UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
FORM 8-K
_______________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 28, 2021
THE INTERPUBLIC GROUP OF COMPANIES, INC.
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
(Address of principal executive offices) (Zip Code)
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
Item 2.02. Results of Operations and Financial Condition.
On April 28, 2021
Item 9.01. Financial Statements and Exhibits.
Exhibit 99.1: Press release dated April 28, 2021
Exhibit 99.2: Investor presentation dated April 28, 2021
Exhibit 104: Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document (included as Exhibit 101).
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 hereunto duly authorized.
| THE INTERPUBLIC GROUP OF COMPANIES, INC. | |||||
| Date: April 28, 2021 | By: /s/ Andrew Bonzani | ||||
| Name: Andrew Bonzani Title: Executive Vice President, General Counsel | |||||
Exhibit 99.1
| FOR IMMEDIATE RELEASE | New York, NY (April 28, 2021) | |||||||
Interpublic Announces First Quarter 2021 Results
• Reported net revenue of $2.03 billion, an increase of 2.8% from a year ago, with organic net revenue growth of 1.9%
• Net income was $91.7 million as reported with first-quarter adjusted EBITA before restructuring of $265.9 million
• First quarter diluted EPS was $0.23 as reported, and was $0.45 as adjusted compared with $0.11 as adjusted in the first quarter of 2020
• Management highlights strategic and operating strengths, exceptional talent base, deep creative, data, martech and adtech capabilities
• With tone of business and visibility improved, and sustained public health and macro recovery, Company says it is positioned to deliver full-year 2021 organic growth of 5.0% to 6.0% and adjusted EBITA margin of approximately 15.5%
Philippe Krakowsky, CEO of IPG:
“We are pleased with results this quarter. Our strong start to the year reflects the quality of our talent, across the organization, and underscores the successful evolution of our offerings at a time of accelerating, transformational change. Our ability to create marketing and media solutions that bring together outstanding creativity with the benefits of technology, and an ethical approach to data management, positions us to address higher-order business opportunities. This combination was a key driver of growth during Q1. Further, our return to growth coupled with the benefits of strategic restructuring actions taken last year, and certain variable expenses that remain at very low levels, led to outstanding margin performance this quarter.”
“Supporting clients is a constant for us. We therefore remain focused on meeting their needs for integrated and collaborative teams that bring a range of expertise to bear to build brands and deliver business outcomes. Given that the pandemic is still with us, across the world, another top priority remains ensuring the health and well-being of our people. This includes a focus on equity and inclusion, as well as a long-term commitment across the ESG spectrum, including responsible data stewardship, digital media and brand safety practices.”
“Building on a strong start to the year, and predicated on the assumption that there will continue to be a reasonably steady course of global economic recovery, we believe that we can deliver organic growth for the full year in the range of 5% to 6%. With that level of performance, we would expect to achieve 2021 adjusted EBITA margin of approximately 15.5%. As such, we look forward to creating further value and opportunity for all of our stakeholders.”
Interpublic Group 909 Third Avenue New York, NY 10022 212-704-1200 tel 212-704-1201 fax
1
Summary
Revenue
•First quarter 2021 net revenue of $2.03 billion increased by 2.8% compared to $1.97 billion in the first quarter of 2020. During the quarter, our organic net revenue increase was 1.9%, which was comprised of a slight organic net revenue decrease of 0.2% in the U.S. and an increase of 6.3% internationally. First quarter 2021 total revenue, which includes billable expenses, was $2.26 billion, compared to $2.36 billion in 2020.
Operating Results
•Operating income in the first quarter of 2021 was $243.0 million, compared to $75.9 million in 2020. Adjusted EBITA before restructuring charges was $265.9 million in the first quarter of 2021, compared to adjusted EBITA of $97.2 million for the same period in 2020. Adjusted EBITA before restructuring charges margin on net revenue was 13.1%, compared to adjusted EBITA margin of 4.9% in 2020.
•Restructuring charges of $1.3 million consist of adjustments to the Company's restructuring actions taken during 2020; there were no new restructuring actions in 2021.
•Refer to reconciliations on page 9 for further detail.
Net Results
•Income tax provision in the first quarter of 2021 was $23.8 million on income before income taxes of $116.4 million.
•First quarter 2021 net income available to IPG common stockholders was $91.7 million, resulting in earnings of $0.23 per basic and diluted share, compared to $0.01 per basic and diluted share for the same period in 2020. Adjusted earnings were $0.45 per diluted share, compared to adjusted earnings of $0.11 per diluted share a year ago. First quarter 2021 adjusted earnings excludes after-tax amortization of acquired intangibles of $17.4 million, after-tax restructuring charges of $1.0 million, an after-tax loss of $11.8 million on the sales of businesses and an after-tax loss of $55.5 million on the early extinguishment of debt.
•Refer to reconciliations on pages 8 through 10 for further detail.
Interpublic Group 909 Third Avenue New York, NY 10022 212-704-1200 tel 212-704-1201 fax
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Operating Results
Revenue
Net revenue of $2.03 billion in the first quarter of 2021 increased 2.8% compared with the same period in 2020. During the quarter, the effect of foreign currency translation was positive 1.5%, the impact of net dispositions was negative 0.6%, and the resulting organic net revenue increase was 1.9%. Total revenue, which includes billable expenses, was $2.26 billion in the first quarter of 2021, compared to $2.36 billion in 2020.
Operating Expenses
For the first quarter of 2021, total operating expenses, excluding billable expenses, decreased by 5.9%, compared to the net revenue increase of 2.8% for the same period.
Staff cost ratio, which is total salaries and related expenses as a percentage of net revenue, decreased to 68.7% in the first quarter of 2021 from 72.1% in the same period in 2020. Salaries and related expenses decreased 2.1% to $1.39 billion during the first quarter of 2021, compared to $1.42 billion for the same period in 2020. 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.
Office and other direct expenses decreased as a percentage of net revenue to 14.4% during the first quarter of 2021, compared to 19.2% a year ago. In the first quarter of 2021, office and other direct expenses were $292.9 million, a decrease of 22.6% compared to the same period in 2020, mainly driven by lower 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.
Selling, general and administrative expenses slightly increased as a percentage of net revenue to 1.4% during the first quarter of 2021, compared to 1.1% during the same period in 2020. In the first quarter of 2021, selling, general and administrative expenses were $28.2 million, an increase of 25.9% compared to the same period in 2020, primarily attributable to increases in professional fees and incentive expense, partially offset by decreased travel and entertainment expenses.
Interpublic Group 909 Third Avenue New York, NY 10022 212-704-1200 tel 212-704-1201 fax
3
Depreciation and amortization as a percentage of net revenue decreased to 3.4% during the first quarter of 2021, compared to 3.7% a year ago. During the first quarter of 2021, depreciation and amortization was $69.2 million, a decrease of 4.9% compared to the same period in 2020.
Restructuring charges in the first quarter of 2021 were $1.3 million related to adjustments to our restructuring actions taken in 2020, which were designed to reduce our operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business.
Non-Operating Results and Tax
Net interest expense increased by $8.6 million to $42.7 million in the first quarter of 2021 from a year ago, primarily attributable to increased cash interest expense from the issuance of $650 million 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 was $83.9 million in the first quarter of 2021, which included a pre-tax loss of $74.0 million related to the early extinguishment of debt.
The income tax provision in the first quarter of 2021 was $23.8 million on income before income taxes of $116.4 million. This compares to an income tax provision of $17.2 million for the first quarter of 2020 on income before income taxes of $20.0 million.
Balance Sheet
At March 31, 2021, cash and cash equivalents totaled $2.02 billion, compared to $2.51 billion at December 31, 2020 and $1.55 billion on March 31, 2020. Total debt was $3.45 billion at March 31, 2021, compared to $3.47 billion at December 31, 2020. On February 25, 2021, the Company issued $500.0 million aggregate principal amount of 2.400% unsecured senior notes due 2031 and $500.0 million aggregate principal amount of 3.375% unsecured senior notes due 2041. The net proceeds were used towards the early extinguishment of our 4.000% unsecured senior notes due 2022, 3.750% unsecured senior notes due 2023 and half of our 4.200% unsecured senior notes due 2024.
Common Stock Dividend
During the first quarter of 2021, the Company declared and paid a common stock cash dividend of $0.270 per share, for a total of $109.1 million.
Interpublic Group 909 Third Avenue New York, NY 10022 212-704-1200 tel 212-704-1201 fax
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For further information regarding the Company's financial results as well as certain non-GAAP measures including organic net revenue change, adjusted EBITA, adjusted EBITA before restructuring charges and adjusted earnings per diluted share, and the reconciliations thereof, please refer to pages 8 to 10 and our Investor Presentation filed on Form 8-K herewith and available on our website, www.interpublic.com.
# # #
About Interpublic
Interpublic is values-based, data-fueled, and creatively-driven. Major global brands include Acxiom, Craft, FCB (Foote, Cone & Belding), FutureBrand, Golin, Huge, Initiative, Jack Morton, Kinesso, MAGNA, Matterkind, McCann, Mediahub, Momentum, MRM, MullenLowe Group, Octagon, R/GA, UM and Weber Shandwick. Other leading brands include Avrett Free Ginsberg, Campbell Ewald, Carmichael Lynch, Deutsch, Hill Holliday, ID Media and The Martin Agency. For more information, please visit www.interpublic.com.
# # #
Contact Information
Tom Cunningham
(Press)
(212) 704-1326
Jerry Leshne
(Analysts, Investors)
(212) 704-1439
Interpublic Group 909 Third Avenue New York, NY 10022 212-704-1200 tel 212-704-1201 fax
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Cautionary Statement
This release contains forward-looking statements. Statements in this release that are not historical facts, including statements about management’s beliefs and expectations, constitute 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 and our other filings with the Securities and Exchange Commission ("SEC"). Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.
Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, the following:
◦the effects of a challenging economy on the demand for our advertising and marketing services, on our clients’ financial condition and on our business or financial condition;
◦the impacts of the novel coronavirus (COVID-19) pandemic and the measures to contain its spread, including social distancing efforts and restrictions on businesses, social activities and travel, any failure to realize anticipated benefits from the rollout of COVID-19 vaccination campaigns and the resulting impact on the economy, our clients and demand for our services, which may precipitate or exacerbate other risks and uncertainties;
◦our ability to attract new clients and retain existing clients;
◦our ability to retain and attract key employees;
◦risks associated with assumptions we make in connection with our critical accounting estimates, including changes in assumptions associated with any effects of a weakened economy;
◦potential adverse effects if we are required to recognize impairment charges or other adverse accounting-related developments;
◦risks associated with the effects of global, national and regional economic and political conditions, including counterparty risks and fluctuations in economic growth rates, interest rates and currency exchange rates;
◦developments from changes in the regulatory and legal environment for advertising and marketing and communications services companies around the world, including laws and regulations related to data protection and consumer privacy; and
◦failure to fully realize the anticipated benefits of our 2020 restructuring actions and other cost-saving 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 and our other SEC filings.
Interpublic Group 909 Third Avenue New York, NY 10022 212-704-1200 tel 212-704-1201 fax
6
| THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED SUMMARY OF EARNINGS FIRST QUARTER REPORT 2021 AND 2020 (Amounts in Millions except Per Share Data) (UNAUDITED) | ||||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||
| 2021 | 2020 | Fav. (Unfav.) % Variance | ||||||||||||||||||
| Revenue: | ||||||||||||||||||||
| Net Revenue | $ | 2,027.7 | $ | 1,972.1 | 2.8 | % | ||||||||||||||
| Billable Expenses | 229.3 | 387.7 | (40.9) | % | ||||||||||||||||
| Total Revenue | 2,257.0 | 2,359.8 | (4.4) | % | ||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||
| Salaries and Related Expenses | 1,393.1 | 1,422.8 | 2.1 | % | ||||||||||||||||
| Office and Other Direct Expenses | 292.9 | 378.2 | 22.6 | % | ||||||||||||||||
| Billable Expenses | 229.3 | 387.7 | 40.9 | % | ||||||||||||||||
| Cost of Services | 1,915.3 | 2,188.7 | 12.5 | % | ||||||||||||||||
| Selling, General and Administrative Expenses | 28.2 | 22.4 | (25.9) | % | ||||||||||||||||
| Depreciation and Amortization | 69.2 | 72.8 | 4.9 | % | ||||||||||||||||
| Restructuring Charges | 1.3 | 0.0 | >(100)% | |||||||||||||||||
| Total Operating Expenses | 2,014.0 | 2,283.9 | 11.8 | % | ||||||||||||||||
| Operating Income | 243.0 | 75.9 | >100% | |||||||||||||||||
| 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 | ||||||||||||||||||
| Dividends Declared Per Common Share | $ | 0.270 | $ | 0.255 | ||||||||||||||||
Interpublic Group 909 Third Avenue New York, NY 10022 212-704-1200 tel 212-704-1201 fax
7
| THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES U.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS (Amounts in Millions except Per Share Data) (UNAUDITED) | |||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2021 | |||||||||||||||||||||||||||||||||||
| As Reported | Amortization of Acquired Intangibles | Restructuring Charges1 | Net Losses on Sales of Businesses2 | Loss on Early Extinguishment of Debt3 | Adjusted Results (Non-GAAP) | ||||||||||||||||||||||||||||||
Operating Income and Adjusted EBITA before Restructuring Charges4 | $ | 243.0 | $ | (21.6) | $ | (1.3) | $ | 265.9 | |||||||||||||||||||||||||||
Total (Expenses) and Other Income5 | (126.6) | $ | (12.5) | $ | (74.0) | (40.1) | |||||||||||||||||||||||||||||
| Income Before Income Taxes | 116.4 | (21.6) | (1.3) | (12.5) | (74.0) | 225.8 | |||||||||||||||||||||||||||||
| Provision for Income Taxes | 23.8 | 4.2 | 0.3 | 0.7 | 18.5 | 47.5 | |||||||||||||||||||||||||||||
| Equity in Net Loss of Unconsolidated Affiliates | (0.2) | (0.2) | |||||||||||||||||||||||||||||||||
| Net Income Attributable to Noncontrolling Interests | (0.7) | (0.7) | |||||||||||||||||||||||||||||||||
| Net Income Available to IPG Common Stockholders | $ | 91.7 | $ | (17.4) | $ | (1.0) | $ | (11.8) | $ | (55.5) | $ | 177.4 | |||||||||||||||||||||||
| Weighted-Average Number of Common Shares Outstanding - Basic | 391.5 | 391.5 | |||||||||||||||||||||||||||||||||
| Dilutive effect of stock options and restricted shares | 4.5 | 4.5 | |||||||||||||||||||||||||||||||||
| Weighted-Average Number of Common Shares Outstanding - Diluted | 396.0 | 396.0 | |||||||||||||||||||||||||||||||||
Earnings per Share Available to IPG Common Stockholders6: | |||||||||||||||||||||||||||||||||||
| Basic | $ | 0.23 | $ | (0.04) | $ | 0.00 | $ | (0.03) | $ | (0.14) | $ | 0.45 | |||||||||||||||||||||||
| Diluted | $ | 0.23 | $ | (0.04) | $ | 0.00 | $ | (0.03) | $ | (0.14) | $ | 0.45 | |||||||||||||||||||||||
1 Restructuring charges of $1.3 million in the first quarter of 2021 were related to adjustments to our restructuring actions taken in 2020, which were designed to reduce our operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business. | |||||||||||||||||||||||||||||||||||
2 Includes losses on complete dispositions of businesses and the classification of certain assets as held for sale. | |||||||||||||||||||||||||||||||||||
3 Consists of a loss related to the early extinguishment of our 4.000% unsecured senior notes due 2022, 3.750% unsecured senior notes due 2023 and half of our 4.200% unsecured senior notes due 2024. | |||||||||||||||||||||||||||||||||||
4 Refer to non-GAAP reconciliation of Adjusted EBITA before Restructuring Charges on page 9. | |||||||||||||||||||||||||||||||||||
5 Consists of non-operating expenses including interest expense, net and other expense, net. | |||||||||||||||||||||||||||||||||||
6 Earnings per share may not add due to rounding. | |||||||||||||||||||||||||||||||||||
| Note: Management believes the resulting comparisons provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. | |||||||||||||||||||||||||||||||||||
Interpublic Group 909 Third Avenue New York, NY 10022 212-704-1200 tel 212-704-1201 fax
8
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES U.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS (Amounts in Millions) (UNAUDITED) | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| Net Revenue | $ | 2,027.7 | $ | 1,972.1 | |||||||
| Non-GAAP Reconciliation: | |||||||||||
| Net Income Available to IPG Common Stockholders | $ | 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 | 243.0 | 75.9 | |||||||||
| Add Back: | |||||||||||
| Amortization of Acquired Intangibles | 21.6 | 21.3 | |||||||||
| Adjusted EBITA | $ | 264.6 | $ | 97.2 | |||||||
| Adjusted EBITA Margin on Net Revenue % | 13.0 | % | 4.9 | % | |||||||
Restructuring Charges1 | 1.3 | N/A | |||||||||
| Adjusted EBITA before Restructuring Charges | $ | 265.9 | N/A | ||||||||
| Adjusted EBITA before Restructuring Charges Margin on Net Revenue % | 13.1 | % | N/A | ||||||||
1 Restructuring charges of $1.3 in the first quarter of 2021 were related to adjustments to our restructuring actions taken in 2020, which were designed to reduce our operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business. | |||||||||||
Note: Management believes the resulting comparisons provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. | |||||||||||
Interpublic Group 909 Third Avenue New York, NY 10022 212-704-1200 tel 212-704-1201 fax
9
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES U.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS (Amounts in Millions except Per Share Data) (UNAUDITED) | |||||||||||||||||||||||
| Three Months Ended March 31, 2020 | |||||||||||||||||||||||
| As Reported | Amortization of Acquired Intangibles | Net Losses on Sales of Businesses1 | Adjusted Results (Non-GAAP) | ||||||||||||||||||||
Operating Income and Adjusted EBITA2 | $ | 75.9 | $ | (21.3) | $ | 97.2 | |||||||||||||||||
Total (Expenses) and Other Income3 | (55.9) | $ | (23.3) | (32.6) | |||||||||||||||||||
| Income Before Income Taxes | 20.0 | (21.3) | (23.3) | 64.6 | |||||||||||||||||||
| Provision for Income Taxes | 17.2 | 4.2 | 0.9 | 22.3 | |||||||||||||||||||
| Equity in Net Loss of Unconsolidated Affiliates | (0.2) | (0.2) | |||||||||||||||||||||
| Net Loss Attributable to Noncontrolling Interests | 2.1 | 2.1 | |||||||||||||||||||||
| Net Income Available to IPG Common Stockholders | $ | 4.7 | $ | (17.1) | $ | (22.4) | $ | 44.2 | |||||||||||||||
| Weighted-Average Number of Common Shares Outstanding - Basic | 387.7 | 387.7 | |||||||||||||||||||||
| Dilutive effect of stock options and restricted shares | 4.0 | 4.0 | |||||||||||||||||||||
| Weighted-Average Number of Common Shares Outstanding - Diluted | 391.7 | 391.7 | |||||||||||||||||||||
Earnings per Share Available to IPG Common Stockholders4: | |||||||||||||||||||||||
| Basic | $ | 0.01 | $ | (0.04) | $ | (0.06) | $ | 0.11 | |||||||||||||||
| Diluted | $ | 0.01 | $ | (0.04) | $ | (0.06) | $ | 0.11 | |||||||||||||||
1 Includes losses on complete dispositions of businesses and the classification of certain assets as held for sale. | |||||||||||||||||||||||
2 Refer to non-GAAP reconciliation of Adjusted EBITA on page 9. | |||||||||||||||||||||||
3 Consists of non-operating expenses including interest expense, net and other expense, net. | |||||||||||||||||||||||
4 Earnings per share may not add due to rounding. | |||||||||||||||||||||||
| Note: Management believes the resulting comparisons provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. | |||||||||||||||||||||||
Interpublic Group 909 Third Avenue New York, NY 10022 212-704-1200 tel 212-704-1201 fax
10
Interpublic Group April 28, 2021 FIRST QUARTER 2021 EARNINGS CONFERENCE CALL
2Interpublic Group of Companies, Inc. • Net revenue growth was +2.8% and organic growth of net revenue was +1.9% ◦ U.S. organic change was negative -0.2% ◦ International organic growth was +6.3% • Net income as reported was $91.7 million, and adjusted EBITA before restructuring charges was $265.9 million this year compared with $97.2 million a year ago • Adjusted EBITA before restructuring charges margin was 13.1% compared with 4.9% a year ago • Diluted EPS was $0.23 and was $0.45 as adjusted compared with $0.11 as adjusted a year ago • Refinanced $1.0 billion of senior notes maturing 2022-2024 with new maturities in 2031 and 2041 • Pleased with our strong start to the year and generally improving tone of business Overview — First Quarter 2021 Organic change of net revenue, adjusted EBITA before restructuring charges and adjusted diluted EPS are non-GAAP measures. Management believes these metrics provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. See our non-GAAP reconciliations of organic net revenue change on page 14 and adjusted results on pages 15, 16 and 17.
3Interpublic Group of Companies, Inc. Three Months Ended March 31, 2021 2020 Net Revenue $ 2,027.7 $ 1,972.1 Billable Expenses 229.3 387.7 Total Revenue 2,257.0 2,359.8 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 — Total Operating Expenses 2,014.0 2,283.9 Operating Income 243.0 75.9 Interest Expense, net (42.7) (34.1) Other Expense, net (1) (83.9) (21.8) Income Before Income Taxes 116.4 20.0 Provision for Income Taxes 23.8 17.2 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 Earnings per Share Available to IPG Common Stockholders - Diluted $ 0.23 $ 0.01 Weighted-Average Number of Common Shares Outstanding - Basic 391.5 387.7 Weighted-Average Number of Common Shares Outstanding - Diluted 396.0 391.7 Dividends Declared per Common Share $ 0.270 $ 0.255 ($ in Millions, except per share amounts) Operating Performance (1) Includes a loss of $74.0 on early extinguishment of debt for the three months ended March 31, 2021.
4Interpublic Group of Companies, Inc. Three Months Ended $ % Change March 31, 2020 $ 1,972.1 Foreign currency 29.3 1.5% Net acquisitions/(divestitures) (11.7) (0.6%) Organic 38.0 1.9% Total change 55.6 2.8% March 31, 2021 $ 2,027.7 Three Months Ended March 31, Change 2021 2020 Organic Total IAN $ 1,734.1 $ 1,664.5 3.2% 4.2% DXTRA $ 293.6 $ 307.6 (4.8%) (4.6%) See reconciliation of segment organic net revenue change on page 14. ($ in Millions) Net Revenue
5Interpublic Group of Companies, Inc. Organic Net Revenue Change by Region “All Other Markets” includes Canada, Africa and the Middle East. Circle proportions represent consolidated net revenue distribution. See reconciliation of organic net revenue change, including total net revenue change, on page 14. Three Months Ended March 31, 2021 -0.2% United States +3.5% United Kingdom +12.4% Continental Europe +5.0% Latin America +3.4% Asia Pacific +6.3% International +1.9% Worldwide +7.3% All Other Markets
6Interpublic Group of Companies, Inc. Depreciation & Amortization 2.3% 2.6% 2021 2020 Operating Expenses % of Net Revenue (1) Excludes amortization of acquired intangibles. Salaries & Related 68.7% 72.1% 2021 2020 Office & Other Direct 14.4% 19.2% 2021 2020 Selling, General & Administrative 1.4% 1.1% 2021 2020 Amortization of Acquired Intangibles 1.1% 1.1% 2021 2020 Restructuring Charges 0.1% 0.0% 2021 2020 Three Months Ended March 31 (1)
7Interpublic Group of Companies, Inc. Three Months Ended March 31, 2021 As Reported Amortization of Acquired Intangibles Restructuring Charges (1) Net Losses on Sales of Businesses Loss on Early Extinguishment of Debt (2) Adjusted Results (Non-GAAP) Operating Income and Adjusted EBITA before Restructuring Charges $ 243.0 $ (21.6) $ (1.3) $ 265.9 Total (Expenses) and Other Income (4) (126.6) $ (12.5) $ (74.0) (40.1) Income Before Income Taxes 116.4 (21.6) (1.3) (12.5) (74.0) 225.8 Provision for Income Taxes 23.8 4.2 0.3 0.7 18.5 47.5 Equity in Net Loss of Unconsolidated Affiliates (0.2) (0.2) Net Income Attributable to Noncontrolling Interests (0.7) (0.7) DILUTED EPS COMPONENTS: Net Income Available to IPG Common Stockholders $ 91.7 $ (17.4) $ (1.0) $ (11.8) $ (55.5) $ 177.4 Weighted-Average Number of Common Shares Outstanding 396.0 396.0 Earnings per Share Available to IPG Common Stockholders (5) $ 0.23 $ (0.04) $ 0.00 $ (0.03) $ (0.14) $ 0.45 ($ in Millions, except per share amounts) (1) Restructuring charges of $1.3 in the first quarter of 2021 were related to adjustments to our restructuring actions taken in 2020, which were designed to reduce our operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business. (2) Consists of a loss related to the early extinguishment of our 4.000% unsecured senior notes due 2022, 3.750% unsecured senior notes due 2023 and half of our 4.200% unsecured senior notes due 2024. (3) Refer to non-GAAP reconciliation of Adjusted EBITA before Restructuring Charges on page 16. (4) Consists of non-operating expenses including interest expense, net and other expense, net. (5) Earnings per share may not add due to rounding. See full non-GAAP reconciliation of adjusted diluted earnings per share on page 15. Adjusted Diluted Earnings Per Share (3)
8Interpublic Group of Companies, Inc. Three Months Ended March 31, 2021 2020 Net Income $ 92.4 $ 2.6 OPERATING ACTIVITIES: Depreciation & amortization 92.2 98.3 Loss on early extinguishment of debt 74.0 — Deferred taxes 18.2 (11.2) Net losses on sales of businesses 12.5 23.3 Other non-cash items 2.4 23.8 Change in working capital, net (496.9) (371.6) Change in other non-current assets & liabilities (44.6) (42.3) Net cash used in Operating Activities (249.8) (277.1) INVESTING ACTIVITIES: Capital expenditures (28.3) (44.6) Acquisitions, net of cash acquired — (1.3) Net proceeds from investments 28.8 1.8 Other investing activities (0.3) (16.7) Net cash provided by (used in) Investing Activities 0.2 (60.8) FINANCING ACTIVITIES: Early extinguishment of long-term debt (1,066.8) — Common stock dividends (109.1) (100.0) Tax payments for employee shares withheld (22.4) (19.1) Acquisition-related payments (3.4) (18.6) Distributions to noncontrolling interests (3.3) (5.6) Net (decrease) increase in short-term borrowings (2.9) 247.8 Proceeds from long-term debt 998.1 646.2 Exercise of stock options 8.0 0.0 Other financing activities (10.9) (6.3) Net cash (used in) provided by Financing Activities (212.7) 744.4 Currency effect (30.4) (46.7) Net (decrease) increase in cash, cash equivalents and restricted cash $ (492.7) $ 359.8 ($ in Millions) Cash Flow
9Interpublic Group of Companies, Inc. March 31, 2021 December 31, 2020 March 31, 2020 CURRENT ASSETS: Cash and cash equivalents $ 2,015.3 $ 2,509.0 $ 1,554.0 Accounts receivable, net 3,440.3 4,646.4 3,661.5 Accounts receivable, billable to clients 1,842.7 1,820.7 1,914.0 Assets held for sale 4.5 0.8 17.4 Other current assets 467.4 390.7 449.8 Total current assets $ 7,770.2 $ 9,367.6 $ 7,596.7 CURRENT LIABILITIES: Accounts payable $ 5,862.0 $ 7,269.7 $ 5,559.5 Accrued liabilities 608.9 832.4 539.5 Contract liabilities 689.1 657.8 571.5 Short-term borrowings 43.1 48.0 310.1 Current portion of long-term debt 502.8 502.5 502.5 Current portion of operating leases 268.8 268.5 257.4 Liabilities held for sale 9.8 1.6 55.4 Total current liabilities $ 7,984.5 $ 9,580.5 $ 7,795.9 ($ in Millions) Balance Sheet — Current Portion
10Interpublic Group of Companies, Inc. Short-Term Debt Senior Notes - Current $546 $250 $500 $650 $541 $500 $500 $500 $500 $46 $41 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2041 2048 Senior Notes 3.750% 4.650% 5.400%2.400%4.200% Total Debt = $3.5 billion ($ in Millions) Debt Maturity Schedule 4.750% (1) Senior Notes due on October 1, 2021 (2) On February 25, 2021, we issued a total of $500 in aggregate principal amount of 2.400% unsecured senior notes due March 1, 2031 and a total of $500 in aggregate principal amount of 3.375% unsecured senior notes due March 1, 2041. (2) New Senior Notes 3.375% (2) ... ... (1)
11Interpublic Group of Companies, Inc. Summary • A strong start to the year • Intense focus on continuing to navigate the impact of COVID-19 • Well-positioned to participate in the global economic recovery • Foundation for sustained growth ◦ Quality of our agency offerings ◦ Exceptional talent ◦ Data capabilities at scale ◦ Strong creative and innovative marketing & media solutions ◦ Integrated digital and digital specialists ◦ "Open architecture" agency collaboration • Effective expense management is an ongoing priority • Financial strength a continued source of value creation
12Interpublic Group of Companies, Inc. Appendix
13Interpublic Group of Companies, Inc. 2021 Q1 Q2 Q3 Q4 YTD 2021 Depreciation and amortization (1) $ 47.6 $ 47.6 Amortization of acquired intangibles 21.6 21.6 Amortization of restricted stock and other non-cash compensation 20.3 20.3 Net amortization of bond discounts and deferred financing costs 2.7 2.7 2020 Q1 Q2 Q3 Q4 FY 2020 Depreciation and amortization (1) $ 51.5 $ 51.3 $ 49.7 $ 52.2 $ 204.7 Amortization of acquired intangibles 21.3 21.8 21.3 21.5 85.9 Amortization of restricted stock and other non-cash compensation 23.2 12.6 20.6 10.6 67.0 Net amortization of bond discounts and deferred financing costs 2.3 3.0 3.3 2.8 11.4 ($ in Millions) (1) Excludes amortization of acquired intangibles. Depreciation and Amortization
14Interpublic Group of Companies, Inc. Components of Change Change Three Months Ended March 31, 2020 Foreign Currency Net Acquisitions / (Divestitures) Organic Three Months Ended March 31, 2021 Organic Total SEGMENT: IAN $ 1,664.5 $ 22.8 $ (6.0) $ 52.8 $ 1,734.1 3.2% 4.2% DXTRA 307.6 6.5 (5.7) (14.8) 293.6 (4.8%) (4.6%) Total $ 1,972.1 $ 29.3 $ (11.7) $ 38.0 $ 2,027.7 1.9% 2.8% GEOGRAPHIC: United States $ 1,320.0 $ — $ (7.4) $ (2.8) $ 1,309.8 (0.2%) (0.8%) International 652.1 29.3 (4.3) 40.8 717.9 6.3% 10.1% United Kingdom 165.7 11.6 0.9 5.8 184.0 3.5% 11.0% Continental Europe 146.0 13.2 (1.5) 18.1 175.8 12.4% 20.4% Asia Pacific 158.8 8.9 (4.0) 5.4 169.1 3.4% 6.5% Latin America 79.3 (8.2) 0.3 4.0 75.4 5.0% (4.9%) All Other Markets 102.3 3.8 0.0 7.5 113.6 7.3% 11.0% Worldwide $ 1,972.1 $ 29.3 $ (11.7) $ 38.0 $ 2,027.7 1.9% 2.8% ($ in Millions) Reconciliation of Organic Net Revenue
15Interpublic Group of Companies, Inc. Three Months Ended March 31, 2021 As Reported Amortization of Acquired Intangibles Restructuring Charges (2) Net Losses on Sales of Businesses Loss on Early Extinguishment of Debt (3) Adjusted Results (Non-GAAP) Operating Income and Adjusted EBITA before Restructuring Charges $ 243.0 $ (21.6) $ (1.3) $ 265.9 Total (Expenses) and Other Income (5) (126.6) $ (12.5) $ (74.0) (40.1) Income Before Income Taxes 116.4 (21.6) (1.3) (12.5) (74.0) 225.8 Provision for Income Taxes 23.8 4.2 0.3 0.7 18.5 47.5 Equity in Net Loss of Unconsolidated Affiliates (0.2) (0.2) Net Income Attributable to Noncontrolling Interests (0.7) (0.7) Net Income Available to IPG Common Stockholders $ 91.7 $ (17.4) $ (1.0) $ (11.8) $ (55.5) $ 177.4 Weighted-Average Number of Common Shares Outstanding - Basic 391.5 391.5 Dilutive effect of stock options and restricted shares 4.5 4.5 Weighted-Average Number of Common Shares Outstanding - Diluted 396.0 396.0 Earnings per Share Available to IPG Common Stockholders (6): Basic $ 0.23 $ (0.04) $ 0.00 $ (0.03) $ (0.14) $ 0.45 Diluted $ 0.23 $ (0.04) $ 0.00 $ (0.03) $ (0.14) $ 0.45 ($ in Millions, except per share amounts) (1) The table reconciles our reported results to our adjusted non-GAAP results. Management believes the resulting comparisons provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. (2) Restructuring charges of $1.3 in the first quarter of 2021 were related to adjustments to our restructuring actions taken in 2020, which were designed to reduce our operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business. (3) Consists of a loss related to the early extinguishment of our 4.000% unsecured senior notes due 2022, 3.750% unsecured senior notes due 2023 and half of our 4.200% unsecured senior notes due 2024. (4) Refer to non-GAAP reconciliation of Adjusted EBITA before Restructuring Charges on page 16. (5) Consists of non-operating expenses including interest expense, net and other expense, net. (6) Earnings per share may not add due to rounding. Reconciliation of Adjusted Results (1) (4)
16Interpublic Group of Companies, Inc. Reconciliation of Adjusted EBITA Three Months Ended March 31, 2021 2020 Net Revenue $ 2,027.7 $ 1,972.1 Non-GAAP Reconciliation: Net Income Available to IPG Common Stockholders $ 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 $ 243.0 $ 75.9 Add Back: Amortization of Acquired Intangibles 21.6 21.3 Adjusted EBITA $ 264.6 $ 97.2 Adjusted EBITA Margin on Net Revenue % 13.0 % 4.9 % Restructuring Charges 1.3 N/A Adjusted EBITA before Restructuring Charges $ 265.9 N/A Adjusted EBITA before Restructuring Charges Margin on Net Revenue % 13.1 % N/A (1) ($ in Millions) (1) The table reconciles our reported results to our adjusted non-GAAP results. Management believes the resulting comparisons provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. (2) Restructuring charges of $1.3 in the first quarter of 2021 were related to adjustments to our restructuring actions taken in 2020, which were designed to reduce our operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business. (2)
17Interpublic Group of Companies, Inc. Three Months Ended March 31, 2020 As Reported Amortization of Acquired Intangibles Net Losses on Sales of Businesses Adjusted Results (Non-GAAP) Operating Income and Adjusted EBITA (2) $ 75.9 $ (21.3) $ 97.2 Total (Expenses) and Other Income (3) (55.9) $ (23.3) (32.6) Income Before Income Taxes 20.0 (21.3) (23.3) 64.6 Provision for Income Taxes 17.2 4.2 0.9 22.3 Equity in Net Loss of Unconsolidated Affiliates (0.2) (0.2) Net Loss Attributable to Noncontrolling Interests 2.1 2.1 Net Income Available to IPG Common Stockholders $ 4.7 $ (17.1) $ (22.4) $ 44.2 Weighted-Average Number of Common Shares Outstanding - Basic 387.7 387.7 Dilutive effect of stock options and restricted shares 4.0 4.0 Weighted-Average Number of Common Shares Outstanding - Diluted 391.7 391.7 Earnings per Share Available to IPG Common Stockholders (4): Basic $ 0.01 $ (0.04) $ (0.06) $ 0.11 Diluted $ 0.01 $ (0.04) $ (0.06) $ 0.11 ($ in Millions, except per share amounts) (1) The table reconciles our reported results to our adjusted non-GAAP results. Management believes the resulting comparisons provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. (2) Refer to non-GAAP reconciliation of Adjusted EBITA on page 16. (3) Consists of non-operating expenses including interest expense, net and other expense, net. (4) Earnings per share may not add due to rounding. Reconciliation of Adjusted Results (1)
18Interpublic Group of Companies, Inc. Metrics Update
19Interpublic Group of Companies, Inc. Metrics Update CATEGORY: SALARIES & RELATED OFFICE & OTHER DIRECT FINANCIAL (% of net revenue) (% of net revenue) METRIC: Trailing Twelve Months Trailing Twelve Months Available Liquidity Base, Benefits & Tax Occupancy Expense Credit Facility Covenant Incentive Expense All Other Office and Other Direct Expenses Severance Expense Temporary Help
20Interpublic Group of Companies, Inc. 65.5% 66.3% 64.8% 3/31/2021 12/31/2020 3/31/2020 Salaries & Related Expenses % of Net Revenue, Trailing Twelve Months
21Interpublic Group of Companies, Inc. Base, Benefits & Tax 58.1% 61.7% Severance Expense 0.3% 1.2% Incentive Expense 4.3% 3.7% Temporary Help 4.6% 4.5% Salaries & Related Expenses (% of Net Revenue) “All Other Salaries & Related,” not shown, was 1.4% and 1.0% for the three months ended March 31, 2021 and 2020, respectively. Three Months Ended March 31 2021 2020
22Interpublic Group of Companies, Inc. 15.8% 17.0% 18.1% 3/31/2021 12/31/2020 3/31/2020 Office & Other Direct Expenses % of Net Revenue, Trailing Twelve Months
23Interpublic Group of Companies, Inc. Occupancy Expense 5.6% 6.7% All Other 8.8% 12.5% Office & Other Direct Expenses (% of Net Revenue) “All Other” primarily 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. Three Months Ended March 31 2021 2020
24Interpublic Group of Companies, Inc. $1,554 $1,085 $1,628 $2,509 $2,015 $1,492 $1,492 $1,491 $1,491 $1,490 $500 $500 $500 $500 3/31/2020 6/30/2020 9/30/2020 12/31/2020 3/31/2021 ($ in Millions) Available Liquidity Cash, Cash Equivalents + Available Committed Credit Facilities Available Committed Credit FacilityCash and Cash Equivalents 364-Day Credit Facility (1) In March 2020, we entered into an agreement for a 364-day revolving credit facility. (2) The 364-day revolving credit facility matured in March 2021. (1) (2)
25Interpublic Group of Companies, Inc. Financial Covenant Four Quarters Ended March 31, 2021 Leverage Ratio (not greater than) (2) (3) 4.25x Actual Leverage Ratio 2.52x CREDIT AGREEMENT EBITDA RECONCILIATION: Four Quarters Ended March 31, 2021 Net Income Available to IPG Common Stockholders $ 438.1 + Non-Operating Adjustments (4) 317.4 Operating Income $ 755.5 + Depreciation and Amortization 406.0 + Other Non-cash Charges Reducing Operating Income 209.7 Credit Agreement EBITDA (2): $ 1,371.2 ($ in Millions) Credit Facility Covenant (1) (1) The leverage ratio financial covenant applies to our committed corporate credit facility, amended and restated as of November 1, 2019 ( the "Credit Agreement"). (2) The 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. (3) On July 28, 2020, we entered into Amendment No. 1 to the Credit Agreement. The Amendment increased the maximum leverage ratio covenant to (i) 4.25x through the quarter ended June 30, 2021, and (ii) 3.50x thereafter. (4) Includes adjustments of the following items from our consolidated statement of operations: provision for (benefit of) income taxes, total (expenses) and other income, equity in net (loss) income of unconsolidated affiliates, and net (income) loss attributable to noncontrolling interests.
26Interpublic Group of Companies, Inc. This investor presentation contains forward-looking statements. Statements in this investor presentation that are not historical facts, including statements about management’s beliefs and expectations, constitute 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 and our other filings with the Securities and Exchange Commission ("SEC"). Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, the following: ▪ the effects of a challenging economy on the demand for our advertising and marketing services, on our clients’ financial condition and on our business or financial condition; ▪ the impacts of the novel coronavirus (COVID-19) pandemic and, the measures to contain its spread, including social distancing efforts and restrictions on businesses, social activities and travel, any failure to realize anticipated benefits from the rollout of COVID-19 vaccination campaigns and the resulting impact on the economy, our clients and demand for our services, which may precipitate or exacerbate other risks and uncertainties; ▪ our ability to attract new clients and retain existing clients; ▪ our ability to retain and attract key employees; ▪ risks associated with assumptions we make in connection with our critical accounting estimates, including changes in assumptions associated with any effects of a weakened economy; ▪ potential adverse effects if we are required to recognize impairment charges or other adverse accounting-related developments; ▪ risks associated with the effects of global, national and regional economic and political conditions, including counterparty risks and fluctuations in economic growth rates, interest rates and currency exchange rates; ▪ developments from changes in the regulatory and legal environment for advertising and marketing and communications services companies around the world, including laws and regulations related to data protection and consumer privacy; and ▪ failure to fully realize the anticipated benefits of our 2020 restructuring actions and other cost-saving 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 and our other SEC filings. Cautionary Statement