- Total revenue, including billable expenses, was $2.68
billion
- Revenue before billable expenses ("net revenue") was
$2.31 billion, an increase of 0.6%, with organic decrease of
0.4%
- Reported net income was $245.7 million
- Adjusted EBITA before restructuring charges was $397.2
million
- Margin of adjusted EBITA before restructuring charges
was 17.2% on revenue before billable expenses
- Diluted earnings per share was $0.63 as reported and
$0.70 as adjusted
Philippe Krakowsky, CEO of IPG:
“During the third quarter, revenue performance
did not measure up to expectations, yet we continued to demonstrate
disciplined management of the business and to see positive
contributions to growth from our media offerings, the health care
sector, sports and experiential marketing, and public
relations.
“Factors that we have identified since the early
part of the year continued to weigh on our growth in the quarter.
These include the decreases in client activity in the tech and
telecom client sector that have been evident across our industry,
and the performance of certain of our digital specialists. Another
factor impacting results is increased concern among marketers
related to macroeconomic conditions, which led to the delay of
projects and sales cycles, as well as slower-than-anticipated
onboarding of some new business.
“Given the evolving business climate and our
portfolio of clients and capabilities, as we look at the remainder
of the year, we believe organic growth in the fourth quarter will
be approximately 1%. Concurrently, we remain fully on track to
deliver our margin goal for the year of 16.7%, which is unchanged,
and represents margin expansion relative to 2022.
“We are focused on closing the year as strongly
as possible and, specific to areas of underperformance, will
simultaneously assess internal structural solutions in order to
improve our growth profile. We continue to be in-market with
compelling offerings that help marketers grow and deliver business
outcomes. This has translated to strong new business success for us
year-to-date, and which will provide some tailwinds as we move into
2024. An additional area of value creation is our long-standing
commitment to capital returns, which remains an important priority
for us going forward.”
Summary
Revenue
- Third quarter 2023: Total revenue, which includes billable
expenses, was $2.68 billion, compared $2.64 billion in the third
quarter of 2022. Revenue before billable expenses ("net revenue")
was $2.31 billion, an increase of 0.6% from the third quarter
of 2022. The organic decrease of net revenue was 0.4% from the
third quarter of 2022, compared to an organic increase of 5.6%
during the third quarter of 2022.
- First nine months 2023: Total revenue, which includes billable
expenses, was $7.87 billion, compared $7.94 billion in the first
nine months of 2022. Revenue before billable expenses ("net
revenue") was $6.81 billion, a decrease of 1.2% from the first
nine months of 2022. The organic decrease of net revenue was
0.8% from the first nine months of 2022, compared to an organic
increase of 8.2% during the first nine months of 2022.
Operating Results
- In the third quarter of 2023, operating income was $376.8
million compared to $341.8 million in 2022. Adjusted EBITA before
restructuring charges was $397.2 million compared to $356.2 million
for the same period in 2022. Third quarter 2023 margin of adjusted
EBITA before restructuring charges was 17.2% on revenue before
billable expenses.
- In the first nine months of 2023, operating income was $875.8
million compared to $936.6 million in 2022. Adjusted EBITA before
restructuring charges was $938.2 million, compared to $999.9
million for the same period in 2022. First nine months of 2023
margin of adjusted EBITA before restructuring charges was 13.8% on
revenue before billable expenses.
- Refer to reconciliations in the appendix within this press
release for further detail.
Net Results
- In the third quarter of 2023, the income tax provision was
$91.5 million on income before income taxes of $339.5 million. In
the first nine months of 2023, the income tax provision was $135.9
million on income before income taxes of $784.1 million.
- The income tax provision in the first nine months of 2023
includes a benefit of $64.2 million, or $0.17 per basic and diluted
share, related to the settlement in the second quarter of 2023 of
U.S. Federal Income Tax Audits for the years 2017-2018, which is
primarily non-cash.
- Third quarter 2023 net income available to IPG common
stockholders was $243.7 million, resulting in earnings of $0.64 per
basic share and $0.63 per diluted share compared to earnings of
$0.64 per basic and diluted share for the same period in 2022.
Adjusted earnings were $0.70 per diluted share compared to adjusted
earnings per diluted share of $0.63 a year ago. Third quarter 2023
adjusted earnings excludes after-tax amortization of acquired
intangibles of $16.7 million, after-tax restructuring credit of
$0.4 million and an after-tax loss of $9.5 million on the sales of
businesses.
- First nine months 2023 net income available to IPG common
stockholders was $635.2 million, resulting in earnings of $1.65 per
basic share and $1.64 per diluted share compared to earnings of
$1.63 per basic and $1.62 per diluted share for the same period in
2022. Adjusted earnings were $1.81 per diluted share, including a
benefit of $0.17 per diluted share related to the tax audit
settlement. Adjusted earnings per diluted share was $1.73 a year
ago. First nine months 2023 adjusted earnings excludes after-tax
amortization of acquired intangibles of $50.4 million, after-tax
restructuring credit of $0.4 million and an after-tax loss of $16.4
million on the sales of businesses.
- Refer to reconciliations in the appendix within this press
release for further detail.
Operating Results
RevenueRevenue before billable
expenses of $2.31 billion in the third quarter of 2023 increased
0.6% compared with the same period in 2022. Compared to the third
quarter of 2022, the effect of foreign currency translation was
positive 0.7%, the impact of net acquisitions was positive 0.3%,
and the resulting organic decrease of net revenue was 0.4%.
Revenue before billable expenses of $6.81
billion in the first nine months of 2023 decreased 1.2% compared
with the same period in 2022. Compared to the first nine months of
2022, the effect of foreign currency translation was negative 0.8%,
the impact of net acquisitions was positive 0.4%, and the resulting
organic decrease of net revenue was 0.8%.
Operating ExpensesIn the third
quarter of 2023, total operating expenses, excluding billable
expenses, decreased 1.1%. In the first nine months of 2023, total
operating expenses, excluding billable expenses, decreased
0.4%.
In the third quarter of 2023, staff cost ratio,
which is total salaries and related expenses as a percentage of
revenue before billable expenses, decreased to 66.3% compared to
67.4% for the same period in 2022. Total salaries and related
expenses in the third quarter of 2023 were $1.53 billion, a
decrease of 1.0% from a year ago. The decrease was primarily driven
by a decrease in performance-based employee compensation expense
and temporary help expense, partially offset by an increase in base
salaries, benefits and tax. In the first nine months of 2023, staff
cost ratio increased to 69.1% compared to 68.1% for the same period
in 2022. Total salaries and related expenses in the first nine
months of 2023 were $4.71 billion, an increase of 0.1% from a year
ago. The increase was primarily due to an increase in base
salaries, benefits and tax as well as severance expense, offset by
decreases in performance-based employee compensation expense and
temporary help expense.
In the third quarter of 2023, office and other
direct expenses as a percentage of revenue before billable expenses
decreased to 13.8% compared to 14.3% for the same period in 2022.
Office and other direct expenses were $318.8 million in the third
quarter of 2023, a decrease of 2.8% from a year ago, primarily
driven by decreases in employment costs, client service costs and
occupancy expense, partially offset by an increase in bad debt
expense. In the first nine months of 2023, office and other direct
expenses as a percentage of revenue before billable expenses
remained consistent at 14.5% compared to the same period in 2022.
Office and other direct expenses were $989.6 million in the first
nine months of 2023, a decrease of 1.1% from a year ago, primarily
driven by factors similar to those noted for the third quarter of
2023.
Selling, general and administrative ("SG&A")
expenses were $16.9 million in the third quarter of 2023, a
decrease of 8.6% from a year ago, primarily due to decreases in
performance-based incentive compensation expense. Selling, general
and administrative expenses were $43.7 million in the first nine
months of 2023, a decrease of 23.6% from a year ago, primarily due
to factors similar to those noted for the third quarter of
2023.
Depreciation and amortization expense decreased
by 1.5% during the third quarter of 2023 and decreased by 1.4%
during the first nine months of 2023.
Non-Operating Results and
TaxNet interest expense decreased by $4.3 million to $23.6
million in the third quarter of 2023 from a year ago, primarily
attributable to higher interest rates on net deposits, partially
offset by lower net cash balances. Net interest expense decreased
by $20.4 million to $66.9 million in the first nine months of 2023
from a year ago, primarily due to factors similar to those noted
for the third quarter of 2023.
Other expense, net was $13.7 million in the
third quarter of 2023, and was $24.8 million in the first nine
months of 2023, which primarily related to losses on sales of
businesses and the classification of certain assets and liabilities
as held for sale.
The income tax provision in the third quarter of
2023 was $91.5 million on income before income taxes of $339.5
million. This compares to an income tax provision of $76.4 million
for the third quarter of 2022 on income before income taxes of
$331.4 million. The income tax provision in the first nine months
of 2023 was $135.9 million on income before income taxes of $784.1
million. This compares to an income tax provision of $209.2 million
for the first nine months of 2022 on income before income taxes of
$856.1 million. The income tax provision in the first nine months
of 2023 includes a benefit of $64.2 million related to the
settlement of U.S. Federal Income Tax Audits for the years
2017-2018, which is primarily non cash.
Balance SheetAt
September 30, 2023, cash and cash equivalents totaled $1.57
billion, compared to $2.55 billion at December 31, 2022 and
$1.77 billion on September 30, 2022. Total debt was $3.20
billion at September 30, 2023, compared to $2.92 billion at
December 31, 2022.
Share Repurchase ProgramDuring
the first nine months of 2023, the Company repurchased 6.1 million
shares of its common stock at an aggregate cost of $219.0 million
and an average price of $35.66 per share, including fees.
Common Stock DividendDuring the
third quarter of 2023, the Company declared and paid a common stock
cash dividend of $0.310 per share, for a total of $118.6
million.
For further information regarding the Company's
financial results as well as certain non-GAAP measures including
organic revenue before billable expenses change, adjusted EBITA,
adjusted EBITA before restructuring charges and adjusted earnings
per diluted share, and the reconciliations thereof, please refer to
the appendix within this press release and our Investor
Presentation filed on Form 8-K herewith and available on our
website, www.interpublic.com.
# # #
About Interpublic
Interpublic (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,
IPG Health, IPG Mediabrands, Jack Morton, KINESSO, MAGNA, McCann,
Mediahub, Momentum, MRM, MullenLowe Global, Octagon, R/GA, UM,
Weber Shandwick and more. IPG is an S&P 500 company with total
revenue of $10.93 billion in 2022.
# # #
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 report that are not historical
facts, including statements regarding guidance, goals, intentions,
and expectations as to future plans, trends, events, or future
results of operations or financial position, constitute
forward-looking statements. Forward-looking statements are based on
current expectations and assumptions that are subject to risks and
uncertainties, which could cause our actual results and outcomes to
differ materially from those reflected in the forward-looking
statements, 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;
- our ability to attract new clients and retain existing
clients;
- our ability to retain and attract key employees;
- the impacts of the COVID-19 pandemic, including potential
developments like the emergence of more transmissible or virulent
coronavirus variants, and associated mitigation measures, such as
restrictions on businesses, social activities and travel, on the
economy, our clients and demand for our services;
- risks associated with the effects of global, national and
regional economic and political conditions, including counterparty
risks and fluctuations in interest rates, inflation rates and
currency exchange rates;
- the economic or business impact of military or political
conflict in key markets;
- risks associated with assumptions we make in connection with
our critical accounting estimates, including changes in assumptions
associated with any effects of a challenging economy;
- potential adverse effects if we are required to recognize
impairment charges or other adverse accounting-related
developments;
- developments from changes in the regulatory and legal
environment for advertising and marketing services companies around
the world, including laws and regulations related to data
protection and consumer privacy; and
- the impact on our operations of general or directed
cybersecurity events.
Investors should carefully consider the
foregoing factors and the other risks and uncertainties that may
affect our business, including those 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. Investors are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date they
are made. We undertake no obligation to update or revise publicly
any of them in light of new information, future events, or
otherwise.
APPENDIX
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND
SUBSIDIARIESCONSOLIDATED SUMMARY OF EARNINGSTHIRD QUARTER REPORT
2023 AND 2022(Amounts in Millions except Per Share
Data)(UNAUDITED) |
|
|
|
|
|
Three Months Ended September 30, |
|
|
2023 |
|
2022 |
|
Fav. (Unfav.)% Variance |
Revenue: |
|
|
|
|
|
|
Revenue before
Billable Expenses |
$2,309.0 |
|
$2,296.2 |
|
0.6 % |
|
Billable
Expenses |
369.5 |
|
341.5 |
|
8.2 % |
Total
Revenue |
2,678.5 |
|
2,637.7 |
|
1.5 % |
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
Salaries and
Related Expenses |
1,531.1 |
|
1,546.8 |
|
1.0 % |
|
Office and Other
Direct Expenses |
318.8 |
|
327.9 |
|
2.8 % |
|
Billable
Expenses |
369.5 |
|
341.5 |
|
(8.2) % |
|
Cost of Services |
2,219.4 |
|
2,216.2 |
|
(0.1) % |
|
Selling, General
and Administrative Expenses |
16.9 |
|
18.5 |
|
8.6 % |
|
Depreciation and
Amortization |
66.0 |
|
67.0 |
|
1.5 % |
|
Restructuring
Charges |
(0.6) |
|
(5.8) |
|
(89.7) % |
Total
Operating Expenses |
2,301.7 |
|
2,295.9 |
|
(0.3) % |
Operating Income |
376.8 |
|
341.8 |
|
10.2 % |
|
|
|
|
|
|
|
Expenses and Other Income: |
|
|
|
|
|
|
Interest
Expense |
(58.7) |
|
(42.6) |
|
|
|
Interest
Income |
35.1 |
|
14.7 |
|
|
|
Other (Expense)
Income, Net |
(13.7) |
|
17.5 |
|
|
Total
(Expenses) and Other Income |
(37.3) |
|
(10.4) |
|
|
|
|
|
|
|
|
|
Income Before Income Taxes |
339.5 |
|
331.4 |
|
|
|
Provision for
Income Taxes |
91.5 |
|
76.4 |
|
|
Income of Consolidated Companies |
248.0 |
|
255.0 |
|
|
|
Equity in Net
(Loss) Income of Unconsolidated Affiliates |
(2.3) |
|
2.5 |
|
|
Net Income |
245.7 |
|
257.5 |
|
|
|
Net Income
Attributable to Non-controlling Interests |
(2.0) |
|
(5.7) |
|
|
Net Income Available to IPG Common
Stockholders |
$243.7 |
|
$251.8 |
|
|
|
|
|
|
|
|
Earnings Per Share Available to IPG Common
Stockholders: |
|
|
|
|
|
Basic |
$0.64 |
|
$0.64 |
|
|
Diluted |
$0.63 |
|
$0.64 |
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding: |
|
|
|
|
|
Basic |
383.6 |
|
390.6 |
|
|
Diluted |
385.5 |
|
394.1 |
|
|
|
|
|
|
|
|
Dividends Declared Per Common Share |
$0.310 |
|
$0.290 |
|
|
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND
SUBSIDIARIESCONSOLIDATED SUMMARY OF EARNINGSTHIRD QUARTER REPORT
2023 AND 2022(Amounts in Millions except Per Share
Data)(UNAUDITED) |
|
|
|
|
|
Nine Months Ended September 30, |
|
|
2023 |
|
2022 |
|
Fav. (Unfav.)% Variance |
Revenue: |
|
|
|
|
|
|
Revenue before
Billable Expenses |
6,814.4 |
|
6,898.9 |
|
(1.2) % |
|
Billable
Expenses |
1,051.6 |
|
1,043.0 |
|
0.8 % |
Total
Revenue |
7,866.0 |
|
7,941.9 |
|
(1.0) % |
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
Salaries and
Related Expenses |
4,707.0 |
|
4,701.4 |
|
(0.1) % |
|
Office and Other
Direct Expenses |
989.6 |
|
1,001.1 |
|
1.1 % |
|
Billable
Expenses |
1,051.6 |
|
1,043.0 |
|
(0.8) % |
|
Cost of Services |
6,748.2 |
|
6,745.5 |
|
0.0 % |
|
Selling, General
and Administrative Expenses |
43.7 |
|
57.2 |
|
23.6 % |
|
Depreciation and
Amortization |
199.0 |
|
201.9 |
|
1.4 % |
|
Restructuring
Charges |
(0.7) |
|
0.7 |
|
>100% |
Total
Operating Expenses |
6,990.2 |
|
7,005.3 |
|
0.2 % |
Operating Income |
875.8 |
|
936.6 |
|
(6.5) % |
|
|
|
|
|
|
|
Expenses and Other Income: |
|
|
|
|
|
|
Interest
Expense |
(164.2) |
|
(121.2) |
|
|
|
Interest
Income |
97.3 |
|
33.9 |
|
|
|
Other (Expense)
Income, Net |
(24.8) |
|
6.8 |
|
|
Total
(Expenses) and Other Income |
(91.7) |
|
(80.5) |
|
|
|
|
|
|
|
|
|
Income Before Income Taxes |
784.1 |
|
856.1 |
|
|
|
Provision for
Income Taxes |
135.9 |
|
209.2 |
|
|
Income of Consolidated Companies |
648.2 |
|
646.9 |
|
|
|
Equity in Net
(Loss) Income of Unconsolidated Affiliates |
(1.7) |
|
3.3 |
|
|
Net Income |
646.5 |
|
650.2 |
|
|
|
Net Income
Attributable to Non-controlling Interests |
(11.3) |
|
(9.4) |
|
|
Net Income Available to IPG Common
Stockholders |
$635.2 |
|
$640.8 |
|
|
|
|
|
|
|
|
Earnings Per Share Available to IPG Common
Stockholders: |
|
|
|
|
|
Basic |
$1.65 |
|
$1.63 |
|
|
Diluted |
$1.64 |
|
$1.62 |
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding: |
|
|
|
|
|
Basic |
385.0 |
|
392.7 |
|
|
Diluted |
386.8 |
|
396.2 |
|
|
|
|
|
|
|
|
Dividends Declared Per Common Share |
$0.930 |
|
$0.870 |
|
|
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, 2023 |
|
As Reported |
|
Amortization of Acquired Intangibles |
|
Restructuring Charges |
|
Net Losses on Sales of Businesses1 |
|
Adjusted Results
(Non-GAAP) |
Operating
Income and Adjusted EBITA before Restructuring
Charges2 |
$376.8 |
|
$(21.0) |
|
$0.6 |
|
|
|
$397.2 |
|
|
|
|
|
|
|
|
|
|
Total (Expenses) and Other Income3 |
(37.3) |
|
|
|
|
|
$(12.1) |
|
(25.2) |
Income
Before Income Taxes |
339.5 |
|
(21.0) |
|
0.6 |
|
(12.1) |
|
372.0 |
Provision for Income Taxes |
91.5 |
|
4.3 |
|
(0.2) |
|
2.6 |
|
98.2 |
Equity in Net Loss of Unconsolidated Affiliates |
(2.3) |
|
|
|
|
|
|
|
(2.3) |
Net Income Attributable to Non-controlling Interests |
(2.0) |
|
|
|
|
|
|
|
(2.0) |
Net
Income Available to IPG Common Stockholders |
$243.7 |
|
$(16.7) |
|
$0.4 |
|
$(9.5) |
|
$269.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding -
Basic |
383.6 |
|
|
|
|
|
|
|
383.6 |
Dilutive effect of stock options and restricted shares |
1.9 |
|
|
|
|
|
|
|
1.9 |
Weighted-Average Number of Common Shares Outstanding -
Diluted |
385.5 |
|
|
|
|
|
|
|
385.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per Share Available to IPG Common Stockholders4: |
|
|
|
|
|
|
|
|
|
Basic |
$0.64 |
|
$(0.04) |
|
$0.00 |
|
$(0.02) |
|
$0.70 |
Diluted |
$0.63 |
|
$(0.04) |
|
$0.00 |
|
$(0.02) |
|
$0.70 |
|
|
|
|
|
|
|
|
|
|
1
Primarily relates to 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 A5 in the appendix. |
3
Consists of non-operating expenses including interest expense,
interest income and other expense, net. |
4
Earnings per share amounts calculated on an unrounded basis. |
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, 2023 |
|
As Reported |
|
Amortization of Acquired Intangibles |
|
Restructuring Charges |
|
Net Losses on Sales of Businesses1 |
|
Adjusted Results
(Non-GAAP) |
Operating
Income and Adjusted EBITA before Restructuring
Charges2 |
$875.8 |
|
$(63.1) |
|
$0.7 |
|
|
|
$938.2 |
|
|
|
|
|
|
|
|
|
|
Total (Expenses) and Other Income3 |
(91.7) |
|
|
|
|
|
$(20.4) |
|
(71.3) |
Income
Before Income Taxes |
784.1 |
|
(63.1) |
|
0.7 |
|
(20.4) |
|
866.9 |
Provision for Income Taxes |
135.9 |
|
12.7 |
|
(0.3) |
|
4.0 |
|
152.3 |
Equity in Net Loss of Unconsolidated Affiliates |
(1.7) |
|
|
|
|
|
|
|
(1.7) |
Net Income Attributable to Non-controlling Interests |
(11.3) |
|
|
|
|
|
|
|
(11.3) |
Net
Income Available to IPG Common Stockholders |
$635.2 |
|
$(50.4) |
|
$0.4 |
|
$(16.4) |
|
$701.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding -
Basic |
385.0 |
|
|
|
|
|
|
|
385.0 |
Dilutive effect of stock options and restricted shares |
1.8 |
|
|
|
|
|
|
|
1.8 |
Weighted-Average Number of Common Shares Outstanding -
Diluted |
386.8 |
|
|
|
|
|
|
|
386.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per Share Available to IPG Common Stockholders4,5: |
|
|
|
|
|
|
|
|
|
Basic |
$1.65 |
|
$(0.13) |
|
$0.00 |
|
$(0.04) |
|
$1.82 |
Diluted |
$1.64 |
|
$(0.13) |
|
$0.00 |
|
$(0.04) |
|
$1.81 |
|
|
|
|
|
|
|
|
|
|
1
Primarily relates to losses on complete dispositions of businesses
and the classification of certain assets as held for sale, as well
as a loss related to the sale of an equity investment. |
2
Refer to non-GAAP reconciliation of Adjusted EBITA before
Restructuring Charges on page A5 in the appendix. |
3
Consists of non-operating expenses including interest expense,
interest income and other expense, net. |
4
Earnings per share amounts calculated on an unrounded basis. |
5
Basic and diluted earnings per share, both As Reported and Adjusted
Results (Non-GAAP), includes a positive impact of $0.17 related to
the settlement of U.S. Federal Income Tax Audits for the years
2017-2018. |
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, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
Revenue
Before Billable Expenses |
$2,309.0 |
|
$2,296.2 |
|
$6,814.4 |
|
$6,898.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Reconciliation: |
|
|
|
|
|
|
|
Net
Income Available to IPG Common Stockholders |
$243.7 |
|
$251.8 |
|
$635.2 |
|
$640.8 |
|
|
|
|
|
|
|
|
Add Back: |
|
|
|
|
|
|
|
Provision for Income Taxes |
91.5 |
|
76.4 |
|
135.9 |
|
209.2 |
Subtract: |
|
|
|
|
|
|
|
Total (Expenses) and Other Income |
(37.3) |
|
(10.4) |
|
(91.7) |
|
(80.5) |
Equity in Net (Loss) Income of Unconsolidated Affiliates |
(2.3) |
|
2.5 |
|
(1.7) |
|
3.3 |
Net Income Attributable to Non-controlling Interests |
(2.0) |
|
(5.7) |
|
(11.3) |
|
(9.4) |
Operating
Income |
376.8 |
|
341.8 |
|
875.8 |
|
936.6 |
|
|
|
|
|
|
|
|
Add Back: |
|
|
|
|
|
|
|
Amortization of Acquired Intangibles |
21.0 |
|
20.2 |
|
63.1 |
|
62.6 |
|
|
|
|
|
|
|
|
Adjusted
EBITA |
$397.8 |
|
$362.0 |
|
$938.9 |
|
$999.2 |
Adjusted EBITA
Margin on Revenue before Billable Expenses % |
17.2 % |
|
15.8 % |
|
13.8 % |
|
14.5 % |
|
|
|
|
|
|
|
|
Restructuring Charges1 |
(0.6) |
|
(5.8) |
|
(0.7) |
|
0.7 |
|
|
|
|
|
|
|
|
Adjusted
EBITA before Restructuring Charges |
$397.2 |
|
$356.2 |
|
$938.2 |
|
$999.9 |
Adjusted EBITA
before Restructuring Charges Margin on Revenue before Billable
Expenses % |
17.2 % |
|
15.5 % |
|
13.8 % |
|
14.5 % |
|
|
|
|
|
|
|
|
1 Net
restructuring charges were $(0.6) for the third quarter of 2023 and
$(0.7) for the nine months ended September 30, 2023, which
represent adjustments to our 2022 and 2020 restructuring actions.
Net restructuring charges of $(5.8) for the third quarter of 2022
and $0.7 for the nine months ended September 30, 2022, which
represent adjustments to our restructuring actions taken in
2020. |
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, 2022 |
|
As Reported |
|
Amortization of Acquired Intangibles |
|
Restructuring Charges1 |
|
Net Gain on Business Dispositions2 |
|
Adjusted Results
(Non-GAAP) |
Operating
Income and Adjusted EBITA before Restructuring
Charges3 |
$341.8 |
|
$(20.2) |
|
$5.8 |
|
|
|
$356.2 |
|
|
|
|
|
|
|
|
|
|
Total (Expenses) and Other Income4 |
(10.4) |
|
|
|
|
|
$15.1 |
|
(25.5) |
Income
Before Income Taxes |
331.4 |
|
(20.2) |
|
5.8 |
|
15.1 |
|
330.7 |
Provision for Income Taxes |
76.4 |
|
4.2 |
|
(1.8) |
|
0.1 |
|
78.9 |
Equity in Net Income of Unconsolidated Affiliates |
2.5 |
|
|
|
|
|
|
|
2.5 |
Net Income Attributable to Non-controlling Interests |
(5.7) |
|
|
|
|
|
|
|
(5.7) |
Net
Income Available to IPG Common Stockholders |
$251.8 |
|
$(16.0) |
|
$4.0 |
|
$15.2 |
|
$248.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding -
Basic |
390.6 |
|
|
|
|
|
|
|
390.6 |
Dilutive effect of stock options and restricted shares |
3.5 |
|
|
|
|
|
|
|
3.5 |
Weighted-Average Number of Common Shares Outstanding -
Diluted |
394.1 |
|
|
|
|
|
|
|
394.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per Share Available to IPG Common Stockholders5: |
|
|
|
|
|
|
|
|
|
Basic |
$0.64 |
|
$(0.04) |
|
$0.01 |
|
$0.04 |
|
$0.64 |
Diluted |
$0.64 |
|
$(0.04) |
|
$0.01 |
|
$0.04 |
|
$0.63 |
|
|
|
|
|
|
|
|
|
|
1
Restructuring charges of $(5.8) in the third quarter of 2022 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 relates to a cash gain in the third quarter of 2022
related to the sale of an equity investment, as well as gains on
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 A5 in the appendix. |
4
Consists of non-operating expenses including interest expense,
interest income and other expense, net. |
5
Earnings per share amounts calculated on an unrounded basis. |
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, 2022 |
|
As Reported |
|
Amortization of Acquired Intangibles |
|
Restructuring Charges1 |
|
Net Losses on Business Dispositions2 |
|
Adjusted Results
(Non-GAAP) |
Operating
Income and Adjusted EBITA before Restructuring
Charges3 |
$936.6 |
|
$(62.6) |
|
$(0.7) |
|
|
|
$999.9 |
|
|
|
|
|
|
|
|
|
|
Total (Expenses) and Other Income4 |
(80.5) |
|
|
|
|
|
$4.5 |
|
(85.0) |
Income
Before Income Taxes |
856.1 |
|
(62.6) |
|
(0.7) |
|
4.5 |
|
914.9 |
Provision for Income Taxes |
209.2 |
|
12.7 |
|
(0.2) |
|
0.1 |
|
221.8 |
Equity in Net Income of Unconsolidated Affiliates |
3.3 |
|
|
|
|
|
|
|
3.3 |
Net Income Attributable to Non-controlling Interests |
(9.4) |
|
|
|
|
|
|
|
(9.4) |
Net
Income Available to IPG Common Stockholders |
$640.8 |
|
$(49.9) |
|
$(0.9) |
|
$4.6 |
|
$687.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding -
Basic |
392.7 |
|
|
|
|
|
|
|
392.7 |
Dilutive effect of stock options and restricted shares |
3.5 |
|
|
|
|
|
|
|
3.5 |
Weighted-Average Number of Common Shares Outstanding -
Diluted |
396.2 |
|
|
|
|
|
|
|
396.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per Share Available to IPG Common Stockholders5: |
|
|
|
|
|
|
|
|
|
Basic |
$1.63 |
|
$(0.13) |
|
$0.00 |
|
$0.01 |
|
$1.75 |
Diluted |
$1.62 |
|
$(0.13) |
|
$0.00 |
|
$0.01 |
|
$1.73 |
|
|
|
|
|
|
|
|
|
|
1
Restructuring charges of $0.7 in the first nine months of 2022 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 cash gain in the first nine months of 2022
related to the sale of an equity investment, partially offset by a
non-cash loss related to the deconsolidation of a previously
consolidated subsidiary in which we maintain an equity investment,
as well as losses on 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 A5 in the appendix. |
4
Consists of non-operating expenses including interest expense,
interest income and other expense, net. |
5
Earnings per share amounts calculated on an unrounded basis. |
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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