UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



	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~~



			o☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

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.

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, 2017~~April 15, 2021 was ~~388,608,593.~~

~~INDEX~~

				Page
PART I. FINANCIAL INFORMATION
Item 1.			Financial Statements (Unaudited)	2
			Consolidated Statements of Operations for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020	23
			Consolidated Statements of Comprehensive Income for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020	34
			Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~2020	45
			Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020	56
			Consolidated Statements of Stockholders’ Equity for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020	67
			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	3440

Item 5.6.			~~Other Information~~Exhibits	3440
~~Item 6.~~	~~Exhibits~~	35
INDEX TO EXHIBITS				3641
SIGNATURES				3742

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~~•the 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;

•the impacts of the novel coronavirus (COVID-19) pandemic and the measures to contain its spread, including social distancing efforts and restrictions on businesses, social activities and travel, any failure to realize anticipated benefits from the rollout of COVID-19 vaccination campaigns and the resulting impact on the economy, our clients and demand for our services, which may precipitate or exacerbate other risks and uncertainties;

•our ability to attract new clients and retain existing clients;

•our ability to retain and attract key employees;

•risks associated with assumptions we make in connection with our critical accounting estimates, including changes in assumptions associated with any effects of a weakened economy;

•potential adverse effects if we are required to recognize impairment charges or other adverse accounting-related developments;

•risks associated with the effects of global, national and regional economic and political conditions, including counterparty risks and fluctuations in economic growth rates, interest rates and currency exchange rates; ~~and~~

•developments from changes in the regulatory and legal environment for advertising and marketing and communications services companies around the ~~world.~~world, including laws and regulations related to data protection and consumer privacy; and

•failure to fully realize the anticipated benefits of our 2020 restructuring actions and other cost-savings initiatives.

Investors should carefully consider these factors and the additional risk factors outlined in more detail under Item 1A, Risk Factors, in our most recent annual report on Form ~~10-K.~~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

Three months ended
September 30, Nine months ended
September 30,
2017 2016 2017 2016
REVENUE $ 1,902.6
$ 1,922.2
$ 5,541.4
$ 5,582.1

OPERATING EXPENSES:
Salaries and related expenses 1,227.6
1,228.0
3,742.3
3,726.3
Office and general expenses 455.9
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

EXPENSES AND OTHER INCOME:
Interest expense (21.0 ) (21.7 ) (67.6 ) (68.8 )
Interest income 4.1
4.7
14.0
16.1
Other (expense) income, net (9.9 ) 5.3
(24.5 ) (13.5 )
Total (expenses) and other income (26.8 ) (11.7 ) (78.1 ) (66.2 )

Income before income taxes 192.3
196.3
377.2
389.1
Provision for income taxes 42.5
63.8
115.8
91.9
Income of consolidated companies 149.8
132.5
261.4
297.2
Equity in net (loss) income of unconsolidated affiliates (1.0 ) 0.2
0.1
(1.6 )
NET INCOME 148.8
132.7
261.5
295.6
Net (income) loss attributable to noncontrolling interests (2.6 ) (4.1 ) 0.9
(4.7 )
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

Weighted-average number of common shares outstanding:
Basic 389.5
397.7
391.2
399.5
Diluted 397.2
407.9
398.6
408.8

Dividends declared per common share $ 0.18
$ 0.15
$ 0.54
$ 0.45

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended
September 30, Nine months ended
September 30,
2017 2016 2017 2016
NET INCOME $ 148.8
$ 132.7
$ 261.5
$ 295.6

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation:
Foreign currency translation adjustments 29.2
4.4
114.0
43.5
Reclassification adjustments recognized in net income 1.5
(4.2 ) 1.8
2.3
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 effect 0.1
0.1
0.1
0.1
(0.7 ) 0.2
(0.6 ) (0.8 )

Derivative instruments:
Recognition of previously unrealized losses in net income 0.5
0.5
1.6
1.5
Income tax effect (0.2 ) (0.2 ) (0.6 ) (0.6 )
0.3
0.3
1.0
0.9

Defined benefit pension and other postretirement plans:
Net actuarial gains (losses) for the period 8.2
(79.2 ) 9.0
(78.4 )
Amortization of unrecognized losses, transition obligation and prior service cost included in net income 1.7
1.2
5.2
3.7
Settlement and curtailment losses included in net income 4.0
0.1
4.0
0.3
Other 0.0
0.0
(0.6 ) 0.0
Income tax effect (2.8 ) 13.0
(3.4 ) 12.5
11.1
(64.9 ) 14.2
(61.9 )

Other comprehensive income (loss), net of tax 41.4
(64.2 ) 130.4
(16.0 )
TOTAL COMPREHENSIVE INCOME 190.2
68.5
391.9
279.6
Less: comprehensive income (loss) attributable to noncontrolling interests 2.5
5.4
(0.3 ) 5.9
COMPREHENSIVE INCOME ATTRIBUTABLE TO IPG $ 187.7
$ 63.1
$ 392.2
$ 273.7

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

Property and equipment, net of accumulated depreciation and amortization of $1,162.7 and $1,133.9, respectively

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in Millions)

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Reclassifications related to redeemable

noncontrolling interests

Change in redemption value of redeemable

noncontrolling interests

~~THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY – (CONTINUED)~~

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 December 31, 2015 404.4
$ 40.4
$ 1,404.1
$ 1,437.6
$ (845.6 ) $ (71.0 ) $ 1,965.5
$ 36.3
$ 2,001.8
Net income 290.9
290.9
4.7
295.6
Other comprehensive (loss) income (17.2 ) (17.2 ) 1.2
(16.0 )
Reclassifications related to redeemable
noncontrolling interests
0.5
0.5
Distributions to noncontrolling interests (10.8 ) (10.8 )
Change in redemption value of redeemable
noncontrolling interests
(1.3 ) (1.3 ) (1.3 )
Repurchases of common stock (193.3 ) (193.3 ) (193.3 )
Common stock dividends (179.6 ) (179.6 ) (179.6 )
Stock-based compensation 3.5
0.3
88.2
88.5
88.5
Exercise of stock options 1.2
0.1
10.2
10.3
10.3
Shares withheld for taxes (1.1 ) (0.1 ) (22.9 ) (23.0 ) (23.0 )
Other 1.6
(1.0 ) 0.6
2.2
2.8
Balance at September 30, 2016 408.0
$ 40.7
$ 1,481.2
$ 1,546.6
$ (862.8 ) $ (264.3 ) $ 1,941.4
$ 34.1
$ 1,975.5

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

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"~~“Company,” “IPG,” “we,” “us” or ~~"our"~~“our”) in accordance with accounting principles generally accepted in the United States of America ("(“U.S. ~~GAAP"~~GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the ~~"SEC"~~“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~~effects of the novel coronavirus ("COVID-19") pandemic have impacted and will likely continue to impact our results of operations, cash flows and financial ~~statements in conformity with U.S. GAAP requires us to make judgments,~~position. The Company’s Consolidated Financial Statements presented herein reflect the latest estimates and assumptions ~~and estimates~~made by management that affect the reported amounts of assets and liabilities and related disclosures as of the date of the consolidated financial statements and reported amounts of revenue and ~~disclosed.~~ expenses during the reporting periods presented. The Company believes it has used reasonable estimates and assumptions to assess the fair values of goodwill, long-lived assets and indefinite-lived intangible assets; assessment of the annual effective tax rate; valuation of deferred income taxes and allowance for expected credit losses on future uncollectible accounts receivable.

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 ~~2016~~ Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2020 (the “2020 Annual Report”).

Cost of services is comprised of the expenses of our revenue-producing reportable segments, Integrated Agency Networks (“IAN”) and IPG DXTRA (“DXTRA”), including salaries and related expenses, office and other direct expenses and billable expenses, and includes an allocation of the centrally managed expenses from Corporate and other. 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 from Corporate and other, 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 in 2021 consist of adjustments to the Company's restructuring actions taken during 2020 to lower our operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business, as discussed further in Note 7. Restructuring charges mainly include severance and termination costs and lease impairment costs.

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~~changes have been made to prior-period financial statements to conform to the current-period presentation.

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 2: Revenue

Disaggregation of Revenue

We have two reportable segments as of March 31, 2021: IAN and DXTRA, as further discussed in Note 11. IAN principally generates revenue from providing advertising and media services as well as a comprehensive array of global communications, marketing services and data management. DXTRA generates revenue from a comprehensive array of global public relations and communication services as well as providing events, sports and entertainment marketing, corporate and brand identity, and strategic marketing consulting.

Our agencies are located in over 100 countries, including every significant world market. Our geographic revenue breakdown is listed below.


	Three months ended March 31,
Total revenue:	2021		2020
United States	$	1,425.8	$	1,569.6
International:
United Kingdom	203.5		197.1
Continental Europe	195.6		169.8
Asia Pacific	210.9		211.4
Latin America	83.6		86.8
Other	137.6		125.1
Total International	831.2		790.2
Total Consolidated	$	2,257.0	$	2,359.8


	Three months ended March 31,
Net revenue:	2021		2020
United States	$	1,309.8	$	1,320.0
International:
United Kingdom	184.0		165.7
Continental Europe	175.8		146.0
Asia Pacific	169.1		158.8
Latin America	75.4		79.3
Other	113.6		102.3
Total International	717.9		652.1
Total Consolidated	$	2,027.7	$	1,972.1


IAN	Three months ended March 31,
Total revenue:	2021		2020
United States	$	1,157.9	$	1,193.3
International	693.5		625.5
Total IAN	$	1,851.4	$	1,818.8

Net revenue:
United States	$	1,113.5	$	1,111.9
International	620.6		552.6
Total IAN	$	1,734.1	$	1,664.5

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)


DXTRA	Three months ended March 31,
Total revenue:	2021		2020
United States	$	267.9	$	376.3
International	137.7		164.7
Total DXTRA	$	405.6	$	541.0

Net revenue:
United States	$	196.3	$	208.1
International	97.3		99.5
Total DXTRA	$	293.6	$	307.6

Contract Balances

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.


	March 31, 2021		December 31, 2020
Accounts receivable, net of allowance of $92.6 and $98.3, respectively	$	3,440.3	$	4,646.4
Accounts receivable, billable to clients	1,842.7		1,820.7
Contract assets	43.1		51.8
Contract liabilities (deferred revenue)	689.1		657.8

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 with the exception of our data management contracts. For those contracts with a term of more than one year, we had approximately $643.0 of unsatisfied performance obligations as of March 31, 2021, which will be recognized as services are performed over the remaining contractual terms through 2027.

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 2:3: 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
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
Other notes payable and capitalized leases 45.9
45.9
65.4
65.4
Total long-term debt 1,586.9
1,604.6

Less: current portion 301.9
323.9

Long-term debt, excluding current portion $ 1,285.0
$ 1,280.7


	Effective Interest Rate	March 31, 2021		December 31, 2020

3.750% Senior Notes due 2021 (less unamortized discount and issuance costs of $0.1 and $0.5, respectively)	3.980%	$	499.4	$	499.1
4.000% Senior Notes due 2022	4.130%	0		249.3
3.750% Senior Notes due 2023	4.320%	0		498.8
4.200% Senior Notes due 2024 (less unamortized discount and issuance costs of $0.2 and $0.6, respectively)	4.240%	249.2		498.3
4.650% Senior Notes due 2028 (less unamortized discount and issuance costs of $1.3 and $3.4, respectively)	4.780%	495.3		495.2
4.750% Senior Notes due 2030 (less unamortized discount and issuance costs of $3.5 and $5.5, respectively)	4.920%	641.0		640.8
2.400% Senior Notes due 2031 (less unamortized discount and issuance costs of $0.8 and $4.7, respectively)	2.512%	494.5		0
3.375% Senior Notes due 2041 (less unamortized discount and issuance costs of $1.1 and $5.8, respectively)	3.448%	493.1		0
5.400% Senior Notes due 2048 (less unamortized discount and issuance costs of $2.7 and $5.1, respectively)	5.480%	492.2		492.1
Other notes payable and capitalized leases		45.0		44.7
Total long-term debt		3,409.7		3,418.3
Less: current portion		502.8		502.5
Long-term debt, excluding current portion		$	2,906.9	$	2,915.8

As of March 31, 2021 and December 31, 2020, the estimated fair value of the Company's long-term debt was $3,739.9 and $3,995.0, respectively. Refer to Note 12 for details.

Debt Transactions

2.400% Senior Notes due 2031

On February 25, 2021, we issued a total of $500.0 in aggregate principal amount of 2.400% unsecured senior notes (the “2.400% Senior Notes”) due March 1, 2031. Upon issuance, the 2.400% Senior Notes were reflected in our unaudited Consolidated Balance Sheets at $494.5, net of discount of $0.8 and net of capitalized debt issuance costs, including commissions and offering expenses of $4.7, both of which will be amortized in interest expense through the maturity date using the effective interest method. Interest is payable semi-annually in arrears on March 1st and September 1st of each year, commencing on September 1, 2021.

3.375% Senior Notes due 2041

On February 25, 2021, we issued a total of $500.0 in aggregate principal amount of 3.375% unsecured senior notes (the “3.375% Senior Notes”) due March 1, 2041. Upon issuance, the 3.375% Senior Notes were reflected in our unaudited Consolidated Balance Sheets at $493.1, net of discount of $1.1 and net of capitalized debt issuance costs, including commissions and offering expenses of $5.8, both of which will be amortized in interest expense through the maturity date using the effective interest method. Interest is payable semi-annually in arrears on March 1st and September 1st of each year, commencing on September 1, 2021.


1	~~See Note 11 for information on the fair value measurement of our long-term debt.~~

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Consistent with our other outstanding debt securities, the newly issued 2.400% and 3.375% Senior Notes include covenants that, among other things, limit our liens and the liens of certain of our consolidated subsidiaries, but do not require us to maintain any financial ratios or specified levels of net worth or liquidity. We may redeem the 2.400% and 3.375% Senior Notes at any time in whole, or from time to time in part, in accordance with the provisions of the indenture, including the applicable supplemental indentures, which contain make-whole provisions, under which the 2.400% and 3.375% Senior Notes were issued. Additionally, upon the occurrence of a change of control repurchase event with respect to the 2.400% and 3.375% Senior Notes, each holder of the 2.400% and 3.375% Senior Notes has the right to require the Company to purchase that holder’s 2.400% and 3.375% Senior Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, unless the Company has exercised its option to redeem all the 2.400% and 3.375% Senior Notes. The proceeds of the 2.400% and 3.375% Senior Notes were used in funding the early extinguishment of certain of our Senior Notes.

4.000% Senior Notes due 2022

In March 2021, we redeemed all $250.0 in aggregate principal amount of the 4.000% unsecured senior notes due 2022 (the "4.000% Senior Notes"). Total cash paid to redeem the 4.000% Senior Notes was $258.9. In connection with the redemption of the 4.000% Senior Notes, we recognized a loss on early extinguishment of debt of $9.2, which included a redemption premium of $8.6 and the write-off of the remaining unamortized discount and debt issuance costs of $0.6. The loss on early extinguishment of debt was recorded in Other expense, net within our unaudited Consolidated Statement of Operations.

3.750% Senior Notes due 2023

In March 2021, we redeemed all $500.0 in aggregate principal amount of the 3.750% unsecured senior notes due 2023 (the "3.750% Senior Notes"). Total cash paid to redeem the 3.750% Senior Notes was $532.9. In connection with the redemption of the 3.750% Senior Notes, we recognized a loss on early extinguishment of debt of $36.5, which included a redemption premium of $30.7, the write-off of the remaining unamortized discount and debt issuance costs of $1.1 and a related deferred loss in other comprehensive income of $4.7. The loss on early extinguishment of debt was recorded in Other expense, net within our unaudited Consolidated Statement of Operations.

4.200% Senior Notes due 2024

In March 2021, we redeemed $250.0 of the $500.0 in aggregate principal amount of the 4.200% unsecured senior notes due 2024 (the "4.200% Senior Notes"). Total cash paid to redeem the 4.200% Senior Notes was $282.2. In connection with the redemption of the 4.200% Senior Notes, we recognized a loss on early extinguishment of debt of $28.3, which included a redemption premium of $27.5, and the write-off of half of the remaining unamortized discount and unamortized debt issuance costs of $0.8. The loss on early extinguishment of debt was recorded in Other expense, net within our unaudited Consolidated Statement of Operations.

Credit ~~Agreements~~Arrangements

Credit Agreement

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,~~November 2024, 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 ~~September 30, 2017,~~March 31, 2021, there were no0 borrowings under the Credit Agreement; however, we had ~~$8.4~~$10.0 of letters of credit under the Credit Agreement, which reduced our total availability to ~~$991.6.~~$1,490.0. We were in compliance with all of our covenants in the Credit Agreement as of ~~September 30, 2017.~~March 31, 2021.

364-Day Credit Facility

On ~~October 25, 2017,~~March 27, 2020, we ~~amended~~entered into an agreement for a 364-day revolving credit facility (the "364-Day Credit Facility") that matured on March 26, 2021. The 364-Day Credit Facility was a revolving facility, under which amounts borrowed by us were to be repaid and ~~restated~~reborrowed, subject to an aggregate lending limit of $500.0. The cost structure of the 364-Day Credit Agreement was based on the Company’s credit ratings. The applicable margin for Base Rate Advances (as defined in the 364-Day Credit Facility) was 0.250%, the applicable margin for Eurodollar Rate Advances (as defined in the 364-Day Credit Facility) was 1.250%, and the facility fee payable on a lender’s revolving commitment was 0.250%. In addition, the 364-Day Credit Facility included covenants that, among other things, (i) limited our ~~Credit Agreement. See Note~~ 14 ~~for further discussion.~~

liens and the liens of our consolidated subsidiaries,

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Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

and (ii) limited subsidiary debt. The 364-Day Credit Facility also contained a financial covenant that required us to maintain, on a consolidated basis as of the end of each fiscal quarter, a leverage ratio for the four quarters then ended. The leverage ratio and other covenants set forth in the 364-Day Credit Facility were equivalent to the covenants contained in the Company’s existing Credit Agreement, which remains in full effect.

Uncommitted Lines of Credit

We also have uncommitted lines of credit with various banks ~~which~~that permit borrowings at variable interest rates and ~~which~~that 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 ~~September 30, 2017,~~March 31, 2021, the Company had uncommitted lines of credit in an aggregate amount of ~~$916.8,~~$927.9, under which we had outstanding borrowings of ~~$152.5~~$43.1 classified as short-term borrowings on our Consolidated Balance Sheet. The average amount outstanding during the ~~third~~first quarter of ~~2017~~2021 was ~~$124.7,~~$81.4 with a weighted-average interest rate of approximately ~~3.1%~~2.9%.

Commercial Paper

~~In June 2017, the~~The Company ~~established a commercial paper program under which the Company was~~is 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 be~~are 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. AsDuring the first quarter of ~~September 30, 2017, the Company had outstanding~~2021, there was 0 commercial paper activity and, as of ~~$359.3 classified as short-term borrowings on our Consolidated Balance Sheet. The average amount outstanding under the program during the third quarter of 2017~~March 31, 2021, there was ~~$488.2, with a weighted-average interest rate of 1.4% and a weighted-average maturity of fourteen days.~~

~~On October 25, 2017, the Company increased the maximum aggregate amount outstanding at any time under our~~0 commercial paper ~~program from $1,000.0~~outstanding.

Table of Contents

Notes to ~~$1,500.0. See Note~~ 14 ~~for further discussion.~~Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 3:4: Earnings Per Share

The following sets forth basic and diluted earnings per common share available to IPG common stockholders.


	Three Months Ended March 31,
	2021		2020
Net income available to IPG common stockholders	$	91.7	$	4.7

Weighted-average number of common shares outstanding - basic	391.5		387.7
Dilutive effect of stock options and restricted shares	4.5		4.0
Weighted-average number of common shares outstanding - diluted	396.0		391.7

Earnings per share available to IPG common stockholders:
Basic	$	0.23	$	0.01
Diluted	$	0.23	$	0.01

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 - basic 389.5
397.7
391.2
399.5
       Dilutive effect of stock options and restricted shares 7.7
10.2
7.4
9.3
Weighted-average number of common shares outstanding - diluted 397.2
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: 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 months of 2017, we completed seven acquisitions, including a strategic 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 included in the Integrated Agency Networks ("IAN") operating segment. During the first nine months of 2017, we recorded approximately $48.1 of goodwill and intangible assets related to our acquisitions.

During the first nine months of 2016, we completed nine 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

~~Table of Contents~~

~~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 optimization and digital content marketing agency 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 our nine acquisitions, three were included in the IAN operating segment, and six were included in the Constituency Management Group ("CMG") operating segment. During the first nine months of 2016, we recorded approximately $147.9 of goodwill and intangible assets related to our acquisitions, primarily in CMG.

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,
2017 2016
Cost of investment: current-year acquisitions $ 28.1
$ 61.0
Cost of investment: prior-year acquisitions 50.0
37.2
Less: net cash acquired (6.4 ) (13.6 )
Total cost of investment 71.7
84.6
Operating payments ¹
37.5
18.7
Total cash paid for acquisitions ²
$ 109.2
$ 103.3

Represents 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.

Of the total cash paid for acquisitions, $22.6 and $47.9 for the nine months ended September 30, 2017 and 2016, 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 and $36.7 for the nine months ended September 30, 2017 and 2016, 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.

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, except for foreign currency translation adjustments.

~~The following table presents changes in our redeemable noncontrolling interests.~~

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:
Additions 3.4
6.8
Redemptions and other (18.5 ) (14.8 )
Redemption value adjustments 9.8
4.5
Balance at end of period $ 238.0
$ 246.9

~~Table of Contents~~

~~Notes to Consolidated Financial Statements – (continued)~~

~~(Amounts in Millions, Except Per Share Amounts)~~

~~(Unaudited)~~

Note 5: Supplementary Data

Accrued Liabilities

The following table presents the components of accrued liabilities.


	March 31, 2021		December 31, 2020
Salaries, benefits and related expenses	$	330.7	$	504.6
Acquisition obligations	59.2		47.9
Interest	45.9		43.6
Income taxes payable	29.2		50.6
Restructuring charges	29.1		69.5
Office and related expenses	23.0		25.5
Other	91.8		90.7
Total accrued liabilities	$	608.9	$	832.4

September 30,
2017 December 31,
2016
Salaries, benefits and related expenses $ 341.3
$ 499.0
Acquisition obligations 53.2
77.5
Office and related expenses 48.8
46.7
Interest 17.0
17.3
Other 90.4
153.5
Total accrued liabilities $ 550.7
$ 794.0

Other ~~(Expense) Income,~~Expense, Net

Results of operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020 include certain items that are not directly associated with our revenue-producing operations.


	Three months ended March 31,
	2021		2020
Loss on early extinguishment of debt	$	(74.0)	$	0.0
Net losses on sales of businesses	(12.5)		(23.3)
Other	2.6		1.5
Total other expense, net	$	(83.9)	$	(21.8)

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) Gains~~Loss on ~~Sales~~early extinguishment of ~~Businesses and Investments~~ debt – During the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2021, we recorded a loss of $74.0 related to the early extinguishment of all $250.0 aggregate principal amount of our 4.000% unsecured senior notes due 2022, all $500.0 aggregate principal amount of our 3.750% unsecured senior notes due 2023, and $250.0 of the $500.0 aggregate principal amount of our 4.200% unsecured senior notes due 2024. See Note 3 for further information.

Net losses on sales of businesses – During the three months ended March 31, 2021 and 2020, the amounts recognized ~~are primarily~~were 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 ~~operating segment. During the three~~ and ~~nine months ended September 30, 2016, the amounts recognized~~DXTRA reportable segments. The businesses held for sale primarily represent unprofitable, non-strategic agencies which are ~~primarily related to sales of businesses within our IAN operating segment.~~

~~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 was in addition to the remaining amount availableexpected to be ~~repurchased from~~sold within 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 amount of the repurchases will depend on market conditions and other funding requirements.

~~The following table presents our share repurchase activity under our share repurchase programs for the nine months ended~~ ~~September 30, 2017~~ ~~and 2016.~~next twelve months.

Nine months ended
September 30,
2017 2016
Number of shares repurchased 9.4
8.5
Aggregate cost, including fees $ 216.0
$ 193.3
Average price per share, including fees $ 22.92
$ 22.69

We fully utilized the 2016 Share Repurchase Program during the third quarter of 2017. As of September 30, 2017, $239.5, excluding fees, remains available for repurchase under the 2017 Share Repurchase Program. The 2017 Share Repurchase Program has no expiration date.

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

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. As of March 31, 2021, $338.4, excluding fees, remains available for repurchase under the share repurchase programs authorized in previous years, which have no expiration date.

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, if necessary, 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.


	Three months ended March 31,
	2021		2020
Balance at beginning of period	$	93.1	$	164.7
Change in related noncontrolling interests balance	0.2		(2.9)
Changes in redemption value of redeemable noncontrolling interests:
Additions	0.0		0.0
Redemptions	(5.7)		(2.5)
Redemption value adjustments	(2.4)		(4.5)
Balance at end of period	$	85.2	$	154.8

Note 6: Income Taxes

For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2021, our ~~effective~~ income tax ~~rates of 22.1% and 30.7%, respectively, were positively~~expense was negatively 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 bynet losses on sales of businesses and the classification of certain assets as held for sale for which we ~~did not~~received minimal tax benefit, as well as by losses in certain foreign jurisdictions where we receive ~~a full~~no tax ~~benefit. For the nine months ended September 30, 2017, our effective income tax rate was positively impacted~~benefit due to 100% valuation allowances, partially offset 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~~$20.0 and ~~$35.0~~$30.0 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.~~2016. With limited exceptions, we are no longer subject to state and local income tax audits for years prior to ~~2007~~2013 or non-U.S. income tax audits for years prior to ~~2006.~~2009.

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 7: Restructuring Charges

Beginning in the second quarter of 2020, the Company took restructuring actions to lower its operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business (the “2020 Restructuring Plan”). These actions continued through the fourth quarter, and most were based on our recent experience and learning in the COVID-19 pandemic and a resulting review of our operations to address certain operating expenses such as occupancy expense and salaries and related expenses.

Lease impairment costs, which relate to the office spaces that were vacated as part of the 2020 Restructuring Plan, included impairments of operating lease right-of-use assets and associated leasehold improvements, furniture and asset retirement obligations in addition to losses and gains related to early lease terminations. Lease impairments were calculated based on estimated fair values using market participant assumptions including forecasted net discounted cash flows related to the operating lease right-of-use assets.

All restructuring actions were identified and initiated in 2020, with all actions completed by the end of the fourth quarter of 2020. The amounts for the three months ended March 31, 2021 are adjustments to the actions taken in 2020.

The components of the restructuring charges related to the 2020 Restructuring Plan are listed below.


	Three months ended March 31,
	2021		2020
Severance and termination costs	$	1.5	$	0.0
Lease impairment costs	(0.4)		0.0
Other restructuring costs	0.2		0.0
Total restructuring charges	$	1.3	$	0.0

Net restructuring charges were comprised of $0.5 at IAN and $0.8 at DXTRA for the three months ended March 31, 2021.

A summary of the restructuring activities taken in the first quarter of 2021 related to the 2020 Restructuring Plan is as follows:


	2020 Restructuring Plan
	Liability at December 31, 2020		Restructuring Expense		Non-Cash Items		Cash Payments		Liability at March 31, 2021
Severance and termination costs	$	74.6	$	1.5	$	0.2	$	43.1	$	32.8
Lease impairment costs	0.0		(0.4)		(0.4)		0.0		0.0
Other restructuring costs	0.0		0.2		0.0		0.2		0.0
Total	$	74.6	$	1.3	$	(0.2)	$	43.3	$	32.8

Note 7:8: Incentive Compensation Plans

We issue stock-based compensation and cash awards to our employees under ~~a plan~~various plans established by the Compensation and Leadership Talent Committee of the Board of Directors (the ~~“Compensation Committee”~~"Compensation Committee") and approved by our ~~shareholders.~~

stockholders. We issued the following stock-based awards under the ~~2014~~2019 Performance Incentive Plan (the ~~"2014~~"2019 PIP") during the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2021.

Awards
Weighted-average
grant-date fair value
(per award)
Stock-settled awards 0.8
$ 24.20
Performance-based awards 4.8
$ 20.06
Total stock-based compensation awards 5.6


	Awards	Weighted-average grant-date fair value (per award)
Restricted stock (units)	0.7	$	25.45
Performance-based stock (shares)	0.5	$	21.71
Stock options (shares)	0.3	$	3.94
Total stock-based compensation awards	1.5

During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021, the Compensation Committee granted performance cash awards under the 2019 PIP and restricted cash awards under the ~~2014 PIP~~2020 Restricted Cash Plan with a total annual target value of ~~$54.3~~$38.3 and ~~$2.8,~~$76.6, respectively. Cash awards are expensed over the vesting period, which is typically three ~~years.~~years for performance cash awards and two years or three years for restricted cash awards.

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 8:9: 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, 2020	$	(637.6)	$	6.8	$	(249.4)	$	(880.2)
Other comprehensive (loss) income before reclassifications	(40.9)		18.4		0.0		(22.5)
Amount reclassified from accumulated other comprehensive loss, net of tax	0.7		3.9		1.8		6.4
Balance as of March 31, 2021	$	(677.8)	$	29.1	$	(247.6)	$	(896.3)


	Foreign Currency Translation Adjustments		Derivative Instruments		Defined Benefit Pension and Other Postretirement Plans		Total
Balance as of December 31, 2019	$	(697.7)	$	(3.5)	$	(228.8)	$	(930.0)
Other comprehensive loss before reclassifications	(145.5)		(0.4)		(1.2)		(147.1)
Amount reclassified from accumulated other comprehensive loss, net of tax	(3.6)		0.5		1.5		(1.6)
Balance as of March 31, 2020	$	(846.8)	$	(3.4)	$	(228.5)	$	(1,078.7)

Amounts reclassified from accumulated other comprehensive loss, net of tax, for the three months ended March 31, 2021 and 2020 are as follows:


	Three months ended March 31,				Affected Line Item in the Consolidated Statements of Operations
	2021		2020
Foreign currency translation adjustments	$	0.7	$	(3.6)		Other expense, net
Losses on derivative instruments	5.2		0.6			Other expense, net, Interest expense
Amortization of defined benefit pension and postretirement plan items	2.3		1.9			Other expense, net
Tax effect	(1.8)		(0.5)			Provision for income taxes
Total amount reclassified from accumulated other comprehensive loss, net of tax	$	6.4	$	(1.6)

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 reclassifications 113.4
0.0
0.0
6.3
119.7
Amount reclassified from accumulated other comprehensive loss, net of tax 1.8
(0.6 ) 1.0
7.9
10.1
Balance as of September 30, 2017 $ (601.5 ) $ 0.0
$ (7.4 ) $ (223.8 ) $ (832.7 )

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

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 reclassifications 42.3
0.4
0.0
(65.0 ) (22.3 )
Amount reclassified from accumulated other comprehensive loss, net of tax 2.3
(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 nine months ended September 30, 2017 and 2016 are as follows:~~

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 instruments 0.5
0.5
1.6
1.5
Interest expense
Amortization of defined benefit pension and postretirement plan items 5.7
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


1	~~These foreign currency translation adjustments are primarily a result of the sales of businesses.~~

Note 9:10: 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.~~ obligation. Certain immaterial foreign pension and postretirement benefit plans have been excluded ~~from~~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 September 30, 2017 2016 2017 2016 2017 2016
Service cost $ 0.0
$ 0.0
$ 1.0
$ 2.4
$ 0.0
$ 0.0
Interest cost 1.3
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 curtailments 0.0
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 losses 0.3
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

~~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
	Domestic Pension Plan						Foreign Pension Plans						Domestic Postretirement Benefit Plan
Nine months ended September 30,	2017			2016			2017			2016			2017			2016
Three Months Ended March 31,																			Three Months Ended March 31,	2021		2020		2021		2020		2021		2020
Service cost	$	0.0		$	0.0		$	2.9		$	7.3		$	0.0		$	0.0		Service cost	$	0.0	$	0.0	$	1.1	$	1.2	$	0.0	$	0.0
Interest cost	3.8			4.4			10.0			13.3			0.9			1.1			Interest cost	0.7		1.0		2.0		2.3		0.2		0.2
Expected return on plan assets	(4.6		)	(4.9		)	(13.2		)	(15.5		)	0.0			0.0			Expected return on plan assets	(1.4)		(1.4)		(5.2)		(4.7)		0.0		0.0
Settlements and curtailments	0.0			0.0			4.0			0.3			0.0			0.0

Amortization of:																			Amortization of:
Prior service cost (credit)	0.0			0.0			0.1			0.1			(0.1		)	(0.1		)
Unrecognized actuarial losses	1.1			1.0			4.1			2.7			0.0			0.0			Unrecognized actuarial losses	0.5		0.4		1.7		1.4		0.1		0.1
Net periodic cost	$	0.3		$	0.5		$	7.9		$	8.2		$	0.8		$	1.0		Net periodic cost	$	(0.2)	$	0.0	$	(0.4)	$	0.2	$	0.3	$	0.3

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 ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021, we contributed ~~$2.3~~$1.3 and ~~$13.0~~$4.6 of cash to our domestic and foreign pension plans, respectively. For the remainder of ~~2017,~~2021, we expect to contribute approximately ~~$0.3~~$1.0 and ~~$5.0~~$14.0 of cash to our domestic and foreign pension plans, respectively.

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note ~~10:~~11: Segment Information

As of ~~September 30, 2017,~~March 31, 2021, we have two reportable segments: IAN and ~~CMG.~~DXTRA. IAN is comprised of McCann Worldgroup, Foote, Cone & Belding ("FCB"), MullenLowe Group, Media, Data Services and Tech, which includes IPG Mediabrands, Acxiom and Kinesso, our digital specialist agencies and our domestic integrated agencies. ~~CMG~~DXTRA is comprised of a number of our specialist marketing services ~~offerings.~~offerings including Weber Shandwick, DeVries, Golin, FutureBrands, Jack Morton and Octagon Worldwide. We also report results for the “Corporate and ~~other”~~Other” group. ~~The~~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 March 31,
	2021		2020
Total revenue:
IAN	$	1,851.4	$	1,818.8
DXTRA	405.6		541.0
Total	$	2,257.0	$	2,359.8

Net revenue:
IAN	$	1,734.1	$	1,664.5
DXTRA	293.6		307.6
Total	$	2,027.7	$	1,972.1

Segment EBITA 1:
IAN	$	254.3	$	99.0
DXTRA	40.4		22.3
Corporate and Other	(30.1)		(24.1)
Total	$	264.6	$	97.2

Amortization of acquired intangibles:
IAN	$	20.5	$	20.2
DXTRA	1.1		1.1
Corporate and Other	0.0		0.0
Total	$	21.6	$	21.3

Depreciation and amortization 2:
IAN	$	41.4	$	44.7
DXTRA	4.3		5.1
Corporate and Other	1.9		1.7
Total	$	47.6	$	51.5

Capital expenditures:
IAN	$	21.7	$	33.7
DXTRA	0.7		1.6
Corporate and Other	5.9		9.3
Total	$	28.3	$	44.6

1 Adjusted EBITA is calculated as net income available to IPG common stockholders before provision for incomes taxes, total (expenses) and other income, equity in net loss of unconsolidated affiliates, net (income) loss attributable to noncontrolling interests and amortization of acquired intangibles.

2 Excludes amortization of acquired intangibles.

Three months ended
September 30, Nine months ended
September 30,
2017 2016 2017 2016
Revenue:
IAN $ 1,520.2
$ 1,503.2
$ 4,465.6
$ 4,453.3
CMG 382.4
419.0
1,075.8
1,128.8
Total $ 1,902.6
$ 1,922.2
$ 5,541.4
$ 5,582.1

Segment operating income (loss):
IAN $ 183.9
$ 184.1
$ 402.1
$ 424.1
CMG 50.1
54.8
127.4
125.2
Corporate and other (14.9 ) (30.9 ) (74.2 ) (94.0 )
Total 219.1
208.0
455.3
455.3

Interest expense (21.0 ) (21.7 ) (67.6 ) (68.8 )
Interest income 4.1
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

Depreciation and amortization of property and equipment and intangible assets:
IAN $ 30.7
$ 29.1
$ 90.8
$ 85.9
CMG 4.6
4.9
15.2
14.6
Corporate and other 6.9
5.7
18.5
17.0
Total $ 42.2
$ 39.7
$ 124.5
$ 117.5

Capital expenditures:
IAN $ 29.3
$ 39.7
$ 77.9
$ 86.9
CMG 6.2
4.7
12.9
8.4
Corporate and other 4.3
7.1
17.9
19.2
Total $ 39.8
$ 51.5
$ 108.7
$ 114.5

September 30,
2017 December 31,
2016
Total assets:
IAN $ 10,257.7
$ 10,660.0

CMG 1,433.4
1,428.3

Corporate and other 25.0
396.9

Total $ 11,716.1
$ 12,485.2

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)


	March 31, 2021		December 31, 2020
Total assets:
IAN	$	13,587.8	$	14,784.5
DXTRA	1,519.7		1,549.2
Corporate and Other	1,242.2		1,709.0
Total	$	16,349.7	$	18,042.7

The following table presents the reconciliation of segment EBITA to Income before income taxes.


	Three months ended March 31,
	2021		2020
IAN EBITA	$	254.3	$	99.0
DXTRA EBITA	40.4		22.3
Corporate and Other EBITA	(30.1)		(24.1)
Less: consolidated amortization of acquired intangibles	21.6		21.3
Operating income	243.0		75.9
Total (expenses) and other income	(126.6)		(55.9)
Income before income taxes	$	116.4	$	20.0

Note ~~11:~~12: 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 ~~nine~~three months ended ~~September 30, 2017~~.March 31, 2021. The following tables present information about our financial instruments measured at fair value on a recurring basis as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~,2020, 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 securities 0.1
0.0
0.0
0.1
Other current assets
Long-term investments 0.4
0.0
0.0
0.4
Other non-current assets
Total $ 153.7
$ 0.0
$ 0.0
$ 153.7

As a percentage of total assets 1.3 % 0.0 % 0.0 % 1.3 %

Liabilities
Contingent acquisition obligations¹
$ 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 securities 3.0
0.0
0.0
3.0
Other current assets
Long-term investments 0.4
0.0
0.0
0.4
Other non-current assets
Total $ 444.2
$ 0.0
$ 0.0
$ 444.2

As a percentage of total assets 3.6 % 0.0 % 0.0 % 3.6 %

Liabilities
Contingent acquisition obligations ¹
$ 0.0
$ 0.0
$ 205.4
$ 205.4

Contingent 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 from December 31, 2016 to September 30, 2017 is primarily due to payments of $91.4, partially offset by acquisitions and exercised options of $38.2. The amounts payable within the next twelve months are classified in accrued liabilities; any amounts payable thereafter are classified in other non-current liabilities.

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)


	March 31, 2021								Balance Sheet Classification
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	1,160.6	$	0.0	$	0.0	$	1,160.6	Cash and cash equivalents
Liabilities
Contingent acquisition obligations 1	$	0.0	$	0.0	$	99.7	$	99.7	Accrued liabilities and Other non-current liabilities

	December 31, 2020								Balance Sheet Classification
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	1,507.4	$	0.0	$	0.0	$	1,507.4	Cash and cash equivalents
Liabilities
Contingent acquisition obligations 1	$	0.0	$	0.0	$	95.5	$	95.5	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 increase in this balance of $4.2 from December 31, 2020 to March 31, 2021 is primarily due to the exercises of redeemable noncontrolling interest and valuation adjustments, partially offset by payments related to ownership increase in our consolidated subsidiaries. The amounts payable within the next twelve months are classified in accrued liabilities; any amounts payable thereafter are classified in other non-current liabilities.

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 ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~,2020, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.


	March 31, 2021								December 31, 2020
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Total long-term debt	$	0.0	$	3,696.8	$	43.1	$	3,739.9	$	0.0	$	3,951.1	$	43.9	$	3,995.0

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 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 inputs~~in markets that are ~~readily observable.~~not active. Therefore, these senior notes are classified as Level ~~2 within the fair value hierarchy.~~2. Our other notes payable are not actively traded, and their fair value is not solely derived from readily observable inputs. ~~Thus, the~~The fair value of our other notes payable is determined based on a discounted cash flow model and other proprietary valuation methods, and therefore ~~are~~is classified as Level ~~3 within the fair value hierarchy.~~3. See Note 23 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~~The discount rates used as significant unobservable inputs in the Level 3 fair value ~~on a recurring basis, primarily accrued restructuring charges.~~measurements of our contingent acquisition obligations and long-term debt as of March 31, 2021 ranged from 1.0% to 4.0% and 0.4% to 3.4%, respectively.

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 (Level 3), 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.

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note ~~12:~~13: Commitments and Contingencies

Guarantees

As discussed in our 2020 Annual Report, we have guaranteed certain obligations of our subsidiaries relating principally to operating leases, uncommitted lines of credit and cash pooling arrangements. As of March 31, 2021 and December 31, 2020, the amount of parent company guarantees on lease obligations was $616.8 and $630.8, respectively, the amount of parent company guarantees relating to uncommitted lines of credit was $400.4 and $399.6, respectively, and the amount of parent company guarantees related to daylight overdrafts, primarily utilized to manage intra-day overdrafts due to timing of transactions under cash pooling arrangements without resulting in incremental borrowings, was $106.3 and $109.2, respectively. In the event of non-payment by the applicable subsidiary of the obligations covered by a guarantee, we would be obligated to pay the amounts covered by that guarantee. As of March 31, 2021, there were 0 material assets pledged as security for such parent company guarantees.

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 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~~ ~~2016~~ Annual Report on Form 10-K, we have guaranteed certain obligations of our subsidiaries relating principally to operating leases and uncommitted lines of credit of certain subsidiaries. The amount of parent company guarantees on lease obligations was $827.8 and $857.3 as of September 30, 2017 and December 31, 2016, respectively, and the amount of parent company guarantees primarily relating to uncommitted lines of credit was $413.8 and $395.6 as of September 30, 2017 and December 31, 2016, respectively.

~~Table of Contents~~

~~Notes to Consolidated Financial Statements – (continued)~~

~~(Amounts in Millions, Except Per Share Amounts)~~

~~(Unaudited)~~

Note ~~13:~~14: 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 Hedging~~Income Taxes

In August 2017, the Financial Accounting Standards Board (the "FASB") issued amended guidance on hedge accounting which expands an entity’s ability to hedge non-financial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument 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,December 2019, ~~with early adoption permitted. We are currently assessing the impact the adoption of the amended guidance will have on our Consolidated Financial Statements.~~

~~Pensions~~

~~In March 2017,~~ the FASB issued amended guidance which requires presentation of all net periodic pension 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 in 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. We have early adopted this amended guidance retrospectively as of the quarter ended March 31, 2017. The Consolidated Statements of Cash Flows for 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.

~~Financial Instrument Credit Losses~~

~~In June 2016, the FASB issued amended guidance on~~simplify the accounting for ~~credit losses on~~income taxes by removing certain ~~types~~exceptions and amending certain sections 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.existing guidance under ASC 740. This amended guidance iswas 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.2021. 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 todid not 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 significantmaterial impact on our Consolidated Financial Statements.

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"~~&A”) is intended to help you understand The Interpublic Group of Companies, Inc. and its subsidiaries (the ~~"Company," "IPG," "we," "us"~~“Company,” “IPG,” “we,” “us” or ~~"our"~~“our”). MD&A should be read in conjunction with our unaudited Consolidated Financial Statements and the accompanying notes included in this report and our ~~2016~~Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report”), as well as our other reports and filings with the Securities and Exchange Commission (the ~~"SEC"~~“SEC”). Our 2020 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 ~~2016~~2020 Annual Report ~~on Form 10-K~~ of our accounting policies that require critical judgment, assumptions and estimates.

RECENT ACCOUNTING STANDARDS, by reference to Note 1314 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

Our Business

We are one of the world’s premier global advertising and marketing services companies. ~~Our~~With approximately 50,200 employees and operations in all major world markets, our companies specialize in consumer advertising, digital marketing, ~~media~~communications planning and media buying, public relations, ~~and~~ specialized communications ~~disciplines.~~disciplines and data management. Our agencies create customized marketing ~~programs~~solutions 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, strategic and ~~strategic~~technology 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 ~~mergers~~acquisitions and strategic alliances ~~as well as through the development of~~and 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'~~agencies’ skill sets and capabilities.

Our financial goals include competitive organic net revenue growth and ~~operating~~expansion of Adjusted 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~~

Table of ~~financial performance for the three and nine months ended September 30, 2017 and 2016.~~Contents

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 expenses 0.0 % 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)

Impact of COVID-19

In March 2020, the World Health Organization categorized the novel coronavirus ("COVID-19") as a pandemic, and it continues to spread extensively throughout the United States and the rest of the world. The outbreak of COVID-19 and public and private sector measures to reduce its transmission, such as forced business closures and limits on operations, the imposition of social distancing and orders to work-from-home, stay-at-home and shelter-in-place, have adversely impacted our business and demand for our services. Some businesses have adjusted, reduced or suspended operating activities, which has negatively impacted the markets we serve. We continue to believe that our focus on our strategic strengths, which include talent, our differentiated go-to-market strategy, data management capabilities, and the relevance of our offerings, position us well to navigate a rapidly changing marketplace. The effects of the COVID-19 pandemic have impacted and will likely continue to impact our results of operations, cash flows and financial position; however, the extent of the impact will vary depending on the duration and severity of the economic and operational impacts of COVID-19 as well as the effectiveness of mass vaccination and other public health efforts to mitigate the impact of the pandemic.

Three months ended
September 30, Nine months ended
September 30,
2017 2016 2017 2016
Operating margin 11.5 % 10.8 % 8.2 % 8.2 %
Expenses as % of revenue:
Salaries and related expenses 64.5 % 63.9 % 67.5 % 66.8 %
Office and general expenses 24.0 % 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
At the outset of the COVID-19 pandemic, we responded swiftly in support of our people, our clients and our communities. To protect our employees, and to do our part in stopping the spread of COVID-19, within days, 95 percent of our global workforce moved to a remote work environment. The majority of our worldwide workforce continues to work from home. We recognized the importance of regular communication to reassure employees and to keep them updated on our plans as the pandemic unfolded, and IPG was recognized with top honors at the Corporate Content Awards North America for its outstanding communication during the pandemic. We adopted an approach of “organized flexibility” to facilitate the new working environments and take into account the need of many employees to work during non-traditional hours and juggle home lives and work responsibilities.

We believe we have had significant success in maintaining and continuing to advance the quality of our services notwithstanding extensive changes required by the pandemic. With respect to managing costs, we undertook multiple initiatives, which continue, to align our expenses with changes in revenue. The steps we took across our agencies and corporate group included deferred merit increases, freezes on hiring and temporary labor, major cuts in non-essential spending, staff reductions, furloughs in markets where that option is available and salary reductions, including voluntary salary reductions for our senior corporate management team.

Starting in the second quarter of 2020 and continuing through the year 2020, the Company also took restructuring actions to lower our operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business. Most of these actions were based on our recent experience and learning in the COVID-19 pandemic and a resulting review of our operations. Notably, we foresee a greater role for work-from-home in a hybrid office-home model to deliver and support our services in a post-COVID world.

Our Financial Information

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. ~~The~~We exclude the impact of billable expenses in analyzing our operating performance ~~metrics that we use~~as the fluctuations from period to ~~evaluate our results include~~period 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 region~~underlying businesses and ~~also by business sector, in which we focus~~have no impact on our ~~top 100 clients, which typically constitute approximately 55% to 60% of our annual consolidated revenues.~~operating income 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 currency that most adversely impacted our~~Our results during the first ~~nine months~~quarter of ~~2017 was~~2021 were most favorably impacted by the Euro, British Pound Sterling ~~partially offset~~and Australian Dollar and most adversely impacted by the Brazilian Real.

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 and disposed of businesses that are not consistent with our strategic plan.

Table of Contents

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

The metrics that we use to evaluate our financial performance include organic change in net revenue as well as the change in certain operating expenses, and the components thereof, expressed as a percentage of consolidated net revenue, as well as Adjusted EBITA. These metrics are also used by management to assess the financial performance of our reportable segments, Integrated Agency Networks (“IAN”) and IPG DXTRA (“DXTRA”). In certain of our discussions, we analyze net revenue by geographic region and by business sector, in which we focus on our top 500 clients, which typically constitute approximately 80% to 85% of our annual consolidated net revenues.

Results for the three months ended March 31, 2021, are not indicative of the results that may be expected for the fiscal year ending December 31, 2021. The Consolidated Financial Statements and MD&A presented herein reflect the latest estimates and assumptions made by us that affect the reported amounts of assets and liabilities and related disclosures as of the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting periods presented. We believe we have used reasonable estimates and assumptions to assess the fair values of the Company’s goodwill, long-lived assets and indefinite-lived intangible assets; assessment of the annual effective tax rate; valuation of deferred income taxes and the allowance for expected credit losses on future uncollectible accounts receivable. If actual market conditions vary significantly from those currently projected, these estimates and assumptions could materially change resulting in adjustments to the carrying values of our assets and liabilities.

The following table presents a summary of our financial performance for the three months ended March 31, 2021 and 2020.


	Three months ended March 31,
Statement of Operations Data	2021			2020			% Increase/ (Decrease)
REVENUE:
Net revenue	$	2,027.7		$	1,972.1		2.8	%
Billable expenses	229.3			387.7			(40.9)	%
Total revenue	$	2,257.0		$	2,359.8		(4.4)	%

OPERATING INCOME	$	243.0		$	75.9		>100%

Adjusted EBITA 1	$	264.6		$	97.2		>100%

NET INCOME AVAILABLE TO IPG COMMON STOCKHOLDERS	$	91.7		$	4.7

Earnings per share available to IPG common stockholders:
Basic	$	0.23		$	0.01
Diluted	$	0.23		$	0.01

Operating Ratios
Organic change in net revenue	1.9		%	0.3		%

Operating margin on net revenue	12.0		%	3.8		%
Operating margin on total revenue	10.8		%	3.2		%

Adjusted EBITA margin on net revenue 1	13.0		%	4.9		%

Expenses as a % of net revenue:
Salaries and related expenses	68.7		%	72.1		%
Office and other direct expenses	14.4		%	19.2		%
Selling, general and administrative expenses	1.4		%	1.1		%
Depreciation and amortization	3.4		%	3.7		%
Restructuring charges 2	0.1		%	0.0		%

Table of Contents

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

1 Adjusted EBITA is a financial measure that is not defined by U.S. GAAP. Adjusted EBITA is calculated as net income available to IPG common stockholders before provision for incomes taxes, total (expenses) and other income, equity in net loss of unconsolidated affiliates, net (income) loss attributable to noncontrolling interests and amortization of acquired intangibles. Refer to the “Non-GAAP Financial Measure” section of this MD&A for additional information and for a reconciliation to U.S. GAAP measures.

2 Results include restructuring charges of $1.3 for the three months ended March 31, 2021. See “Restructuring Charges” in this MD&A and Note 47 to the unaudited Consolidated Financial Statements for ~~additional information on acquisitions.~~further information.

Our organic net revenue increase of 1.9% for the first quarter of 2021 was primarily from net client wins in the healthcare sector and net higher spending from existing clients in the retail sector, partially offset by net client losses in the financial services sector and net decreases from existing clients in the technology and telecom sector. During the first quarter of 2021, our Adjusted EBITA margin increased to 13.0% from 4.9% in the prior-year period as net revenue increased, discussed below in the “Results of Operations” section, and our operating expenses, excluding billable expenses and amortization of acquired intangibles, decreased.

Table of Contents

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

RESULTS OF OPERATIONS

Consolidated Results of Operations – Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2021 Compared to Three ~~and Nine~~ Months Ended ~~September 30, 2016~~March 31, 2020

~~REVENUE~~Net 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~~clients.


			Components of Change								Change
	Three months ended March 31, 2020		Foreign Currency		Net Acquisitions/ (Divestitures)		Organic		Three months ended March 31, 2021		Organic		Total
Consolidated	$	1,972.1	$	29.3	$	(11.7)	$	38.0	$	2,027.7	1.9	%	2.8	%
Domestic	1,320.0		—		(7.4)		(2.8)		1,309.8		(0.2)	%	(0.8)	%
International	652.1		29.3		(4.3)		40.8		717.9		6.3	%	10.1	%
United Kingdom	165.7		11.6		0.9		5.8		184.0		3.5	%	11.0	%
Continental Europe	146.0		13.2		(1.5)		18.1		175.8		12.4	%	20.4	%
Asia Pacific	158.8		8.9		(4.0)		5.4		169.1		3.4	%	6.5	%
Latin America	79.3		(8.2)		0.3		4.0		75.4		5.0	%	(4.9)	%
Other	102.3		3.8		0.0		7.5		113.6		7.3	%	11.0	%

The slight organic decrease during the ~~fourth quarter. In the events marketing business, revenues can fluctuate~~first quarter of 2021 in our domestic market was primarily driven by revenue declines due to the ~~timing~~continuing impact of ~~completed projects, as revenue is typically recognized when~~ the ~~project is complete. When we act as principal for these projects, we record~~COVID-19 pandemic on the ~~gross amount billed~~economy at our discretionary digital project-based offerings and our sports and experiential marketing businesses. The organic decrease in our domestic market was largely offset by growth at our advertising and media businesses. In our international markets, the 6.3% organic increase was driven by growth across all geographic regions. This organic increase was primarily attributable to growth at our media and advertising businesses, most notably in the Continental Europe region, partially offset by declines at our sports and experiential marketing businesses.

Refer to the ~~client~~segment discussion later in this MD&A for information on changes in net revenue by segment.

Salaries and Related Expenses


	Three months ended March 31,
	2021			2020			% Increase/ (Decrease)
Salaries and related expenses	$	1,393.1		$	1,422.8		(2.1)	%

As a % of net revenue:
Salaries and related expenses	68.7		%	72.1		%
Base salaries, benefits and tax	58.1		%	61.7		%
Incentive expense	4.3		%	3.7		%
Severance expense	0.3		%	1.2		%
Temporary help	4.6		%	4.5		%
All other salaries and related expenses	1.4		%	1.0		%

Salaries and related expenses decreased by 2.1% compared to the net revenue increase of 2.8% during the first quarter of 2021 as compared to the prior-year period. The decrease was primarily driven by reductions in base salaries, benefits and tax and severance expense, resulting from multiple initiatives taken in 2020 to align our expenses with changes in net revenue in response to the effects of the COVID-19 pandemic on economic conditions. The decreases were partially offset by increased incentive expense, primarily related to better-than-projected performance, and ~~the related costs are incurred as pass-through costs in office and general expenses~~.increased temporary help expenses.

Table of Contents

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Office and Other Direct Expenses


	Three months ended March 31,
	2021			2020			% Increase/ (Decrease)
Office and other direct expenses	$	292.9		$	378.2		(22.6)	%

As a % of net revenue:
Office and other direct expenses	14.4		%	19.2		%
Occupancy expense	5.6		%	6.7		%
All other office and other direct expenses 1	8.8		%	12.5		%

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 $ 1,922.2
$ 7.7
$ (37.2 ) $ 9.9
$ 1,902.6
0.5 % (1.0 )%
Domestic 1,165.9
0.0
(25.0 ) 15.1
1,156.0
1.3 % (0.8 )%
International 756.3
7.7
(12.2 ) (5.2 ) 746.6
(0.7 )% (1.3 )%
United Kingdom 174.0
(4.3 ) 1.4
5.3
176.4
3.0 % 1.4 %
Continental Europe 147.6
6.4
(4.0 ) 0.6
150.6
0.4 % 2.0 %
Asia Pacific 217.9
0.8
(0.2 ) (4.6 ) 213.9
(2.1 )% (1.8 )%
Latin America 103.6
2.4
(10.4 ) (10.3 ) 85.3
(9.9 )% (17.7 )%
Other 113.2
2.4
1.0
3.8
120.4
3.4 % 6.4 %

~~During the third quarter of 2017, our revenue~~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 decreased by ~~$19.6, or 1.0%,~~22.6% compared to the ~~third quarter of 2016, comprised of an organic~~net revenue increase of ~~$9.9, or 0.5% and a favorable foreign currency rate impact~~2.8% during the first quarter of ~~$7.7, offset by~~2021 as compared to the ~~effect of net divestitures of $37.2. Our organic revenue increase~~prior-year period. The decrease was ~~primarily attributable~~mainly due to ~~growth within the healthcare sector, offset by~~ decreases in ~~the technology~~travel and ~~telecom sector.~~entertainment expenses, bad debt expense, and new business and promotion expenses. The ~~organic revenue increase in our domestic market was mainly 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~~other direct expenses was ~~primarily attributable~~also largely due 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 )%
Domestic 3,426.2
0.0
(52.5 ) 54.6
3,428.3
1.6 % 0.1 %
International 2,155.9
(30.7 ) (21.3 ) 9.2
2,113.1
0.4 % (2.0 )%
United Kingdom 495.3
(44.5 ) 12.5
8.5
471.8
1.7 % (4.7 )%
Continental Europe 468.1
(3.9 ) (13.3 ) 6.1
457.0
1.3 % (2.4 )%
Asia Pacific 617.7
(0.7 ) 2.4
(12.0 ) 607.4
(1.9 )% (1.7 )%
Latin America 255.7
14.3
(24.6 ) (7.9 ) 237.5
(3.1 )% (7.1 )%
Other 319.1
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%, 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 in 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 organic revenue increase was primarily driven by growth across all regions at our media businesses and our advertising businesses in the United Kingdom, partially offset by decreases at our advertising businesses in the Asia Pacific and Latin America regions and our events businesses in the United Kingdom, primarilysavings on occupancy expense as a result of ~~certain projects where we no longer act~~real estate restructuring actions taken in 2020.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (“SG&A”) are primarily the unallocated expenses of our Corporate and other group, as ~~principal.~~

~~Refer to~~detailed further in the segment discussion later in this MD&A, excluding depreciation and amortization. For the three months ended March 31, 2021, SG&A as a percentage of net revenue slightly increased as compared to the prior-year period, primarily due to increases in professional fees and incentive expense, partially offset by decreased travel and entertainment expenses.

Depreciation and Amortization

During the three months ended March 31, 2021, depreciation and amortization expenses decreased compared to the prior-year periods.

Restructuring Charges

Beginning in the second quarter of 2020, the Company took restructuring actions to lower its operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business (the “2020 Restructuring Plan”). These actions continued through the fourth quarter and most were based on our recent experience and learning in the COVID-19 pandemic and a resulting review of our operations to address certain operating expenses such as occupancy expense and salaries and related expenses.

All restructuring actions were identified and initiated in 2020, with all actions completed by the end of the fourth quarter of 2020. The amounts for ~~information on changes~~the three months ended March 31, 2021 are adjustments to the actions taken in ~~revenue by segment.~~2020.

The components of the restructuring charges related to the 2020 Restructuring Plan are listed below.

Table of Contents

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)


	Three months ended March 31,
	2021		2020
Severance and termination costs	$	1.5	$	0.0
Lease impairment costs	(0.4)		0.0
Other restructuring costs	0.2		0.0
Total restructuring charges	$	1.3	$	0.0

~~OPERATING EXPENSES~~Net restructuring charges were comprised of $0.5 at IAN and $0.8 at DXTRA for the three months ended March 31, 2021.

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 expenses 455.9
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

InA summary of the ~~third~~restructuring activities taken in the first quarter of ~~2017, total operating expenses decreased 1.8%, compared~~2021 related to ~~our revenue decrease of 1.0%, from~~ the ~~third~~2020 Restructuring Plan is as follows:


	2020 Restructuring Plan
	Liability at December 31, 2020		Restructuring Expense		Non-Cash Items		Cash Payments		Liability at March 31, 2021
Severance and termination costs	$	74.6	$	1.5	$	0.2	$	43.1	$	32.8
Lease impairment costs	0.0		(0.4)		(0.4)		0.0		0.0
Other restructuring costs	0.0		0.2		0.0		0.2		0.0
Total	$	74.6	$	1.3	$	(0.2)	$	43.3	$	32.8

EXPENSES AND OTHER INCOME


	Three months ended March 31,
	2021		2020
Cash interest on debt obligations	$	(47.1)	$	(43.4)
Non-cash interest	(2.5)		(1.4)
Interest expense	(49.6)		(44.8)
Interest income	6.9		10.7
Net interest expense	(42.7)		(34.1)
Other expense, net	(83.9)		(21.8)
Total (expenses) and other income	$	(126.6)	$	(55.9)

Net interest expense increased by $8.6 to $42.7 in the first quarter of ~~2016, resulting in operating margin expansion to 11.5%~~2021 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 2017 Organic 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 %

Salaries and related expenses in the third quarter of 2017 decreased by $0.4 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, offset by the effect of net divestitures of $21.0. The organic increase wasa year ago, primarily attributable to ~~an increase~~increased cash interest expense from the issuance of $650.0 in ~~base salaries, benefits and tax, partially offset by lower incentive expense. Our staff cost ratio, defined as salaries and related expenses as a percentage~~aggregate principal amount of ~~total consolidated revenue, increased~~4.750% unsecured senior notes due 2030 in ~~the third quarter of 2017 to 64.5% from 63.9%, when 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 was primarily driven by factors similar to those noted above for the third quarter of 2017,March 2020 as well as ~~lower acquisition-related contractual compensation, which is classified within all other salaries~~a decrease in interest income.

Other Expense, Net

Results of operations for the three months ended March 31, 2021 and ~~related expenses in the table below. Our staff cost ratio increased in the first nine months~~2020 include certain items that are not directly associated with our revenue-producing operations.


	Three months ended March 31,
	2021		2020
Loss on early extinguishment of debt	$	(74.0)	$	0.0
Net losses on sales of businesses	(12.5)		(23.3)
Other	2.6		1.5
Total other expense, net	$	(83.9)	$	(21.8)

Table of ~~2017 to 67.5% from 66.8% when compared to the prior-year period.~~Contents

~~The following table details our staff cost ratio.~~

Three months ended
September 30, Nine months ended
September 30,
2017 2016 2017 2016
Salaries and related expenses 64.5 % 63.9 % 67.5 % 66.8 %
Base salaries, benefits and tax 55.7 % 53.5 % 57.3 % 55.6 %
Incentive expense 2.0 % 3.7 % 3.1 % 3.8 %
Severance expense 0.8 % 0.7 % 1.0 % 1.0 %
Temporary help 3.8 % 3.9 % 3.9 % 3.9 %
All other salaries and related expenses 2.2 % 2.1 % 2.2 % 2.5 %

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 2017 Organic 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 expenses in the third quarter~~Net losses on sales of 2017 decreased by $30.3 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 was attributable to lower production expenses related to pass-through costs, which are also reflected in revenue, partially offset by higher occupancy costs. Our office and general expense ratio, defined as office and general expenses as a percentage of total consolidated revenue, decreased in the third quarter of 2017 to 24.0% from 25.3%, when compared to the prior-year period.

Office and general expenses in the first nine months of 2017 decreased by $56.7 compared to the first nine months of 2016, comprised of an organic decrease of $18.0, the effect of net divestitures of $27.9 and a favorable foreign currency rate impact of $10.8. The organic decrease was primarily driven by factors similar to those noted above for the third quarter of 2017, as well as decreases in adjustments to contingent acquisition obligations, as compared to the prior year. Our office and general expense ratio decreased in the first nine months of 2017 to 24.3% from 25.1%, when compared to the prior-year period.

~~The following table details our office and general expense ratio.~~

Three months ended
September 30, Nine months ended
September 30,
2017 2016 2017 2016
Office and general expenses 24.0 % 25.3 % 24.3 % 25.1 %
Professional fees 1.4 % 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 telecommunications 2.8 % 2.8 % 3.1 % 3.2 %
All other office and general expenses ¹
12.9 % 14.5 % 12.6 % 13.6 %


1	Includes 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,
2017 2016 2017 2016
Cash interest on debt obligations $ (21.0 ) $ (19.5 ) $ (60.1 ) $ (59.8 )
Non-cash interest 0.0
(2.2 ) (7.5 ) (9.0 )
Interest expense (21.0 ) (21.7 ) (67.6 ) (68.8 )
Interest income 4.1
4.7
14.0
16.1
Net interest expense (16.9 ) (17.0 ) (53.6 ) (52.7 )
Other (expense) income, net (9.9 ) 5.3
(24.5 ) (13.5 )
Total (expenses) and other income $ (26.8 ) $ (11.7 ) $ (78.1 ) $ (66.2 )

~~Net Interest Expense~~

For the nine months ended September 30, 2017, net interest expense increased by $0.9 as compared to prior-year period, primarily due to lower interest income from our international markets, partially offset by a decrease in non-cash interest expense from revaluations of mandatorily redeemable noncontrolling interests.

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)~~

~~(Amounts in Millions, Except Per Share Amounts)~~

~~(Unaudited)~~

~~Other (Expense) Income, Net~~

~~Results of operations for the three and nine months ended September 30, 2017 and 2016 include certain items that are not directly associated with our revenue-producing operations.~~

~~Net (Losses) Gains on Sales of Businesses and Investments~~ businesses – During the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2021 and 2020, the amounts recognized ~~are primarily~~were 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") operating segment.~~IAN and DXTRA reportable segments. The businesses held for sale primarily represent unprofitable, non-strategic agencies which are expected to be sold within the next twelve months.

Loss on early extinguishment of debt – During the three ~~and nine~~ months ended ~~September 30, 2016, the amounts recognized are primarily~~March 31, 2021, we recorded a loss of $74.0 related to ~~sales~~the early extinguishment of ~~businesses within~~ our ~~IAN segment.~~$250.0 in aggregate principal amount 4.000% unsecured senior notes due 2022, $500.0 in aggregate principal amount 3.750% unsecured senior notes due 2023, and $250.0 of the $500.0 in aggregate principal amount 4.200% unsecured senior notes due 2024. See Note 3 in Item 1, unaudited Consolidated Financial Statements, for further information.

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 nine~~ months ended ~~September 30, 2017,~~March 31, 2021, our ~~effective~~ income tax ~~rates of 22.1% and 30.7%, respectively, were positively~~expense was negatively 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 bynet losses on sales of businesses and the classification of certain assets as held for sale for which we ~~did not~~received minimal tax benefit, as well as by losses in certain foreign jurisdictions where we receive ~~a full~~no tax ~~benefit. For the nine months ended September 30, 2017, our effective income tax rate was positively impacted~~benefit due to 100% valuation allowances, partially offset 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~~three months ended ~~September 30, 2016,~~March 31, 2020, our ~~effective~~ income tax ~~rate of 23.6%~~provision was ~~positively~~negatively 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 were 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 for which we did not receive a full tax benefit.~~

~~EARNINGS PER SHARE~~

Basic earnings per share available to IPG common stockholders for the three and nine months ended September 30, 2017 were $0.38 and $0.67, respectively, compared to $0.32 and $0.73 for the three and nine months ended September 30, 2016, respectively. Diluted earnings per share for the three and nine months ended September 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 stockholders included $31.2 related to foreign tax credits from distributions of unremitted earnings, resulting in a positive impact of $0.08 on basic and diluted earnings per share for both periods. For the three and nine months ended September 30, 2017, 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 impacts of $0.02~~for which we received minimal tax benefit.

Basic and ~~$0.05, respectively,~~diluted earnings per share available to IPG common stockholders for the three months ended March 31, 2021 were $0.23, compared to basic and diluted earnings per ~~share.~~share of $0.01 for the three months ended March 31, 2020.

Basic and diluted earnings per share for the three months ended March 31, 2021 included negative impacts of $0.04 from the amortization of acquired intangibles, $0.03 from net losses on sales of businesses and the classification of certain assets as held for sale and $0.14 from the loss on early extinguishment of debt.

Basic and diluted earnings per share for the three months ended March 31, 2020 included negative impacts of $0.04 from the amortization of acquired intangibles and $0.06 from net losses on sales of businesses and the classification of certain assets as held for sale.

Segment Results of Operations – Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020

As discussed in Note 11 to the unaudited Consolidated Financial Statements, we have two reportable segments as of March 31, 2021: IAN and DXTRA. We also report results for the “Corporate and Other” group.


			Components of Change								Change
	Three months ended March 31, 2020		Foreign Currency		Net Acquisitions/ (Divestitures)		Organic		Three months ended March 31, 2021		Organic		Total
Consolidated	$	1,664.5	$	22.8	$	(6.0)	$	52.8	$	1,734.1	3.2	%	4.2	%
Domestic	1,111.9		—		(4.3)		5.9		1,113.5		0.5	%	0.1	%
International	552.6		22.8		(1.7)		46.9		620.6		8.5	%	12.3	%

Table of Contents

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

~~For~~The organic increase during the nine months ended September 30, 2016, 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 benefit of $12.2 related to the reversals of valuation allowances as a consequence of the sales of businesses, resulting in impacts of $0.06, ($0.04) and $0.03, respectively, to basic and diluted earnings per share.

~~Segment Results of Operations – Three and Nine Months Ended September 30, 2017 Compared to Three and Nine Months Ended September 30, 2016~~

~~As discussed in Note~~ 10 ~~to the unaudited Consolidated Financial Statements, we have two reportable segments as of~~ ~~September 30, 2017: IAN and Constituency Management Group ("CMG"). We also report results for the "Corporate and other" group.~~

~~During the third~~first quarter of 2017, IAN revenue increased by $17.0 compared to the third quarter of 2016, comprised of an organic revenue increase of $30.7 and a favorable foreign currency rate impact of $8.7, partially offset by the effect of net divestitures of $22.4. The organic revenue increase2021 was primarily ~~attributable to growth within~~from net client wins in the healthcare sector and net higher spending from existing clients in the retail sector, partially offset by ~~decreases~~net client losses in the food and beverage and financial services ~~and technology and telecom~~ sectors. The organic ~~revenue~~ increase during the first quarter of 2021 in our domestic market was ~~mainly~~primarily driven by growth at our ~~media~~advertising and ~~advertising~~media businesses, partially offset by ~~a decline within our~~revenue declines related to discretionary 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.

~~During the first nine months of 2017, IAN revenue increased by $12.3 compared~~project-based offerings due 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~~continuing impact of ~~$15.9. The organic revenue increase was primarily attributable to growth within~~ the ~~healthcare sector, partially offset by decreases in~~COVID-19 pandemic on 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.economy. In our international markets, the organic increase was primarily driven by ~~growth~~strong performance at our media businesses ~~across~~in almost all geographic regions ~~most notably~~ in ~~Canada within our Other region and in Latin America, as well as~~addition to growth at our advertising businesses mainly in the United Kingdom and Continental Europe regions.


	Three months ended March 31,
	2021			2020			Change
Segment EBITA 1	$	254.3		$	99.0		> 100%
Segment EBITA margin on net revenue 1	14.7		%	5.9		%

1 Segment EBITA and Segment EBITA margin on net revenue include restructuring charges of $0.5 in the three months ended March 31, 2021. See “Restructuring Charges” in this MD&A and Note 7 to the unaudited Consolidated Financial Statements for further information.

Segment EBITA margin expanded during the first quarter of 2021 compared to the prior-year period, as net revenue increased, as discussed above, and operating expenses, excluding billable expenses and amortization of acquired intangibles, decreased. The decrease in salaries and related expenses was primarily driven by reductions in base salaries, benefits and tax and severance expense, resulting from multiple initiatives taken in the prior year to align our expenses with changes in net revenue in response to the effects of the COVID-19 pandemic on economic conditions. The decreases were partially offset by increased incentive expense, primarily related to better than projected performance, and increased temporary help expenses. The decrease in office and other direct expense was mainly due to decreases in travel and entertainment expenses, bad debt expense and new business and promotion expenses. The decrease in office and other direct expenses was also largely due to savings on occupancy expense as a result of our real estate restructuring actions taken in 2020. During the three months ended March 31, 2021, Segment EBITA included restructuring charges of $0.5.

Depreciation and amortization, excluding amortization of acquired intangibles, as a percentage of net revenue was 2.4% during the first quarter of 2021, which decreased compared to the prior-year periods.


			Components of Change								Change
	Three months ended March 31, 2020		Foreign Currency		Net Acquisitions/ (Divestitures)		Organic		Three months ended March 31, 2021		Organic		Total
Consolidated	$	307.6	$	6.5	$	(5.7)	$	(14.8)	$	293.6	(4.8)	%	(4.6)	%
Domestic	208.1		—		(3.1)		(8.7)		196.3		(4.2)	%	(5.7)	%
International	99.5		6.5		(2.6)		(6.1)		97.3		(6.1)	%	(2.2)	%

The organic decrease during the first quarter of 2021 was mainly attributable to lower spending from existing clients, primarily related to the impact of COVID-19 pandemic. The revenue decrease was in the technology and telecom, auto and transportation, and financial services sectors, partially offset by net client wins in the food and beverage sector and net higher spending from existing clients in the healthcare and consumer goods sectors. The organic decreases during the first quarter of 2021 in our domestic and international markets were primarily driven by revenue declines at our ~~advertising~~sports and experiential marketing businesses, inprimarily due to the ~~Asia Pacific and Latin America regions.~~

~~SEGMENT OPERATING INCOME~~continuing impact of the COVID-19 pandemic on the economy.

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 margin 12.1 % 12.2 % 9.0 % 9.5 %

Table of Contents

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

~~Operating income decreased~~


	Three months ended March 31,
	2021			2020			Change
Segment EBITA 1	$	40.4		$	22.3		81.2	%
Segment EBITA margin on net revenue 1	13.8		%	7.2		%

1 Segment EBITA and Segment EBITA margin on net revenue include restructuring charges of $0.8 in the three months ended March 31, 2021. See “Restructuring Charges” in this MD&A and Note 7 to the unaudited Consolidated Financial Statements for further information.

Segment EBITA margin increased during the ~~third quarter of 2017 when~~three months ended March 31, 2021 compared to the ~~third quarter of 2016, due to an increase in revenue of $17.0,~~prior-year period, as ~~discussed above, and a~~the decrease in ~~office~~operating expense, excluding billable expenses and ~~general expenses~~amortization of $5.9, offset by an increase in salaries and related expenses of $23.1. The increase in salaries and related expenses was primarily due to an increase in base salaries, benefits and tax, partially offset by lower incentive expense. Theacquired intangibles, exceeded the decrease in office and general expenses was attributable to lower production expenses related to pass-through costs, which are also reflected in revenue, and lower bad debt expense, partially offset by higher occupancy costs.

~~Operating income decreased during the first nine months of 2017 when compared to the first nine months of 2016, comprised of an increase in revenue of $12.3, as discussed above, and a~~net revenue. The 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 was primarily driven by ~~factors similar~~reductions in base salaries, benefits and tax and severance expense, resulting from multiple initiatives taken in the prior year to ~~those noted above for~~align our expenses with changes in net revenue in response to the ~~third quarter~~effects of ~~2017,~~the COVID-19 pandemic on economic conditions. The decreases were partially offset by ~~lower acquisition-related contractual compensation.~~increased incentive expense, primarily related to better than projected performance. The decrease in office and ~~general~~other direct expenses was ~~primarily driven by factors similar to those noted above for the third quarter of 2017.~~

~~During the third quarter of 2017, CMG revenue decreased by $36.6 compared to the third quarter of 2016,~~mainly 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. The organic revenue~~ decreases in ~~our domestic~~travel and ~~international markets were primarily driven by a decrease in pass-through revenue related to certain projects where we acted~~entertainment expenses and new business and promotion expenses 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~~well as a ~~comparable reduction~~year-over-year change in ~~office and general expenses.~~

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, partially offset by growth at our sports marketing businesses in all regions.

~~SEGMENT OPERATING INCOME~~

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 margin 13.1 % 13.1 % 11.8 % 11.1 %

Operating income decreased during the third quarter of 2017 when compared to the third quarter of 2016, comprised of a decrease in revenue of $36.6, as discussed above, a decrease in office and general expenses of $21.0 and a decrease in salaries and related expenses of $10.9.contingent acquisition obligations. The decrease in office and ~~general~~other direct expenses was ~~primarily~~also due to ~~lower production expenses related to pass-through costs,~~savings on occupancy expense as a result of our real estate restructuring actions taken in 2020. During the three months ended March 31, 2021, Segment EBITA included restructuring charges of $0.8.

Depreciation and amortization, excluding amortization of acquired intangibles, as a percentage of net revenue was 1.5% during the first quarter of 2021, which ~~are also reflected in revenue, as well as decreases in adjustments to contingent acquisition obligations,~~decreased as compared to the ~~prior year. The decrease in salaries and related expenses was primarily due to net divestitures of non-strategic businesses.~~

~~(Amounts in Millions, Except Per Share Amounts)~~

Operating income increased during the first nine months of 2017 when compared to the first nine months of 2016, comprised of a decrease in revenue of $53.0, as discussed above, a decrease in office and general expenses of $35.0 and a decrease in salaries and related expenses of $20.2. The decreases in office and general and salaries and related expenses were primarily driven by factors similar to those noted above for the third quarter of 2017.prior-year periods.

~~Certain corporate~~Corporate and ~~other charges are reported as separate line items within total segment operating income (loss)~~Other is primarily comprised of selling, general and ~~include~~administrative 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 include~~divisions; salaries, long-term incentives, annual bonuses and other miscellaneous benefits for corporate office ~~employees. Office and general expenses primarily include~~employees; 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. Office~~office; 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 ~~are~~is 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.

During the first quarter of 2021, Corporate and ~~other~~Other expenses ~~decreased during the third quarter of 2017~~increased by ~~$16.0~~$6.0 to ~~$14.9~~$30.1 compared to the ~~third quarter~~prior-year period, primarily attributable to increases in professional fees and incentive expense, partially offset by decreased travel and entertainment expenses.

Table of ~~2016, primarily due to lower incentive expense. During the first nine months~~Contents

Management’s Discussion and Analysis of ~~2017, corporate~~Financial Condition and ~~other expenses decreased by $19.8 to $74.2 compared to the first nine months~~Results of ~~2016, also primarily due to lower incentive expense.~~Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

The following tables summarize key financial data relating to our liquidity, capital resources and uses of capital.

Net income, adjusted to reconcile to net cash used in operating activities ¹

Net cash used in working capital ²


	Three months ended March 31,
Cash Flow Data	2021		2020
Net income, adjusted to reconcile to net cash used in operating activities 1	$	291.7	$	136.8
Net cash used in working capital 2	(496.9)		(371.6)
Changes in other assets and liabilities using cash	(44.6)		(42.3)
Net cash used in operating activities	$	(249.8)	$	(277.1)
Net cash provided by (used in) investing activities	$	0.2	$	(60.8)
Net cash (used in) provided by financing activities	$	(212.7)	$	744.4

1Reflects net income adjusted primarily for loss on early extinguishment of debt, depreciation and amortization of fixed assets and intangible assets, amortization of restricted stock and other non-cash compensation, deferred income taxes, and net losses on sales of businesses.

2Reflects changes in accounts receivable, other current assets, accounts payable, accrued liabilities and contract 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. The~~driven by the seasonally strong media spending by our clients. Quarterly and annual working capital ~~use in~~results are impacted by the ~~first nine months~~fluctuating 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 ~~accrued~~contract 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.

~~(Amounts in Millions, Except Per Share Amounts)~~

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 used in operating activities during the first quarter of 2021 was $249.8, which was a decrease of $27.3 as compared to the first quarter of 2020, primarily due to our increase in net income, partially offset by an increase in working capital usage of $125.3. Working capital was impacted by the spending levels of our clients and was primarily attributable to our media business.

Investing Activities

Net cash ~~used in~~provided by investing activities during the first ~~nine months~~quarter of ~~2017~~2021 was $0.2, which was an increase of $61.0 as compared to the first quarter of 2020, primarily due to an increase from net proceeds from investments during the first quarter of 2021 as well as a decrease in capital expenditures, which consisted primarily of decreases in computer software and lease-related costs. The payments for capital expenditures were $28.3 and $44.6 in the first quarters of ~~$108.7, related mostly to leasehold improvements~~2021 and ~~computer hardware and software.~~2020, respectively.

Financing Activities

Net cash used in financing activities during the first ~~nine months~~quarter of ~~2017~~2021 was $212.7, primarily driven by payment for the early extinguishment of long-term debt of $1,066.8 and the payment of common stock dividends of $109.1, partially offset by the net proceeds of $998.1 from the issuance of our $500.0 aggregate principal amount of 2.400% unsecured senior notes due 2031 (the "2.400% Senior Notes") and $500.0 aggregate principal amount of 3.375% unsecured senior notes due 2041 (the "3.375% Senior Notes"). See Note 3 in Item 1, Financial Statements, for further information.

Net cash provided by financing activities during the first quarter of 2020 was $744.4, primarily driven by the ~~repurchase~~net proceeds of ~~9.4 shares~~$646.2 from the issuance of our ~~common stock for an aggregate cost of $216.0, including fees, and~~4.750% unsecured senior notes due 2030 as well as the ~~payment of dividends of $211.2, partially offset by a~~ net increase in short-term borrowings of ~~$429.9.~~$247.8, primarily an increase of outstanding commercial paper, partially offset by the payment of common stock dividends of $100.0.

Table of Contents

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

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~~decrease of ~~$0.4~~$30.4 during the first ~~nine months~~quarter of ~~2017.~~

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 commercial paper program, a committed corporate credit facility, and uncommitted lines of credit ~~and a commercial paper program available~~ to support our operating needs. Borrowings under our commercial paper program are supported by our committed corporate credit agreement. 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, 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 – Our 3.750% unsecured senior notes in aggregate principal amount of $500.0 mature on October 1, 2021. We expect to use available cash on hand as well as additional short-term borrowings as needed to fund the principal repayment. As of ~~September 30, 2017,~~March 31, 2021, we had outstanding short-term borrowings of ~~$511.8~~$43.1 from our ~~commercial paper program and~~ uncommitted lines of credit used primarily to fund ~~seasonal~~short-term 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 2024 through ~~2024.~~2048.

~~(Amounts in Millions, Except Per Share Amounts)~~

•Dividends – In the first ~~nine months~~quarter of ~~2017,~~2021, we paid ~~three~~a quarterly cash ~~dividends~~dividend of ~~$0.18~~$0.270 per share on our common stock, which corresponded to an aggregate dividend payment of ~~$211.2.~~$109.1. Assuming we ~~continue to~~ pay a quarterly dividend of ~~$0.18~~$0.270 per share, and there is no significant change in the number of outstanding shares as of ~~September 30, 2017,~~March 31, 2021, we would expect to pay approximately ~~$280.0~~$425.0 over the next twelve months. Whether to declare and the amount of any such future dividend is at the discretion of our Board of Directors and will depend upon factors such as our earnings, financial position and cash requirements.

•Restructuring – All restructuring charges were identified and initiated in 2020, with all actions completed by the end of the fourth quarter of 2020. Restructuring charges of $1.3 for the three months ended March 31, 2021 are adjustments to the actions taken in 2020. As of March 31, 2021, our remaining liability related to restructuring actions was $32.8.

Share Repurchase Program

~~In February 2017, our Board~~On July 2, 2018, in connection with the announcement of ~~Directors (the "Board") authorized~~the Acxiom acquisition, we announced that share repurchases will be suspended for a ~~new share repurchase program~~period 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 was~~increased debt levels incurred in ~~addition to~~conjunction 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 ~~September 30, 2017, $239.5,~~ March 31, 2021, $338.4, excluding fees, remains available for repurchase under the ~~2017 Share Repurchase Program. The 2017 Share Repurchase Program has~~share repurchase programs authorized in previous years, which have no expiration date.

~~We may effect such repurchases through open market purchases, trading plans established~~

Table of Contents

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts 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.Millions, Except Per Share Amounts)

(Unaudited)

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.

Credit ~~Agreements~~Arrangements

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"~~“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 November 2024, 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 ~~September 30, 2017,~~March 31, 2021, there were no borrowings under the Credit Agreement; however, we had ~~$8.4~~$10.0 of letters of credit under the Credit Agreement, which reduced our total availability to ~~$991.6.~~$1,490.0.

On March 27, 2020, we entered into an agreement for a 364-day revolving credit facility (the “364-Day Credit Facility”) that matured on March 26, 2021. The 364-Day Credit Facility was a revolving facility, under which amounts borrowed by us were to be repaid and reborrowed, subject to an aggregate lending limit of $500.0. The cost structure of the 364-Day Credit Agreement was based on our credit ratings. The applicable margin for Base Rate Advances (as defined in the 364-Day Credit Facility) was 0.250%, the applicable margin for Eurodollar Rate Advances (as defined in the 364-Day Credit Facility) was 1.250%, and the facility fee payable on a lender’s revolving commitment was 0.250%. In addition, the 364-Day Credit Facility included covenants that, among other things, (i) limited our liens and the liens of our consolidated subsidiaries, and (ii) limited subsidiary debt. The 364-Day Credit Facility also contained a financial covenant that required us to maintain, on a consolidated basis as of the end of each fiscal quarter, a leverage ratio for the four quarters then ended. The leverage ratio and other covenants set forth in the 364-Day Credit Facility were equivalent to the covenants contained in the Company’s existing Credit Agreement, which remains in full effect.

We were in compliance with all of our covenants in the Credit Agreement as of ~~September 30, 2017.~~March 31, 2021. The financial ~~covenants~~covenant in the Credit Agreement ~~require~~requires that we maintain, as of the end of each fiscal quarter, a certain ~~financial measures~~leverage ratio for the four quarters then ended.

~~(Amounts in Millions, Except Per Share Amounts)~~

The table below sets forth the financial ~~covenants~~covenant in effect as of ~~September 30, 2017.~~

Four Quarters
Ended

Financial Covenant

March 31, 2021

Credit Agreement EBITDA Reconciliation

March 31, 2021

Leverage ratio (not greater than) 1, 2

4.25x

Net income available to IPG common stockholders

438.1

Actual leverage ratio

2.52x

Non-operating adjustments 3

317.4

Operating income

755.5

Add:

Depreciation and amortization

406.0

Other non-cash charges reducing operating income

209.7

Credit Agreement EBITDA 1

1,371.2

1The leverage ratio is defined as debt as of the last day of such fiscal quarter to EBITDA (as defined in the Credit Agreement) for the four quarters then ended.

2On July 28, 2020, we entered into Amendment No.1 to the Credit Agreement, which increased the maximum leverage ratio covenant to (i) 4.25x through the quarter ended June 30, 2021, and (ii) 3.50x thereafter.

3Includes adjustments of the following items from our Consolidated Statements of Operations: provision for (benefit of) income taxes, total (expenses) and other income, equity in net (loss) income of unconsolidated affiliates, and net (income) loss attributable to noncontrolling interests.

Uncommitted Lines of Credit

Table of Contents

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

outstanding borrowings of ~~$152.5~~$43.1 classified as short-term borrowings on our Consolidated Balance Sheet. The average amount outstanding during the ~~third~~first quarter of ~~2017~~2021 was ~~$124.7,~~$81.4 with a weighted-average interest rate of approximately ~~3.1%~~2.9%.

~~In June 2017, the~~The Company ~~established a commercial paper program under which the Company was~~is 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 be~~are 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. AsDuring the first quarter of ~~September 30, 2017, the Company had outstanding~~2021, there was no commercial paper activity, and as of ~~$359.3 classified as short-term borrowings on our Consolidated Balance Sheet. The average amount outstanding under the program during the third quarter of 2017~~March 31, 2021, there was ~~$488.2, with a weighted-average interest rate of 1.4% and a weighted-average maturity of fourteen days. See Note~~ 14 ~~to the unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further information.~~no commercial paper outstanding.

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 ~~September 30, 2017,~~March 31, 2021, the amount netted was ~~$1,567.0.~~

~~(Amounts in Millions, Except Per Share Amounts)~~

Our debt credit ratings as of ~~October 16, 2017~~April 15, 2021, are listed below.

~~We are rated investment-grade by Moody's Investors Service,~~The most recent update to our outlook occurred in March 2021 when S&P Global Ratings and Fitch ~~Ratings. On June 8, 2017, we received~~Ratings changed from ~~the credit rating agencies the short-term credit ratings, described above, with respect~~Negative 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.~~Stable. 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.

Our significant accounting policies are described in Note 1 to the Consolidated Financial Statements for the year ended December 31, ~~2016~~,2020, included in our ~~2016~~2020 Annual ~~Report on Form 10-K.~~Report. As summarized in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our 2020 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, ~~2016~~.2020, other than as noted below. Actual results may differ from these estimates under different assumptions or conditions.

RECENT ACCOUNTING STANDARDS

See Note 1314 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.

Table of Contents

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) Loss Attributable to Noncontrolling Interests and Amortization of Acquired Intangibles, which we refer to as “Adjusted EBITA”.

Adjusted 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.

Adjusted 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 Adjusted 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 use Adjusted EBITA in the incentive compensation programs applicable to some of our employees in order to evaluate our Company’s performance. Our management recognizes that Adjusted EBITA has inherent limitations because of the excluded items, particularly those items that are recurring in nature. Management also reviews operating income and net income as well as the specific items that are excluded from Adjusted 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 Adjusted 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 Adjusted 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 Adjusted 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, Adjusted 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 Adjusted 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) Loss Attributable to Noncontrolling 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.

Table of Contents

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 Adjusted EBITA for the three months ended March 31, 2021 and 2020.

Net Income Available to IPG Common Stockholders 1

Adjusted EBITA Margin on Net Revenue

1 Calculations include restructuring charges of $1.3 for the three months ended March 31, 2021. See “Restructuring Charges” in this MD&A and Note 7 in Item 1, Financial Statements, for further information



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. From time to time, we use derivative instruments, pursuant to established guidelines and policies, to manage some portion of these risks. Derivative instruments utilized in our hedging activities are viewed as risk management tools and are not used for trading or speculative purposes. There has been no significant change in our exposure to market risk during the ~~third~~first quarter of ~~2017.~~2021. 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 ~~September 30, 2017,~~March 31, 2021, and December 31, ~~2016,~~2020, approximately ~~77%~~98% and ~~93%~~97%, respectively, 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 ~~2016~~2020 Annual ~~Report on Form 10-K.~~Report.

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 ~~September 30, 2017~~,March 31, 2021, 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.

There has been no change in internal control over financial reporting in the quarter ended ~~September 30, 2017,~~March 31, 2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Information about our legal proceedings is set forth in Note 1213 to the unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Item 1A, Risk Factors, in our 2020 Annual Report, on Form 10-K (the “2020 Annual Report”), which could materially affect our business, financial condition or future results. In the ~~third~~first quarter of ~~2017,~~2021, there have been no material changes in the risk factors we have previously disclosed in Item 1A, Risk Factors, in our ~~2016~~2020 Annual Report. The risks described in our 2020 Annual Report, which include the impacts from the COVID-19 pandemic on ~~Form 10-K.~~the Company’s business, financial condition and results of operations, are not the only risks we face, and additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect the Company’s business, financial condition and/or operating results.


	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
January 1 - 31	3,654	$	24.30	—	$	338,421,933
February 1 - 28	883,395	$	26.02	—	$	338,421,933
March 1 - 31	—	$	—	—	$	338,421,933
Total	887,049	$	26.01	—


~~(c)~~			~~The following table provides information regarding our purchases of our equity securities during the period from July 1, 2017 to September 30, 2017:~~

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 - 31 1,045,347
$ 24.76
1,033,613
$ 314,797,836
August 1 - 31 2,336,046
$ 20.98
2,334,077
$ 265,832,070
September 1 - 30 1,288,700
$ 20.42
1,288,700
$ 239,522,615
Total 4,670,093
$ 21.67
4,656,390

~~Included~~

1The 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”).

2The average price per share 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”). We repurchased 11,734 Withheld Shares in July 2017, 1,969 Withheld Shares in August 2017 and no Withheld Shares in September 2017, for each of the months in the fiscal quarter and for the three-month period was calculated by dividing (a) the sum for the applicable period of the aggregate value of the tax withholding obligations by (b) the sum of the number of Withheld Shares.

3In February 2017, the Company's Board of Directors (the “Board”) authorized a ~~total of 13,703 Withheld Shares during the three-month period.~~

The average price per share for each of the months in the fiscal quarter and for the three month period was calculated by dividing (a) the sum for 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.


3	~~On February 10, 2017, we announced that our Board of Directors had approved a new~~ share repurchase program to repurchase ~~from time to time up to $300.0 million of our common stock, in addition to amounts available on existing authorizations. There is no expiration date 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~~$300.0 million, ~~provided~~excluding fees, of our common stock (the “2017 Share Repurchase Program”). In February 2018, 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 onBoard authorized a ~~lender’s revolving commitment is 0.150%.~~

~~In addition~~share repurchase program 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 issuerepurchase from time to time up to $300.0 million, excluding fees, of our common stock, which was in addition to any amounts remaining under the ~~Program to an aggregate amount not to exceed $1.5 billion outstanding at any time. Under~~2017 Share Repurchase Program. On July 2, 2018, in connection with the ~~Program, the Company may issue Notes from time to time, and proceeds~~announcement of the ~~Notes~~Acxiom acquisition, we announced that share repurchases will be ~~used~~suspended for ~~working capital~~a period of time in order to reduce the increased debt levels incurred in conjunction with the acquisition, 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”)no shares were repurchased 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 mayshare repurchase programs in the ~~future provide, commercial banking, investment banking and other financial advisory services to~~periods reflected. There are no expiration dates associated with 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.share repurchase programs.

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. The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

Table of Contents

INDEX TO EXHIBITS


Exhibit No.		Description

~~Exhibit No.~~	~~Description~~

~~10(i)(1)~~4.1	~~Credit Agreement,~~Tenth Supplemental Indenture, dated as of ~~July 18, 2008,~~February 25, 2021, between the Company and U.S. Bank National Association, as ~~amended and restated~~Trustee, is incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 25, 2021.

4.2		Eleventh Supplemental Indenture, dated as of ~~April 23, 2010,~~February 25, 2021, between the Company and U.S. Bank National Association, 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, as further amended and restated as of October 20, 2015 and as further amended and restated as of OctoberTrustee, is incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed with the SEC on February 25, ~~2017 among The Interpublic Group of Companies, Inc., the lenders named therein and Citibank, as administrative agent.~~2021.

~~10(iii)(A)(1)~~4.3		~~The Interpublic Executive Severance Plan, amended~~Form of Global Note representing the Company’s 2.400% Senior Notes due 2031 is included as part of and ~~restated, effective August 16, 2017.~~incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 25, 2021.

~~12.1~~4.4		~~Computation~~Form of ~~Ratios~~Global Note representing the Company’s 3.375% Senior Notes due 2041 is included as part of ~~Earnings~~and incorporated by reference to ~~Fixed Charges.~~Exhibit 4.3 to the Company’s Current Report on Form 8-K filed with the SEC on February 25, 2021.

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 ~~September 30, 2017.~~March 31, 2021. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

104		Cover Page Interactive Data File. The cover page XBRL tags are embedded within the inline XBRL document and are included in Exhibit 101.

Table of Contents

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~~Philippe Krakowsky
		~~Michael I. Roth~~Philippe Krakowsky ~~Chairman and~~ Chief Executive Officer

Date: ~~October 26, 2017~~April 28, 2021





By	/s/ Christopher F. Carroll
		Christopher F. Carroll Senior Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer)

Date: ~~October 26, 2017~~

April 28, 2021



Delaware						13-1024020
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.10 per share	IPG	The New York Stock Exchange


	September 30, 2017			December 31, 2016				March 31, 2021		December 31, 2020
ASSETS:							ASSETS:
Cash and cash equivalents	$	704.9		$	1,097.6		Cash and cash equivalents	$	2,015.3	$	2,509.0
Accounts receivable, net of allowance of $45.8 and $55.7, respectively	3,696.1			4,389.7
Expenditures billable to clients	1,742.3			1,518.1
Accounts receivable, net of allowance of $92.6 and $98.3, respectively							Accounts receivable, net of allowance of $92.6 and $98.3, respectively	3,440.3		4,646.4
Accounts receivable, billable to clients							Accounts receivable, billable to clients	1,842.7		1,820.7
Assets held for sale	8.3			203.2			Assets held for sale	4.5		0.8
Other current assets	312.2			229.4			Other current assets	467.4		390.7
Total current assets	6,463.8			7,438.0			Total current assets	7,770.2		9,367.6
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 and amortization of $1,162.7 and $1,133.9, respectively							Property and equipment, net of accumulated depreciation and amortization of $1,162.7 and $1,133.9, respectively	667.0		690.3
Deferred income taxes	270.9			220.3			Deferred income taxes	295.6		302.0
Goodwill	3,799.9			3,674.4			Goodwill	4,934.3		4,945.5
Other intangible assets							Other intangible assets	913.6		933.6
Operating lease right-of-use assets							Operating lease right-of-use assets	1,361.2		1,379.3
Other non-current assets	544.0			530.5			Other non-current assets	407.8		424.4
TOTAL ASSETS	$	11,716.1		$	12,485.2		TOTAL ASSETS	$	16,349.7	$	18,042.7

LIABILITIES:							LIABILITIES:
Accounts payable	$	5,561.1		$	6,303.6		Accounts payable	$	5,862.0	$	7,269.7
Accrued liabilities	550.7			794.0			Accrued liabilities	608.9		832.4
Contract liabilities							Contract liabilities	689.1		657.8
Short-term borrowings	511.8			85.7			Short-term borrowings	43.1		48.0
Current portion of long-term debt	301.9			323.9			Current portion of long-term debt	502.8		502.5
Current portion of operating leases							Current portion of operating leases	268.8		268.5
Liabilities held for sale	20.8			198.8			Liabilities held for sale	9.8		1.6
Total current liabilities	6,946.3			7,706.0			Total current liabilities	7,984.5		9,580.5
Long-term debt	1,285.0			1,280.7			Long-term debt	2,906.9		2,915.8
Non-current operating leases							Non-current operating leases	1,414.2		1,441.0
Deferred compensation	457.2			480.7			Deferred compensation	377.0		413.2
Other non-current liabilities	749.4			708.3			Other non-current liabilities	660.3		655.2
TOTAL LIABILITIES	9,437.9			10,175.7			TOTAL LIABILITIES	13,342.9		15,005.7

Redeemable noncontrolling interests (see Note 4)	238.0			252.8
Redeemable noncontrolling interests (see Note 5)							Redeemable noncontrolling interests (see Note 5)	85.2		93.1

STOCKHOLDERS’ EQUITY:							STOCKHOLDERS’ EQUITY:
Common stock	39.9			39.4			Common stock	39.3		39.0
Additional paid-in capital	1,235.7			1,199.2			Additional paid-in capital	1,107.9		1,099.3
Retained earnings	1,849.8			1,804.3			Retained earnings	2,623.1		2,636.9
Accumulated other comprehensive loss, net of tax	(832.7		)	(962.5		)	Accumulated other comprehensive loss, net of tax	(896.3)		(880.2)
	2,292.7			2,080.4
Less: Treasury stock	(279.3		)	(63.3		)

Total IPG stockholders’ equity	2,013.4			2,017.1			Total IPG stockholders’ equity	2,874.0		2,895.0
Noncontrolling interests	26.8			39.6			Noncontrolling interests	47.6		48.9
TOTAL STOCKHOLDERS’ EQUITY	2,040.2			2,056.7			TOTAL STOCKHOLDERS’ EQUITY	2,921.6		2,943.9
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	11,716.1		$	12,485.2		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	16,349.7	$	18,042.7


	Nine months ended September 30,							Three months ended March 31,
	2017			2016				2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:							CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	261.5		$	295.6		Net income	$	92.4	$	2.6
Adjustments to reconcile net income to net cash used in operating activities:							Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization of fixed assets and intangible assets	124.5			117.5
Provision for uncollectible receivables	9.5			13.6
Depreciation and amortization							Depreciation and amortization	69.2		72.8
Loss on early extinguishment of debt							Loss on early extinguishment of debt	74.0		0.0
Amortization of restricted stock and other non-cash compensation	59.8			59.0			Amortization of restricted stock and other non-cash compensation	20.3		23.2
Deferred income tax							Deferred income tax	18.2		(11.2)
Net losses on sales of businesses							Net losses on sales of businesses	12.5		23.3
Net amortization of bond discounts and deferred financing costs	4.2			4.2			Net amortization of bond discounts and deferred financing costs	2.7		2.3
Deferred income tax (benefit) provision	(1.6		)	2.6
Net losses on sales of businesses	20.9			16.1

(Reversal of) Provision for uncollectible receivables							(Reversal of) Provision for uncollectible receivables	(2.2)		22.6
Other	16.1			29.8			Other	4.6		1.2
Changes in assets and liabilities, net of acquisitions and divestitures, providing (using) cash:							Changes in assets and liabilities, net of acquisitions and divestitures, providing (using) cash:
Accounts receivable	875.8			666.3			Accounts receivable	1,158.6		1,343.5
Expenditures billable to clients	(165.9		)	(241.2		)
Accounts receivable, billable to clients							Accounts receivable, billable to clients	(40.8)		(40.7)
Other current assets	(48.2		)	(20.6		)	Other current assets	(68.8)		(57.5)
Accounts payable	(986.4		)	(688.4		)	Accounts payable	(1,347.0)		(1,466.9)
Accrued liabilities	(287.8		)	(207.9		)	Accrued liabilities	(233.6)		(158.8)
Contract liabilities							Contract liabilities	34.7		8.8
Other non-current assets and liabilities	(21.4		)	(73.5		)	Other non-current assets and liabilities	(44.6)		(42.3)
Net cash used in operating activities	(139.0		)	(26.9		)	Net cash used in operating activities	(249.8)		(277.1)
CASH FLOWS FROM INVESTING ACTIVITIES:							CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(108.7		)	(114.5		)	Capital expenditures	(28.3)		(44.6)
Acquisitions, net of cash acquired	(22.6		)	(47.9		)	Acquisitions, net of cash acquired	0.0		(1.3)
Net proceeds from investments							Net proceeds from investments	28.8		1.8
Other investing activities	(9.2		)	(5.1		)	Other investing activities	(0.3)		(16.7)
Net cash used in investing activities	(140.5		)	(167.5		)
Net cash provided by (used in) investing activities							Net cash provided by (used in) investing activities	0.2		(60.8)
CASH FLOWS FROM FINANCING ACTIVITIES:							CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchases of common stock	(216.0		)	(193.3		)
Early extinguishment of long-term debt							Early extinguishment of long-term debt	(1,066.8)		0.0
Common stock dividends	(211.2		)	(179.6		)	Common stock dividends	(109.1)		(100.0)
Tax payments for employee shares withheld							Tax payments for employee shares withheld	(22.4)		(19.1)
Acquisition-related payments	(49.1		)	(36.7		)	Acquisition-related payments	(3.4)		(18.6)
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		)	Distributions to noncontrolling interests	(3.3)		(5.6)
Net increase (decrease) in short-term borrowings	429.9			(33.9		)
Net (decrease) increase in short-term borrowings							Net (decrease) increase in short-term borrowings	(2.9)		247.8
Proceeds from long-term debt							Proceeds from long-term debt	998.1		646.2
Exercise of stock options	12.1			10.2			Exercise of stock options	8.0		0.0
Other financing activities	0.1			1.0			Other financing activities	(10.9)		(6.3)
Net cash used in financing activities	(113.1		)	(466.9		)
Net cash (used in) provided by financing activities							Net cash (used in) provided by financing activities	(212.7)		744.4
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash	0.4			50.7			Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash	(30.4)		(46.7)
Net decrease in cash, cash equivalents and restricted cash	(392.2		)	(610.6		)
Net (decrease) increase in cash, cash equivalents and restricted cash							Net (decrease) increase in cash, cash equivalents and restricted cash	(492.7)		359.8
Cash, cash equivalents and restricted cash at beginning of period	1,100.2			1,506.1			Cash, cash equivalents and restricted cash at beginning of period	2,511.5		1,195.7
Cash, cash equivalents and restricted cash at end of period	$	708.0		$	895.5		Cash, cash equivalents and restricted cash at end of period	$	2,018.8	$	1,555.5



	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
REVENUE	$	1,902.6		$	1,922.2		$	5,541.4		$	5,582.1

OPERATING EXPENSES:
Salaries and related expenses	1,227.6			1,228.0			3,742.3			3,726.3
Office and general expenses	455.9			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

EXPENSES AND OTHER INCOME:
Interest expense	(21.0		)	(21.7		)	(67.6		)	(68.8		)
Interest income	4.1			4.7			14.0			16.1
Other (expense) income, net	(9.9		)	5.3			(24.5		)	(13.5		)
Total (expenses) and other income	(26.8		)	(11.7		)	(78.1		)	(66.2		)

Income before income taxes	192.3			196.3			377.2			389.1
Provision for income taxes	42.5			63.8			115.8			91.9
Income of consolidated companies	149.8			132.5			261.4			297.2
Equity in net (loss) income of unconsolidated affiliates	(1.0		)	0.2			0.1			(1.6		)
NET INCOME	148.8			132.7			261.5			295.6
Net (income) loss attributable to noncontrolling interests	(2.6		)	(4.1		)	0.9			(4.7		)
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

Weighted-average number of common shares outstanding:
Basic	389.5			397.7			391.2			399.5
Diluted	397.2			407.9			398.6			408.8

Dividends declared per common share	$	0.18		$	0.15		$	0.54		$	0.45


	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 December 31, 2020	390.9	$	39.0	$	1,099.3	$	2,636.9	$	(880.2)	$	2,895.0	$	48.9	$	2,943.9
Net income						91.7				91.7		0.7		92.4
Other comprehensive loss								(16.1)		(16.1)		(0.1)		(16.2)
Reclassifications related to redeemable noncontrolling interests												1.0		1.0
Distributions to noncontrolling interests												(3.3)		(3.3)
Change in redemption value of redeemable noncontrolling interests						1.0				1.0				1.0
Common stock dividends ($0.270 per share)						(106.5)				(106.5)				(106.5)
Stock-based compensation	2.6	0.3		23.4						23.7				23.7
Exercise of stock options	0.6	0.1		8.2						8.3				8.3
Shares withheld for taxes	(0.9)	(0.1)		(23.0)						(23.1)				(23.1)
Other				0								0.4		0.4
Balance at March 31, 2021	393.2	$	39.3	$	1,107.9	$	2,623.1	$	(896.3)	$	2,874.0	$	47.6	$	2,921.6



	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 reclassifications	113.4			0.0			0.0			6.3			119.7
Amount reclassified from accumulated other comprehensive loss, net of tax	1.8			(0.6		)	1.0			7.9			10.1
Balance as of September 30, 2017	$	(601.5	)	$	0.0		$	(7.4	)	$	(223.8	)	$	(832.7	)



	September 30, 2017												Balance Sheet Classification
	Level 1			Level 2			Level 3			Total			Balance Sheet Classification
Assets
Cash equivalents	$	153.2		$	0.0		$	0.0		$	153.2		Cash and cash equivalents
Short-term marketable securities	0.1			0.0			0.0			0.1			Other current assets
Long-term investments	0.4			0.0			0.0			0.4			Other non-current assets
Total	$	153.7		$	0.0		$	0.0		$	153.7

As a percentage of total assets	1.3		%	0.0		%	0.0		%	1.3		%

Liabilities
Contingent acquisition obligations¹	$	0.0		$	0.0		$	164.2		$	164.2

	December 31, 2016												Balance Sheet Classification
	Level 1			Level 2			Level 3			Total			Balance Sheet Classification
Assets
Cash equivalents	$	440.8		$	0.0		$	0.0		$	440.8		Cash and cash equivalents
Short-term marketable securities	3.0			0.0			0.0			3.0			Other current assets
Long-term investments	0.4			0.0			0.0			0.4			Other non-current assets
Total	$	444.2		$	0.0		$	0.0		$	444.2

As a percentage of total assets	3.6		%	0.0		%	0.0		%	3.6		%

Liabilities
Contingent acquisition obligations ¹	$	0.0		$	0.0		$	205.4		$	205.4



	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 expenses	0.0	%	1.3	%	0.4	%	2.4	%
Office and general expenses	(6.2	)%	(3.3	)%	(4.0	)%	(1.3	)%



			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	$	1,922.2	$	7.7		$	(37.2	)	$	9.9		$	1,902.6	0.5	%	(1.0	)%
Domestic	1,165.9		0.0			(25.0		)	15.1			1,156.0		1.3	%	(0.8	)%
International	756.3		7.7			(12.2		)	(5.2		)	746.6		(0.7	)%	(1.3	)%
United Kingdom	174.0		(4.3		)	1.4			5.3			176.4		3.0	%	1.4	%
Continental Europe	147.6		6.4			(4.0		)	0.6			150.6		0.4	%	2.0	%
Asia Pacific	217.9		0.8			(0.2		)	(4.6		)	213.9		(2.1	)%	(1.8	)%
Latin America	103.6		2.4			(10.4		)	(10.3		)	85.3		(9.9	)%	(17.7	)%
Other	113.2		2.4			1.0			3.8			120.4		3.4	%	6.4	%



			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	)%
Domestic	3,426.2		0.0			(52.5		)	54.6			3,428.3		1.6	%	0.1	%
International	2,155.9		(30.7		)	(21.3		)	9.2			2,113.1		0.4	%	(2.0	)%
United Kingdom	495.3		(44.5		)	12.5			8.5			471.8		1.7	%	(4.7	)%
Continental Europe	468.1		(3.9		)	(13.3		)	6.1			457.0		1.3	%	(2.4	)%
Asia Pacific	617.7		(0.7		)	2.4			(12.0		)	607.4		(1.9	)%	(1.7	)%
Latin America	255.7		14.3			(24.6		)	(7.9		)	237.5		(3.1	)%	(7.1	)%
Other	319.1		4.1			1.7			14.5			339.4		4.5	%	6.4	%


1	Reflects 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.


2	~~Reflects changes in accounts receivable, expenditures billable to clients, other current assets, accounts payable and accrued liabilities.~~



Balance Sheet Data	September 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 debt	301.9		323.9		24.5
Long-term debt	1,285.0		1,280.7		1,583.3
Total debt	$	2,098.7	$	1,690.3	$	1,715.6



	Four Quarters Ended		Four Quarters Ended
Financial Covenants	September 30, 2017	EBITDA Reconciliation	September 30, 2017
Interest coverage ratio (not less than) ¹	5.00x	Operating income	$	941.0
Actual interest coverage ratio	18.05x	Add:
Leverage ratio (not greater than) ¹	3.50x	Depreciation and amortization	253.6
Actual leverage ratio	1.76x	EBITDA ¹	$	1,194.6


1	The interest coverage ratio is defined as EBITDA, as defined in the Credit 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.



	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 - 31	1,045,347	$	24.76	1,033,613	$	314,797,836
August 1 - 31	2,336,046	$	20.98	2,334,077	$	265,832,070
September 1 - 30	1,288,700	$	20.42	1,288,700	$	239,522,615
Total	4,670,093	$	21.67	4,656,390

Weighted-average
grant-date fair value
(per award)

Stock-settled awards

Performance-based awards

Total stock-based compensation awards