- Third quarter net revenue was $2.26 billion, an increase of
15.7% from a year ago, with organic growth of 15.0%
- Net income was $239.9 million, with adjusted EBITA before
restructuring charges of $369.5 million and margin of 16.3% on net
revenue
- Third quarter diluted EPS was $0.60 as reported, and $0.63
as adjusted compared with $0.53 a year ago
- Company upgrades expectation for FY 2021 financial
performance to organic growth of approximately 11.0% and adjusted
EBITA margin of approximately 16.8%, based on continued progress on
public health and sustained macro recovery
Philippe Krakowsky, CEO of IPG:
“We are pleased with our third quarter performance, which was
highlighted by strong revenue growth in all world regions and
across our operating segments, and driven by broad-based
contributions across our agencies and client sectors. Given 15.0%
organic revenue growth from a year ago, our two-year organic
increase on that important metric was 10.7% relative to the third
quarter of 2019, which demonstrates the strength and relevance of
our evolving offerings. The quarter was similarly highlighted by
margin expansion compared to last year and well ahead of the third
quarter of 2019. These remarkable results are thanks to our people,
across all of Interpublic, who have continued to show a high level
of dedication and support – to our clients and to one another. The
combination of our exceptionally talented people, and a balanced
portfolio of capabilities and expertise, continues to set a high
competitive standard.”
“The strategic steps we have taken over the long-term position
us as a high value business partner that helps marketers thrive in
the digital economy. By combining the power of creativity with the
benefits of data and technology, we can create integrated solutions
that are precise and accountable, solving business issues and
driving growth for clients across a range of industry sectors. A
culture that values diversity, corporate responsibility, and a
transparent and ethical approach to the deployment of data further
differentiates IPG.”
“With the level of performance we are showing through nine
months, we are pleased to increase our financial objectives for the
full year. Based on expectations of a reasonably steady course of
improvement in the public health situation and attendant global
economic recovery, we expect that we can deliver organic growth for
the year of approximately 11%. With growth at that level, we expect
to achieve adjusted EBITA margin of approximately 16.8%. As such,
we see significant opportunity to create further value for all of
our stakeholders.”
Summary
Revenue
- Third
quarter 2021 net revenue of $2.26 billion increased by
15.7% compared to $1.95 billion in the third quarter
of 2020. During the quarter, our organic net revenue increase
was 15.0%, which was comprised of an organic net revenue increase
of 14.7% in the U.S. and an increase of 15.4% internationally.
Third quarter 2021 total revenue, which includes billable
expenses, of $2.54 billion, increased by 19.6% compared to $2.13
billion in 2020.
- First nine months 2021 net revenue of $6.56 billion
increased by 13.5% compared to $5.78 billion in
the first nine months of 2020. During the quarter, our
organic net revenue increase was 12.0%, which was comprised of an
organic net revenue increase of 10.4% in the U.S. and an increase
of 15.2% internationally. First nine months 2021 total
revenue, which includes billable expenses, of $7.31 billion
increased by 12.3% compared to $6.51 billion in 2020.
Operating Results
- Operating income in the third quarter of 2021 increased to
$351.5 million, compared to $248.6 million in 2020. Adjusted EBITA
before restructuring charges increased to $369.5 million in the
third quarter of 2021, compared to adjusted EBITA before
restructuring charges of $317.2 million for the same period in
2020. Adjusted EBITA before restructuring charges margin on net
revenue increased to 16.3%, compared to 16.2% in 2020.
- Restructuring charges of $(3.5) million and $(2.4) million for
the three and nine months ended September 30, 2021, respectively,
consist of adjustments to the Company's restructuring actions taken
during 2020 to lower its operating expenses structurally and
permanently relative to revenue and to accelerate the
transformation of our business; there were no new restructuring
actions in 2021. Restructuring charges were $47.3 million and
$159.9 million for the three and nine months ended September 30,
2020, respectively.
- Operating income in the first nine months of 2021 increased to
$978.9 million, compared to $365.0 million in 2020. Adjusted EBITA
before restructuring charges increased to $1,041.2 million in the
first nine months of 2021, compared to adjusted EBITA before
restructuring charges of $589.3 million for the same period in
2020. Adjusted EBITA before restructuring charges margin on net
revenue increased to 15.9%, compared to 10.2% in 2020.
- Refer to reconciliations on page 12 for further detail.
Net Results
- Income tax provision in the third quarter of 2021 was $73.9
million on income before income taxes of $318.3 million.
- Third quarter 2021 net income available to IPG common
stockholders was $239.9 million, resulting in earnings of $0.61 per
basic share and $0.60 per diluted share, compared to earnings of
$0.72 and $0.71 per basic and diluted share, respectively, for the
same period in 2020. Adjusted earnings were $0.63 per diluted
share, compared to adjusted earnings of $0.53 per diluted share a
year ago. Third quarter 2021 adjusted earnings excludes after-tax
amortization of acquired intangibles of $17.3 million, after-tax
restructuring charges of $(3.5) million and an after-tax gain of
$1.7 million on the sales of businesses.
- Income tax provision in the first nine months of 2021 was
$184.4 million on income before income taxes of $788.8
million.
- First nine months of 2021 net income available to IPG common
stockholders was $594.9 million, resulting in earnings of $1.51 per
basic share and $1.49 per diluted share, compared to earnings of
$0.61 per basic and diluted share for the same period in 2020.
Adjusted earnings were $1.78 per diluted share, compared to
adjusted earnings of $0.87 per diluted share a year ago. First nine
months 2021 adjusted earnings excludes after-tax amortization of
acquired intangibles of $52.1 million, after-tax restructuring
charges of $(2.7) million, an after-tax loss of $10.8 million on
the sales of businesses and an after-tax loss of $55.5 million on
the early extinguishment of debt.
- Refer to reconciliations on pages 10 through 14 for further
detail.
Operating Results
RevenueNet revenue of $2.26 billion in the third quarter
of 2021 increased 15.7% compared with the same period in 2020.
During the quarter, the effect of foreign currency translation was
positive 1.1%, the impact of net dispositions was negative 0.4%,
and the resulting organic net revenue increase was 15.0%. Total
revenue, which includes billable expenses, increased to $2.54
billion in the third quarter of 2021, compared to $2.13 billion in
2020.
Net revenue of $6.56 billion in the first nine months of 2021
increased 13.5% compared with the same period in 2020. During the
first nine months of 2021, the effect of foreign currency
translation was positive 1.9%, the impact of net dispositions was
negative 0.4%, and the resulting organic net revenue increase was
12.0%. Total revenue, which includes billable expenses, increased
to $7.31 billion in the first nine months of 2021, compared to
$6.51 billion in 2020.
Operating ExpensesFor the third quarter of 2021, total
operating expenses, excluding billable expenses, increased by
12.0%, compared to the net revenue increase of 15.7% from the same
period a year ago. For the first nine months of 2021, total
operating expenses, excluding billable expenses, increased by 3.0%
compared to the net revenue increase of 13.5% from the same period
a year ago.
Staff cost ratio, which is total salaries and related expenses
as a percentage of net revenue, increased to 66.8% in the third
quarter of 2021 from 65.0% in the same period in 2020, and
decreased to 66.9% in the first nine months of 2021 from 69.2% in
the same period in 2020. Salaries and related expenses increased
19.0% to $1.51 billion during the third quarter of 2021, compared
to $1.27 billion for the same period in 2020. Salaries and related
expenses increased 9.8% to $4.39 billion during the first nine
months of 2021, compared to $4.00 billion for the same period in
2020. The increase in staff cost ratio as a percentage of net
revenue in the third quarter was primarily driven by increased
performance-based employee incentive compensation expense and
increased temporary labor expense supporting our revenue growth,
which is partially offset by leverage in base salaries, benefits
and payroll tax expenses. The decrease in staff cost ratio as a
percentage of net revenue in the first nine months of 2021 was
primarily driven by leverage in base salaries, benefits and tax
that includes the benefit of initiatives taken during 2020.
Office and other direct expenses decreased as a percentage of
net revenue to 13.3% during the third quarter of 2021, compared to
15.8% a year ago, and decreased as a percentage of net revenue to
13.6% during the first nine months of 2021, compared to 17.4% a
year ago. In the third quarter of 2021, office and other direct
expenses were $300.9 million, a decrease of 2.3% compared to the
same period in 2020. In the first nine months of 2021, office and
other direct expenses were $894.8 million, a decrease of 10.8%
compared to the same period in 2020. The change for the third
quarter was mainly due to lower bad debt expense and a reduction in
the year-over-year change in contingent acquisition obligations, as
well as savings on occupancy expense as a result of real estate
restructuring actions taken in 2020. The change for the first nine
months was mainly due to factors similar to those noted for the
third quarter of 2021 in addition to a decrease in travel and
entertainment expenses.
Selling, general and administrative expenses increased as a
percentage of net revenue to 1.4% during the third quarter of 2021,
compared to 0.5% during the same period in 2020, and increased as a
percentage of net revenue to 1.4% during the first nine months of
2021, compared to 0.6% during the same period in 2020. The change
for the third quarter was primarily due to increases in
performance-based incentive compensation expense and employee
insurance expense. The change for the first nine months was mainly
due to factors similar to those noted for the third quarter of
2021, in addition to an increase in base salaries as the prior year
benefited from temporary cost saving actions that have since
unwound as well as higher other office and other direct
expenses.
Depreciation and amortization as a percentage of net revenue
decreased to 3.1% during the third quarter of 2021, compared to
3.6% a year ago, and decreased to 3.2% during the first nine months
of 2021, compared to 3.8% a year ago. During the third quarter of
2021, depreciation and amortization was $69.4 million, a decrease
of 2.3% compared to the same period in 2020. During the first nine
months of 2021, depreciation and amortization was $208.7 million, a
decrease of 3.8% compared to the same period in 2020.
Restructuring charges in the third quarter of 2021 were $(3.5)
million and were $(2.4) million in the first nine months of 2021,
consisting of adjustments to the Company's restructuring actions
taken during 2020 to lower its operating expenses structurally and
permanently relative to revenue and to accelerate the
transformation of our business; there were no new restructuring
actions in 2021. Restructuring charges were $47.3 million and
$159.9 million for the three and nine months ended September 30,
2020, respectively.
Non-Operating Results and TaxNet interest expense
decreased by $9.2 million to $35.5 million in the third quarter of
2021 from a year ago, and decreased by $9.5 million to $113.2
million in the first nine months of 2021 from a year ago.
Other income, net was $2.3 million in the third quarter of 2021
and other expense, net was $76.9 million in the first nine months
of 2021, which included a pre-tax loss of $74.0 million related to
the early extinguishment of debt from the first quarter of
2021.
The income tax provision in the third quarter of 2021 was $73.9
million on income before income taxes of $318.3 million. This
compares to an income tax benefit of $86.3 million for the third
quarter of 2020 on income before income taxes of $192.6
million.
The income tax provision in the first nine months of 2021 was
$184.4 million on income before income taxes of $788.8 million.
This compares to an income tax benefit of $50.1 million for the
first nine months of 2020 on income before income taxes of $187.7
million.
Balance SheetAt September 30, 2021, cash and cash
equivalents totaled $2.49 billion, compared to $2.51 billion at
December 31, 2020 and $1.63 billion on September 30, 2020. Total
debt was $3.45 billion at September 30, 2021, compared to $3.47
billion at December 31, 2020.
Common Stock DividendDuring the third quarter of 2021,
the Company declared and paid a common stock cash dividend of
$0.270 per share, for a total of $106.2 million.
For further information regarding the Company's financial
results as well as certain non-GAAP measures including organic net
revenue change, 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.
# # #
About InterpublicInterpublic (NYSE: IPG) (www.interpublic.com)
is a values-based, data-fueled, and creatively-driven provider of
marketing solutions. Home to some of the world’s best-known and
most innovative communications specialists, IPG global brands
include: Acxiom, Craft, FCB, FutureBrand, Golin, Huge, Initiative,
Jack Morton, Kinesso, MAGNA, Matterkind, McCann, Mediahub,
Momentum, MRM, MullenLowe Group, Octagon, R/GA, UM, Weber Shandwick
and more. IPG is an S&P 500 company with net revenue of $8.06
billion in 2020.
# # #
Contact InformationTom 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 impacts of the 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 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 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
SUBSIDIARIESCONSOLIDATED SUMMARY OF EARNINGSTHIRD QUARTER REPORT
2021 AND 2020(Amounts in Millions except Per Share
Data)(UNAUDITED) |
|
|
|
|
|
Three Months Ended September 30, |
|
|
2021 |
|
2020 |
|
Fav. (Unfav.)% Variance |
Revenue: |
|
|
|
|
|
|
Net Revenue |
$ |
2,261.7 |
|
|
$ |
1,954.6 |
|
|
15.7 |
% |
|
Billable Expenses |
280.3 |
|
|
170.9 |
|
|
64.0 |
% |
Total Revenue |
2,542.0 |
|
|
2,125.5 |
|
|
19.6 |
% |
|
|
|
|
|
|
|
Operating
Expenses: |
|
|
|
|
|
|
Salaries and Related Expenses |
1,511.2 |
|
|
1,269.9 |
|
|
(19.0) |
% |
|
Office and Other Direct Expenses |
300.9 |
|
|
307.9 |
|
|
2.3 |
% |
|
Billable Expenses |
280.3 |
|
|
170.9 |
|
|
(64.0) |
% |
|
Cost of Services |
2,092.4 |
|
|
1,748.7 |
|
|
(19.7) |
% |
|
Selling, General and Administrative
Expenses |
32.2 |
|
|
9.9 |
|
|
>(100)% |
|
Depreciation and Amortization |
69.4 |
|
|
71.0 |
|
|
2.3 |
% |
|
Restructuring Charges |
(3.5) |
|
|
47.3 |
|
|
>100% |
Total Operating Expenses |
2,190.5 |
|
|
1,876.9 |
|
|
(16.7) |
% |
Operating Income |
351.5 |
|
|
248.6 |
|
|
41.4 |
% |
|
|
|
|
|
|
|
Expenses and Other
Income: |
|
|
|
|
|
|
Interest Expense |
(42.9) |
|
|
(50.8) |
|
|
|
|
Interest Income |
7.4 |
|
|
6.1 |
|
|
|
|
Other Income (Expense), Net |
2.3 |
|
|
(11.3) |
|
|
|
Total (Expenses) and Other
Income |
(33.2) |
|
|
(56.0) |
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes |
318.3 |
|
|
192.6 |
|
|
|
|
Provision for
(Benefit of) Income Taxes |
73.9 |
|
|
(86.3) |
|
|
|
Income of Consolidated
Companies |
244.4 |
|
|
278.9 |
|
|
|
|
Equity in Net Income (Loss) of
Unconsolidated Affiliates |
0.2 |
|
|
(0.4) |
|
|
|
Net Income |
244.6 |
|
|
278.5 |
|
|
|
|
Net (Income) Loss Attributable to
Non-controlling Interests |
(4.7) |
|
|
1.2 |
|
|
|
Net Income Available to IPG
Common Stockholders |
$ |
239.9 |
|
|
$ |
279.7 |
|
|
|
|
|
|
|
|
|
Earnings Per Share
Available to IPG Common Stockholders: |
|
|
|
|
|
Basic |
$ |
0.61 |
|
|
$ |
0.72 |
|
|
|
Diluted |
$ |
0.60 |
|
|
$ |
0.71 |
|
|
|
|
|
|
|
|
|
Weighted-Average Number of
Common Shares Outstanding: |
|
|
|
|
|
Basic |
393.5 |
|
|
389.6 |
|
|
|
Diluted |
399.8 |
|
|
393.9 |
|
|
|
|
|
|
|
|
|
Dividends Declared Per Common
Share |
$ |
0.270 |
|
|
$ |
0.255 |
|
|
|
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND
SUBSIDIARIESCONSOLIDATED SUMMARY OF EARNINGSTHIRD QUARTER REPORT
2021 AND 2020(Amounts in Millions except Per Share
Data)(UNAUDITED) |
|
|
|
|
|
Nine Months Ended September 30, |
|
|
2021 |
|
2020 |
|
Fav. (Unfav.)% Variance |
Revenue: |
|
|
|
|
|
|
Net Revenue |
$ |
6,559.0 |
|
|
$ |
5,780.1 |
|
|
13.5 |
% |
|
Billable Expenses |
749.6 |
|
|
730.9 |
|
|
2.6 |
% |
Total Revenue |
7,308.6 |
|
|
6,511.0 |
|
|
12.3 |
% |
|
|
|
|
|
|
|
Operating
Expenses: |
|
|
|
|
|
|
Salaries and Related Expenses |
4,389.2 |
|
|
3,998.8 |
|
|
(9.8) |
% |
|
Office and Other Direct Expenses |
894.8 |
|
|
1,003.1 |
|
|
10.8 |
% |
|
Billable Expenses |
749.6 |
|
|
730.9 |
|
|
(2.6) |
% |
|
Cost of Services |
6,033.6 |
|
|
5,732.8 |
|
|
(5.2) |
% |
|
Selling, General and Administrative
Expenses |
89.8 |
|
|
36.4 |
|
|
>(100)% |
|
Depreciation and Amortization |
208.7 |
|
|
216.9 |
|
|
3.8 |
% |
|
Restructuring Charges |
(2.4) |
|
|
159.9 |
|
|
>100% |
Total Operating Expenses |
6,329.7 |
|
|
6,146.0 |
|
|
(3.0) |
% |
Operating Income |
978.9 |
|
|
365.0 |
|
|
>100% |
|
|
|
|
|
|
|
Expenses and Other
Income: |
|
|
|
|
|
|
Interest Expense |
(135.1) |
|
|
(145.4) |
|
|
|
|
Interest Income |
21.9 |
|
|
22.7 |
|
|
|
|
Other Expense, Net |
(76.9) |
|
|
(54.6) |
|
|
|
Total (Expenses) and Other
Income |
(190.1) |
|
|
(177.3) |
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes |
788.8 |
|
|
187.7 |
|
|
|
|
Provision for
(Benefit of) Income Taxes |
184.4 |
|
|
(50.1) |
|
|
|
Income of Consolidated
Companies |
604.4 |
|
|
237.8 |
|
|
|
|
Equity in Net Income (Loss) of
Unconsolidated Affiliates |
0.4 |
|
|
(0.6) |
|
|
|
Net Income |
604.8 |
|
|
237.2 |
|
|
|
|
Net (Income) Loss Attributable to
Non-controlling Interests |
(9.9) |
|
|
1.6 |
|
|
|
Net Income Available to IPG
Common Stockholders |
$ |
594.9 |
|
|
$ |
238.8 |
|
|
|
|
|
|
|
|
|
Earnings Per Share
Available to IPG Common Stockholders: |
|
|
|
|
|
Basic |
$ |
1.51 |
|
|
$ |
0.61 |
|
|
|
Diluted |
$ |
1.49 |
|
|
$ |
0.61 |
|
|
|
|
|
|
|
|
|
Weighted-Average Number of
Common Shares Outstanding: |
|
|
|
|
|
Basic |
392.8 |
|
|
388.9 |
|
|
|
Diluted |
398.3 |
|
|
392.6 |
|
|
|
|
|
|
|
|
|
Dividends Declared Per Common
Share |
$ |
0.810 |
|
|
$ |
0.765 |
|
|
|
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIESU.S. GAAP
RECONCILIATION OF NON-GAAP ADJUSTED RESULTS(Amounts in Millions
except Per Share Data)(UNAUDITED) |
|
Three Months Ended September 30, 2021 |
|
As Reported |
|
Amortization of Acquired Intangibles |
|
Restructuring Charges1 |
|
Net Losses on Sales of Businesses2 |
|
Adjusted Results
(Non-GAAP) |
Operating Income and Adjusted EBITA
before Restructuring Charges3 |
$ |
351.5 |
|
|
$ |
(21.5) |
|
|
$ |
3.5 |
|
|
|
|
$ |
369.5 |
|
|
|
|
|
|
|
|
|
|
|
Total (Expenses) and Other Income4 |
(33.2) |
|
|
|
|
|
|
$ |
1.7 |
|
|
(34.9) |
|
Income Before Income Taxes |
318.3 |
|
|
(21.5) |
|
|
3.5 |
|
|
1.7 |
|
|
334.6 |
|
Provision for Income Taxes |
73.9 |
|
|
4.2 |
|
|
0.0 |
|
|
0.0 |
|
|
78.1 |
|
Equity in Net Income of Unconsolidated Affiliates |
0.2 |
|
|
|
|
|
|
|
|
0.2 |
|
Net Income Attributable to Non-controlling Interests |
(4.7) |
|
|
|
|
|
|
|
|
(4.7) |
|
Net Income Available to IPG Common
Stockholders |
$ |
239.9 |
|
|
$ |
(17.3) |
|
|
$ |
3.5 |
|
|
$ |
1.7 |
|
|
$ |
252.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Number of Common
Shares Outstanding - Basic |
393.5 |
|
|
|
|
|
|
|
|
393.5 |
|
Dilutive effect of stock options and restricted shares |
6.3 |
|
|
|
|
|
|
|
|
6.3 |
|
Weighted-Average Number of Common
Shares Outstanding - Diluted |
399.8 |
|
|
|
|
|
|
|
|
399.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share Available to IPG
Common Stockholders5: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.61 |
|
|
$ |
(0.04) |
|
|
$ |
0.01 |
|
|
$ |
0.00 |
|
|
$ |
0.64 |
|
Diluted |
$ |
0.60 |
|
|
$ |
(0.04) |
|
|
$ |
0.01 |
|
|
$ |
0.00 |
|
|
$ |
0.63 |
|
|
|
|
|
|
|
|
|
|
|
1
Restructuring charges of $(3.5) million in the third quarter of
2021 were related to adjustments to our restructuring actions taken
in 2020, which were designed to reduce our operating expenses
structurally and permanently relative to revenue and to accelerate
the transformation of our business. |
2
Primarily includes a non-cash gain in the third quarter of 2021
related to the deconsolidation of a previously consolidated
subsidiary in which we maintain an equity interest, partially
offset by losses on complete dispositions of businesses and the
classification of certain assets as held for sale. |
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 SUBSIDIARIESU.S. GAAP
RECONCILIATION OF NON-GAAP ADJUSTED RESULTS(Amounts in Millions
except Per Share Data)(UNAUDITED) |
|
Nine Months Ended September 30, 2021 |
|
As Reported |
|
Amortization of Acquired Intangibles |
|
Restructuring Charges1 |
|
Net Losses on Sales of Businesses2 |
|
Loss on Early Extinguishment of Debt3 |
|
Adjusted Results
(Non-GAAP) |
Operating Income and Adjusted EBITA
before Restructuring Charges4 |
$ |
978.9 |
|
|
$ |
(64.7) |
|
|
$ |
2.4 |
|
|
|
|
|
|
$ |
1,041.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total (Expenses) and Other Income5 |
(190.1) |
|
|
|
|
|
|
$ |
(12.5) |
|
|
$ |
(74.0) |
|
|
(103.6) |
|
Income Before Income Taxes |
788.8 |
|
|
(64.7) |
|
|
2.4 |
|
|
(12.5) |
|
|
(74.0) |
|
|
937.6 |
|
Provision for Income Taxes |
184.4 |
|
|
12.6 |
|
|
0.3 |
|
|
1.7 |
|
|
18.5 |
|
|
217.5 |
|
Equity in Net Income of Unconsolidated Affiliates |
0.4 |
|
|
|
|
|
|
|
|
|
|
0.4 |
|
Net Income Attributable to Non-controlling Interests |
(9.9) |
|
|
|
|
|
|
|
|
|
|
(9.9) |
|
Net Income Available to IPG Common
Stockholders |
$ |
594.9 |
|
|
$ |
(52.1) |
|
|
$ |
2.7 |
|
|
$ |
(10.8) |
|
|
$ |
(55.5) |
|
|
$ |
710.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Number of Common
Shares Outstanding - Basic |
392.8 |
|
|
|
|
|
|
|
|
|
|
392.8 |
|
Dilutive effect of stock options and restricted shares |
5.5 |
|
|
|
|
|
|
|
|
|
|
5.5 |
|
Weighted-Average Number of Common
Shares Outstanding - Diluted |
398.3 |
|
|
|
|
|
|
|
|
|
|
398.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share Available to IPG
Common Stockholders6: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.51 |
|
|
$ |
(0.13) |
|
|
$ |
0.01 |
|
|
$ |
(0.03) |
|
|
$ |
(0.14) |
|
|
$ |
1.81 |
|
Diluted |
$ |
1.49 |
|
|
$ |
(0.13) |
|
|
$ |
0.01 |
|
|
$ |
(0.03) |
|
|
$ |
(0.14) |
|
|
$ |
1.78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Restructuring charges of $(2.4) million in the first nine months of
2021 were related to adjustments to our restructuring actions taken
in 2020, which were designed to reduce our operating expenses
structurally and permanently relative to revenue and to accelerate
the transformation of our business. |
2
Includes losses on complete dispositions of businesses and the
classification of certain assets as held for sale, partially offset
by a non-cash gain in the third quarter of 2021 related to the
deconsolidation of a previously consolidated subsidiary in which we
maintain an equity interest. |
3
Consists of a loss incurred in the first quarter of 2021 related to
the early extinguishment of our 4.000% unsecured senior notes due
2022, 3.750% unsecured senior notes due 2023 and half of our 4.200%
unsecured senior notes due 2024. |
4 Refer
to non-GAAP reconciliation of Adjusted EBITA before Restructuring
Charges on page 12. |
5
Consists of non-operating expenses including interest expense, net
and other expense, net. |
6
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, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
Net Revenue |
$ |
2,261.7 |
|
|
$ |
1,954.6 |
|
|
$ |
6,559.0 |
|
|
$ |
5,780.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Reconciliation: |
|
|
|
|
|
|
|
Net Income Available to IPG Common
Stockholders |
$ |
239.9 |
|
|
$ |
279.7 |
|
|
$ |
594.9 |
|
|
$ |
238.8 |
|
|
|
|
|
|
|
|
|
Add Back: |
|
|
|
|
|
|
|
Provision for (Benefit of) Income Taxes |
73.9 |
|
|
(86.3) |
|
|
184.4 |
|
|
(50.1) |
|
Subtract: |
|
|
|
|
|
|
|
Total (Expenses) and Other Income |
(33.2) |
|
|
(56.0) |
|
|
(190.1) |
|
|
(177.3) |
|
Equity in Net Income (Loss) of Unconsolidated Affiliates |
0.2 |
|
|
(0.4) |
|
|
0.4 |
|
|
(0.6) |
|
Net (Income) Loss Attributable to Non-controlling Interests |
(4.7) |
|
|
1.2 |
|
|
(9.9) |
|
|
1.6 |
|
Operating Income |
351.5 |
|
|
248.6 |
|
|
978.9 |
|
|
365.0 |
|
|
|
|
|
|
|
|
|
Add Back: |
|
|
|
|
|
|
|
Amortization of Acquired Intangibles |
21.5 |
|
|
21.3 |
|
|
64.7 |
|
|
64.4 |
|
|
|
|
|
|
|
|
|
Adjusted
EBITA |
$ |
373.0 |
|
|
$ |
269.9 |
|
|
$ |
1,043.6 |
|
|
$ |
429.4 |
|
Adjusted EBITA
Margin on Net Revenue % |
16.5 |
% |
|
13.8 |
% |
|
15.9 |
% |
|
7.4 |
% |
|
|
|
|
|
|
|
|
Restructuring Charges1 |
(3.5) |
|
|
47.3 |
|
|
(2.4) |
|
|
159.9 |
|
|
|
|
|
|
|
|
|
Adjusted EBITA
before Restructuring Charges |
$ |
369.5 |
|
|
$ |
317.2 |
|
|
$ |
1,041.2 |
|
|
$ |
589.3 |
|
Adjusted EBITA
before Restructuring Charges Margin on Net Revenue % |
16.3 |
% |
|
16.2 |
% |
|
15.9 |
% |
|
10.2 |
% |
|
|
|
|
|
|
|
|
1
Restructuring charges of $(3.5) million and $(2.4) million in the
third quarter and first nine months of 2021, respectively, were
related to adjustments to our restructuring actions taken in 2020,
which were designed to reduce our operating expenses structurally
and permanently relative to revenue and to accelerate the
transformation of our business. |
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 SUBSIDIARIESU.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 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 Non-controlling 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 $136.2 related to the finalization and
settlement of the U.S. Federal income tax audit for years 2006
through 2016 partially offset by $3.6 of tax expense related to the
estimated costs associated with our change in our APB 23 assertion
for certain foreign subsidiaries. |
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 SUBSIDIARIESU.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 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 Non-controlling 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 $136.2 related to the finalization and
settlement of the U.S. Federal income tax audit for years 2006
through 2016 partially offset by $13.6 of tax expense related to
the estimated costs associated with our change in our APB 23
assertion for certain foreign subsidiaries. |
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. |
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