1, 2021. Assuming we pay a quarterly dividend of $0.27 per share and there is no significant change in the number of outstanding shares as of December 31, 2020, we would expect to pay approximately $422.0 over the next twelve months. Whether to declare and the amount of any such future dividend is at the discretion of our Board and will depend upon factors such as our earnings, financial position and cash requirements.
Restructuring – During 2020, we paid cash of $73.6 for restructuring costs related to our 2020 Plan designed to lower our operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business. As of December 31, 2020, our remaining liability related to restructuring actions was $74.6. Most of our restructuring actions are based on our recent experience and learning in the COVID-19 pandemic and a resulting review of our operations to address certain operating expenses such as occupancy expense and salaries and related expenses.
The following summarizes our estimated contractual cash obligations and commitments as of December 31, 2020 and their effect on our liquidity and cash flow in future periods.
 Years ended December 31,ThereafterTotal
 20212022202320242025
Long-term debt 1
$502.5 $250.2 $498.9 $498.3 $0.0 $1,668.4 $3,418.3 
Interest payments on long-term debt 1
147.5 124.8 104.5 87.3 57.9 832.8 1,354.8 
Non-cancelable operating lease obligations 2
322.9 302.6 241.2 212.2 194.7 735.2 2,008.8 
Contingent acquisition payments 3
65.1 34.2 33.8 9.9 0.7 2.9 146.6 
Uncertain tax positions 4
24.8 82.4 19.8 63.8 13.0 13.8 217.6 
Total$1,062.8 $794.2 $898.2 $871.5 $266.3 $3,253.1 $7,146.1 
1Amounts represent maturity at book value and interest payments based on contractual obligations. We may at our option and at any time redeem all or some of any outstanding series of our senior notes reflected in this table at the redemption prices set forth in the applicable supplemental indentures under which such senior notes were issued. See Note 4 in Item 8, Financial Statements and Supplementary Data for further information.
2Non-cancellable operating lease obligations are presented net of future receipts on contractual sublease arrangements. See Note 3 in Item 8, Financial Statements and Supplementary Data for further information.
3We have structured certain acquisitions with additional contingent purchase price obligations based on factors including future performance of the acquired entity. See Note 6 and Note 16 in Item 8, Financial Statements and Supplementary Data for further information.
4The amounts presented are estimates due to inherent uncertainty of tax settlements, including the ability to offset liabilities with tax loss carryforwards.

Share Repurchase Program
On July 2, 2018, in connection with the announcement of the Acxiom acquisition, we announced that share repurchases will be suspended for a period of time in order to reduce the increased debt levels incurred in conjunction with the acquisition.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
As of December 31, 2020, $338.4, excluding fees, remains available for repurchase under the share repurchase programs authorized in previous years, which have no expiration date.
FINANCING AND SOURCES OF FUNDS
Substantially all of our operating cash flow is generated by our agencies. Our cash balances are held in numerous jurisdictions throughout the world, including at the holding company level. Below is a summary of our sources of liquidity.
At December 31, 2020, we held $932.4 of cash, cash equivalents and marketable securities in foreign subsidiaries. The Company has historically asserted that its unremitted foreign earnings are permanently reinvested, and therefore has not recorded any deferred taxes on such amounts. In the second quarter of 2020, in response to changes in non-U.S. tax law, and in the third quarter of 2020, in response to restructuring actions taken within foreign subsidiaries, the Company determined that approximately $120.0 and $46.0, respectively, of undistributed foreign earnings from certain international entities were no longer subject to the permanent reinvestment assertion, of which $102.4 remains undistributed as of December 31, 2020.
During the third quarter ended September 30, 2018, the Company re-evaluated its global cash needs and as a result determined that approximately $435.0 of undistributed foreign earnings from certain international entities were no longer subject to the permanent reinvestment assertion, of which $173.7 remains undistributed as of December 31, 2020. We have not changed our permanent reinvestment assertion with respect to any other international entities as we intend to use the related historical earnings and profits to fund international operations and investments.
Credit Arrangements
We maintain a committed corporate credit facility, originally dated as of July 18, 2008, which has been amended and restated from time to time (the "Credit Agreement"). We use our Credit Agreement to increase our financial flexibility, to provide letters of credit primarily to support obligations of our subsidiaries and to support our commercial paper program. The Credit Agreement is a revolving facility, expiring in November 2024, under which amounts borrowed by us or any of our subsidiaries designated under the Credit Agreement may be repaid and reborrowed, subject to an aggregate lending limit of $1,500.0, or the equivalent in other currencies. The Company has the ability to increase the commitments under the Credit Agreement from time to time by an additional amount of up to $250.0, provided the Company receives commitments for such increases and satisfies certain other conditions. The aggregate available amount of letters of credit outstanding may decrease or increase, subject to a sublimit of $50.0, or the equivalent in other currencies. Our obligations under the Credit Agreement are unsecured. As of December 31, 2020, there were no borrowings under the Credit Agreement; however, we had $9.0 of letters of credit under the Credit Agreement, which reduced our total availability to $1,491.0.
On March 27, 2020, we entered into an agreement for a 364-Day revolving credit facility (the "364-Day Credit Facility") that matures on March 26, 2021. The 364-Day Credit Facility is a revolving facility, under which amounts borrowed by us may be repaid and reborrowed, subject to an aggregate lending limit of $500.0. The cost structure of the 364-Day Credit Agreement is based on our current credit ratings. The applicable margin for Base Rate Advances (as defined in the 364-Day Credit Facility) is 0.250%, the applicable margin for Eurodollar Rate Advances (as defined in the 364-Day Credit Facility) is 1.250%, and the facility fee payable on a lender's revolving commitment is 0.250%. In addition, the 364-Day Credit Facility includes covenants that among other things, (i) limit our liens and the liens of our consolidated subsidiaries, and (ii) limit subsidiary debt. The 364-Day Credit Facility also contains a financial covenant that requires us to maintain, on a consolidated basis as of the end of each fiscal quarter, a leverage ratio for the four quarters then ended. The leverage ratio and other covenants set forth in the 364-Day Credit Facility are equivalent to the covenants contained in the Company's existing Credit Agreement, which remains in full effect. As of December 31, 2020, there were no borrowings under the 364-Day Credit Facility.
On July 28, 2020, we entered into Amendment No. 1 to the Credit Agreement and Amendment No. 1 to the 364-Day Credit Facility (together, the “Amendments”). The Amendments increased the maximum leverage ratio covenant to 4.25x in the case of the 364-Day Credit Facility and, in the case of the Credit Agreement, to (i) 4.25x through the quarter ended June 30, 2021, and (ii) 3.50x thereafter. Amendment No.1 to the Credit Agreement also increased the Applicable Margin (as defined in the Credit Agreement) for any borrowings we make under the Credit Agreement if our long-term public debt ratings are BB+/Ba1 or below at the time of borrowing. We have the option to terminate Amendment No.1 to the Credit Agreement at any time, provided that at the time we deliver a termination notice, the leverage ratio as of the end of the most recently ended fiscal quarter did not exceed 3.50x. The Credit Agreement reverts to its original terms on June 30, 2021, or following any such early termination, whichever is earlier. We paid amendment fees of $2.0 in connection with the Amendments.
We were in compliance with all of our covenants in both the Credit Agreement and the 364-Day Credit Facility as of December 31, 2020. The financial covenant in the Credit Agreement and the 364-Day Credit Facility requires that we maintain, as of the end of each fiscal quarter, a certain leverage ratio for the four quarters then ended.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
The table below sets forth the financial covenant in effect as of December 31, 2020.
Four Quarters EndedFour Quarters Ended
Financial CovenantDecember 31, 2020
Credit Agreement EBITDA Reconciliation 1
December 31, 2020
Leverage ratio (not greater than) 1, 2
4.25xNet income available to IPG common stockholders$351.1 
Actual leverage ratio 2.86x
Non-operating adjustments 3
237.3 
Operating income588.4 
Add:
Depreciation and amortization412.3 
Other non-cash charges reducing operating income209.9 
Credit Agreement EBITDA 1
$1,210.6 
1The leverage ratio is defined as debt as of the last day of such fiscal quarter to EBITDA (as defined in the Credit Agreement and the 364-Day Credit Facility) for the four quarters then ended.
2On July 28, 2020, the Amendments increased the maximum leverage ratio covenant to 4.25x in the case of the 364-Day Credit Facility and, in the case of the Credit Agreement, to (i) 4.25x through the quarter ended June 30, 2021, and (ii) 3.50x thereafter.
3Includes adjustments of the following items from our Consolidated Statement of Operations in Item 8, Financial Statements and Supplementary Data: provision for income taxes, total (expenses) and other income, equity in net income of unconsolidated affiliates, and net income attributable to noncontrolling interests.

Uncommitted Lines of Credit
We also have uncommitted lines of credit with various banks that permit borrowings at variable interest rates and that are primarily used to fund working capital needs. We have guaranteed the repayment of some of these borrowings made by certain subsidiaries. If we lose access to these credit lines, we would have to provide funding directly to some of our operations. As of December 31, 2020, the Company had uncommitted lines of credit in an aggregate amount of $857.6, under which we had outstanding borrowings of $48.0 classified as short-term borrowings on our Consolidated Balance Sheet. The average amount outstanding during 2020 was $86.5, with a weighted-average interest rate of approximately 3.6%.
Commercial Paper
The Company is authorized to issue unsecured commercial paper up to a maximum aggregate amount outstanding at any time of $1,500.0. Borrowings under the commercial paper program are supported by the Credit Agreement described above. Proceeds of the commercial paper are used for working capital and general corporate purposes, including the repayment of maturing indebtedness and other short-term liquidity needs. The maturities of the commercial paper vary but may not exceed 397 days from the date of issue. As of December 31, 2020, there was no commercial paper outstanding. The average amount outstanding under the program was $105.8 in 2020, with a weighted-average interest rate of 1.5% and a weighted-average maturity of twelve days.
Cash Pooling
We aggregate our domestic cash position on a daily basis. Outside the United States, we use cash pooling arrangements with banks to help manage our liquidity requirements. In these pooling arrangements, several IPG agencies agree with a single bank that the cash balances of any of the agencies with the bank will be subject to a full right of set-off against amounts other agencies owe the bank, and the bank provides for overdrafts as long as the net balance for all agencies does not exceed an agreed-upon level. Typically, each agency pays interest on outstanding overdrafts and receives interest on cash balances. Our Consolidated Balance Sheets reflect cash, net of bank overdrafts, under all of our pooling arrangements, and as of December 31, 2020 and 2019 the amounts netted were $2,702.2 and $2,274.9, respectively.

DEBT CREDIT RATINGS
Our debt credit ratings as of February 11, 2021 are listed below.
 Moody’s Investors ServiceS&P Global RatingsFitch Ratings
Short-term ratingP-2A-2F2
Long-term ratingBaa2BBBBBB+
OutlookNegativeNegativeNegative
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