- Total revenue, including billable expenses, was $2.67
billion
- Revenue before billable expenses ("net revenue") was
$2.33 billion, a decrease of 2.0%, with organic decrease of
1.7%
- Reported net income was $265.5 million
- Adjusted EBITA before restructuring charges was $330.2
million
- Margin of adjusted EBITA before restructuring charges
was 14.2% on revenue before billable expenses
- Diluted earnings per share was $0.68 as reported and
$0.74 as adjusted
- Diluted EPS as reported and adjusted includes tax
benefit of $0.17 per share related to the conclusion of prior
period routine Federal tax audits
Philippe Krakowsky, CEO of IPG:
“During the second quarter, we saw the same puts-and-takes on
revenue that we have identified and discussed since the beginning
of the year. Notably, among our client sectors, tech continued to
weigh significantly on growth. In addition, modestly heightened
macro uncertainty impacted certain of our specialty assets and
traditional consumer agencies. Concurrently, we continued to
deliver strong growth in areas of the business that have been
important drivers of our success over several years, namely our
media offerings and the healthcare sector. We also saw solid growth
in disciplines such as public relations and our experiential
offerings during the quarter. Taken together, these factors
resulted in Q2 organic revenue performance that is inconsistent
with our expectations and our long-term track record of strong
growth. Despite this challenge, our operating discipline was
evident in our ability to deliver a favorable margin result.
“Given our first six months, we are revising our full-year
organic growth expectation to 1% to 2%, while remaining fully
committed to our existing margin target for the year of 16.7%,
which represents margin expansion relative to 2022. Our new
business performance to date this year has been exceptionally
strong, featuring wins in many of the industry’s largest and most
competitive reviews. These speak to the strength of our offerings,
underpinned by our foundational data and technology infrastructure,
and will provide strong tailwinds as we move into the back half of
this year and even more so in 2024.”
Summary
Revenue
- Second quarter 2023: Total revenue, which includes billable
expenses, was $2.67 billion, compared $2.74 billion in the second
quarter of 2022. Revenue before billable expenses ("net revenue")
was $2.33 billion, a decrease of 2.0% from the second quarter
of 2022. The organic decrease of net revenue was 1.7% from the
second quarter of 2022, compared to an organic increase of 7.9%
during the second quarter of 2022.
- First half 2023: Total revenue, which includes billable
expenses, was $5.19 billion, compared $5.30 billion in the first
half of 2022. Revenue before billable expenses ("net revenue") was
$4.51 billion, a decrease of 2.1% from the first half
of 2022. The organic decrease of net revenue was 0.9% from the
first half of 2022, compared to an organic increase of 9.6% during
the first half of 2022.
Operating Results
- In the second quarter of 2023, operating income was $310.7
million compared to $349.1 million in 2022. Adjusted EBITA before
restructuring charges was $330.2 million compared to $370.1 million
for the same period in 2022. Second quarter 2023 margin of adjusted
EBITA before restructuring charges was 14.2% on revenue before
billable expenses.
- In the first half of 2023, operating income was $499.0 million
compared to $594.8 million in 2022. Adjusted EBITA before
restructuring charges was $541.0 million, compared to $643.7
million for the same period in 2022. First half of 2023 margin of
adjusted EBITA before restructuring charges was 12.0% on revenue
before billable expenses.
- Refer to reconciliations in the appendix within this press
release for further detail.
Net Results
- In the second quarter of 2023, the income tax provision was
$10.6 million on income before income taxes of $278.6 million. In
the first half of 2023, the income tax provision was $44.4 million
on income before income taxes of $444.6 million.
- The income tax provision in the second quarter and first half
of 2023 includes a benefit of $64.2 million, or $0.17 per basic and
diluted share, related to the settlement of U.S. Federal Income Tax
Audits for the years 2017-2018, which is primarily non-cash.
- Second quarter 2023 net income available to IPG common
stockholders was $265.5 million, resulting in earnings of $0.69 per
basic share and $0.68 per diluted share compared to earnings of
$0.58 per basic and diluted share for the same period in 2022.
Adjusted earnings were $0.74 per diluted share, including a benefit
of $0.17 per diluted share related to the tax audit settlement.
Adjusted earnings per diluted share was $0.63 a year ago. Second
quarter 2023 adjusted earnings excludes after-tax amortization of
acquired intangibles of $17.0 million, after-tax restructuring
credit of $1.3 million and an after-tax loss of $4.0 million on the
sales of businesses.
- First half 2023 net income available to IPG common stockholders
was $391.5 million, resulting in earnings of $1.01 per basic share
and diluted share compared to earnings of $0.99 per basic and $0.98
per diluted share for the same period in 2022. Adjusted earnings
were $1.11 per diluted share, including a benefit of $0.17 per
diluted share related to the tax audit settlement. Adjusted
earnings per diluted share was $1.10 a year ago. First half 2023
adjusted earnings excludes after-tax amortization of acquired
intangibles of $33.7 million and an after-tax loss of $6.9 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 $2.33 billion in the second quarter of 2023 decreased
2.0% compared with the same period in 2022. Compared to the second
quarter of 2022, the effect of foreign currency translation was
negative 1.0%, the impact of net acquisitions was positive 0.7%,
and the resulting organic decrease of net revenue was 1.7%.
Revenue before billable expenses of $4.51
billion in the first half of 2023 decreased 2.1% compared with the
same period in 2022. Compared to the first half of 2022, the effect
of foreign currency translation was negative 1.6%, the impact of
net acquisitions was positive 0.4%, and the resulting organic
decrease of net revenue was 0.9%.
Operating ExpensesIn the second
quarter of 2023, total operating expenses, excluding billable
expenses, decreased 0.4%. In the first half of 2023, total
operating expenses, excluding billable expenses, were approximately
unchanged from a year ago.
In the second quarter of 2023, staff cost ratio,
which is total salaries and related expenses as a percentage of
revenue before billable expenses, increased to 68.7% compared to
66.9% for the same period in 2022. Total salaries and related
expenses in the second quarter of 2023 were $1.60 billion, an
increase of 0.5% from a year ago. The increase was primarily due to
an increase in base salaries, benefits and tax as well as an
increase in severance expense, partially offset by a decrease in
performance-based employee compensation expense and temporary help
expense. In the first half of 2023, staff cost ratio increased to
70.5% compared to 68.5% for the same period in 2022. Total salaries
and related expenses in the first half of 2023 were $3.18 billion,
an increase of 0.7% from a year ago. The increase was primarily
driven by similar factors to those noted above for the second
quarter of 2023.
In the second quarter of 2023, office and other
direct expenses as a percentage of revenue before billable expenses
decreased to 14.6% compared to 14.7% for the same period in 2022.
Office and other direct expenses were $340.5 million in the second
quarter of 2023, a decrease of 2.7% from a year ago, primarily due
to decreases in employment costs, occupancy expense, client service
costs and professional consulting fees, partially offset by an
increase in bad debt expense. In the first half of 2023, office and
other direct expenses as a percentage of revenue before billable
expenses increased to 14.9% compared to 14.6% for the same period
in 2022. Office and other direct expenses were $670.8 million in
the first half of 2023, a decrease of 0.4% from a year ago,
primarily due to decreases in employment costs, occupancy expense
and client service costs, partially offset by increases in travel
and entertainment expense.
Selling, general and administrative ("SG&A")
expenses were $13.9 million in the second quarter of 2023, a
decrease of 28.4% from a year ago, primarily due to decreases in
performance-based incentive compensation expense. Selling, general
and administrative ("SG&A") expenses were $26.8 million in the
first half of 2023, a decrease of 30.7% from a year ago, primarily
due to decreases in performance-based incentive compensation
expense.
Depreciation and amortization expense decreased
by 0.9% during the second quarter of 2023 and decreased by 1.4%
during the first half of 2023.
Restructuring charges in the second quarter of
2023 were $(1.7) million, consisting of adjustments to our 2022 and
2020 restructuring actions. Restructuring charges in the first half
of 2023 were $(0.1) million, consisting of adjustments to our 2022
and 2020 restructuring actions.
Non-Operating Results and
TaxNet interest expense decreased by $2.1 million to $27.7
million in the second 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 $16.1 million to $43.3 million in the first half of 2023 from a
year ago, primarily attributable to higher interest rates on net
deposits, partially offset by lower net cash balances.
Other expense, net was $4.4 million in the
second quarter of 2023, and was $11.1 million in the first half of
2023, which primarily consisted of losses related to dispositions
of small, non-strategic agencies.
The income tax provision in the second quarter
of 2023 was $10.6 million on income before income taxes of $278.6
million. This compares to an income tax provision of $83.7 million
for the second quarter of 2022 on income before income taxes of
$314.8 million. The income tax provision in the first half of 2023
was $44.4 million on income before income taxes of $444.6 million.
This compares to an income tax provision of $132.8 million for the
first half of 2022 on income before income taxes of $524.7 million.
The income tax provision in the second quarter and first half of
2023 includes 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 June 30,
2023, cash and cash equivalents totaled $1.63 billion, compared to
$2.55 billion at December 31, 2022 and $1.98 billion on
June 30, 2022. Total debt was $3.20 billion at June 30,
2023, compared to $2.92 billion at December 31, 2022.
Share Repurchase ProgramDuring
the first half of 2023, the Company repurchased 3.5 million shares
of its common stock at an aggregate cost of $128.0 million and an
average price of $36.40 per share, including fees.
Common Stock DividendDuring the
second quarter of 2023, the Company declared and paid a common
stock cash dividend of $0.310 per share, for a total of $119.4
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, Jack
Morton, Kinesso, MAGNA, Matterkind, McCann, Mediabrands, Mediahub,
Momentum, MRM, MullenLowe Group, 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 EARNINGSSECOND QUARTER REPORT
2023 AND 2022(Amounts in Millions except Per Share
Data)(UNAUDITED) |
|
|
|
|
|
Three Months Ended June 30, |
|
|
2023 |
|
2022 |
|
Fav. (Unfav.)% Variance |
Revenue: |
|
|
|
|
|
|
Revenue before
Billable Expenses |
$2,328.5 |
|
$2,375.5 |
|
(2.0) % |
|
Billable
Expenses |
338.0 |
|
360.2 |
|
(6.2) % |
Total
Revenue |
2,666.5 |
|
2,735.7 |
|
(2.5) % |
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
Salaries and
Related Expenses |
1,598.6 |
|
1,590.2 |
|
(0.5) % |
|
Office and Other
Direct Expenses |
340.5 |
|
349.8 |
|
2.7 % |
|
Billable
Expenses |
338.0 |
|
360.2 |
|
6.2 % |
|
Cost of Services |
2,277.1 |
|
2,300.2 |
|
1.0 % |
|
Selling, General
and Administrative Expenses |
13.9 |
|
19.4 |
|
28.4 % |
|
Depreciation and
Amortization |
66.5 |
|
67.1 |
|
0.9 % |
|
Restructuring
Charges |
(1.7) |
|
(0.1) |
|
>100% |
Total
Operating Expenses |
2,355.8 |
|
2,386.6 |
|
1.3 % |
Operating Income |
310.7 |
|
349.1 |
|
(11.0) % |
|
|
|
|
|
|
|
Expenses and Other Income: |
|
|
|
|
|
|
Interest
Expense |
(63.2) |
|
(41.0) |
|
|
|
Interest
Income |
35.5 |
|
11.2 |
|
|
|
Other Expense,
Net |
(4.4) |
|
(4.5) |
|
|
Total
(Expenses) and Other Income |
(32.1) |
|
(34.3) |
|
|
|
|
|
|
|
|
|
Income Before Income Taxes |
278.6 |
|
314.8 |
|
|
|
Provision for
Income Taxes |
10.6 |
|
83.7 |
|
|
Income of Consolidated Companies |
268.0 |
|
231.1 |
|
|
|
Equity in Net
Income of Unconsolidated Affiliates |
0.7 |
|
0.7 |
|
|
Net Income |
268.7 |
|
231.8 |
|
|
|
Net Income
Attributable to Non-controlling Interests |
(3.2) |
|
(2.2) |
|
|
Net Income Available to IPG Common
Stockholders |
$265.5 |
|
$229.6 |
|
|
|
|
|
|
|
|
Earnings Per Share Available to IPG Common
Stockholders: |
|
|
|
|
|
Basic |
$0.69 |
|
$0.58 |
|
|
Diluted |
$0.68 |
|
$0.58 |
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding: |
|
|
|
|
|
Basic |
385.7 |
|
393.1 |
|
|
Diluted |
387.7 |
|
396.8 |
|
|
|
|
|
|
|
|
Dividends Declared Per Common Share |
$0.310 |
|
$0.290 |
|
|
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND
SUBSIDIARIESCONSOLIDATED SUMMARY OF EARNINGSSECOND QUARTER REPORT
2023 AND 2022(Amounts in Millions except Per Share
Data)(UNAUDITED) |
|
|
|
|
|
Six Months Ended June 30, |
|
|
2023 |
|
2022 |
|
Fav. (Unfav.)% Variance |
Revenue: |
|
|
|
|
|
|
Revenue before
Billable Expenses |
4,505.4 |
|
4,602.7 |
|
(2.1) % |
|
Billable
Expenses |
682.1 |
|
701.5 |
|
(2.8) % |
Total
Revenue |
5,187.5 |
|
5,304.2 |
|
(2.2) % |
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
Salaries and
Related Expenses |
3,175.9 |
|
3,154.6 |
|
(0.7) % |
|
Office and Other
Direct Expenses |
670.8 |
|
673.2 |
|
0.4 % |
|
Billable
Expenses |
682.1 |
|
701.5 |
|
2.8 % |
|
Cost of Services |
4,528.8 |
|
4,529.3 |
|
0.0 % |
|
Selling, General
and Administrative Expenses |
26.8 |
|
38.7 |
|
30.7 % |
|
Depreciation and
Amortization |
133.0 |
|
134.9 |
|
1.4 % |
|
Restructuring
Charges |
(0.1) |
|
6.5 |
|
>100% |
Total
Operating Expenses |
4,688.5 |
|
4,709.4 |
|
0.4 % |
Operating Income |
499.0 |
|
594.8 |
|
(16.1) % |
|
|
|
|
|
|
|
Expenses and Other Income: |
|
|
|
|
|
|
Interest
Expense |
(119.0) |
|
(80.4) |
|
|
|
Interest
Income |
75.7 |
|
21.0 |
|
|
|
Other Expense,
Net |
(11.1) |
|
(10.7) |
|
|
Total
(Expenses) and Other Income |
(54.4) |
|
(70.1) |
|
|
|
|
|
|
|
|
|
Income Before Income Taxes |
444.6 |
|
524.7 |
|
|
|
Provision for
Income Taxes |
44.4 |
|
132.8 |
|
|
Income of Consolidated Companies |
400.2 |
|
391.9 |
|
|
|
Equity in Net
Income of Unconsolidated Affiliates |
0.6 |
|
0.8 |
|
|
Net Income |
400.8 |
|
392.7 |
|
|
|
Net Income
Attributable to Non-controlling Interests |
(9.3) |
|
(3.7) |
|
|
Net Income Available to IPG Common
Stockholders |
$391.5 |
|
$389.0 |
|
|
|
|
|
|
|
|
Earnings Per Share Available to IPG Common
Stockholders: |
|
|
|
|
|
Basic |
$1.01 |
|
$0.99 |
|
|
Diluted |
$1.01 |
|
$0.98 |
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding: |
|
|
|
|
|
Basic |
385.8 |
|
393.8 |
|
|
Diluted |
387.6 |
|
397.5 |
|
|
|
|
|
|
|
|
Dividends Declared Per Common Share |
$0.620 |
|
$0.580 |
|
|
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 June 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 |
$310.7 |
|
$(21.2) |
|
$1.7 |
|
|
|
$330.2 |
|
|
|
|
|
|
|
|
|
|
Total (Expenses) and Other Income3 |
(32.1) |
|
|
|
|
|
$(4.1) |
|
(28.0) |
Income
Before Income Taxes |
278.6 |
|
(21.2) |
|
1.7 |
|
(4.1) |
|
302.2 |
Provision for Income Taxes |
10.6 |
|
4.2 |
|
(0.4) |
|
0.1 |
|
14.5 |
Equity in Net Income of Unconsolidated Affiliates |
0.7 |
|
|
|
|
|
|
|
0.7 |
Net Income Attributable to Non-controlling Interests |
(3.2) |
|
|
|
|
|
|
|
(3.2) |
Net
Income Available to IPG Common Stockholders |
$265.5 |
|
$(17.0) |
|
$1.3 |
|
$(4.0) |
|
$285.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding -
Basic |
385.7 |
|
|
|
|
|
|
|
385.7 |
Dilutive effect of stock options and restricted shares |
2.0 |
|
|
|
|
|
|
|
2.0 |
Weighted-Average Number of Common Shares Outstanding -
Diluted |
387.7 |
|
|
|
|
|
|
|
387.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per Share Available to IPG Common Stockholders4,5: |
|
|
|
|
|
|
|
|
|
Basic |
$0.69 |
|
$(0.04) |
|
$0.00 |
|
$(0.01) |
|
$0.74 |
Diluted |
$0.68 |
|
$(0.04) |
|
$0.00 |
|
$(0.01) |
|
$0.74 |
|
|
|
|
|
|
|
|
|
|
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 SUBSIDIARIESU.S. GAAP
RECONCILIATION OF NON-GAAP ADJUSTED RESULTS(Amounts in Millions
except Per Share Data)(UNAUDITED) |
|
Six Months Ended June 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 |
$499.0 |
|
$(42.1) |
|
$0.1 |
|
|
|
$541.0 |
|
|
|
|
|
|
|
|
|
|
Total (Expenses) and Other Income3 |
(54.4) |
|
|
|
|
|
$(8.3) |
|
(46.1) |
Income
Before Income Taxes |
444.6 |
|
(42.1) |
|
0.1 |
|
(8.3) |
|
494.9 |
Provision for Income Taxes |
44.4 |
|
8.4 |
|
(0.1) |
|
1.4 |
|
54.1 |
Equity in Net Income of Unconsolidated Affiliates |
0.6 |
|
|
|
|
|
|
|
0.6 |
Net Income Attributable to Non-controlling Interests |
(9.3) |
|
|
|
|
|
|
|
(9.3) |
Net
Income Available to IPG Common Stockholders |
$391.5 |
|
$(33.7) |
|
$0.0 |
|
$(6.9) |
|
$432.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding -
Basic |
385.8 |
|
|
|
|
|
|
|
385.8 |
Dilutive effect of stock options and restricted shares |
1.8 |
|
|
|
|
|
|
|
1.8 |
Weighted-Average Number of Common Shares Outstanding -
Diluted |
387.6 |
|
|
|
|
|
|
|
387.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per Share Available to IPG Common Stockholders4,5: |
|
|
|
|
|
|
|
|
|
Basic |
$1.01 |
|
$(0.09) |
|
$0.00 |
|
$(0.02) |
|
$1.12 |
Diluted |
$1.01 |
|
$(0.09) |
|
$0.00 |
|
$(0.02) |
|
$1.11 |
|
|
|
|
|
|
|
|
|
|
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 June 30, |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
Revenue
Before Billable Expenses |
$2,328.5 |
|
$2,375.5 |
|
$4,505.4 |
|
$4,602.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Reconciliation: |
|
|
|
|
|
|
|
Net
Income Available to IPG Common Stockholders |
$265.5 |
|
$229.6 |
|
$391.5 |
|
$389.0 |
|
|
|
|
|
|
|
|
Add Back: |
|
|
|
|
|
|
|
Provision for Income Taxes |
10.6 |
|
83.7 |
|
44.4 |
|
132.8 |
Subtract: |
|
|
|
|
|
|
|
Total (Expenses) and Other Income |
(32.1) |
|
(34.3) |
|
(54.4) |
|
(70.1) |
Equity in Net Income of Unconsolidated Affiliates |
0.7 |
|
0.7 |
|
0.6 |
|
0.8 |
Net Income Attributable to Non-controlling Interests |
(3.2) |
|
(2.2) |
|
(9.3) |
|
(3.7) |
Operating
Income |
310.7 |
|
349.1 |
|
499.0 |
|
594.8 |
|
|
|
|
|
|
|
|
Add Back: |
|
|
|
|
|
|
|
Amortization of Acquired Intangibles |
21.2 |
|
21.1 |
|
42.1 |
|
42.4 |
|
|
|
|
|
|
|
|
Adjusted
EBITA |
$331.9 |
|
$370.2 |
|
$541.1 |
|
$637.2 |
Adjusted EBITA
Margin on Revenue before Billable Expenses % |
14.3 % |
|
15.6 % |
|
12.0 % |
|
13.8 % |
|
|
|
|
|
|
|
|
Restructuring Charges1 |
(1.7) |
|
(0.1) |
|
(0.1) |
|
6.5 |
|
|
|
|
|
|
|
|
Adjusted
EBITA before Restructuring Charges |
$330.2 |
|
$370.1 |
|
$541.0 |
|
$643.7 |
Adjusted EBITA
before Restructuring Charges Margin on Revenue before Billable
Expenses % |
14.2 % |
|
15.6 % |
|
12.0 % |
|
14.0 % |
|
|
|
|
|
|
|
|
1 Net
restructuring charges were $(1.7) million for the second quarter of
2023 and $(0.1) million for the six months ended June 30, 2023,
which represent adjustments to our 2022 and 2020 restructuring
actions. Net restructuring charges of $(0.1) million for the second
quarter of 2022 and $6.5 million for the six months ended June 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 June 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 |
$349.1 |
|
$(21.1) |
|
$0.1 |
|
|
|
$370.1 |
|
|
|
|
|
|
|
|
|
|
Total (Expenses) and Other Income4 |
(34.3) |
|
|
|
|
|
$(4.2) |
|
(30.1) |
Income
Before Income Taxes |
314.8 |
|
(21.1) |
|
0.1 |
|
(4.2) |
|
340.0 |
Provision for Income Taxes |
83.7 |
|
4.3 |
|
0.0 |
|
0.0 |
|
88.0 |
Equity in Net Income of Unconsolidated Affiliates |
0.7 |
|
|
|
|
|
|
|
0.7 |
Net Income Attributable to Non-controlling Interests |
(2.2) |
|
|
|
|
|
|
|
(2.2) |
Net
Income Available to IPG Common Stockholders |
$229.6 |
|
$(16.8) |
|
$0.1 |
|
$(4.2) |
|
$250.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding -
Basic |
393.1 |
|
|
|
|
|
|
|
393.1 |
Dilutive effect of stock options and restricted shares |
3.7 |
|
|
|
|
|
|
|
3.7 |
Weighted-Average Number of Common Shares Outstanding -
Diluted |
396.8 |
|
|
|
|
|
|
|
396.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per Share Available to IPG Common Stockholders5: |
|
|
|
|
|
|
|
|
|
Basic |
$0.58 |
|
$(0.04) |
|
$0.00 |
|
$(0.01) |
|
$0.64 |
Diluted |
$0.58 |
|
$(0.04) |
|
$0.00 |
|
$(0.01) |
|
$0.63 |
|
|
|
|
|
|
|
|
|
|
1
Restructuring charges of $(0.1) in the second 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 includes a non-cash loss in the second quarter of 2022
related to the deconsolidation of a previously consolidated
subsidiary in which we maintain an equity interest, as well
as 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 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) |
|
Six Months Ended June 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 |
$594.8 |
|
$(42.4) |
|
$(6.5) |
|
|
|
$643.7 |
|
|
|
|
|
|
|
|
|
|
Total (Expenses) and Other Income4 |
(70.1) |
|
|
|
|
|
$(10.6) |
|
(59.5) |
Income
Before Income Taxes |
524.7 |
|
(42.4) |
|
(6.5) |
|
(10.6) |
|
584.2 |
Provision for Income Taxes |
132.8 |
|
8.5 |
|
1.6 |
|
0.0 |
|
142.9 |
Equity in Net Income of Unconsolidated Affiliates |
0.8 |
|
|
|
|
|
|
|
0.8 |
Net Income Attributable to Non-controlling Interests |
(3.7) |
|
|
|
|
|
|
|
(3.7) |
Net
Income Available to IPG Common Stockholders |
$389.0 |
|
$(33.9) |
|
$(4.9) |
|
$(10.6) |
|
$438.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding -
Basic |
393.8 |
|
|
|
|
|
|
|
393.8 |
Dilutive effect of stock options and restricted shares |
3.7 |
|
|
|
|
|
|
|
3.7 |
Weighted-Average Number of Common Shares Outstanding -
Diluted |
397.5 |
|
|
|
|
|
|
|
397.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per Share Available to IPG Common Stockholders5: |
|
|
|
|
|
|
|
|
|
Basic |
$0.99 |
|
$(0.09) |
|
$(0.01) |
|
$(0.03) |
|
$1.11 |
Diluted |
$0.98 |
|
$(0.09) |
|
$(0.01) |
|
$(0.03) |
|
$1.10 |
|
|
|
|
|
|
|
|
|
|
1
Restructuring charges of $6.5 in the first half 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
Includes losses on complete dispositions of businesses and the
classification of certain assets as held for sale, as well as a
non-cash loss in the second quarter of 2022 related to the
deconsolidation of a previously consolidated subsidiary in which we
maintain an equity interest. |
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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