Note 3:  Loss Per Share

Loss per basic and diluted common share available to IPG common stockholders equals net loss available to IPG common stockholders divided by the weighted average number of common shares outstanding for the applicable period. The following table presents information aboutsets forth loss per basic and diluted common share available to IPG common stockholders.

Basic and diluted shares outstanding and loss per share are equal for the three months ended March 31, 2009 and 2008 because our assets and liabilities measured at fair value onpotentially dilutive securities are antidilutive as a recurring basis as of September 30, 2008 and indicates the fair value hierarchyresult of the valuation techniques utilizednet loss available to determine such fair value.IPG common stockholders in each period presented.

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

The following tables present additional information about assets and liabilities measured at fair value on a recurring basis and for which we utilize Level 3 inputs to determine fair value.

Three months ended September 30, 2008table presents the potential shares excluded from diluted loss per share because the effect of including these potential shares would be antidilutive.

Realized gains (losses) included in net income for foreign currency derivatives and a minority interest put obligation are reported as a component of other expense and interest expense, respectively.

Note 4:  Supplementary Data

Accrued Liabilities

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

As part of the restatement set forth in our 2004 Annual Report on Form 10-K filed in September 2005 (the “2004 Restatement”),Restatement, we recognized liabilities related to vendor discounts and credits where we had a contractual or legal obligation to rebate such amounts to our clients or vendors. For the nine months ended September 30, 2008, we satisfied $1.4 ofReductions to these liabilities through cash payments and reductions of certain client receivables. Further reductions of these liabilities were a result of favorable settlements with clients, the release of liabilities due to the lapse of the respective statutes of limitations and foreign currency effects. Also, as part of the 2004 Restatement, we recognized liabilities related to internal investigations and international compensation arrangements.

Restructuring and Other Reorganization-Related Charges (Reversals)

Restructuring and other reorganization-related charges of $3.9 and $11.2 for the three and nine months ended September 30, 2008, respectively, primarily relate to the realignment of our global media operations. See Note 11 for a discussion regarding the creation of our new management entity, Mediabrands, in the second quarter of 2008. In addition, the charges for the nine months ended September 30, 2008 relate to the restructuring program announced at Lowe Worldwide (“Lowe”) during the third quarter of 2007. Net charges primarily consist of leasehold amortization and additional severance expense. Payments during the quarter related to the 2007, 2003 and 2001 programs were approximately $3.0. The total liability balance as of September 30, 2008 for our restructuring programs is $15.7, of which $1.9, $6.9 and $6.9 relate to the 2007, 2003 and 2001 programs, respectively.

Other (Expense) Income

Results of operations for the three and nine months ended September 30, 2008 and 2007 include certain items which are either non-recurring or are not directly associated with our revenue producing operations. These items are included in the other income (expense) line in the Consolidated Statements of Operations.

Sales of businesses and investments — Primarily includes realized gains and losses relating to the sales of businesses, cumulative translation adjustment balances from the liquidation of entities, sales of marketable securities and investments in publicly traded and privately held companies in our Rabbi Trusts, and charges related to declines in the values of investments that are deemed to be other than temporary.

Vendor discounts and credit adjustments — We are in the process of settling our liabilities related to vendor discounts and credits primarily established as part of the 2004 Restatement. These adjustments reflect the reversal of certain liabilities as a result of settlements with clients and vendors or where the statute of limitations has lapsed.

Litigation settlement — During May 2008, the SEC concluded their investigation that began in 2002 into our financial reporting practices resulting in a settlement charge of $12.0.

Note 5:  Acquisitions

The majority of our acquisitions include an initial payment at the time of closing and provide for additional contingent purchase price payments over a specified time. Contingent purchase price payments are recorded within the financialachieved

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

statementsthrough settlements with clients and vendors but also may occur if the applicable statute of limitations in a jurisdiction has lapsed. Also as an increase to goodwill and other intangible assets once the terms and conditionspart of the contingent acquisition obligations have been met2004 Restatement, we recognized liabilities related to internal investigations and the consideration is determinable and distributable, or expensed asinternational compensation in our Consolidated Statementsarrangements.

Other income (expense), net

Results of Operations based on the acquisition agreement and the terms and conditions of employmentoperations for the former owners of the acquired businesses.

During the ninethree months ended September 30,March 31, 2009 and 2008 we completed nine acquisitions,include certain items which are either non-recurring or are not directly associated with our revenue producing operations, such as sales of which the most significant were: a) the remaining interests in an entertainment-marketing agency in North America in which we previously held a 40% interest, b) a digital advertisingbusinesses and communications agency in the United Kingdom, c) a marketing services agency in France, d) a 51% interest in a digital marketing agency in North America,investments and e) an additional 31.1% interest in a full-service advertising agency in the Middle East which increases our total interest in that agency to 51%. Total cash paid for these acquisitions at closing was $100.8,vendor discounts and we have accrued an additional $51.7 for known deferred payments, primarily related to our acquisition in the Middle East.

For companies acquired during the first nine months of 2008, we made estimates of the fair values of the assets and liabilities for consolidation. The purchase price in excess of the estimated fair value of the tangible net assets acquired was allocated to goodwill and identifiable intangible assets.credit adjustments. These acquisitions do not have significant amounts of tangible assets, therefore a substantial portion of the total consideration has been allocated to goodwill and identifiable intangible assets (approximately $183.0). The purchase price allocations for our acquisitions are substantially complete, however certain of these allocations are based on estimates and assumptions and are subject to change. The final determination of the estimated fair value of the acquired net assets will be completed as soon as possible, but no later than one year from the acquisition date. All acquisitions during the first nine months of 2008items are included in the IAN operating segment. Pro forma information, as requiredother income (expense), net line in the unaudited Consolidated Statements of Operations. Included in other expense, net, of $1.4 for the three months ended March 31, 2008 is a settlement estimate of $12.0 for our previously disclosed SEC investigation of our past restatement of our financial statements, which we settled in May 2008. This expense is partially offset by SFAS No. 141,Business Combinations,vendor discounts and credit adjustments due to the reversal of certain liabilities where the statute of limitations has lapsed.

Note 5:  Income Taxes

For the three months ended March 31, 2009, the difference between the effective tax rate and the statutory rate of 35% is primarily due to state and local taxes, losses in certain foreign locations where we receive no tax benefit due to 100% valuation allowances and the write-off of deferred tax assets related to these acquisitionsrestricted stock.

With respect to all tax years open to examination by U.S. Federal and various state, local and non-U.S. tax authorities, we currently anticipate that total unrecognized tax benefits will decrease by an amount between $50.0 and $60.0 in the next twelve months, a portion of which will affect the effective tax rate, primarily as a result of the settlement of tax examinations and the lapsing of statute of limitations. This net decrease is related to various items of income and expense, including transfer pricing adjustments and adjustments related to the 2004 Restatement. We expect to complete our discussions with the IRS appeals division regarding the years 1997 through 2004 by the end of the current year.

In December 2007, the IRS commenced its examination for the 2005 and 2006 tax years. We expect this examination to be completed by the end of the current year. In addition, we have various tax years under examination by tax authorities in various countries, such as the United Kingdom, and in various states, such as New York, in which we have significant business operations. It is not presented because the impact ofyet known whether these acquisitions, either individually orexaminations will, in the aggregate, onresult in our paying additional taxes. We believe our tax reserves are adequate in relation to the Company’s consolidated resultspotential for additional assessments in each of operations is not significant.

During the nine months ended September 30, 2007, we completed six acquisitions, of which the most significant were: a) a full-service advertising agency in Latin America, b) Reprise Media, which is a full-service search engine marketing firm in North America, and c) the remaining interests in two full-service advertising agencies in Indiajurisdictions in which we previously held 49%are subject to taxation. We regularly assess the likelihood of additional tax assessments in those jurisdictions and, 51% interests. Total cash paid during the first nine months of 2007if necessary, adjust our reserves as additional information or events require.

We are effectively settled with respect to U.S. income tax audits for these acquisitions was $112.8.

Details of cash paid for currentyears prior to 2005. With limited exceptions, we are no longer subject to state and prior years’ acquisitions are as follows:

In addition,local income tax audits for the nine months ended September 30, 2007,years prior to 1999 or non-U.S. income tax audits for the years prior to 2000.

On February 17, 2009, the American Recovery and Reinvestment Act of 2009 (the “Act”) was signed into law. The principal purpose of the Act was to address the current economic challenges in the US. Based on our review of the tax provisions of the Act, we acquired $8.1 of marketable securities held by one ofdo not anticipate any material impact to our acquisitions.financial position from the tax provisions contained in the Act.

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 6:  Comprehensive Loss

Note 7:  Incentive Compensation Plans

Our two types of incentive compensation include cash awards and stock-based compensation awards.

Cash Awards

In March 2009 the Compensation Committee of the Board of Directors approved the Interpublic Restricted Cash Plan (the “Cash Plan”). Under the Cash Plan, the Board of Directors, the Compensation Committee or the Plan Administrator may grant cash awards to certain employees eligible to receive stock-settled and cash-settled awards. Cash awards are generally granted on an annual basis, have a service period vesting condition and generally will vest in three years. On March 31, 2009, the Compensation Committee granted awards under the Cash Plan with a total value of $26.7.

In March 2009 the Board of Directors approved two amendments to the 2006 Performance Incentive Plan (“2006 PIP”). The first amendment allows cash awards to be granted for a multiple year term, the effect of which permits targets to be based on future year performance. The second amendment allows deferral of 100% of an individual award until it vests. Once the amendments were approved, the Compensation Committee granted performance cash awards to certain employees who otherwise would have been eligible to receive performance-based stock awards. These awards have a service period vesting condition and a performance vesting condition. The amount of the performance cash award received by an employee with a performance vesting condition can range from 0% to 200% of the target amount of the original grant value. Performance cash awards generally vest in three years. A committee of the Board of Directors may grant performance cash awards to any eligible employee; however, no employee can receive more than $5.0 during a performance period. On March 31, 2009 the Compensation Committee granted new performance cash awards under the 2006 PIP with a total target value of $31.5.

We amortize the present value of the amount expected to vest for cash awards and performance cash awards over the vesting period using the straight line method, less an assumed forfeiture rate. Cash awards do not fall within the scope of SFAS No. 123R,Share-Based Payment, as they are not paid in equity and the value of the award is not correlated with our stock price. Due to the cash nature of the payouts and the vesting period, we account for these awards in accordance with APB Opinion No. 12,Deferred Compensation Contracts.

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Stock-Based Compensation

We issued the following stock-based awards under the 2006 Performance Incentive Plan during the three months ended March 31, 2009:

Stock options are granted with the exercise price equal to the fair market value of our common stock on the grant date, are generally exercisable between two and four years from the grant date and expire ten years from the grant date (or earlier in the case of certain terminations of employment).

We grant other stock-based compensation awards such as stock-settled awards, cash-settled awards and performance-based awards (settled in cash or shares) to certain key employees. The number of shares or units received by an employee for performance-based awards depends on Company and/or individual performance against specific performance targets and could range from 0% to 200% of the target amount of shares originally granted. Incentive awards are subject to certain restrictions and vesting requirements as determined by the Compensation Committee. The vesting period is generally three years. Upon completion of the vesting period for cash-settled awards, which include restricted stock units expected to be settled in cash, the grantee is entitled to receive a payment in cash or in shares of common stock based on the fair market value of the corresponding number of shares of common stock. No monetary consideration is paid by a recipient for any incentive award, and the fair value of the shares on the grant date is amortized over the vesting period, except for cash-settled awards where the quarterly-adjusted fair value based on our share price is amortized over the vesting period. The holders of cash-settled and performance-based awards have no ownership interest in the underlying shares of common stock until the awards vest and the shares of common stock are issued.

In conjunction with our annual grant of long-term incentive compensation awards we review our estimates and assumptions. This review in the first quarter of 2009 resulted in an increase to our estimated forfeiture rate, as our review of our actual forfeitures over the last ten years indicated a higher level of forfeitures than previously assumed.

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 8:  Employee Benefits

We have a defined benefit plan which covers substantially all regular U.S. employees employed through March 31, 1998. In addition, some of our agencies have additional domestic plans. These plans are closed to new participants. We also have numerous plans outside of the U.S., some of which are funded, while others provide payments at the time of retirement or termination under applicable labor laws or agreements. Some of our domestic and foreign subsidiaries also provide postretirement health benefits to eligible employees and their dependents. Additionally, some of our domestic subsidiaries provide postretirement life insurance to eligible employees. Certain immaterial foreign pension plans have been excluded from the below tables. The components of net periodic cost for the domestic pension plans, the principal foreign pension plans and the postretirement benefit plans are as follows:

During the three and nine months ended September 30, 2008,March 31, 2009, we made contributions of $5.7 and $21.9, respectively,$9.0 to our foreign pension plans and no contributions to our domestic pension plans. For the remainder of 2008,2009, we expect to contribute $6.2approximately $16.0 to our foreign pension plans. In accordance with changes required by the Pension Protection Act of 2006, we contributed $2.3 to our domestic pension plans during the three and nine months ended September 30, 2008. For the remainder of 2008, we do not expect to make any additional contributionsapproximately $10.0 to our domestic pension plans.

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 7:  Stock-Based Compensation

During the nine months ended September 30, 2008 we granted the following stock-based compensation awards under our 2006 Performance Incentive Plan:

Stock options are granted with the exercise price equal to the fair market value of our common stock on the grant date, are generally exercisable between two and four years from the grant date and expire ten years from the grant date (or earlier in the case of certain terminations of employment).

Stock-settled awards include restricted stock and restricted stock units (“RSUs”) expected to be settled with our common stock and generally vest over three years. RSUs that are expected to be settled in stock and restricted stock are amortized over the vesting period based on the grant date fair value of awards.

Cash-settled awards include RSUs expected to be settled in cash and generally vest over three years. We adjust our fair value measurement for RSUs that are expected to be settled in cash quarterly based on our share price, and we amortize stock-based compensation expense over the vesting periods based upon the quarterly-adjusted fair value.

Performance-based awards are a form of stock-based compensation in which the number of shares or units ultimately received by the participant depends on Company and/or individual performance against specific performance targets and can be settled in cash or shares. The awards generally vest over a three-year period subject to the participant’s continuing employment and the achievement of certain performance objectives. We amortize stock-based compensation expense for the estimated number of performance-based awards that we expect to vest over the vesting period using the grant-date fair value of the shares, except for the cash-settled performance-based-awards, which we amortize using the quarterly-adjusted fair value.

Note 8:  Comprehensive (Loss) Income

Note 9:  Earnings (Loss) Per Share

Earnings (loss) per basic common share equals net income (loss) applicable to common stockholders divided by the weighted average number of common shares outstanding for the applicable period. Diluted earnings (loss) per share equals

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

net income (loss) applicable to common stockholders adjusted to exclude, if dilutive, preferred stock dividends, allocation to participating securities and interest expense related to potentially dilutive securities divided by the weighted average number of common shares outstanding, plus any additional common shares that would have been outstanding if potentially dilutive shares had been issued. The following sets forth basic and diluted earnings (loss) per common share applicable to common stock.

Basic and diluted shares outstanding and loss per share are equal for the three and nine months ended September 30, 2007 because our potentially dilutive securities are antidilutive as a result of the net loss applicable to common stockholders in each period.

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

The following table presents the potential shares excluded from diluted earnings (loss) per share because the effect of including these potential shares would be antidilutive.

Note 10:  Taxes

The effective tax rates for the three and nine months ended September 30, 2008 were 41.6% and 52.2%, respectively. For the three and nine months ended September 30, 2008, the differences between the effective tax rates and the statutory rate of 35% is primarily due to state and local taxes, losses in certain foreign locations where we receive no tax benefit due to 100% valuation allowances and, for nine months ended September 30, 2008, the SEC settlement provision for which we receive no tax benefit and the release of valuation allowances in jurisdictions where we believe it is more likely than not that we will realize our deferred tax assets. The tax provision for the first nine months of 2007 was favorably impacted by net reversals of tax reserves, primarily related to previously unrecognized tax benefits related to various items of income and expense, including approximately $80.0 for certain worthless securities deductions associated with investments in consolidated subsidiaries, which was a result of the completion of a tax examination.

With respect to all tax years open to examination by U.S. Federal and various state, local, and non-U.S. tax authorities, we currently anticipate that the total unrecognized tax benefits will decrease by an amount between $35.0 and $45.0 in the next twelve months, a portion of which will affect the effective tax rate, primarily as a result of the settlement of tax examinations and the lapsing of statutes of limitation. This net decrease is related to various items of income and expense, including transfer pricing adjustments and adjustments related to the 2004 Restatement. For this purpose, we expect to complete our discussions with the IRS appeals division regarding the years 1997 through 2004 within the next twelve months.

In December 2007, the IRS commenced its examination for the 2005 and 2006 tax years. In addition, we have various tax years under examination by tax authorities in various countries, such as the United Kingdom, and in various states, such as New York, in which we have significant business operations. It is not yet known whether these examinations will, in the aggregate, result in our paying additional taxes. We believe our tax reserves are adequate in relation to the potential for additional assessments in each of the jurisdictions in which we are subject to taxation. We regularly assess the likelihood of additional tax assessments in those jurisdictions and, if necessary, adjust our reserves as additional information or events require.

With limited exceptions, we are no longer subject to U.S. income tax audits for the years prior to 1997, state and local income tax audits for the years prior to 1999, or non-U.S. income tax audits for the years prior to 2000.

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

On October 3, 2008, the Emergency Economic Stabilization Act of 2008 (the “Act”) was enacted in the United States. The Act primarily contains provisions which address the U.S. banking and financial industry bailout. In addition, it contains various tax provisions. However, based on our review we do not anticipate any material impact to our financial position from the tax provisions contained in the Act.

Note 11:  Segment Information

On July 9, 2008 we announced the creation of a management entity called Mediabrands to oversee our media assets that are included in our Integrated Agency Networks (“IAN”) segment. The new entity provides oversight of operational efficiency and increased collaboration across our media units. Our global media networks, Initiative and Universal McCann, continue to operate as independent entities, each aligned where appropriate with its respective full-service marketing network partner. The previously existing entities that comprise Mediabrands remain in the IAN segment.

We have two reportable segments: IAN,Integrated Agency Networks (“IAN”), which is comprised of Draftfcb, Lowe, McCann Worldgroup and Mediabrands, and Constituency Management Group (“CMG”), which is comprised of the bulka number of our specialist marketing service offerings. We also report results for the Corporate“Corporate and otherother” group. The profitability measure employed by our chief operating decision maker for allocating resources to our operating divisions and assessing operating division performance is operating income (loss), excluding the impact of restructuring and other reorganization-related (reversals) charges (reversals) and long-lived asset impairment and other charges. Segment information is presented consistently with the basis described in our 20072008 Annual Report on Form 10-K. Summarized financial information concerning our reportable segments is shown in the following table.