Interpublic Announces Third Quarter and First Nine Months 2020 Results
Interpublic Group (IPG) reported Q3 2020 net revenue of $1.95 billion, a 5.2% decline year-over-year, with an organic net revenue decrease of 3.7%. The company's Q3 diluted earnings per share were $0.71, adjusted earnings at $0.53, with total revenue of $2.13 billion. For the first nine months, net revenue fell 6.7% to $5.78 billion. IPG incurred $47.3 million in restructuring charges, aiming for annual expense savings of $110-$130 million. Despite challenges from COVID-19, management highlights operational adjustments and continued talent investment.
- Adjusted EBITA margin increased to 16.2% in Q3 2020, up from 14.7% in Q3 2019.
- Cash and cash equivalents rose to $1.63 billion from $1.19 billion at the end of 2019.
- Ongoing investment in offerings and strong new business pipeline.
- Net revenue decreased 5.2% in Q3 2020 and 6.7% in the first nine months compared to 2019.
- Restructuring charges totaled $47.3 million in Q3 2020, impacting overall performance.
- Visibility for Q4 remains unclear due to ongoing COVID-19 disruptions.
New York, Oct. 21, 2020 (GLOBE NEWSWIRE) --
- Third quarter reported net revenue of
$1.95 billion , a decrease of5.2% from a year ago, with organic net revenue decrease of3.7% , due to impact of COVID-19 macroeconomic disruption - Third quarter organic change of net revenue was negative
2.4% in the US and was negative6.0% in International markets - First nine months reported net revenue decrease of
6.7% , and organic net revenue decrease of4.5% - Third quarter reported net income was
$279.7 million , including restructuring charges, and adjusted EBITA was$317.2 million before restructuring charges - Third quarter adjusted EBITA margin of
16.2% before restructuring charges - Third quarter diluted earnings per share of
$0.71 and diluted earnings per share of$0.53 as adjusted - First nine months diluted earnings per share of
$0.61 and diluted earnings per share of$0.87 as adjusted - Management continued a program of structural operating cost reduction, resulting in restructuring charges in the quarter of
$47.3 million - Management highlights exceptional base of talent, continued investment in offerings, and sustained industry leadership
Michael Roth, Chairman and CEO, IPG:
“At IPG, we continue to stay focused on the safety, health and well-being of our employees, clients, and key partners. In light of the very challenging environment, we are proud of our results in the quarter, and the work our people are doing under such challenging and extraordinary circumstances. This level of performance demonstrates how effectively our companies and our people have adjusted to new ways of working.”
“During the quarter, we continued to stay close to clients, and invest in our offerings, while managing operating expenses to revenue. Unquestionably, there will be enduring consumer changes because of the pandemic, including the mass shift to ecommerce, the emergence of digital consumer experience, and a deeper accountability for brand authenticity and purpose. At IPG, we are distinctively well-resourced with outstanding talent and tools to help marketers re-think and re-imagine their brands. Our new business pipeline continues to be active, and has begun to recover relative to earlier this year. We continue our program of structural operating cost reduction to lower our expense base, and raise our margin potential going forward. Our balance sheet and liquidity continue to be further areas of strength.”
“Looking forward to our important fourth quarter, visibility remains unclear for as long as COVID-19 is disrupting everyday life and macroeconomic conditions. As always, we will be disciplined in how we manage the business, aligning expenses closely to any changes in revenue. We look forward to returning to our strong trajectory of organic revenue and profit growth as a macro recovery takes hold. We are thankful for the continued close partnership with our clients, and proud of our employees around the world for their outstanding work and productivity despite all the challenges brought by the pandemic.”
Summary
Revenue
- Third quarter 2020 net revenue was
$1.95 billion , compared to$2.06 billion in the third quarter of 2019. During the quarter, the organic net revenue decrease was3.7% , while the effect of foreign currency translation was negative0.3% , and the impact of net dispositions was negative1.2% . Third quarter 2020 total revenue, which includes billable expenses, was$2.13 billion , compared to$2.44 billion in 2019. - First nine months 2020 net revenue was
$5.78 billion , compared to$6.19 billion in the first nine months of 2019. During the first nine months of 2020, the organic net revenue decrease was4.5% , while the effect of foreign currency translation was negative1.2% , and the impact of net dispositions was negative1.0% . First nine months 2020 total revenue, which includes billable expenses, was$6.51 billion , compared to$7.32 billion in 2019.
Operating Results
- Operating income in the third quarter of 2020 was
$248.6 million , including restructuring charges of$47.3 million , compared to$280.3 million in 2019. Adjusted EBITA was$317.2 million before restructuring charges in the third quarter of 2020, compared to adjusted EBITA of$302.0 million for the same period in 2019. Adjusted EBITA margin on net revenue was16.2% before restructuring charges, compared to adjusted EBITA margin of14.7% in 2019. - Operating income in the first nine months of 2020 was
$365.0 million , including restructuring charges of$159.9 million , compared to$594.7 million in 2019. Adjusted EBITA was$589.3 million before restructuring charges in the first nine months of 2020, compared to$691.1 million for the same period in 2019. Adjusted EBITA margin on net revenue was10.2% before restructuring charges, compared to11.2% for the same period in 2019. - In the third quarter and first nine months of 2020, the Company recognized restructuring charges of
$47.3 million and$159.9 million , respectively. We expect that our restructuring actions in this year's second and third quarters will together result in annualized structural operating expense savings of$110 t o$130 million . - Refer to reconciliations on page 12 for further detail.
Net Results
- Income tax benefit in the third quarter of 2020 was
$86.3 million on income before income taxes of$192.6 million , primarily due to an income tax benefit of$136.2 million related to the finalization and settlement of the U.S. Federal income tax audit from years 2006 through 2016. - Third quarter 2020 net income available to IPG common stockholders was
$279.7 million , resulting in earnings of$0.72 and$0.71 per basic and diluted share, respectively, compared to$0.43 and$0.42 for the same period in 2019. Adjusted earnings were$0.53 per diluted share, compared to adjusted earnings of$0.49 per diluted share a year ago. Third quarter 2020 adjusted earnings excludes after-tax amortization of acquired intangibles of$17.0 million , after-tax restructuring charges of$36.5 million , an after-tax loss of$6.5 million on the sales of businesses and a net positive impact of$132.6 million from discrete tax items. - Income tax benefit in the first nine months of 2020 was
$50.1 million on income before income taxes of$187.7 million , primarily due to an income tax benefit of$136.2 million related to the finalization and settlement of the U.S. Federal income tax audit from years 2006 through 2016. - First nine months 2020 net income available to IPG common stockholders was
$238.8 million , resulting in earnings of$0.61 per basic and diluted share, compared to$0.85 and$0.84 per basic and diluted share, respectively, for the same period in 2019. Adjusted earnings were$0.87 per diluted share compared to adjusted earnings of$1.05 per diluted share a year ago. First nine months 2020 adjusted earnings excludes after-tax amortization of acquired intangibles of$51.7 million , after-tax restructuring charges of$123.7 million , an after-tax loss of$48.8 million on the sales of businesses and a net positive impact of$122.6 million from discrete tax items. - Refer to reconciliations on pages 10 through 14 for further detail.
Operating Results
Revenue
Net revenue of
Net revenue of
Operating Expenses
For the third quarter and first nine months of 2020, total operating expenses, excluding billable expenses, decreased by
Salaries and related expenses decreased
Office and other direct expenses decreased as a percentage of net revenue to
Selling, general and administrative expenses remained flat as a percentage of net revenue for the third quarter of 2020, compared to the same period in 2019. For the first nine months of 2020, selling, general and administrative expenses decreased as a percentage of net revenue to
Depreciation and amortization slightly increased as a percentage of net revenue to
Restructuring charges in the third quarter and first nine months of 2020 were
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. This compares to restructuring charges of
Non-Operating Results and Tax
Net interest expense increased by
Other expense, net was
The income tax benefit in the third quarter of 2020 was
The income tax benefit in the first nine months of 2020 was
Balance Sheet
At September 30, 2020, cash and cash equivalents totaled
Common Stock Dividend
During the third quarter of 2020, the Company declared and paid a common stock cash dividend of
For further information regarding the Company's financial results as well as certain non-GAAP measures including organic net revenue growth, Adjusted EBITA, adjusted EBITA before restructuring charges and adjusted earnings per diluted share, and the reconciliations thereof, please refer to pages 10 to 14 and our Investor Presentation filed on Form 8-K herewith and available on our website, www.interpublic.com.
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About Interpublic
Interpublic is values-based, data-fueled, and creatively-driven. Major global brands include Acxiom, Craft, FCB (Foote, Cone & Belding), FutureBrand, Golin, Huge, Initiative, Jack Morton, Kinesso, MAGNA, McCann, Mediahub, Momentum, MRM, MullenLowe Group, Octagon, R/GA, UM and Weber Shandwick. Other leading brands include Avrett Free Ginsberg, Campbell Ewald, Carmichael Lynch, Deutsch, Hill Holliday, ID Media and The Martin Agency. For more information, please visit www.interpublic.com.
# # #
Contact Information
Tom Cunningham
(Press)
(212) 704-1326
Jerry Leshne
(Analysts, Investors)
(212) 704-1439
Cautionary Statement
This release contains forward-looking statements. Statements in this release that are not historical facts, including statements about management’s beliefs and expectations, constitute forward-looking statements. These statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined under item 1A, Risk Factors, in our most recent Annual Report on Form 10-K and our quarterly reports on Form 10-Q and our other filings with the Securities and Exchange Commission ("SEC"). 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 outbreak of the novel coronavirus (COVID-19), including the measures to contain its spread, and the impact on the economy 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; and
- failure to realize the anticipated benefits on the acquisition of the Acxiom business.
Investors should carefully consider these factors and the additional risk factors outlined in more detail under Item 1A, Risk Factors, in our most recent Annual Report on Form 10-K and our quarterly reports on Form 10-Q and our other SEC filings.
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED SUMMARY OF EARNINGS THIRD QUARTER REPORT 2020 AND 2019 (Amounts in Millions except Per Share Data) (UNAUDITED) | |||||||||||
| Three Months Ended September 30, | |||||||||||
| 2020 | 2019 | Fav. (Unfav.) % Variance | |||||||||
| Revenue: | |||||||||||
| Net Revenue | $ | 1,954.6 | $ | 2,061.4 | (5.2) | % | |||||
| Billable Expenses | 170.9 | 376.7 | (54.6) | % | |||||||
| Total Revenue | 2,125.5 | 2,438.1 | (12.8) | % | |||||||
| Operating Expenses: | |||||||||||
| Salaries and Related Expenses | 1,269.9 | 1,334.4 | 4.8 | % | |||||||
| Office and Other Direct Expenses | 307.9 | 367.9 | 16.3 | % | |||||||
| Billable Expenses | 170.9 | 376.7 | 54.6 | % | |||||||
| Cost of Services | 1,748.7 | 2,079.0 | 15.9 | % | |||||||
| Selling, General and Administrative Expenses | 9.9 | 9.8 | (1.0) | % | |||||||
| Depreciation and Amortization | 71.0 | 69.0 | (2.9) | % | |||||||
| Restructuring Charges | 47.3 | 0.0 | >(100)% | ||||||||
| Total Operating Expenses | 1,876.9 | 2,157.8 | 13.0 | % | |||||||
| Operating Income | 248.6 | 280.3 | (11.3) | % | |||||||
| Expenses and Other Income: | |||||||||||
| Interest Expense | (50.8) | (49.7) | |||||||||
| Interest Income | 6.1 | 9.5 | |||||||||
| Other Expense, Net | (11.3) | (7.4) | |||||||||
| Total (Expenses) and Other Income | (56.0) | (47.6) | |||||||||
| Income Before Income Taxes | 192.6 | 232.7 | |||||||||
| (Benefit of) Provision for Income Taxes | (86.3) | 64.6 | |||||||||
| Income of Consolidated Companies | 278.9 | 168.1 | |||||||||
| Equity in Net (Loss) Income of Unconsolidated Affiliates | (0.4) | 0.3 | |||||||||
| Net Income | 278.5 | 168.4 | |||||||||
| Net Loss (Income) Attributable to Noncontrolling Interests | 1.2 | (2.8) | |||||||||
| Net Income Available to IPG Common Stockholders | $ | 279.7 | $ | 165.6 | |||||||
| Earnings Per Share Available to IPG Common Stockholders: | |||||||||||
| Basic | $ | 0.72 | $ | 0.43 | |||||||
| Diluted | $ | 0.71 | $ | 0.42 | |||||||
| Weighted-Average Number of Common Shares Outstanding: | |||||||||||
| Basic | 389.6 | 386.7 | |||||||||
| Diluted | 393.9 | 391.8 | |||||||||
| Dividends Declared Per Common Share | $ | 0.255 | $ | 0.235 | |||||||
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED SUMMARY OF EARNINGS THIRD QUARTER REPORT 2020 AND 2019 (Amounts in Millions except Per Share Data) (UNAUDITED) | |||||||||||
| Nine Months Ended September 30, | |||||||||||
| 2020 | 2019 | Fav. (Unfav.) % Variance | |||||||||
| Revenue: | |||||||||||
| Net Revenue | $ | 5,780.1 | $ | 6,192.1 | (6.7) | % | |||||
| Billable Expenses | 730.9 | 1,127.4 | (35.2) | % | |||||||
| Total Revenue | 6,511.0 | 7,319.5 | (11.0) | % | |||||||
| Operating Expenses: | |||||||||||
| Salaries and Related Expenses | 3,998.8 | 4,136.7 | 3.3 | % | |||||||
| Office and Other Direct Expenses | 1,003.1 | 1,144.4 | 12.3 | % | |||||||
| Billable Expenses | 730.9 | 1,127.4 | 35.2 | % | |||||||
| Cost of Services | 5,732.8 | 6,408.5 | 10.5 | % | |||||||
| Selling, General and Administrative Expenses | 36.4 | 69.3 | 47.5 | % | |||||||
| Depreciation and Amortization | 216.9 | 213.1 | (1.8) | % | |||||||
| Restructuring Charges | 159.9 | 33.9 | >(100)% | ||||||||
| Total Operating Expenses | 6,146.0 | 6,724.8 | 8.6 | % | |||||||
| Operating Income | 365.0 | 594.7 | (38.6) | % | |||||||
| Expenses and Other Income: | |||||||||||
| Interest Expense | (145.4) | (151.1) | |||||||||
| Interest Income | 22.7 | 25.0 | |||||||||
| Other Expense, Net | (54.6) | (18.1) | |||||||||
| Total (Expenses) and Other Income | (177.3) | (144.2) | |||||||||
| Income Before Income Taxes | 187.7 | 450.5 | |||||||||
| (Benefit of) Provision for Income Taxes | (50.1) | 118.7 | |||||||||
| Income of Consolidated Companies | 237.8 | 331.8 | |||||||||
| Equity in Net Loss of Unconsolidated Affiliates | (0.6) | (0.1) | |||||||||
| Net Income | 237.2 | 331.7 | |||||||||
| Net Loss (Income) Attributable to Noncontrolling Interests | 1.6 | (4.6) | |||||||||
| Net Income Available to IPG Common Stockholders | $ | 238.8 | $ | 327.1 | |||||||
| Earnings Per Share Available to IPG Common Stockholders: | |||||||||||
| Basic | $ | 0.61 | $ | 0.85 | |||||||
| Diluted | $ | 0.61 | $ | 0.84 | |||||||
| Weighted-Average Number of Common Shares Outstanding: | |||||||||||
| Basic | 388.9 | 385.8 | |||||||||
| Diluted | 392.6 | 390.3 | |||||||||
| Dividends Declared Per Common Share | $ | 0.765 | $ | 0.705 | |||||||
| THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES U.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS (Amounts in Millions except Per Share Data) (UNAUDITED) | |||||||||||||||||||||||
| Three Months Ended September 30, 2020 | |||||||||||||||||||||||
| As Reported | Amortization of Acquired Intangibles | Restructuring Charges | Net Losses on Sales of Businesses1 | Net Impact of Various Discrete Tax Items2 | Adjusted Results (Non-GAAP) | ||||||||||||||||||
| Operating Income and Adjusted EBITA before Restructuring Charges3 | $ | 248.6 | $ | (21.3) | $ | (47.3) | $ | 317.2 | |||||||||||||||
| Total (Expenses) and Other Income4 | (56.0) | $ | (8.6) | (47.4) | |||||||||||||||||||
| Income Before Income Taxes | 192.6 | (21.3) | (47.3) | (8.6) | 269.8 | ||||||||||||||||||
| (Benefit of) Provision for Income Taxes | (86.3) | 4.3 | 10.8 | 2.1 | $ | 132.6 | 63.5 | ||||||||||||||||
| Equity in Net Loss of Unconsolidated Affiliates | (0.4) | (0.4) | |||||||||||||||||||||
| Net Loss Attributable to Noncontrolling Interests | 1.2 | 1.2 | |||||||||||||||||||||
| Net Income Available to IPG Common Stockholders | $ | 279.7 | $ | (17.0) | $ | (36.5) | $ | (6.5) | $ | 132.6 | $ | 207.1 | |||||||||||
| Weighted-Average Number of Common Shares Outstanding - Basic | 389.6 | 389.6 | |||||||||||||||||||||
| Dilutive effect of stock options and restricted shares | 4.3 | 4.3 | |||||||||||||||||||||
| Weighted-Average Number of Common Shares Outstanding - Diluted | 393.9 | 393.9 | |||||||||||||||||||||
| Earnings per Share Available to IPG Common Stockholders5: | |||||||||||||||||||||||
| Basic | $ | 0.72 | $ | (0.04) | $ | (0.09) | $ | (0.02) | $ | 0.34 | $ | 0.53 | |||||||||||
| Diluted | $ | 0.71 | $ | (0.04) | $ | (0.09) | $ | (0.02) | $ | 0.34 | $ | 0.53 | |||||||||||
| 1 Includes losses on complete dispositions of businesses and the classification of certain assets as held for sale. | |||||||||||||||||||||||
| 2 Includes a tax benefit of | |||||||||||||||||||||||
| 3 Refer to non-GAAP reconciliation of Adjusted EBITA before Restructuring Charges on page 12. | |||||||||||||||||||||||
| 4 Consists of non-operating expenses including interest expense, net and other expense, net. | |||||||||||||||||||||||
| 5 Earnings per share may not add due to rounding. | |||||||||||||||||||||||
| Note: Management believes the resulting comparisons provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. | |||||||||||||||||||||||
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES U.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS (Amounts in Millions except Per Share Data) (UNAUDITED) | |||||||||||||||||||||||
| Nine Months Ended September 30, 2020 | |||||||||||||||||||||||
| As Reported | Amortization of Acquired Intangibles | Restructuring Charges | Net Losses on Sales of Businesses1 | Net Impact of Various Discrete Tax Items2 | Adjusted Results (Non-GAAP) | ||||||||||||||||||
| Operating Income and Adjusted EBITA before Restructuring Charges3 | $ | 365.0 | $ | (64.4) | $ | (159.9) | $ | 589.3 | |||||||||||||||
| Total (Expenses) and Other Income4 | (177.3) | $ | (51.8) | (125.5) | |||||||||||||||||||
| Income Before Income Taxes | 187.7 | (64.4) | (159.9) | (51.8) | 463.8 | ||||||||||||||||||
| (Benefit of) Provision for Income Taxes | (50.1) | 12.7 | 36.2 | 3.0 | $ | 122.6 | 124.4 | ||||||||||||||||
| Equity in Net Loss of Unconsolidated Affiliates | (0.6) | (0.6) | |||||||||||||||||||||
| Net Loss Attributable to Noncontrolling Interests | 1.6 | 1.6 | |||||||||||||||||||||
| Net Income Available to IPG Common Stockholders | $ | 238.8 | $ | (51.7) | $ | (123.7) | $ | (48.8) | $ | 122.6 | $ | 340.4 | |||||||||||
| Weighted-Average Number of Common Shares Outstanding - Basic | 388.9 | 388.9 | |||||||||||||||||||||
| Dilutive effect of stock options and restricted shares | 3.7 | 3.7 | |||||||||||||||||||||
| Weighted-Average Number of Common Shares Outstanding - Diluted | 392.6 | 392.6 | |||||||||||||||||||||
| Earnings per Share Available to IPG Common Stockholders5: | |||||||||||||||||||||||
| Basic | $ | 0.61 | $ | (0.13) | $ | (0.32) | $ | (0.13) | $ | 0.32 | $ | 0.88 | |||||||||||
| Diluted | $ | 0.61 | $ | (0.13) | $ | (0.32) | $ | (0.12) | $ | 0.31 | $ | 0.87 | |||||||||||
| 1 Includes losses on complete dispositions of businesses and the classification of certain assets as held for sale. | |||||||||||||||||||||||
| 2 Includes a tax benefit of | |||||||||||||||||||||||
| 3 Refer to non-GAAP reconciliation of Adjusted EBITA before Restructuring Charges on page 12. | |||||||||||||||||||||||
| 4 Consists of non-operating expenses including interest expense, net and other expense, net. | |||||||||||||||||||||||
| 5 Earnings per share may not add due to rounding. | |||||||||||||||||||||||
| Note: Management believes the resulting comparisons provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. | |||||||||||||||||||||||
| THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES U.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS (Amounts in Millions) (UNAUDITED) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Net Revenue | $ | 1,954.6 | $ | 2,061.4 | $ | 5,780.1 | $ | 6,192.1 | |||||||
| Non-GAAP Reconciliation: | |||||||||||||||
| Net Income Available to IPG Common Stockholders | $ | 279.7 | $ | 165.6 | $ | 238.8 | $ | 327.1 | |||||||
| Add Back: | |||||||||||||||
| (Benefit of) Provision for Income Taxes | (86.3) | 64.6 | (50.1) | 118.7 | |||||||||||
| Subtract: | |||||||||||||||
| Total (Expenses) and Other Income | (56.0) | (47.6) | (177.3) | (144.2) | |||||||||||
| Equity in Net (Loss) Income of Unconsolidated Affiliates | (0.4) | 0.3 | (0.6) | (0.1) | |||||||||||
| Net Loss (Income) Attributable to Noncontrolling Interests | 1.2 | (2.8) | 1.6 | (4.6) | |||||||||||
| Operating Income | 248.6 | 280.3 | 365.0 | 594.7 | |||||||||||
| Add Back: | |||||||||||||||
| Amortization of Acquired Intangibles | 21.3 | 21.7 | 64.4 | 64.6 | |||||||||||
| Adjusted EBITA | $ | 269.9 | $ | 302.0 | $ | 429.4 | $ | 659.3 | |||||||
| Adjusted EBITA Margin on Net Revenue % | 13.8 | % | 14.7 | % | 7.4 | % | 10.6 | % | |||||||
| Restructuring Charges1 | 47.3 | N/A | 159.9 | 31.8 | |||||||||||
| Adjusted EBITA before Restructuring Charges | $ | 317.2 | N/A | $ | 589.3 | $ | 691.1 | ||||||||
| Adjusted EBITA before Restructuring Charges Margin on Net Revenue % | 16.2 | % | N/A | 10.2 | % | 11.2 | % | ||||||||
| 1 In the second and third quarters of 2020, 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 adjustment of | |||||||||||||||
| Note: Management believes the resulting comparisons provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. | |||||||||||||||
| THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES U.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS (Amounts in Millions except Per Share Data) (UNAUDITED) | |||||||||||||||
| Three Months Ended September 30, 2019 | |||||||||||||||
| As Reported | Amortization of Acquired Intangibles | Net Losses on Sales of Businesses1 | Adjusted Results (Non-GAAP) | ||||||||||||
| Operating Income and Adjusted EBITA2 | $ | 280.3 | $ | (21.7) | $ | 302.0 | |||||||||
| Total (Expenses) and Other Income3 | (47.6) | $ | (7.7) | (39.9) | |||||||||||
| Income Before Income Taxes | 232.7 | (21.7) | (7.7) | 262.1 | |||||||||||
| Provision for Income Taxes | 64.6 | 4.2 | — | 68.8 | |||||||||||
| Equity in Net Income of Unconsolidated Affiliates | 0.3 | 0.3 | |||||||||||||
| Net Income Attributable to Noncontrolling Interests | (2.8) | (2.8) | |||||||||||||
| Net Income Available to IPG Common Stockholders | $ | 165.6 | $ | (17.5) | $ | (7.7) | $ | 190.8 | |||||||
| Weighted-Average Number of Common Shares Outstanding - Basic | 386.7 | 386.7 | |||||||||||||
| Dilutive effect of stock options and restricted shares | 5.1 | 5.1 | |||||||||||||
| Weighted-Average Number of Common Shares Outstanding - Diluted | 391.8 | 391.8 | |||||||||||||
| Earnings per Share Available to IPG Common Stockholders4: | |||||||||||||||
| Basic | $ | 0.43 | $ | (0.05) | $ | (0.02) | $ | 0.49 | |||||||
| Diluted | $ | 0.42 | $ | (0.04) | $ | (0.02) | $ | 0.49 | |||||||
| 1 Includes losses on complete dispositions of businesses and the classification of certain assets as held for sale. | |||||||||||||||
| 2 Refer to non-GAAP reconciliation of Adjusted EBITA on page 12. | |||||||||||||||
| 3 Consists of non-operating expenses including interest expense, net and other expense, net. | |||||||||||||||
| 4 Earnings per share may not add due to rounding. | |||||||||||||||
| Note: Management believes the resulting comparisons provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. | |||||||||||||||
| THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES U.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS (Amounts in Millions except Per Share Data) (UNAUDITED) | |||||||||||||||||||||||
| Nine Months Ended September 30, 2019 | |||||||||||||||||||||||
| As Reported | Amortization of Acquired Intangibles | Q1 2019 Restructuring Charges | Net Losses on Sales of Businesses1 | Settlement of Certain Tax Positions | Adjusted Results (Non-GAAP) | ||||||||||||||||||
| Operating Income and Adjusted EBITA before Restructuring Charges2 | $ | 594.7 | $ | (64.6) | $ | (31.8) | $ | 691.1 | |||||||||||||||
| Total (Expenses) and Other Income3 | (144.2) | $ | (22.3) | (121.9) | |||||||||||||||||||
| Income Before Income Taxes | 450.5 | (64.6) | (31.8) | (22.3) | 569.2 | ||||||||||||||||||
| Provision for Income Taxes | 118.7 | 12.6 | 7.6 | — | $ | 13.9 | 152.8 | ||||||||||||||||
| Equity in Net Loss of Unconsolidated Affiliates | (0.1) | (0.1) | |||||||||||||||||||||
| Net Income Attributable to Noncontrolling Interests | (4.6) | (4.6) | |||||||||||||||||||||
| Net Income Available to IPG Common Stockholders | $ | 327.1 | $ | (52.0) | $ | (24.2) | $ | (22.3) | $ | 13.9 | $ | 411.7 | |||||||||||
| Weighted-Average Number of Common Shares Outstanding - Basic | 385.8 | 385.8 | |||||||||||||||||||||
| Dilutive effect of stock options and restricted shares | 4.5 | 4.5 | |||||||||||||||||||||
| Weighted-Average Number of Common Shares Outstanding - Diluted | 390.3 | 390.3 | |||||||||||||||||||||
| Earnings per Share Available to IPG Common Stockholders4: | |||||||||||||||||||||||
| Basic | $ | 0.85 | $ | (0.13) | $ | (0.06) | $ | (0.06) | $ | 0.04 | $ | 1.07 | |||||||||||
| Diluted | $ | 0.84 | $ | (0.13) | $ | (0.06) | $ | (0.06) | $ | 0.04 | $ | 1.05 | |||||||||||
| 1 Includes losses on complete dispositions of businesses and the classification of certain assets as held for sale. | |||||||||||||||||||||||
| 2 Refer to non-GAAP reconciliation of Adjusted EBITA before Restructuring Charges on page 12. | |||||||||||||||||||||||
| 3 Consists of non-operating expenses including interest expense, net and other expense, net. | |||||||||||||||||||||||
| 4 Earnings per share may not add due to rounding. | |||||||||||||||||||||||
| Note: Management believes the resulting comparisons provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. | |||||||||||||||||||||||
FAQ
What were IPG's Q3 2020 earnings per share?
How much did IPG's net revenue decrease in Q3 2020?
What is IPG's strategy for cost reduction in 2020?
What was IPG's reported net revenue for the first nine months of 2020?
What challenges did IPG face due to COVID-19 in Q3 2020?
