July 19, 2007
Ms. Sondra Stokes
U.S. Securities and Exchange Commission
Division of Corporation Finance
100 F Street, NE
Washington, D.C. 20549
U.S. Securities and Exchange Commission
Division of Corporation Finance
100 F Street, NE
Washington, D.C. 20549
| Re: | The Interpublic Group of Companies, Inc. Form 10-K for the fiscal year ended December 31, 2006 Filed February 28, 2007 File No. 1-06686 |
Dear Ms. Stokes:
Enclosed please find a copy of *, as requested.
Additionally, we have modified our analysis, previously provided as Attachment A to our letter
to you dated June 14, 2007, to reflect the operating margins (both as reported and pro forma, as
defined) with and without all prior period adjustments (including stock options) dating back to
1996.
If you have any questions, please do not hesitate to call.
Sincerely,
/s/ Christopher F. Carroll
Christopher F. Carroll
Senior Vice President, Controller
and Chief Accounting Officer
Senior Vice President, Controller
and Chief Accounting Officer
| Copies to: | Mr. Terry French Mr. Paul Monsour |
Enclosure
*
* Refers to material omitted pursuant to a request for confidential treatment. This material
has been filed separately with the Securities and Exchange Commission.
| (in millions) | ATTACHMENT A (1 of 3) |
Rollover Method
| Year ended December 31, 2006 | Year ended December 31, 2005 | Year ended December 31, 2004 | Year ended December 31, 2003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Correcting/ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Correcting | Originating | Originating | Originating | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| As | Error | As | Error | As | Error | As | Error | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reported | (Notes 1 and 2) | If Adjusted | % | Reported | (Note 2) | If Adjusted | % | Reported | (Note 2) | If Adjusted | % | Reported | (Notes 2 & 3) | If Adjusted | % | |||||||||||||||||||||||||||||||||||||||||||||||||
Revenue |
$ | 6,190.8 | $ | (6.1 | ) | $ | 6,184.7 | (0.1 | )% | $ | 6,274.3 | $ | 21.2 | $ | 6,295.5 | 0.3 | % | $ | 6,387.0 | $ | 5.8 | $ | 6,392.8 | 0.1 | % | $ | 6,161.7 | (6.1 | ) | $ | 6,155.6 | (0.1 | )% | |||||||||||||||||||||||||||||||
Salaries and
related expenses |
3,944.1 | (5.6 | ) | 3,949.7 | (0.1 | )% | 3,999.1 | 4.8 | 3,994.3 | 0.1 | % | 3,733.0 | 1.2 | 3,731.8 | 0.0 | % | 3,501.4 | 0.1 | 3,501.3 | 0.0 | % | |||||||||||||||||||||||||||||||||||||||||||
Office and general
expenses |
2,079.0 | 6.5 | 2,072.5 | 0.3 | % | 2,288.1 | 2.1 | 2,286.0 | 0.1 | % | 2,250.4 | (1.5 | ) | 2,251.9 | (0.1 | )% | 2,225.3 | (0.6 | ) | 2,225.9 | 0.0 | % | ||||||||||||||||||||||||||||||||||||||||||
Operating income
(loss) as reported |
106.0 | (5.4 | ) | 100.6 | (5.1 | )% | (104.2 | ) | 23.0 | (81.2 | ) | 22.1 | % | (94.4 | ) | 6.4 | (88.0 | ) | 6.8 | % | (31.9 | ) | (6.9 | ) | (38.8 | ) | (21.6 | )% | ||||||||||||||||||||||||||||||||||||
Operating margin %
as reported |
1.7 | % | 1.6 | % | -1.7 | % | -1.3 | % | -1.5 | % | -1.4 | % | -0.5 | % | -0.6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Operating margin %
pro forma
(Note 6) |
2.7 | % | 2.6 | % | -0.2 | % | 0.2 | % | 6.3 | % | 6.4 | % | 7.1 | % | 7.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Note 1 — Adjustments noted above have been corrected from amounts reflected in Note 21 in Company’s 2006 Form 10-K.
See revised Note 21 in Company’s Response No. 3.
Note 2 — Credit adjustments are reflected without brackets.
Note 3 — Salaries and related expenses originating/correcting error includes $0.3, $2.4, $2.9, $10.3, $11.0, $8.4, $4.2 and $1.1 for 2003, 2002,
2001, 2000, 1999, 1998, 1997 and 1996, respectively, relating to stock options.
Note 4 — Includes the cumulative impact of the out-of-period adjustments relating to 2000 and prior years which were not able to be
reflected in their specific year of origination.
Note 5 — As Reported amounts for years prior to 2000 were not restated in connection with
the restatement announced in 2005.
Note 6 — Pro forma operating margin % represents revenue less salaries and related expenses and office and general expenses as a percentage of revenue, excluding
restructuring, impairments, contract termination costs and other charges.
| (in millions) | ATTACHMENT A (2 of 3) |
Rollover Method
| Year ended December 31, 2002 | Year ended December 31, 2001 | Year ended December 31, 2000 | Year ended December 31, 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Originating | Originating | Originating | As | Originating | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| As | Error | As | Error | As | Error | Reported | Error | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reported | (Notes 2 & 3) | If Adjusted | % | Reported | (Notes 2 and 3) | If Adjusted | % | Reported | (Notes 2, 3 and 4) | If Adjusted | % | (Note 5) | (Notes 2 and 3) | If Adjusted | % | |||||||||||||||||||||||||||||||||||||||||||||||||
Revenue |
$ | 6,059.1 | (2.8 | ) | $ | 6,056.3 | 0.0 | % | $ | 6,598.5 | $ | (3.7 | ) | $ | 6,594.8 | (0.1 | )% | $ | 6,872.2 | $ | (9.6 | ) | $ | 6,862.6 | (0.1 | )% | $ | 5,960.0 | $ | — | $ | 5,960.0 | 0.0 | % | ||||||||||||||||||||||||||||||
Salaries and
related expenses |
3,397.1 | (0.1 | ) | 3,397.2 | 0.0 | % | 3,634.9 | (2.6 | ) | 3,637.5 | (0.1 | )% | 3,830.8 | (13.8 | ) | 3,844.6 | (0.4 | )% | 3,447.5 | (11.0 | ) | 3,458.5 | (0.3 | )% | ||||||||||||||||||||||||||||||||||||||||
Office and general
expenses |
2,248.3 | (1.5 | ) | 2,249.8 | (0.1 | )% | 2,397.9 | (1.0 | ) | 2,398.9 | 0.0 | % | 2,173.0 | (4.2 | ) | 2,177.2 | (0.2 | )% | 1,640.9 | 0.0 | 1,640.9 | 0.0 | ||||||||||||||||||||||||||||||||||||||||||
Operating income
(loss) as reported |
275.8 | (4.4 | ) | 271.4 | (1.6 | )% | (364.5 | ) | (6.8 | ) | (371.3 | ) | (1.9 | )% | 710.1 | (23.5 | ) | 686.6 | (3.3 | )% | 608.6 | (11.0 | ) | 597.6 | (1.8 | )% | ||||||||||||||||||||||||||||||||||||||
Operating margin %
as reported |
4.6 | % | 4.5 | % | -5.5 | % | -5.6 | % | 10.3 | % | 10.0 | % | 10.2 | % | 10.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Operating margin %
pro forma
(Note 6) |
6.8 | % | 6.8 | % | 8.6 | % | 8.5 | % | 12.6 | % | 12.3 | % | 14.6 | % | 14.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | ATTACHMENT A (3 of 3) |
Rollover Method
| Year ended December 31, 1998 | Year ended December 31, 1997 | Year ended December 31, 1996 | ||||||||||||||||||||||||||||||||||||||||||||||
| Originating | Originating | Originating | ||||||||||||||||||||||||||||||||||||||||||||||
| As Reported | Error | As Reported | Error | As Reported | Error | |||||||||||||||||||||||||||||||||||||||||||
| (Note 5) | (Notes 2 and 3) | If Adjusted | % | (Note 5) | (Notes 2 and 3) | If Adjusted | % | (Note 5) | (Notes 2 and 3) | If Adjusted | % | |||||||||||||||||||||||||||||||||||||
Revenue |
$ | 5,492.9 | $ | — | $ | 5,492.9 | 0.0 | $ | 4,850.7 | $ | — | $ | 4,850.7 | 0.0 | % | $ | 3,053.9 | $ | — | $ | 3,053.9 | 0.0 | % | |||||||||||||||||||||||||
Salaries and
related expenses |
3,158.9 | (8.4 | ) | 3,167.3 | (0.3 | )% | 2,800.5 | (4.2 | ) | 2,804.7 | (0.1 | )% | 1,619.6 | (1.1 | ) | 1,620.7 | (0.1 | )% | ||||||||||||||||||||||||||||||
Office and general
expenses |
1,592.0 | 0.0 | 1,592.0 | 0.0 | % | 1,583.4 | 0.0 | 1,583.4 | 0.0 | 938.7 | 0 | 938.7 | 0.0 | |||||||||||||||||||||||||||||||||||
Operating income
(loss) as reported |
654.7 | (8.4 | ) | 646.3 | (1.3 | )% | 320.9 | (4.2 | ) | 316.7 | (1.3 | )% | 358.9 | (1.1 | ) | 357.8 | (0.3 | )% | ||||||||||||||||||||||||||||||
Operating margin %
as reported |
11.9 | % | 11.8 | % | 6.6 | % | 6.5 | % | 11.8 | % | 11.7 | % | ||||||||||||||||||||||||||||||||||||
Operating margin %
pro forma
(Note 6) |
13.5 | % | 13.4 | % | 9.6 | % | 9.5 | % | 16.2 | % | 16.2 | % | ||||||||||||||||||||||||||||||||||||