GlobeNewswire Inc | Feb 10, 2021 07:00AM EST

February 10, 2021

New York, Feb. 10, 2021 (GLOBE NEWSWIRE) --

-- Fourth quarter reported net revenue of $2.28 billion, a decrease of 6.1% from a year ago, with organic net revenue decrease of 5.4%, due to challenging macroeconomic environment -- Fourth quarter organic net revenue decreases of 1.8% in the U.S. and 10.5% in International markets -- Fourth quarter diluted earnings per share of $0.28 as reported and $0.86 as adjusted -- Full year reported net revenue decrease of 6.5%, and organic net revenue decrease of 4.8% -- Full year reported net income was $351.1 million, including restructuring charges, and adjusted EBITA before restructuring charges was $1.09 billion -- Full year adjusted EBITA before restructuring charges margin on net revenue of 13.5% -- Full year diluted earnings per share of $0.89 and $1.73 as adjusted -- Management continued a program of structural operating cost reduction, resulting in restructuring charges of $413.8 million for the full year -- Board approves 6% increase in quarterly dividend

Philippe Krakowsky, CEO of IPG:

"Our focus remains on mitigating the impact of the health crisis on our clients, our business, and most important, our people. Their achievements have been remarkable, and I want to express our admiration for their resilience, and our appreciation for their ongoing commitment and effort.

As expected, our results this quarter continue to reflect the effect of the pandemic. Under challenging conditions, we reported a solid fourth quarter, especially in the U.S., and full year performance that once again should place us at the top of our sector. We continued to be disciplined with respect to expenses, proactive and strategic in our approach to structural cost actions, while simultaneously investing in our business during the year to accelerate areas of strongest opportunity and growth. That investment continues to result in differentiated capabilities and forward-looking offerings, which are in demand and driving success in the marketplace.

Heading into 2021, we are confident of the strength and competitiveness of our offerings, the talent within our group, and the value that our services can deliver by ensuring that clients' businesses and brands thrive in the digital economy. Our commitment to a strong balance sheet and financial flexibility remains a key priority, and the action by our Board announced today to increase our dividend further speaks to confidence in the forward trajectory of our company. While visibility into the full year remains challenging, due to exceptional macroeconomic circumstances, we fully expect to return to positive organic growth over the course of the year, and to post full-year 2021 growth consistent with the industry, on top of IPGs 2020 outperformance relative to our peer group. Along with that growth, we expect to continue to build on our long-term record of improving profitability and sustained value creation.

Summary

Revenue

-- Fourth quarter 2020 net revenue was $2.28 billion, compared to $2.43 billion in the fourth quarter of 2019. During the quarter, the organic net revenue decrease was 5.4%, while the effect of foreign currency translation was positive 0.1%, and the impact of net dispositions was negative 0.8%. Fourth quarter 2020 total revenue, which includes billable expenses, was $2.55 billion, compared to $2.90 billion in 2019. -- Full year 2020 net revenue was $8.06 billion, compared to $8.63 billion in 2019. During the year, the organic net revenue decrease was 4.8%, while the effect of foreign currency translation was negative 0.8%, and the impact of net dispositions was negative 0.9%. Full year 2020 total revenue, which includes billable expenses, was $9.06 billion, compared to $10.22 billion in 2019.

Operating Results

-- Operating income in the fourth quarter of 2020 was $223.4 million, including restructuring charges of $253.9 million, compared to $491.3 million in 2019. Adjusted EBITA before restructuring charges was $498.8 million in the fourth quarter of 2020, compared to adjusted EBITA of $512.7 million for the same period in 2019. Adjusted EBITA before restructuring charges margin on net revenue was 21.8%, compared to adjusted EBITA margin of 21.1% for the same period in 2019. -- Operating income for the full year 2020 was $588.4 million, including restructuring charges of $413.8 million, compared to $1.09 billion in 2019, including restructuring charges of $33.9 million. Adjusted EBITA before restructuring charges was $1.09 billion for the full year 2020, compared to $1.20 billion for the same period in 2019. Adjusted EBITA before restructuring charges margin on net revenue was 13.5% in 2020, compared to 14.0% in 2019. -- In the fourth quarter and full year of 2020, the Company recognized restructuring charges of $253.9 million and $413.8 million, respectively, of which $169.9 million and $265.6 million, respectively, were non-cash. We expect that our restructuring actions taken throughout this year will together result in annualized structural operating expense savings of approximately $160 million. -- Refer to reconciliations on page 13 for more detail.

Net Results

-- Income tax provision in thefourth quarterof2020was$58.1 millionon income before income taxes of$173.6 million. -- Fourth quarter 2020 net income available to IPG common stockholders was $112.3 million, resulting in earnings of $0.29 per basic share and $0.28 per diluted share, compared to $0.85 and $0.84, respectively, for the same period in 2019. Adjusted earnings were$0.86per diluted share as adjusted for after-tax amortization of acquired intangibles of$17.3 million, after-tax restructuring charges of $197.0 million, and an after-tax loss of$13.2 millionon the sales of businesses. This compares to adjusted earnings of$0.88 per diluted share a year ago. -- Income tax provision for the full year 2020was$8.0 millionon income before income taxes of$361.3 million, primarily driven by an income tax benefit of $136.2 million related to the finalization and settlement of the U.S. Federal income tax audit of the years 2006 through 2016. -- Full year 2020 net income available to IPG common stockholders was $351.1 million, resulting in earnings of $0.90 per basic share and $0.89 per diluted share, compared to $1.70 and $1.68, respectively, for the same period in 2019. Adjusted earnings were $1.73 per diluted share as adjusted for after-tax amortization of acquired intangibles of $69.0 million, after-tax restructuring charges of $320.7 million, an after-tax loss of $62.0 million on the sales of businesses, and the net positive impact of various discrete tax items of $122.6 million. This compares to adjusted earnings of $1.93 per diluted share a year ago. -- Refer to reconciliations on pages 11 to 15 for more detail.

Operating Results

RevenueDuring the fourth quarter of 2020, net revenue of $2.28 billion decreased 6.1% compared to the same period in 2019. During the quarter, the effect of foreign currency translation was positive 0.1%, the impact of net divestitures was negative 0.8%, and the resulting organic revenue decrease was 5.4%. Total revenue of $2.55 billion in the fourth quarter of 2020 decreased 12.1% compared to 2019.

For the full year 2020, net revenue of $8.06 billion decreased 6.5% compared to the same period in 2019. During the year, the effect of foreign currency translation was negative 0.8%, the impact of net divestitures was negative 0.9%, and the resulting organic revenue decrease was 4.8%. Total revenue of $9.06 billion decreased 11.4% during the full year 2020 compared to 2019.

Operating ExpensesFor the fourth quarter of 2020, total operating expenses, excluding billable expenses and including restructuring charges, increasedby 6.1%, and excluding restructuring charges decreased by 6.9%, compared to a net revenue decrease of 6.1% for the same period. For the full year 2020, total operating expenses, excluding billable expenses and including restructuring charges, decreasedby 0.8%, and excluding restructuring charges decreased by 5.9%, compared to a net revenue decrease of 6.5% from a year ago.

Staff cost ratio, which is total salaries and related expenses as a percentage of net revenue, was58.9% in the fourth quarter of2020, which remained flat compared to the same period in2019. For the full year 2020, staff cost ratio was66.3%,compared to64.6%in the same period in2019. During the fourth quarter of 2020, salaries and related expenses were $1.35 billion, a decrease of 6.0% compared to the same period in 2019. For the full year 2020, salaries and related expenses were $5.35 billion, a decrease of 4.0% compared to 2019. The decrease was primarily driven by reductions in base salaries, benefits and tax and lower incentive and temporary help expenses in response to the declines in net revenue, which were primarily due to the impact of the COVID-19 pandemic on economic conditions. The decreases were partially offset by increased severance expense.

For the fourth quarter and full year 2020, office and other direct expenses as a percentage of net revenue decreased to 16.0% and 17.0%, respectively, from 17.3% and 18.1%, respectively, for the same periods in 2019. During the fourth quarter of 2020, office and other direct expenses were $364.8 million, a decrease of 13.1% compared to the same period in 2019. For the full year 2020, office and other direct expenses were $1.37 billion, a decrease of 12.5% compared to 2019. The decrease in office and other direct expenses was mainly due to decreases in travel and entertainment expenses and new business and promotion expenses as well as lower occupancy expense and professional consulting fees, partially offset by an increase in bad debt expense.

For the fourth quarter of 2020, selling, general and administrative expenses as a percentage of net revenue was 1.0%, which remained flat compared to the same period in 2019. For the full year 2020 selling, general and administrative expenses as a percentage of net revenue decreased to 0.7%, from 1.1% in 2019. During the fourth quarter of 2020, selling, general and administrative expenses were $22.4 million, a decrease of8.6% compared to the same period in 2019. For the full year 2020, selling, general and administrative expenses were $58.8 million, a decrease of 37.3% compared to 2019.The decrease was primarily attributable to a decrease in employee insurance expense, resulting from fewer insurance claims as well as lower incentive expense and travel and entertainment expenses.

For the fourth quarter and full year 2020, depreciation and amortization as a percentage of net revenue was 3.2% and 3.6%, respectively, compared to 2.7% and 3.2%, respectively, for the same periods in 2019. During the fourth quarter of 2020, depreciation and amortization was $73.7 million, an increase of 12.7% compared to the same period in 2019. For the full year 2020, depreciation and amortization was $290.6 million, an increase of 4.3% compared to 2019.

During thefourth quarter and full year 2020, restructuring charges were $253.9 millionand $413.8 million, respectively,due to actions taken, with the objective of lowering our operating expenses structurally and permanently relative to revenue and accelerating the transformation of our business. The non-cash component of these charges was $169.9 million and $265.6 million for the fourth quarter and full year 2020, respectively. The majority of our charges reflect our actions to exit leased space totaling approximately 1.7 million square feet over the course of the year, in approximately 120 locations around the world.

Non-Operating Results and TaxNet interest expense increased by $1.3 million to $40.0 million in the fourth quarter of 2020 from a year ago. Full year 2020 net interest expense decreasedby$2.1 million to $162.7 million from a year ago.

Other expense, net was $9.8 million for the fourth quarter of 2020 and $64.4 million for the full year 2020, which primarily included losses on the sales of certain small, non-strategic businesses.

The income tax provision in the fourth quarter of 2020 was $58.1 million on income before income taxes of $173.6 million, compared to a provision of $86.1 million on income before income taxes of $427.8 million in the same period in 2019. The income tax provision for the full year 2020 was $8.0 million on income before income taxes of $361.3 million, compared to a provision of $204.8 million on income before income taxes of $878.3 million in 2019. The decrease in the provision for the full year 2020 is primarily due to an income tax benefit related to the finalization and settlement of the U.S. Federal income tax audit of the years 2006 through 2016.

The effective tax rate for the fourth quarter of 2020 was 33.5% compared to 20.1% for the same period in 2019. Excluding the impacts of amortization of acquired intangibles, restructuring charges, and losses on the sales of businesses, the effective tax rate for the fourth quarter of 2020 was 26.1% compared to 24.5% in 2019 as similarly adjusted. The effective tax rate for the full year 2020 was 2.2% compared to 23.3% for the same period in 2019. Excluding the impacts of amortization of acquired intangibles, restructuring charges, net losses on the sales of businesses, and the net positive impact of various discrete tax items, the effective tax rate for the full year 2020 was 26.5% compared to 25.8% in 2019 as similarly adjusted.

Balance SheetAt December 31, 2020, cash and cash equivalents totaled $2.51 billion, compared to $1.19 billion at December 31, 2019. Total debt was $3.47 billion at December 31, 2020, compared to $3.33 billion at December 31, 2019.

Common Stock DividendDuring the fourth quarter of 2020, the Company declared and paid a common stock cash dividend of$0.255per share, for a total of$99.5 million. During 2020, the Company paid four quarterly cash dividends of $0.255 per share on our common stock, which corresponded to aggregate dividend payments of $398.1 million for the full year.

On February 10, 2021, the Company also announced that its Board of Directors has declared a common stock cash dividend of $0.27 per share, payable quarterly to holders of record on an ongoing basis.

For further information regarding the Company's financial results as well as certain non-GAAP measures including organic net revenue growth, adjusted EBITA, adjusted EBITA before restructuring charges and adjusted earnings per diluted share, and the reconciliations thereof, please refer to pages 11 to 15 and our Investor Presentation filed on Form 8-K herewith andavailable on our website, www.interpublic.com.

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About InterpublicInterpublic 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.

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Contact InformationTom Cunningham (Press) (212) 704-1326

Jerry Leshne (Analysts, Investors) (212) 704-1439

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 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 other SEC filings.



THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIESCONSOLIDATED SUMMARY OF EARNINGSFOURTH QUARTER REPORT 2020 AND 2019(Amounts in Millions except Per Share Data)(UNAUDITED) Three Months Ended December 31, Fav. 2020 2019 (Unfav.) % VarianceRevenue: Net Revenue $ 2,284.4 $ 2,433.0 (6.1) % Billable Expenses 265.6 468.8 (43.3) %Total Revenue 2,550.0 2,901.8 (12.1) % Operating Expenses: Salaries and Related Expenses 1,346.2 1,432.1 6.0 % Office and Other Direct 364.8 419.7 13.1 % Expenses Billable Expenses 265.6 468.8 43.3 % Cost of Services 1,976.6 2,320.6 14.8 % Selling, General and 22.4 24.5 8.6 % Administrative Expenses Depreciation and Amortization 73.7 65.4 (12.7) % Restructuring Charges 253.9 0.0 >(100)%Total Operating Expenses 2,326.6 2,410.5 3.5 %Operating Income 223.4 491.3 (54.5) % Expenses and Other Income: Interest Expense (46.8) (48.2) Interest Income 6.8 9.5 Other Expense, Net (9.8) (24.8) Total (Expenses) and Other Income (49.8) (63.5) Income Before Income Taxes 173.6 427.8 Provision for Income Taxes 58.1 86.1 Income of Consolidated Companies 115.5 341.7 Equity in Net Income of 1.5 0.5 Unconsolidated AffiliatesNet Income 117.0 342.2 Net Income Attributable to (4.7) (13.3) Noncontrolling InterestsNet Income Available to IPG $ 112.3 $ 328.9 Common Stockholders Earnings Per Share Available to IPG Common Stockholders:Basic $ 0.29 $ 0.85 Diluted $ 0.28 $ 0.84 Weighted-Average Number of Common Shares Outstanding:Basic 390.5 386.9 Diluted 396.1 393.3 Dividends Declared Per Common $ 0.255 $ 0.235 Share

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIESCONSOLIDATED SUMMARY OF EARNINGSANNUAL REPORT 2020 AND 2019(Amounts in Millions except Per Share Data)(UNAUDITED) Twelve Months Ended December 31, Fav. 2020 2019 (Unfav.) % VarianceRevenue: Net Revenue $ 8,064.5 $ 8,625.1 (6.5) % Billable Expenses 996.5 1,596.2 (37.6) %Total Revenue 9,061.0 10,221.3 (11.4) % Operating Expenses: Salaries and Related Expenses 5,345.0 5,568.8 4.0 % Office and Other Direct 1,367.9 1,564.1 12.5 % Expenses Billable Expenses 996.5 1,596.2 37.6 % Cost of Services 7,709.4 8,729.1 11.7 % Selling, General and 58.8 93.8 37.3 % Administrative Expenses Depreciation and Amortization 290.6 278.5 (4.3) % Restructuring Charges 413.8 33.9 >(100)%Total Operating Expenses 8,472.6 9,135.3 7.3 %Operating Income 588.4 1,086.0 (45.8) % Expenses and Other Income: Interest Expense (192.2) (199.3) Interest Income 29.5 34.5 Other Expense, Net (64.4) (42.9) Total (Expenses) and Other Income (227.1) (207.7) Income Before Income Taxes 361.3 878.3 Provision for Income Taxes 8.0 204.8 Income of Consolidated Companies 353.3 673.5 Equity in Net Income of 0.9 0.4 Unconsolidated AffiliatesNet Income 354.2 673.9 Net Income Attributable to (3.1) (17.9) Noncontrolling InterestsNet Income Attributable to IPG $ 351.1 $ 656.0 Common Stockholders Earnings Per Share Available to IPG Common Stockholders:Basic $ 0.90 $ 1.70 Diluted $ 0.89 $ 1.68 Weighted-Average Number of Common Shares Outstanding:Basic 389.4 386.1 Diluted 393.2 391.2 Dividends Declared Per Common $ 1.020 $ 0.940 Share

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIESU.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS(Amounts in Millions except Per Share Data)(UNAUDITED)

Three Months Ended December 31, 2020 Amortization Net Losses Adjusted As Reported of Acquired Restructuring on Sales of Results Intangibles Charges Businesses (Non-GAAP) ^1Operating Incomeand AdjustedEBITA before $ 223.4 $ (21.5) $ (253.9) $ 498.8 RestructuringCharges ^2 Total (Expenses)and Other Income (49.8) $ (15.2) (34.6) ^3Income Before 173.6 (21.5) (253.9) (15.2) 464.2 Income Taxes

Provision for 58.1 4.2 56.9 2.0 121.2 Income TaxesEffective Tax 33.5 % 26.1 %RateEquity in NetIncome of 1.5 1.5 UnconsolidatedAffiliatesNet IncomeAttributable to (4.7) (4.7) NoncontrollingInterestsNet IncomeAvailable to IPG $ 112.3 $ (17.3) $ (197.0) $ (13.2) $ 339.8 CommonStockholders Weighted-AverageNumber of CommonShares 390.5 390.5 Outstanding -BasicDilutive effectof stock options 5.6 5.6 and restrictedsharesWeighted-AverageNumber of CommonShares 396.1 396.1 Outstanding -Diluted Earnings PerShare Available to IPG CommonStockholders ^4: Basic $ 0.29 $ (0.04) $ (0.50) $ (0.03) $ 0.87 Diluted $ 0.28 $ (0.04) $ (0.50) $ (0.03) $ 0.86 ^1 Includes losses on complete dispositions of businesses and theclassification of certain assets as held for sale.^2 Refer to non-GAAP reconciliation of Adjusted EBITA before RestructuringCharges on page 13.^3 Consists of non-operating expenses including interest expense, net andother expense, net.^4 Earnings per share may not add due to rounding.Note: Management believes the resulting comparisons provide useful supplementaldata that, while not a substitute for GAAP measures, allow for greatertransparency in the review of our financial and operational performance.

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIESU.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS(Amounts in Millions except Per Share Data)(UNAUDITED) Twelve Months Ended December 31, 2020 Amortization Net Losses Net Impact Adjusted As Reported of Acquired Restructuring on Sales of of Various Results Intangibles Charges Businesses Discrete Tax (Non-GAAP) ^1 Items ^2Operating Incomeand AdjustedEBITA before $ 588.4 $ (85.9) $ (413.8) $ 1,088.1 RestructuringCharges ^3 Total (Expenses)and Other Income (227.1) $ (67.0) (160.1) ^4Income Before 361.3 (85.9) (413.8) (67.0) 928.0 Income TaxesProvision for 8.0 16.9 93.1 5.0 $ 122.6 245.6 Income TaxesEffective Tax 2.2 % 26.5 %RateEquity in NetIncome of 0.9 0.9 UnconsolidatedAffiliatesNet IncomeAttributable to (3.1) (3.1) NoncontrollingInterestsNet IncomeAvailable to IPG $ 351.1 $ (69.0) $ (320.7) $ (62.0) $ 122.6 $ 680.2 CommonStockholders Weighted-AverageNumber of CommonShares 389.4 389.4 Outstanding -BasicDilutive effectof stock options 3.8 3.8 and restrictedsharesWeighted-AverageNumber of CommonShares 393.2 393.2 Outstanding -Diluted Earnings PerShare Available to IPG CommonStockholders ^5: Basic $ 0.90 $ (0.18) $ (0.82) $ (0.16) $ 0.31 $ 1.75 Diluted $ 0.89 $ (0.18) $ (0.82) $ (0.16) $ 0.31 $ 1.73 ^1 Includes losses on complete dispositions of businesses and theclassification of certain assets as held for sale.^2 Includes a tax benefit of $136.2 related to the finalization and settlementof the U.S. Federal income tax audit for years 2006 through 2016 partiallyoffset by $13.6 of tax expense related to the estimated costs associated withour change in our APB 23 assertion for certain foreign subsidiaries.^3 Refer to non-GAAP reconciliation of Adjusted EBITA before RestructuringCharges on page 13.^4 Consists of non-operating expenses including interest expense, net andother expense, net.^5 Earnings per share may not add due to rounding.Note: Management believes the resulting comparisons provide useful supplementaldata that, while not a substitute for GAAP measures, allow for greatertransparency in the review of our financial and operational performance.

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIESU.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS(Amounts in Millions)(UNAUDITED)

Three Months Ended December 31, Twelve Months Ended December 31, 2020 2019 2020 2019 Net Revenue $ 2,284.4 $ 2,433.0 $ 8,064.5 $ 8,625.1 Non-GAAP Reconciliation:Net IncomeAvailable to $ 112.3 $ 328.9 $ 351.1 $ 656.0 IPG CommonStockholders Add Back: Provision for 58.1 86.1 8.0 204.8 Income TaxesSubtract: Total(Expenses) and (49.8) (63.5) (227.1) (207.7) Other IncomeEquity in NetIncome of 1.5 0.5 0.9 0.4 UnconsolidatedAffiliatesNet IncomeAttributable to (4.7) (13.3) (3.1) (17.9) NoncontrollingInterestsOperating 223.4 491.3 588.4 1,086.0 Income Add Back: Amortization ofAcquired 21.5 21.4 85.9 86.0 Intangibles Adjusted EBITA 244.9 512.7 674.3 1,172.0 Adjusted EBITAMargin on Net 10.7 % 21.1 % 8.4 % 13.6 %Revenue %Restructuring 253.9 N/A 413.8 31.8 Charges ^1 Adjusted EBITAbefore $ 498.8 N/A $ 1,088.1 $ 1,203.8 RestructuringChargesAdjusted EBITAbeforeRestructuring 21.8 % N/A 13.5 % 14.0 %Charges Marginon Net Revenue% ^1 In the second, third and fourth quarters of 2020, the Company tookrestructuring actions to lower our operating expenses structurally andpermanently relative to revenue and to accelerate the transformation of ourbusiness. The adjustment of $31.8 for restructuring charges for the nine monthsended September 30, 2019 only includes restructuring charges during the firstquarter of 2019, which relate to a cost initiative to better align our coststructure with our revenue due to client losses occurring in 2018.Note: Management believes the resulting comparisons provide useful supplementaldata that, while not a substitute for GAAP measures, allow for greatertransparency in the review of our financial and operational performance.

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIESU.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS(Amounts in Millions except Per Share Data)(UNAUDITED)

Three Months Ended December 31, 2019 Amortization Net Losses Tax Adjusted As Reported of Acquired on Sales of Valuation Results Intangibles Businesses Allowance (Non-GAAP) ^1 ReversalsOperating Incomeand Adjusted $ 491.3 $ (21.4) $ 512.7 EBITA ^2 Total (Expenses)and Other Income (63.5) $ (24.0) (39.5) ^3Income Before 427.8 (21.4) (24.0) 473.2 Income TaxesProvision for 86.1 4.2 0.4 $ 25.3 116.0 Income TaxesEffective Tax 20.1 % 24.5 %RateEquity in NetIncome of 0.5 0.5 UnconsolidatedAffiliatesNet IncomeAttributable to (13.3) (13.3) NoncontrollingInterestsNet IncomeAvailable to IPG $ 328.9 $ (17.2) $ (23.6) $ 25.3 $ 344.4 CommonStockholders Weighted-AverageNumber of CommonShares 386.9 386.9 Outstanding -BasicDilutive effectof stock options 6.4 6.4 and restrictedsharesWeighted-AverageNumber of CommonShares 393.3 393.3 Outstanding -Diluted Earnings PerShare Available to IPG CommonStockholders ^4: Basic $ 0.85 $ (0.04) $ (0.06) $ 0.07 $ 0.89 Diluted $ 0.84 $ (0.04) $ (0.06) $ 0.06 $ 0.88 ^1 Includes losses on complete dispositions of businesses and theclassification of certain assets as held for sale.^2 Refer to non-GAAP reconciliation of Adjusted EBITA on page 13.^3 Consists of non-operating expenses including interest expense, net andother expense, net.^4 Earnings per share may not add due to rounding.Note: Management believes the resulting comparisons provide useful supplementaldata that, while not a substitute for GAAP measures, allow for greatertransparency in the review of our financial and operational performance.

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIESU.S. GAAP RECONCILIATION OF NON-GAAP ADJUSTED RESULTS(Amounts in Millions except Per Share Data)(UNAUDITED)

Twelve Months Ended December 31, 2019 Net Losses Net Impact Amortization Q1 2019 on Sales of of Various Adjusted As Reported of Acquired Restructuring Businesses Discrete Results Intangibles Charges ^1 Tax Items ^ (Non-GAAP) 2Operating Incomeand AdjustedEBITA before $ 1,086.0 $ (86.0) $ (31.8) $ 1,203.8 RestructuringCharges ^3 Total (Expenses)and Other Income (207.7) $ (46.3) (161.4) ^4Income Before 878.3 (86.0) (31.8) (46.3) 1,042.4 Income TaxesProvision for 204.8 16.9 7.6 0.4 $ 39.2 268.9 Income TaxesEffective Tax 23.3 % 25.8 %RateEquity in NetIncome of 0.4 0.4 UnconsolidatedAffiliatesNet IncomeAttributable to (17.9) (17.9) NoncontrollingInterestsNet IncomeAvailable to IPG $ 656.0 $ (69.1) $ (24.2) $ (45.9) $ 39.2 $ 756.0 CommonStockholders Weighted-AverageNumber of CommonShares 386.1 386.1 Outstanding -BasicDilutive effectof stock options 5.1 5.1 and restrictedsharesWeighted-AverageNumber of CommonShares 391.2 391.2 Outstanding -Diluted Earnings PerShare Available to IPG CommonStockholders ^5: Basic $ 1.70 $ (0.18) $ (0.06) $ (0.12) $ 0.10 $ 1.96 Diluted $ 1.68 $ (0.18) $ (0.06) $ (0.12) $ 0.10 $ 1.93 ^1 Includes losses on complete dispositions of businesses and theclassification of certain assets as held for sale.^2 Includes $13.9 related to the settlement of certain tax positions in thesecond quarter of 2019 and $25.3 related to tax valuation allowance reversalsin the fourth quarter of 2019.^3 Refer to non-GAAP reconciliation of Adjusted EBITA before RestructuringCharges on page 13.^4 Consists of non-operating expenses including interest expense, net andother expense, net.^5 Earnings per share may not add due to rounding.Note: Management believes the resulting comparisons provide useful supplementaldata that, while not a substitute for GAAP measures, allow for greatertransparency in the review of our financial and operational performance.