UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
 x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017
For the quarterly period ended June 30, 2019
or
 o☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 1-6686
ipglogo2018a03.jpg
THEINTERPUBLIC GROUP OF COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-1024020
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)

909 Third Avenue, New York, New York 10022
(Address of principal executive offices) (Zip Code)
(212)704-1200
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.10 per shareIPGThe New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No ¨


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý    No ¨


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated Filer ý☒ Accelerated filerFiler ¨☐
Non-accelerated filerFiler ¨☐ Smaller reporting companyReporting Company ¨☐
(Do not check if a smaller reporting company)   Emerging growth companyGrowth Company ¨☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐    No ý


The number of shares of the registrant’s common stock outstanding as of October 16, 2017July 15, 2019 was 388,608,593.387,223,208.



INDEX
 Page
PART I. FINANCIAL INFORMATION
Item 1.
Financial Statements (Unaudited)
Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2019 and 2018
2
 
Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2017 and 2016
2
Consolidated Statements of Comprehensive Income for the Three and NineSix Months Ended SeptemberJune 30, 20172019 and 20162018
3
 
Consolidated Balance Sheets as of SeptemberJune 30, 20172019 and December 31, 20162018
4
 
Consolidated Statements of Cash Flows for the NineSix Months Ended SeptemberJune 30, 20172019 and 20162018
5
 
Consolidated Statements of Stockholders’ Equity for the NineThree and Six Months Ended SeptemberJune 30, 20172019 and 20162018
6
 
Notes to Consolidated Financial Statements
8
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
2023
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
3339
Item 4.
Controls and Procedures
3339
   
PART II. OTHER INFORMATION
Item 1.
Legal Proceedings
3440
Item 1A.
Risk Factors
3440
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
34
Item 5.
Other Information
3440
Item 6.
Exhibits
3540
INDEX TO EXHIBITS
3641
SIGNATURES
3742
INFORMATION REGARDING FORWARD-LOOKING DISCLOSURE
This quarterly report on Form 10-Q contains forward-looking statements. Statements in this report that are not historical facts, including statements about management’s beliefs and expectations, constitute forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” “continue” or comparable terminology are intended to identify forward-looking statements. These statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined under Item 1A, Risk Factors, in our most recent annual report on Form 10-K.10-K and our quarterly reports on Form 10-Q. 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:
potential effects of a challenging economy, for example, 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 assumptions we make in connection with our critical accounting estimates, including changes in assumptions associated with any effects of a weakened economy;
potential adverse effects if we are required to recognize impairment charges or other adverse accounting-related developments;
risks associated with the effects of global, national and regional economic and political conditions, including counterparty risks and fluctuations in economic growth rates, interest rates and currency exchange rates; and
developments from changes in the regulatory and legal environment for advertising and marketing and communications services companies around the world.world; and
failure to realize the anticipated benefits on the acquisition of the Acxiom business.
Investors should carefully consider these factors and the additional risk factors outlined in more detail under Item 1A, Risk Factors, in our most recent annual report on Form 10-K.10-K and our quarterly reports on Form 10-Q.

PART I – FINANCIAL INFORMATION
Item 1.Financial Statements (Unaudited)
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)
Three months ended
September 30,		 Nine months ended
September 30,		Three months ended June 30, Six months ended
June 30,
2017 2016 2017 20162019 2018 2019 2018
REVENUE$1,902.6
 $1,922.2
 $5,541.4
 $5,582.1
REVENUE:       
Net revenue$2,125.9
 $1,948.2
 $4,130.7
 $3,722.2
Billable expenses394.3
 443.6
 750.7
 838.7
Total revenue2,520.2
 2,391.8
 4,881.4
 4,560.9
              
OPERATING EXPENSES:              
Salaries and related expenses1,227.6
 1,228.0
 3,742.3
 3,726.3
1,381.2
 1,292.9
 2,802.3
 2,623.2
Office and general expenses455.9
 486.2
 1,343.8
 1,400.5
Office and other direct expenses387.3
 333.3
 776.5
 657.1
Billable expenses394.3
 443.6
 750.7
 838.7
Cost of services2,162.8
 2,069.8
 4,329.5
 4,119.0
Selling, general and administrative expenses18.1
 28.8
 59.5
 63.9
Depreciation and amortization73.0
 44.0
 144.1
 90.0
Restructuring charges2.1
 0.0
 33.9
 0.0
Total operating expenses1,683.5
 1,714.2
 5,086.1
 5,126.8
2,256.0
 2,142.6
 4,567.0
 4,272.9
              
OPERATING INCOME219.1
 208.0
 455.3
 455.3
264.2
 249.2
 314.4
 288.0
              
EXPENSES AND OTHER INCOME:              
Interest expense(21.0) (21.7) (67.6) (68.8)(51.6) (26.1) (101.4) (46.0)
Interest income4.1
 4.7
 14.0
 16.1
7.7
 4.7
 15.5
 8.7
Other (expense) income, net(9.9) 5.3
 (24.5) (13.5)
Other expense, net(3.8) (16.3) (10.7) (40.7)
Total (expenses) and other income(26.8) (11.7) (78.1) (66.2)(47.7) (37.7) (96.6) (78.0)
              
Income before income taxes192.3
 196.3
 377.2
 389.1
216.5
 211.5
 217.8
 210.0
Provision for income taxes42.5
 63.8
 115.8
 91.9
43.6
 63.6
 54.1
 76.3
Income of consolidated companies149.8
 132.5
 261.4
 297.2
172.9
 147.9
 163.7
 133.7
Equity in net (loss) income of unconsolidated affiliates(1.0) 0.2
 0.1
 (1.6)
Equity in net loss of unconsolidated affiliates(0.1) (0.1) (0.4) (2.0)
NET INCOME148.8
 132.7
 261.5
 295.6
172.8
 147.8
 163.3
 131.7
Net (income) loss attributable to noncontrolling interests(2.6) (4.1) 0.9
 (4.7)
Net income attributable to noncontrolling interests(3.3) (2.0) (1.8) 0.0
NET INCOME AVAILABLE TO IPG COMMON STOCKHOLDERS$146.2
 $128.6
 $262.4
 $290.9
$169.5
 $145.8
 $161.5
 $131.7
              
Earnings per share available to IPG common stockholders:              
Basic$0.38
 $0.32
 $0.67
 $0.73
$0.44
 $0.38
 $0.42
 $0.34
Diluted$0.37
 $0.32
 $0.66
 $0.71
$0.43
 $0.37
 $0.41
 $0.34
              
Weighted-average number of common shares outstanding:              
Basic389.5
 397.7
 391.2
 399.5
386.2
 383.6
 385.4
 383.5
Diluted397.2
 407.9
 398.6
 408.8
391.2
 389.5
 390.1
 388.9
       
Dividends declared per common share$0.18
 $0.15
 $0.54
 $0.45
 
The accompanying notes are an integral part of these unaudited financial statements.

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in Millions)
(Unaudited)
Three months ended
September 30,		 Nine months ended
September 30,		Three months ended
June 30,		 Six months ended
June 30,
2017 2016 2017 20162019 2018 2019 2018
NET INCOME$148.8
 $132.7
 $261.5
 $295.6
$172.8
 $147.8
 $163.3
 $131.7
              
OTHER COMPREHENSIVE INCOME (LOSS)              
Foreign currency translation:              
Foreign currency translation adjustments29.2
 4.4
 114.0
 43.5
4.2
 (116.4) 12.5
 (94.0)
Reclassification adjustments recognized in net income1.5
 (4.2) 1.8
 2.3
4.6
 0.9
 5.8
 13.4
30.7
 0.2
 115.8
 45.8
       
Available-for-sale securities:       
Changes in fair value of available-for-sale securities(0.1) 0.2
 0.0
 0.4
Recognition of previously unrealized gains in net income(0.7) (0.1) (0.7) (1.3)
Income tax effect0.1
 0.1
 0.1
 0.1
(0.7) 0.2
 (0.6) (0.8)8.8
 (115.5) 18.3
 (80.6)
              
Derivative instruments:              
Recognition of previously unrealized losses in net income0.5
 0.5
 1.6
 1.5
0.6
 0.6
 1.2
 1.1
Income tax effect(0.2) (0.2) (0.6) (0.6)(0.1) (0.1) (0.2) (0.3)
0.3
 0.3
 1.0
 0.9
0.5
 0.5
 1.0
 0.8
              
Defined benefit pension and other postretirement plans:              
Net actuarial gains (losses) for the period8.2
 (79.2) 9.0
 (78.4)0.7
 (1.4) 0.7
 (1.4)
Amortization of unrecognized losses, transition obligation and prior service cost included in net income1.7
 1.2
 5.2
 3.7
1.6
 2.0
 3.3
 3.9
Settlement and curtailment losses included in net income4.0
 0.1
 4.0
 0.3
0.0
 0.0
 0.0
 0.2
Other0.0
 0.0
 (0.6) 0.0
0.6
 (0.5) 0.3
 (0.4)
Income tax effect(2.8) 13.0
 (3.4) 12.5
(0.1) 0.2
 (0.2) 0.1
11.1
 (64.9) 14.2
 (61.9)2.8
 0.3
 4.1
 2.4
       
Other comprehensive income (loss), net of tax41.4
 (64.2) 130.4
 (16.0)12.1
 (114.7) 23.4
 (77.4)
TOTAL COMPREHENSIVE INCOME190.2
 68.5
 391.9
 279.6
184.9
 33.1
 186.7
 54.3
Less: comprehensive income (loss) attributable to noncontrolling interests2.5
 5.4
 (0.3) 5.9
3.6
 (0.1) 2.0
 (1.8)
COMPREHENSIVE INCOME ATTRIBUTABLE TO IPG$187.7
 $63.1
 $392.2
 $273.7
$181.3
 $33.2
 $184.7
 $56.1


The accompanying notes are an integral part of these unaudited financial statements.

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in Millions)
(Unaudited)
September 30,
2017		 December 31,
2016		June 30,
2019		 December 31,
2018
ASSETS:      
Cash and cash equivalents$704.9
 $1,097.6
$614.0
 $673.4
Accounts receivable, net of allowance of $45.8 and $55.7, respectively3,696.1
 4,389.7
Expenditures billable to clients1,742.3
 1,518.1
Accounts receivable, net of allowance of $43.6 and $42.5, respectively4,389.5
 5,126.6
Accounts receivable, billable to clients1,977.6
 1,900.6
Assets held for sale8.3
 203.2
26.4
 5.7
Other current assets312.2
 229.4
467.9
 476.6
Total current assets6,463.8
 7,438.0
7,475.4
 8,182.9
Property and equipment, net of accumulated depreciation of $1,045.5
and $961.6, respectively		637.5
 622.0
Property and equipment, net of accumulated depreciation of $1,103.4 and $1,034.9, respectively767.1
 790.9
Deferred income taxes270.9
 220.3
297.8
 247.0
Goodwill3,799.9
 3,674.4
4,884.1
 4,875.9
Other intangible assets1,052.0
 1,094.7
Operating lease right-of-use assets1,596.5
 0.0
Other non-current assets544.0
 530.5
454.0
 428.9
TOTAL ASSETS$11,716.1
 $12,485.2
$16,526.9
 $15,620.3
      
LIABILITIES:      
Accounts payable$5,561.1
 $6,303.6
$6,022.3
 $6,698.1
Accrued liabilities550.7
 794.0
626.4
 806.9
Contract liabilities585.2
 533.9
Short-term borrowings511.8
 85.7
207.1
 73.7
Current portion of long-term debt301.9
 323.9
0.3
 0.1
Current portion of operating leases261.0
 0.0
Liabilities held for sale20.8
 198.8
29.0
 11.2
Total current liabilities6,946.3
 7,706.0
7,731.3
 8,123.9
Long-term debt1,285.0
 1,280.7
3,563.8
 3,660.2
Non-current operating leases1,463.2
 0.0
Deferred compensation457.2
 480.7
401.6
 422.7
Other non-current liabilities749.4
 708.3
720.3
 812.8
TOTAL LIABILITIES9,437.9
 10,175.7
13,880.2
 13,019.6
      
Redeemable noncontrolling interests (see Note 4)238.0
 252.8
Redeemable noncontrolling interests (see Note 5)188.3
 167.9
      
STOCKHOLDERS’ EQUITY:      
Common stock39.9
 39.4
38.6
 38.3
Additional paid-in capital1,235.7
 1,199.2
921.4
 895.9
Retained earnings1,849.8
 1,804.3
2,381.8
 2,400.1
Accumulated other comprehensive loss, net of tax(832.7) (962.5)(917.9) (941.1)
2,292.7
 2,080.4
Less: Treasury stock(279.3) (63.3)
Total IPG stockholders’ equity2,013.4
 2,017.1
2,423.9
 2,393.2
Noncontrolling interests26.8
 39.6
34.5
 39.6
TOTAL STOCKHOLDERS’ EQUITY2,040.2
 2,056.7
2,458.4
 2,432.8
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$11,716.1
 $12,485.2
$16,526.9
 $15,620.3
 
The accompanying notes are an integral part of these unaudited financial statements.

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Millions)
(Unaudited)
Nine months ended
September 30,		Six months ended
June 30,
2017 20162019 2018
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net income$261.5
 $295.6
$163.3
 $131.7
Adjustments to reconcile net income to net cash used in operating activities:      
Depreciation and amortization of fixed assets and intangible assets124.5
 117.5
Depreciation and amortization144.1
 90.0
Provision for uncollectible receivables9.5
 13.6
6.7
 6.1
Amortization of restricted stock and other non-cash compensation59.8
 59.0
44.1
 46.0
Net amortization of bond discounts and deferred financing costs4.2
 4.2
4.6
 2.7
Deferred income tax (benefit) provision(1.6) 2.6
Deferred income tax provision(3.0) (31.0)
Net losses on sales of businesses20.9
 16.1
11.8
 44.2
Other16.1
 29.8
2.1
 1.9
Changes in assets and liabilities, net of acquisitions and divestitures, providing (using) cash:      
Accounts receivable875.8
 666.3
743.3
 238.0
Expenditures billable to clients(165.9) (241.2)
Accounts receivable, billable to clients(75.4) (233.7)
Other current assets(48.2) (20.6)(62.1) (124.6)
Accounts payable(986.4) (688.4)(676.9) (579.3)
Accrued liabilities(287.8) (207.9)(92.2) (175.9)
Contract liabilities50.2
 38.0
Operating lease right-of-use assets168.0
 0.0
Operating lease liabilities(164.0) 0.0
Other non-current assets and liabilities(21.4) (73.5)(65.6) (11.8)
Net cash used in operating activities(139.0) (26.9)
Net cash provided by (used in) operating activities199.0
 (557.7)
CASH FLOWS FROM INVESTING ACTIVITIES:      
Capital expenditures(108.7) (114.5)(80.1) (61.5)
Acquisitions, net of cash acquired(22.6) (47.9)(0.6) (8.5)
Other investing activities(9.2) (5.1)2.8
 12.4
Net cash used in investing activities(140.5) (167.5)(77.9) (57.6)
CASH FLOWS FROM FINANCING ACTIVITIES:      
Net increase in short-term borrowings132.3
 669.3
Exercise of stock options0.6
 7.0
Repurchases of common stock(216.0) (193.3)0.0
 (114.5)
Common stock dividends(211.2) (179.6)(181.4) (161.2)
Repayment of long-term debt(100.1) (4.7)
Tax payments for employee shares withheld(22.0) (28.0)
Acquisition-related payments(49.1) (36.7)(13.0) (16.0)
Tax payments for employee shares withheld(38.4) (22.7)
Repayments of long-term debt(23.6) (1.1)
Distributions to noncontrolling interests(16.9) (10.8)(8.1) (10.6)
Net increase (decrease) in short-term borrowings429.9
 (33.9)
Exercise of stock options12.1
 10.2
Other financing activities0.1
 1.0
0.0
 (0.3)
Net cash used in financing activities(113.1) (466.9)
Net cash (used in) provided by financing activities(191.7) 341.0
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash0.4
 50.7
10.3
 (27.5)
Net decrease in cash, cash equivalents and restricted cash(392.2) (610.6)(60.3) (301.8)
Cash, cash equivalents and restricted cash at beginning of period1,100.2
 1,506.1
677.2
 797.7
Cash, cash equivalents and restricted cash at end of period$708.0
 $895.5
$616.9
 $495.9
The accompanying notes are an integral part of these unaudited financial statements.

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Amounts in Millions)
(Unaudited)
 
 
Common Stock
 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated 
Other
Comprehensive
Loss, Net of Tax
 
Total IPG
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Stockholders’
Equity
 Shares Amount 
Balance at March 31, 2019386.2
 $38.6
 $903.3
 $2,303.1
 $(929.7) $2,315.3
 $39.3
 $2,354.6
Net income      169.5
   169.5
 3.3
 172.8
Other comprehensive income        11.8
 11.8
 0.3
 12.1
Reclassifications related to redeemable noncontrolling interests            (3.0) (3.0)
Distributions to noncontrolling interests            (5.6) (5.6)
Change in redemption value of redeemable noncontrolling interests      1.1
   1.1
   1.1
Common stock dividends ($0.235 per share)      (90.8)   (90.8)   (90.8)
Stock-based compensation0.2
 0.1
 18.3
     18.4
   18.4
Exercise of stock options0.1
 0.0
 0.0
     0.0
   0.0
Shares withheld for taxes(0.1) (0.1) (0.2)     (0.3)   (0.3)
Other    0.0
 (1.1)   (1.1) 0.2
 (0.9)
Balance at June 30, 2019386.4
 $38.6
 $921.4
 $2,381.8
 $(917.9) $2,423.9
 $34.5
 $2,458.4
 
Common Stock
 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated 
Other
Comprehensive
Loss, Net of Tax
 
Treasury
Stock
 
Total IPG
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Stockholders’
Equity
 
Common Stock
 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated 
Other
Comprehensive
Loss, Net of Tax
 
Total IPG
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Stockholders’
Equity
Shares Amount Shares Amount 
Balance at December 31, 2016394.3
 $39.4
 $1,199.2
 $1,804.3
 $(962.5) $(63.3) $2,017.1
 $39.6
 $2,056.7
Balance at December 31, 2018383.6
 $38.3
 $895.9
 $2,400.1
 $(941.1) $2,393.2
 $39.6
 $2,432.8
Cumulative effect of accounting change
      2.2
   2.2
   2.2
Net income      262.4
     262.4
 (0.9) 261.5
      161.5
   161.5
 1.8
 163.3
Other comprehensive income        129.8
   129.8
 0.6
 130.4
        23.2
 23.2
 0.2
 23.4
Reclassifications related to redeemable
noncontrolling interests
            

 7.3
 7.3
            (0.4) (0.4)
Distributions to noncontrolling interests              (17.5) (17.5)            (8.1) (8.1)
Change in redemption value of redeemable
noncontrolling interests
      (4.6)     (4.6)   (4.6)      1.4
   1.4
   1.4
Repurchases of common stock          (216.0) (216.0)   (216.0)
Common stock dividends      (211.2)     (211.2)   (211.2)
Common stock dividends ($0.235 per share)      (181.4)   (181.4)   (181.4)
Stock-based compensation5.6
 0.6
 62.9
       63.5
   63.5
3.6
 0.4
 48.1
     48.5
   48.5
Exercise of stock options1.1
 0.1
 12.1
       12.2
   12.2
0.1
 0.0
 0.6
     0.6
   0.6
Shares withheld for taxes(1.6) (0.2) (38.5)       (38.7)   (38.7)(0.9) (0.1) (22.2)     (22.3)   (22.3)
Other      (1.1)     (1.1) (2.3) (3.4)    (1.0) (2.0)   (3.0) 1.4
 (1.6)
Balance at September 30, 2017399.4
 $39.9
 $1,235.7
 $1,849.8
 $(832.7) $(279.3) $2,013.4
 $26.8
 $2,040.2
Balance at June 30, 2019386.4
 $38.6
 $921.4
 $2,381.8
 $(917.9) $2,423.9
 $34.5
 $2,458.4

The accompanying notes are an integral part of these unaudited financial statements.



THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY – (CONTINUED)
(Amounts in Millions)
(Unaudited)
 Common Stock 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated 
Other
Comprehensive
Loss, Net of Tax
 
Treasury
Stock
 
Total IPG
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Stockholders’
Equity
 Shares Amount 
Balance at March 31, 2018390.3
 $39.0
 $963.7
 $2,010.5
 $(790.8) $(113.9) $2,108.5
 $31.8
 $2,140.3
Net income      145.8
     145.8
 2.0
 147.8
Other comprehensive loss        (112.6)   (112.6) (2.1) (114.7)
Reclassifications related to redeemable
    noncontrolling interests
              3.8
 3.8
Distributions to noncontrolling interests              (6.7) (6.7)
Change in redemption value of redeemable
    noncontrolling interests
    41.8
 1.4
     43.2
   43.2
Repurchases of common stock          (59.6) (59.6)   (59.6)
Common stock dividends ($0.210 per share)      (80.4)     (80.4)   (80.4)
Stock-based compensation0.2
 0.1
 17.7
       17.8
   17.8
Exercise of stock options0.1
 (0.1) 0.1
       0.0
   0.0
Shares withheld for taxes(0.1) 0.0
 (0.5)       (0.5)   (0.5)
Other    0.1
 (0.6)     (0.5) 1.1
 0.6
Balance at June 30, 2018390.5
 $39.0
 $1,022.9
 $2,076.7
 $(903.4) $(173.5) $2,061.7
 $29.9
 $2,091.6
Common Stock 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated 
Other
Comprehensive
Loss, Net of Tax
 
Treasury
Stock
 
Total IPG
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Stockholders’
Equity
Common Stock 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated 
Other
Comprehensive
Loss, Net of Tax
 
Treasury
Stock
 
Total IPG
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Stockholders’
Equity
Shares Amount Shares Amount 
Balance at December 31, 2015404.4
 $40.4
 $1,404.1
 $1,437.6
 $(845.6) $(71.0) $1,965.5
 $36.3
 $2,001.8
Balance at December 31, 2017386.2
 $38.6
 $955.2
 $2,104.5
 $(827.8) $(59.0) $2,211.5
 $34.8
 $2,246.3
Net income      290.9
     290.9
 4.7
 295.6
      131.7
     131.7
 0.0
 131.7
Other comprehensive (loss) income        (17.2)   (17.2) 1.2
 (16.0)
Other comprehensive loss        (75.6)   (75.6) (1.8) (77.4)
Reclassifications related to redeemable
noncontrolling interests
              0.5
 0.5
              6.3
 6.3
Distributions to noncontrolling interests              (10.8) (10.8)              (10.6) (10.6)
Change in redemption value of redeemable
noncontrolling interests
      (1.3)     (1.3)   (1.3)    41.8
 2.9
     44.7
   44.7
Repurchases of common stock          (193.3) (193.3)   (193.3)          (114.5) (114.5)   (114.5)
Common stock dividends      (179.6)     (179.6)   (179.6)
Common stock dividends ($0.210 per share)      (161.2)     (161.2)   (161.2)
Stock-based compensation3.5
 0.3
 88.2
       88.5
   88.5
4.6
 0.5
 48.0
       48.5
   48.5
Exercise of stock options1.2
 0.1
 10.2
       10.3
   10.3
0.9
 0.0
 7.0
       7.0
   7.0
Shares withheld for taxes(1.1) (0.1) (22.9)       (23.0)   (23.0)(1.2) (0.1) (28.5)       (28.6)   (28.6)
Other    1.6
 (1.0)     0.6
 2.2
 2.8
    (0.6) (1.2)     (1.8) 1.2
 (0.6)
Balance at September 30, 2016408.0
 $40.7
 $1,481.2
 $1,546.6
 $(862.8) $(264.3) $1,941.4
 $34.1
 $1,975.5
Balance at June 30, 2018390.5
 $39.0
 $1,022.9
 $2,076.7
 $(903.4) $(173.5) $2,061.7
 $29.9
 $2,091.6
The accompanying notes are an integral part of these unaudited financial statements.

Notes to Consolidated Financial Statements
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)
Note 1:  Basis of Presentation
The unaudited Consolidated Financial Statements have been prepared by The Interpublic Group of Companies, Inc. and its subsidiaries (the "Company," "IPG," "we," "us" or "our") in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for reporting interim financial information on Form 10-Q. Accordingly, they do not include certain information and disclosures required for complete financial statements. The preparation of financial statements in conformity with U.S. GAAP requires us to make judgments, assumptions and estimates that affect the amounts reported and disclosed. Actual results could differ from these estimates and assumptions. The consolidated results for interim periods are not necessarily indicative of results for the full year and should be read in conjunction with our 20162018 Annual Report on Form 10-K.
Cost of services is comprised of the expenses of our revenue-producing operating segments, Integrated Agency Networks ("IAN") and Constituency Management Group ("CMG"), including salaries and related expenses, office and other direct expenses and billable expenses, and includes an allocation of the centrally managed expenses of our Corporate and other group. Office and other direct expenses include rent expense, professional fees, certain expenses incurred by our staff in servicing our clients and other costs directly attributable to client engagements.
Selling, general and administrative expenses are primarily the unallocated expenses of our Corporate and other group, excluding depreciation and amortization.
Depreciation and amortization of fixed assets and intangible assets of the Company is disclosed as a separate operating expense.
Restructuring charges relate to the Company's implementation of a cost initiative to better align our cost structure with our revenue, as discussed further in Note 9.
In the opinion of management, these unaudited Consolidated Financial Statements include all adjustments, consisting only of normal and recurring adjustments necessary for a fair statement of the information for each period contained therein. Certain reclassifications and immaterial revisions have been made to prior-period financial statements to conform to the current-period presentation.


Note 2:  Revenue
Disaggregation of Revenue
We have two reportable segments as of June 30, 2019: IAN and CMG, as further discussed in Note 13. IAN principally generates revenue from providing advertising and media services as well as a comprehensive array of global communications and marketing services. CMG generates revenue from providing events and public relations services as well as sports and entertainment marketing, corporate and brand identity, and strategic marketing consulting.
Our agencies are located in over 110 countries, including every significant world market. Our geographic revenue breakdown is listed below.
 Three months ended
June 30,		 Six months ended
June 30,
Total revenue:2019 2018 2019 2018
United States$1,595.1
 $1,445.7
 $3,130.2
 $2,796.4
International:       
United Kingdom209.8
 201.6
 416.0
 406.0
Continental Europe209.4
 205.1
 388.2
 386.8
Asia Pacific258.2
 304.2
 490.6
 535.7
Latin America101.8
 92.5
 191.1
 172.5
Other145.9
 142.7
 265.3
 263.5
Total International925.1
 946.1
 1,751.2
 1,764.5
Total Consolidated$2,520.2
 $2,391.8
 $4,881.4
 $4,560.9

8
Table of Contents
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)

 Three months ended
June 30,		 Six months ended
June 30,
Net revenue:2019 2018 2019 2018
United States$1,337.7
 $1,171.5
 $2,651.8
 $2,263.8
International:       
United Kingdom180.4
 175.7
 350.7
 339.2
Continental Europe183.3
 178.7
 340.1
 337.4
Asia Pacific205.1
 214.2
 383.1
 393.0
Latin America92.1
 82.0
 172.4
 155.9
Other127.3
 126.1
 232.6
 232.9
Total International788.2
 776.7
 1,478.9
 1,458.4
Total Consolidated$2,125.9
 $1,948.2
 $4,130.7
 $3,722.2

IANThree months ended
June 30,		 Six months ended
June 30,
Total revenue:2019 2018 2019 2018
United States$1,215.8
 $1,063.2
 $2,425.9
 $2,086.4
International752.8
 749.3
 1,414.9
 1,411.6
Total IAN$1,968.6
 $1,812.5
 $3,840.8
 $3,498.0
        
Net revenue:       
United States$1,131.7
 $963.3
 $2,251.0
 $1,861.3
International674.1
 665.8
 1,266.0
 1,249.1
Total IAN$1,805.8
 $1,629.1
 $3,517.0
 $3,110.4

CMGThree months ended
June 30,		 Six months ended
June 30,
Total revenue:2019 2018 2019 2018
United States$379.3
 $382.5
 $704.3
 $710.0
International172.3
 196.8
 336.3
 352.9
Total CMG$551.6
 $579.3
 $1,040.6
 $1,062.9
        
Net revenue:       
United States$206.0
 $208.2
 $400.8
 $402.5
International114.1
 110.9
 212.9
 209.3
Total CMG$320.1
 $319.1
 $613.7
 $611.8

Contract Balances
The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.
 June 30,
2019		 December 31,
2018
Accounts receivable, net of allowance of $43.6 and $42.5, respectively$4,389.5
 $5,126.6
Accounts receivable, billable to clients1,977.6
 1,900.6
Contract assets51.2
 67.9
Contract liabilities (deferred revenue)585.2
 533.9


9
Table of Contents
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)

Contract assets are primarily comprised of contract incentives that are generally satisfied annually under the terms of our contracts and are transferred to accounts receivable when the right to payment becomes unconditional. Contract liabilities relate to advance consideration received from customers under the terms of our contracts primarily related to reimbursements of third-party expenses, whether we act as principal or agent, and to a lesser extent, periodic retainer fees, both of which are generally recognized shortly after billing.
The majority of our contracts are for periods of one year or less. For those contracts with a term of more than one year, we had approximately $756.0 of unsatisfied performance obligations as of June 30, 2019, which will be recognized as services are performed over the remaining contractual terms.

Note 3:  Leases
Effective January 1, 2019, IPG adopted Accounting Standards Codification Topic 842, Leases ("ASC 842"),using the modified retrospective transition method. As such, we have recognized a right-of-use asset and a corresponding lease liability on our Consolidated Balance Sheet for virtually all of our leases with a term of more than twelve months. Prior-year financial statements were not recast under the new standard and, therefore, those amounts are not presented below. As an accounting policy, we have elected not to apply the recognition requirements to short-term leases, not to separate non-lease components from lease components, and have elected the package of transition provisions available for existing contracts, which allowed us to carry forward our historical assessments of (i) whether contracts are or contain leases, (ii) lease classification and (iii) initial direct costs.
We do not have a material amount of finance leases and the majority of our operating leases, for which we serve as the lessee, consist primarily of real-estate property for our offices around the world. Both the asset and liability are measured at the present value of the future lease payments, with the asset being subject to adjustments such as initial direct costs, prepaid lease payments, and lease incentives. Many of our leases provide for renewal and/or termination options, as well as escalation clauses, which are also factored into our lease payments when appropriate. Our leases have remaining lease terms of 1 year to 20 years. The discount rate used to measure the lease asset and liability is determined at the beginning of the lease term using the rate implicit in the lease, if readily determinable, or using the Company's collateralized credit-adjusted borrowing rate.
The following table presents information on our operating leases for the three and six months ended June 30, 2019.
 Three months ended
June 30, 2019		 Six months ended
June 30, 2019
Operating lease cost$81.0
 $159.4
Short-term lease cost4.9
 10.0
Sublease income(2.7) (4.8)
Total lease cost$83.2
 $164.6
    
   Six months ended
June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
  $164.0
Right-of-use assets obtained in exchange for lease liabilities  $309.6
    
   As of June 30, 2019
Weighted-average remaining lease term  Eight years
Weighted-average discount rate  4.36%



10
Table of Contents
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)

Our future payments of our operating leases as of June 30, 2019 are listed in the table below.
PeriodNet Rent
2019$174.0
2020315.3
2021282.0
2022250.6
2023195.2
Thereafter844.3
Total future lease payments2,061.4
Less: imputed interest(337.2)
Present value of future lease payments1,724.2
Less: current portion of operating leases261.0
Non-current operating leases

$1,463.2


Our future payments of our operating leases as of December 31, 2018 are listed in the table below.
Period
Rent
Obligations
 
Sublease Rental
Income
 Net Rent
2019$352.0
 $(7.7) $344.3
2020324.3
 (5.2) 319.1
2021282.3
 (2.2) 280.1
2022242.5
 (1.3) 241.2
2023184.0
 (0.6) 183.4
Thereafter714.6
 (0.5) 714.1
Total future lease payments

$2,099.7
 $(17.5) $2,082.2


As of June 30, 2019, we have additional operating leases that have not yet commenced with future lease payments of approximately $140.0 that will commence between 2019 and 2020 with lease terms of 5 to 15 years.


11
Table of Contents
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)

Note 2:4:  Debt and Credit Arrangements
Long-Term Debt
A summary of the carrying amounts and fair values of our long-term debt is listed below.
Effective
Interest Rate
 September 30,
2017		 December 31,
2016
Effective
Interest Rate
 June 30,
2019		 December 31,
2018
Book
Value
 
Fair
Value 1
 
Book
Value
 
Fair
Value 1
Book
Value
 
Fair
Value 1
 
Book
Value
 
Fair
Value 1
2.25% Senior Notes due 2017 (less unamortized issuance costs of $0.1)2.30% $299.9
 $300.2
 $299.4
 $301.4
4.00% Senior Notes due 2022 (less unamortized discount and issuance costs of $1.4 and $1.1, respectively)4.13% 247.5
 258.5
 247.0
 258.4
3.75% Senior Notes due 2023 (less unamortized discount and issuance costs of $0.8 and $2.2, respectively)4.32% 497.0
 520.5
 496.6
 503.3
4.20% Senior Notes due 2024 (less unamortized discount and issuance costs of $0.7 and $2.7, respectively)4.24% 496.6
 527.0
 496.2
 511.6
3.50% Senior Notes due 2020 (less unamortized discount and issuance costs of $0.6 and $1.8, respectively)3.89% $497.6
 $506.3
 $496.6
 $499.9
3.75% Senior Notes due 2021 (less unamortized discount and issuance costs of $0.3 and $2.4, respectively)3.98% 497.3
 513.6
 496.8
 503.2
4.00% Senior Notes due 2022 (less unamortized discount and issuance costs of $0.8 and $0.7, respectively)4.13% 248.5
 258.5
 248.2
 250.3
3.75% Senior Notes due 2023 (less unamortized discount and issuance costs of $0.6 and $1.5, respectively)4.32% 497.9
 520.7
 497.7
 491.4
4.20% Senior Notes due 2024 (less unamortized discount and issuance costs of $0.5 and $2.0, respectively)4.24% 497.5
 538.2
 497.3
 492.6
4.65% Senior Notes due 2028 (less unamortized discount and issuance costs of $1.6 and $4.1, respectively)4.78% 494.3
 545.9
 494.0
 494.1
5.40% Senior Notes due 2048 (less unamortized discount and issuance costs of $2.7 and $5.5, respectively)5.48% 491.8
 555.6
 491.7
 474.1
Term Loan due 2021 - LIBOR plus 1.25% 300.0
 300.0
 400.0
 400.0
Other notes payable and capitalized leases 45.9
 45.9
 65.4
 65.4
 39.2
 39.2
 38.0
 38.0
Total long-term debt 1,586.9
   1,604.6
   3,564.1
   3,660.3
  
Less: current portion 301.9
   323.9
   0.3
   0.1
  
Long-term debt, excluding current portion $1,285.0
   $1,280.7
   $3,563.8
   $3,660.2
  
 
1See Note 1114 for information on the fair value measurement of our long-term debt.
Term Loan Agreement
On October 1, 2018, in order to fund the acquisition of Acxiom (the "Acxiom Acquisition"), we entered into financing arrangements with third-party lenders under a three-year term loan agreement (the "Term Loan Agreement"). On June 13, 2019, we repaid $100.0 of the outstanding balance, which reduced our borrowings under the agreement to $300.0. Consistent with our other debt securities, the Term Loan Agreement includes covenants that, among other things, limit our liens and the liens of certain of our consolidated subsidiaries. We were in compliance with all of our covenants in the Term Loan Agreement as of June 30, 2019.
Credit Agreements
We maintain a committed corporate credit facility, originally dated as of July 18, 2008, which has been amended and restated from time to time (the "Credit Agreement"). We use our Credit Agreement to increase our financial flexibility, to provide letters of credit primarily to support obligations of our subsidiaries and to support our commercial paper program. The Credit Agreement is a revolving facility, expiring in October 2020,2022, under which amounts borrowed by us or any of our subsidiaries designated under the Credit Agreement may be repaid and reborrowed, subject to an aggregate lending limit of $1,000.0,$1,500.0, or the equivalent in other specified currencies. The Company has the ability to increase the commitments under the Credit Agreement from time to time by an additional amount of up to $250.0, provided the Company receives commitments for such increases and satisfies certain other conditions. The aggregate available amount of letters of credit outstanding may decrease or increase, subject to a sublimit on letters of credit of $200.0,$50.0, or the equivalent in other specified currencies. Our obligations under the Credit Agreement are unsecured. As of SeptemberJune 30, 2017,2019, there were no borrowings under the Credit Agreement; however, we had $8.4$8.6 of letters of credit under the Credit Agreement, which reduced our total availability to $991.6.$1,491.4. We were in compliance with all of our covenants in the Credit Agreement as of SeptemberJune 30, 2017.2019.
On October 25, 2017, we amended and restated our Credit Agreement. See Note 14 for further discussion.


812
Table of Contents
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)



We also have uncommitted lines of credit with various banks whichthat permit borrowings at variable interest rates and whichthat are primarily used to fund working capital needs. We have guaranteed the repayment of some of these borrowings made by certain subsidiaries. If we lose access to these credit lines, we would have to provide funding directly to some of our international operations. As of SeptemberJune 30, 2017,2019, the Company had uncommitted lines of credit in an aggregate amount of $916.8,$1,085.5, under which we had outstanding borrowings of $152.5$57.1 classified as short-term borrowings on our Consolidated Balance Sheet. The average amount outstanding during the thirdsecond quarter of 20172019 was $124.7,$98.3, with a weighted-average interest rate of approximately 3.1%4.7%.
Commercial Paper
In June 2017, theThe Company established a commercial paper program under which the Company wasis authorized to issue unsecured commercial paper up to a maximum aggregate amount outstanding at any time of $1,000.0.$1,500.0. Borrowings under the program are supported by the Credit Agreement described above. Proceeds of the commercial paper will beare used for working capital and general corporate purposes, including the repayment of maturing indebtedness and other short-term liquidity needs. The maturities of the commercial paper vary but may not exceed 397 days from the date of issue. As of SeptemberJune 30, 2017, the Company had outstanding2019, there was $150.0 of commercial paper of $359.3outstanding classified as short-term borrowings on our Consolidated Balance Sheet. The average amount outstanding under the program during the thirdsecond quarter of 20172019 was $488.2,$482.6, with a weighted-average interest rate of 1.4%2.8% and a weighted-average maturity of fourteen18 days.
On October 25, 2017, the Company increased the maximum aggregate amount outstanding at any time under our commercial paper program from $1,000.0 to $1,500.0. See Note 14 for further discussion.


Note 3:  Earnings Per Share5:  Acquisitions
Acxiom Acquisition
On October 1, 2018 (the "acquisition date"), the Company completed its acquisition of Acxiom. The following sets forth basic and diluted earnings per common share availablepurchase accounting process has not been completed primarily because the valuation of acquired assets has not been finalized. We expect to IPG common stockholders.complete the purchase accounting as soon as practicable but no later than one year from the acquisition date. We do not believe there will be material adjustments.
 Three months ended
September 30,		 Nine months ended
September 30,
 2017 2016 2017 2016
Net income available to IPG common stockholders$146.2
 $128.6
 $262.4
 $290.9
        
Weighted-average number of common shares outstanding - basic389.5
 397.7
 391.2
 399.5
       Dilutive effect of stock options and restricted shares7.7
 10.2
 7.4
 9.3
Weighted-average number of common shares outstanding - diluted397.2
 407.9
 398.6
 408.8
        
Earnings per share available to IPG common stockholders:       
       Basic$0.38
 $0.32
 $0.67
 $0.73
       Diluted$0.37
 $0.32
 $0.66
 $0.71

Note 4:Other Acquisitions
We continue to evaluate strategic opportunities to expand our industry expertise, strengthen our position in high-growth and key strategic geographical markets and industry sectors, advance our technological capabilities and improve our operational efficiency through both acquisitions and increased ownership interests in current investments. Our acquisitions typically provide for an initial payment at the time of closing and additional contingent purchase price payments based on the future performance of the acquired entity. We have entered into agreements that may require us to purchase additional equity interests in certain consolidated and unconsolidated subsidiaries. The amounts at which we record these transactions in our financial statements are based on estimates of the future financial performance of the acquired entity, the timing of the exercise of these rights, foreign currency exchange rates and other factors.
During the first nine monthshalf of 2017,2019, we completed seven acquisitions, includingone acquisition, a strategiccontent communications agency based in the U.K., an independent creative agency based in the U.K., a retail branding and design firm based in the U.S., a content creation and marketing agency based in the Netherlands, an independent media agency and digital consultancy based in Finland, and an integrated marketing communications agency based in Canada. All seven of our acquisitions were This acquisition was included in the Integrated Agency Networks ("IAN")IAN operating segment. During the first nine monthshalf of 2017,2019, we recorded approximately $48.1$2.4 of goodwill and intangible assets related to our acquisitions.
During the first nine monthshalf of 2016,2018, we completed ninetwo acquisitions, including a product and service design consultancy based in the U.S., an integrated healthcare marketing communications agency based in the U.S., a content creation and digital agency with offices in the U.S. and the U.K., a mobile consultancy and application development agency based in the U.K., a

9
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Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


branded content production agency specializing in sports and entertainment based in Australia, a full-service public relations and digital agency based in China, a search engine optimizationBrazil and digital contentan entertainment marketing and brand licensing agency in the fashion and lifestyle sector based in the U.K., a mobile focused digital agency based in the U.K. and a business consultancy services agency based in Australia. Of Both of our nine acquisitions three were included in the IAN operating segment, and six were included in the Constituency Management Group ("CMG")CMG operating segment. During the first nine monthshalf of 2016,2018, we recorded approximately $147.9$14.2 of goodwill and intangible assets related to our acquisitions, primarily in CMG.acquisitions.
The results of operations of our acquired companies were included in our consolidated results from the closing date of each acquisition. Details of cash paid for current and prior years' acquisitions are listed below.
Nine months ended
September 30,		Six months ended
June 30,
2017 20162019 2018
Cost of investment: current-year acquisitions$28.1
 $61.0
$0.6
 $8.7
Cost of investment: prior-year acquisitions50.0
 37.2
13.0
 16.2
Less: net cash acquired(6.4) (13.6)—
 (0.4)
Total cost of investment71.7
 84.6
13.6
 24.5
Operating payments 1
37.5
 18.7
9.1
 18.2
Total cash paid for acquisitions 2
$109.2
 $103.3
$22.7
 $42.7
 
1Represents cash payments for amounts that have been recognized in operating expenses since the date of acquisition either relating to adjustments to estimates in excess of the initial value of contingent payments recorded or were contingent upon the future employment of the former owners of the acquired companies. Amounts are reflected in the operating section of the unaudited Consolidated Statements of Cash Flows.
2
Of the total cash paid for acquisitions, $22.6$0.6 and $47.9$8.5 for the ninesix months ended SeptemberJune 30, 20172019 and 2016,2018, respectively, are classified under the investing section of the unaudited Consolidated Statements of Cash Flows, as acquisitions, net of cash acquired. These amounts relate to initial payments for new transactions. Of the total cash paid for acquisitions, $49.1$13.0 and $36.7$16.0 for the ninesix months ended SeptemberJune 30, 20172019 and 2016,2018, respectively, are classified under the financing section of the unaudited Consolidated Statements of Cash Flows as acquisition-related payments. These amounts relate to deferred payments and increases in our ownership interest for prior acquisitions.

13
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Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)

Redeemable Noncontrolling Interests
Many of our acquisitions include provisions under which the noncontrolling equity owners may require us to purchase additional interests in a subsidiary at their discretion. Redeemable noncontrolling interests are adjusted quarterly to their estimated redemption value, but not less than their initial fair value. Any adjustments to the redemption value impact retained earnings or additional paid in capital, except for foreign currency translation adjustments.
The following table presents changes in our redeemable noncontrolling interests.
 Six months ended
June 30,
 2019 2018
Balance at beginning of period$167.9
 $252.1
Change in related noncontrolling interests balance0.2
 (14.6)
Changes in redemption value of redeemable noncontrolling interests:   
Additions24.3
 0.0
Redemptions(3.1) (32.2)
Redemption value adjustments(1.0) (39.5)
Balance at end of period$188.3
 $165.8

 Nine months ended
September 30,
 2017 2016
Balance at beginning of period$252.8
 $251.9
Change in related noncontrolling interests balance(9.5) (1.5)
Changes in redemption value of redeemable noncontrolling interests:   
Additions3.4
 6.8
Redemptions and other(18.5) (14.8)
Redemption value adjustments9.8
 4.5
Balance at end of period$238.0
 $246.9



Note 6: Earnings Per Share
The following sets forth basic and diluted earnings per common share available to IPG common stockholders.
10
 Three months ended
June 30,		 Six months ended
June 30,
 2019 2018 2019 2018
Net income available to IPG common stockholders$169.5
 $145.8
 $161.5
 $131.7
        
Weighted-average number of common shares outstanding - basic386.2
 383.6
 385.4
 383.5
       Dilutive effect of stock options and restricted shares5.0
 5.9
 4.7
 5.4
Weighted-average number of common shares outstanding - diluted391.2
 389.5
 390.1
 388.9
        
Earnings per share available to IPG common stockholders:       
       Basic$0.44
 $0.38
 $0.42
 $0.34
       Diluted$0.43
 $0.37
 $0.41
 $0.34


Note 7:  Supplementary Data
Accrued Liabilities
The following table presents the components of accrued liabilities.
 June 30,
2019		 December 31,
2018
Salaries, benefits and related expenses$375.6
 $494.9
Interest40.2
 43.6
Acquisition obligations38.2
 65.7
Office and related expenses26.2
 52.2
Restructuring charges7.5
 0.0
Other138.7
 150.5
Total accrued liabilities$626.4
 $806.9



14
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Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)



Note 5:  Supplementary DataOther Expense, Net
Accrued Liabilities
The following table presents the components of accrued liabilities.
 September 30,
2017		 December 31,
2016
Salaries, benefits and related expenses$341.3
 $499.0
Acquisition obligations53.2
 77.5
Office and related expenses48.8
 46.7
Interest17.0
 17.3
Other90.4
 153.5
Total accrued liabilities$550.7
 $794.0

Other (Expense) Income, Net
Results of operations for the three and ninesix months ended SeptemberJune 30, 20172019 and 20162018 include certain items that are not directly associated with our revenue-producing operations.
 Three months ended
June 30,		 Six months ended
June 30,
 2019 2018 2019 2018
Net losses on sales of businesses$(3.2) $(19.8) $(11.8) $(44.2)
Other(0.6) 3.5
 1.1
 3.5
Total other expense, net$(3.8) $(16.3) $(10.7) $(40.7)

 Three months ended
September 30,		 Nine months ended
September 30,
 2017 2016 2017 2016
Net (losses) gains on sales of businesses and investments$(6.2) $3.9
 $(18.3) $(14.6)
Other (expense) income, net(3.7) 1.4
 (6.2) 1.1
Total other (expense) income, net$(9.9) $5.3
 $(24.5) $(13.5)
Net (Losses) Gainslosses on Salessales of Businesses and Investments businesses – During the three and ninesix months ended SeptemberJune 30, 2017,2019, the amounts recognized are primarilywere related to sales of businesses and the classification of certain assets and liabilities, consisting primarily of accounts receivable and accounts payable, respectively,cash, as held for sale within our IAN operatingreportable segment. During the three and ninesix months ended SeptemberJune 30, 2016,2018, the amounts recognized are primarilywere related to sales of businesses and the classification of certain assets and liabilities, consisting primarily of cash, as held for sale within our IAN operatingreportable segment. The businesses held for sale primarily represent unprofitable, non-strategic agencies which are expected to be sold within the next twelve months.

Other – During the three and six months ended June 30, 2019, the amounts recognized were primarily related to a sale of an equity investment.

Share Repurchase Program
In February 2017, our Board of Directors (the "Board") authorized a new share repurchase program to repurchase from time to time up to $300.0, excluding fees, of our common stock (the "2017 Share Repurchase Program"), which wasOn July 2, 2018, in addition toconnection with the remaining amount available to be repurchased from the $300.0 authorization made by the Board in February 2016 (the "2016 Share Repurchase Program").
We may effect such repurchases through open market purchases, trading plans established in accordance with SEC rules, derivative transactions or other means. We expect to continue to repurchase our common stock in future periods, although the timing and amountannouncement of the Acxiom Acquisition, we announced that share repurchases will depend on market conditions and other funding requirements.
The following table presents our share repurchase activity under our share repurchase programsbe suspended for a period of time in order to reduce the nine months ended September 30, 2017 and 2016.
 Nine months ended
September 30,
 2017 2016
Number of shares repurchased9.4
 8.5
Aggregate cost, including fees$216.0
 $193.3
Average price per share, including fees$22.92
 $22.69
We fully utilizedincreased debt levels incurred in conjunction with the 2016 Share Repurchase Program during the third quarter of 2017.acquisition. As of SeptemberJune 30, 2017, $239.5,2019, $338.4, excluding fees, remains available for repurchase under the 2017 Share Repurchase Program. The 2017 Share Repurchase Program hasshare repurchase programs authorized in previous years, which have no expiration date.



11
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Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


Note 6:8:  Income Taxes
For the three and ninesix months ended SeptemberJune 30, 2017,2019, our effective income tax rates of 22.1% and 30.7%, respectively, wereprovision was positively impacted by a benefitthe settlement of $31.2 related to foreignstate income tax credits from distributions of unremitted earnings,audits, partially offset by losses in certain foreign jurisdictions where we receive no tax benefit due to 100% valuation allowances, and bynet losses on sales of businesses and the classification of certain assets as held for sale, for which we did not receive a full tax benefit. For the nine months ended September 30, 2017, our effective income tax rate was positively impacted by excess tax benefits on employee share-based payments, the majority of which is typically recognized in the first quarter due to the timing of the vesting of awards.
We have various tax years under examination by tax authorities in various countries, and in various states, such as New York, in which we have significant business operations. It is not yet known whether these examinations will, in the aggregate, result in our paying additional taxes. We believe our tax reserves are adequate in relation to the potential for additional assessments in each of the jurisdictions in which we are subject to taxation. We regularly assess the likelihood of additional tax assessments in those jurisdictions and, if necessary, adjust our reserves as additional information or events require.
With respect to all tax years open to examination by U.S. federal, various state and local, and non-U.S. tax authorities, we currently anticipate that total unrecognized tax benefits will decrease by an amount between $25.0$10.0 and $35.0$20.0 in the next twelve months, a portion of which will affect our effective income tax rate, primarily as a result of the settlement of tax examinations and the lapsing of statutes of limitations.
We are effectively settled with respect to U.S. federal income tax audits through 2012, with the exception of 2009. With limited exceptions, we are no longer subject to state and local income tax audits for years prior to 20072013 or non-U.S. income tax audits for years prior to 2006.2009.


Note 7:9:  Restructuring Charges
In the first quarter of 2019, the Company implemented a cost initiative (the "2019 Plan") to better align our cost structure with our revenue primarily related to specific client losses occurring in 2018, the components of which are listed below.

15
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Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)

 Three months ended
June 30, 2019		 Six months ended
June 30, 2019
Severance and termination costs$2.1
 $22.0
Lease restructuring costs0.0
 11.9
Total restructuring charges$2.1
 $33.9

Net restructuring charges was comprised of $27.6 at IAN and $5.6 at CMG for the first half of 2019. All restructuring actions were identified and initiated by the end of first quarter of 2019, with all actions substantially completed by the end of the second quarter of 2019. The amounts for the three months ended June 30, 2019 are adjustments to the actions taken in the first quarter, and we don't expect any further restructuring activities.
During the first half of 2019, severance and termination costs related to a planned reduction in workforces of 627 employees. The employee groups affected include executive, regional and account management as well as administrative, creative and media production personnel. Cash payments of $14.5 were made during the first half of 2019, with the remaining liability of $7.5 expected to be paid by the end of the third quarter of 2019.
Lease impairment costs relate to the office spaces that were vacated as part of the 2019 Plan, which includes impairment on the right-of-use asset of operating leases, furniture, and leasehold improvements. Given the remaining lease terms involved, the lease obligation will be paid out over a period of several years, net of sublease income.

Note 10:  Incentive Compensation Plans
We issue stock-based compensation and cash awards to our employees under a plan established by the Compensation and Leadership Talent Committee of the Board of Directors (the “Compensation Committee”"Compensation Committee") and approved by our shareholders.
We issued the following stock-based awards under the 2014 and 2019 Performance Incentive PlanPlans (the "2014 PIP"and 2019 PIPs") during the ninesix months ended SeptemberJune 30, 2017.2019.
 Awards 
Weighted-average
grant-date fair value
(per award)
Restricted stock (shares or units)2.4
 $22.84
Performance-based stock (shares)2.1
 $20.16
Total stock-based compensation awards4.5
 

 Awards 
Weighted-average
grant-date fair value
(per award)
Stock-settled awards0.8
 $24.20
Performance-based awards4.8
 $20.06
Total stock-based compensation awards5.6
  

During the ninesix months ended SeptemberJune 30, 2017,2019, the Compensation Committee granted performance cash awards under the 2014 and 2019 PIPs and restricted cash awards under the 2014 PIP2009 Restricted Cash Plan with a total annual target value of $54.3$40.6 and $2.8,$19.6, respectively. Cash awards are expensed over the vesting period, which is typically three years.


Note 8:11:  Accumulated Other Comprehensive Loss, Net of Tax
The following tables present the changes in accumulated other comprehensive loss, net of tax, by component.
 
Foreign Currency
Translation Adjustments
 
Derivative
Instruments
 Defined Benefit Pension and Other Postretirement Plans Total
Balance as of December 31, 2018$(716.4) $(5.3) $(219.4) $(941.1)
Other comprehensive income before reclassifications12.3
 0.0
 1.5
 13.8
Amount reclassified from accumulated other comprehensive loss, net of tax5.8
 1.0
 2.6
 9.4
Balance as of June 30, 2019$(698.3) $(4.3) $(215.3) $(917.9)

 
Foreign Currency
Translation Adjustments
 
Available-for-Sale
Securities
 
Derivative
Instruments
 Defined Benefit Pension and Other Postretirement Plans Total
Balance as of December 31, 2016$(716.7) $0.6
 $(8.4) $(238.0) $(962.5)
Other comprehensive income before reclassifications113.4
 0.0
 0.0
 6.3
 119.7
Amount reclassified from accumulated other comprehensive loss, net of tax1.8
 (0.6) 1.0
 7.9
 10.1
Balance as of September 30, 2017$(601.5) $0.0
 $(7.4) $(223.8) $(832.7)


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Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)



 
Foreign Currency
Translation Adjustments
 
Derivative
Instruments
 Defined Benefit Pension and Other Postretirement Plans Total
Balance as of December 31, 2017$(585.3) $(6.8) $(235.7) $(827.8)
Other comprehensive loss before reclassifications(92.2) 0.0
 (0.9) (93.1)
Amount reclassified from accumulated other comprehensive loss, net of tax13.4
 0.8
 3.3
 17.5
Balance as of June 30, 2018$(664.1) $(6.0) $(233.3) $(903.4)

 
Foreign Currency
Translation Adjustments
 
Available-for-Sale
Securities
 
Derivative
Instruments
 Defined Benefit Pension and Other Postretirement Plans Total
Balance as of December 31, 2015$(665.6) $1.3
 $(9.6) $(171.7) $(845.6)
Other comprehensive income before reclassifications42.3
 0.4
 0.0
 (65.0) (22.3)
Amount reclassified from accumulated other comprehensive loss, net of tax2.3
 (1.2) 0.9
 3.1
 5.1
Balance as of September 30, 2016$(621.0) $0.5
 $(8.7) $(233.6) $(862.8)
Amounts reclassified from accumulated other comprehensive loss, net of tax, for the three and ninesix months ended SeptemberJune 30, 20172019 and 20162018 are as follows:
 Three months ended
June 30,		 Six months ended
June 30,		 Affected Line Item in the Consolidated Statements of Operations
 2019 2018 2019 2018 
Foreign currency translation adjustments$4.6
 $0.9
 $5.8
 $13.4
 Other expense, net
Losses on derivative instruments0.6
 0.6
 1.2
 1.1
 Interest expense
Amortization of defined benefit pension and postretirement plan items1.6
 2.0
 3.3
 4.1
 Other expense, net
Tax effect(0.4) (0.5) (0.9) (1.1) Provision for income taxes
Total amount reclassified from accumulated other comprehensive loss, net of tax$6.4
 $3.0
 $9.4
 $17.5
  

 Three months ended
September 30,		 Nine months ended
September 30,		 Affected Line Item in the Consolidated Statements of Operations
 2017 2016 2017 2016 
Foreign currency translation adjustments 1
$1.5
 $(4.2) $1.8
 $2.3
 Other (expense) income, net
Gains on available-for-sale securities(0.7) (0.1) (0.7) (1.3) Other (expense) income, net
Losses on derivative instruments0.5
 0.5
 1.6
 1.5
 Interest expense
Amortization of defined benefit pension and postretirement plan items5.7
 1.3
 9.2
 4.0
 Other (expense) income, net
Tax effect(0.6) (0.4) (1.8) (1.4) Provision for income taxes
Total amount reclassified from accumulated other comprehensive loss, net of tax$6.4
 $(2.9) $10.1
 $5.1
  

17
1These foreign currency translation adjustments are primarily a result of the sales of businesses.
Table of Contents
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)

Note 9:12:  Employee Benefits
We have a defined benefit pension plan that covers certain U.S. employees (the “Domestic Pension Plan”). We also have numerous funded and unfunded plans outside the U.S. The Interpublic Limited Pension Plan in the U.K. is a defined benefit plan and is our most material foreign pension plan in terms of the benefit obligation and plan assets. Some of our domestic and foreign subsidiaries provide postretirement health benefits and life insurance to eligible employees and, in certain cases, their dependents. The domestic postretirement benefit plan is our most material postretirement benefit plan in terms of the benefit obligation. Certain immaterial foreign pension and postretirement benefit plans have been excluded from the table below.
The components of net periodic cost for the Domestic Pension Plan, the significant foreign pension plans and the domestic postretirement benefit plan are listed below.
 Domestic Pension Plan Foreign Pension Plans Domestic Postretirement Benefit Plan
Three months ended June 30,2019 2018 2019 2018 2019 2018
Service cost$0.0
 $0.0
 $1.1
 $0.9
 $0.0
 $0.0
Interest cost1.2
 1.1
 3.1
 3.4
 0.3
 0.2
Expected return on plan assets(1.4) (1.5) (4.4) (4.8) 0.0
 0.0
Amortization of:           
Prior service cost (credit)0.0
 0.0
 0.1
 0.1
 (0.1) (0.1)
Unrecognized actuarial losses0.4
 0.4
 1.2
 1.5
 0.0
 0.1
Net periodic cost$0.2
 $0.0
 $1.1
 $1.1
 $0.2
 $0.2

 Domestic Pension Plan Foreign Pension Plans Domestic Postretirement Benefit Plan
Three months ended September 30,2017 2016 2017 2016 2017 2016
Service cost$0.0
 $0.0
 $1.0
 $2.4
 $0.0
 $0.0
Interest cost1.3
 1.4
 3.4
 4.1
 0.3
 0.4
Expected return on plan assets(1.5) (1.5) (4.5) (4.9) 0.0
 0.0
Settlements and curtailments0.0
 0.0
 4.0
 0.1
 0.0
 0.0
Amortization of:           
Prior service cost (credit)0.0
 0.0
 0.1
 0.1
 (0.1) (0.1)
Unrecognized actuarial losses0.3
 0.3
 1.4
 0.9
 0.0
 0.0
Net periodic cost$0.1
 $0.2
 $5.4
 $2.7
 $0.2
 $0.3



13
 Domestic Pension Plan Foreign Pension Plans Domestic Postretirement Benefit Plan
Six months ended June 30,2019 2018 2019 2018 2019 2018
Service cost$0.0
 $0.0
 $2.3
 $2.0
 $0.0
 $0.0
Interest cost2.4
 2.2
 6.3
 6.8
 0.6
 0.5
Expected return on plan assets(2.9) (3.3) (8.8) (9.7) 0.0
 0.0
Settlements and curtailments0.0
 0.0
 0.0
 0.2
 0.0
 0.0
Amortization of:           
Prior service cost (credit)0.0
 0.0
 0.1
 0.1
 (0.1) (0.1)
Unrecognized actuarial losses0.9
 0.8
 2.4
 3.0
 0.0
 0.1
Net periodic cost$0.4
 $(0.3) $2.3
 $2.4
 $0.5
 $0.5
Table of Contents
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


 Domestic Pension Plan Foreign Pension Plans Domestic Postretirement Benefit Plan
Nine months ended September 30,2017 2016 2017 2016 2017 2016
Service cost$0.0
 $0.0
 $2.9
 $7.3
 $0.0
 $0.0
Interest cost3.8
 4.4
 10.0
 13.3
 0.9
 1.1
Expected return on plan assets(4.6) (4.9) (13.2) (15.5) 0.0
 0.0
Settlements and curtailments0.0
 0.0
 4.0
 0.3
 0.0
 0.0
Amortization of:           
Prior service cost (credit)0.0
 0.0
 0.1
 0.1
 (0.1) (0.1)
Unrecognized actuarial losses1.1
 1.0
 4.1
 2.7
 0.0
 0.0
Net periodic cost$0.3
 $0.5
 $7.9
 $8.2
 $0.8
 $1.0

The components of net periodic cost other than the service cost component are included in the line item “Other (expense) income,expense, net” in the Consolidated Statements of Operations.
During the ninesix months ended SeptemberJune 30, 2017,2019, we contributed $2.3$1.1 and $13.0$8.7 of cash to our domestic and foreign pension plans, respectively. For the remainder of 2017,2019, we expect to contribute approximately $0.3$1.0 and $5.0$8.0 of cash to our domestic and foreign pension plans, respectively.




1418
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Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)



Note 10:13:  Segment Information
As of SeptemberJune 30, 2017,2019, we have two reportable segments: IAN and CMG. IAN is comprised of McCann Worldgroup, Foote, Cone & Belding ("FCB"), MullenLowe Group, IPG Mediabrands, Acxiom, our digital specialist agencies and our domestic integrated agencies. CMG is comprised of a number of our specialist marketing services offerings. We also report results for the “Corporate and other” group. TheBeginning in the first quarter of 2019, Acxiom's results are presented in IAN although we continue to evaluate our financial reporting structure, and the profitability measure employed by our chief operating decision maker for allocating resources to operating divisions and assessing operating division performance is segment operating income (loss). Segment information is presented consistently with the basis described in our 2016 Annual Report on Form 10-K.
EBITA. Summarized financial information concerning our reportable segments is shown in the following tables.table.
Three months ended
September 30,		 Nine months ended
September 30,		Three months ended
June 30,		 Six months ended
June 30,
2017 2016 2017 20162019 2018 2019 2018
Revenue:       
Total revenue:       
IAN$1,520.2
 $1,503.2
 $4,465.6
 $4,453.3
$1,968.6
 $1,812.5
 $3,840.8
 $3,498.0
CMG382.4
 419.0
 1,075.8
 1,128.8
551.6
 579.3
 1,040.6
 1,062.9
Total$1,902.6
 $1,922.2
 $5,541.4
 $5,582.1
$2,520.2
 $2,391.8
 $4,881.4
 $4,560.9
              
Segment operating income (loss):       
Net revenue:       
IAN$1,805.8
 $1,629.1
 $3,517.0
 $3,110.4
CMG320.1
 319.1
 613.7
 611.8
Total$2,125.9
 $1,948.2
 $4,130.7
 $3,722.2
       
Segment EBITA:       
IAN$183.9
 $184.1
 $402.1
 $424.1
$261.7
 $242.2
 $376.2
 $303.2
CMG50.1
 54.8
 127.4
 125.2
43.6
 43.2
 45.5
 63.9
Corporate and other(14.9) (30.9) (74.2) (94.0)(19.8) (31.0) (64.4) (68.6)
Total219.1
 208.0
 455.3
 455.3
$285.5
 $254.4
 $357.3
 $298.5
              
Interest expense(21.0) (21.7) (67.6) (68.8)
Interest income4.1
 4.7
 14.0
 16.1
Other (expense) income, net(9.9) 5.3
 (24.5) (13.5)
Income before income taxes$192.3
 $196.3
 $377.2
 $389.1
Amortization of acquired intangibles:       
IAN$20.2
 $3.9
 $40.7
 $8.0
CMG1.1
 1.3
 2.2
 2.5
Corporate and other0.0
 0.0
 0.0
 0.0
Total$21.3
 $5.2
 $42.9
 $10.5
              
Depreciation and amortization of property and equipment and intangible assets:       
Depreciation:       
IAN$30.7
 $29.1
 $90.8
 $85.9
$45.2
 $31.9
 $87.5
 $65.2
CMG4.6
 4.9
 15.2
 14.6
4.9
 4.7
 9.5
 9.6
Corporate and other6.9
 5.7
 18.5
 17.0
1.6
 2.2
 4.2
 4.7
Total$42.2
 $39.7
 $124.5
 $117.5
$51.7
 $38.8
 $101.2
 $79.5
              
Capital expenditures:              
IAN$29.3
 $39.7
 $77.9
 $86.9
$35.9
 $31.9
 $62.4
 $47.7
CMG6.2
 4.7
 12.9
 8.4
2.9
 1.9
 3.9
 3.0
Corporate and other4.3
 7.1
 17.9
 19.2
8.5
 4.9
 13.8
 10.8
Total$39.8
 $51.5
 $108.7
 $114.5
$47.3
 $38.7
 $80.1
 $61.5
       
September 30,
2017		 December 31,
2016		    
Total assets:       
IAN$10,257.7
 $10,660.0
    
CMG1,433.4
 1,428.3
    
Corporate and other25.0
 396.9
    
Total$11,716.1
 $12,485.2
    




1519
Table of Contents
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)



 June 30,
2019		 December 31,
2018
Total assets 1:
   
IAN$14,323.1
 $13,867.9
CMG1,695.1
 1,516.7
Corporate and other508.7
 235.7
Total$16,526.9
 $15,620.3
1 Results for December 31, 2018 have been restated to conform to the current-period presentation.
The following table presents the reconciliation of segment EBITA to Income before income taxes.
 Three months ended
June 30,		 Six months ended
June 30,
 2019 2018 2019 2018
IAN EBITA$261.7
 $242.2
 $376.2
 $303.2
CMG EBITA43.6
 43.2
 45.5
 63.9
Corporate and other EBITA(19.8) (31.0) (64.4) (68.6)
Less: consolidated amortization of acquired intangibles21.3
 5.2
 42.9
 10.5
Operating income264.2
 249.2
 314.4
 288.0
Total (expenses) and other income(47.7) (37.7) (96.6) (78.0)
Income before income taxes$216.5
 $211.5
 $217.8
 $210.0



Note 11:14:  Fair Value Measurements
Authoritative guidance for fair value measurements establishes a fair value hierarchy which requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:
Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
  
Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
   
Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Financial Instruments that are Measured at Fair Value on a Recurring Basis
We primarily apply the market approach to determine the fair value of financial instruments that are measured at fair value on a recurring basis. There were no changes to our valuation techniques used to determine the fair value of financial instruments during the ninesix months ended SeptemberJune 30, 2017.2019. The following tables present information about our financial instruments measured at fair value on a recurring basis as of SeptemberJune 30, 20172019 and December 31, 20162018, and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value.

 September 30, 2017 Balance Sheet Classification
 Level 1 Level 2 Level 3 Total 
Assets         
Cash equivalents$153.2
 $0.0
 $0.0
 $153.2
 Cash and cash equivalents
Short-term marketable securities0.1
 0.0
 0.0
 0.1
 Other current assets
Long-term investments0.4
 0.0
 0.0
 0.4
 Other non-current assets
Total$153.7
 $0.0
 $0.0
 $153.7
  
          
As a percentage of total assets1.3% 0.0% 0.0% 1.3%  
          
Liabilities         
Contingent acquisition obligations 1
$0.0
 $0.0
 $164.2
 $164.2
  
          
 December 31, 2016 Balance Sheet Classification
 Level 1 Level 2 Level 3 Total 
Assets         
Cash equivalents$440.8
 $0.0
 $0.0
 $440.8
 Cash and cash equivalents
Short-term marketable securities3.0
 0.0
 0.0
 3.0
 Other current assets
Long-term investments0.4
 0.0
 0.0
 0.4
 Other non-current assets
Total$444.2
 $0.0
 $0.0
 $444.2
  
          
As a percentage of total assets3.6% 0.0% 0.0% 3.6%  
          
Liabilities         
Contingent acquisition obligations 1
$0.0
 $0.0
 $205.4
 $205.4
  
20
Table of Contents
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)

 June 30, 2019 Balance Sheet Classification
 Level 1 Level 2 Level 3 Total 
Assets         
Cash equivalents$260.9
 $0.0
 $0.0
 $260.9
 Cash and cash equivalents
Liabilities         
Contingent acquisition obligations 1
$0.0
 $0.0
 $110.6
 $110.6
 Accrued liabilities and Other non-current liabilities
          
 December 31, 2018 Balance Sheet Classification
 Level 1 Level 2 Level 3 Total 
Assets         
Cash equivalents$132.1
 $0.0
 $0.0
 $132.1
 Cash and cash equivalents
Liabilities         
Contingent acquisition obligations 1
$0.0
 $0.0
 $148.4
 $148.4
 Accrued liabilities and Other non-current liabilities
 

1Contingent acquisition obligations includes deferred acquisition payments and unconditional obligations to purchase additional noncontrolling equity shares of consolidated subsidiaries. Fair value measurement of the obligations is based upon actual and projected operating performance targets as specified in the related agreements. The decrease in this balance of $41.2$37.8 from December 31, 20162018 to SeptemberJune 30, 20172019 is primarily due to payments and a reclassification from an arrangement during the second quarter of $91.4, partially offset by acquisitions and exercised options of $38.2.2019. The amounts payable within the next twelve months are classified in accrued liabilities; any amounts payable thereafter are classified in other non-current liabilities.

16
Table of Contents
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


Financial Instruments that are not Measured at Fair Value on a Recurring Basis
The following table presents information about our financial instruments that are not measured at fair value on a recurring basis as of SeptemberJune 30, 20172019 and December 31, 2016,2018, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.
 June 30, 2019 December 31, 2018
 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Total long-term debt$0.0
 $3,738.8
 $39.2
 $3,778.0
 $0.0
 $3,605.6
 $38.0
 $3,643.6

 September 30, 2017 December 31, 2016
 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Total long-term debt$0.0
 $1,606.2
 $45.9
 $1,652.1
 $0.0
 $1,574.7
 $65.4
 $1,640.1
Our long-term debt is comprised of senior notes, a term loan and other notes payable. The fair value of our senior notes, which are traded over-the-counter, is based on quoted prices for such securities, but for which fair value can also be derived from inputsin markets that are readily observable.not active. Therefore, these senior notes are classified as Level 2 within the fair value hierarchy. Our term loan is a fixed price commitment that cannot be traded on the open market, and therefore is classified as Level 2 within the fair value hierarchy. Our other notes payable are not actively traded, and their fair value is not solely derived from readily observable inputs. Thus, theThe fair value of our other notes payable is determined based on a discounted cash flow model and other proprietary valuation methods, and therefore areis classified as Level 3 within the fair value hierarchy. See Note 24 for further information on our long-term debt.
Non-financial Assets and Liabilities that are Measured at Fair Value on a Recurring Basis
Certain non-financial assets and liabilities are measured at fair value on a recurring basis, primarily accrued restructuring charges.
Non-financial Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis
Certain non-financial assets and liabilities are measured at fair value on a nonrecurring basis, primarily goodwill, intangible assets, and property and equipment. Accordingly, these assets are not measured and adjusted to fair value on an ongoing basis but are subject to periodic evaluations for potential impairment.


Note 12:15:  Commitments and Contingencies
Legal Matters
We are involved in various legal proceedings, and subject to investigations, inspections, audits, inquiries and similar actions by governmental authorities, arising in the normal course of business. The types of allegations that arise in connection with such legal proceedings may vary in nature, but can include claims related to contract, employment, tax and intellectual property matters. We evaluate all cases each reporting period and record liabilities for losses from legal proceedings when we determine that it is probable that the outcome in a legal proceeding will be unfavorable and the amount, or potential range, of loss can be reasonably estimated. In certain cases, we cannot reasonably estimate the potential loss because, for example, the litigation is in its early stages. While any outcome related to litigation or such governmental proceedings in which we are involved cannot be predicted

21
Table of Contents
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)

with certainty, management believes that the outcome of these matters, individually and in the aggregate, will not have a material adverse effect on our financial condition, results of operations or cash flows.
As previously disclosed, on April 10, 2015, a federal judge in Brazil authorized the search of the records of an agency's offices in São Paulo and Brasilia, in connection with an ongoing investigation by Brazilian authorities involving payments potentially connected to local government contracts. The Company had previously investigated the matter and taken a number of remedial and disciplinary actions. The Company is in the process of concluding a settlement related to these matters with government agencies.
The Company confirmed that one of its standalone domestic agencies has been contacted by the Department of Justice Antitrust Division for documents regarding video production practices and is cooperating with the government.
Guarantees
As discussed in our 20162018 Annual Report on Form 10-K, we have guaranteed certain obligations of our subsidiaries relating principally to operating leases, and uncommitted lines of credit and cash pooling arrangements. As of certain subsidiaries. TheJune 30, 2019 and December 31, 2018, the amount of parent company guarantees on lease obligations was $827.8$766.3 and $857.3 as$824.5, respectively, the amount of September 30, 2017parent company guarantees relating to uncommitted lines of credit was $296.7 and December 31, 2016,$349.1, respectively, and the amount of parent company guarantees related to daylight overdrafts, primarily relatingutilized to uncommitted linesmanage intra-day overdrafts due to timing of credittransactions under cash pooling arrangements without resulting in incremental borrowings, was $413.8$205.2 and $395.6 as of September 30, 2017 and December 31, 2016,$207.8, respectively.



17
Table of Contents
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


Note 13:16:  Recent Accounting Standards
Accounting pronouncements not listed below were assessed and determined to be not applicable or are expected to have minimal impact on our Consolidated Financial Statements.
Derivatives and HedgingLeases
In August 2017,February 2016, the Financial Accounting Standards Board (the "FASB"("FASB") issued amended guidance on hedge accounting which expandslease accounting. We adopted the standard using the modified retrospective approach with an entity’s ability to hedge non-financial andeffective date of January 1, 2019. Prior-year financial risk components and alignsstatements were not recast under the recognition andnew standard. The adoption resulted in the presentation of the effects of the hedging instrumenta right-of-use asset and the hedged item in the financial statements. The new guidance also eliminates the requirement to separately measure and report hedge ineffectiveness. This amended guidance is effective beginning January 1, 2019, with early adoption permitted. We are currently assessing the impact the adoption of the amended guidance will havelease liability on our Consolidated Financial Statements.
Pensions
In March 2017, the FASB issued amended guidance which requires presentation of all net periodic pensionBalance Sheet and postretirement benefit costs, other than service costs, in non-operating expenses in the Consolidated Statement of Operations. We have early adopted this amended guidance retrospectively as of the quarter ended March 31, 2017 using the practical expedient, which permits the use of amounts disclosed incorresponding impacts on our Employee Benefits note for prior comparative periods as the estimation basis for applying the retrospective presentation requirements. This resulted in the reclassification of a portion of postretirement costs from "Salaries and related expenses" to "Other (expense) income, net" in the amount of $4.8 and $0.8 for the three months ended September 30, 2017 and 2016, respectively, and $6.4 and $2.4 for the nine months ended September 30, 2017 and 2016, respectively.
Restricted Cash
In November 2016, the FASB issued amended guidance which requires that the Consolidated Statement of Cash Flows, present the change during the period in the total cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Webut did not have early adopted this amended guidance retrospectively as of the quarter ended March 31, 2017. Thea significant impact on our Consolidated Statements of Cash FlowsOperations. See Note 3 for further discussion on our adoption of the nine months ended September 30, 2017 and 2016 now include restricted cash balances of $2.5 and $3.2, respectively, in the beginning-of-period totals and $3.1 and $3.9, respectively, in the end-of-period totals.new leases standard.
Financial Instrument Credit Losses
In June 2016, the FASB issued amended guidance on the accounting for credit losses on certain types of financial instruments, including trade receivables. The new model uses a forward-looking expected loss method, as opposed to the incurred loss method in current U.S. GAAP, which will generally result in earlier recognition of allowances for losses. This amended guidance is effective beginning January 1, 2020, with early adoption permitted as early as January 1, 2019. We are currently assessing the impact the adoption of the amended guidance will have on our Consolidated Financial Statements.
Leases
In February 2016, the FASB issued amended guidance on lease accounting which requires an entity to recognize a right-of-use asset and a corresponding lease liability on its balance sheet for virtually all of its leases with a term of more than 12 months, including those classified as operating leases. Both the asset and liability will initially be measured at the present value of the future minimum lease payments, with the asset being subject to adjustments such as initial direct costs. Consistent with current U.S. GAAP, the presentation of expenses and cash flows will depend primarily on the classification of the lease as either a finance or an operating lease. The new standard also requires additional quantitative and qualitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases in order to provide additional information about the nature of an organization’s leasing activities. This amended guidance, which will be effective beginning January 1, 2019, requires modified retrospective application, with early adoption permitted. We expect the adoption of this amended guidance to have a significant impact on our Consolidated Balance Sheets but not on our Consolidated Statements of Operations.
Fair Value Measurements
In January 2016, the FASB issued amended guidance which updates the fair value presentation requirements for certain financial instruments. Equity investments with readily determinable fair values, other than those accounted for using the equity method of accounting, will be measured at fair value with changes recorded through current earnings rather than other comprehensive income. This amended guidance will be effective for us beginning January 1, 2018, and is required to be adopted prospectively with a cumulative-effect adjustment recorded on our Consolidated Balance Sheets, if applicable. We do not expect the adoption of this amended guidance to have a significant impact on our Consolidated Financial Statements.

18
Table of Contents
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


Revenue Recognition
In May 2014, the FASB issued amended guidance on revenue recognition which requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. We expect to adopt the standard, which is effective January 1, 2018, using the full retrospective method. The standard impacts the timing of revenue recognition between quarters, primarily as a result of estimating variable consideration. We have determined that the standard will result in an increase in the number of performance obligations within certain of our contractual arrangements. The standard will also result in an increase in third party costs being included in revenue, primarily in connection with our events businesses, which will have no impact on operating income or net income. Additionally, we continue to evaluate the disclosures that may be required.

Note 14:  Subsequent Events
On October 25, 2017, we amended and restated our Credit Agreement, which was most recently amended and restated on October 20, 2015. The amendment increases the revolving commitments under the Credit Agreement from $1,000.0 to $1,500.0 and extends the Credit Agreement's expiration to October 25, 2022. The Credit Agreement is a revolving facility, under which amounts borrowed by us or any of our subsidiaries designated under the Credit Agreement may be repaid and reborrowed. The cost structure, financial covenants and the ability to increase the commitments under the Credit Agreement from time to time by an additional amount of up to $250.0 remain unchanged by the amendment.
On October 25, 2017, the Company increased the maximum aggregate amount outstanding at any time under our commercial paper program from $1,000.0 to $1,500.0. Borrowings under the program continue to be supported by the Credit Agreement, and the proceeds of which will be used for working capital and general corporate purposes, including the repayment of maturing indebtedness and other short-term liquidity needs.

Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help you understand The Interpublic Group of Companies, Inc. and its subsidiaries (the "Company," "IPG," "we," "us" or "our"). MD&A should be read in conjunction with our unaudited Consolidated Financial Statements and the accompanying notes included in this report and our 20162018 Annual Report on Form 10-K, as well as our other reports and filings with the Securities and Exchange Commission (the "SEC"). Our Annual Report includes additional information about our significant accounting policies and practices as well as details about the most significant risks and uncertainties associated with our financial and operating results. Our MD&A includes the following sections:
EXECUTIVE SUMMARY provides a discussion about our strategic outlook, factors influencing our business and an overview of our results of operations.
RESULTS OF OPERATIONS provides an analysis of the consolidated and segment results of operations for the periods presented.
LIQUIDITY AND CAPITAL RESOURCES provides an overview of our cash flows, funding requirements, financing and sources of funds, and debt credit ratings.
CRITICAL ACCOUNTING ESTIMATES provides an update to the discussion in our 20162018 Annual Report on Form 10-K of our accounting policies that require critical judgment, assumptions and estimates.
RECENT ACCOUNTING STANDARDS, by reference to Note 1316 to the unaudited Consolidated Financial Statements, provides a discussion of certain accounting standards that have been recently adopted or that have not yet been required to be implemented and may be applicable to our future operations.

NON-GAAP FINANCIAL MEASURE, provides a reconciliation of non-GAAP financial measure with the most directly comparable generally accepted accounting principles in the United States ("U.S. GAAP") financial measures and sets forth the reasons we believe that presentation of the non-GAAP financial measure contained therein provides useful information to investors regarding our results of operations and financial condition.

EXECUTIVE SUMMARY
We are one of the world’s premier global advertising and marketing services companies. Our companies specialize in consumer advertising, digital marketing, media planning and buying, public relations and specialized communications disciplines. Our agencies create customized marketing programs for clients that range in scale from large global marketers to regional and local clients. Comprehensive global services are critical to effectively serve our multinational and local clients in markets throughout the world as they seek to build brands, increase sales of their products and services, and gain market share.
We operate in a media landscape that continues to evolve at a rapid pace. Media channels continue to fragment, and clients face an increasingly complex consumer environment. To stay ahead of these challenges and to achieve our objectives, we have made and continue to make investments in creative and strategic talent in areas including fast-growth digital marketing channels, high-growth geographic regions and strategic world markets. We consistently review opportunities within our Company to enhance our operations through mergersacquisitions and strategic alliances as well as through the development ofand internal programs that encourage intra-company collaboration. As appropriate, we also develop relationships with technology and emerging media companies that are building leading-edge marketing tools that complement our agencies' skill sets and capabilities.
Our financial goals include competitive organic net revenue growth and operatingexpansion of EBITA margin, expansion,as defined and discussed within the Non-GAAP Financial Measure section of this MD&A, which we expect will further strengthen our balance sheet and total liquidity and increase value to our shareholders. Accordingly, we remain focused on meeting the evolving needs of our clients while concurrently managing our cost structure. We continually seek greater efficiency in the delivery of our services, focusing on more effective resource utilization, including the productivity of our employees, real estate, information technology and shared services, such as finance, human resources and legal. The improvements we have made and continue to make in our financial reporting and business information systems in recent years allow us more timely and actionable insights from our global operations. Our disciplined approach to our balance sheet and liquidity provides us with a solid financial foundation and financial flexibility to manage and grow our business. We believe that our strategy and execution position us to meet our financial goals and to deliver long-term shareholder value.
The following tables present a summary of financial performance for the three and nine months ended September 30, 2017 and 2016.
 Three months ended
September 30, 2017		 Nine months ended
September 30, 2017
% Increase/(Decrease)Total Organic Total Organic
Revenue(1.0)% 0.5 % (0.7)% 1.1 %
Salaries and related expenses0.0 % 1.3 % 0.4 % 2.4 %
Office and general expenses(6.2)% (3.3)% (4.0)% (1.3)%

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


 Three months ended
September 30,		 Nine months ended
September 30,
 2017 2016 2017 2016
Operating margin11.5% 10.8% 8.2% 8.2%
Expenses as % of revenue:       
Salaries and related expenses64.5% 63.9% 67.5% 66.8%
Office and general expenses24.0% 25.3% 24.3% 25.1%
        
Net income available to IPG common stockholders$146.2
 $128.6
 $262.4
 $290.9
        
Earnings per share available to IPG common stockholders:       
Basic$0.38
 $0.32
 $0.67
 $0.73
Diluted$0.37
 $0.32
 $0.66
 $0.71
When we analyze period-to-period changes in our operating performance, we determine the portion of the change that is attributable to changes in foreign currency rates and the net effect of acquisitions and divestitures, and the remainder we call organic change, which indicates how our underlying business performed. TheWe exclude the impact of billable expenses in analyzing our operating performance metrics that we useas the fluctuations from period to evaluate our results includeperiod are not indicative of the organic change in revenue, salaries and related expenses, and office and general expenses, and the components of operating expenses expressed as a percentage of total consolidated revenue. Additionally, in certainperformance of our discussions we analyze revenue by geographic regionunderlying

Management’s Discussion and also by business sector,Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in which we focusMillions, Except Per Share Amounts)
(Unaudited)


businesses and have no impact on our top 100 clients, which typically constitute approximately 55% to 60%EBITA, as defined and discussed within the Non-GAAP Financial Measure section of our annual consolidated revenues.this MD&A, or net income.
The change in our operating performance attributable to changes in foreign currency rates is determined by converting the prior-period reported results using the current-period exchange rates and comparing these prior-period adjusted amounts to the prior-period reported results. Although the U.S. Dollar is our reporting currency, a substantial portion of our revenues and expenses are generated in foreign currencies. Therefore, our reported results are affected by fluctuations in the currencies in which we conduct our international businesses. Our exposure is mitigated as the majority of our revenues and expenses in any given market are generally denominated in the same currency. Both positive and negative currency fluctuations against the U.S. Dollar affect our consolidated results of operations, and the magnitude of the foreign currency impact to our operations related to each geographic region depends on the significance and operating performance of the region. The foreign currencycurrencies that most adversely impacted our results during the first nine monthshalf of 2017 was2019 were the British Pound Sterling partially offset by the Brazilian Real.and Euro.
For purposes of analyzing changes in our operating performance attributable to the net effect of acquisitions and divestitures, transactions are treated as if they occurred on the first day of the quarter during which the transaction occurred. During the past few years, we have acquired companies that we believe will enhance our offerings, including the acquisition of Acxiom (the "Acxiom Acquisition"), and disposed of businesses that are not consistent with our strategic plan. See Note 4
The metrics that we use to evaluate our financial performance include organic change in net revenue as well as the Consolidated Financial Statements for additional informationchange in certain operating expenses, and the components thereof, expressed as a percentage of consolidated net revenue, as well as EBITA. These metrics are also used by management to assess the financial performance of our operating segments, Integrated Agency Networks ("IAN") and Constituency Management Group ("CMG"). In certain of our discussions, we analyze net revenue by geographic region and by business sector, in which we focus on acquisitions.our top 100 clients, which typically constitute approximately 55% to 60% of our annual consolidated net revenues.


Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


The following table presents a summary of our financial performance for the three and six months ended June 30, 2019 and 2018.
 Three months ended
June 30,		   Six months ended
June 30,		  
Statement of Operations Data2019 2018 
% Increase/
(Decrease)
 2019 2018 
% Increase/
(Decrease)
REVENUE:    

      
Net revenue$2,125.9
 $1,948.2
 9.1 % $4,130.7
 $3,722.2
 11.0 %
Billable expenses394.3
 443.6
 (11.1)% 750.7
 838.7
 (10.5)%
Total revenue$2,520.2
 $2,391.8
 5.4 % $4,881.4
 $4,560.9
 7.0 %
            
OPERATING INCOME$264.2
 $249.2
 6.0 % $314.4
 $288.0
 9.2 %
            
EBITA 1
$285.5
 $254.4
 12.2 % $357.3
 $298.5
 19.7 %
            
NET INCOME AVAILABLE TO IPG COMMON STOCKHOLDERS$169.5
 $145.8
   $161.5
 $131.7
  
            
Earnings per share available to IPG common stockholders:           
Basic$0.44
 $0.38
   $0.42
 $0.34
  
Diluted$0.43
 $0.37
   $0.41
 $0.34
  
            
Operating Ratios           
Organic change in net revenue3.0% 5.6%   4.6% 4.7%  
            
Operating margin on net revenue12.4% 12.8%   7.6% 7.7%  
Operating margin on total revenue10.5% 10.4%   6.4% 6.3%  
            
EBITA margin on net revenue 1
13.4% 13.1%   8.6% 8.0%  
            
Expenses as a % of net revenue:           
Salaries and related expenses65.0% 66.4%   67.8% 70.5%  
Office and other direct expenses18.2% 17.1%   18.8% 17.7%  
Selling, general and administrative expenses0.8% 1.5%   1.4% 1.7%  
Depreciation and amortization3.4% 2.3%   3.5% 2.4%  
Restructuring charges 2
0.1% 0.0%   0.8% 0.0%  
1
EBITA is a financial measure that is not defined by U.S. GAAP. Refer to the Non-GAAP Financial Measure section of this MD&A for additional information and for a reconciliation to U.S. GAAP measures.
2Results include restructuring charges of $2.1 and $33.9 for the three and six months ended June 30, 2019, respectively.
Our organic net revenue increase of 3.0% (which excludes results from Acxiom) for the second quarter of 2019 was driven by growth throughout nearly all geographic regions and most disciplines, attributable to a combination of net client wins and net higher spending from existing clients, most notably in the healthcare and financial services sectors, partially offset by decrease in the auto and transportation sector. During the second quarter of 2019, our EBITA margin grew to 13.4% from 13.1% in the prior-year period as the increase in net revenue outpaced the overall increase in our operating expense, excluding billable expenses and amortization of acquired intangibles.
Our organic net revenue increase of 4.6% (which excludes results from Acxiom) for the first half of 2019 was driven by growth throughout all geographic regions and most disciplines, attributable to a combination of net client wins and net higher spending from existing clients, most notably in the healthcare and financial services sectors, partially offset by decrease in the auto and transportation sector. During the first half of 2019, our EBITA margin grew to 8.6% from 8.0% in the prior-year period as the

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


increase in net revenue outpaced the overall increase in our operating expense, excluding billable expenses and amortization of acquired intangibles. In the first half of 2019, our EBITA margin includes restructuring charges of 0.8% of net revenue.

RESULTS OF OPERATIONS
Consolidated Results of Operations – Three and NineSix Months Ended SeptemberJune 30, 20172019 Compared to Three and NineSix Months Ended SeptemberJune 30, 20162018
REVENUENet Revenue
Our net revenue is directly impacted by the retention and spending levels of existing clients and by our ability to win new clients. Most of our expenses are recognized ratably throughout the year and are therefore less seasonal than revenue. Our net revenue is typically lowest in the first quarter and highest in the fourth quarter, reflecting the seasonal spending of our clients, incentives earned at year end on various contracts and project work completed that is typically recognized during the fourth quarter. In the events marketing business, revenues can fluctuate due to the timing of completed projects, as revenue is typically recognized when the project is complete. When we act as principal for these projects, we record the gross amount billed to the client as revenue, and the related costs are incurred as pass-through costs in office and general expenses.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


clients.
  Components of Change   Change  Components of Change   Change
Three months ended
September 30, 2016
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 Organic Three months ended
September 30, 2017		Organic TotalThree months ended
June 30, 2018
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 Organic Three months ended
June 30, 2019		Organic Total
Consolidated$1,922.2
 $7.7
 $(37.2) $9.9
 $1,902.6
 0.5 % (1.0)%$1,948.2
 $(45.8) $165.9
 $57.6
 $2,125.9
 3.0 % 9.1 %
Domestic1,165.9
 0.0
 (25.0) 15.1
 1,156.0
 1.3 % (0.8)%1,171.5
 0.0
 159.2
 7.0
 1,337.7
 0.6 % 14.2 %
International756.3
 7.7
 (12.2) (5.2) 746.6
 (0.7)% (1.3)%776.7
 (45.8) 6.7
 50.6
 788.2
 6.5 % 1.5 %
United Kingdom174.0
 (4.3) 1.4
 5.3
 176.4
 3.0 % 1.4 %175.7
 (10.2) 6.6
 8.3
 180.4
 4.7 % 2.7 %
Continental Europe147.6
 6.4
 (4.0) 0.6
 150.6
 0.4 % 2.0 %178.7
 (12.0) 0.2
 16.4
 183.3
 9.2 % 2.6 %
Asia Pacific217.9
 0.8
 (0.2) (4.6) 213.9
 (2.1)% (1.8)%214.2
 (9.7) 1.3
 (0.7) 205.1
 (0.3)% (4.2)%
Latin America103.6
 2.4
 (10.4) (10.3) 85.3
 (9.9)% (17.7)%82.0
 (9.7) (0.8) 20.6
 92.1
 25.1 % 12.3 %
Other113.2
 2.4
 1.0
 3.8
 120.4
 3.4 % 6.4 %126.1
 (4.2) (0.6) 6.0
 127.3
 4.8 % 1.0 %
DuringThe organic increase during the thirdsecond quarter of 2017, our revenue decreased by $19.6, or 1.0%, compared to the third quarter of 2016, comprised of an organic revenue increase of $9.9, or 0.5% and a favorable foreign currency rate impact of $7.7, offset by the effect of net divestitures of $37.2. Our organic revenue increase was primarily attributable to growth within the healthcare sector, offset by decreases in the technology and telecom sector. The organic revenue increase2019 in our domestic market was mainlyprimarily driven by our media and advertising businesses, partially offset by declines within our digital specialist agencies and a decrease in pass-through revenue related to certain projects where we acted as principal that decreased in size or did not recur in our events businesses during the third quarter of 2017, the impact of which is also reflected as a comparable reduction in office and general expenses. In our international markets, the organic revenue decrease was primarily attributable to decreases at our advertising businesses in Latin America, most notably in Brazil, and the Asia Pacific region, partially offset by growth across all regions at our media businesses as well as growth at our advertising businesses in the United Kingdom.
   Components of Change   Change
 Nine months ended
September 30, 2016
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 Organic Nine months ended
September 30, 2017		Organic Total
Consolidated$5,582.1
 $(30.7) $(73.8) $63.8
 $5,541.4
 1.1 % (0.7)%
Domestic3,426.2
 0.0
 (52.5) 54.6
 3,428.3
 1.6 % 0.1 %
International2,155.9
 (30.7) (21.3) 9.2
 2,113.1
 0.4 % (2.0)%
United Kingdom495.3
 (44.5) 12.5
 8.5
 471.8
 1.7 % (4.7)%
Continental Europe468.1
 (3.9) (13.3) 6.1
 457.0
 1.3 % (2.4)%
Asia Pacific617.7
 (0.7) 2.4
 (12.0) 607.4
 (1.9)% (1.7)%
Latin America255.7
 14.3
 (24.6) (7.9) 237.5
 (3.1)% (7.1)%
Other319.1
 4.1
 1.7
 14.5
 339.4
 4.5 % 6.4 %
During the first nine months of 2017, our revenue decreased by $40.7, or 0.7%, compared to the first nine months of 2016, comprised of an organic revenue increase of $63.8, or 1.1%,and digital specialist agencies, partially offset by the effect of net divestitures of $73.8 and an adverse foreign currency rate impact of $30.7. Our organic revenue increase was primarily attributable to growth within the healthcare sector, offset by decreases in the technology and telecom sector. The organic increase ina decrease at our domestic market was mainly driven by our media and advertising businesses, offset by weakness in our events and branding businesses. In our international markets, the 6.5% organic increase was driven by growth across nearly all geographic regions, primarily at our media and advertising businesses as well as public relations agencies. Consolidated net acquisitions includes net revenue mostly from Acxiom, which we acquired on October 1, 2018, partially offset by divestitures mostly in our domestic market and Continental Europe regions.
   Components of Change   Change
 Six months ended
June 30, 2018
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 Organic Six months ended
June 30, 2019		Organic Total
Consolidated$3,722.2
 $(95.2) $331.7
 $172.0
 $4,130.7
 4.6% 11.0 %
Domestic2,263.8
 0.0
 319.2
 68.8
 2,651.8
 3.0% 17.1 %
International1,458.4
 (95.2) 12.5
 103.2
 1,478.9
 7.1% 1.4 %
United Kingdom339.2
 (20.7) 14.5
 17.7
 350.7
 5.2% 3.4 %
Continental Europe337.4
 (24.7) (1.0) 28.4
 340.1
 8.4% 0.8 %
Asia Pacific393.0
 (19.5) 2.3
 7.3
 383.1
 1.9% (2.5)%
Latin America155.9
 (20.5) (1.2) 38.2
 172.4
 24.5% 10.6 %
Other232.9
 (9.8) (2.1) 11.6
 232.6
 5.0% (0.1)%
The 3.0% organic increase during the first half of 2019 in our domestic market was primarily driven by growth at our advertising and media businesses. In our international markets, the 7.1% organic increase was driven by growth across all geographic regions and most disciplines, primarily at our media businesses and our advertising businesses in the United Kingdom,as well as public relations agencies. Consolidated net acquisitions includes net revenue mostly from Acxiom, which we acquired on October 1, 2018, partially offset by decreases atdivestitures mostly in our advertising businesses in the Asia Pacificdomestic market and Latin America regions and our events businesses in the United Kingdom, primarily as a result of certain projects where we no longer act as principal.Continental Europe region.
Refer to the segment discussion later in this MD&A for information on changes in net revenue by segment.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)



OPERATING EXPENSES
 Three months ended
September 30,		 Nine months ended
September 30,
 2017 2016 2017 2016
Salaries and related expenses$1,227.6
 $1,228.0
 $3,742.3
 $3,726.3
Office and general expenses455.9
 486.2
 1,343.8
 1,400.5
Total operating expenses$1,683.5
 $1,714.2
 $5,086.1
 $5,126.8
Operating income$219.1
 $208.0
 $455.3
 $455.3
In the third quarter of 2017, total operating expenses decreased 1.8%, compared to our revenue decrease of 1.0%, from the third quarter of 2016, resulting in operating margin expansion to 11.5% from 10.8%. In the first nine months of 2017, total operating expenses decreased 0.8%, compared to our revenue decrease of 0.7%, from the first nine months of 2016, resulting in an operating margin of 8.2%, which remains flat as compared to the prior-year period.
Salaries and Related Expenses
   Components of Change   Change
 2016
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 Organic 2017Organic Total
Three months ended September 30,$1,228.0
 $4.6
 $(21.0) $16.0
 $1,227.6
 1.3% 0.0 %
Nine months ended September 30,3,726.3
 (24.6) (49.4) 90.0
 3,742.3
 2.4% 0.4 %
 Three months ended
June 30,		   Six months ended
June 30,		  
 2019 2018 % Increase/
(Decrease)		 2019 2018 % Increase/
(Decrease)
Salaries and related expenses$1,381.2
 $1,292.9
 6.8% $2,802.3
 $2,623.2
 6.8%
            
As a % of net revenue:           
Salaries and related expenses65.0% 66.4%   67.8% 70.5%  
Base salaries, benefits and tax54.9% 55.8%   57.1% 58.9%  
Incentive expense3.2% 3.2%   3.9% 3.8%  
Severance expense0.5% 1.0%   0.7% 1.3%  
Temporary help4.1% 4.3%   4.1% 4.4%  
All other salaries and related expenses2.3% 2.1%   2.0% 2.1%  
SalariesNet revenue growth of 9.1% outpaced the increase in salaries and related expenses inof 6.8% during the thirdsecond quarter of 2017 decreased by $0.42019 as compared to the third quarter of 2016, comprised of an organic increase of $16.0 and an adverse foreign currency rate impact of $4.6, offsetprior-year period, primarily driven by the effect of net divestitures of $21.0. The organic increase was primarily attributable to an increaseleverage in base salaries, benefits and tax partially offset byand temporary help expenses. The improved ratio was a result of carefully managing our employee base, and to a lesser extent, lower incentive expense. Our staff costnet benefit expenses. Also contributing to the lower percentage was the inclusion of Acxiom, which has a lower ratio defined asof salaries and related expenses as a percentage of total consolidatedits net revenue.
Net revenue increasedgrowth of 11.0% outpaced the increase in salaries and related expenses of 6.8% during the third quarterfirst half of 2017 to 64.5% from 63.9%, when2019 as compared to the prior-year period.
Salaries and related expenses in the first nine months of 2017 increased by $16.0 compared to the first nine months of 2016, comprised of an organic increase of $90.0, partially offset by the effect of net divestitures of $49.4 and a favorable foreign currency rate impact of $24.6. The organic increase wasperiod, primarily driven by factors similar to those noted above for the thirdsecond quarter of 2017,2019.
Office and Other Direct Expenses
 Three months ended
June 30,		   Six months ended
June 30,		  
 2019 2018 % Increase/
(Decrease)		 2019 2018 % Increase/
(Decrease)
Office and other direct expenses$387.3
 $333.3
 16.2% $776.5
 $657.1
 18.2%
            
As a % of net revenue:           
Office and other direct expenses18.2% 17.1%   18.8% 17.7%  
Occupancy expense6.5% 6.6%   6.5% 6.9%  
All other office and other direct expenses 1
11.7% 10.5%   12.3% 10.8%  
1Includes client service costs, non-pass through production expenses, travel and entertainment, professional fees, spending to support new business activity, telecommunications, office supplies, bad debt expense, adjustments to contingent acquisition obligations, foreign currency losses (gains) and other expenses.
Office and other direct expenses increased by 16.2% compared to net revenue growth of 9.1% during the second quarter of 2019 as well as lower acquisition-related contractual compensation, which is classified within all other salaries and related expenses in the table below. Our staff cost ratio increased in the first nine months of 2017 to 67.5% from 66.8% when compared to the prior-year period. The increase in office and other direct expenses was mainly due to the inclusion of Acxiom, which has a higher ratio of office and other direct expenses as a percentage of its net revenue, primarily driven by client service costs. Additionally, overall office and other direct expenses benefited primarily from leverage in occupancy expense, partially offset by an increase in professional fees.
The following table detailsOffice and other direct expenses increased by 18.2% compared to net revenue growth of 11.0% during the first half of 2019 as compared to the prior-year period, primarily driven by factors similar to those noted above for the second quarter of 2019.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A") are primarily the unallocated expenses of our staff cost ratio.
 Three months ended
September 30,		 Nine months ended
September 30,
 2017 2016 2017 2016
Salaries and related expenses64.5% 63.9% 67.5% 66.8%
Base salaries, benefits and tax55.7% 53.5% 57.3% 55.6%
Incentive expense2.0% 3.7% 3.1% 3.8%
Severance expense0.8% 0.7% 1.0% 1.0%
Temporary help3.8% 3.9% 3.9% 3.9%
All other salaries and related expenses2.2% 2.1% 2.2% 2.5%
Corporate and other group, as detailed further in the segment discussion later in this MD&A, excluding depreciation and amortization. SG&A as a

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)




Office and General Expenses
   Components of Change   Change
 2016
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 Organic 2017Organic Total
Three months ended September 30,$486.2
 $(0.2) $(13.9) $(16.2) $455.9
 (3.3)% (6.2)%
Nine months ended September 30,1,400.5
 (10.8) (27.9) (18.0) 1,343.8
 (1.3)% (4.0)%
Office and general expensespercentage of net revenue decreased in the thirdsecond quarter and first half of 2017 decreased by $30.32019 compared to the third quarter of 2016, comprised of an organic decrease of $16.2, the effect of net divestitures of $13.9 and a favorable foreign currency rate impact of $0.2. The organic decrease wasprior-year period, primarily attributable to an increase in allocated service fees, mainly as a result of the inclusion of Acxiom, and lower production expenses related to pass-through costs, which are also reflected in revenue,professional fees, partially offset by higher occupancy costs. Our officeincentive expense.
Depreciation and general expense ratio, defined as officeAmortization
Depreciation and general expensesamortization as a percentage of total consolidatednet revenue decreasedincreased to 3.4% in the thirdsecond quarter of 2017 to 24.0%2019 from 25.3%, when compared to the prior-year period.
Office2.3% and general expenses3.5% in the first nine monthshalf of 2017 decreased by $56.7 compared2019 from 2.4% in the prior-year period, primarily due to the inclusion of Acxiom.
Restructuring Charges
In the first nine monthsquarter of 2016, comprised2019, the Company implemented a cost initiative (the “2019 Plan”) to better align our cost structure with our revenue primarily related to specific client losses occurring in 2018, the components of an organic decreasewhich are listed below. All restructuring actions were substantially completed by the end of $18.0, the effectsecond quarter of net divestitures of $27.9 and a favorable foreign currency rate impact of $10.8.2019. The organic decrease was primarily driven by factors similar to those noted aboveamounts for the third quarter of 2017, as well as decreases inthree months ended June 30, 2019 are adjustments to contingent acquisition obligations, as compared to the prior year. Our office and general expense ratio decreasedactions taken in the first nine months of 2017 to 24.3% from 25.1%, when compared to the prior-year period.quarter, and we don't expect any further restructuring activities.
 Three months ended
June 30, 2019		 Six months ended
June 30, 2019
Severance and termination costs$2.1
 $22.0
Lease impairment costs0.0
 11.9
Total restructuring charges$2.1
 $33.9
The following table details our officepresents the 2019 Plan restructuring charges and general expense ratio.employee headcount reduction for the first six months ended June 30, 2019.
 Three months ended
September 30,		 Nine months ended
September 30,
 2017 2016 2017 2016
Office and general expenses24.0% 25.3% 24.3% 25.1%
Professional fees1.4% 1.4% 1.6% 1.5%
Occupancy expense (excluding depreciation and amortization)6.9% 6.6% 7.0% 6.8%
Travel & entertainment, office supplies and telecommunications2.8% 2.8% 3.1% 3.2%
All other office and general expenses 1
12.9% 14.5% 12.6% 13.6%
 Restructuring Charges Headcount Reduction (Actual Number)
Domestic$27.0
 507
International6.9
 120
Consolidated$33.9
 627
The 2019 Plan included cost initiatives due to specific client losses, and as such we considered the potential for goodwill impairment at one of our reporting units. Our review did not indicate an impairment triggering event as of June 30, 2019.
1Includes production expenses and, to a lesser extent, depreciation and amortization, bad debt expense, adjustments to contingent acquisition obligations, foreign currency losses (gains), spending to support new business activity, net restructuring and other reorganization-related charges (reversals), long-lived asset impairments and other expenses.


EXPENSES AND OTHER INCOME
Three months ended
September 30,		 Nine months ended
September 30,		Three months ended
June 30,		 Six months ended
June 30,
2017 2016 2017 20162019 2018 2019 2018
Cash interest on debt obligations$(21.0) $(19.5) $(60.1) $(59.8)$(49.4) $(24.4) $(95.0) $(43.9)
Non-cash interest0.0
 (2.2) (7.5) (9.0)(2.2) (1.7) (6.4) (2.1)
Interest expense(21.0) (21.7) (67.6) (68.8)(51.6) (26.1) (101.4) (46.0)
Interest income4.1
 4.7
 14.0
 16.1
7.7
 4.7
 15.5
 8.7
Net interest expense(16.9) (17.0) (53.6) (52.7)(43.9) (21.4) (85.9) (37.3)
Other (expense) income, net(9.9) 5.3
 (24.5) (13.5)
Other expense, net(3.8) (16.3) (10.7) (40.7)
Total (expenses) and other income$(26.8) $(11.7) $(78.1) $(66.2)$(47.7) $(37.7) $(96.6) $(78.0)
Net Interest Expense
For the ninethree and six months ended SeptemberJune 30, 2017,2019, net interest expense increased by $0.9$22.5 and $48.6, respectively, as compared to the prior-year period, primarily dueattributable to lowerincreased cash interest incomeexpense from our international markets,the issuance of long-term debt in 2018 in order to finance the Acxiom Acquisition, partially offset by a decreasean increase in non-cash interest expense from revaluations of mandatorily redeemable noncontrolling interests.income, primarily due to higher interest rates in international markets.


Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)




Other (Expense) Income,Expense, Net
Results of operations for the three and ninesix months ended SeptemberJune 30, 20172019 and 20162018 include certain items that are not directly associated with our revenue-producing operations.
 Three months ended
September 30,		 Nine months ended
September 30,
 2017 2016 2017 2016
Net (losses) gains on sales of businesses and investments$(6.2) $3.9
 $(18.3) $(14.6)
Other (expense) income, net(3.7) 1.4
 (6.2) 1.1
Total other (expense) income, net$(9.9) $5.3
 $(24.5) $(13.5)
 Three months ended
June 30,		 Six months ended
June 30,
 2019 2018 2019 2018
Net losses on sales of businesses$(3.2) $(19.8) $(11.8) $(44.2)
Other(0.6) 3.5
 1.1
 3.5
Total other expense, net$(3.8) $(16.3) $(10.7) $(40.7)
Net (Losses) Gainslosses on Salessales of Businesses and Investments businesses – During the three and ninesix months ended SeptemberJune 30, 2017,2019, the amounts recognized are primarilywere related to sales of businesses and the classification of certain assets and liabilities, consisting primarily of accounts receivable and accounts payable, respectively,cash, as held for sale within our Integrated Agency Networks ("IAN") operatingIAN reportable segment. During the three and ninesix months ended SeptemberJune 30, 2016,2018, the amounts recognized are primarilywere related to sales of businesses and the classification of certain assets and liabilities, consisting primarily of cash, as held for sale within our IAN reportable segment. The businesses held for sale primarily represent unprofitable, non-strategic agencies which are expected to be sold within the next twelve months.

Other – During the three and six months ended June 30, 2019, the amounts recognized were primarily related to a sale of an equity investment.

INCOME TAXES
Three months ended
September 30,		 Nine months ended
September 30,		Three months ended
June 30,		 Six months ended
June 30,
2017 2016 2017 20162019 2018 2019 2018
Income before income taxes$192.3
 $196.3
 $377.2
 $389.1
$216.5
 $211.5
 $217.8
 $210.0
Provision for income taxes$42.5
 $63.8
 $115.8
 $91.9
$43.6
 $63.6
 $54.1
 $76.3
Effective income tax rate22.1% 32.5% 30.7% 23.6%
Our tax rates are affected by many factors, including our worldwide earnings from various countries, changes in legislation and tax characteristics of our income. For the three and ninesix months ended SeptemberJune 30, 2017,2019, our income tax provision was positively impacted by the settlement of state income tax audits, partially offset by losses in certain foreign jurisdictions where we receive no tax benefit due to 100% valuation allowances, and net losses on sales of businesses and the classification of certain assets as held for sale, for which we did not receive a tax benefit.
For the three and six months ended June 30, 2018, our effective income tax rates of 22.1% and 30.7%, respectively, were positivelynegatively impacted by a benefit of $31.2 related to foreign tax credits from distributions of unremitted earnings, partially offset by losses in certain foreign jurisdictions where we receive no tax benefit due to 100% valuation allowances and by losses on sales of businesses, and the classification of certain assets as held for sale, for which we did not receivereceived a fullminimal tax benefit. For the nine months ended September 30, 2017, our effective income tax rate was positively impacted by excess tax benefits on employee share-based payments, the majority of which is typically recognized in the first quarter due to the timing of the vesting of awards.
For the nine months ended September 30, 2016, our effective income tax rate of 23.6% was positively impacted by the settlement of 2011 and 2012 income tax audits which included the recognition of certain previously unrecognized tax benefits of $23.4, the reversal of valuation allowances of $12.2 as a consequence of the disposition of certain businesses in Continental Europe, excess tax benefits on employee share-based payments and the recognition of previously unrecognized tax benefits as a result of a lapse in statute of limitations. The positive impacts to our tax rates werebenefit, partially offset by losses in certain foreign jurisdictions where we receive no tax benefit due to 100% valuation allowancesadditional research and by lossesdevelopment credits based on salesthe conclusion of businesses for which we did not receive a full tax benefit.multi-year studies.


EARNINGS PER SHARE
Basic earnings per share available to IPG common stockholders for the three and ninesix months ended SeptemberJune 30, 20172019 were $0.38$0.44 and $0.67,$0.42, respectively, compared to $0.32$0.38 and $0.73$0.34 for the three and ninesix months ended SeptemberJune 30, 2016,2018, respectively. Diluted earnings per share available to IPG common stockholders for the three and six months ended June 30, 2019 were $0.43 and $0.41, respectively, compared to $0.37 and $0.34 for the three and six months ended June 30, 2018, respectively.
Basic and diluted earnings per share for the three and nine months ended SeptemberJune 30, 2017 were $0.37 and $0.66, respectively, compared to $0.32 and $0.71 for the three and nine months ended September 30, 2016, respectively.
For the three and nine months ended September 30, 2017, net income available to IPG common stockholders2019 included $31.2 related to foreign tax credits from distributions of unremitted earnings, resulting in a positivenegative impact of $0.08 on basic and diluted earnings per share for both periods. For$0.04 from the three and nine months ended September 30, 2017,amortization of acquired intangibles, a negative impact of $0.02 from net income available to IPG common stockholders included net losses of $7.0 and $19.2, respectively, on sales of businesses and the classification of certain assets as held for sale resulting in negative impactsand a positive impact of $0.02$0.04 from a tax benefit related to the conclusion and $0.05, respectively, to basicsettlement of tax examinations of previous years.
Basic and diluted earnings per share.share for the six months ended June 30, 2019 included a negative impact of $0.09 from the amortization of acquired intangibles, a negative impact of $0.06 from first-quarter restructuring charges, a negative impact of $0.04 from net losses on sales of businesses and the classification of certain assets as held for sale and a positive impact of $0.04 from a tax benefit related to the conclusion and settlement of tax examinations of previous years.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)




ForBasic and diluted earnings per share for the ninethree months ended SeptemberJune 30, 2016,2018 included a negative impact of $0.01 from the amortization of acquired intangibles and a negative impact of $0.05 from net income available to IPG common stockholders included the recognition of certain previously unrecognized tax benefits totaling $23.4, losses of $15.7, net of tax, on sales of businesses in our international markets, and a benefitthe classification of $12.2 related to the reversals of valuation allowancescertain assets as a consequence of the sales of businesses, resulting in impacts of $0.06, ($0.04) and $0.03, respectively, to basicheld for sale.
Basic and diluted earnings per share.share for the six months ended June 30, 2018 included a negative impact of $0.03 from the amortization of acquired intangibles and a negative impact of $0.11 from net losses on sales of businesses and the classification of certain assets as held for sale.


Segment Results of Operations – Three and NineSix Months Ended SeptemberJune 30, 20172019 Compared to Three and NineSix Months Ended SeptemberJune 30, 20162018
As discussed in Note 1013 to the unaudited Consolidated Financial Statements, we have two reportable segments as of SeptemberJune 30, 2017:2019: IAN and Constituency Management Group ("CMG").CMG. We also report results for the "Corporate and other" group.
IAN
REVENUENet Revenue
  Components of Change   Change  Components of Change   Change
Three months ended
September 30, 2016
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 Organic Three months ended
September 30, 2017		Organic TotalThree months ended
June 30, 2018
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 Organic Three months ended
June 30, 2019		Organic Total
Consolidated$1,503.2
 $8.7
 $(22.4) $30.7
 $1,520.2
 2.0 % 1.1%$1,629.1
 $(39.6) $164.8
 $51.5
 $1,805.8
 3.2% 10.8%
Domestic893.8
 0.0
 (17.4) 31.6
 908.0
 3.5 % 1.6%963.3
 0.0
 159.8
 8.6
 1,131.7
 0.9% 17.5%
International609.4
 8.7
 (5.0) (0.9) 612.2
 (0.1)% 0.5%665.8
 (39.6) 5.0
 42.9
 674.1
 6.4% 1.2%
DuringThe organic increase was attributable to a combination of net client wins and net higher spending from existing clients, most notably in the third quarter of 2017, IAN revenue increased by $17.0 compared to the third quarter of 2016, comprised of an organic revenue increase of $30.7healthcare and a favorable foreign currency rate impact of $8.7,financial services sectors, partially offset by decrease in the effect of net divestitures of $22.4.auto and transportation sector. The organic revenue increase was primarily attributable to growth within the healthcare sector, partially offset by decreases in the financial services and technology and telecom sectors. The organic revenue increase in our domestic market was mainly driven by our media and advertising businesses, partially offset by a decline within our digital specialist agencies. In our international markets, the slight organic revenue decrease was primarily attributable to decreases at our advertising businesses in Latin America, most notably in Brazil, and the Asia Pacific region, as well as a decline in our digital specialist agencies in the United Kingdom, partially offset by growth across all regions at our media businesses as well as growth at our advertising businesses in the United Kingdom.
   Components of Change   Change
 Nine months ended
September 30, 2016
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 Organic Nine months ended
September 30, 2017		Organic Total
Consolidated$4,453.3
 $(15.9) $(49.1) $77.3
 $4,465.6
 1.7% 0.3 %
Domestic2,675.9
 0.0
 (36.0) 67.7
 2,707.6
 2.5% 1.2 %
International1,777.4
 (15.9) (13.1) 9.6
 1,758.0
 0.5% (1.1)%
During the first nine months of 2017, IAN revenue increased by $12.3 compared to the first nine months of 2016, comprised of an organic revenue increase of $77.3, partially offset by the effect of net divestitures of $49.1 and an adverse foreign currency rate impact of $15.9. The organic revenue increase was primarily attributable to growth within the healthcare sector, partially offset by decreases in the financial services and technology and telecom sectors. The organic revenue increase in our domestic market was driven by growth across all disciplines, most notably at our media and advertising businesses. In our international markets, the organic increase was primarily driven by growth at our advertising businesses and digital specialist agencies, partially offset by our media businessesbusinesses. The international organic increase was driven by growth across nearly all geographic regions, primarily at our media and advertising businesses, most notably in Canada within our Other region and inthe Latin America as well as our advertising businesses in the United Kingdom,and Continental Europe regions. Consolidated net acquisitions includes net revenue mostly from Acxiom, which we acquired on October 1, 2018, partially offset by decreasesdivestitures mostly from our domestic market and Continental Europe regions.
   Components of Change   Change
 Six months ended
June 30, 2018
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 Organic Six months ended
June 30, 2019		Organic Total
Consolidated$3,110.4
 $(82.7) $328.9
 $160.4
 $3,517.0
 5.2% 13.1%
Domestic1,861.3
 0.0
 320.6
 69.1
 2,251.0
 3.7% 20.9%
International1,249.1
 (82.7) 8.3
 91.3
 1,266.0
 7.3% 1.4%
The organic increase was attributable to a combination of net client wins and net higher spending from existing clients, most notably in the healthcare and financial services sectors, partially offset by decrease in the auto and transportation sector. The organic increase in our domestic market was primarily driven by growth at our advertising and media businesses. The international organic increase was driven by growth across all of our major networks, primarily at our media and advertising businesses, most notably in the Asia Pacific and Latin America and Continental Europe regions. Consolidated net acquisitions includes net revenue mostly from Acxiom, which we acquired on October 1, 2018, partially offset by divestitures mostly from our domestic market and Continental Europe regions.
SEGMENT OPERATING INCOMESegment EBITA
 Three months ended
September 30,		   Nine months ended
September 30,		  
 2017 2016 Change 2017 2016 Change
Segment operating income$183.9
 $184.1
 (0.1)% $402.1
 $424.1
 (5.2)%
Operating margin12.1% 12.2%   9.0% 9.5%  
 Three months ended
June 30,		   Six months ended
June 30,		  
 2019 2018 Change 2019 2018 Change
Segment EBITA 1
$261.7
 $242.2
 8.1% $376.2
 $303.2
 24.1%
EBITA margin on net revenue 1
14.5% 14.9%   10.7% 9.5%  

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)




1
Segment EBITA and EBITA margin on net revenue include $2.0 and $27.6 of restructuring charges in the second quarter and first half of 2019, respectively. See "Restructuring Charges" in MD&Aand Note 9 to the Consolidated Financial Statements for the further information.
Operating incomeEBITA margin slightly decreased during the thirdsecond quarter of 20172019 when compared to the thirdsecond quarter of 2016, due to an2018, as the increase in operating expenses, excluding billable expenses and amortization of acquired intangibles, outpaced the net revenue growth of $17.0, as10.8%, which was discussed above, and a decrease in office and general expenses of $5.9, offset by andetail above. The net revenue growth outpaced the increase in salaries and related expenses as compared to the prior period, primarily due to leverage in base salaries, benefits and tax and temporary help expenses as well as the inclusion of $23.1.Acxiom, which has a lower ratio of salaries and related expenses as a percentage of its net revenue. The improved ratio was a result of carefully managing our employee base, and to a lesser extent, lower net benefit expenses which included a gain from an employer related contract. The increase in office and other direct expenses outpaced the growth in net revenue as compared to the prior-year period, mainly due to the inclusion of Acxiom, which has a higher ratio of office and other direct expense as a percentage of its net revenue, primarily driven by client service costs. Additionally, overall office and other direct expenses primarily benefited from leverage in occupancy expense, partially offset by an increase in professional fees.
EBITA margin expanded during the first half of 2019 when compared to the first half of 2018, as the net revenue growth of 13.1%, which was discussed in detail above, outpaced the increase in operating expenses, excluding billable expenses and amortization of acquired intangibles. The net revenue growth outpaced the increase in salaries and related expenses was primarily due to anand the increase in base salaries, benefits and tax, partially offset by lower incentive expense. The decrease in office and generalother direct expenses was attributable to lower production expenses related to pass-through costs, which are also reflectedoutpaced the growth in net revenue and lower bad debt expense, partially offset by higher occupancy costs.
Operating income decreased during the first nine months of 2017 whenas compared to the first nine months of 2016, comprised of an increase in revenue of $12.3, as discussed above, and a decrease in office and general expenses of $18.1, offset by an increase in salaries and related expenses of $52.4. The increase in salaries and related expenses wasprior-year period, primarily driven by factors similar to those noted above for the thirdsecond quarter of 2017,2019.
For the three and six months ended June 30, 2019, segment EBITA includes restructuring charges of $2.0 and $27.6, respectively, to better align our cost structure with our revenue.
Depreciation and amortization as a percentage of net revenue increased to 3.6% in the second quarter of 2019 from 2.2% and 3.6% in the first half of 2019 from 2.4% in the prior-year period, primarily due to the inclusion of Acxiom.
CMG
Net Revenue
   Components of Change   Change
 Three months ended
June 30, 2018
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 Organic Three months ended
June 30, 2019		Organic Total
Consolidated$319.1
 $(6.2) $1.1
 $6.1
 $320.1
 1.9 % 0.3 %
Domestic208.2
 0.0
 (0.6) (1.6) 206.0
 (0.8)% (1.1)%
International110.9
 (6.2) 1.7
 7.7
 114.1
 6.9 % 2.9 %
The organic increase was primarily attributable to net client wins, most notably in the healthcare sector, partially offset by lower acquisition-related contractual compensation. The decrease in officethe auto and general expenses was primarily driven by factors similar to those noted above for the third quarter of 2017.
CMG
REVENUE
   Components of Change   Change
 Three months ended
September 30, 2016
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 Organic Three months ended
September 30, 2017		Organic Total
Consolidated$419.0
 $(1.0) $(14.8) $(20.8) $382.4
 (5.0)% (8.7)%
Domestic272.1
 0.0
 (7.6) (16.5) 248.0
 (6.1)% (8.9)%
International146.9
 (1.0) (7.2) (4.3) 134.4
 (2.9)% (8.5)%
During the third quarter of 2017, CMG revenue decreased by $36.6 compared to the third quarter of 2016, due to an organic revenue decrease of $20.8, the effect of net divestitures of $14.8 and an adverse foreign currency rate impact of $1.0.transportation sector. The organic revenue decreasesdecrease in our domestic market was primarily due to declines at our event businesses and international markets were primarily driven by a decrease in pass-through revenue related to certain projects where we acted as principal that decreased in size or did not recur in our events businesses during the third quarter of 2017, the impact of which is also reflected as a comparable reduction in office and general expenses.
   Components of Change   Change
 Nine months ended
September 30, 2016
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 Organic Nine months ended
September 30, 2017		Organic Total
Consolidated$1,128.8
 $(14.8) $(24.7) $(13.5) $1,075.8
 (1.2)% (4.7)%
Domestic750.3
 0.0
 (16.5) (13.1) 720.7
 (1.7)% (3.9)%
International378.5
 (14.8) (8.2) (0.4) 355.1
 (0.1)% (6.2)%
During the first nine months of 2017, CMG revenue decreased by $53.0 compared to the first nine months of 2016, comprised of an organic revenue decrease of $13.5, the effect of net divestitures of $24.7 and an adverse foreign currency rate impact of $14.8. The organic revenue decreases in our domestic and international markets were primarily driven by factors similar to those noted above for the third quarter of 2017,public relations agencies, partially offset by growth at our sports marketing businessesbusiness. The international organic increase was driven by growth across all geographic regions and most disciplines, primarily at our public relations agencies and sports marketing business, most notably in all regions.
SEGMENT OPERATING INCOMEthe United Kingdom.
 Three months ended
September 30,		   Nine months ended
September 30,		  
 2017 2016 Change 2017 2016 Change
Segment operating income$50.1
 $54.8
 (8.6)% $127.4
 $125.2
 1.8%
Operating margin13.1% 13.1%   11.8% 11.1%  
   Components of Change   Change
 Six months ended
June 30, 2018
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 Organic Six months ended
June 30, 2019		Organic Total
Consolidated$611.8
 $(12.5) $2.8
 $11.6
 $613.7
 1.9 % 0.3 %
Domestic402.5
 0.0
 (1.4) (0.3) 400.8
 (0.1)% (0.4)%
International209.3
 (12.5) 4.2
 11.9
 212.9
 5.7 % 1.7 %
Operating income decreased duringThe organic increase was primarily attributable to net client wins, most notably in the third quarter of 2017 when compared to the third quarter of 2016, comprised of ahealthcare sector, partially offset by decrease in revenue of $36.6, as discussed above, athe auto and transportation sector. The slight organic decrease in office and general expenses of $21.0 and a decrease in salaries and related expenses of $10.9. The decrease in office and general expensesour domestic market was primarily due to lower production expenses related to pass-through costs, which are also reflecteddeclines at our event businesses, partially offset by growth at our public relations agencies and sports marketing business. The international organic increase was driven by growth across all geographic regions and most disciplines, primarily at our public relations agencies and sports marketing business, most notably in revenue, as well as decreases in adjustments to contingent acquisition obligations, as compared to the prior year. The decrease in salaries and related expenses was primarily due to net divestitures of non-strategic businesses.United Kingdom.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)




Operating incomeSegment EBITA
 Three months ended
June 30,		   Six months ended
June 30,		  
 2019 2018 Change 2019 2018 Change
Segment EBITA 1
$43.6
 $43.2
 0.9% $45.5
 $63.9
 (28.8)%
EBITA margin on net revenue 1
13.6% 13.5%   7.4% 10.0%  
1
Segment EBITA and EBITA margin on net revenue include $5.6 of restructuring charges in the first half of 2019. See "Restructuring Charges" in MD&A and Note 9 to the Consolidated Financial Statements for the further information.
EBITA margin slightly increased during the second quarter of 2019 when compared to the second quarter of 2018, as the net revenue growth of 0.3%, which was discussed in detail above, outpaced the increase in operating expenses, excluding billable expenses and amortization of acquired intangibles, primarily driven by leverage in salaries and related expenses.
EBITA margin decreased during the first nine monthshalf of 20172019 when compared to the first nine monthshalf of 2016, comprised2018, as the increase in operating expenses, primarily driven by the restructuring charges of a decrease$5.6 in revenuethe first quarter of $53.0, as discussed above, a decrease in office2019 and general expenses of $35.0 and a decrease inhigher salaries and related expenses to support business growth, outpaced net revenue growth of $20.2.0.3%, which was discussed in detail above. The decreasesrestructuring charges taken in office and general and salaries and related expenses were primarily driven by factors similar to those noted above for the thirdfirst quarter of 2017.2019 was to better align our cost structure with our revenue.
Depreciation and amortization as a percentage of net revenue relatively remained flat in the second quarter and first half of 2019 as compared to the prior-year period.
CORPORATE AND OTHER
Certain corporateCorporate and other charges are reported as separate line items within total segment operating income (loss)is primarily comprised of selling, general and includeadministrative expenses including corporate office expenses as well as shared service center and certain other centrally managed expenses that are not fully allocated to operating divisions. Salaries and related expenses includedivisions; salaries, long-term incentives, annual bonuses and other miscellaneous benefits for corporate office employees. Office and general expenses primarily includeemployees; professional fees related to internal control compliance, financial statement audits and legal, information technology and other consulting services that are engaged and managed through the corporate office. Officeoffice; and general expenses also include rental expense and depreciation of leasehold improvements for properties occupied by corporate office employees. A portion of centrally managed expenses areis allocated to operating divisions based on a formula that uses the planned revenues of each of the operating units. Amounts allocated also include specific charges for information technology-related projects, which are allocated based on utilization.
Corporate and other expenses decreased by $11.2 to $19.8 during the thirdsecond quarter of 2017 by $16.02019 and $4.2 to $14.9$64.4 during the first half of 2019 as compared to the third quarterprior-year period, primarily attributable to an increase in allocated service fees, mainly as a result of 2016, primarily due tothe inclusion of Acxiom, and lower professional fees, partially offset by higher incentive expense. During the first nine monthshalf of 2017,2019, corporate and other expenses decreased by $19.8 to $74.2 comparedexpense includes $0.7 of restructuring charges. See "Restructuring Charges" in MD&A and Note 9 to the first nine months of 2016, also primarily due to lower incentive expense.Consolidated Financial Statements for the further information.


Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


LIQUIDITY AND CAPITAL RESOURCES
CASH FLOW OVERVIEW
The following tables summarize key financial data relating to our liquidity, capital resources and uses of capital.
Nine months ended
September 30,		Six months ended
June 30,
Cash Flow Data2017 20162019 2018
Net income, adjusted to reconcile to net cash used in operating activities 1
$494.9
 $538.4
$373.7
 $291.6
Net cash used in working capital 2
(612.5) (491.8)(113.1) (837.5)
Changes in other non-current assets and liabilities using cash(21.4) (73.5)
Net cash used in operating activities$(139.0) $(26.9)
Changes in other assets and liabilities using cash(61.6) (11.8)
Net cash provided by (used in) operating activities$199.0
 $(557.7)
Net cash used in investing activities$(140.5) $(167.5)(77.9) (57.6)
Net cash used in financing activities$(113.1) $(466.9)
Net cash (used in) provided by financing activities(191.7) 341.0
 
1Reflects net income adjusted primarily for depreciation and amortization of fixed assets and intangible assets, amortization of restricted stock and other non-cash compensation, net losses on sales of businesses and deferred income taxes.
2Reflects changes in accounts receivable, expenditures billable to clients, other current assets, accounts payable, accrued liabilities and accruedcontract liabilities.
Operating Activities
Net cash used in operating activities during the first nine months of 2017 was $139.0, which was an increase of $112.1 as compared to the first nine months of 2016 driven by higher use of cash in working capital. Working capital in the first nine months of 2016 benefited from the spending patterns of our clients compared to the first nine months of 2017. Due to the seasonality of our business, we typically use cash from working capital in the first nine months of a year, with the largest impact in the first quarter, and generate cash from working capital in the fourth quarter, of a year. Thedriven by the seasonally strong media spending by our clients. Quarterly and annual working capital use inresults are impacted by the first nine monthsfluctuating annual media spending budgets of 2017 was primarily attributable to our clients as well as their changing media businesses.spending patterns throughout each year across various countries.
The timing of media buying on behalf of our clients across various countries affects our working capital and operating cash flow and can be volatile. In most of our businesses, our agencies enter into commitments to pay production and media costs on behalf of clients. To the extent possible, we pay production and media charges after we have received funds from our clients. The amounts involved, which substantially exceed our revenues, and primarily affect the level of accounts receivable, expenditures billable to clients, accounts payable, accrued liabilities and accruedcontract liabilities. Our assets include both cash received and accounts receivable from clients for these pass-through arrangements, while our liabilities include amounts owed on behalf of clients to media and production suppliers.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


Our accrued liabilities are also affected by the timing of certain other payments. For example, while annual cash incentive awards are accrued throughout the year, they are generally paid during the first quarter of the subsequent year.
Net cash provided by operating activities during the first half of 2019 was $199.0, which was a decrease in use of $756.7 as compared to the first half of 2018, primarily as a result of a decrease in working capital usage of $724.4. Working capital in the first half of 2019 was an unseasonably low use, which benefited from the timing of sizable cash collections that were received in the first half of 2019 instead of the fourth quarter of 2018, primarily attributable to our media businesses.
Investing Activities
Net cash used in investing activities during the first nine monthshalf of 20172019 primarily consisted of payments for capital expenditures of $108.7,$80.1, related mostly to leasehold improvements and computer hardwaresoftware and software.hardware.
Financing Activities
Net cash used in financing activities during the first nine monthshalf of 20172019 was primarily driven by the repurchase of 9.4 shares of our common stock for an aggregate cost of $216.0, including fees, and the payment of dividends of $211.2,$181.4 and the payment of $100.0 of the outstanding balance of our Term Loan due in 2021, partially offset by a netan increase in short-term borrowings of $429.9.$132.3, related mostly to an increase of outstanding commercial paper.
Foreign Exchange Rate Changes
The effect of foreign exchange rate changes on cash, cash equivalents and restricted cash included in the unaudited Consolidated Statements of Cash Flows resulted in a net increase of $0.4$10.3 during the first nine monthshalf of 2017.2019.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)

Balance Sheet DataSeptember 30,
2017		 December 31,
2016		 September 30,
2016
Cash, cash equivalents and marketable securities$705.0
 $1,100.6
 $894.6
      
Short-term borrowings$511.8
 $85.7
 $107.8
Current portion of long-term debt301.9
 323.9
 24.5
Long-term debt1,285.0
 1,280.7
 1,583.3
Total debt$2,098.7
 $1,690.3
 $1,715.6

LIQUIDITY OUTLOOK
We expect our cash flow from operations and existing cash and cash equivalents to be sufficient to meet our anticipated operating requirements at a minimum for the next twelve months. We also have a committed corporate credit facility as well as uncommitted lines of credit and a commercial paper program available to support our operating needs. We continue to maintain a disciplined approach to managing liquidity, with flexibility over significant uses of cash, including our capital expenditures, cash used for new acquisitions, our common stock repurchase program and our common stock dividends.
From time to time, we evaluate market conditions and financing alternatives for opportunities to raise additional funds or otherwise improve our liquidity profile, enhance our financial flexibility and manage market risk. Our ability to access the capital markets depends on a number of factors, which include those specific to us, such as our credit ratings, and those related to the financial markets, such as the amount or terms of available credit. There can be no guarantee that we would be able to access new sources of liquidity, or continue to access existing sources of liquidity, on commercially reasonable terms, or at all.
Funding Requirements
Our most significant funding requirements include our operations, non-cancelable operating lease obligations, capital expenditures, acquisitions, common stock dividends, taxes, restructuring, and debt service. Additionally, we may be required to make payments to minority shareholders in certain subsidiaries if they exercise their options to sell us their equity interests.
Notable funding requirements include:
Debt service – As of SeptemberJune 30, 2017,2019, we had outstanding short-term borrowings of $511.8$207.1 primarily from our commercial paper program and uncommitted lines of credit and commercial paper program used primarily to fund seasonal working capital needs. Our 2.25% Senior Notes in aggregate principal amount of $300.0 mature on November 15, 2017, and we expect to use proceeds from the issuance of commercial paper to repay the outstanding 2.25% Senior Notes upon maturity. The remainder of our debt is primarily long-term, with maturities scheduled from 2020 through 2024.

Management’s Discussion and Analysis2048. On June 13, 2019, we repaid $100.0 of Financial Condition and Resultsthe outstanding balance of Operations - (continued)
(Amountsour Term Loan due in Millions, Except Per Share Amounts)
(Unaudited)


2021, which reduced our borrowings under the agreement to $300.0.
Acquisitions – We paid cash of $21.7, net of cash acquired of $6.4,$0.6 for acquisitions completed in the first nine monthshalf of 2017.2019. We also paid $0.9 in up-front payments and $86.6$22.1 in deferred payments for prior acquisitions as well as ownership increases in our consolidated subsidiaries. In addition to potential cash expenditures for new acquisitions, we expect to pay approximately $54.0$38.0 over the next twelve months related to prior acquisitions. We may also be required to pay approximately $32.0$30.0 related to put options held by minority shareholders if exercised over the next twelve months. We will continue to evaluate strategic opportunities to grow and continue to strengthen our market position, particularly in our digital and marketing services offerings, and to expand our presence in high-growth and key strategic world markets.
Dividends – In the first nine monthshalf of 2017,2019, we paid threea quarterly cash dividendsdividend of $0.18$0.235 per share on our common stock, which corresponded to an aggregate dividend payment of $211.2.$181.4. Assuming we continue to pay a quarterly dividend of $0.18$0.235 per share, and there is no significant change in the number of outstanding shares as of SeptemberJune 30, 2017,2019, we would expect to pay approximately $280.0$363.0 over the next twelve months.
Share Repurchase Program
In February 2017, our BoardOn July 2, 2018, in connection with the announcement of Directors (the "Board") authorizedthe Acxiom Acquisition, we announced that share repurchases will be suspended for a new share repurchase programperiod of time in order to repurchase from time to time up to $300.0, excluding fees, of our common stock ("reduce the 2017 Share Repurchase Program"), which wasincreased debt levels incurred in addition toconjunction with the remaining amount available to be repurchased from the $300.0 authorization made by the Board in February 2016 ("the 2016 Share Repurchase Program"). We fully utilized the 2016 Share Repurchase Program during the third quarter of 2017.acquisition. As of SeptemberJune 30, 2017, $239.5,2019, $338.4, excluding fees, remains available for repurchase under the 2017 Share Repurchase Program. The 2017 Share Repurchase Program hasshare repurchase programs authorized in previous years, which have no expiration date.
We may effect such repurchases through open market purchases, trading plans established in accordance with SEC rules, derivative transactions or other means. We expect to continue to repurchase our common stock in future periods, although the timing and amount of the repurchases will depend on market conditions and other funding requirements.
FINANCING AND SOURCES OF FUNDS
Substantially all of our operating cash flow is generated by our agencies. Our cash balances are held in numerous jurisdictions throughout the world, including at the holding company level. Below is a summary of our sources of liquidity.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


Credit Agreements
We maintain a committed corporate credit facility, originally dated as of July 18, 2008, which has been amended and restated from time to time (the "Credit Agreement"). The Credit Agreement is a revolving facility, under which amounts borrowed by us or any of our subsidiaries designated under the Credit Agreement may be repaid and reborrowed, subject to an aggregate lending limit. On October 25, 2017, we amended and restated the Credit Agreement, increasing the revolving commitments under the Credit Agreement from $1,000.0 to $1,500.0, or the equivalent in other specified currencies, and extending the Credit Agreement's expiration to October 25, 2022. See Note 14 to the unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further information.
We use our Credit Agreement to increase our financial flexibility, to provide letters of credit primarily to support obligations of our subsidiaries and to support our commercial paper program. The Credit Agreement is a revolving facility, expiring in October 2022, under which amounts borrowed by us or any of our subsidiaries designated under the Credit Agreement may be repaid and reborrowed, subject to an aggregate lending limit of $1,500.0, or the equivalent in other currencies. The Company has the ability to increase the commitments under the Credit Agreement from time to time by an additional amount of up to $250.0, provided the Company receives commitments for such increases and satisfies certain other conditions. The aggregate available amount of letters of credit outstanding may decrease or increase, subject to a sublimit on letters of credit of $200.0,$50.0, or the equivalent in other specified currencies. Our obligations under the Credit Agreement are unsecured. As of SeptemberJune 30, 2017,2019, there were no borrowings under the Credit Agreement; however, we had $8.4$8.6 of letters of credit under the Credit Agreement, which reduced our total availability to $991.6.$1,491.4.
We were in compliance with all of our covenants in the Credit Agreement as of SeptemberJune 30, 2017.2019. The financial covenants in the Credit Agreement require that we maintain, as of the end of each fiscal quarter, certain financial measures for the four quarters then ended.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


The table below sets forth the financial covenants in effect as of SeptemberJune 30, 2017.2019.
 Four Quarters Ended Four Quarters Ended Four Quarters Ended Four Quarters Ended
Financial Covenants September 30, 2017 EBITDA Reconciliation September 30, 2017 June 30, 2019 EBITDA Reconciliation June 30, 2019
Interest coverage ratio (not less than) 1
 5.00x Operating income $941.0
 5.00x Operating income $1,066.5
Actual interest coverage ratio 18.05x Add:   8.20x Add:  
Leverage ratio (not greater than) 1
 3.50x Depreciation and amortization 253.6
 4.00x Depreciation and amortization 350.6
Actual leverage ratio 1.76x 
EBITDA 1
 $1,194.6
 2.66x 
EBITDA 1
 $1,417.1
 
1The interest coverage ratio is defined as EBITDA, as defined in the Credit Agreement and the Term Loan Agreement, to net interest expense for the four quarters then ended. The leverage ratio is defined as debt as of the last day of such fiscal quarter to EBITDA for the four quarters then ended. The inclusion of Acxiom results, as required per the Credit Agreement and the Term Loan Agreement, did not impact compliance with our covenants.
We also have uncommitted lines of credit with various banks whichthat permit borrowings at variable interest rates and whichthat are primarily used to fund working capital needs. We have guaranteed the repayment of some of these borrowings made by certain subsidiaries. If we lose access to these credit lines, we would have to provide funding directly to some of our international operations. As of SeptemberJune 30, 2017,2019, the Company had uncommitted lines of credit in an aggregate amount of $916.8,$1,085.5, under which we had outstanding borrowings of $152.5$57.1 classified as short-term borrowings on our Consolidated Balance Sheet. The average amount outstanding during the thirdsecond quarter of 20172019 was $124.7,$98.3, with a weighted-average interest rate of approximately 3.1%4.7%.
Commercial Paper
In June 2017, theThe Company established a commercial paper program under which the Company wasis authorized to issue unsecured commercial paper up to a maximum aggregate amount outstanding at any time of $1,000.0. On October 25, 2017, the Company increased the maximum aggregate amount outstanding at any time under our commercial paper program to $1,500.0. Borrowings under the program are supported by the Credit Agreement described above. Proceeds of the commercial paper will beare used for working capital and general corporate purposes, including the repayment of maturing indebtedness as described above, and other short-term liquidity needs. The maturities of the commercial paper vary but may not exceed 397 days from the date of issue. As of SeptemberJune 30, 2017, the Company had outstanding2019, there was $150.0 of commercial paper of $359.3 classified as short-term borrowings on our Consolidated Balance Sheet.outstanding. The average amount outstanding under the program during the thirdsecond quarter of 20172019 was $488.2,$482.6, with a weighted-average interest rate of 1.4%2.8% and a weighted-average maturity of fourteen18 days. See Note 14 to the unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further information.
Cash Pooling
We aggregate our domestic cash position on a daily basis. Outside the United States, we use cash pooling arrangements with banks to help manage our liquidity requirements. In these pooling arrangements, several IPG agencies agree with a single bank that the cash balances of any of the agencies with the bank will be subject to a full right of set-off against amounts that other agencies owe the bank, and the bank provides for overdrafts as long as the net balance for all the agencies does not exceed an agreed-upon level. Typically, each agency pays interest on outstanding overdrafts and receives interest on cash balances. Our unaudited Consolidated Balance Sheets reflect cash, net of bank overdrafts, under all of our pooling arrangements, and as of SeptemberJune 30, 2017,2019, the amount netted was $1,567.0.$2,059.7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)




DEBT CREDIT RATINGS
Our debt credit ratings as of October 16, 2017July 15, 2019, are listed below.
 Moody’s Investors Service S&P Global Ratings Fitch Ratings
Short-term ratingP-2 A-2 F2
Long-term ratingBaa2 BBB BBBBBB+
OutlookStable StableNegative PositiveStable
We are rated investment-grade by Moody's Investors Service, S&P Global Ratings and Fitch Ratings. On June 8, 2017, we received from the credit rating agencies the short-term credit ratings, described above, with respect to our commercial paper. The most recent update to our long-term credit ratings occurred in April 2017 when S&P Global Ratings upgraded our rating from BBB- to BBB with a Stable outlook. A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning credit rating agency. The rating of each credit rating agency should be evaluated independently of any other rating. Credit ratings could have an impact on liquidity, either adverse or favorable, because, among other things, they could affect funding costs in or the ability to access, the capital markets or otherwise. For example, our Credit Agreement fees and borrowing rates are based on a long-term credit ratings grid.grid, and our access to the commercial paper market is contingent on our maintenance of sufficient short-term debt ratings.


CRITICAL ACCOUNTING ESTIMATES
Our significant accounting policies are described in Note 1 to the Consolidated Financial Statements for the year ended December 31, 20162018, included in our 20162018 Annual Report on Form 10-K. As summarized in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report, we believe that certain of these policies are critical because they are important to the presentation of our financial condition and results of operations, and they require management’s most difficult, subjective or complex judgments, often as a result of the need to estimate the effect of matters that are inherently uncertain. These critical estimates relate to revenue recognition, income taxes, goodwill and other intangible assets, and pension and postretirement benefits. We base our estimates on historical experience and various other factors that we believe to be relevant under the circumstances. Estimation methodologies are applied consistently from year to year, and there have been no significant changes in the application of critical accounting estimates since December 31, 20162018. Actual results may differ from these estimates under different assumptions or conditions.
RECENT ACCOUNTING STANDARDS
See Note 1316 to the unaudited Consolidated Financial Statements for further information on certain accounting standards that have been recently adopted or that have not yet been required to be implemented and may be applicable to our future operations.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


NON-GAAP FINANCIAL MEASURE
This MD&A includes both financial measures in accordance with U.S. GAAP, as well as a non-GAAP financial measure. The non-GAAP financial measure represents Net Income Available to IPG Common Stockholders before Provision for Income Taxes, Total (Expenses) and Other Income, Equity in Net Loss of Unconsolidated Affiliates, Net Income Attributable to Noncontrolling Interests and Amortization of Acquired Intangibles, which we refer to as “EBITA”.
EBITA should be viewed as supplemental to, and not as an alternative for Net Income Available to IPG Common Stockholders calculated in accordance with U.S. GAAP ("net income") or operating income calculated in accordance with U.S. GAAP ("operating income"). This section also includes reconciliation of this non-GAAP financial measure to the most directly comparable U.S. GAAP financial measures, as presented below.
EBITA is used by our management as an additional measure of our Company’s performance for purposes of business decision-making, including developing budgets, managing expenditures, and evaluating potential acquisitions or divestitures. Period-to-period comparisons of EBITA help our management identify additional trends in our Company’s financial results that may not be shown solely by period-to-period comparisons of net income or operating income. In addition, we may use EBITA in the incentive compensation programs applicable to some of our employees in order to evaluate our Company’s performance. Our management recognizes that EBITA has inherent limitations because of the excluded items, particularly those items that are recurring in nature. Management also reviews operating and net income as well as the specific items that are excluded from EBITA, but included in net income or operating income, as well as trends in those items. The amounts of those items are set forth, for the applicable periods, in the reconciliation of EBITA to net income that accompany our disclosure documents containing non-GAAP financial measures, including the reconciliations contained in this MD&A.
We believe that the presentation of EBITA is useful to investors in their analysis of our results for reasons similar to the reasons why our management finds it useful and because it helps facilitate investor understanding of decisions made by management in light of the performance metrics used in making those decisions. In addition, as more fully described below, we believe that providing EBITA, together with a reconciliation of this non-GAAP financial measure to net income, helps investors make comparisons between our Company and other companies that may have different capital structures, different effective income tax rates and tax attributes, different capitalized asset values and/or different forms of employee compensation. However, EBITA is intended to provide a supplemental way of comparing our Company with other public companies and is not intended as a substitute for comparisons based on net income or operating income. In making any comparisons to other companies, investors need to be aware that companies may use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measures and the corresponding U.S. GAAP measures provided by each company under the applicable rules of the SEC.
The following is an explanation of the items excluded by us from EBITA but included in net loss:
•
Total (Expense) and Other Income, Provision for Income Taxes, Equity in Net Loss of Unconsolidated Affiliates and Net Income Attributable to Noncontolling Interests. We exclude these items (i) because these items are not directly attributable to the performance of our business operations and, accordingly, their exclusion assists management and investors in making period-to-period comparisons of operating performance and (ii) to assist management and investors in making comparisons to companies with different capital structures. Investors should note that these items will recur in future periods.

•
Amortization of Acquired Intangibles. Amortization of acquired intangibles is a non-cash expense relating to intangible assets arising from acquisitions that are expensed on a straight-line basis over the estimated useful life of the related assets. We exclude amortization of acquired intangibles because we believe that (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired intangible assets. Accordingly, we believe that this exclusion assists management and investors in making period-to-period comparisons of operating performance. Investors should note that the use of intangible assets contributed to revenue in the periods presented and will contribute to future revenue generation and should also note that such expense may recur in future periods.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


The following table presents the reconciliation of Net Income Available to IPG Common Stockholders to EBITA for the second quarter and first half of 2019 and 2018.
 Three months ended
June 30,		 Six months ended
June 30,
 2019 2018 2019 2018
Net Revenue$2,125.9
 $1,948.2
 $4,130.7
 $3,722.2
        
EBITA Reconciliation:       
Net Income Available to IPG Common Stockholders 1
$169.5
 $145.8
 $161.5
 $131.7
        
Add Back:       
Provision for Income Taxes43.6
 63.6
 54.1
 76.3
Subtract:       
Total (Expenses) and Other Income(47.7) (37.7) (96.6) (78.0)
Equity in Net Loss of Unconsolidated Affiliates(0.1) (0.1) (0.4) (2.0)
Net Income Attributable to Noncontrolling Interests(3.3) (2.0) (1.8) 0.0
Operating Income 1
264.2
 249.2
 314.4
 288.0
        
Add Back:       
Amortization of Acquired Intangibles21.3
 5.2
 42.9
 10.5
        
EBITA 1
$285.5
 $254.4
 $357.3
 $298.5
EBITA Margin on Net Revenue 1
13.4% 13.1% 8.6% 8.0%
1Calculations include restructuring charges of $2.1 and $33.9 for the three and six months ended June 30, 2019, respectively.


Item 3.Quantitative and Qualitative Disclosures about Market Risk
In the normal course of business, we are exposed to market risks related to interest rates, foreign currency rates and certain balance sheet items. There has been no significant change in our exposure to market risk during the thirdsecond quarter of 2017.2019. Our exposure to market risk for changes in interest rates primarily relates to the fair market value and cash flows of our debt obligations. As of SeptemberJune 30, 2017,2019, and December 31, 2016,2018, approximately 77% and 93%, respectively,86% of our debt obligations bore fixed interest rates. We have, from time to time, used interest rate swaps for risk management purposes to manage our exposure to changes in interest rates. We do not have any interest rate swaps outstanding as of September 30, 2017. For further discussion of our exposure to market risk, refer to Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in our 20162018 Annual Report on Form 10-K.


Item 4.Controls and Procedures
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of SeptemberJune 30, 2017,2019, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.
There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.
Changes in Internal Control Over Financial Reporting
There has been no change in internal control over financial reporting in the quarter ended SeptemberJune 30, 2017,2019, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION
Item 1.Legal Proceedings
Information about our legal proceedings is set forth in Note 1215 to the unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.


Item 1A.Risk Factors
In the thirdsecond quarter of 2017,2019, there have been no material changes in the risk factors we have previously disclosed in Item 1A, Risk Factors,, in our 20162018 Annual Report on Form 10-K.


Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
(c)The following table provides information regarding our purchases of our equity securities during the period from JulyApril 1, 20172019 to SeptemberJune 30, 2017:2019:
 
Total Number of
Shares (or Units)
Purchased 1
 
Average Price Paid
per Share (or Unit) 2
 
Total Number of Shares (or Units) Purchased as Part of
Publicly Announced
Plans or Programs 3
 
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs 3
July 1 - 311,045,347
 $24.76
 1,033,613
 $314,797,836
August 1 - 312,336,046
 $20.98
 2,334,077
 $265,832,070
September 1 - 301,288,700
 $20.42
 1,288,700
 $239,522,615
Total4,670,093
 $21.67
 4,656,390
  
 
Total Number of Shares (or Units) Purchased 1
 
Average Price Paid
per Share (or Unit) 2
 
Total Number of Shares (or Units) Purchased as Part of
Publicly Announced
Plans or Programs 3
 
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs 3
April 1 - 302,765
 $23.12
 —
 $338,421,933
May 1 - 313,153
 $21.27
 —
 $338,421,933
June 1 - 302,037
 $22.38
 —
 $338,421,933
Total7,955
 $22.20
 —
  
 
1IncludedThe total number of shares of our common stock, par value $0.10 per share, purchased were withheld under the terms of grants under employee stock-based compensation plans to offset tax withholding obligations that arose upon vesting and release of restricted shares (the “Withheld Shares”"Withheld Shares"). We repurchased 11,734 Withheld Shares in July 2017, 1,969 Withheld Shares in August 2017 and no Withheld Shares in September 2017, for a total of 13,703 Withheld Shares during the three-month period.
2The average price per share for each of the months in the fiscal quarter and for the three monththree-month period was calculated by dividing (a) the sum forin the applicable period of the aggregate value of the tax withholding obligations and the aggregate amount we paid for shares acquired under our share repurchase programs, described in Note 5 to the unaudited Consolidated Financial Statements, by (b) the sum of the number of Withheld Shares and the number of shares acquired in our share repurchase programs.Shares.
3OnIn February 10, 2017, we announced that ourthe Company's Board of Directors had approved(the "Board") authorized a new share repurchase program to repurchase from time to time up to $300.0 million, excluding fees, of our common stock (the "2017 Share Repurchase Program"). In February 2018, the Board authorized a share repurchase program to repurchase from time to time up to $300.0 million, excluding fees, of our common stock, which was in addition to any amounts available on existing authorizations.remaining under the 2017 Share Repurchase Program. On July 2, 2018, in connection with the announcement of the Acxiom Acquisition, we announced that share repurchases will be suspended for a period of time in order to reduce the increased debt levels incurred in conjunction with the acquisition, and no shares were repurchased pursuant to the share repurchase programs in the periods reflected. There isare no expiration datedates associated with the share repurchase programs.


Item 5.Other Information
(a) On October 25, 2017, The Interpublic Group of Companies, Inc. (the “Company”) entered into an amendment and restatement (the “Amendment”) of the Company’s credit agreement originally dated as of July 18, 2008, as amended and restated as of April 23, 2010, as further amended and restated as of May 31, 2011, as further amended as of November 6, 2012, as further amended and restated as of December 12, 2013 and as further amended and restated as of October 20, 2015 (as further amended and restated pursuant to the Amendment, the “Credit Agreement”). Under the Amendment, among other things, the revolving commitments under the Credit Agreement have been increased from $1 billion to $1.5 billion, and the maturity date was extended to October 25, 2022. The Company continues to have the ability to increase the commitments under the Credit Agreement from time to time by an additional amount of up to $250 million, provided the Company receives commitments for such increases and satisfies certain other conditions.
The cost structure under the Amendment has not changed. Based on the Company’s current credit ratings, the applicable margin for Eurocurrency Rate borrowings (as defined in the Credit Agreement) is 1.100%, and the facility fee payable on a lender’s revolving commitment is 0.150%.
In addition to other usual and customary covenants, the Credit Agreement contains two financial covenants, both of which remain the same. Under the Credit Agreement, the Company is required to maintain, as of the end of each fiscal quarter: (i) an interest coverage ratio of not less than 5.00 to 1.00 for the period of four fiscal quarters then ended; and (ii) a leverage ratio of not more than 3.50 to 1.00 for the period of four fiscal quarters then ended. The leverage ratio may be changed to not more than 4.00

to 1, at the election of the Company, for four consecutive fiscal quarters, beginning with the fiscal quarter in which there is an occurrence of one or more acquisitions with an aggregate purchase price of at least $200,000,000.
From time to time, one or more of the lenders under the Credit Agreement and certain of their respective affiliates have provided, and may in the future provide, investment banking and other financial advisory services to the Company and its affiliates, for which such lender or its affiliate has received or will receive payment of customary fees and expenses.
The foregoing description is qualified in its entirety by reference to the Credit Agreement, attached hereto as Exhibit 10(i)(1), which is incorporated herein by reference.
(b) As previously disclosed in a Current Report on Form 8-K filed on June 8, 2017, the Company established a commercial paper program (the “Program”), under which the Company may issue unsecured commercial paper notes (the “Notes”) on a private placement basis. On October 25, 2017, the Company increased the amount of Notes that it may issue from time to time under the Program to an aggregate amount not to exceed $1.5 billion outstanding at any time. Under the Program, the Company may issue Notes from time to time, and proceeds of the Notes will be used for working capital and general corporate purposes, including the repayment of maturing indebtedness and other short-term liquidity needs. Citibank, N.A. is acting issuing and paying agent under the Program. Each of the commercial paper dealers will act as a dealer under the Program (each a “Dealer” and, collectively, the “Dealers”) pursuant to the terms and conditions of a commercial paper dealer agreement entered into between the Company and each Dealer (the “Dealer Agreements”). Each Dealer Agreement contains customary representations, warranties, covenants and indemnification provisions. From time to time, one or more of the Dealers and certain of their respective affiliates have provided, and may in the future provide, commercial banking, investment banking and other financial advisory services to the Company and its affiliates for which such Dealer has received or will receive customary fees and expenses. The Notes have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, and may not be offered and sold except in compliance with an applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws.
The information contained in this Report on Form 10-Q shall not constitute an offer to sell or the solicitation of an offer to purchase any Notes, nor shall there be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful.
The maturities of the Notes will vary but may not exceed 397 days from the date of issue. The Notes will be sold under customary terms in the commercial paper market and will be issued at a discount from par, or, alternatively, will be issued at par and bear varying interest rates on a fixed or floating basis.

Item 6.Exhibits
All exhibits required pursuant to Item 601 of Regulation S-K to be filed as part of this report or incorporated herein by reference to other documents, are listed in the Index to Exhibits below.

INDEX TO EXHIBITS
Exhibit No. Description
   
10(i)10(iii)(A)(1)
 Credit
Transition Agreement, dated as of July 18, 2008, as amendedJune 11, 2019, by and restated as of April 23, 2010, as further amendedbetween the Company and restated as of May 31, 2011, as further amended as of November 6, 2012, as further amended and restated as of DecemberFrank Mergenthaler, is incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on June 12, 2013, as further amended and restated as of October 20, 2015 and as further amended and restated as of October 25, 2017 among The Interpublic Group of Companies, Inc., the lenders named therein and Citibank, as administrative agent.2019.


   
10(iii)(A)(1)(2)
 The Interpublic
Extension of Existing Executive Severance Plan, amendedChange of Control Agreement between the Company and restated, effective August 16, 2017.Michael Roth dated July 24, 2019.

   
12.110(iii)(A)(3)
 ComputationExtension of RatiosExisting Executive Change of Earnings to Fixed Charges.Control Agreement between the Company and Andrew Bonzani dated July 24, 2019.
   
10(iii)(A)(4)
Extension of Existing Executive Change of Control Agreement between the Company and Christopher Carroll dated July 24, 2019.

10(iii)(A)(5)
Extension of Existing Executive Change of Control Agreement between the Company and Philippe Krakowsky dated July 24, 2019.

10(iii)(A)(6)
Extension of Existing Executive Change of Control Agreement between the Company and Ellen Johnson dated July 24, 2019.

10(iii)(A)(7)
The Interpublic Senior Executive Incentive Plan
31.1
 Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
   
31.2
 Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
   
32
 Certification of the Chief Executive Officer and the Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350 and Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended.
   
101 Interactive Data File, for the period ended SeptemberJune 30, 2017.2019. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
   
 THE INTERPUBLIC GROUP OF COMPANIES, INC.
   
 By
/s/ Michael I. Roth
  
Michael I. Roth
Chairman and Chief Executive Officer
Date: October 26, 2017July 25, 2019
 
   
   
 By
/s/ Christopher F. Carroll
  
Christopher F. Carroll
Senior Vice President, Controller and
Chief Accounting Officer
(Principal Accounting Officer)
Date: October 26, 2017July 25, 2019


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