SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 25, 2000
The Interpublic Group of Companies, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-6686 13-1024020
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
1271 Avenue of the Americas, New York, New York 10020
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
212-399-8000
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events.
Two press releases issued by The Interpublic Group of Companies, Inc.
("Interpublic") with respect to its year-end and fourth quarter results for 1999
are attached as Exhibits 99.1 and 99.2 and are incorporated herein by reference.
This document contains forward-looking statements. Statements that are not
historical facts, including statements about Interpublic's beliefs and
expectations, are forward-looking statements. These statements are based on
current plans, estimates and projections, and therefore you should not place
undue reliance on them. Forward-looking statements speak only as of the date
they are made, and Interpublic undertakes no obligation to update publicly any
of them in light of new information or future events.
Forward-looking statements involve inherent risks and uncertainties.
Interpublic cautions you that 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, those associated with
the effect of national and regional economic conditions, the ability of
Interpublic to attract new clients and retain existing clients, the financial
success of the clients of Interpublic, and developments from changes in the
regulatory and legal environment for advertising companies around the world.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Exhibits.
99.1 Press Release dated February 23, 2000.
99.2 Press Release dated February 24, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE INTERPUBLIC GROUP OF
COMPANIES, INC.
Date: February 25, 2000 By: /s/ Nicholas J. Camera
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Nicholas J. Camera
VICE PRESIDENT, GENERAL
COUNSEL AND SECRETARY
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EXHIBIT INDEX
Exhibits.
99.1 Press Release dated February 23, 2000.
99.2 Press Release dated February 24, 2000.
[GRAPHIC OMITTED]
THE INTERPUBLIC GROUP OF COMPANIES, INC.
WORLDWIDE ADVERTISING AND MARKETING COMMUNICATIONS
1271 Avenue of the Americas, New York, N.Y. 10020
Exhibit 99.1
FOR IMMEDIATE RELEASE
INTERPUBLIC GROUP REPORTS
RESULTS FOR YEAR-END AND FOURTH QUARTER 1999
[All discussions exclude the impact of restructuring and other merger related
charges taken in the fourth quarter of 1999. The restructuring and its financial
impact are discussed in a separate section of this release.]
New York, February 23, 2000 (NYSE:IPG) -- Philip H. Geier, Jr., Chairman of the
Board and Chief Executive Officer, reported that The Interpublic Group of
Companies, Inc. had net income of $373.4 million for the year ended December 31,
1999, compared to $309.9 million for the prior year, an increase of
approximately 21% over the prior year.
On a diluted basis, earnings per share for the year ended 1999 was $1.29 versus
$1.10 in 1998, an increase of more than 17% over the prior year.
Gross income for the full year of 1999 was approximately $4.6 billion, an
increase of $593 million or nearly 15% over the 1998 gross income. Gross income
from domestic operations increased approximately 19%, and gross income from
international operations increased over 11%. Gross income from international
operations would have increased 16% except for the strengthening of the U.S.
dollar against major currencies. Exclusive of acquisitions, worldwide gross
income on a constant dollar basis increased over 9% for the year.
Net income for the fourth quarter of 1999 was $130.1 million compared to net
income for the fourth quarter of 1998 of $106.7 million, an increase of 22% over
the prior year quarter.
On a diluted basis, earnings per share was $.44 in the fourth quarter of 1999
versus $.38 in the fourth quarter of 1998, an increase of nearly 16% over the
prior year quarter.
Gross income for the fourth quarter of 1999 was $1.5 billion, a 22% increase
over the gross income for the fourth quarter of 1998. Gross income from domestic
operations increased approximately 26%, and gross income from international
operations increased 19%. Gross income from international operations would have
increased 26% except for the strengthening of the U.S. dollar against major
currencies. Exclusive of acquisitions, worldwide gross income on a constant
dollar basis increased nearly 12% for the fourth quarter.
Revenue from other marketing communications services comprised approximately 40%
of total worldwide revenue in 1999, compared to 33% in 1998. For the fourth
quarter of 1999, these revenues comprised 42% of the worldwide total, compared
to 33% in 1998.
Restructuring and other Merger Related Charges
In the fourth quarter of 1999, the Company announced the merger of Lowe &
Partners Worldwide and Ammirati Puris Lintas to form an agency network called
Lowe Lintas & Partners Worldwide. The Company began execution of a comprehensive
restructuring plan which includes headcount reductions, consolidation of real
estate and sale or disposition of certain investments. The Company recognized
$84.2 million of pre-tax restructuring charges in 1999 ($51.4 million after
tax), and expects to recognize additional pre-tax charges in 2000 of
approximately $90 - $105 million.
* * * * * * * * * * * * * * * * * * * *
Interpublic's agency systems gained net new business during 1999 of
approximately $1.8 billion, an increase of $379 million or 26% over the net new
business gains of 1998. During the fourth quarter of 1999, Interpublic's agency
systems gained net new business of approximately $295 million compared with the
fourth quarter of 1998 net new business gains of $253 million, an increase of
17%.
Continuing cost containment efforts kept costs at appropriate levels. Mr. Geier
noted that the Company's financial condition continues to be excellent, with a
strong balance sheet and a solid cash position.
The Interpublic Group of Companies, Inc., one of the largest advertising and
marketing communications organizations in the world, is comprised of
McCann-Erickson WorldGroup, The Lowe Group, DraftWorldwide, Initiative Media
Worldwide, International Public Relations, Octagon, Zentropy Partners, Allied
Communications Group, and other related companies.
The shares of The Interpublic Group of Companies, Inc. are listed on the New
York Stock Exchange (IPG); more information about Interpublic is available on
the Company's Web site at
www.interpublic.com.
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# # # #
Contact: Sean Orr Thomas J. Volpe
212/399-8093 212/399-8056
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THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED SUMMARY OF EARNINGS
TWELVE MONTHS AND FOURTH QUARTER REPORT 1999 AND 1998
(Dollars in Thousands Except Per Share Data)
<TABLE>
<CAPTION>
Twelve Months Ended December
---------------------------------- Pre-Restr. Post-Restr.
1999 Pre- 1999 Post- %Favorable %Favorable
Restructuring Restructuring 1998 (Unfavorable) (Unfavorable)
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<S> <C> <C> <C> <C> <C>
Gross Income:
United States $2,352,870 $2,352,870 $1,983,665 18.6 18.6
International $2,208,648 $2,208,648 $1,985,063 11.3 11.3
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$4,561,518 $4,561,518 $3,968,728 14.9 14.9
Costs and Expenses $3,825,856 $3,825,856 $3,347,158 (14.3) (14.3)
Interest Expense $ 66,422 $ 66,422 $ 58,699 (13.2) (13.2)
Restructuring and other Merger
Related Costs $ - $ 84,183 $ - N/A N/A
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Income Before Provision for Income Taxes $ 669,240 $ 585,057 $ 562,871 18.9 3.9
Provision for Income Taxes $ 269,085 $ 236,339 $ 232,005 (16.0) (1.9)
Net Equity Interests (a) (26,797) (26,797) $ (20,961) (27.8) (27.8)
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Net Income $ 373,358 $ 321,921 $ 309,905 20.5 3.9
Per Share Data:
Basic E.P.S. (b) $ 1.34 $ 1.15 $ 1.14 17.5 0.9
Diluted E.P.S. (b) (c) $ 1.29 $ 1.11 $ 1.10 17.3 0.9
Dividend per share - Interpublic $ 0.330 $ .330 $ .290 13.8 13.8
Weighted Average Shares:
Basic 278,923,346 278,923,346 270,970,652
Diluted 296,240,944 289,547,942 281,050,544
<CAPTION>
Fourth Quarter
---------------------------------- Pre-Restr. Post-Restr.
1999 Pre- 1999 Post- %Favorable %Favorable
Restructuring Restructuring 1998 (Unfavorable) (Unfavorable)
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<S> <C> <C> <C> <C> <C>
Gross Income:
United States $ 706,589 $ 706,589 $ 562,599 25.6 25.6
International $ 751,413 $ 751,413 $ 632,174 18.9 18.9
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$1,458,002 $1,458,002 $1,194,773 22.0 22.0
Costs and Expenses $1,207,734 $1,207,734 $ 981,730 (23.0) (23.0)
Interest Expense $ 18,501 $ 18,501 $ 15,305 (20.9) (20.9)
Restructuring and other Merger
Related Costs $ - $ 84,183 $ - N/A N/A
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Income Before Provision for Income Taxes $ 231,767 $ 147,584 $ 197,738 17.2 (25.4)
Provision for Income Taxes $ 88,893 $ 56,147 $ 81,238 (9.4) 30.9
Net Equity Interests (a) $ (12,754) $ (12,754) $ (9,833) (29.7) (29.7)
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Net Income $ 130,120 $ 78,683 $ 106,667 22.0 (26.2)
Per Share Data:
Basic E.P.S. (b) $ .47 $ .28 $ .39 20.5 (28.2)
Diluted E.P.S.(b)(d) $ .44 $ .27 $ .38 15.8 (28.9)
Dividend per share - Interpublic $ .085 $ .085 $ .075 13.3 13.3
Weighted Average Shares:
Basic 279,498,520 279,498,520 271,156,006
Diluted 303,488,580 290,436,204 287,690,390
</TABLE>
(a) Net equity interests is the net of equity in income of unconsolidated
affiliates less income attributable to minority interests of consolidated
subsidiaries.
(b) All per share data for 1998 adjusted to reflect 2 for 1 stock split
effective July 15, 1999.
(c) 1999 post-restructuring and 1998 include the addback of restricted stock
dividends. 1999 pre-restructuring includes the addback of restricted stock
dividends and the interest on convertible subordinated debentures.
(d) 1999 post-restructuring includes the addback of restricted stock dividends.
1999 pre-restructuring and 1998 include the addback of restricted stock
dividends and the interest on convertible subordinated debentures.
Exhibit 99.2
Interpublic Corrects Certain Press Reports Regarding Merger Related Charges
NEW YORK, Feb. 24 -- To correct inaccuracies in a press report this
morning, The Interpublic Group of Companies (NYSE: IPG) reiterated its
prior announcement of January 23, 2000 that the total charges related to
its merger of the Lowe Group and Ammirati Puris Lintas to form Lowe Lintas
and Partners Worldwide will remain in line with the original estimates
which were between $170 to $190 million pre-tax ($100 to $115 million, net
of tax).
The company is pleased with the progress of the merger to date. In the
fourth quarter of 1999, the Company incurred merger-related charges of $84
million pre-tax ($51 million, net of tax). In the first half of this year,
the Company expects to recognize the balance of the merger related charges
of approximately $90 to $105 million pre-tax ($54 to $64 million, net of
tax). The Company also reiterated that beginning in 2001 its after-tax
results of operations will benefit by between $20 to $25 million annually.
The Interpublic Group of Companies, Inc. one of the largest
advertising and marketing communications organizations in the world, is
comprised of McCann-Erickson WorldGroup, The Lowe Group, Initiative Media
Worldwide, International Public Relations, Octagon, Zentropy Partners,
Allied Communications Group and other related companies. The shares of The
Interpublic Group of Companies, Inc. are listed on the New York Stock
Exchange ("IPG"). For further information, visit:
http://www.interpublic.com.
