FOURTH QUARTER
- Total revenue, including billable expenses,
was $3.0 billion
- Revenue before billable expenses ("net revenue") was
$2.6 billion, with organic growth of 1.7%
- Diluted earnings per share of $1.21 as reported and
$1.18 as adjusted
FULL YEAR
- Total revenue. including billable expenses, was $10.9
billion
- Revenue before billable expenses ("net revenue") was
$9.4 billion, with organic decrease of 0.1%
- Reported net income was $1.1 billion
- Adjusted EBITA before restructuring charges was $1.6
billion, with margin of 16.7% on revenue before billable
expenses
- Diluted earnings per share of $2.85 as reported and
$2.99 as adjusted
- FY diluted EPS as reported and adjusted include
second-quarter tax benefit of $0.17 per share related to the
conclusion of routine Federal tax audits
DIVIDEND & SHARE REPURCHASE
- Board approves 6% dividend increase to $0.33 per share
per quarter and additional share repurchase authorization of $320
million
Philippe Krakowsky, CEO of IPG:
“We are pleased to report growth in the fourth quarter ahead of
expectations, during our seasonally largest quarter and across each
of our segments. The strength of our capabilities in media,
healthcare and specialty marketing services was once again evident,
as was the impact of macro uncertainty and challenges due to
clients in the technology sector. These cross-currents continue to
be in effect as we move into 2024.
“Looking ahead, we remain confident in the foundational
strengths of our company. We anticipate that the strongest and most
consistent growth areas of our business will perform well in the
year ahead. We will continue to make strategic investments,
including the ongoing development of our leading addressable
capabilities, such as our data-powered tools, retail and
performance media, and the expansion of our media buying models.
Our current and prospective investment in AI ensures that this
increasingly important technology extends to the full range of our
offerings. Along with other strategic actions, this will allow us
to continue to evolve our portfolio and asset mix.
“We expect organic net revenue growth for 2024 in a range of 1%
to 2%, and full-year adjusted EBITA margin of 16.6%, which
consolidates significant margin progress in recent years and will
allow us to continue to invest in key growth areas of the business.
Our strong balance sheet and commitment to financial flexibility
remain key priorities and the actions announced by our Board today,
to increase our dividend and authorize additional share repurchase,
speak to confidence in the strategic trajectory of our
company.”
Summary
Revenue
- Fourth quarter 2023 total revenue, which includes billable
expenses, was $3.02 billion, compared $2.99 billion in the fourth
quarter of 2022. Revenue before billable expenses ("net revenue")
was $2.59 billion, an increase of 1.4% compared to the fourth
quarter of 2022. The organic increase of net revenue was 1.7% from
the fourth quarter of 2022.
- Full year 2023 total revenue, which includes billable expenses,
was $10.89 billion compared to $10.93 billion for the full year
2022. Revenue before billable expenses was $9.40 billion compared
to $9.45 billion for the full year 2022. The organic decrease of
net revenue was 0.1% from the full year 2022.
Operating Results
- In the fourth quarter of 2023, operating income was $606.8
million, including restructuring charges of $0.8 million, compared
to $444.6 million, including restructuring charges of $101.7
million, for the same period in 2022. Adjusted EBITA before
restructuring charges was $628.5 million in the fourth quarter of
2023, compared to $568.4 million for the same period in 2022.
Fourth quarter 2023 margin of adjusted EBITA before restructuring
charges on revenue before billable expenses was 24.3%, compared to
22.3% for the same period in 2022.
- Operating income for the full year 2023 was $1.48 billion,
including restructuring charges of $0.1 million, compared to $1.38
billion, including restructuring charges of $102.4 million, for the
same period in 2022. Adjusted EBITA before restructuring charges
was $1.57 billion for the full year 2023 and for the same period in
2022. Our margin of adjusted EBITA before restructuring charges on
revenue before billable expenses was 16.7% in 2023, compared to
16.6% in 2022.
- Restructuring charges were $0.8 million and $0.1 million for
the fourth quarter and full year of 2023, respectively, and were
related to adjustments to our restructuring actions taken in 2022
and 2020.
- Restructuring charges were $101.7 million and $102.4 million
for the fourth quarter and full year 2022, respectively, and were
related to restructuring actions taken in the fourth quarter of
2022, as well as adjustments to our restructuring actions taken in
2020.
- Refer to reconciliations in the appendix within this press
release for further detail.
Net Results
- In the fourth quarter of 2023, the Income tax
provision was $155.3 million on income before income
taxes of $623.9 million. Income tax provision for the full
year 2023 was $291.2 million on income before income
taxes of $1.41 billion.
- The income tax provision for the full year 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.
- Fourth quarter 2023 net income available to IPG common
stockholders was $463.2 million, resulting in earnings of $1.21 per
basic share and $1.21 per diluted share, compared to $0.77 and
$0.76, respectively, for the same period in 2022. Adjusted earnings
were $1.18 per diluted share as adjusted for after-tax
amortization of acquired intangibles of $16.7 million,
after-tax restructuring charges of $0.6 million and an after-tax
gain of $29.4 million on the sales of businesses. This
compares to adjusted earnings of $1.02 per diluted share a
year ago.
- Full year 2023 net income available to IPG common stockholders
was $1,098.4 million, resulting in earnings of $2.86 per basic
share and $2.85 per diluted share, compared to $2.40 and $2.37,
respectively, for the same period in 2022. Adjusted earnings were
$2.99 per diluted share as adjusted for after-tax amortization of
acquired intangibles of $67.1 million, after-tax restructuring
charges of $0.2 million and an after-tax gain of $13.0 million on
the sales of businesses. Full year 2023 basic and diluted earnings
per share, both as reported and adjusted, include a positive impact
of $0.17 related to the settlement of U.S. Federal Income Tax
Audits for the years 2017-2018. Adjusted earnings were $2.75 per
diluted share a year ago.
- Refer to reconciliations in the appendix within this press
release for further detail.
Operating Results
RevenueRevenue before billable
expenses was $2.59 billion in the fourth quarter of 2023 compared
to $2.55 billion in the fourth quarter of 2022. During the quarter,
the effect of foreign currency translation was positive 0.5%, the
impact of net divestitures was negative 0.8%, and the resulting
organic increase of net revenue was 1.7%.
Revenue before billable expenses was $9.40
billion for the full year 2023 compared to $9.45 billion in the
same period in 2022. During the year, the effect of foreign
currency translation was negative 0.5%, the impact of net
acquisitions was positive 0.1%, and the resulting organic decrease
of net revenue was 0.1%.
Operating ExpensesFor the
fourth quarter of 2023, total operating expenses, excluding
billable expenses decreased by 6.0%. For the full year 2023,
total operating expenses excluding billable expenses
decreased by 1.9%.
Staff cost ratio, which is total salaries and
related expenses as a percentage of revenue before billable
expenses, was 59.4% in the fourth quarter of 2023, compared to
61.0% in the same period in 2022. Total salaries and related
expenses in the fourth quarter of 2023 was $1.54 billion, a
decrease of 1.3% compared to the same period in 2022. The decrease
was primarily driven by decreases in performance-based employee
incentive compensation and base salaries, benefits and tax.
For the full year 2023, staff cost ratio was 66.4%, compared to
66.2% in the same period in 2022. Total salaries and related
expenses was $6.24 billion during the full year 2023, a decrease of
0.2% compared to the same period 2022. The decrease was primarily
driven by decreases in performance-based employee incentive
compensation and temporary help expense, partially offset by
increases in base salaries, benefits and tax and severance
expense.
For the fourth quarter 2023 office and other
direct expenses as a percentage of revenue before billable expenses
increased slightly to 13.6% compared to 13.5% for the same period
in 2022. Office and other direct expenses were $352.9 million in
the fourth quarter of 2023, an increase of 2.2% compared to the
same period in 2022. The increase in the fourth quarter was
primarily driven by increases in bad debt expense and professional
consulting fees, partially offset by decreases in occupancy expense
and client service costs. For the full year 2023 office and other
direct expenses as a percentage of revenue before billable expenses
increased slightly to 14.3% compared to 14.2% for the same period
in 2022. Office and other direct expenses were $1.34 billion for
the full year 2023, a decrease of 0.3% compared to 2022. The
decrease in office and other direct expenses for the full year 2023
was driven by decreases in employment costs, occupancy expense and
client service costs, partially offset by increases in bad debt
expense, travel and entertainment expenses, and software and
cloud-based expenses, as well as foreign currency losses.
Selling, general and administrative expenses
were $23.5 million in the fourth quarter of 2023, a decrease of
21.4% compared to the same period in 2022. Selling, general and
administrative expenses were $67.2 million for the full year 2023,
a decrease of 22.8% compared to the same period in 2022.The
decrease for the fourth quarter and full year 2023 was primarily
due to decreases in performance-based incentive compensation
expense, partially offset by increases in software and cloud-based
expenses.
Depreciation and amortization expense decreased
by 9.4% during the fourth quarter of 2023, and decreased by 3.5%
for the full year 2023.
Restructuring charges were $0.8 million and $0.1
million for the fourth quarter and full year of 2023, respectively,
and were related to adjustments to our restructuring actions taken
in 2022 and 2020. Restructuring charges were $101.7 million and
$102.4 million for the fourth quarter and full year 2022,
respectively, and were related to restructuring actions taken in
the fourth quarter of 2022, as well as adjustments to our
restructuring actions taken in 2020.
Non-Operating Results and
TaxNet interest expense decreased by $6.1 million to $17.9
million in the fourth quarter of 2023 from a year ago. Full year
2023 net interest expense decreased by $26.5 million to
$84.8 million from a year ago.
Other Income (expense), net was $35.0 million
and $10.2 million for the fourth quarter and full year 2023,
respectively.
The income tax provision in the fourth quarter
of 2023 was $155.3 million on income before income taxes of $623.9
million, compared to a provision of $109.2 million on income before
income taxes of $412.8 million for the same period in 2022. The
income tax provision for the full year 2023 was $291.2 million on
income before income taxes of $1.41 billion, compared to a
provision of $318.4 million on income before income taxes of $1.27
billion in 2022. The income tax provision for the full year 2023
includes a benefit of $64.2 million related to the settlement of
2023 of U.S. Federal Income Tax Audits for the years 2017-2018,
which is primarily non-cash.
The effective tax rate for the fourth quarter of
2023 was 24.9% compared to 26.5% for the same period in 2022.
Excluding the impacts of amortization of acquired intangibles,
restructuring charges and gains on the sales of businesses, the
effective tax rate for the fourth quarter of 2023 was 25.0%
compared to 25.7% in 2022 as similarly adjusted. The effective tax
rate for the full year 2023 was 20.7% compared to 25.1% for the
same period in 2022. The income tax provision for the full year
2023 includes a benefit of $64.2 million related to the settlement
of 2023 of U.S. Federal Income Tax Audits for the years 2017-2018,
which reduced the effective tax rate by approximately 4.5%.
Excluding the impacts of amortization of acquired intangibles,
restructuring charges and net gains on the sales of businesses, the
effective tax rate for the full year 2023 was 20.6% compared to
24.8% in 2022 as similarly adjusted.
Balance SheetAt December 31,
2023, cash and cash equivalents totaled $2.39 billion, compared to
$2.55 billion at December 31, 2022. Total debt was $3.20 billion at
December 31, 2023, compared to $2.92 billion at December 31,
2022.
Share Repurchase ProgramDuring
the fourth quarter of 2023, the Company repurchased 4.3 million
shares of its common stock at an aggregate cost of $131.2 million
and an average price of $30.73 per share, including fees. During
the full year 2023, the Company repurchased 10.4 million shares of
its common stock at an aggregate cost of $350.2 million and an
average price of $33.64 per share, including fees.
Common Stock DividendDuring the
fourth quarter of 2023, the Company declared and paid a common
stock cash dividend of $0.310 per share, for a total
of $117.9 million. During 2023, the Company paid four
quarterly cash dividends of $0.310 per share on our common stock,
which corresponded to aggregate dividend payments of $479.1 million
for the full year.
The Company also announced that its Board of
Directors has declared a common stock cash dividend of $0.33 per
share, payable quarterly to holders of record on an ongoing
basis.
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 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, 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 $10.89 billion in
2023.
# # #
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 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 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;
- 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;
- the impacts on our business of any pandemics, epidemics,
disease outbreaks or other public health crises;
- 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 under Item 1A, Risk
Factors, in our most recent Annual Report on Form 10-K, 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 EARNINGSFOURTH QUARTER REPORT
2023 AND 2022 (Amounts in Millions except Per Share
Data)(UNAUDITED) |
|
|
|
|
|
Three Months Ended December 31, |
|
|
2023 |
|
2022 |
|
Fav. (Unfav.)% Variance |
Revenue: |
|
|
|
|
|
|
Revenue Before
Billable Expenses |
$2,586.2 |
|
$2,550.5 |
|
1.4 % |
|
Billable
Expenses |
437.1 |
|
435.4 |
|
0.4 % |
Total
Revenue |
3,023.3 |
|
2,985.9 |
|
1.3 % |
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
Salaries and
Related Expenses |
1,536.9 |
|
1,556.9 |
|
1.3 % |
|
Office and Other
Direct Expenses |
352.9 |
|
345.3 |
|
(2.2) % |
|
Billable
Expenses |
437.1 |
|
435.4 |
|
(0.4) % |
|
Cost of Services |
2,326.9 |
|
2,337.6 |
|
0.5 % |
|
Selling, General
and Administrative Expenses |
23.5 |
|
29.9 |
|
21.4 % |
|
Depreciation and
Amortization |
65.3 |
|
72.1 |
|
9.4 % |
|
Restructuring
Charges |
0.8 |
|
101.7 |
|
99.2 % |
Total
Operating Expenses |
2,416.5 |
|
2,541.3 |
|
4.9 % |
Operating Income |
606.8 |
|
444.6 |
|
36.5 % |
|
|
|
|
|
|
|
Expenses and Other Income: |
|
|
|
|
|
|
Interest
Expense |
(61.4) |
|
(46.7) |
|
|
|
Interest
Income |
43.5 |
|
22.7 |
|
|
|
Other Income
(Expense), Net |
35.0 |
|
(7.8) |
|
|
Total
(Expenses) and Other Income |
17.1 |
|
(31.8) |
|
|
|
|
|
|
|
|
|
Income Before Income Taxes |
623.9 |
|
412.8 |
|
|
|
Provision for
Income Taxes |
155.3 |
|
109.2 |
|
|
Income of Consolidated Companies |
468.6 |
|
303.6 |
|
|
|
Equity in Net
Income of Unconsolidated Affiliates |
3.0 |
|
2.3 |
|
|
Net Income |
471.6 |
|
305.9 |
|
|
|
Net Income
Attributable to Non-controlling Interests |
(8.4) |
|
(8.7) |
|
|
Net Income Available to IPG Common
Stockholders |
$463.2 |
|
$297.2 |
|
|
|
|
|
|
|
|
Earnings Per Share Available to IPG Common
Stockholders1: |
|
|
|
|
|
Basic |
$1.21 |
|
$0.77 |
|
|
Diluted |
$1.21 |
|
$0.76 |
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding: |
|
|
|
|
|
Basic |
381.4 |
|
387.9 |
|
|
Diluted |
383.4 |
|
392.1 |
|
|
|
|
|
|
|
|
Dividends Declared Per Common Share |
$0.310 |
|
$0.290 |
|
|
|
|
|
|
|
|
1 Earnings per share amounts calculated on an
unrounded basis. |
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND
SUBSIDIARIESCONSOLIDATED SUMMARY OF EARNINGSANNUAL REPORT 2023 AND
2022(Amounts in Millions except Per Share Data)(UNAUDITED) |
|
|
|
|
|
Twelve Months Ended December 31, |
|
|
2023 |
|
2022 |
|
Fav. (Unfav.)% Variance |
Revenue: |
|
|
|
|
|
|
Revenue Before
Billable Expenses |
$9,400.6 |
|
$9,449.4 |
|
(0.5) % |
|
Billable
Expenses |
1,488.7 |
|
1,478.4 |
|
0.7 % |
Total
Revenue |
10,889.3 |
|
10,927.8 |
|
(0.4) % |
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
Salaries and
Related Expenses |
6,243.9 |
|
6,258.3 |
|
0.2 % |
|
Office and Other
Direct Expenses |
1,342.5 |
|
1,346.4 |
|
0.3 % |
|
Billable
Expenses |
1,488.7 |
|
1,478.4 |
|
(0.7) % |
|
Cost of Services |
9,075.1 |
|
9,083.1 |
|
0.1 % |
|
Selling, General
and Administrative Expenses |
67.2 |
|
87.1 |
|
22.8 % |
|
Depreciation and
Amortization |
264.3 |
|
274.0 |
|
3.5 % |
|
Restructuring
Charges |
0.1 |
|
102.4 |
|
99.9 % |
Total
Operating Expenses |
9,406.7 |
|
9,546.6 |
|
1.5 % |
Operating Income |
1,482.6 |
|
1,381.2 |
|
7.3 % |
|
|
|
|
|
|
|
Expenses and Other Income: |
|
|
|
|
|
|
Interest
Expense |
(225.6) |
|
(167.9) |
|
|
|
Interest
Income |
140.8 |
|
56.6 |
|
|
|
Other Income
(Expense), Net |
10.2 |
|
(1.0) |
|
|
Total
(Expenses) and Other Income |
(74.6) |
|
(112.3) |
|
|
|
|
|
|
|
|
Income Before Income Taxes |
1,408.0 |
|
1,268.9 |
|
|
|
Provision for
Income Taxes |
291.2 |
|
318.4 |
|
|
Income of Consolidated Companies |
1,116.8 |
|
950.5 |
|
|
|
Equity in Net
Income of Unconsolidated Affiliates |
1.3 |
|
5.6 |
|
|
Net Income |
1,118.1 |
|
956.1 |
|
|
|
Net Income
Attributable to Non-controlling Interests |
(19.7) |
|
(18.1) |
|
|
Net Income Attributable to IPG Common
Stockholders |
$1,098.4 |
|
$938.0 |
|
|
|
|
|
|
|
|
Earnings Per Share Available to IPG Common
Stockholders1: |
|
|
|
|
|
Basic |
$2.86 |
|
$2.40 |
|
|
Diluted |
$2.85 |
|
$2.37 |
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding: |
|
|
|
|
|
Basic |
384.1 |
|
391.5 |
|
|
Diluted |
385.9 |
|
395.1 |
|
|
|
|
|
|
|
|
Dividends Declared Per Common Share |
$1.240 |
|
$1.160 |
|
|
|
|
|
|
|
|
|
1 Earnings per share amounts calculated on an
unrounded basis. |
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 December 31, 2023 |
|
As Reported |
|
Amortization of Acquired Intangibles |
|
Restructuring Charges |
|
Net Gain on Business Dispositions1 |
|
Adjusted Results
(Non-GAAP) |
Operating
Income and Adjusted EBITA before Restructuring Charges
2 |
$606.8 |
|
$(20.9) |
|
$(0.8) |
|
|
|
$628.5 |
|
|
|
|
|
|
|
|
|
|
Total (Expenses) and Other Income 3 |
17.1 |
|
|
|
|
|
$36.8 |
|
(19.7) |
Income
Before Income Taxes |
623.9 |
|
(20.9) |
|
(0.8) |
|
36.8 |
|
608.8 |
Provision for Income Taxes |
155.3 |
|
4.2 |
|
0.2 |
|
(7.4) |
|
152.3 |
Effective Tax Rate |
24.9 % |
|
|
|
|
|
|
|
25.0 % |
Equity in Net Income of Unconsolidated Affiliates |
3.0 |
|
|
|
|
|
|
|
3.0 |
Net Income Attributable to Non-controlling Interests |
(8.4) |
|
|
|
|
|
|
|
(8.4) |
Net
Income Available to IPG Common Stockholders |
$463.2 |
|
$(16.7) |
|
$(0.6) |
|
$29.4 |
|
$451.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding -
Basic |
381.4 |
|
|
|
|
|
|
|
381.4 |
Dilutive effect of stock options and restricted shares |
2.0 |
|
|
|
|
|
|
|
2.0 |
Weighted-Average Number of Common Shares Outstanding -
Diluted |
383.4 |
|
|
|
|
|
|
|
383.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
Per Share Available to IPG Common Stockholders4: |
|
|
|
|
|
|
|
|
|
Basic |
$1.21 |
|
$(0.04) |
|
$(0.00) |
|
$0.08 |
|
$1.18 |
Diluted |
$1.21 |
|
$(0.04) |
|
$(0.00) |
|
$0.08 |
|
$1.18 |
|
|
|
|
|
|
|
|
|
|
1 Primarily relates to a net gain as a result of a completed
disposition 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 income (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) |
|
Twelve Months Ended December 31, 2023 |
|
As Reported |
|
Amortization of Acquired Intangibles |
|
Restructuring Charges |
|
Net Gain on Businesses Dispositions1 |
|
Adjusted Results (Non-GAAP) |
Operating
Income and Adjusted EBITA before Restructuring Charges
2 |
$1,482.6 |
|
$(84.0) |
|
$(0.1) |
|
|
|
$1,566.7 |
|
|
|
|
|
|
|
|
|
|
Total (Expenses) and Other Income 3 |
(74.6) |
|
|
|
|
|
16.4 |
|
(91.0) |
Income
Before Income Taxes |
1,408.0 |
|
(84.0) |
|
(0.1) |
|
16.4 |
|
1,475.7 |
Provision for Income Taxes |
291.2 |
|
16.9 |
|
(0.1) |
|
(3.4) |
|
304.6 |
Effective Tax Rate |
20.7 % |
|
|
|
|
|
|
|
20.6 % |
Equity in Net Income of Unconsolidated Affiliates |
1.3 |
|
|
|
|
|
|
|
1.3 |
Net Income Attributable to Non-controlling Interests |
(19.7) |
|
|
|
|
|
|
|
(19.7) |
Net
Income Available to IPG Common Stockholders |
$1,098.4 |
|
$(67.1) |
|
$(0.2) |
|
$13.0 |
|
$1,152.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding -
Basic |
384.1 |
|
|
|
|
|
|
|
384.1 |
Dilutive effect of stock options and restricted shares |
1.8 |
|
|
|
|
|
|
|
1.8 |
Weighted-Average Number of Common Shares Outstanding -
Diluted |
385.9 |
|
|
|
|
|
|
|
385.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
Per Share Available to IPG Common Stockholders4, 5: |
|
|
|
|
|
|
|
|
|
Basic |
$2.86 |
|
$(0.17) |
|
$(0.00) |
|
$0.03 |
|
$3.00 |
Diluted |
$2.85 |
|
$(0.17) |
|
$(0.00) |
|
$0.03 |
|
$2.99 |
|
|
|
|
|
|
|
|
|
|
1 Primarily relates to a net gain as a result of a completed
disposition 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), include 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 December 31, |
|
Twelve Months Ended December 31, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
Revenue
Before Billable Expenses |
$2,586.2 |
|
$2,550.5 |
|
$9,400.6 |
|
$9,449.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Reconciliation: |
|
|
|
|
|
|
|
Net
Income Available to IPG Common Stockholders |
$463.2 |
|
$297.2 |
|
$1,098.4 |
|
$938.0 |
|
|
|
|
|
|
|
|
Add Back: |
|
|
|
|
|
|
|
Provision for Income Taxes |
155.3 |
|
109.2 |
|
291.2 |
|
318.4 |
Subtract: |
|
|
|
|
|
|
|
Total (Expenses) and Other Income |
17.1 |
|
(31.8) |
|
(74.6) |
|
(112.3) |
Equity in Net Income of Unconsolidated Affiliates |
3.0 |
|
2.3 |
|
1.3 |
|
5.6 |
Net Income Attributable to Non-controlling Interests |
(8.4) |
|
(8.7) |
|
(19.7) |
|
(18.1) |
Operating
Income |
606.8 |
|
444.6 |
|
1,482.6 |
|
1,381.2 |
|
|
|
|
|
|
|
|
Add Back: |
|
|
|
|
|
|
|
Amortization of Acquired Intangibles |
20.9 |
|
22.1 |
|
84.0 |
|
84.7 |
|
|
|
|
|
|
|
|
Adjusted
EBITA |
627.7 |
|
466.7 |
|
1,566.6 |
|
1,465.9 |
|
|
|
|
|
|
|
|
Adjusted EBITA
Margin on Net Revenue % |
24.3 % |
|
18.3 % |
|
16.7 % |
|
15.5 % |
Restructuring Charges |
0.8 |
|
101.7 |
|
0.1 |
|
102.4 |
|
|
|
|
|
|
|
|
Adjusted
EBITA before Restructuring Charges |
$628.5 |
|
$568.4 |
|
$1,566.7 |
|
$1,568.3 |
Adjusted EBITA
before Restructuring Charges Margin on Net Revenue % |
24.3 % |
|
22.3 % |
|
16.7 % |
|
16.6 % |
|
|
|
|
|
|
|
|
Note: Management believes the resulting comparisons provide useful
supplemental data that, while not a substitute for GAAP measures,
allow for greater transparency in the review of our financial and
operational performance. |
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES U.S. GAAP
RECONCILIATION OF NON-GAAP ADJUSTED RESULTS (Amounts in Millions
except Per Share Data) (UNAUDITED) |
|
Three Months Ended December 31, 2022 |
|
As Reported |
|
Amortization of Acquired Intangibles |
|
Restructuring Charges |
|
Net Losses on Business Dispositions1 |
|
Adjusted Results (Non-GAAP) |
Operating
Income and Adjusted EBITA before Restructuring Charges
2 |
$444.6 |
|
$(22.1) |
|
$(101.7) |
|
|
|
$568.4 |
|
|
|
|
|
|
|
|
|
|
Total (Expenses) and Other Income 3 |
(31.8) |
|
|
|
|
|
$(8.3) |
|
(23.5) |
Income
Before Income Taxes |
412.8 |
|
(22.1) |
|
(101.7) |
|
(8.3) |
|
544.9 |
Provision for Income Taxes |
109.2 |
|
4.6 |
|
26.0 |
|
0.0 |
|
139.8 |
Effective Tax Rate |
26.5 % |
|
|
|
|
|
|
|
25.7 % |
Equity in Net Income of Unconsolidated Affiliates |
2.3 |
|
|
|
|
|
|
|
2.3 |
Net Income Attributable to Non-controlling Interests |
(8.7) |
|
|
|
|
|
|
|
(8.7) |
Net
Income Available to IPG Common Stockholders |
$297.2 |
|
$(17.5) |
|
$(75.7) |
|
$(8.3) |
|
$398.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding -
Basic |
387.9 |
|
|
|
|
|
|
|
387.9 |
Dilutive effect of stock options and restricted shares |
4.2 |
|
|
|
|
|
|
|
4.2 |
Weighted-Average Number of Common Shares Outstanding -
Diluted |
392.1 |
|
|
|
|
|
|
|
392.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
Per Share Available to IPG Common Stockholders 4, 5: |
|
|
|
|
|
|
|
|
|
Basic |
$0.77 |
|
$(0.05) |
|
$(0.20) |
|
$(0.02) |
|
$1.03 |
Diluted |
$0.76 |
|
$(0.04) |
|
$(0.19) |
|
$(0.02) |
|
$1.02 |
|
|
|
|
|
|
|
|
|
|
1 Primarily relates to losses on complete dispositions of
businesses and the classification of certain assets as held for
sale, as well as a non-cash loss related to the remeasurement of an
equity method investment in which we acquired a controlling
interest. |
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), include a negative impact of $0.02
related to the net set-up of income tax valuation allowances. |
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) |
|
Twelve Months Ended December 31, 2022 |
|
As Reported |
|
Amortization of Acquired Intangibles |
|
Restructuring Charges |
|
Net Losses on Business Dispositions1 |
|
Adjusted Results (Non-GAAP) |
Operating
Income and Adjusted EBITA before Restructuring Charges
2 |
$1,381.2 |
|
$(84.7) |
|
$(102.4) |
|
|
|
$1,568.3 |
|
|
|
|
|
|
|
|
|
|
Total (Expenses) and Other Income 3 |
(112.3) |
|
|
|
|
|
$(3.8) |
|
(108.5) |
Income
Before Income Taxes |
1,268.9 |
|
(84.7) |
|
(102.4) |
|
(3.8) |
|
1,459.8 |
Provision for Income Taxes |
318.4 |
|
17.3 |
|
25.8 |
|
0.1 |
|
361.6 |
Effective Tax Rate |
25.1 % |
|
|
|
|
|
|
|
24.8 % |
Equity in Net Income of Unconsolidated Affiliates |
5.6 |
|
|
|
|
|
|
|
5.6 |
Net Income Attributable to Noncontrolling Interests |
(18.1) |
|
|
|
|
|
|
|
(18.1) |
Net
Income Available to IPG Common Stockholders |
$938.0 |
|
$(67.4) |
|
$(76.6) |
|
$(3.7) |
|
$1,085.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding -
Basic |
391.5 |
|
|
|
|
|
|
|
391.5 |
Dilutive effect
of stock options and restricted shares |
3.6 |
|
|
|
|
|
|
|
3.6 |
Weighted-Average Number of Common Shares Outstanding -
Diluted |
395.1 |
|
|
|
|
|
|
|
395.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
Per Share Available to IPG Common Stockholders 4, 5: |
|
|
|
|
|
|
|
|
|
Basic |
$2.40 |
|
$(0.17) |
|
$(0.20) |
|
$(0.01) |
|
$2.77 |
Diluted |
$2.37 |
|
$(0.17) |
|
$(0.19) |
|
$(0.01) |
|
$2.75 |
|
|
|
|
|
|
|
|
|
|
1 Includes a cash gain related to the sale of an equity investment,
offset by losses on complete dispositions of businesses and the
classification of certain assets as held for sale, a non-cash loss
related to the deconsolidation of a previously consolidated
subsidiary in which we maintain an equity interest, and a non-cash
loss related to remeasurement of an equity method investment in
which we acquired a controlling interest. |
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), include a negative impact of $0.02
related to the net set-up of income tax valuation allowances. |
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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