UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended June 30, 2023

or

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

Commission file number: 1-6686

THE INTERPUBLIC GROUP OF COMPANIES, INC.

(Exact name of registrant as specified in its charter)

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

909 Third Avenue, New York, New York 10022

(Address of principal executive offices) (Zip Code)

(212)704-1200

(Registrant’s telephone number, including area code)

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý    No ¨

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

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

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

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

The number of shares of the registrant’s common stock outstanding as of July 18, 2023 was 384,934,698.

INDEX

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022	3
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2023 and 2022	4
	Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022	6
	Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2023 and 2022	7
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	46
Item 4.	Controls and Procedures	46
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3.	Defaults Upon Senior Securities	47
Item 4.	Mine Safety Disclosures	47
Item 5.	Other Information	47
Item 6.	Exhibits	47
INDEX TO EXHIBITS		48
SIGNATURES		49

1

INFORMATION REGARDING FORWARD-LOOKING DISCLOSURE

This quarterly report on Form 10-Q contains forward-looking statements. Statements in this report that are not historical facts, including statements regarding goals, intentions, and expectations as to future plans, trends, events, or future results of operations or financial position, constitute forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “project,” “forecast,” “plan,” “intend,” “could,” “would,” “should,” “estimate,” “will likely result” or comparable terminology are intended to identify forward-looking statements. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results and outcomes to differ materially from those reflected in the forward-looking statements.

Actual results and outcomes could differ materially for a variety of reasons, including, among others:

•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;

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

•our ability to retain and attract key employees;

•the impacts of the COVID-19 pandemic, including potential developments like the emergence of more transmissible or virulent coronavirus variants, and associated mitigation measures, such as restrictions on businesses, social activities and travel, on the economy, our clients and demand for our services;

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

•the economic or business impact of military or political conflict in key markets;

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

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

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

•the impact on our operations of general or directed cybersecurity events;

Investors should carefully consider the foregoing factors and the other risks and uncertainties that may affect our business 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. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update or revise publicly any of them in light of new information, future events, or otherwise.

2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
REVENUE:
Revenue before billable expenses	$	2,328.5	$	2,375.5	$	4,505.4	$	4,602.7
Billable expenses	338.0		360.2		682.1		701.5
Total revenue	2,666.5		2,735.7		5,187.5		5,304.2
OPERATING EXPENSES:
Salaries and related expenses	1,598.6		1,590.2		3,175.9		3,154.6
Office and other direct expenses	340.5		349.8		670.8		673.2
Billable expenses	338.0		360.2		682.1		701.5
Cost of services	2,277.1		2,300.2		4,528.8		4,529.3
Selling, general and administrative expenses	13.9		19.4		26.8		38.7
Depreciation and amortization	66.5		67.1		133.0		134.9
Restructuring charges	(1.7)		(0.1)		(0.1)		6.5
Total operating expenses	2,355.8		2,386.6		4,688.5		4,709.4
OPERATING INCOME	310.7		349.1		499.0		594.8
EXPENSES AND OTHER INCOME:
Interest expense	(63.2)		(41.0)		(119.0)		(80.4)
Interest income	35.5		11.2		75.7		21.0
Other expense, net	(4.4)		(4.5)		(11.1)		(10.7)
Total (expenses) and other income	(32.1)		(34.3)		(54.4)		(70.1)
INCOME BEFORE INCOME TAXES	278.6		314.8		444.6		524.7
Provision for income taxes	10.6		83.7		44.4		132.8
INCOME OF CONSOLIDATED COMPANIES	268.0		231.1		400.2		391.9
Equity in net income of unconsolidated affiliates	0.7		0.7		0.6		0.8
NET INCOME	268.7		231.8		400.8		392.7
Net income attributable to non-controlling interests	(3.2)		(2.2)		(9.3)		(3.7)
NET INCOME AVAILABLE TO IPG COMMON STOCKHOLDERS	$	265.5	$	229.6	$	391.5	$	389.0
Earnings per share available to IPG common stockholders:
Basic	$	0.69	$	0.58	$	1.01	$	0.99
Diluted	$	0.68	$	0.58	$	1.01	$	0.98
Weighted-average number of common shares outstanding:
Basic	385.7		393.1		385.8		393.8
Diluted	387.7		396.8		387.6		397.5

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

3

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in Millions)

(Unaudited)

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
NET INCOME	$	268.7	$	231.8	$	400.8	$	392.7
OTHER COMPREHENSIVE INCOME
Foreign currency translation:
Foreign currency translation adjustments	9.2		(108.9)		31.5		(112.5)
Reclassification adjustments recognized in net income	0.5		1.8		0.5		1.8
	9.7		(107.1)		32.0		(110.7)
Derivative instruments:
Changes in fair value of derivative instruments	3.4		6.7		0.6		12.6
Recognition of previously unrealized net gain in net income	(0.2)		(0.4)		(0.6)		(0.7)
Income tax effect	(0.8)		(1.6)		0.0		(3.0)
	2.4		4.7		0.0		8.9
Defined benefit pension and other postretirement plans:
Net actuarial gain for the period	0.8		4.0		2.7		3.4
Amortization of unrecognized losses, transition obligation and prior service cost included in net income	1.7		1.6		3.4		3.3
Other	0.0		0.1		0.4		0.0
Income tax effect	(0.6)		(1.2)		(1.0)		(0.6)
	1.9		4.5		5.5		6.1
Other comprehensive income (loss), net of tax	14.0		(97.9)		37.5		(95.7)
TOTAL COMPREHENSIVE INCOME	282.7		133.9		438.3		297.0
Less: comprehensive income attributable to non-controlling interests	3.3		0.9		9.1		2.7
COMPREHENSIVE INCOME ATTRIBUTABLE TO IPG	$	279.4	$	133.0	$	429.2	$	294.3

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

4

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in Millions)

(Unaudited)

	June 30, 2023		December 31, 2022
ASSETS:
Cash and cash equivalents	$	1,628.1	$	2,545.3
Accounts receivable, net of allowance of $47.7 and $48.6, respectively	4,170.0		5,316.0
Accounts receivable, billable to clients	2,215.9		2,023.0
Marketable securities	102.8		1.1
Prepaid expenses	456.9		354.1
Assets held for sale	6.0		5.9
Other current assets	61.3		79.8
Total current assets	8,641.0		10,325.2
Property and equipment, net of accumulated depreciation and amortization of $1,234.8 and $1,244.8, respectively	629.6		637.4
Deferred income taxes	287.0		271.7
Goodwill	5,078.4		5,050.6
Other intangible assets	785.9		818.1
Operating lease right-of-use assets	1,240.7		1,277.5
Other non-current assets	447.4		464.5
TOTAL ASSETS	$	17,110.0	$	18,845.0
LIABILITIES:
Accounts payable	$	6,573.2	$	8,235.3
Accrued liabilities	562.3		787.1
Contract liabilities	690.5		680.0
Short-term borrowings	30.2		44.3
Current portion of long-term debt	250.3		0.6
Current portion of operating leases	243.5		235.9
Liabilities held for sale	5.3		—
Total current liabilities	8,355.3		9,983.2
Long-term debt	2,915.4		2,870.7
Non-current operating leases	1,316.9		1,380.1
Deferred compensation	215.6		294.1
Other non-current liabilities	515.5		572.6
TOTAL LIABILITIES	13,318.7		15,100.7
Redeemable non-controlling interests (see Note 5)	45.5		38.3
STOCKHOLDERS’ EQUITY:
Common stock	39.2		38.9
Additional paid-in capital	1,035.2		1,057.5
Retained earnings	3,782.8		3,632.1
Accumulated other comprehensive loss, net of tax	(922.7)		(960.4)
	3,934.5		3,768.1
Less: Treasury stock	(248.2)		(120.2)
Total IPG stockholders’ equity	3,686.3		3,647.9
Non-controlling interests	59.5		58.1
TOTAL STOCKHOLDERS’ EQUITY	3,745.8		3,706.0
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	17,110.0	$	18,845.0

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

5

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in Millions)

(Unaudited)

	Six months ended June 30,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	400.8	$	392.7
Adjustments to reconcile net income to net cash used in operating activities:
Deferred income tax	(29.0)		(0.1)
Net amortization of bond discounts and deferred financing costs	1.4		1.4
Provision for uncollectible receivables	3.2		(6.0)
Net losses on sales of businesses	6.8		7.1
Amortization of restricted stock and other non-cash compensation	23.9		25.3
Depreciation and amortization	133.0		134.9
Other	13.4		19.3
Changes in assets and liabilities, net of acquisitions and divestitures, providing (using) cash:
Accounts receivable	1,187.7		970.4
Accounts receivable, billable to clients	(164.5)		35.4
Prepaid expenses and other current assets	(72.3)		(112.9)
Accounts payable	(1,717.2)		(1,838.2)
Accrued liabilities	(214.8)		(302.3)
Contract liabilities	4.7		0.1
Other non-current assets and liabilities	(159.9)		(51.5)
Net cash used in operating activities	(582.8)		(724.4)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term marketable securities	(97.6)		—
Capital expenditures	(79.3)		(72.3)
Deconsolidation of a subsidiary	—		(20.4)
Acquisitions, net of cash acquired	(6.3)		—
Net proceeds from investments	21.7		2.6
Other investing activities	5.8		0.3
Net cash used in investing activities	(155.7)		(89.8)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock dividends	(242.6)		(232.1)
Repurchases of common stock	(128.0)		(147.9)
Tax payments for employee shares withheld	(58.0)		(39.6)
Net decrease in short-term borrowings	(11.0)		(12.1)
Acquisition-related payments	(10.1)		(6.0)
Distributions to non-controlling interests	(8.5)		(5.2)
Proceeds from long-term debt	296.3		0.0
Other financing activities	(2.6)		(0.2)
Net cash used in financing activities	(164.5)		(443.1)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash	(13.7)		(28.8)
Net decrease in cash, cash equivalents and restricted cash	(916.7)		(1,286.1)
Cash, cash equivalents and restricted cash at beginning of period	2,553.1		3,272.2
Cash, cash equivalents and restricted cash at end of period	$	1,636.4	$	1,986.1

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

6

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Amounts in Millions)

(Unaudited)

	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated  Other Comprehensive Loss, Net of Tax		Treasury Stock		Total IPG Stockholders’ Equity		Non-controlling Interests		Total Stockholders’ Equity
	Shares	Amount
Balance at March 31, 2023	391.8	$	39.1	$	1,016.7	$	3,638.1	$	(936.6)	$	(198.0)	$	3,559.3	$	60.7	$	3,620.0
Net income						265.5						265.5		3.2		268.7
Other comprehensive income								13.9				13.9		0.1		14.0
Reclassifications related to redeemable non-controlling interests														0.4		0.4
Distributions to non-controlling interests														(5.4)		(5.4)
Repurchase of common stock										(50.2)		(50.2)				(50.2)
Common stock dividends ($0.31 per share)						(120.8)						(120.8)				(120.8)
Stock-based compensation	0.2	0.0		18.6								18.6				18.6
Shares withheld for taxes	0.0	0.1		(0.1)								0.0				0.0
Other														0.5		0.5
Balance at June 30, 2023	392.0	$	39.2	$	1,035.2	$	3,782.8	$	(922.7)	$	(248.2)	$	3,686.3	$	59.5	$	3,745.8

	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated  Other Comprehensive Loss, Net of Tax		Treasury Stock		Total IPG Stockholders’ Equity		Non-controlling Interests		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2022	389.6	$	38.9	$	1,057.5	$	3,632.1	$	(960.4)	$	(120.2)	$	3,647.9	$	58.1	$	3,706.0
Net income						391.5						391.5		9.3		400.8
Other comprehensive income (loss)								37.7				37.7		(0.2)		37.5
Reclassifications related to redeemable non-controlling interests														0.1		0.1
Distributions to non-controlling interests														(8.5)		(8.5)
Repurchase of common stock										(128.0)		(128.0)				(128.0)
Common stock dividends ($0.62 per share)						(240.8)						(240.8)				(240.8)
Stock-based compensation	4.0	0.4		36.4								36.8				36.8
Shares withheld for taxes	(1.6)	(0.1)		(58.7)								(58.8)				(58.8)
Other														0.7		0.7
Balance at June 30, 2023	392.0	$	39.2	$	1,035.2	$	3,782.8	$	(922.7)	$	(248.2)	$	3,686.3	$	59.5	$	3,745.8

7

	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated  Other Comprehensive Loss, Net of Tax		Treasury Stock		Total IPG Stockholders’ Equity		Non-controlling Interests		Total Stockholders’ Equity
	Shares	Amount
Balance at March 31, 2022	396.1	$	39.7	$	1,206.0	$	3,196.7	$	(892.3)	$	(63.1)	$	3,487.0	$	61.8	$	3,548.8
Net income						229.6						229.6		2.2		231.8
Other comprehensive loss								(96.6)				(96.6)		(1.3)		(97.9)
Reclassifications related to redeemable non-controlling interests				(1.9)								(1.9)		0.9		(1.0)
Distributions to non-controlling interests														(2.1)		(2.1)
Change in redemption value of redeemable non-controlling interests						0.1						0.1				0.1
Repurchases of common stock										(84.8)		(84.8)				(84.8)
Common stock dividends ($0.29 per share)						(114.6)						(114.6)				(114.6)
Stock-based compensation	0.3	(0.1)		18.7								18.6				18.6
Shares withheld for taxes				(1.2)								(1.2)				(1.2)
Other				0.5								0.5		(9.2)		(8.7)
Balance at June 30, 2022	396.4	$	39.6	$	1,222.1	$	3,311.8	$	(988.9)	$	(147.9)	$	3,436.7	$	52.3	$	3,489.0

	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated  Other Comprehensive Loss, Net of Tax		Treasury Stock		Total IPG Stockholders’ Equity		Non-controlling Interests		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2021	394.3	$	39.3	$	1,226.6	$	3,154.3	$	(894.2)	$	0.0	$	3,526.0	$	63.2	$	3,589.2
Net income						389.0						389.0		3.7		392.7
Other comprehensive loss								(94.7)				(94.7)		(1.0)		(95.7)
Reclassifications related to redeemable non-controlling interests				(3.1)								(3.1)		0.8		(2.3)
Distributions to non-controlling interests														(5.2)		(5.2)
Change in redemption value of redeemable non-controlling interests						(1.3)						(1.3)				(1.3)
Repurchases of common stock										(147.9)		(147.9)				(147.9)
Common stock dividends ($0.58 per share)						(230.2)						(230.2)				(230.2)
Stock-based compensation	3.1	0.4		36.2								36.6				36.6
Shares withheld for taxes	(1.0)	(0.1)		(38.1)								(38.2)				(38.2)
Other				0.5								0.5		(9.2)		(8.7)
Balance at June 30, 2022	396.4	$	39.6	$	1,222.1	$	3,311.8	$	(988.9)	$	(147.9)	$	3,436.7	$	52.3	$	3,489.0

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

8

Notes to Consolidated Financial Statements

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 1:  Basis of Presentation

The unaudited Consolidated Financial Statements have been prepared by The Interpublic Group of Companies, Inc. and its subsidiaries (the “Company,” “IPG,” “we,” “us” or “our”) in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for reporting interim financial information on Form 10-Q. Accordingly, they do not include certain information and disclosures required for complete financial statements. The effects of heightened macroeconomic uncertainty have impacted and may continue to impact our results of operations, cash flows and financial position. The Company’s Consolidated Financial Statements presented herein reflect the latest estimates and assumptions made by management that affect the reported amounts of assets and liabilities and related disclosures as of the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting periods presented. The Company believes it has used reasonable estimates and assumptions to assess the fair values of goodwill, long-lived assets and indefinite-lived intangible assets; assessment of the annual effective tax rate; valuation of deferred income taxes and allowance for expected credit losses on future uncollectible accounts receivable.

Actual results could differ from these estimates and assumptions. The consolidated results for interim periods are not necessarily indicative of results for the full year and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”).

We conduct our business across three reportable segments described in Note 10. The three reportable segments are: Media, Data & Engagement Solutions ("MD&E"), Integrated Advertising & Creativity Led Solutions ("IA&C"), and Specialized Communications & Experiential Solutions ("SC&E").

Cost of services is comprised of the expenses of our revenue-producing reportable segments, MD&E, IA&C, and SC&E, including salaries and related expenses, office and other direct expenses and billable expenses, and includes an allocation of the centrally managed expenses from our "Corporate and Other" group. Office and other direct expenses include rent expense, professional fees, certain expenses incurred by our staff in servicing our clients and other costs directly attributable to client engagements.

Selling, general and administrative expenses are primarily the unallocated expenses from Corporate and Other, excluding depreciation and amortization.

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

Restructuring charges in 2023 consist of adjustments to the Company's restructuring actions taken in 2022 and 2020, and primarily relate to real estate actions which were designed to reduce our real estate footprint and to better align our cost structure with revenue, as discussed further in Note 5.

In the opinion of management, these unaudited Consolidated Financial Statements include all adjustments, consisting only of normal and recurring adjustments necessary for a fair statement of the information for each period contained therein. Certain reclassifications have been made to prior-period financial statements to conform to the current-period presentation, including the recast of certain prior period amounts to reflect the transfer of certain agencies between reportable segments.

9

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 2:  Revenue

Disaggregation of Revenue

We have three reportable segments as of June 30, 2023: MD&E, IA&C and SC&E, as further discussed in Note 10. MD&E principally generates revenue from providing global media and communications services, digital services and products, advertising and marketing technology, e‐commerce services, data management and analytics, strategic consulting, and digital brand experience. IA&C principally generates revenue from providing advertising, corporate and brand identity services, and strategic consulting. SC&E generates revenue from providing best-in-class global public relations and communications services, events, sports and entertainment marketing, and strategic consulting.

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

	Three months ended June 30,				Six months ended June 30,
Total revenue:	2023		2022		2023		2022
United States	$	1,737.2	$	1,777.1	$	3,420.4	$	3,427.5
International:
United Kingdom	216.3		219.2		412.1		451.3
Continental Europe	214.8		221.1		408.4		425.8
Asia Pacific	211.7		217.8		403.6		433.1
Latin America	110.4		110.0		201.1		204.4
Other	176.1		190.5		341.9		362.1
Total International	929.3		958.6		1,767.1		1,876.7
Total Consolidated	$	2,666.5	$	2,735.7	$	5,187.5	$	5,304.2

	Three months ended June 30,				Six months ended June 30,
Revenue before billable expenses:	2023		2022		2023		2022
United States	$	1,531.8	$	1,554.9	$	3,002.4	$	3,025.0
International:
United Kingdom	184.9		184.8		355.1		367.2
Continental Europe	192.5		199.8		356.2		379.1
Asia Pacific	177.3		187.8		336.5		362.4
Latin America	102.4		101.9		187.1		189.6
Other	139.6		146.3		268.1		279.4
Total International	796.7		820.6		1,503.0		1,577.7
Total Consolidated	$	2,328.5	$	2,375.5	$	4,505.4	$	4,602.7

10

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

MD&E	Three months ended June 30,				Six months ended June 30,
Total revenue:	2023		2022		2023		2022
United States	$	674.5	$	676.0	$	1,322.8	$	1,316.3
International	395.7		413.0		729.2		769.5
Total MD&E	$	1,070.2	$	1,089.0	$	2,052.0	$	2,085.8
Revenue before billable expenses:
United States	$	670.8	$	663.1	$	1,306.7	$	1,291.6
International	384.7		402.2		709.6		747.4
Total MD&E	$	1,055.5	$	1,065.3	$	2,016.3	$	2,039.0

IA&C	Three months ended June 30,				Six months ended June 30,
Total revenue:	2023		2022		2023		2022
United States	$	644.8	$	670.8	$	1,268.5	$	1,303.6
International	365.8		385.0		706.2		764.8
Total IA&C	$	1,010.6	$	1,055.8	$	1,974.7	$	2,068.4
Revenue before billable expenses:
United States	$	609.0	$	645.1	$	1,202.7	$	1,250.8
International	304.7		316.7		586.6		627.9
Total IA&C	$	913.7	$	961.8	$	1,789.3	$	1,878.7

SC&E	Three months ended June 30,				Six months ended June 30,
Total revenue:	2023		2022		2023		2022
United States	$	417.9	$	430.3	$	829.1	$	807.6
International	167.8		160.6		331.7		342.4
Total SC&E	$	585.7	$	590.9	$	1,160.8	$	1,150.0
Revenue before billable expenses:
United States	$	252.0	$	246.7	$	493.0	$	482.6
International	107.3		101.7		206.8		202.4
Total SC&E	$	359.3	$	348.4	$	699.8	$	685.0

Contract Balances

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

	June 30, 2023		December 31, 2022
Accounts receivable, net of allowance of $47.7 and $48.6, respectively	$	4,170.0	$	5,316.0
Accounts receivable, billable to clients	2,215.9		2,023.0
Contract assets	45.3		67.4
Contract liabilities (deferred revenue)	690.5		680.0

Contract assets are primarily comprised of contract incentives that are generally satisfied annually under the terms of our contracts and are transferred to accounts receivable when the right to payment becomes unconditional. Contract liabilities relate

11

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

to advance consideration received from customers under the terms of our contracts primarily related to reimbursements of third-party expenses, whether we act as principal or agent, and to a lesser extent, periodic retainer fees, both of which are generally recognized shortly after billing.

The majority of our contracts are for periods of one year or less with the exception of our data management contracts. For those contracts with a term of more than one year, we had approximately $862.3 of unsatisfied performance obligations as of June 30, 2023, which will be recognized as services are performed over the remaining contractual terms through 2028.

12

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 3:  Debt and Credit Arrangements

Long-Term Debt

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

	Effective Interest Rate	June 30, 2023		December 31, 2022
4.200% Senior Notes due 2024 (less unamortized discount and issuance costs of $0.0 and $0.2, respectively)	4.240%	$	249.8	$	249.7
4.650% Senior Notes due 2028 (less unamortized discount and issuance costs of $1.0 and $2.3, respectively)	4.780%	496.7		496.4
4.750% Senior Notes due 2030 (less unamortized discount and issuance costs of $2.8 and $4.1, respectively)	4.920%	643.1		642.6
2.400% Senior Notes due 2031 (less unamortized discount and issuance costs of $0.6 and $3.6, respectively)	2.512%	495.8		495.5
5.375% Senior Notes due 2033 (less unamortized discount and issuance costs of $3.7 and $3.3, respectively)	5.650%	293.0		—
3.375% Senior Notes due 2041 (less unamortized discount and issuance costs of $1.0 and $5.1, respectively)	3.448%	493.9		493.7
5.400% Senior Notes due 2048 (less unamortized discount and issuance costs of $2.6 and $4.7, respectively)	5.480%	492.7		492.6
Other notes payable and finance leases		0.7		0.8
Total long-term debt		3,165.7		2,871.3
Less: current portion		250.3		0.6
Long-term debt, excluding current portion		$	2,915.4	$	2,870.7

As of June 30, 2023 and December 31, 2022, the estimated fair value of the Company's long-term debt was $2,892.7 and $2,552.3, respectively. Refer to Note 11 for details.

Debt Transactions

5.375% Senior Notes due 2033

On June 8, 2023, we issued a total of $300.0 in aggregate principal amount of 5.375% unsecured senior notes (the "5.375% Senior Notes") due June 15, 2033. Upon issuance, the 5.375% Senior Notes were reflected in our unaudited Consolidated Balance Sheets at $292.9, net of discount of $3.8 and net of capitalized debt issuance costs, including commissions and offering expenses of $3.3, both of which will be amortized in interest expense through the maturity date using the effective interest method. Interest is payable semi-annually in arrears on June 15th and December 15th of each year, commencing on December 15, 2023.

Credit Agreement

We maintain a committed corporate credit facility, originally dated as of July 18, 2008, which has been amended and restated from time to time (the "Credit Agreement"). We use our Credit Agreement to increase our financial flexibility, to provide letters of credit primarily to support obligations of our subsidiaries and to support our commercial paper program. On November 1, 2021, we amended and restated the Credit Agreement. As amended, among other things, the maturity date of the Credit Agreement was extended to November 1, 2026 and the cost structure of the Credit Agreement was changed. The Credit Agreement continues to include a required leverage ratio of not more than 3.50 to 1.00, among other customary covenants, including limitations on our liens and the liens of our consolidated subsidiaries and limitations on the incurrence of subsidiary debt. At the election of the Company, the leverage ratio may be changed to not more than 4.00 to 1.00 for four consecutive quarters, beginning with the fiscal quarter in which there is an occurrence of one or more acquisitions with an aggregate purchase price of at least $200.0.

13

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

The Credit Agreement is a revolving facility, under which amounts borrowed by us or any of our subsidiaries designated under the Credit Agreement may be repaid and reborrowed, subject to an aggregate lending limit of $1,500.0, or the equivalent in other currencies. The Company has the ability to increase the commitments under the Credit Agreement from time to time by an additional amount of up to $250.0, provided the Company receives commitments for such increases and satisfies certain other conditions. The aggregate available amount of letters of credit outstanding may decrease or increase, subject to a sublimit of $50.0, or the equivalent in other currencies. Our obligations under the Credit Agreement are unsecured. As of June 30, 2023, there were no borrowings under the Credit Agreement; however, we had $9.6 of letters of credit under the Credit Agreement, which reduced our total availability to $1,490.4. We were in compliance with all of our covenants in the Credit Agreement as of June 30, 2023.

Uncommitted Lines of Credit

We also have uncommitted lines of credit with various banks that permit borrowings at variable interest rates and that are primarily used to fund working capital needs. We have guaranteed the repayment of some of these borrowings made by certain subsidiaries. If we lose access to these credit lines, we would have to provide funding directly to some of our operations. As of June 30, 2023, the Company had uncommitted lines of credit in an aggregate amount of $879.0, under which we had outstanding borrowings of $30.2 classified as short-term borrowings on our Consolidated Balance Sheet. The average amount outstanding during the second quarter of 2023 was $42.1 with a weighted-average interest rate of approximately 6.1%.

Commercial Paper

The Company is authorized to issue unsecured commercial paper up to a maximum aggregate amount outstanding at any time of $1,500.0. Borrowings under the program are supported by the Credit Agreement described above. Proceeds of the commercial paper are used for working capital and general corporate purposes, including the repayment of maturing indebtedness and other short-term liquidity needs. The maturities of the commercial paper vary but may not exceed 397 days from the date of issue. During the second quarter of 2023, there was no commercial paper activity and, as of June 30, 2023, there was no commercial paper outstanding.

14

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 4: Earnings Per Share

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

	Three Months Ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Net income available to IPG common stockholders	$	265.5	$	229.6	$	391.5	$	389.0
Weighted-average number of common shares outstanding - basic	385.7		393.1		385.8		393.8
Dilutive effect of stock options and restricted shares	2.0		3.7		1.8		3.7
Weighted-average number of common shares outstanding - diluted	387.7		396.8		387.6		397.5
Earnings per share available to IPG common stockholders:
Basic	$	0.69	$	0.58	$	1.01	$	0.99
Diluted	$	0.68	$	0.58	$	1.01	$	0.98

Note 5:  Supplementary Data

Restructuring Charges

	Three months ended June 30,				Six months ended June 30,
	20231		20222		20231		20222
Severance and termination costs	$	0.1	$	0.0	$	0.4	$	0.3
Lease impairment costs	(2.4)		0.0		(1.2)		5.3
Other restructuring costs	0.6		(0.1)		0.7		0.9
Total restructuring charges	$	(1.7)	$	(0.1)	$	(0.1)	$	6.5

1The amounts for the three and six months ended June 30, 2023 represent adjustments to the restructuring actions taken in 2022 and 2020.

2The amounts for the three and six months ended June 30, 2022 represent adjustments to the restructuring actions taken in 2020.

In the fourth quarter of 2022, the Company took real estate actions related to new real estate exits and lease terminations to further optimize the real estate footprint supporting our office-home hybrid service model in a post-pandemic economy.

A summary of the restructuring activities related to adjustments to the 2022 real estate actions for the six months ended June 30, 2023 is as follows:

	2022 Real Estate Actions
	Liability at December 31, 2022		Restructuring Expense		Non-Cash Items		Cash Payments		Liability at June 30, 2023
Lease impairment costs	$	0.0	$	(0.7)	$	(0.7)	$	0.0	$	0.0
Other restructuring costs	0.0		0.7		0.1		0.6		0.0
Total	$	0.0	$	0.0	$	(0.6)	$	0.6	$	0.0

15

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Beginning in the second quarter of 2020, the Company took restructuring actions to lower its operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business (the “2020 Plan”).

A summary of the restructuring activities related to adjustments to the the 2020 Plan for the six months ended June 30, 2023 is as follows:

	2020 Restructuring Plan
	Liability at December 31, 2022		Restructuring Expense		Non-Cash Items		Cash Payments		Liability at June 30, 2023
Severance and termination costs	$	2.3	$	0.4	$	0.0	$	1.6	$	1.1
Lease impairment costs	0.0		(0.5)		(0.5)		0.0		0.0
Total	$	2.3	$	(0.1)	$	(0.5)	$	1.6	$	1.1

16

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Accrued Liabilities

The following table presents the components of accrued liabilities.

	June 30, 2023		December 31, 2022
Salaries, benefits and related expenses	$	408.2	$	554.0
Interest	42.5		37.3
Income taxes payable	16.2		64.7
Office and related expenses	19.1		28.9
Acquisition obligations	8.6		18.7
Restructuring charges	0.8		2.2
Other	66.9		81.3
Total accrued liabilities	$	562.3	$	787.1

Other Expense, Net

Results of operations for the three and six months ended June 30, 2023 and 2022 include certain items that are not directly associated with our revenue-producing operations.

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Net losses on sales of businesses	$	(2.6)	$	(0.7)	$	(6.8)	$	(7.1)
Other	(1.8)		(3.8)		(4.3)		(3.6)
Total other expense, net	$	(4.4)	$	(4.5)	$	(11.1)	$	(10.7)

Net losses on sales of businesses – During the three and six months ended June 30, 2023 and 2022, the amounts recognized were related to sales of businesses and the classification of certain assets and liabilities, consisting primarily of cash, as held for sale within our MD&E, IA&C, and SC&E reportable segments. The businesses sold and held for sale primarily represent unprofitable, non-strategic agencies which are expected to be sold within the next twelve months.

Other - During the three months ended June 30, 2023, the amounts recognized were primarily related to pension and postretirement costs and a loss from the sale of an equity investment, partially offset by a gain on remeasurement of equity interests due to a change in ownership. During the six months ended June 30, 2023, the amounts recognized were primarily related to pension and postretirement costs and a reduction to the cash gain from the sale of an equity investment. During the three and six months ended June 30, 2022, the amounts recognized were primarily related to a non-cash loss related to the deconsolidation of a previously consolidated entity in which we maintain an equity interest.

Share Repurchase Programs

In February 2022, our Board of Directors (the "Board") reauthorized a program to repurchase, from time to time, up to $400.0 of our common stock.

On February 8, 2023, the Board authorized a share repurchase program to repurchase from time to time up to $350.0, excluding fees, of our common stock, which was in addition to any amounts remaining under the 2022 share repurchase program.

We may effect such repurchases through open market purchases, trading plans established in accordance with U.S. Securities and Exchange Commission ("SEC") rules, derivative transactions or other means. The timing and amount of repurchases in future periods will depend on market conditions and other funding requirements.

The following table presents our share repurchase activity under our share repurchase programs for the six months ended June 30, 2023 and 2022.

17

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

	Six months ended June 30,
	2023		2022
Number of shares repurchased	3.5		4.5
Aggregate cost, including fees	$	128.0	$	147.9
Average price per share, including fees	$	36.40	$	32.84

We fully utilized the 2022 share repurchase program during the second quarter of 2023. As of June 30, 2023, $302.2, excluding fees, remains available for repurchase under the 2023 share repurchase program. There are no expiration dates associated with the 2023 share repurchase program.

Redeemable Non-controlling Interests

Many of our acquisitions include provisions under which the non-controlling equity owners may require us to purchase additional interests in a subsidiary at their discretion. Redeemable non-controlling interests are adjusted quarterly, if necessary, to their estimated redemption value, but not less than their initial fair value. Any adjustments to the redemption value impact retained earnings or additional paid in capital, except for foreign currency translation adjustments.

The following table presents changes in our redeemable non-controlling interests.

	Six months ended June 30,
	2023		2022
Balance at beginning of period	$	38.3	$	15.6
Change in related non-controlling interests balance	(0.1)		(0.8)
Changes in redemption value of redeemable non-controlling interests:
Additions	7.4		3.1
Redemptions	(0.4)		(9.4)
Redemption value adjustments	0.3		0.9
Balance at end of period	$	45.5	$	9.4

Goodwill

Goodwill is the excess purchase price remaining from an acquisition after an allocation of purchase price has been made to identifiable assets acquired and liabilities assumed based on estimated fair values.

The Company transferred certain agencies between operating segments as of January 1, 2023 which resulted in certain changes to our reporting units and reportable segments. We have allocated goodwill to our reporting units using a relative fair value approach. In addition, we completed an assessment of any potential goodwill impairment for all impacted reporting units immediately prior and subsequent to the reallocation and determined that no impairment existed.

The following table sets forth details of changes in goodwill by reportable segment of the Company:

	MD&E		IA&C		SC&E		Total
Balance at December 31, 2022	$	2,484.6	$	1,881.6	$	684.4	$	5,050.6
Goodwill Reallocation	180.6		(180.6)		—		—
Balance at January 1, 2023	2,665.2		1,701.0		684.4		5,050.6
Acquisitions	0.5		7.9		1.0		9.4
Foreign Currency and Other	9.0		5.9		3.5		18.4
Balance at June 30, 2023	$	2,674.7	$	1,714.8	$	688.9	$	5,078.4

Note 6:  Income Taxes

18

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

For the three and six months ended June 30, 2023, our income tax expense was positively impacted by a benefit of $64.2 related to the the settlement of the 2017 and 2018 U.S. Federal income tax audits, as well as excess tax benefits on employee share-based payments, the majority of which were recognized in the first quarter due to the timing of the vesting of awards.

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

With respect to all tax years open to examination by U.S. federal, various state and local, and non-U.S. tax authorities, we currently anticipate that total unrecognized tax benefits will decrease by an amount between $15.0 and $25.0 in the next twelve months, a portion of which will affect our effective income tax rate, primarily as a result of the settlement of tax examinations and the lapsing of statutes of limitations.

We are effectively settled with respect to U.S. federal income tax audits through 2018. With limited exceptions, we are no longer subject to state and local income tax audits for years prior to 2015 or non-U.S. income tax audits for years prior to 2010.

Note 7:  Incentive Compensation Plans

We issue stock-based compensation and cash awards to our employees under various plans established by the Compensation and Leadership Talent Committee of the Board of Directors (the "Compensation Committee") and approved by our stockholders. We issued the following stock-based awards under the 2019 Performance Incentive Plan (the "2019 PIP") during the six months ended June 30, 2023.

	Awards	Weighted-average grant-date fair value (per award)
Restricted stock (units)	1.3	$	35.76
Performance-based stock (shares)	2.1	$	26.31
Total stock-based compensation awards	3.4

During the six months ended June 30, 2023, the Compensation Committee granted performance cash awards under the 2019 PIP and restricted cash awards under the 2020 Restricted Cash Plan with a total annual target value of $45.9 and $14.5, respectively. Cash awards are expensed over the vesting period, which is typically three years for performance cash awards and two years or three years for restricted cash awards.

Note 8:  Accumulated Other Comprehensive Loss, Net of Tax

The following tables present the changes in accumulated other comprehensive loss, net of tax, by component.

	Foreign Currency Translation Adjustments		Derivative Instruments		Defined Benefit Pension and Other Postretirement Plans		Total
Balance as of December 31, 2022	$	(815.8)	$	35.0	$	(179.6)	$	(960.4)
Other comprehensive income before reclassifications	31.7		0.6		2.9		35.2
Amount reclassified from accumulated other comprehensive loss, net of tax	0.5		(0.6)		2.6		2.5
Balance as of June 30, 2023	$	(783.6)	$	35.0	$	(174.1)	$	(922.7)

19

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

	Foreign Currency Translation Adjustments		Derivative Instruments		Defined Benefit Pension and Other Postretirement Plans		Total
Balance as of December 31, 2021	$	(723.2)	$	22.9	$	(193.9)	$	(894.2)
Other comprehensive (loss) income before reclassifications	(111.5)		9.4		3.5		(98.6)
Amount reclassified from accumulated other comprehensive loss, net of tax	1.8		(0.5)		2.6		3.9
Balance as of June 30, 2022	$	(832.9)	$	31.8	$	(187.8)	$	(988.9)

Amounts reclassified from accumulated other comprehensive loss, net of tax, for the three and six months ended June 30, 2023 and 2022 are as follows:

	Three months ended June 30,				Six months ended June 30,				Affected Line Item in the Consolidated Statements of Operations
	2023		2022		2023		2022
Foreign currency translation adjustments	$	0.5	$	1.8	$	0.5	$	1.8	Other expense, net
Net gain on derivative instruments	(0.2)		(0.4)		(0.6)		(0.7)		Other expense, net, Interest expense
Amortization of defined benefit pension and postretirement plan items	1.7		1.6		3.4		3.3		Other expense, net
Tax effect	(0.5)		(0.2)		(0.8)		(0.5)		Provision for income taxes
Total amount reclassified from accumulated other comprehensive loss, net of tax	$	1.5	$	2.8	$	2.5	$	3.9

20

Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 9:  Employee Benefits

We have a defined benefit pension plan that covers certain U.S. employees (the “Domestic Pension Plan”). We also have numerous funded and unfunded plans outside the U.S. The Interpublic Limited Pension Plan in the U.K. is a defined benefit plan and is our most material foreign pension plan in terms of the benefit obligation and plan assets. Some of our domestic and foreign subsidiaries provide postretirement health benefits and life insurance to eligible employees and, in certain cases, their dependents. The domestic postretirement benefit plan is our most material postretirement benefit plan in terms of the benefit obligation. Certain immaterial foreign pension and postretirement benefit plans have been excluded from the table below.

The components of net periodic cost for the Domestic Pension Plan, the significant foreign pension plans and the domestic postretirement benefit plan are listed below.

	Domestic Pension Plan				Foreign Pension Plans				Domestic Postretirement Benefit Plan
Three Months Ended June 30,	2023		2022		2023		2022		2023		2022
Service cost	$	0.0	$	0.0	$	0.8	$	1.2	$	0.0	$	0.0
Interest cost	1.0		0.7		3.8		2.3		0.3		0.1
Expected return on plan assets	(1.0)		(1.1)		(4.3)		(5.2)		0.0		0.0
Amortization of:
Prior service cost	0.0		0.0		0.1		0.1		0.0		0.0
Unrecognized actuarial losses	0.4		0.3		1.2		1.1		0.0		0.1
Net periodic cost	$	0.4	$	(0.1)	$	1.6	$	(0.5)	$	0.3	$	0.2

	Domestic Pension Plan		Foreign Pension Plans		Domestic Postretirement Benefit Plan
Six Months Ended June 30,	2023	2022	2023	2022	2023	2022
Service cost