UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q



			☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2020~~March 31, 2021



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

Commission file number: 1-6686

THE INTERPUBLIC GROUP OF COMPANIES, INC.

(Exact name of registrant as specified in its charter)



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

909 Third Avenue, New York, New York 10022

(Address of principal executive offices) (Zip Code)

(212)704-1200

(Registrant’s telephone number, including area code)

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

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



Title of each 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

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 every Interactive Data File required to be submitted 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 such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

The number of shares of the registrant’s common stock outstanding as of ~~July~~April 15, ~~2020~~2021 was ~~389,922,896.~~393,375,648.

INDEX

~~INDEX~~

				Page
PART I. FINANCIAL INFORMATION
Item 1.			Financial Statements (Unaudited)
			Consolidated Statements of Operations for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~	23
			Consolidated Statements of Comprehensive Income for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~	34
			Consolidated Balance Sheets as of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020	45
			Consolidated Statements of Cash Flows for the ~~Six~~Three Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~	56
			Consolidated Statements of Stockholders’ Equity for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~	67
			Notes to Consolidated Financial Statements	8
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations	2423
Item 3.			Quantitative and Qualitative Disclosures about Market Risk	4439
Item 4.			Controls and Procedures	4439

PART II. OTHER INFORMATION
Item 1.			Legal Proceedings	4540
Item 1A.			Risk Factors	4540
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds	4640

Item 5.6.			~~Other Information~~Exhibits	4640
~~Item 6.~~	~~Exhibits~~	46
INDEX TO EXHIBITS				4741
SIGNATURES				4842

INFORMATION REGARDING FORWARD-LOOKING DISCLOSURE

This quarterly report on Form 10-Q contains forward-looking statements. Statements in this report that are not historical facts, including statements about management’s beliefs and expectations, constitute forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” “continue” or comparable terminology are intended to identify forward-looking statements. These statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined under Item 1A, Risk Factors, in our most recent annual report on Form 10-K 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:

•the effects of a challenging economy on the demand for our advertising and marketing services, on our clients’ financial condition and on our business or financial condition;

•the ~~outbreak~~impacts of the novel coronavirus (COVID-19)~~, including~~ 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;

•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 ~~on the acquisition~~ of ~~the Acxiom business.~~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 and our quarterly reports on Form 10-Q.

Table of Contents

PART I – FINANCIAL INFORMATION



Item 1.			Financial Statements (Unaudited)

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)


	Three months ended March 31,
	2021		2020
REVENUE:
Net revenue	$	2,027.7	$	1,972.1
Billable expenses	229.3		387.7
Total revenue	2,257.0		2,359.8

OPERATING EXPENSES:
Salaries and related expenses	1,393.1		1,422.8
Office and other direct expenses	292.9		378.2
Billable expenses	229.3		387.7
Cost of services	1,915.3		2,188.7
Selling, general and administrative expenses	28.2		22.4
Depreciation and amortization	69.2		72.8
Restructuring charges	1.3		0.0
Total operating expenses	2,014.0		2,283.9

OPERATING INCOME	243.0		75.9

EXPENSES AND OTHER INCOME:
Interest expense	(49.6)		(44.8)
Interest income	6.9		10.7
Other expense, net	(83.9)		(21.8)
Total (expenses) and other income	(126.6)		(55.9)

Income before income taxes	116.4		20.0
Provision for income taxes	23.8		17.2
Income of consolidated companies	92.6		2.8
Equity in net loss of unconsolidated affiliates	(0.2)		(0.2)
NET INCOME	92.4		2.6
Net (income) loss attributable to noncontrolling interests	(0.7)		2.1
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

Weighted-average number of common shares outstanding:
Basic	391.5		387.7
Diluted	396.0		391.7

Three months ended
June 30, Six months ended
June 30,
2020 2019 2020 2019
REVENUE:
Net revenue $ 1,853.4
$ 2,125.9
$ 3,825.5
$ 4,130.7
Billable expenses 172.3
394.3
560.0
750.7
Total revenue 2,025.7
2,520.2
4,385.5
4,881.4

OPERATING EXPENSES:
Salaries and related expenses 1,306.1
1,381.2
2,728.9
2,802.3
Office and other direct expenses 317.0
387.3
695.2
776.5
Billable expenses 172.3
394.3
560.0
750.7
Cost of services 1,795.4
2,162.8
3,984.1
4,329.5
Selling, general and administrative expenses 4.1
18.1
26.5
59.5
Depreciation and amortization 73.1
73.0
145.9
144.1
Restructuring charges 112.6
2.1
112.6
33.9
Total operating expenses 1,985.2
2,256.0
4,269.1
4,567.0

OPERATING INCOME 40.5
264.2
116.4
314.4

EXPENSES AND OTHER INCOME:
Interest expense (49.8 ) (51.6 ) (94.6 ) (101.4 )
Interest income 5.9
7.7
16.6
15.5
Other expense, net (21.5 ) (3.8 ) (43.3 ) (10.7 )
Total (expenses) and other income (65.4 ) (47.7 ) (121.3 ) (96.6 )

(Loss) Income before income taxes (24.9 ) 216.5
(4.9 ) 217.8
Provision for income taxes 19.0
43.6
36.2
54.1
(Loss) Income of consolidated companies (43.9 ) 172.9
(41.1 ) 163.7
Equity in net loss of unconsolidated affiliates 0.0
(0.1 ) (0.2 ) (0.4 )
NET (LOSS) INCOME (43.9 ) 172.8
(41.3 ) 163.3
Net (income) loss attributable to noncontrolling interests (1.7 ) (3.3 ) 0.4
(1.8 )
NET (LOSS) INCOME AVAILABLE TO IPG COMMON STOCKHOLDERS $ (45.6 ) $ 169.5
$ (40.9 ) $ 161.5

(Loss) Earnings per share available to IPG common stockholders:
Basic $ (0.12 ) $ 0.44
$ (0.11 ) $ 0.42
Diluted $ (0.12 ) $ 0.43
$ (0.11 ) $ 0.41

Weighted-average number of common shares outstanding:
Basic 389.4
386.2
388.5
385.4
Diluted 389.4
391.2
388.5
390.1

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

Table of Contents

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in Millions)

(Unaudited)


	Three months ended March 31,
	2021		2020
NET INCOME	$	92.4	$	2.6

OTHER COMPREHENSIVE LOSS
Foreign currency translation:
Foreign currency translation adjustments	(41.0)		(147.6)
Reclassification adjustments recognized in net income	0.7		(3.6)
	(40.3)		(151.2)
Derivative instruments:
Changes in fair value of derivative instruments	21.3		(0.4)
Recognition of previously unrealized losses in net income	5.2		0.6
Income tax effect	(4.2)		(0.1)
	22.3		0.1
Defined benefit pension and other postretirement plans:

Amortization of unrecognized losses, transition obligation and prior service cost included in net income	2.3		1.9

Other	(0.1)		(1.3)
Income tax effect	(0.4)		(0.3)
	1.8		0.3
Other comprehensive loss, net of tax	(16.2)		(150.8)
TOTAL COMPREHENSIVE INCOME (LOSS)	76.2		(148.2)
Less: comprehensive income (loss) attributable to noncontrolling interests	0.6		(4.2)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO IPG	$	75.6	$	(144.0)

Three months ended
June 30, Six months ended
June 30,
2020 2019 2020 2019
NET (LOSS) INCOME $ (43.9 ) $ 172.8
$ (41.3 ) $ 163.3

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation:
Foreign currency translation adjustments 42.8
4.2
(104.8 ) 12.5
Reclassification adjustments recognized in net (loss) income 3.3
4.6
(0.3 ) 5.8
46.1
8.8
(105.1 ) 18.3
Derivative instruments:
Changes in fair value of derivative instruments (0.5 ) 0.0
(0.9 ) 0.0
Recognition of previously unrealized losses in net (loss) income 0.6
0.6
1.2
1.2
Income tax effect 0.0
(0.1 ) (0.1 ) (0.2 )
0.1
0.5
0.2
1.0
Defined benefit pension and other postretirement plans:
Net actuarial gains for the period 2.2
0.7
2.2
0.7
Amortization of unrecognized losses, transition obligation and prior service cost included in net (loss) income 1.8
1.6
3.7
3.3
Other (0.1 ) 0.6
(1.4 ) 0.3
Income tax effect (0.9 ) (0.1 ) (1.2 ) (0.2 )
3.0
2.8
3.3
4.1
Other comprehensive income (loss), net of tax 49.2
12.1
(101.6 ) 23.4
TOTAL COMPREHENSIVE INCOME (LOSS) 5.3
184.9
(142.9 ) 186.7
Less: comprehensive income (loss) attributable to noncontrolling interests 1.3
3.6
(2.9 ) 2.0
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO IPG $ 4.0
$ 181.3
$ (140.0 ) $ 184.7

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

Table of Contents

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in Millions)

(Unaudited)


	June 30, 2020			December 31, 2019				March 31, 2021		December 31, 2020
ASSETS:							ASSETS:
Cash and cash equivalents	$	1,085.4		$	1,192.2		Cash and cash equivalents	$	2,015.3	$	2,509.0
Accounts receivable, net of allowance of $81.3 and $40.2, respectively	3,146.6			5,209.2
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	1,463.7			1,934.1			Accounts receivable, billable to clients	1,842.7		1,820.7
Assets held for sale	26.6			22.8			Assets held for sale	4.5		0.8
Other current assets	492.0			412.4			Other current assets	467.4		390.7
Total current assets	6,214.3			8,770.7			Total current assets	7,770.2		9,367.6
Property and equipment, net of accumulated depreciation and amortization of $1,163.7 and $1,116.4, respectively	717.8			778.1
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	287.7			252.1			Deferred income taxes	295.6		302.0
Goodwill	4,842.4			4,894.4			Goodwill	4,934.3		4,945.5
Other intangible assets	968.1			1,014.3			Other intangible assets	913.6		933.6
Operating lease right-of-use assets	1,435.8			1,574.4			Operating lease right-of-use assets	1,361.2		1,379.3
Other non-current assets	430.8			467.9			Other non-current assets	407.8		424.4
TOTAL ASSETS	$	14,896.9		$	17,751.9		TOTAL ASSETS	$	16,349.7	$	18,042.7

LIABILITIES:							LIABILITIES:
Accounts payable	$	4,328.1		$	7,205.4		Accounts payable	$	5,862.0	$	7,269.7
Accrued liabilities	599.3			742.8			Accrued liabilities	608.9		832.4
Contract liabilities	557.6			585.6			Contract liabilities	689.1		657.8
Short-term borrowings	51.9			52.4			Short-term borrowings	43.1		48.0
Current portion of long-term debt	503.0			502.0			Current portion of long-term debt	502.8		502.5
Current portion of operating leases	258.5			267.2			Current portion of operating leases	268.8		268.5
Liabilities held for sale	68.1			65.0			Liabilities held for sale	9.8		1.6
Total current liabilities	6,366.5			9,420.4			Total current liabilities	7,984.5		9,580.5
Long-term debt	3,411.7			2,771.9			Long-term debt	2,906.9		2,915.8
Non-current operating leases	1,347.7			1,429.6			Non-current operating leases	1,414.2		1,441.0
Deferred compensation	375.5			425.0			Deferred compensation	377.0		413.2
Other non-current liabilities	749.2			714.7			Other non-current liabilities	660.3		655.2
TOTAL LIABILITIES	12,250.6			14,761.6			TOTAL LIABILITIES	13,342.9		15,005.7

Redeemable noncontrolling interests (see Note 5)	155.2			164.7			Redeemable noncontrolling interests (see Note 5)	85.2		93.1

STOCKHOLDERS’ EQUITY:							STOCKHOLDERS’ EQUITY:
Common stock	38.9			38.7			Common stock	39.3		39.0
Additional paid-in capital	996.3			977.3			Additional paid-in capital	1,107.9		1,099.3
Retained earnings	2,444.3			2,689.9			Retained earnings	2,623.1		2,636.9
Accumulated other comprehensive loss, net of tax	(1,029.1		)	(930.0		)	Accumulated other comprehensive loss, net of tax	(896.3)		(880.2)

Total IPG stockholders’ equity	2,450.4			2,775.9			Total IPG stockholders’ equity	2,874.0		2,895.0
Noncontrolling interests	40.7			49.7			Noncontrolling interests	47.6		48.9
TOTAL STOCKHOLDERS’ EQUITY	2,491.1			2,825.6			TOTAL STOCKHOLDERS’ EQUITY	2,921.6		2,943.9
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	14,896.9		$	17,751.9		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	16,349.7	$	18,042.7

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

Table of Contents

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in Millions)

(Unaudited)


	Six months ended June 30,							Three months ended March 31,
	2020			2019				2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:							CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(41.3	)	$	163.3
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Net income							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	145.9			144.1			Depreciation and amortization	69.2		72.8
Provision for uncollectible receivables	39.4			6.7
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	35.8			44.1			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	5.3			4.6			Net amortization of bond discounts and deferred financing costs	2.7		2.3
Deferred income tax provision	(21.1		)	(3.0		)
Net losses on sales of businesses	43.2			11.8
Non-cash restructuring charges	67.6			11.7

(Reversal of) Provision for uncollectible receivables							(Reversal of) Provision for uncollectible receivables	(2.2)		22.6
Other	11.6			(1.0		)	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	1,871.2			743.3			Accounts receivable	1,158.6		1,343.5
Accounts receivable, billable to clients	418.9			(75.4		)	Accounts receivable, billable to clients	(40.8)		(40.7)
Other current assets	(75.0		)	(62.1		)	Other current assets	(68.8)		(57.5)
Accounts payable	(2,731.4		)	(676.9		)	Accounts payable	(1,347.0)		(1,466.9)
Accrued liabilities	(109.4		)	(92.2		)	Accrued liabilities	(233.6)		(158.8)
Contract liabilities	(10.8		)	50.2			Contract liabilities	34.7		8.8
Other non-current assets and liabilities	(14.1		)	(70.2		)	Other non-current assets and liabilities	(44.6)		(42.3)
Net cash (used in) provided by operating activities	(364.2		)	199.0
Net cash used in operating activities							Net cash used in operating activities	(249.8)		(277.1)
CASH FLOWS FROM INVESTING ACTIVITIES:							CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(71.9		)	(80.1		)	Capital expenditures	(28.3)		(44.6)
Acquisitions, net of cash acquired	(2.5		)	(0.6		)	Acquisitions, net of cash acquired	0.0		(1.3)
Net proceeds from investments							Net proceeds from investments	28.8		1.8
Other investing activities	(18.9		)	2.8			Other investing activities	(0.3)		(16.7)
Net cash used in investing activities	(93.3		)	(77.9		)
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:
Early extinguishment of long-term debt							Early extinguishment of long-term debt	(1,066.8)		0.0
Common stock dividends							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							Acquisition-related payments	(3.4)		(18.6)
Distributions to noncontrolling interests							Distributions to noncontrolling interests	(3.3)		(5.6)
Net (decrease) increase in short-term borrowings							Net (decrease) increase in short-term borrowings	(2.9)		247.8
Proceeds from long-term debt	646.2			0.0			Proceeds from long-term debt	998.1		646.2
Net increase in short-term borrowings	2.5			132.3
Exercise of stock options	0.0			0.6			Exercise of stock options	8.0		0.0
Common stock dividends	(199.2		)	(181.4		)
Acquisition-related payments	(32.3		)	(13.0		)
Tax payments for employee shares withheld	(21.8		)	(22.0		)
Distributions to noncontrolling interests	(9.4		)	(8.1		)
Repayment of long-term debt	(0.1		)	(100.1		)
Other financing activities	(8.2		)	0.0			Other financing activities	(10.9)		(6.3)
Net cash provided by (used in) financing activities	377.7			(191.7		)
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	(28.9		)	10.3			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	(108.7		)	(60.3		)
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	1,195.7			677.2			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	$	1,087.0		$	616.9		Cash, cash equivalents and restricted cash at end of period	$	2,018.8	$	1,555.5

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

Table of Contents

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Amounts in Millions)

(Unaudited)


	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss, Net of Tax		Total IPG Stockholders’ Equity		Noncontrolling Interests		Total Stockholders’ Equity
	Shares	Amount
Balance at 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

Common Stock

Additional
Paid-In
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Loss, Net of Tax

Total IPG
Stockholders’
Equity

Noncontrolling
Interests

Total
Stockholders’
Equity
Shares Amount
Balance at March 31, 2020 389.5
$ 38.9
$ 981.2
$ 2,591.1
$ (1,078.7 ) $ 2,532.5
$ 42.7
$ 2,575.2
Net (loss) income (45.6 ) (45.6 ) 1.7
(43.9 )
Other comprehensive income (loss) 49.6
49.6
(0.4 ) 49.2
Reclassifications related to redeemable noncontrolling interests 0.2
0.2
Distributions to noncontrolling interests (3.8 ) (3.8 )
Change in redemption value of redeemable noncontrolling interests —
—
—
Common stock dividends ($0.255 per share) (101.2 ) (101.2 ) (101.2 )
Stock-based compensation 0.2
0.1
15.5
15.6
15.6
Exercise of stock options 0.0
0.0
0.2
0.2
0.2
Shares withheld for taxes (0.1 ) (0.1 ) (0.6 ) (0.7 ) (0.7 )
Other 0.3
0.3
Balance at June 30, 2020 389.6
$ 38.9
$ 996.3
$ 2,444.3
$ (1,029.1 ) $ 2,450.4
$ 40.7
$ 2,491.1


	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, 2019	387.0	$	38.7	$	977.3	$	2,689.9	$	(930.0)	$	2,775.9	$	49.7	$	2,825.6
Cumulative effect of accounting change						(6.6)				(6.6)				(6.6)
Net income (loss)						4.7				4.7		(2.1)		2.6
Other comprehensive loss								(148.7)		(148.7)		(2.1)		(150.8)
Reclassifications related to redeemable noncontrolling interests												2.8		2.8
Distributions to noncontrolling interests												(5.6)		(5.6)
Change in redemption value of redeemable noncontrolling interests						3.1				3.1				3.1

Common stock dividends ($0.255 per share)						(100.0)				(100.0)				(100.0)
Stock-based compensation	3.4	0.3		25.1						25.4				25.4
Exercise of stock options	0.0	0.0		0.2						0.2				0.2
Shares withheld for taxes	(0.9)	(0.1)		(21.4)						(21.5)				(21.5)
Balance at March 31, 2020	389.5	$	38.9	$	981.2	$	2,591.1	$	(1,078.7)	$	2,532.5	$	42.7	$	2,575.2

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, 2019 387.0
$ 38.7
$ 977.3
$ 2,689.9
$ (930.0 ) $ 2,775.9
$ 49.7
$ 2,825.6
Cumulative effect of accounting change
(6.6 ) (6.6 ) (6.6 )
Net loss (40.9 ) (40.9 ) (0.4 ) (41.3 )
Other comprehensive loss (99.1 ) (99.1 ) (2.5 ) (101.6 )
Reclassifications related to redeemable noncontrolling interests 3.0
3.0
Distributions to noncontrolling interests (9.4 ) (9.4 )
Change in redemption value of redeemable noncontrolling interests 3.1
3.1
3.1
Common stock dividends ($0.510 per share) (201.2 ) (201.2 ) (201.2 )
Stock-based compensation 3.6
0.4
40.6
41.0
41.0
Exercise of stock options 0.0
0.0
0.4
0.4
0.4
Shares withheld for taxes (1.0 ) (0.2 ) (22.0 ) (22.2 ) (22.2 )
Other 0.3
0.3
Balance at June 30, 2020 389.6
$ 38.9
$ 996.3
$ 2,444.3
$ (1,029.1 ) $ 2,450.4
$ 40.7
$ 2,491.1

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

Table of Contents

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

~~CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY~~

~~(Amounts in Millions)~~

~~(Unaudited)~~

Common Stock

Additional
Paid-In
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Loss, Net of Tax

Total IPG
Stockholders’
Equity

Noncontrolling
Interests

Total
Stockholders’
Equity
Shares Amount
Balance at March 31, 2019 386.2
$ 38.6
$ 903.3
$ 2,303.1
$ (929.7 ) $ 2,315.3
$ 39.3
$ 2,354.6
Net income 169.5
169.5
3.3
172.8
Other comprehensive income 11.8
11.8
0.3
12.1
Reclassifications related to redeemable noncontrolling interests (3.0 ) (3.0 )
Distributions to noncontrolling interests (5.6 ) (5.6 )
Change in redemption value of redeemable noncontrolling interests

1.1
1.1
1.1
Common stock dividends ($0.235 per share) (90.8 ) (90.8 ) (90.8 )
Stock-based compensation 0.2
0.1
18.3
18.4
18.4
Exercise of stock options 0.1
0.0
0.0
0.0
0.0
Shares withheld for taxes (0.1 ) (0.1 ) (0.2 ) (0.3 ) (0.3 )
Other 0.0
(1.1 ) (1.1 ) 0.2
(0.9 )
Balance at June 30, 2019 386.4
$ 38.6
$ 921.4
$ 2,381.8
$ (917.9 ) $ 2,423.9
$ 34.5
$ 2,458.4

Common Stock
Additional
Paid-In
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Loss, Net of Tax

Total IPG
Stockholders’
Equity

Noncontrolling
Interests

Total
Stockholders’
Equity
Shares Amount
Balance at December 31, 2018 383.6
$ 38.3
$ 895.9
$ 2,400.1
$ (941.1 ) $ 2,393.2
$ 39.6
$ 2,432.8
Cumulative effect of accounting change 2.2
2.2
2.2
Net income 161.5
161.5
1.8
163.3
Other comprehensive income 23.2
23.2
0.2
23.4
Reclassifications related to redeemable noncontrolling interests (0.4 ) (0.4 )
Distributions to noncontrolling interests (8.1 ) (8.1 )
Change in redemption value of redeemable noncontrolling interests

1.4
1.4
1.4
Common stock dividends ($0.470 per share) (181.4 ) (181.4 ) (181.4 )
Stock-based compensation 3.6
0.4
48.1
48.5
48.5
Exercise of stock options 0.1
0.0
0.6
0.6
0.6
Shares withheld for taxes (0.9 ) (0.1 ) (22.2 ) (22.3 ) (22.3 )
Other (1.0 ) (2.0 ) (3.0 ) 1.4
(1.6 )
Balance at June 30, 2019 386.4
$ 38.6
$ 921.4
$ 2,381.8
$ (917.9 ) $ 2,423.9
$ 34.5
$ 2,458.4

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

~~Table of 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” or “our”) in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for reporting interim financial information on Form 10-Q. Accordingly, they do not include certain information and disclosures required for complete financial statements. The effects of the ~~COVID-19~~novel coronavirus ("COVID-19") pandemic have ~~negatively~~ impacted and will likely continue to ~~negatively~~ impact our results of operations, cash flows and financial position. The Company’s Consolidated Financial Statements presented herein reflect the latest estimates and assumptions 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 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 ~~the~~ allowance for ~~doubtful accounts.~~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 Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 (the ~~“2019~~“2020 Annual Report”).

Cost of services is comprised of the expenses of our revenue-producing reportable segments, Integrated Agency Networks (“IAN”) and ~~Constituency Management Group~~IPG DXTRA (“~~CMG”~~DXTRA”), including salaries and related expenses, office and other direct expenses and billable expenses, and includes an allocation of the centrally managed expenses ~~of our~~from Corporate and ~~other group.~~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 ~~of our~~from Corporate and other, ~~group,~~ excluding depreciation and amortization.

Depreciation and amortization of fixed assets and intangible assets of the Company is disclosed as a separate operating expense.

Restructuring charges in ~~the current period relate~~2021 consist of adjustments to the Company's ~~implementation of~~ 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 7.7. Restructuring charges mainly include severance and termination costs and lease ~~impairments~~impairment costs.

~~Segment information for the prior period has been recast to conform to the current-period presentation.~~

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 2:2: Revenue

Disaggregation of Revenue

We have two reportable segments as of ~~June 30, 2020:~~March 31, 2021: IAN and ~~CMG,~~DXTRA, as further discussed in Note 11.11. IAN principally generates revenue from providing advertising and media services as well as a comprehensive array of global communications, marketing services and data management. ~~CMG~~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
June 30, Six months ended
June 30,
Total revenue: 2020 2019 2020 2019
United States $ 1,309.6
$ 1,595.1
$ 2,879.2
$ 3,130.2
International:
United Kingdom 159.3
209.8
356.4
416.0
Continental Europe 164.2
209.4
334.0
388.2
Asia Pacific 200.4
258.2
411.8
490.6
Latin America 65.7
101.8
152.5
191.1
Other 126.5
145.9
251.6
265.3
Total International 716.1
925.1
1,506.3
1,751.2
Total Consolidated $ 2,025.7
$ 2,520.2
$ 4,385.5
$ 4,881.4


	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

Three months ended
June 30, Six months ended
June 30,
Net revenue: 2020 2019 2020 2019
United States $ 1,227.2
$ 1,337.7
$ 2,547.2
$ 2,651.8
International:
United Kingdom 147.2
180.4
312.9
350.7
Continental Europe 149.7
183.3
295.7
340.1
Asia Pacific 162.6
205.1
321.4
383.1
Latin America 62.3
92.1
141.6
172.4
Other 104.4
127.3
206.7
232.6
Total International 626.2
788.2
1,278.3
1,478.9
Total Consolidated $ 1,853.4
$ 2,125.9
$ 3,825.5
$ 4,130.7

IAN Three months ended
June 30, Six months ended
June 30,
Total revenue: 2020 2019 2020 2019
United States $ 1,078.9
$ 1,206.8
$ 2,272.2
$ 2,406.9
International 593.6
752.8
1,219.1
1,414.9
Total IAN $ 1,672.5
$ 1,959.6
$ 3,491.3
$ 3,821.8

Net revenue:
United States $ 1,048.4
$ 1,127.0
$ 2,160.3
$ 2,241.2
International 537.3
674.1
1,089.9
1,266.0
Total IAN $ 1,585.7
$ 1,801.1
$ 3,250.2
$ 3,507.2

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

CMG Three months ended
June 30, Six months ended
June 30,
Total revenue: 2020 2019 2020 2019
United States $ 230.7
$ 388.3
$ 607.0
$ 723.3
International 122.5
172.3
287.2
336.3
Total CMG $ 353.2
$ 560.6
$ 894.2
$ 1,059.6

Net revenue:
United States $ 178.8
$ 210.7
$ 386.9
$ 410.6
International 88.9
114.1
188.4
212.9
Total CMG $ 267.7
$ 324.8
$ 575.3
$ 623.5


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.

June 30,
2020 December 31,
2019
Accounts receivable, net of allowance of $81.3 and $40.2, respectively $ 3,146.6
$ 5,209.2
Accounts receivable, billable to clients 1,463.7
1,934.1
Contract assets 46.7
63.0
Contract liabilities (deferred revenue) 557.6
585.6


	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 ~~$696.0~~$643.0 of unsatisfied performance obligations as of ~~June 30, 2020,~~March 31, 2021, which will be recognized as services are performed over the remaining contractual terms through ~~2026.~~2027.

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 3: Debt and Credit Arrangements

Long-Term Debt

A summary of the carrying amounts of our long-term debt is listed below.

Effective
Interest Rate
June 30,
2020 December 31,
2019

3.50% Senior Notes due 2020 (less unamortized discount and issuance costs of $0.1 and $0.4, respectively) 3.89% $ 499.5
$ 498.5
3.75% Senior Notes due 2021 (less unamortized discount and issuance costs of $0.2 and $1.3, respectively) 3.98% 498.5
497.9
4.00% Senior Notes due 2022 (less unamortized discount and issuance costs of $0.6 and $0.4, respectively) 4.13% 249.0
248.7
3.75% Senior Notes due 2023 (less unamortized discount and issuance costs of $0.4 and $1.1, respectively) 4.32% 498.5
498.2
4.20% Senior Notes due 2024 (less unamortized discount and issuance costs of $0.4 and $1.6, respectively) 4.24% 498.0
497.8
4.65% Senior Notes due 2028 (less unamortized discount and issuance costs of $1.4 and $3.7, respectively) 4.78% 494.9
494.6
4.75% Senior Notes due 2030 (less unamortized discount and issuance costs of $3.7 and $6.0, respectively) 4.92% 640.3
—
5.40% Senior Notes due 2048 (less unamortized discount and issuance costs of $2.7 and $5.3, respectively) 5.48% 492.0
491.9
Other notes payable and capitalized leases 44.0
46.3
Total long-term debt 3,914.7
3,273.9
Less: current portion 503.0
502.0
Long-term debt, excluding current portion $ 3,411.7
$ 2,771.9


	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 ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the estimated fair value of the Company's long-term debt was ~~$4,299.4~~$3,739.9 and ~~$3,565.5,~~$3,995.0, respectively. Refer to Note 12 for details.

Debt Transactions

~~4.75%~~2.400% Senior Notes ~~Due 2030~~due 2031

On ~~March 30, 2020,~~February 25, 2021, we issued a total of ~~$650.0~~$500.0 in aggregate principal amount of ~~4.75%~~2.400% unsecured senior ~~unsecured~~ notes (the ~~“4.75%~~“2.400% Senior Notes”) due March ~~30, 2030.~~1, 2031. Upon issuance, the ~~4.75%~~2.400% Senior Notes were reflected in our unaudited Consolidated Balance Sheets at ~~$640.0,~~$494.5, net of discount of ~~$3.8~~$0.8 and net of capitalized debt issuance costs, including commissions and offering expenses of ~~$6.2,~~$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 ~~30th~~1st and September ~~30th~~1st of each year, commencing on September ~~30, 2020.~~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.

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 ~~4.75%~~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 ~~4.75%~~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 ~~indenture,~~indentures, which contain make-whole provisions, under which the ~~4.75%~~2.400% and 3.375% Senior Notes were issued. Additionally, upon the occurrence of a change of control repurchase event with respect to the ~~4.75%~~2.400% and 3.375% Senior Notes, each holder of the ~~4.75%~~2.400% and 3.375% Senior Notes has the right to require the Company to purchase that holder’s ~~4.75%~~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 ~~4.75%~~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 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 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

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

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

~~(Unaudited)~~

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 of $50.0, or the equivalent in other currencies. Our obligations under the Credit Agreement are unsecured. As of ~~June 30, 2020,~~March 31, 2021, there were 0 borrowings under the Credit Agreement; however, we had ~~$8.3~~$10.0 of letters of credit under the Credit Agreement, which reduced our total availability to ~~$1,491.7.~~$1,490.0. We were in compliance with all of our covenants in the Credit Agreement as of ~~June 30, 2020.~~March 31, 2021.

364-Day Credit Facility

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

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

and (ii) ~~limit~~limited subsidiary debt. The 364-Day Credit Facility also ~~contains~~contained a financial covenant that ~~requires~~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 ~~are identical~~were equivalent to the covenants contained in the Company’s existing Credit Agreement, which remains in full effect. ~~As of June 30, 2020, there were 0 borrowings under the 364-Day Credit Facility, and we were in compliance with all of our covenants in the 364-Day Credit Facility.~~

Uncommitted Lines of Credit

We also have uncommitted lines of credit with various banks that permit borrowings at variable interest rates and 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 operations. As of ~~June 30, 2020,~~March 31, 2021, the Company had uncommitted lines of credit in an aggregate amount of ~~$928.4,~~$927.9, under which we had outstanding borrowings of ~~$51.9~~$43.1 classified as short-term borrowings on our Consolidated Balance Sheet. The average amount outstanding during the ~~second~~first quarter of ~~2020~~2021 was ~~$76.4,~~$81.4 with a weighted-average interest rate of approximately ~~3.7%~~2.9%.

Commercial Paper

The Company is authorized to issue unsecured commercial paper up to a maximum aggregate amount outstanding at any time of $1,500.0. Borrowings under the program are supported by the Credit Agreement described above. Proceeds of the commercial paper 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 ~~June 30, 2020,~~2021, there was 0 commercial paper ~~outstanding. The average amount outstanding under the program during the second quarter~~activity and, as of ~~2020~~March 31, 2021, there was ~~$365.7, with a weighted-average interest rate~~0 commercial paper outstanding.

Table of ~~approximately 1.3% and a weighted-average maturity of 12 days.~~

Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 4~~: (Loss)~~4: Earnings Per Share

The following sets forth basic and diluted ~~(loss)~~ 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
June 30, Six Months Ended
June 30,
2020 2019 2020 2019
Net (loss) income available to IPG common stockholders $ (45.6 ) $ 169.5
$ (40.9 ) $ 161.5

Weighted-average number of common shares outstanding - basic 389.4
386.2
388.5
385.4
       Dilutive effect of stock options and restricted shares N/A
5.0
N/A
4.7
Weighted-average number of common shares outstanding - diluted 389.4
391.2
388.5
390.1

(Loss) earnings per share available to IPG common stockholders:
       Basic $ (0.12 ) $ 0.44
$ (0.11 ) $ 0.42
       Diluted $ (0.12 ) $ 0.43
$ (0.11 ) $ 0.41

~~Weighted-average number of common shares outstanding and loss per share available to IPG common stockholders are equal on a basic and diluted basis for the~~ ~~three and six months ended June 30, 2020~~, respectively, because our potentially dilutive securities are anti-dilutive as a result of the net loss available to IPG common stockholders. The potential dilutive effect of stock options and restricted shares on basic weighted-average number of common shares outstanding totaling 2.9 and 3.3 was excluded from the diluted loss per share calculation for the ~~three and six months ended June 30, 2020, respectively.~~

Note 5:5: 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

June 30,
2020 December 31,
2019
Salaries, benefits and related expenses $ 360.3
$ 494.1
Acquisition obligations 53.0
45.7
Interest 47.0
38.8
Restructuring charges 32.5
1.6
Income taxes payable 21.1
43.2
Office and related expenses 17.7
26.9
Other 67.7
92.5
Total accrued liabilities $ 599.3
$ 742.8

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

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

~~(Unaudited)~~

Other Expense, Net

Results of operations for the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~ 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
June 30, Six months ended
June 30,
2020 2019 2020 2019
Net losses on sales of businesses $ (19.9 ) $ (3.2 ) $ (43.2 ) $ (11.8 )
Other (1.6 ) (0.6 ) (0.1 ) 1.1
Total other expense, net $ (21.5 ) $ (3.8 ) $ (43.3 ) $ (10.7 )

Loss on early extinguishment of debt – During the three months ended 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 ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020,, the amounts recognized were related to sales of businesses and the classification of certain assets and liabilities, consisting primarily of cash, as held for sale, within our IAN and ~~CMG~~DXTRA reportable segments. During the three and six months ended June 30, 2019, the amounts recognized were related to sales of businesses and the classification of certain assets and liabilities, consisting primarily of accounts receivable and cash, as held for sale within our IAN reportable segment. The businesses held for sale primarily represent unprofitable, non-strategic agencies which are expected to be sold within the next twelve months.

~~Other~~ ~~– During the three and six months ended June 30, 2019, the amounts recognized were primarily related to a sale~~Table of ~~an equity investment.~~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 ~~June 30, 2020,~~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

Six months ended
June 30,
2020 2019
Balance at beginning of period $ 164.7
$ 167.9
Change in related noncontrolling interests balance (3.1 ) 0.2
Changes in redemption value of redeemable noncontrolling interests:
Additions 0.0
24.3
Redemptions (2.5 ) (3.1 )
Redemption value adjustments (3.9 ) (1.0 )
Balance at end of period $ 155.2
$ 188.3

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

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

~~(Unaudited)~~

Note 6:6: Income Taxes

For the three months ended ~~June 30, 2020~~,March 31, 2021, our income tax ~~provision~~expense was negatively impacted by losses in certain foreign jurisdictions where we received no tax benefit due to 100% valuation allowances, by net losses on sales of businesses and the classification of certain assets as held for sale for which we received no tax benefit and by tax expense associated with the change to our assertion regarding the permanent reinvestment of undistributed earnings attributable to certain foreign subsidiaries.

~~For the~~ ~~six months ended June 30, 2020, our income tax provision was negatively impacted by the same factors noted for the~~ ~~three months ended June 30, 2020~~ ~~in addition to~~ net losses on sales of businesses and the classification of certain assets as held for sale for which we received minimal tax ~~benefit.~~

~~On March 27, 2020,~~benefit, as well as by losses in certain foreign jurisdictions where we receive no tax benefit due to 100% valuation allowances, partially offset by excess tax benefits on employee share-based payments, the ~~Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted and signed into law. The CARES Act includes several provisions for corporations including increasing~~majority of which is typically recognized in the ~~amount~~first quarter due to the timing of ~~deductible interest, allowing companies to carryback certain net operating losses (“NOLs”) and increasing~~ the ~~amount~~vesting of NOLs that corporations can use to offset income. The CARES Act did not materially affect our quarter or year-to-date income tax provision, deferred tax assets and liabilities, or related taxes payable. We are currently assessing the future implications of these provisions within the CARES Act on our Consolidated Financial Statements, but do not expect the impact to be material.

In the second quarter of 2020, in response to changes in non-US tax law, a decision was made to change our indefinite reinvestment assertion on a $110.0 of undistributed foreign earnings of specific subsidiaries. We recorded $10.0 of income tax costs associated with this change to our assertion.awards.

We have various tax years under examination by tax authorities in various countries, and in various states, 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 ~~$180.0~~$20.0 and ~~$190.0~~$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 2013 or non-U.S. income tax audits for years prior to 2009.

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 7:7: Restructuring Charges

~~The components of restructuring charges for 2020 and 2019 restructuring plans are listed below.~~

Three months ended
June 30, Six months ended
June 30,
2020 2019 2020 2019
Severance and termination costs $ 44.6
$ 2.1
$ 44.6
$ 22.0
Lease impairment costs 65.7
0.0
65.7
11.9
Other restructuring costs 2.3
0.0
2.3
0.0
Total restructuring charges $ 112.6
$ 2.1
$ 112.6
$ 33.9

~~2020 Restructuring Plan~~

InBeginning in the second quarter of 2020, the Company took restructuring actions to lower ~~our~~its operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business (the “2020 Restructuring Plan”). ~~Most of these~~These actions ~~are~~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 ~~which continues,~~ to address certain operating expenses such as occupancy expense and salaries and related expenses.

Net restructuring charges were comprised of $68.8 at IAN and $36.7 at CMG for the three and six months ended June 30, 2020, which include non-cash lease impairment costs of $35.8 at IAN and $26.8 at CMG. Restructuring actions under the 2020 Plan were identified and initiated during the second quarter of 2020, with additional actions expected during the third and fourth quarters and all actions to be substantially complete by the end of the fourth quarter of 2020.

During the first half of 2020, severance and termination costs related to a planned reduction in workforce of 694 employees. The employee groups affected include executive, regional and account management as well as administrative, creative and media production personnel.

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.~~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.

~~A summary of the restructuring activities related to the 2020 Plan is as follows:~~

2020 Plan
Restructuring Expense Non-Cash Items Cash Payments Liability at June 30, 2020
Severance and termination costs $ 44.6
$ 0.7
$ 10.1
$ 33.8
Lease impairment costs 65.7
65.7
0.0
0.0
Other 2.3
1.2
1.1
0.0
Total $ 112.6
$ 67.6
$ 11.2
$ 33.8

~~2019 Restructuring Plan~~

In the first quarter of 2019, the Company implemented a cost initiative (the “2019 Plan”) to better align our cost structure with our revenue primarily related to specific client losses occurring in 2018. All restructuring actions were identified and initiated ~~by the end of the first quarter of 2019,~~in 2020, with all actions ~~substantially~~ completed by the end of the ~~second~~fourth quarter of ~~2019,~~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 ~~there have not been any~~$0.8 at DXTRA for the three months ended March 31, 2021.

A summary of the restructuring ~~adjustments.~~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 8:8: Incentive Compensation Plans

We issue stock-based compensation and cash awards to our employees under various plans established by the Compensation and Leadership Talent Committee of the Board of Directors (the "Compensation Committee") and approved by our stockholders. We issued the following stock-based awards under the 2019 Performance Incentive Plan (the "2019 PIP") during the ~~six~~three months ended ~~June 30, 2020.~~March 31, 2021.

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

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

~~(Unaudited)~~

Awards
Weighted-average
grant-date fair value
(per award)
Restricted stock (shares or units) 2.2
$ 20.76
Performance-based stock (shares) 2.3
$ 18.70
Total stock-based compensation awards 4.5


	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 ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, the Compensation Committee granted performance cash awards under the 2019 PIP and restricted cash awards under the ~~2009~~2020 Restricted Cash Plan with a total annual target value of ~~$43.3~~$38.3 and ~~$35.2,~~$76.6, respectively. Cash awards are expensed over the vesting period, which is typically three years for performance cash awards and two years or three years for restricted cash awards.

~~Note~~ 9~~: Accumulated Other Comprehensive Loss, Net~~Table of ~~Tax~~Contents

~~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, 2019 $ (697.7 ) $ (3.5 ) $ (228.8 ) $ (930.0 )
Other comprehensive (loss) income before reclassifications (102.3 ) (0.9 ) 0.4
(102.8 )
Amount reclassified from accumulated other comprehensive loss, net of tax (0.3 ) 1.1
2.9
3.7
Balance as of June 30, 2020 $ (800.3 ) $ (3.3 ) $ (225.5 ) $ (1,029.1 )

Foreign Currency
Translation Adjustments

Derivative
Instruments
Defined Benefit Pension and Other Postretirement Plans Total
Balance as of December 31, 2018 $ (716.4 ) $ (5.3 ) $ (219.4 ) $ (941.1 )
Other comprehensive income before reclassifications 12.3
0.0
1.5
13.8
Amount reclassified from accumulated other comprehensive loss, net of tax 5.8
1.0
2.6
9.4
Balance as of June 30, 2019 $ (698.3 ) $ (4.3 ) $ (215.3 ) $ (917.9 )

~~Amounts reclassified from accumulated other comprehensive loss, net of tax, for the~~ ~~three and six months ended June 30, 2020~~ ~~and 2019 are as follows:~~

Three months ended
June 30, Six months ended
June 30, Affected Line Item in the Consolidated Statements of Operations
2020 2019 2020 2019
Foreign currency translation adjustments $ 3.3
$ 4.6
$ (0.3 ) $ 5.8
Other expense, net
Losses on derivative instruments 0.6
0.6
1.2
1.2
Interest expense
Amortization of defined benefit pension and postretirement plan items 1.8
1.6
3.7
3.3
Other expense, net
Tax effect (0.4 ) (0.4 ) (0.9 ) (0.9 ) Provision for income taxes
Total amount reclassified from accumulated other comprehensive loss, net of tax $ 5.3
$ 6.4
$ 3.7
$ 9.4

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 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)

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 10: Employee Benefits

~~Note~~ 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 June 30, 2020 2019 2020 2019 2020 2019
Service cost $ 0.0
$ 0.0
$ 1.1
$ 1.1
$ 0.0
$ 0.0
Interest cost 0.9
1.2
2.3
3.1
0.2
0.3
Expected return on plan assets (1.4 ) (1.4 ) (4.6 ) (4.4 ) 0.0
0.0
Amortization of:
Prior service cost (credit) 0.0
0.0
0.1
0.1
0.0
(0.1 )
Unrecognized actuarial losses 0.4
0.4
1.3
1.2
0.0
0.0
Net periodic cost $ (0.1 ) $ 0.2
$ 0.2
$ 1.1
$ 0.2
$ 0.2


																			Domestic Pension Plan				Foreign Pension Plans				Domestic Postretirement Benefit Plan
	Domestic Pension Plan						Foreign Pension Plans						Domestic Postretirement Benefit Plan
Six Months Ended June 30,	2020			2019			2020			2019			2020		2019
Three Months Ended March 31,																		Three Months Ended March 31,	2021		2020		2021		2020		2021		2020
Service cost	$	0.0		$	0.0		$	2.3		$	2.3		$	0.0	$	0.0		Service cost	$	0.0	$	0.0	$	1.1	$	1.2	$	0.0	$	0.0
Interest cost	1.9			2.4			4.6			6.3			0.4		0.6			Interest cost	0.7		1.0		2.0		2.3		0.2		0.2
Expected return on plan assets	(2.8		)	(2.9		)	(9.3		)	(8.8		)	0.0		0.0			Expected return on plan assets	(1.4)		(1.4)		(5.2)		(4.7)		0.0		0.0

Amortization of:																		Amortization of:
Prior service cost (credit)	0.0			0.0			0.1			0.1			0.0		(0.1		)
Unrecognized actuarial losses	0.8			0.9			2.7			2.4			0.1		0.0			Unrecognized actuarial losses	0.5		0.4		1.7		1.4		0.1		0.1
Net periodic cost	$	(0.1	)	$	0.4		$	0.4		$	2.3		$	0.5	$	0.5		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, net” in the Consolidated Statements of Operations.

During the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, we contributed $1.3 and ~~$8.6~~$4.6 of cash to our domestic and foreign pension plans, respectively. For the remainder of ~~2020,~~2021, we expect to contribute approximately ~~$2.0~~$1.0 and ~~$9.0~~$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 11:11: Segment Information

As of ~~June 30, 2020,~~March 31, 2021, we have two reportable segments: IAN and ~~CMG.~~DXTRA. IAN is comprised of McCann Worldgroup, ~~FCB (Foote,~~Foote, Cone & ~~Belding)~~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 including Weber Shandwick, DeVries, Golin, ~~FutureBrand,~~FutureBrands, Jack Morton and Octagon Worldwide. We also report results for the “Corporate and ~~other”~~Other” group. 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 EBITA. Summarized financial information concerning our reportable segments is shown in the following table.

Three months ended
June 30, Six months ended
June 30,
2020 2019 2020 2019
Total revenue:
IAN $ 1,672.5
$ 1,959.6
$ 3,491.3
$ 3,821.8
CMG 353.2
560.6
894.2
1,059.6
Total $ 2,025.7
$ 2,520.2
$ 4,385.5
$ 4,881.4

Net revenue:
IAN $ 1,585.7
$ 1,801.1
$ 3,250.2
$ 3,507.2
CMG 267.7
324.8
575.3
623.5
Total $ 1,853.4
$ 2,125.9
$ 3,825.5
$ 4,130.7

Segment EBITA ¹:

IAN $ 100.4
$ 262.4
$ 199.4
$ 378.4
CMG (26.3 ) 42.9
(4.0 ) 43.3
Corporate and other (11.8 ) (19.8 ) (35.9 ) (64.4 )
Total $ 62.3
$ 285.5
$ 159.5
$ 357.3

Amortization of acquired intangibles:
IAN $ 20.8
$ 20.2
$ 41.0
$ 40.7
CMG 1.0
1.1
2.1
2.2
Corporate and other 0.0
0.0
0.0
0.0
Total $ 21.8
$ 21.3
$ 43.1
$ 42.9

Depreciation and amortization ²:

IAN $ 45.3
$ 44.9
$ 90.0
$ 87.0
CMG 5.4
5.2
10.5
10.0
Corporate and other 0.6
1.6
2.3
4.2
Total $ 51.3
$ 51.7
$ 102.8
$ 101.2

Capital expenditures:
IAN $ 19.8
$ 35.9
$ 53.5
$ 62.4
CMG 1.3
2.9
2.9
3.9
Corporate and other 6.2
8.5
15.5
13.8
Total $ 27.3
$ 47.3
$ 71.9
$ 80.1


	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 ~~(loss)~~ 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.

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

June 30,
2020 December 31,
2019
Total assets:
IAN $ 12,667.1
$ 15,155.2
CMG 1,528.2
1,725.5
Corporate and other 701.6
871.2
Total $ 14,896.9
$ 17,751.9

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

Three months ended
June 30, Six months ended
June 30,
2020 2019 2020 2019
IAN EBITA $ 100.4
$ 262.4
$ 199.4
$ 378.4
CMG EBITA (26.3 ) 42.9
(4.0 ) 43.3
Corporate and other EBITA (11.8 ) (19.8 ) (35.9 ) (64.4 )
Less: consolidated amortization of acquired intangibles 21.8
21.3
43.1
42.9
Operating income 40.5
264.2
116.4
314.4
Total (expenses) and other income (65.4 ) (47.7 ) (121.3 ) (96.6 )
(Loss) Income before income taxes $ (24.9 ) $ 216.5
$ (4.9 ) $ 217.8

Note 12:12: 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 ~~six~~three months ended ~~June 30, 2020.~~March 31, 2021. The following tables present information about our financial instruments measured at fair value on a recurring basis as of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value.

Table of Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)


	June 30, 2020								Balance Sheet Classification		March 31, 2021								Balance Sheet Classification
	Level 1		Level 2		Level 3		Total				Level 1		Level 2		Level 3		Total
Assets										Assets
Cash equivalents	$	690.2	$	0.0	$	0.0	$	690.2	Cash and cash equivalents	Cash equivalents	$	1,160.6	$	0.0	$	0.0	$	1,160.6	Cash and cash equivalents
Liabilities										Liabilities
Contingent acquisition obligations¹	$	0.0	$	0.0	$	96.5	$	96.5	Accrued liabilities and Other non-current liabilities	Contingent acquisition obligations 1	$	0.0	$	0.0	$	99.7	$	99.7	Accrued liabilities and Other non-current liabilities

	December 31, 2019								Balance Sheet Classification		December 31, 2020								Balance Sheet Classification
	Level 1		Level 2		Level 3		Total				Level 1		Level 2		Level 3		Total
Assets										Assets
Cash equivalents	$	786.0	$	0.0	$	0.0	$	786.0	Cash and cash equivalents	Cash equivalents	$	1,507.4	$	0.0	$	0.0	$	1,507.4	Cash and cash equivalents
Liabilities										Liabilities
Contingent acquisition obligations ¹	$	0.0	$	0.0	$	114.1	$	114.1	Accrued liabilities and Other non-current 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.

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 $17.6 from December 31, 2019 to June 30, 2020 is primarily due to acquisition payments, partially offset by valuation adjustments, an increase in deferred acquisition payments and exercises of put options. 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 ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

June 30, 2020 December 31, 2019
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Total long-term debt $ 0.0
$ 4,254.0
$ 45.4
$ 4,299.4
$ 0.0
$ 3,520.0
$ 45.5
$ 3,565.5


	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

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 in markets that are not active. Therefore, these senior notes are classified as Level 2. Our other notes payable are not actively traded, and their fair value is not solely derived from readily observable inputs. The fair value of our other notes payable is determined based on a discounted cash flow model and other proprietary valuation methods, and therefore is classified as Level 3. See Note 3 for further information on our long-term debt.

The discount rates used as significant unobservable inputs in the Level 3 fair value measurements of our contingent acquisition obligations and long-term debt as of ~~June 30, 2020~~March 31, 2021 ranged from ~~2.0%~~1.0% to ~~5.0% and 0.5%~~4.0% and 0.4% to ~~3.5%~~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.

~~During the second quarter~~

Table of 2020, recent economic developments related to the COVID-19 pandemic contributed to declines in our most recent forecasted financial results. We evaluated our reporting units including the impact of these declines, restructuring actions taken in the second quarter of 2020 and other reporting unit specific factors, and concluded that this constituted a goodwill triggering event for one reporting unit, requiring us to evaluate its goodwill for impairment. Based on the results of a quantitative interim impairment test, we concluded that the reporting unit’s goodwill was not impaired as of June 30, 2020, because the fair value of the reporting unit was in excess of its carrying value.

Contents

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 13:13: Commitments and Contingencies

Guarantees

As discussed in our ~~2019~~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 ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the amount of parent company guarantees on lease obligations was ~~$684.0~~$616.8 and ~~$739.1,~~$630.8, respectively, the amount of parent company guarantees relating to uncommitted lines of credit was ~~$270.9~~$400.4 and ~~$293.8,~~$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 ~~$207.0~~$106.3 and ~~$207.7,~~$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.

Note 14:14: 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.~~

~~Financial Instrument Credit Losses~~

In June 2016, the Financial Accounting Standards Board ("FASB") issued amended guidance on the accounting for credit losses on certain types of financial instruments, including trade receivables. The new model uses a forward-looking expected loss method, as opposed to the incurred loss method in current U.S. GAAP, which will generally result in earlier recognition of allowances for losses. We adopted this standard using the modified retrospective approach with an effective date of January 1, 2020. The adoption of this amended guidance did not have a material impact on our Consolidated Financial Statements.

~~Fair Value Measurement Disclosures~~

In August 2018, the FASB issued amended disclosure requirements for fair value measurements by removing, modifying and adding certain disclosures. This amended guidance was effective beginning January 1, 2020. The adoption of this guidance did not have a material impact on our Consolidated Financial Statements.

Income Taxes

In December 2019, the FASB issued amended guidance to simplify the accounting for income taxes by removing certain exceptions and amending certain sections of existing guidance under ASC 740. This amended guidance iswas effective beginning January 1, ~~2021 with early adoption permitted as early as January 1, 2020. We are currently assessing the impact the~~2021. The adoption of ~~the~~this amended guidance ~~will~~did not have a material impact on our Consolidated Financial Statements.

Table of Contents

~~Note~~
15~~: Subsequent Events~~

~~Credit Agreement Amendments~~

On July 28, 2020, we entered into Amendment No. 1 to the Credit Agreement and Amendment No. 1 to the 364-Day Credit Facility (together, the “Amendments”). The Amendments increased the maximum leverage ratio covenant to 4.25x in the case of the 364-Day Credit Facility and, in the case of the Credit Agreement, to (i) 4.25x through the quarter ended June 30, 2021, and (ii) 3.50x thereafter. Amendment No. 1 to the Credit Agreement also increased the Applicable Margin (as defined in the Credit Agreement) for any borrowings we make under the Credit Agreement if our long-term public debt ratings are BB+/Ba1 or below at the time of borrowing. We have the option to terminate Amendment No. 1 to the Credit Agreement at any time, provided that at the time we deliver a termination notice the leverage ratio as of the end of the most recently ended fiscal quarter did not exceed 3.50x. The Credit Agreement reverts to its original terms on June 30, 2021, or following any such early termination, whichever is earlier. We paid amendment fees of $2.0 in connection with the Amendments.

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

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

~~(Unaudited)~~

~~Tax Examination Settlement~~

On July 29, 2020, the Internal Revenue Service notified the Company that the U.S. Federal income tax examination of years 2006 through 2016 has been finalized and effectively settled. As a result, we expect to recognize an income tax benefit of approximately $135.0 in the third quarter of 2020.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)



Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand The Interpublic Group of Companies, Inc. and its subsidiaries (the “Company,” “IPG,” “we,” “us” or “our”). MD&A should be read in conjunction with our unaudited Consolidated Financial Statements and the accompanying notes included in this report and our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 (the ~~“2019~~“2020 Annual Report”), as well as our other reports and filings with the Securities and Exchange Commission (the “SEC”). Our ~~2019~~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 ~~2019~~2020 Annual Report of our accounting policies that require critical judgment, assumptions and estimates.

RECENT ACCOUNTING STANDARDS, by reference to Note 14 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

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 with different geographical locations impacted more than others. 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. 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 negatively impacted and will likely continue to negatively 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.

We have taken steps to protect the safety of our employees, and to support their working arrangements, with a majority of our worldwide workforce continuing to work from home. 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 have multiple initiatives underway to align our expenses with changes in revenue. The steps we have taken across our agencies and corporate group include 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.

In the second quarter of 2020, the Company took restructuring actions to lower our operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business (the “2020 Plan”). Most of these actions are based on our recent experience and learning in the COVID-19 pandemic and a resulting review of our operations, which continues, to address certain operating expenses such as occupancy expense and salaries and related expenses. 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. In addition, we remain committed to and have intensified our efforts around cash flow discipline, including the identification of significant capital expenditures that can be deferred, and working capital management.

We began to see the effects of COVID-19 on client spending throughout the first and second quarters, first in the Asia Pacific region in the first quarter and subsequently in the U.S., Europe and other markets beginning in March and continuing throughout

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

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

~~(Unaudited)~~

the second quarter. Growth in our retail and healthcare sector clients was offset by broad-based declines across most other sectors due to economic conditions, with the greatest declines in our experiential and events businesses. We expect continued negative impacts on our third-quarter results as clients continue to respond to the current economic conditions by reducing their marketing budgets, which will affect the demand for our services. See Item 1A, ~~Risk Factors, in this Quarterly Report on Form 10-Q.~~

We have also taken steps to strengthen our financial position during this period of heightened uncertainty. As discussed in more detail below under “Liquidity and Capital Resources,” on March 30, 2020, we issued $650.0 aggregate principal amount of 4.75% senior unsecured notes due 2030 (the “4.75% Senior Notes”) and on March 27, 2020, we entered into a new $500.0 364-day revolving credit facility. We believe these steps will further enhance our financial resources as we navigate the period ahead.

Results for the three and six months ended June 30, 2020, are not indicative of the results that may be expected for the fiscal year ending December 31, 2020. 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 doubtful accounts. 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.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, specialized communications 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 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 acquisitions and strategic alliances 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’ skill sets and capabilities.

Our financial goals include competitive organic net revenue growth and expansion of Adjusted EBITA margin, 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.

Table of Contents

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.

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. We exclude the impact of billable expenses in analyzing our operating performance as the fluctuations from period to period are not indicative of the performance of our underlying businesses and have no impact on our 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 currencies that most adversely impacted our~~Our results during the first ~~half~~quarter of ~~2020~~2021 were most favorably impacted by the ~~Brazilian Real,~~Euro, British Pound Sterling ~~Euro, Argentine Peso~~ and Australian ~~Dollar.~~

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

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

~~(Unaudited)~~

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 ~~Constituency Management Group~~IPG DXTRA (“~~CMG”~~DXTRA”). In certain of our discussions, we analyze net revenue by geographic region and by business sector, in which we focus on our top ~~100~~500 clients, which typically constitute approximately ~~55%~~80% to ~~60%~~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 ~~and six~~ months ended ~~June 30, 2020~~March 31, 2021 and ~~2019.~~2020.


	Three months ended June 30,								Six months ended June 30,									Three months ended March 31,
Statement of Operations Data	2020			2019			% Increase/ (Decrease)		2020			2019			% Increase/ (Decrease)		Statement of Operations Data	2021			2020			% Increase/ (Decrease)
REVENUE:																	REVENUE:
Net revenue	$	1,853.4		$	2,125.9		(12.8	)%	$	3,825.5		$	4,130.7		(7.4	)%	Net revenue	$	2,027.7		$	1,972.1		2.8	%
Billable expenses	172.3			394.3			(56.3	)%	560.0			750.7			(25.4	)%	Billable expenses	229.3			387.7			(40.9)	%
Total revenue	$	2,025.7		$	2,520.2		(19.6	)%	$	4,385.5		$	4,881.4		(10.2	)%	Total revenue	$	2,257.0		$	2,359.8		(4.4)	%

OPERATING INCOME	$	40.5		$	264.2		(84.7	)%	$	116.4		$	314.4		(63.0	)%	OPERATING INCOME	$	243.0		$	75.9		>100%

Adjusted EBITA ¹	$	62.3		$	285.5		(78.2	)%	$	159.5		$	357.3		(55.4	)%	Adjusted EBITA 1	$	264.6		$	97.2		>100%

NET (LOSS) INCOME AVAILABLE TO IPG COMMON STOCKHOLDERS	$	(45.6	)	$	169.5				$	(40.9	)	$	161.5
NET INCOME AVAILABLE TO IPG COMMON STOCKHOLDERS																	NET INCOME AVAILABLE TO IPG COMMON STOCKHOLDERS	$	91.7		$	4.7

Earnings per share available to IPG common stockholders:																	Earnings per share available to IPG common stockholders:
Basic	$	(0.12	)	$	0.44				$	(0.11	)	$	0.42				Basic	$	0.23		$	0.01
Diluted	$	(0.12	)	$	0.43				$	(0.11	)	$	0.41				Diluted	$	0.23		$	0.01

Operating Ratios																	Operating Ratios
Organic change in net revenue	(9.9		)%	3.0		%			(5.0		)%	4.6		%			Organic change in net revenue	1.9		%	0.3		%

Operating margin on net revenue	2.2		%	12.4		%			3.0		%	7.6		%			Operating margin on net revenue	12.0		%	3.8		%
Operating margin on total revenue	2.0		%	10.5		%			2.7		%	6.4		%			Operating margin on total revenue	10.8		%	3.2		%

Adjusted EBITA margin on net revenue ¹	3.4		%	13.4		%			4.2		%	8.6		%			Adjusted EBITA margin on net revenue 1	13.0		%	4.9		%

Expenses as a % of net revenue:																	Expenses as a % of net revenue:
Salaries and related expenses	70.5		%	65.0		%			71.3		%	67.8		%			Salaries and related expenses	68.7		%	72.1		%
Office and other direct expenses	17.1		%	18.2		%			18.2		%	18.8		%			Office and other direct expenses	14.4		%	19.2		%
Selling, general and administrative expenses	0.2		%	0.8		%			0.7		%	1.4		%			Selling, general and administrative expenses	1.4		%	1.1		%
Depreciation and amortization	3.9		%	3.4		%			3.8		%	3.5		%			Depreciation and amortization	3.4		%	3.7		%
Restructuring charges ²	6.1		%	0.1		%			2.9		%	0.8		%			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)

~~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 income (loss) of unconsolidated affiliates, net income 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.~~

~~Results include restructuring charges of $112.6 for the three and six months ended June 30, 2020 and $2.1 and $33.9 for the three and six months ended June 30, 2019, respectively. See~~ ~~“Restructuring Charges”~~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 7 to the unaudited Consolidated Financial Statements for further information.

Our organic net revenue ~~decrease~~increase of ~~9.9%~~1.9% for the ~~second~~first quarter of ~~2020~~2021 was primarily ~~attributable to lower spending~~ from ~~existing clients as well as~~ net client ~~losses~~wins in the ~~auto and transportation, financial services and consumer goods sectors, partially offset by a combination of net client wins~~healthcare sector and net higher spending from existing clients in the ~~healthcare~~retail sector, partially offset by net client losses in the financial services sector and ~~retail sectors.~~net decreases from existing clients in the technology and telecom sector. During the ~~second~~first quarter of ~~2020,~~2021, our Adjusted EBITA margin ~~decreased~~increased to ~~3.4%~~13.0% from ~~13.4%~~4.9% in the prior-year period as ~~the decrease in~~ net revenue increased, discussed below in the “Results of Operations” section, ~~exceeded the overall decrease in~~and our operating ~~expense,~~expenses, excluding billable expenses and amortization of acquired ~~intangibles.~~intangibles, decreased.

~~Our organic net revenue decrease~~

Table of 5.0% for the first half of 2020 was primarily attributable to lower spending from existing clients and net client losses in the auto and transportation, government and consumer goods sectors, partially offset by a combination of net client wins and net higher spending from existing clients in the healthcare and retail sectors. During the first half of 2020, our Adjusted EBITA margin decreased to 4.2% from 8.6% in the prior-year period as the decrease in net revenue, discussed below in the ~~“Results of Operations”~~ ~~section, exceeded the overall decrease in our operating expense, excluding billable expenses and amortization of acquired intangibles.~~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 Six~~ Months Ended ~~June 30, 2020~~March 31, 2021 Compared to Three ~~and Six~~ Months Ended ~~June 30, 2019~~March 31, 2020

Net Revenue

~~In a typical year (pre-pandemic), our~~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.


			Components of Change											Change							Components of Change								Change
	Three months ended June 30, 2019		Foreign Currency			Net Acquisitions/ (Divestitures)			Organic			Three months ended June 30, 2020		Organic		Total			Three months ended March 31, 2020		Foreign Currency		Net Acquisitions/ (Divestitures)		Organic		Three months ended March 31, 2021		Organic		Total
Consolidated	$	2,125.9	$	(44.8	)	$	(17.8	)	$	(209.9	)	$	1,853.4	(9.9	)%	(12.8	)%	Consolidated	$	1,972.1	$	29.3	$	(11.7)	$	38.0	$	2,027.7	1.9	%	2.8	%
Domestic	1,337.7		—			(4.1		)	(106.4		)	1,227.2		(8.0	)%	(8.3	)%	Domestic	1,320.0		—		(7.4)		(2.8)		1,309.8		(0.2)	%	(0.8)	%
International	788.2		(44.8		)	(13.7		)	(103.5		)	626.2		(13.1	)%	(20.6	)%	International	652.1		29.3		(4.3)		40.8		717.9		6.3	%	10.1	%
United Kingdom	180.4		(7.5		)	0.5			(26.2		)	147.2		(14.5	)%	(18.4	)%	United Kingdom	165.7		11.6		0.9		5.8		184.0		3.5	%	11.0	%
Continental Europe	183.3		(5.6		)	(7.7		)	(20.3		)	149.7		(11.1	)%	(18.3	)%	Continental Europe	146.0		13.2		(1.5)		18.1		175.8		12.4	%	20.4	%
Asia Pacific	205.1		(8.0		)	(5.8		)	(28.7		)	162.6		(14.0	)%	(20.7	)%	Asia Pacific	158.8		8.9		(4.0)		5.4		169.1		3.4	%	6.5	%
Latin America	92.1		(19.5		)	(0.7		)	(9.6		)	62.3		(10.4	)%	(32.4	)%	Latin America	79.3		(8.2)		0.3		4.0		75.4		5.0	%	(4.9)	%
Other	127.3		(4.2		)	0.0			(18.7		)	104.4		(14.7	)%	(18.0	)%	Other	102.3		3.8		0.0		7.5		113.6		7.3	%	11.0	%

The slight organic decrease during the ~~second~~first quarter of ~~2020~~2021 in our domestic market was primarily driven by ~~the~~ revenue declines due to the continuing impact of the COVID-19 pandemic on the economy at our discretionary digital ~~specialist agencies, media businesses~~project-based offerings and our sports and ~~event~~experiential marketing businesses, primarily due to sports and events cancellations. In our international markets, the organic decrease was driven by the revenue declines at our advertising businesses, primarily in the United Kingdom and Asia Pacific regions, media businesses, primarily in Continental Europe, and public relations agencies, primarily in the Asia Pacific region.

Components of Change Change
Six months ended
June 30, 2019
Foreign
Currency

Net
Acquisitions/
(Divestitures)
Organic Six months ended
June 30, 2020 Organic Total
Consolidated $ 4,130.7
$ (65.4 ) $ (35.3 ) $ (204.5 ) $ 3,825.5
(5.0 )% (7.4 )%
Domestic 2,651.8
—
(8.1 ) (96.5 ) 2,547.2
(3.6 )% (3.9 )%
International 1,478.9
(65.4 ) (27.2 ) (108.0 ) 1,278.3
(7.3 )% (13.6 )%
United Kingdom 350.7
(9.1 ) 0.5
(29.2 ) 312.9
(8.3 )% (10.8 )%
Continental Europe 340.1
(10.7 ) (15.3 ) (18.4 ) 295.7
(5.4 )% (13.1 )%
Asia Pacific 383.1
(12.0 ) (11.5 ) (38.2 ) 321.4
(10.0 )% (16.1 )%
Latin America 172.4
(29.1 ) (0.7 ) (1.0 ) 141.6
(0.6 )% (17.9 )%
Other 232.6
(4.5 ) (0.2 ) (21.2 ) 206.7
(9.1 )% (11.1 )%

businesses. The organic decrease ~~during the first half of 2020~~ in our domestic market was ~~primarily driven by the revenue declines at our digital specialist agencies, media businesses and sports and event marketing businesses, primarily due to sports and events cancellations, partially~~largely offset by growth at our advertising and media businesses. In our international markets, the 6.3% organic ~~decrease~~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 ~~factors similar to those noted above for the second quarter of 2020.~~Continental Europe region, partially offset by declines at our sports and experiential marketing businesses.

Refer to the 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 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)

~~Salaries~~Office and ~~Related~~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		%

Three months ended
June 30, Six months ended
June 30,
2020 2019 % Increase/
(Decrease) 2020 2019 % Increase/
(Decrease)
Salaries and related expenses $ 1,306.1
$ 1,381.2
(5.4 )% $ 2,728.9
$ 2,802.3
(2.6 )%

As a % of net revenue:
Salaries and related expenses 70.5 % 65.0 % 71.3 % 67.8 %
Base salaries, benefits and tax 59.2 % 54.9 % 60.4 % 57.1 %
Incentive expense 4.1 % 4.2 % 3.9 % 4.5 %
Severance expense 3.0 % 0.5 % 2.1 % 0.7 %
Temporary help 3.1 % 4.1 % 3.8 % 4.1 %
All other salaries and related expenses 1.1 % 1.3 % 1.1 % 1.4 %

~~Salaries~~1Includes client service costs, non-pass through production expenses, travel and ~~related~~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 ~~5.4%~~22.6% compared to the net revenue ~~decline~~increase of ~~12.8%~~2.8% during the ~~second~~first quarter of ~~2020~~2021 as compared to the prior-year period. The decrease was primarily driven by reductions in base salaries, benefits and tax and lower temporary help expenses in response to the declines in net revenue, which were primarily due to the effects of the COVID-19 pandemic on economic conditions, in addition to lower incentive expense. The cumulative decreases were partially offset by increased severance expense.

Salaries and related expenses decreased by 2.6% compared to net revenue decline of 7.4% during the first half of 2020 as compared to the prior-year period, primarily driven by factors similar to those noted above for the second quarter of 2020.

~~Office and Other Direct Expenses~~

Three months ended
June 30, Six months ended
June 30,
2020 2019 % Increase/
(Decrease) 2020 2019 % Increase/
(Decrease)
Office and other direct expenses $ 317.0
$ 387.3
(18.2 )% $ 695.2
$ 776.5
(10.5 )%

As a % of net revenue:
Office and other direct expenses 17.1 % 18.2 % 18.2 % 18.8 %
Occupancy expense 6.6 % 6.5 % 6.6 % 6.5 %
All other office and other direct expenses ¹
10.5 % 11.7 % 11.6 % 12.3 %


1	Includes 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 18.2% compared to net revenue decline of 12.8% during the second quarter of 2020 as compared to the prior-year period. The decrease in office and other direct expenses was mainly due to decreases in travel and entertainment expenses, bad debt expense, and new business and promotion ~~expenses as well as lower occupancy expense, partially offset by an increase in bad debt expense and a year-over-year change in contingent acquisition obligations.~~

~~Office and other direct expenses decreased by 10.5% compared to net revenue decline of 7.4% during the first half of 2020 as compared to the prior-year period.~~expenses. The decrease in office and other direct expenses was ~~mainly~~also largely due to ~~factors similar to those noted above for the second quarter of 2020 as well~~savings on occupancy expense as a ~~reduction~~result of real estate restructuring actions taken in ~~professional consulting fees.~~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 detailed further in the segment discussion later in this MD&A, excluding depreciation and amortization. For the three ~~and six~~ months ended ~~June 30, 2020,~~March 31, 2021, SG&A as a percentage of net revenue ~~decreased~~slightly increased as compared to the prior-year period, primarily

~~Management’s Discussion~~ due to increases in professional fees and ~~Analysis of Financial Condition and Results of Operations - (continued)~~

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

~~(Unaudited)~~

~~attributable to a decrease in employee insurance~~incentive expense, ~~resulting from fewer insurance claims with elective procedures and routine care being delayed in 2020 as well as a decrease in~~partially offset by decreased travel and entertainment expenses.

Depreciation and Amortization

During the ~~second quarter of 2020,~~three months ended March 31, 2021, depreciation and amortization expenses ~~remained relatively flat as~~decreased compared to the prior-year ~~period. During the first half of 2020, depreciation and amortization expenses slightly increased compared to the prior-year period.~~periods.

Restructuring Charges

~~The components of restructuring charges for 2020 and 2019 restructuring plans are listed below.~~

~~2020 Restructuring Plan~~

InBeginning in the second quarter of 2020, the Company took restructuring actions to lower ~~our~~its operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business (the “2020 Restructuring Plan”). ~~Most of these~~These actions ~~are~~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 ~~which continues,~~ to address certain operating expenses such as occupancy expense and salaries and related expenses.

~~A summary~~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 ~~activities~~charges related to the 2020 Restructuring Plan ~~is as follows:~~are listed below.

Table of Contents

The resulting restructuring charges of $112.6 in the second quarter of 2020, to reduce our ongoing expenses such as occupancy expense and salaries and related expenses, reflects the breadth of our review. These actions reduce our global real estate footprint by approximately 5% or 500,000 square feet and, further, address selected levels of management and staffing with severance costs for 694 employees. Of the total charge in the second quarter, $67.6 or 60%, is non-cash, mainly representing the write-off of right-of-use assets of operating leases. We expect to realize approximately $80 to $90 of annualized cost savings associated with the actions taken during the second quarter of 2020.

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

~~As part~~Net restructuring charges were comprised of ~~our continuing review, we also anticipate that we will take additional actions in the second half of this year, primarily related to further occupancy~~$0.5 at IAN and ~~salaries-related reductions. We are currently evaluating cost reduction actions~~$0.8 at DXTRA for the remainder of 2020, which may result in additional charges between approximately $90 to $110. The additional charges should be primarily non-cash, although the amount and type of additional actions will be dependent on market conditions over the remainderthree months ended March 31, 2021.

A summary of the ~~year. Our~~ restructuring ~~actions are designed to structurally lower our cost base~~activities taken in ~~the future.~~

~~2019 Restructuring Plan~~

In the first quarter of ~~2019, the Company implemented a cost initiative (the "2019 Plan") to better align our cost structure with our revenue primarily~~2021 related to ~~specific client losses occurring in 2018. All restructuring actions were identified and initiated by~~ the ~~end of the first quarter of 2019, with all actions substantially completed by the end of the second quarter of 2019 and there have not been any restructuring adjustments.~~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)

Three months ended
June 30, Six months ended
June 30,
2020 2019 2020 2019
Cash interest on debt obligations $ (48.5 ) $ (49.4 ) $ (91.9 ) $ (95.0 )
Non-cash interest (1.3 ) (2.2 ) (2.7 ) (6.4 )
Interest expense (49.8 ) (51.6 ) (94.6 ) (101.4 )
Interest income 5.9
7.7
16.6
15.5
Net interest expense (43.9 ) (43.9 ) (78.0 ) (85.9 )
Other expense, net (21.5 ) (3.8 ) (43.3 ) (10.7 )
Total (expenses) and other income $ (65.4 ) $ (47.7 ) $ (121.3 ) $ (96.6 )
Net interest expense increased by $8.6 to $42.7 in the first quarter of 2021 from a year ago, primarily attributable to increased cash interest expense from the issuance of $650.0 in aggregate principal amount of 4.750% unsecured senior notes due 2030 in March 2020 as well as a decrease in interest income.

Other Expense, Net


	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 Contents

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

~~Other~~Loss on early extinguishment of debt – During the three ~~and six~~ months ended ~~June 30, 2019, the amounts recognized were primarily~~March 31, 2021, we recorded a loss of $74.0 related to ~~a sale~~the early extinguishment of ~~an equity investment.~~our $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.

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

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

~~(Unaudited)~~

INCOME TAXES


	Three months ended March 31,
	2021		2020
Income before income taxes	$	116.4	$	20.0
Provision for income taxes	$	23.8	$	17.2

Three months ended
June 30, Six months ended
June 30,
2020 2019 2020 2019
(Loss) Income before income taxes $ (24.9 ) $ 216.5
$ (4.9 ) $ 217.8
Provision for income taxes $ 19.0
$ 43.6
$ 36.2
$ 54.1

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 months ended ~~June 30, 2020~~,March 31, 2021, our income tax ~~provision~~expense was negatively impacted by losses in certain foreign jurisdictions where we received no tax benefit due to 100% valuation allowances, by net losses on sales of businesses and the classification of certain assets as held for sale for which we received no tax benefit and by tax expense associated with the change to our assertion regarding the permanent reinvestment of undistributed earnings attributable to certain foreign subsidiaries.

For the three ~~and six~~ months ended ~~June 30, 2019,~~March 31, 2020, our income tax provision was ~~positively~~negatively impacted ~~by the settlement of state income tax audits, partially offset~~ by losses in certain foreign jurisdictions where we receive no tax benefit due to 100% valuation allowances, and net losses on sales of businesses and the classification of certain assets as held for sale, for which we ~~did not receive a~~received minimal tax benefit.

~~(LOSS)~~ EARNINGS PER SHARE

Basic ~~loss~~and diluted earnings per share available to IPG common stockholders for the three ~~and six~~ months ended ~~June 30, 2020~~ ~~was $0.12 and $0.11, respectively,~~March 31, 2021 were $0.23, compared to ~~earnings per share of $0.44~~basic and ~~$0.42 for the~~ ~~three and six months ended June 30, 2019, respectively. Diluted loss per share available to IPG common stockholders for the~~ ~~three and six months ended June 30, 2020was $0.12 and $0.11, respectively, compared to~~ diluted earnings per share of ~~$0.43~~ ~~and~~ ~~$0.41~~$0.01 for the three ~~and six~~ months ended ~~June 30, 2019, respectively.~~March 31, 2020.

Basic and diluted ~~loss~~earnings per share for the three months ended ~~June 30, 2020 included a~~March 31, 2021 included negative ~~impact~~impacts of ~~$0.05~~$0.04 from the amortization of acquired intangibles a, $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 ~~impact~~impacts of ~~$0.22~~$0.04 from ~~restructuring charges, a negative impact~~the amortization of ~~$0.05~~acquired intangibles and $0.06 from net losses on sales of businesses and the classification of certain assets as held for ~~sale,~~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 ~~a negative impact of $0.03 from a discrete tax item.~~

~~Basic and diluted loss per share~~DXTRA. We also report results for the ~~six months ended June~~ “Corporate and Other” group.

IAN

Net Revenue


			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	%

30 ~~2020 included a negative impact~~

Table of $0.09 from the amortization of acquired intangibles, a negative impact of $0.22 from restructuring charges, a negative impact of $0.11 from net losses on sales of businesses and the classification of certain assets as held for sale, and a negative impact of $0.03 from a discrete tax item.Contents

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

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

The organic increase during 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 food and beverage and financial services sectors. The organic increase during the first quarter of 2021 in our domestic market was primarily driven by growth at our advertising and media businesses, partially offset by revenue declines related to discretionary digital project-based offerings due to the continuing impact of the COVID-19 pandemic on the economy. In our international markets, the organic increase was primarily driven by strong performance at our media businesses in almost all geographic regions in addition to growth at our advertising businesses mainly in the United Kingdom and Continental Europe regions.

~~Basic~~Segment EBITA


	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 ~~diluted earnings per share for~~Segment EBITA margin on net revenue include restructuring charges of $0.5 in the three months ended ~~June 30, 2019 included a negative impact of $0.04 from the amortization of acquired intangibles, a negative impact of $0.02 from net losses on sales of businesses~~March 31, 2021. See “Restructuring Charges” in this MD&A and ~~the classification of certain assets as held for sale and a positive impact of $0.04 from a tax benefit related to the conclusion and settlement of tax examinations of previous years.~~

Basic and diluted earnings per share for the six months ended June 30, 2019 included a negative impact of $0.09 from the amortization of acquired intangibles, a negative impact of $0.06 from first-quarter restructuring charges, a negative impact of $0.04 from net losses on sales of businesses and the classification of certain assets as held for sale and a positive impact of $0.04 from a tax benefit related to the conclusion and settlement of tax examinations of previous years.

~~Segment Results of Operations – Three and Six Months Ended June 30, 2020 Compared to Three and Six Months Ended June 30, 2019~~

~~As discussed in~~ Note 117 to the unaudited Consolidated Financial Statements ~~we have two reportable segments~~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 ~~June 30, 2020: IAN~~acquired intangibles, decreased. The decrease in salaries and ~~CMG. We also report results for the “Corporate~~related expenses was primarily driven by reductions in base salaries, benefits and ~~other” group. Segment information for~~tax and severance expense, resulting from multiple initiatives taken in the prior ~~period has been recast~~year to ~~conform~~align our expenses with changes in net revenue in response to the ~~current-period presentation.~~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.

~~IAN~~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.

DXTRA

Net Revenue


			Components of Change											Change							Components of Change								Change
	Three months ended June 30, 2019		Foreign Currency			Net Acquisitions/ (Divestitures)			Organic			Three months ended June 30, 2020		Organic		Total			Three months ended March 31, 2020		Foreign Currency		Net Acquisitions/ (Divestitures)		Organic		Three months ended March 31, 2021		Organic		Total
Consolidated	$	1,801.1	$	(40.0	)	$	(16.2	)	$	(159.2	)	$	1,585.7	(8.8	)%	(12.0	)%	Consolidated	$	307.6	$	6.5	$	(5.7)	$	(14.8)	$	293.6	(4.8)	%	(4.6)	%
Domestic	1,127.0		0.0			(3.3		)	(75.3		)	1,048.4		(6.7	)%	(7.0	)%	Domestic	208.1		—		(3.1)		(8.7)		196.3		(4.2)	%	(5.7)	%
International	674.1		(40.0		)	(12.9		)	(83.9		)	537.3		(12.4	)%	(20.3	)%	International	99.5		6.5		(2.6)		(6.1)		97.3		(6.1)	%	(2.2)	%

The organic decrease during the ~~second~~first quarter of ~~2020~~2021 was mainly attributable to lower spending from existing clients, primarily related to the impact of COVID-19 ~~pandemic, and net client losses.~~pandemic. The ~~lower spending and net client losses were~~revenue decrease was in the technology and telecom, auto and transportation, and financial services ~~and consumer goods~~ sectors, partially offset by net client wins in the food and beverage sector and net higher spending from existing clients in the healthcare and ~~retail~~consumer goods sectors. The organic ~~decrease~~decreases during the ~~second~~first quarter of ~~2020~~2021 in our domestic ~~market was~~and international markets were primarily driven by ~~the~~ revenue declines at our ~~digital specialist agencies~~sports and ~~media businesses. In our international markets, the organic decrease was driven by the revenue declines at our advertising~~experiential marketing businesses, primarily indue to the ~~United Kingdom and Asia Pacific regions, and media businesses, primarily in the Continental Europe.~~

~~The organic decrease during the first half~~continuing impact of ~~2020 was mainly attributable to lower spending from existing clients, primarily related to~~ the COVID-19 pandemic ~~and net client losses. The lower spending and net client losses were in~~on the auto and transportation, government and consumer goods sectors, partially offset by net client wins and net higher spending from existing clients in the healthcare and retail sectors. The organic decrease during the first halfeconomy.

Table of 2020 in our domestic market was primarily driven by the revenue declines at our digital specialist agencies and media businesses, partially offset by growth at our advertising businesses. In our international markets, the organic decrease was driven by the factors similar to those noted above for the second quarter of 2020.Contents

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

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Segment EBITA


	Three months ended June 30,								Six months ended June 30,									Three months ended March 31,
	2020			2019			Change		2020			2019			Change			2021			2020			Change
Segment EBITA ¹	$	100.4		$	262.4		(61.7	)%	$	199.4		$	378.4		(47.3	)%	Segment EBITA 1	$	40.4		$	22.3		81.2	%
Segment EBITA margin on net revenue ¹	6.3		%	14.6		%			6.1		%	10.8		%			Segment EBITA margin on net revenue 1	13.8		%	7.2		%

Segment EBITA and Segment EBITA margin on net revenue include $68.8 of restructuring charges in the second quarter and first half of 2020 and $2.0 and $27.6 of restructuring charges in the second quarter and first half of 2019, respectively. See ~~“Restructuring~~

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 ~~decreased~~increased during the ~~second quarter of 2020 when~~three months ended March 31, 2021 compared to the prior-year period, as the decrease in ~~net revenue of 12.0% exceeded the overall decrease in the~~ operating ~~expenses, including restructuring charges and~~expense, excluding billable expenses and amortization of acquired ~~intangibles.~~intangibles, exceeded the decrease in net revenue. The decrease in salaries and related expenses was primarily driven by reductions in base salaries, benefits and tax and ~~lower temporary help~~severance expense, resulting from multiple initiatives taken in the prior year to align our expenses ~~in response to the declines~~with changes in net revenue ~~primarily due~~in response to the effects of the COVID-19 pandemic on economic ~~conditions, in addition to lower incentive expense.~~conditions. The ~~cumulative~~ decreases were partially offset by increased ~~severance expense.~~incentive expense, primarily related to better than projected performance. The decrease in office and other direct expenses was ~~primarily driven by~~mainly due to decreases in travel and entertainment expenses and new business and promotion expenses as well as ~~lower occupancy expense, partially offset by an increase in bad debt expense and~~ a year-over-year change in contingent acquisition obligations. The decrease in office and other direct expenses was also due to savings on occupancy expense as a result of our real estate restructuring actions taken in 2020. During the ~~second quarter of 2020, segment~~three months ended March 31, 2021, Segment EBITA included restructuring charges of ~~$68.8 compared to restructuring charges of $2.0 during the second quarter of 2019.~~

Segment EBITA margin decreased during the first half of 2020 when compared to the prior-year period, as the decrease in net revenue of 7.3% exceeded the overall decrease in the operating expenses, including restructuring charges and excluding billable expenses and amortization of acquired intangibles. The decrease in salaries and related expenses and office and other direct expenses were mainly due to factors similar to those noted above for the second quarter of 2020 as well as a reduction in professional consulting fees. During the first half of 2020, segment EBITA included restructuring charges of $68.8, compared to restructuring charges of $27.6 during the first half of 2019.$0.8.

Depreciation and amortization, excluding amortization of acquired intangibles, as a percentage of net revenue was ~~2.9% and 2.8% during the second quarter and first half of 2020, respectively, which increased compared to the prior-year period.~~

~~CMG~~

~~Net Revenue~~

Components of Change Change
Three months ended
June 30, 2019
Foreign
Currency

Net
Acquisitions/
(Divestitures)
Organic Three months ended
June 30, 2020 Organic Total
Consolidated $ 324.8
$ (4.8 ) $ (1.6 ) $ (50.7 ) $ 267.7
(15.6 )% (17.6 )%
Domestic 210.7
0.0
(0.8 ) (31.1 ) 178.8
(14.8 )% (15.1 )%
International 114.1
(4.8 ) (0.8 ) (19.6 ) 88.9
(17.2 )% (22.1 )%

The organic decrease during the second quarter of 2020 was mainly attributable to lower spending from existing clients, primarily related to the COVID-19 pandemic. The lower spending was in the auto and transportation and technology and telecom sectors. The organic decrease during the second quarter of 2020 in our domestic market was primarily driven by the revenue declines at our sports and event marketing businesses, primarily due to sports and events cancellations. In our international markets, the organic decrease was driven by the revenue declines at our public relations agencies, primarily in the Asia Pacific region.

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

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

~~(Unaudited)~~

~~The organic decrease~~1.5% during the first half of 2020 was mainly attributable to lower spending from existing clients, primarily related to the COVID-19 pandemic. The lower spending was in the auto and transportation and technology and telecom sectors, partially offset by a combination of net client wins and net higher spending from existing clients in the healthcare sector. The organic decreases during the first half of 2020 in our domestic and international market were primarily driven by the factors similar to those noted above for the second quarter of ~~2020.~~

~~Segment EBITA~~

Three months ended
June 30, Six months ended
June 30,
2020 2019 Change 2020 2019 Change
Segment EBITA ¹
$ (26.3 ) $ 42.9
>(100)% $ (4.0 ) $ 43.3
>(100)%
Segment EBITA margin on net revenue ¹
(9.8 )% 13.2 % (0.7 )% 6.9 %


1	Segment EBITA and Segment EBITA margin on net revenue include $36.7 of restructuring charges in the second quarter and first half of 2020 and $5.6 of restructuring charges in the first half of 2019. See ~~“Restructuring Charges”~~ ~~in this MD&A and Note 7 to the unaudited Consolidated Financial Statements for further information.~~

~~Segment EBITA margin~~2021, which decreased during the second quarter of 2020 when compared to the prior-year period, as net revenue decreased 17.6% while operating expenses, including restructuring charges and excluding billable expenses and amortization of acquired intangibles, increased. The decrease in salaries and related expenses was primarily driven by reductions in base salaries, benefits and tax and lower temporary help expenses in response to the declines in net revenue, primarily due to the impact of the COVID-19 on economic conditions, in addition to lower incentive expense. The cumulative decreases were partially offset by increased severance expense. The decrease in office and other direct expenses was primarily driven by decreases in travel and entertainment expenses and new business and promotion expenses as well as lower occupancy expense, partially offset by a year-over-year change in contingent acquisition obligations. During the second quarter of 2020, segment EBITA included restructuring charges of $36.7.

Segment EBITA margin decreased during the first half of 2020 when compared to the prior-year period, as net revenue decreased 17.6% while operating expenses, including restructuring charges and excluding billable expenses and amortization of acquired intangibles, relatively remained flat. The decreases in salaries and related expenses and office and other direct expenses were mainly due to factors similar to those noted above for the second quarter of 2020. During the first half of 2020, segment EBITA included restructuring charges of $36.7 compared to the restructuring charges of $5.6 during the first half of 2019.

~~Depreciation and amortization, excluding amortization of acquired intangibles, as a percentage of net revenue slightly increased during the second quarter and first half of 2020~~ as compared to the prior-year ~~period.~~periods.

CORPORATE AND OTHER

Corporate and ~~other~~Other is primarily comprised of selling, general and 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, long-term incentives, annual bonuses and other miscellaneous benefits for corporate office 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; and rental expense for properties occupied by corporate office employees. A portion of centrally managed expenses 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~~increased by ~~$8.0~~$6.0 to ~~$11.8 during the second quarter of 2020 and by $28.5 to $35.9 during the first half of 2020~~$30.1 compared to the prior-year period, primarily attributable to ~~a decrease~~increases in ~~employee insurance~~professional fees and incentive expense, ~~resulting from fewer insurance claims with elective procedures~~partially offset by decreased travel and ~~routine care being delayed in 2020 as well as a decrease in travel and~~entertainment 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)

entertainment expenses. During the second quarter and first half of 2020, Corporate and other expense includes $7.1 of restructuring charges, and during the first half of 2019, Corporate and other expense includes $0.7 of restructuring charges.

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOW OVERVIEW

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

Six months ended
June 30,
Cash Flow Data 2020 2019
Net (loss) income, adjusted to reconcile to net cash used in operating activities ¹
$ 286.4
$ 382.3
Net cash used in working capital ²
(636.5 ) (113.1 )
Changes in other assets and liabilities using cash (14.1 ) (70.2 )
Net cash (used in) provided by operating activities $ (364.2 ) $ 199.0
Net cash used in investing activities (93.3 ) (77.9 )
Net cash provided by (used in) financing activities 377.7
(191.7 )


	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


1	Reflects net (loss) income adjusted primarily for depreciation and amortization of fixed assets and intangible assets, provision for uncollectible receivables, amortization of restricted stock and other non-cash compensation, net losses on sales of businesses, non-cash restructuring charges and deferred income taxes.


2	~~Reflects changes in accounts receivable, other current assets, accounts payable, accrued liabilities and contract liabilities.~~

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

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, driven by the seasonally strong media spending by our clients. ~~Quarterly~~Quarterly and annual working capital results are impacted by the fluctuating annual media spending budgets of our clients as well as their changing media 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, primarily affect the level of accounts receivable, accounts payable, accrued liabilities and 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. 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 ~~half~~quarter of ~~2020~~2021 was ~~$364.2,~~$249.8, which was ~~an increase~~a decrease of ~~$563.2~~$27.3 as compared to the first ~~half~~quarter of ~~2019,~~2020, primarily ~~as a result of~~due to our increase in net income, partially offset by an increase in working capital usage of ~~$523.4.~~$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 ~~half~~quarter of ~~2020~~2021 was ~~$93.3,~~$0.2, which was an increase of ~~$15.4~~$61.0 as compared to the first ~~half~~quarter of ~~2019,~~2020, primarily due to an increase ~~in cash sold~~ from ~~dispositions~~net proceeds from investments during the first ~~half~~quarter of ~~2020, partially offset by~~2021 as well as a decrease in capital expenditures, which consisted primarily of decreases in computer ~~hardware~~software and lease-related costs. The payments for capital expenditures were ~~$71.9~~$28.3 and ~~$80.1~~$44.6 in the first ~~half~~quarters of ~~2020~~2021 and ~~2019,~~2020, respectively.

Financing Activities

Net cash used in financing activities during the first quarter of 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 ~~half~~quarter of 2020 was $744.4, primarily driven by the net proceeds of $646.2 from the issuance of our ~~4.75% Senior Notes,~~4.750% unsecured senior notes due 2030 as well as the net increase in short-term borrowings of $247.8, primarily an increase of outstanding commercial paper, partially offset by the payment of common stock dividends of ~~$199.2.~~$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 decrease of ~~$28.9~~$30.4 during the first ~~half~~quarter of ~~2020.~~2021. The decrease was primarily a result of the U.S. Dollar being stronger than several foreign currencies, including the ~~South African Rand, Mexican Peso, Indian Rupee,~~Euro, British Pound Sterling and Brazilian Real ~~Chilean Peso, and Canadian Dollar~~ as of ~~June 30, 2020~~March 31, 2021 as compared to December 31, ~~2019.~~2020.

LIQUIDITY OUTLOOK

We expect our cash flow from operations and existing cash and cash equivalents to be sufficient to meet our anticipated operating requirements at a minimum for the next twelve months. We also have a commercial paper program, a committed corporate ~~credit facility, a 364-day~~ credit facility, and uncommitted lines of credit 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. ~~Particularly in light of the current market conditions, there~~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 ~~3.50% Senior Notes~~3.750% unsecured senior notes in aggregate principal amount of $500.0 mature on October 1, ~~2020.~~2021. We expect to use available cash ~~which may include cash proceeds from the offering of our 4.75% Senior Notes~~on hand as well as ~~credit available under our commercial paper and~~additional short-term ~~debt lines~~borrowings as needed to fund the principal repayment. As of ~~June 30, 2020,~~March 31, 2021, we had outstanding short-term borrowings of ~~$51.9 primarily~~$43.1 from our uncommitted lines of credit used primarily to fund short-term working capital needs. The remainder of our debt is primarily long-term, with maturities scheduled from ~~2021~~2024 through 2048. ~~On March 30, 2020, we issued $650.0 in aggregate principal amount of our 4.75% Senior Notes.~~

•Acquisitions – We paid ~~cash~~deferred payments of ~~$2.5, net of cash acquired of $2.5,~~$3.7 for ~~acquisitions completed~~ ownership increases in our consolidated subsidiaries in the first ~~half~~quarter of ~~2020. We also paid deferred payments of $34.8 for prior acquisitions.~~2021. In addition to potential cash expenditures for new acquisitions, we expect to pay approximately ~~$53.0~~$59.0 over the next twelve months related to ~~prior acquisitions.~~all completed acquisitions as of March 31, 2021. We may also be required to pay approximately ~~$29.0~~$34.0 related to ~~put options~~redeemable noncontrolling interest held by minority shareholders, if exercised, over the next twelve months. We will continue to evaluate strategic opportunities to grow and continue to strengthen our market position, particularly in our digital and marketing services offerings, and to expand our presence in high-growth and key strategic world markets.

•Dividends – In the first ~~half~~quarter of ~~2020,~~2021, we paid a quarterly cash dividend of ~~$0.255~~$0.270 per share on our common stock, which corresponded to an aggregate dividend payment of ~~$199.2.~~$109.1. Assuming we ~~continue to~~ pay a quarterly dividend of ~~$0.255~~$0.270 per share, and there is no significant change in the number of outstanding shares as of ~~June 30, 2020,~~March 31, 2021, we would expect to pay approximately ~~$397.0~~$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 – InAll restructuring charges were identified and initiated in 2020, with all actions completed by the ~~first half~~end of ~~2020, we paid cash~~the fourth quarter of ~~$11.2~~2020. Restructuring charges of $1.3 for ~~restructuring costs related~~the three months ended March 31, 2021 are adjustments to ~~our 2020 Plan designed to lower our operating expenses structurally and permanently relative to revenue and to accelerate~~ the ~~transformation of our business.~~actions taken in 2020. As of ~~June 30, 2020,~~March 31, 2021, our remaining liability related to restructuring actions was $33.8. Most of our restructuring actions are based on our recent experience and learning in the COVID-19 pandemic and a resulting review of our operations, which continues, to address certain operating expenses such as occupancy expense and salaries and related expenses.

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

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

~~(Unaudited)~~

$32.8.

Share Repurchase Program

Table of Contents

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

(Amounts in 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 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”). 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 of $50.0, or the equivalent in other currencies. Our obligations under the Credit Agreement are unsecured. As of ~~June 30, 2020,~~March 31, 2021, there were no borrowings under the Credit Agreement; however, we had ~~$8.3~~$10.0 of letters of credit under the Credit Agreement, which reduced our total availability to ~~$1,491.7.~~$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 ~~matures~~matured on March 26, 2021. The 364-Day Credit Facility iswas a revolving facility, under which amounts borrowed by us ~~may~~were to be repaid and reborrowed, subject to an aggregate lending limit of $500.0. The cost structure of the 364-Day Credit Agreement iswas based on our ~~current~~ credit ratings. The applicable margin for Base Rate Advances (as defined in the 364-Day Credit Facility) iswas 0.250%, the applicable margin for Eurodollar Rate Advances (as defined in the 364-Day Credit Facility) iswas 1.250%, and the facility fee payable on a lender’s revolving commitment iswas 0.250%. In addition, the 364-Day Credit Facility ~~includes~~included covenants that, among other things, (i) ~~limit~~limited our liens and the liens of our consolidated subsidiaries, and (ii) ~~limit~~limited subsidiary debt. The 364-Day Credit Facility also ~~contains~~contained a financial covenant that ~~requires~~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 ~~are identical~~were equivalent to the covenants contained in the Company’s existing Credit Agreement, which remains in full effect. ~~As of June 30, 2020, there were no borrowings under the 364-Day Credit Facility.~~

We were in compliance with all of our covenants in ~~both~~ the Credit Agreement ~~and the 364-Day Credit Facility~~ as of ~~June 30, 2020.~~March 31, 2021. The financial covenant in the Credit Agreement ~~and the 364-Day Credit Facility~~ requires that we maintain, as of the end of each fiscal quarter, a certain leverage ratio for the four quarters then ended. The table below sets forth the financial covenant in effect as of ~~June 30, 2020.~~

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

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

~~(Unaudited)~~

Four Quarters
Ended

Four Quarters
Ended
Financial Covenant June 30, 2020 Credit Agreement EBITDA Reconciliation June 30, 2020
Leverage ratio (not greater than) ¹
3.75x Net income available to IPG common stockholders $ 453.6
Actual leverage ratio 3.01x
Non-operating adjustments ²
434.4
Operating income 888.0
Add:
Depreciation and amortization 376.3
Other non-cash charges reducing operating income 53.9

Credit Agreement EBITDA ¹
$ 1,318.2

March 31, 2021.

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


1	~~The leverage ratio is defined as debt as of the last day of such fiscal quarter to EBITDA (as defined in the Credit Agreement and the 364-Day Credit Facility) for the four quarters then ended.~~


2	Includes adjustments of the following items from our consolidated statement of operations: provision for income taxes, total (expenses) and other income, equity in net loss of unconsolidated affiliates, and net loss attributable to noncontrolling interests.

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~~No.1 to the Credit Agreement, ~~and Amendment No. 1 to the 364-Day Credit Facility (together, the “Amendments”). The Amendments~~which increased the maximum leverage ratio covenant ~~to 4.25x in the case of the 364-Day Credit Facility and, in the case of the Credit Agreement,~~ to (i) 4.25x through the quarter ended June 30, 2021, and (ii) 3.50x thereafter. ~~See Note 15~~

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 ~~the unaudited Consolidated Financial Statements for further information on the Amendments.~~noncontrolling interests.

Uncommitted Lines of Credit

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

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

outstanding borrowings of ~~$51.9~~$43.1 classified as short-term borrowings on our Consolidated Balance Sheet. The average amount outstanding during the ~~second~~first quarter of ~~2020~~2021 was ~~$76.4,~~$81.4 with a weighted-average interest rate of approximately ~~3.7%~~2.9%.

Commercial Paper

The Company is authorized to issue unsecured commercial paper up to a maximum aggregate amount outstanding at any time of $1,500.0. Borrowings under the program are supported by the Credit Agreement described above. Proceeds of the commercial paper 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 ~~June 30, 2020,~~2021, there was no commercial paper ~~outstanding classified~~activity, and as ~~short-term borrowings on our Consolidated Balance Sheet. The average amount outstanding under the program during the second quarter~~ of ~~2020~~March 31, 2021, there was ~~$365.7, with a weighted-average interest rate of 1.3% and a weighted-average maturity of twelve days.~~no commercial paper outstanding.

Cash Pooling

We aggregate our domestic cash position on a daily basis. Outside the United States, we use cash pooling arrangements with banks to help manage our liquidity requirements. In these pooling arrangements, several IPG agencies agree with a single bank that the cash balances of any of the agencies with the bank will be subject to a full right of set-off against amounts other agencies owe the bank, and the bank provides for overdrafts as long as the net balance for all 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 ~~June 30, 2020,~~March 31, 2021, the amount netted was ~~$2,537.5.~~

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

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

~~(Unaudited)~~

$2,704.9.

DEBT CREDIT RATINGS

Our debt credit ratings as of ~~July~~April 15, ~~2020,~~2021, are listed below.

Moody’s Investors Service

S&P Global Ratings

Fitch Ratings

Short-term rating

P-2

A-2

Long-term rating

Baa2

BBB

BBB+

Outlook

Negative

~~Negative~~Stable

The most recent update to our outlook occurred in March 2021 when S&P Global Ratings and Fitch Ratings changed from Negative to 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 the capital markets or otherwise. For example, our Credit Agreement fees and borrowing rates are based on a credit ratings grid, and our access to the commercial paper market is contingent on our maintenance of sufficient short-term debt ratings.

CRITICAL ACCOUNTING ESTIMATES

Our significant accounting policies are described in Note 1 to the Consolidated Financial Statements for the year ended December 31, ~~2019~~,2020, included in our ~~2019~~2020 Annual Report. As summarized in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our ~~2019~~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, ~~2019,~~2020, other than as noted below. Actual results may differ from these estimates under different assumptions or conditions.

~~Goodwill~~

~~We review goodwill for impairment annually as of October 1~~^st ~~each year, or whenever events or significant changes in circumstances indicate that the carrying value may not be recoverable. We evaluate the recoverability of goodwill at a reporting unit level.~~

During the second quarter of 2020, recent economic developments related to the COVID-19 pandemic contributed to declines in our most recent forecasted financial results. We evaluated our reporting units including the impact of these declines, restructuring actions taken in the second quarter of 2020 and other reporting unit specific factors, and concluded that these factors constituted a goodwill triggering event for one reporting unit, requiring us to evaluate its goodwill for impairment. The fair value of the reporting unit for which we performed the quantitative interim impairment test was estimated using a combination of the income approach, which incorporates the use of the discounted cash flow method, and the market approach, which incorporates the use of earnings and revenue multiples based on market data. We generally applied an equal weighting to the income and market approaches for our analysis. For the income approach, we used projections, which require the use of significant estimates and assumptions specific to the reporting unit as well as those based on general economic conditions. Factors specific to the reporting unit include revenue growth, profit margins, terminal value growth rates, capital expenditures projections, assumed tax rates, discount rates and other assumptions deemed reasonable by management. For the market approach, we used judgment in identifying the relevant comparable-company market multiples.

The discount rate used for the reporting unit is influenced by general market conditions as well as factors specific to the reporting unit. For the interim impairment test of goodwill, the discount rate we used for our reporting unit tested was 13.0%, and the terminal value growth rate was 3.0%. The terminal value growth rate represents the expected long-term growth rate for our industry, which incorporates the type of services each reporting unit provides as well as the global economy. The revenue growth rates utilized in the interim impairment test for our reporting unit were between 6.0% and 8.0%. Factors influencing the revenue growth rates include the nature of the services the reporting unit provides for its clients, the geographic locations in which the reporting unit conducts business and the maturity of the reporting unit. We believe that the estimates and assumptions we made are reasonable, but they are susceptible to change from period to period. Actual results of operations, cash flows and other factors will likely differ from the estimates used in our valuation, and it is possible that differences and changes could be material. A

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

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

~~(Unaudited)~~

deterioration in profitability, adverse market conditions, significant client losses, changes in spending levels of our existing clients or a different economic outlook than currently estimated by management could have a significant impact on the estimated fair value of our reporting unit and could result in an impairment charge in the future.

We also performed a sensitivity analysis to detail the impact that changes in assumptions may have on the outcome of the first step of the impairment test. Our sensitivity analysis provides a range of fair value for the reporting unit, where the low end of the range increases discount rates by 0.5%, and the high end of the range decreases discount rates by 0.5%. We use the average of our fair values for purposes of our comparison between carrying value and fair value for the quantitative impairment test.

The table below displays the midpoint of the fair value range for the reporting unit tested in the interim impairment test, indicating that the fair value exceeded the carrying value for the reporting unit by greater than 10%.

Q2 2020 Interim Impairment Test
Reporting Unit Goodwill as of 6/30/2020 Fair value exceeds carrying value by:
A $ 209.1
> 10%

Based on the analysis described above, for the reporting unit for which we performed the quantitative interim impairment test of goodwill, we concluded that our goodwill was not impaired as of June 30, 2020, because the fair value of the reporting unit was in excess of its net book value.

The impact of COVID-19 on our forecasts also remains uncertain and increases the subjectivity that will be involved in evaluating our goodwill for potential impairments going forward. If the future were to differ adversely from these assumptions, the estimated fair value may decline and result in non-cash charges against our earnings.

~~We also considered the potential for goodwill impairment of our other reporting units. Our review of our other reporting units did not indicate an impairment triggering event as of June 30, 2020.~~

RECENT ACCOUNTING STANDARDS

See Note 14 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.

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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 ~~(Loss)~~ 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.

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We exclude these items (i) because these items are not directly attributable to the performance of our business operations and, accordingly, their exclusion assists management and investors in making period-to-period comparisons of operating performance and (ii) to assist management and investors in making comparisons to companies with different capital structures. Investors should note that these items will recur in future periods.

•

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

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

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

The following table presents the reconciliation of Net ~~(Loss)~~ Income Available to IPG Common Stockholders to Adjusted EBITA for the ~~second quarter~~three months ended March 31, 2021 and ~~first half of 2020 and 2019.~~2020.

Three months ended
June 30, Six months ended
June 30,
2020 2019 2020 2019
Net Revenue $ 1,853.4
$ 2,125.9
$ 3,825.5
$ 4,130.7

Adjusted EBITA Reconciliation:
Net (Loss) Income Available to IPG Common Stockholders ¹
$ (45.6 ) $ 169.5
$ (40.9 ) $ 161.5

Add Back:
Provision for income taxes 19.0
43.6
36.2
54.1
Subtract:
Total (expenses) and other income (65.4 ) (47.7 ) (121.3 ) (96.6 )
Equity in net loss of unconsolidated affiliates 0.0
(0.1 ) (0.2 ) (0.4 )
Net (income) loss attributable to noncontrolling interests (1.7 ) (3.3 ) 0.4
(1.8 )
Operating Income ¹
40.5
264.2
116.4
314.4
Add Back:
Amortization of acquired intangibles 21.8
21.3
43.1
42.9
Adjusted EBITA ¹
$ 62.3
$ 285.5
$ 159.5
$ 357.3
Adjusted EBITAMargin on Net Revenue ¹
3.4 % 13.4 % 4.2 % 8.6 %



	Three months ended March 31,
	2021			2020
Net Revenue	$	2,027.7		$	1,972.1

Adjusted EBITA Reconciliation:
Net Income Available to IPG Common Stockholders 1	$	91.7		$	4.7

Add Back:
Provision for income taxes	23.8			17.2
Subtract:
Total (expenses) and other income	(126.6)			(55.9)
Equity in net loss of unconsolidated affiliates	(0.2)			(0.2)
Net (income) loss attributable to noncontrolling interests	(0.7)			2.1
Operating Income 1	243.0			75.9
Add Back:
Amortization of acquired intangibles	21.6			21.3
Adjusted EBITA 1	$	264.6		$	97.2
Adjusted EBITA Margin on Net Revenue	13.0		%	4.9		%

~~Calculations include restructuring charges of $112.6 for the three and six months ended June 30, 2020 and $2.1 and $33.9 for the three and six months ended June 30, 2019, respectively.~~

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~~“Restructuring Charges”~~ ~~in this MD&A and Note 7 to the Consolidated Financial Statements for further information.~~

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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 ~~second~~first quarter of ~~2020.~~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 ~~June 30, 2020,~~March 31, 2021, and December 31, ~~2019,~~2020, approximately 98% and 97%, respectively, of our debt obligations bore fixed interest rates. For further discussion of our exposure to market risk, refer to Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in our ~~2019~~2020 Annual Report.



Item 4.			Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~June 30, 2020,~~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.

Changes in Internal Control Over Financial Reporting

There has been no change in internal control over financial reporting in the quarter ended ~~June 30, 2020,~~March 31, 2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION



Item 1.			Legal Proceedings

Information about our legal proceedings is set forth in Note 13 to the unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.



Item 1A.			Risk Factors

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 ~~2019~~2020 Annual Report, on Form 10-K (the ~~“2019~~“2020 Annual Report”), which could materially affect our business, financial condition or future results. In the first quarter of 2021, there have been no material changes in the risk factors we have previously disclosed in Item 1A, Risk Factors, in our 2020 Annual Report. The risks described in our ~~2019~~2020 Annual Report, ~~are not the only risks facing the Company. For example, these risks now~~which include the impacts from the ~~novel coronavirus (“COVID-19”) outbreak~~COVID-19 pandemic on the Company’s business, financial condition and results of ~~operations. Additional~~operations, are not the only risks we face, and additional risks and uncertainties not currently known to ~~the Company~~us or that itwe currently ~~deems~~deem to be immaterial also may materially adversely affect the Company’s business, financial condition and/or operating results. ~~The risk factors included in our 2019 Annual Report should be read in conjunction with the updated risks described below.~~

~~The COVID-19 outbreak has adversely impacted our business, financial condition and results of operations, and the extent of the continuing impact is highly uncertain and cannot be predicted.~~

The global spread of COVID-19 has created significant worldwide operational volatility, uncertainty and disruption. The COVID-19 pandemic has adversely impacted our business, financial condition and results of operations, and the extent of the continuing impact will depend on numerous evolving factors, which are highly uncertain, rapidly changing and cannot be predicted, including:

~~the duration, severity and scope of the outbreak;~~

governmental, business and individual actions that have been and continue to be taken in response to the outbreak, including travel restrictions, quarantines, social distancing, work-at-home, stay-at-home and shelter-in-place orders and shut-downs;

~~the impact of the outbreak on the financial markets and economic activity generally;~~

~~the effect of the outbreak on our clients and other business partners;~~

~~our ability to access usual sources of liquidity on reasonable terms;~~

~~our ability to comply with the financial covenant in our Credit Agreement if the material economic downturn results in increased indebtedness or substantially lower EBITDA;~~

~~potential goodwill or impairment charges;~~

~~our ability to achieve the benefits of the 2020 restructuring plan and other cost-saving initiatives;~~

~~increased cybersecurity risks as a result of remote working conditions;~~

~~our ability during the outbreak to provide our services, including the health and wellbeing of our employees; and~~

~~the ability of our clients to pay for our services during and following the outbreak.~~

The COVID-19 outbreak has significantly increased financial and economic volatility and uncertainty. The continued downturn in the economy has had, and we expect will continue to have, a negative impact on many of our clients. Some clients have responded to the current economic and financial conditions by reducing their marketing budgets, thereby decreasing the market and demand for our services. In addition, many businesses have adjusted, reduced or suspended operating activities, which has negatively impacted the markets we serve. All of the foregoing has impacted, and will likely continue to impact, our business, financial condition, results of operations and forward-looking expectations.

Furthermore, modified processes, procedures and controls have been required to respond to the changes in our business environment, as the vast majority of our employees have continued to work from home and many onsite locations remain closed. The significant increase in remote working of our employees may exacerbate certain risks to our business, including the increased demand for information technology resources, increased risk of malicious technology-related events, such as cyberattacks and phishing attacks, and increased risk of improper dissemination of personal, proprietary or confidential information.

~~The potential effects of COVID-19 could also heighten the risks disclosed in many of our risk factors that are included in Part I, Item 1A,~~ ~~Risk Factors~~, in our 2019 Annual Report, including as a result of, but not limited to, the factors described above. Because the COVID-19 situation is unprecedented, complex and continually evolving, the other potential impacts to our risk factors that are described in our 2019 Annual Report are uncertain. See Item 1A, ~~Risk Factors, in our 2019 Annual Report.~~

~~Table of Contents~~



Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds

(c)The following table provides information regarding our purchases of our equity securities during the period from January 1, 2021 to March 31, 2021:


	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 April 1, 2020 to June 30, 2020:~~

Total Number of Shares (or Units) Purchased ¹

Average Price Paid
per Share (or Unit) ²

Total Number of Shares (or Units) Purchased as Part of
Publicly Announced
Plans or Programs ³

Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs ³
April 1 - 30 25,573
$ 17.40
—
$ 338,421,933
May 1 - 31 9,558
$ 16.90
—
$ 338,421,933
June 1 - 30 3,253
$ 16.81
—
$ 338,421,933
Total 38,384
$ 17.22
—


1	The 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”).


2	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 by (b) the sum of the number of Withheld Shares.

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 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 share repurchase program to repurchase from time to time up to $300.0 million, excluding fees, of our common stock (the “2017 Share Repurchase Program”). In February 2018, the Board authorized a share repurchase program to repurchase from time to time up to $300.0 million, excluding fees, of our common stock, which was in addition to any amounts remaining under the 2017 Share Repurchase Program. On July 2, 2018, in connection with the announcement of the Acxiom acquisition, we announced that share repurchases will be suspended for a period of time in order to reduce the increased debt levels incurred in conjunction with the acquisition, and no shares were repurchased pursuant to the share repurchase programs in the periods reflected. There are no expiration dates associated with the share repurchase programs.



~~Item 5.~~	~~Other Information~~

On July 28, 2020, we entered into Amendment No. 1 to the Amended and Restated Credit Agreement, dated as of November 1, 2019, among the Company, the lenders and agents named therein and Citibank, N.A., as administrative agent (the “Credit Agreement”), and Amendment No. 1 to the 364-Day Credit Facility, dated as of March 27, 2020, among the Company, the lenders and agents named therein and Citibank, N.A., as administrative agent (the “364-Day Credit Facility”) (together, the “Amendments”). The Amendments increased the maximum leverage ratio covenant to 4.25x in the case of the 364-Day Credit Facility and, in the case of the Credit Agreement, to (i) 4.25x through the quarter ended June 30, 2021, and (ii) 3.50x thereafter. Amendment No. 1 to the Credit Agreement also increased the Applicable Margin (as defined in the Credit Agreement) for any borrowings we make under the Credit Agreement if our long-term public debt ratings are BB+/Ba1 or below at the time of borrowing. We have the option to terminate Amendment No. 1 to the Credit Agreement at any time, provided that at the time we deliver a termination notice the leverage ratio as of the end of the most recently ended fiscal quarter did not exceed 3.50x. The Credit Agreement reverts to its original terms on June 30, 2021, or following any such early termination, whichever is earlier. We paid amendment fees of $2.0 million in connection with the ~~Amendments.~~announcement of the Acxiom acquisition, we announced that share repurchases will be suspended for a period of time in order to reduce the increased debt levels incurred in conjunction with the acquisition, and no shares were repurchased pursuant to the share repurchase programs in the periods reflected. There are no expiration dates associated with the share repurchase programs.



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.

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INDEX TO EXHIBITS


Exhibit No.		Description

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

~~10.1~~4.1	~~Employment Agreement, made~~Tenth Supplemental Indenture, dated as of ~~January 1, 2020, entered into on July 29, 2020,~~February 25, 2021, between the Company and ~~Ellen Johnson.~~ U.S. Bank National Association, as 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.

~~10.2~~4.2		~~Amendment No. 1,~~Eleventh Supplemental Indenture, dated as of ~~July 28, 2020,~~February 25, 2021, between the Company and U.S. Bank National Association, as Trustee, is incorporated by reference to Exhibit 4.3 to the ~~Amended and Restated Credit Agreement, dated as of November 1, 2019, among~~Company’s Current Report on Form 8-K filed with the ~~Company, the lenders and agents named therein and Citibank, N.A., as administrative agent.~~SEC on February 25, 2021.

~~10.3~~4.3		~~Amendment No. 1, dated~~Form of Global Note representing the Company’s 2.400% Senior Notes due 2031 is included as part of ~~July 28, 2020,~~and incorporated by reference to Exhibit 4.2 to the ~~364-Day Credit Facility, dated as of March 27, 2020, among~~Company’s Current Report on Form 8-K filed with the ~~Company, the lenders and agents named therein and Citibank, N.A., as administrative agent.~~SEC on February 25, 2021.

~~31.1~~4.4		Form of Global Note representing the Company’s 3.375% Senior Notes due 2041 is included as part of and incorporated by reference to 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 ~~June 30, 2020.~~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.

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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: ~~July 31, 2020~~April 28, 2021





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

Date: ~~July 31, 2020~~

April 28, 2021



	2020 Plan
	Restructuring Expense		Non-Cash Items		Cash Payments		Liability at June 30, 2020
Severance and termination costs	$	44.6	$	0.7	$	10.1	$	33.8
Lease impairment costs	65.7		65.7		0.0		0.0
Other	2.3		1.2		1.1		0.0
Total	$	112.6	$	67.6	$	11.2	$	33.8



			Components of Change											Change
	Six months ended June 30, 2019		Foreign Currency			Net Acquisitions/ (Divestitures)			Organic			Six months ended June 30, 2020		Organic		Total
Consolidated	$	4,130.7	$	(65.4	)	$	(35.3	)	$	(204.5	)	$	3,825.5	(5.0	)%	(7.4	)%
Domestic	2,651.8		—			(8.1		)	(96.5		)	2,547.2		(3.6	)%	(3.9	)%
International	1,478.9		(65.4		)	(27.2		)	(108.0		)	1,278.3		(7.3	)%	(13.6	)%
United Kingdom	350.7		(9.1		)	0.5			(29.2		)	312.9		(8.3	)%	(10.8	)%
Continental Europe	340.1		(10.7		)	(15.3		)	(18.4		)	295.7		(5.4	)%	(13.1	)%
Asia Pacific	383.1		(12.0		)	(11.5		)	(38.2		)	321.4		(10.0	)%	(16.1	)%
Latin America	172.4		(29.1		)	(0.7		)	(1.0		)	141.6		(0.6	)%	(17.9	)%
Other	232.6		(4.5		)	(0.2		)	(21.2		)	206.7		(9.1	)%	(11.1	)%



	Total Number of Shares (or Units) Purchased ¹	Average Price Paid per Share (or Unit) ²		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs ³	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs ³
April 1 - 30	25,573	$	17.40	—	$	338,421,933
May 1 - 31	9,558	$	16.90	—	$	338,421,933
June 1 - 30	3,253	$	16.81	—	$	338,421,933
Total	38,384	$	17.22	—

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

Restricted stock (shares or units)

Performance-based stock (shares)

Total stock-based compensation awards