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What changed in Interpublic Group of Companies (The)'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Interpublic Group of Companies (The)'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+352 added−268 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-20)

Top changes in Interpublic Group of Companies (The)'s 2024 10-K

352 paragraphs added · 268 removed · 219 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeGovernments, government agencies and industry self-regulatory bodies have adopted laws, regulations and standards, and judicial bodies have issued rulings, that directly or indirectly affect the form and content of advertising, public relations and other marketing activities we produce or conduct on behalf of our clients.
Biggest changeWhile these governmental regulations and other actions can impact the Company’s operations, the specific marketing regulations we may face in a given market do not as a general matter significantly impact the Company’s overall service offerings or the nature in which we provide these services. 8 Table of Contents Governments, government agencies and industry self-regulatory bodies have adopted laws, regulations and standards, and judicial bodies have issued rulings, that directly or indirectly affect the form and content of advertising, public relations and other marketing activities we produce or conduct on behalf of our clients.
We formally assess our operating units against their efforts in the areas of people development, diversity and inclusion, performance management, talent acquisition and organization development in order to drive or support the units’ strategic business and growth goals.
We formally assess our operating units against their efforts in the areas of people development, inclusion, performance management, talent acquisition and organization development in order to drive or support the units’ strategic business and growth goals.
The IPG brands include our leading global networks FCB, IPG Health, McCann Worldgroup, and MullenLowe Group as well as our domestic integrated agencies Campbell Ewald, Carmichael Lynch, Deutsch LA, The Martin Agency and others.
The IPG brands include our leading global networks FCB, IPG Health, McCann Worldgroup, and MullenLowe Group as well as our domestic integrated agencies Campbell Ewald, Carmichael Lynch, Deutsch, The Martin Agency and others.
All our brands leverage IPG’s unique assets in data and technology, creativity and production, media, consulting, technology and artificial intelligence to connect brand marketing and performance marketing, driving accelerated growth for our clients. 2 Table of Contents We list approximately 80 of our companies on our website under the "Our Companies" section, with descriptions, capabilities and office locations for each.
All our brands leverage IPG’s unique assets in data and technology, creativity and production, media, consulting, technology and artificial intelligence to connect brand marketing and performance marketing, driving accelerated growth for our clients. 3 Table of Contents We list approximately 80 of our companies on our website under the "Our Companies" section, with descriptions, capabilities and office locations for each.
Our holding company structure allows us to maintain a diversified client base across and within a full range of industry sectors. In the aggregate, our top ten clients based on revenue before billable expenses accounted for approximately 20% of revenue before billable expenses in 2023 and 2022.
Our holding company structure allows us to maintain a diversified client base across and within a full range of industry sectors. In the aggregate, our top ten clients based on revenue before billable expenses accounted for approximately 20% of revenue before billable expenses in 2024 and 2023.
We believe that our strategy and execution position us to meet our financial goals and to deliver long-term value to all of our stakeholders. Financial Reporting Segments We determined we conduct our business across three reportable segments described in Note 15 in Item 8, Financial Statements and Supplementary Data .
We believe that our strategy and execution position us to meet our financial goals and to deliver long-term value to all of our stakeholders. Financial Reporting Segments We determined we conduct our business across three reportable segments described in Note 16 in Item 8, Financial Statements and Supplementary Data .
With agencies and clients located in over 100 countries worldwide, we are also subject to laws governing our international operations. These include broad anti-corruption laws such as the U.S. Foreign Corrupt Practices Act ("FCPA") and the U.K. Bribery Act (2010), which generally prohibit the making or offering of improper payments to government officials and political 7 Table of Contents figures.
With agencies and clients located in over 100 countries worldwide, we are also subject to laws governing our international operations. These include broad anti-corruption laws such as the U.S. Foreign Corrupt Practices Act ("FCPA") and the U.K. Bribery Act (2010), which generally prohibit the making or offering of improper payments to government officials and political figures.
With IPG’s 2021 ESG report, the Company became the first U.S.-based advertising holding company to receive limited external assurance on certain ESG data and the first to disclose in accordance with TCFD recommendations. Our 2022 report added third-party assurance for GHG emissions from Scope 3/Category 6, Business Travel, and our 2023 report will include this metric as well.
With IPG’s 2021 ESG report, the Company became the first U.S.-based advertising holding company to receive limited external assurance on certain ESG data and the first to disclose in accordance with TCFD recommendations. Our 2022 report added third-party assurance for GHG emissions from Scope 3/Category 6, Business Travel, and our 2023 report included this metric as well.
This commitment also makes Interpublic a signatory to the Business Ambition for 1.5°C and a member of the United Nations-backed Race to Zero campaign. • Renewable Electricity: The Company also committed to sourcing 100% renewable electricity by 2030 for its entire portfolio. • Net-Zero Carbon Emissions: Additionally, the Company formally joined The Climate Pledge, a commitment to reaching net-zero carbon across our business by 2040.
This commitment also makes Interpublic a signatory to the Business Ambition for 1.5°C and a member of the United Nations-backed Race to Zero campaign. 6 Table of Contents • Renewable Electricity: The Company also committed to sourcing 100% renewable electricity by 2030 for its entire portfolio. • Net-Zero Carbon Emissions: Additionally, the Company formally joined The Climate Pledge, a commitment to reaching net-zero carbon across our business by 2040.
Our largest client accounted for approximately 4% of revenue before billable expenses in 2023 and 2022. Based on revenue before billable expenses for the year ended December 31, 2023, our largest client sectors (in alphabetical order) were financial services, healthcare, and technology and telecom.
Our largest client accounted for approximately 4% of revenue before billable expenses in 2024 and 2023. Based on revenue before billable expenses for the year ended December 31, 2024, our largest client sectors (in alphabetical order) were financial services, healthcare, and technology and telecom.
Among these, IPG is a member of the Global Leadership Group of Ad Net Zero, a trade organization with a goal of supporting the advertising industry as it moves toward a net-zero carbon future for advertising production. We are also a participant of the U.N. Global Compact and an active supporter of the 5 Table of Contents U.N.
Among these, IPG is a member of the Global Leadership Group of Ad Net Zero, a trade organization with a goal of supporting the advertising industry as it moves toward a net-zero carbon future for advertising production. We are also a participant of the U.N. Global Compact and an active supporter of the U.N.
Our goal is that our talent represents the diversity of our communities and consumers, with a corporate culture that drives belonging, well-being and growth. We believe that such a workplace will enable us to provide cultural insights to help our clients make authentic and responsible connections with their customers.
Our goal is that our talent represents our communities and consumers, with a corporate culture that drives belonging, well-being and growth. We believe that such a workplace will enable us to provide cultural insights to help our clients make authentic and responsible connections with their customers.
The Company has operated under the Interpublic name since January 1961. About Us We provide marketing, communications and business transformation services that help marketers and brands succeed in today’s digital economy. Combining the power of creativity and technology, our approximately 57,400 employees and operations span all major world markets.
The Company has operated under the Interpublic name since January 1961. About Us We provide marketing, communications and business transformation services that help marketers and brands succeed in today’s digital economy. Combining the power of creativity and technology, our approximately 53,300 employees and operations span all major world markets.
Our brands in this segment include IPG Mediabrands, UM, Initiative, KINESSO, Acxiom, Huge, MRM and R/GA. • Integrated Advertising & Creativity Led Solution s provides advertising, corporate and brand identity services, and strategic consulting.
Our brands in this segment include IPG Mediabrands, UM, Initiative, KINESSO, Acxiom and MRM. • Integrated Advertising & Creativity Led Solution s provides advertising, corporate and brand identity services, and strategic consulting.
We also report results for the “Corporate and other” group. See Note 15 in Item 8, Financial Statements and Supplementary Data , for further information. Sources of Revenue Our revenues are primarily derived from the planning and execution of multi-channel advertising, marketing and communications programs around the world.
We also report results for the “Corporate and other” group. See Note 16 in Item 8, Financial Statements and Supplementary Data , for further information. 7 Table of Contents Sources of Revenue Our revenues are primarily derived from the planning and execution of multi-channel advertising, marketing and communications programs around the world.
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"). MD&E is comprised of IPG Mediabrands, Acxiom, and KINESSO, as well as our digital and commerce specialist agencies, which include MRM, R/GA, and Huge.
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"). MD&E is comprised of IPG Mediabrands, Acxiom, and KINESSO, as well as our digital and commerce specialist agencies.
Generally, we act as the client’s agent rather than the primary obligor in these arrangements. 6 Table of Contents Our revenue is typically lowest in the first quarter and highest in the fourth quarter.
Generally, we act as the client’s agent rather than the primary obligor in these arrangements. Our revenue is typically lowest in the first quarter and highest in the fourth quarter.
Regulatory Environment The advertising and marketing services that our agencies provide are subject to governmental regulation and other action in all of the jurisdictions in which the Company operates.
Regulatory Environment The advertising and marketing services that our agencies provide are subject to governmental regulation and other action in all of the jurisdictions in which we operate.
Accordingly, the operating units create and deploy skills-training programs, management training, employee goal-setting and feedback platforms, applicant-tracking systems, new-employee onboarding processes, and other programs intended to enhance the performance and engagement of the workforce. As discussed above under Market Strategy — Diversity, Equity and Inclusion , diversity, equity and inclusion are essential priorities for IPG.
Accordingly, the operating units create and deploy skills-training programs, management training, employee goal-setting and feedback platforms, applicant-tracking systems, new-employee onboarding processes, and other programs intended to enhance the performance and engagement of the workforce. As discussed above under Market Strategy — Making an Impact , inclusion, the potential of our talent, growth and social impact are essential priorities for IPG.
Consolidated Total Revenues for the Three Months Ended 2023 2022 2021 (Amounts in Millions) % of Total % of Total % of Total March 31 $ 2,521.0 23.2% $ 2,568.5 23.5% $ 2,257.0 22.0% June 30 2,666.5 24.4% 2,735.7 25.1% 2,509.6 24.6% September 30 2,678.5 24.6% 2,637.7 24.1% 2,542.0 24.8% December 31 3,023.3 27.8% 2,985.9 27.3% 2,932.1 28.6% $ 10,889.3 $ 10,927.8 $ 10,240.7 Clients Our large and diverse client base includes many of the most recognizable companies and brands throughout the world.
Consolidated Total Revenues for the Three Months Ended 2024 2023 2022 (Amounts in Millions) % of Total % of Total % of Total March 31 $ 2,495.9 23.3% $ 2,521.0 23.2% $ 2,568.5 23.5% June 30 2,710.0 25.4% 2,666.5 24.4% 2,735.7 25.1% September 30 2,628.8 24.6% 2,678.5 24.6% 2,637.7 24.1% December 31 2,857.0 26.7% 3,023.3 27.8% 2,985.9 27.3% $ 10,691.7 $ 10,889.3 $ 10,927.8 Clients Our large and diverse client base includes many of the most recognizable companies and brands throughout the world.
We have been widely recognized for our efforts in this area. In January 2024 we announced that IPG had received several honors that recognize its initiatives and transparency around Environmental, Social and Governance (ESG) efforts this year.
In January 2024 we announced that IPG had received several honors that recognize its initiatives and transparency around Environmental, Social and Governance (ESG) efforts this year.
The programs we provide in support of diversity, equity and inclusion include events, training and curated and bespoke content, research and tools, to foster awareness and action on an array of critical issues that we believe are vital for the recruitment, retention, advancement, well-being and belonging for people who are part of under-represented groups.
The programs we provide include events, training and curated and bespoke content, research and tools, to foster awareness and action on an array of critical issues that we believe are vital for the recruitment, retention, advancement, well-being and belonging for all of our employees.
At the corporate level, centralized human capital management processes include development of human resources governance and policy; executive compensation for senior leaders across the Company; benefits programs; succession planning focusing on the performance, development and retention of the Company’s senior-most executives and key roles in the operating units; and executive development. 4 Table of Contents IPG sets specific standards for human capital management and, on a yearly basis, assesses each operating unit’s performance in managing and developing its workforce.
At the corporate level, centralized human capital management processes include development of human resources governance and policy; executive compensation for senior leaders across the Company; benefits programs; succession planning focusing on the performance, development and retention of the Company’s senior-most executives and key roles in the operating units; and executive development.
We conduct extensive employee training and development throughout our agencies and benchmark our compensation programs against those of our industry for their competitiveness and effectiveness in recruitment and retention. There is keen competition for qualified employees. As of December 31, 2023, we employed approximately 57,400 people, of which approximately 23,800 were employed in the United States.
We conduct extensive employee training and development throughout our agencies and benchmark our compensation programs against those of our industry for their competitiveness and effectiveness in recruitment and retention. There is keen competition for qualified employees.
It is a priority for our company to take action to address both causes and impacts of climate change. Our commitment includes measuring our carbon footprint and working toward limiting that footprint.
Environmental Sustainability Initiatives IPG understands that climate change has consequences for all of us, bringing challenges for environmental protection, social wellbeing and good governance. It is a priority for our company to take action to address both causes and impacts of climate change. Our commitment includes measuring our carbon footprint and working toward limiting that footprint.
As of December 31, 2023 Total 57,400 Domestic 23,800 International 33,600 United Kingdom 5,200 Continental Europe 6,800 Asia Pacific 10,500 Latin America 7,000 Other 4,100 We employ a balanced approach in managing our human capital resources.
As of December 31, 2024, we employed approximately 53,300 people, of which approximately 21,100 were employed in the United States. 5 Table of Contents As of December 31, 2024 Total 53,300 Domestic 21,100 International 32,200 United Kingdom 4,900 Continental Europe 6,600 Asia Pacific 10,000 Latin America 6,700 Other 4,000 We employ a balanced approach in managing our human capital resources.
Since then, IPG has seen notable improvements in the diversity of our workforce, and further progress is a management priority. We believe that an environment that encourages respect and trust is key to a creative business like ours, and that a competitive advantage comes with having a variety of perspectives and beliefs in our workforce.
We believe 4 Table of Contents that an environment that encourages respect and trust is key to a creative business like ours, and that a competitive advantage comes with having a variety of perspectives and beliefs in our workforce. We have been widely recognized for our efforts in this area.
We undertake human capital initiatives with an aim of ensuring that employees have the high level of competence and commitment our businesses need to succeed.
IPG sets specific standards for human capital management and, on a yearly basis, assesses each operating unit’s performance in managing and developing its workforce. We undertake human capital initiatives with an aim of ensuring that employees have the high level of competence and commitment our businesses need to succeed.
Diversity, Equity and Inclusion IPG and our agencies are committed to diversity and inclusion, and we reinforce these values through a comprehensive set of award-winning programs. These include business resource groups that develop career building programs, as well as training around topics like unconscious bias.
Making an Impact IPG and our agencies are committed to create effective and inspiring work that is driven by a rich and inclusive company culture. We reinforce these values through a comprehensive set of award-winning programs, a global strategy and committed stakeholders.
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In 2023, IPG was once again ranked as the #1 most creatively effective holding company at the U.S. Effie Awards, the second consecutive year the Company has won this title. Altogether, 18 IPG agencies secured top honors across a range of categories and clients at the awards.
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These include business resource groups, open to all, that develop career building programs for all of our employees, as well as bring new tools to the business on a variety of topics. We seek to hire, promote and retain top talent, and we regularly measure the inclusiveness of our culture with a company-wide survey that measures belonging.
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We seek to ensure accountability by tying executive compensation directly to the ability of 3 Table of Contents our leaders to hire, promote and retain diverse talent, and we regularly measure the inclusiveness of our culture with a company-wide climate for inclusion survey. We began our formal programs over a decade ago.
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We began our people-first approach over a decade ago. Since then, IPG has seen notable improvements in the range and skill set of our workforce that reflect the skills to keep us competitive and the communities our clients represent.
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During 2023, IPG continued to further evolve our offerings, investing in new capabilities and innovation to help our clients succeed in today’s digital economy.
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Proposed Omnicom Transaction On December 8, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Omnicom Group Inc. (“Omnicom”), pursuant to which an Omnicom merger subsidiary will merge with and into IPG, with IPG surviving the merger as a direct wholly owned subsidiary of Omnicom.
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We also foster business resource groups that offer programs on all facets of diversity and inclusion in support of our employees. Environmental Sustainability Initiatives IPG understands that climate change has consequences for all of us, bringing challenges for environmental protection, social wellbeing and good governance.
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As a result of the merger, each share of IPG common stock issued and outstanding immediately prior to the effective time of the merger will be converted into the right to receive 0.344 shares of Omnicom common stock. The exchange ratio is fixed and will not be adjusted to reflect stock price changes prior to closing the merger.
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While these governmental regulations and other actions can impact the Company’s operations, the specific marketing regulations we may face in a given market do not as a general matter significantly impact the Company’s overall service offerings or the nature in which we provide these services.
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The closing of the merger is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals and approval by IPG stockholders and Omnicom stockholders. If the transaction is completed, following the closing Omnicom shareholders will own 60.6% of the combined company and IPG shareholders will own 39.4%, on a fully diluted basis.
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Information on our website is not part of this report. 8 Table of Contents Executive Officers of IPG Name Age Office Philippe Krakowsky 61 Chief Executive Officer Ellen Johnson 58 Executive Vice President and Chief Financial Officer Andrew Bonzani 60 Executive Vice President and General Counsel Christopher F.
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As a result of the merger, we will cease to be a publicly traded company. We believe the combined company will bring together the industry’s deepest bench of marketing talent, and the broadest and most innovative services and products, driven by the most advanced sales and marketing platform.
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Carroll 57 Senior Vice President, Controller and Chief Accounting Officer There is no family relationship among any of the executive officers. Mr. Krakowsky is Chief Executive Officer of IPG, a role he assumed on January 1, 2021. He is also a member of IPG’s Board of Directors. Prior to being named IPG's CEO, Mr.
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Together, the companies will expand their capacity to create comprehensive full-funnel solutions that deliver better outcomes for the world’s most sophisticated clients. We anticipate the combined company will have over 100,000 expert practitioners, delivering end-to-end services across media, precision marketing, CRM, data, digital commerce, advertising, healthcare, public relations and branding.
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Krakowsky served as the company’s Chief Operating Officer beginning in September 2019, managing business operations across Interpublic, with direct oversight of IPG’s independent companies including Carmichael Lynch, Deutsch, Hill Holliday, Huge and R/GA and IPG's Media, Data and Technology offerings including IPG Mediabrands, Acxiom, KINESSO and Matterkind. During that time, Mr. Krakowsky was also Chairman of IPG Mediabrands.
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For further details about the Merger Agreement and the transactions it contemplates, please see our Current Reports on Form 8-K filed on December 9, 2024.
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Over the course of his nearly two-decade tenure at IPG, Mr. Krakowsky has also led the strategy, talent, communications and business development functions for the holding company. Before taking on the COO role at IPG, Mr. Krakowsky spent a number of years as CEO of Mediabrands, leading the 10,500-person media investment unit, as well as served as interim-CEO of FCB.
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The description of the Merger Agreement in this section does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, which is filed as Exhibit 2.1 of our Current Report on Form 8-K filed on December 9, 2024, and incorporated by reference herein.
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From February 2011 until assuming the role of COO, Mr. Krakowsky was also IPG’s Chief Strategy and Talent Officer, where he oversaw key functions that have been vital to the company’s development and growth. Ms. Johnson became Executive Vice President and Chief Financial Officer of the Company, effective January 1, 2020. Prior to that time, Ms.
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Information on our website is not part of this report. 9 Table of Contents
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Johnson served as Senior Vice President of Finance and Treasurer from February 2013 to December 31, 2020, and as Senior Vice President and Treasurer from October 2004 to February 2013.
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She served as Executive Vice President, Chief Financial Officer of The Partnership, a division of IPG from May 2004 to October 2004, and prior to that, served as Assistant Treasurer, International from February 2000 to May 2004. Mr. Bonzani was hired as Senior Vice President, General Counsel and Secretary in April 2012.
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He was promoted to Executive Vice President, General Counsel and Secretary in February 2019 and now serves as Executive Vice President and General Counsel as of February 2021. Prior to joining IPG, Mr.
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Bonzani worked at IBM for 18 years, holding a number of positions in the legal department, most recently as Vice President, Assistant General Counsel and Secretary from July 2008 to March 2012. Mr. Carroll was named Senior Vice President, Controller and Chief Accounting Officer in April 2006. In 2017, Mr. Carroll assumed additional responsibilities as Chief Financial Officer for DXTRA.
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Mr. Carroll served as Senior Vice President and Controller of McCann Worldgroup from November 2005 to March 2006. Prior to joining us, Mr.
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Carroll served in various Chief Accounting Officer and Controller roles, as well as a Financial Vice President at Lucent Technologies, Inc. and began his professional career at PricewaterhouseCoopers from October 1991 to September 2000. 9 Table of Contents

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur agencies and media services compete with other agencies and other providers of creative, marketing or media services to maintain existing client relationships and to win new business. Our competitors include not only other large multinational advertising and marketing communications companies, but also smaller entities that operate in local or regional markets as well as new forms of market participants.
Biggest changeOur competitors include not only other large multinational advertising and marketing communications companies, but also smaller entities that operate in local or regional markets as well as new forms of market participants.
We regularly undertake acquisitions and other investments that we believe will enhance our service offerings to our clients, such as our acquisition of Acxiom in 2018 and RafterOne in 2022. These transactions can involve significant challenges and risks, including that the transaction does not advance our business strategy or fails to produce a satisfactory return on our investment.
We regularly undertake acquisitions and other investments that we believe will enhance our service offerings to our clients, such as our acquisitions of Acxiom in 2018 and RafterOne in 2022. These transactions can involve significant challenges and risks, including that the transaction does not advance our business strategy or fails to produce a satisfactory return on our investment.
These policies can, in some cases, prevent one agency, or even different agencies under our ownership, from performing similar services for competing products or companies. • We may lose or fail to attract and retain key employees and management personnel.
These client policies can, in some cases, prevent one agency, or even different agencies under our ownership, from performing similar services for competing products or companies. • We may lose or fail to attract and retain key employees and management personnel.
Our 2023 results for example, were negatively impacted by significant reductions in spending by clients in the technology & telecom sector. This pattern may recur in the future. Furthermore, unexpected revenue shortfalls can result in misalignments of costs and revenues, resulting in a negative impact to our operating margins.
Our 2024 results for example, were negatively impacted by significant reductions in spending by clients in the technology & telecom sector. This pattern may recur in the future. Furthermore, unexpected revenue shortfalls can result in misalignments of costs and revenues, resulting in a negative impact to our operating margins.
On the other hand, because an agency’s principal asset is its people and freedom of entry into the industry is almost unlimited, our relationships with clients can be affected by the departure of key personnel and a small agency is, on occasion, able to take all or some portion of a client’s account from a much larger competitor. • Clients may terminate or reduce their relationships with us on short notice.
On the other hand, because an agency’s principal asset is its people and freedom of entry into the industry is almost unlimited, our relationships with clients can be affected by the departure of key personnel and a small agency is, on occasion, able to take all or some portion of a client’s account from a much larger competitor. 10 Table of Contents • Clients may terminate or reduce their relationships with us on short notice.
Future events, including our financial performance, market valuation of us or market multiples of comparable companies, loss of a significant client’s business or strategic decisions, could cause us to conclude that impairment indicators exist and that the asset values associated with long-lived assets, deferred tax assets and investments may have become impaired.
Future events, including our financial performance, market valuation of us or market multiples of comparable companies, loss of a significant client’s business or 14 Table of Contents strategic decisions, could cause us to conclude that impairment indicators exist and that the asset values associated with long-lived assets, deferred tax assets and investments may have become impaired.
Market conditions can be and have been adversely affected by natural and human disruptions, such as natural disasters, public health crises, severe weather events, military conflict or civil unrest.
Market conditions can be and have been adversely affected by natural and human disruptions, such as natural disasters, public health crises, severe weather events, political upheaval, military conflict or civil unrest.
A relatively small number of clients contribute a significant portion of our revenue. In the aggregate, our top ten clients based on revenue before billable expenses accounted for approximately 20% of revenue before billable expenses in 2023.
A relatively small number of clients contribute a significant portion of our revenue. In the aggregate, our top ten clients based on revenue before billable expenses accounted for approximately 20% of revenue before billable expenses in 2024.
For further discussion of goodwill and 14 Table of Contents other intangible assets, as well as our sensitivity analysis of our valuation of these assets, see Critical Accounting Estimates in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations . • Our financial results are exposed to exchange rate risk.
For further discussion of goodwill and other intangible assets, as well as our sensitivity analysis of our valuation of these assets, see Critical Accounting Estimates in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations . • Our financial results are exposed to exchange rate risk.
Operations outside the United States represent a significant portion of our revenue before billable expenses, approximately 35% in 2023.
Operations outside the United States represent a significant portion of our revenue before billable expenses, approximately 35% in 2024.
An agency’s ability to serve clients, particularly large international clients, on a broad geographic basis and across a range of services and technologies may also be an important competitive 10 Table of Contents consideration.
An agency’s ability to serve clients, particularly large international clients, on a broad geographic basis and across a range of services and technologies may also be an important competitive consideration.
See also Statement Regarding Forward-Looking Disclosure. Risks Related to the Global Market and the Economy • Our results of operations are highly susceptible to unfavorable or uncertain economic conditions. We are exposed to risks associated with weak or uncertain regional or global economic conditions and disruption in the financial markets.
Risks Related to the Global Market and the Economy • Our results of operations are highly susceptible to unfavorable or uncertain economic conditions. We are exposed to risks associated with weak or uncertain regional or global economic conditions and disruption in the financial markets.
The global economy continues to be challenging, including as a result of the adverse effects of the continuing impact of supply chain and labor disruptions, inflationary pressures and conflict in Ukraine and the Middle East.
The global economy continues to be challenging, including as a result of the adverse effects of the continuing impact of supply chain and labor disruptions, inflationary pressures, conflict in Ukraine and the Middle East and uncertainty generated by political developments in key markets.
As of December 31, 2023, we had substantial amounts of long-lived assets, deferred tax assets and investments on our Consolidated Balance Sheet, including approximately $5.1 billion of goodwill.
As of December 31, 2024, we had substantial amounts of long-lived assets, deferred tax assets and investments on our Consolidated Balance Sheet, including approximately $4.7 billion of goodwill.
Our ability to meet any target or milestone is subject to inherent risks and uncertainties, and we caution investors against placing undue reliance on them. See Statement Regarding Forward-Looking Disclosure . 15 Table of Contents Item 1B. Unresolved Staff Comments None.
Our ability to meet any target or milestone is subject to inherent risks and uncertainties, and we caution investors against placing undue reliance on them. See Statement Regarding Forward-Looking Disclosure .
The following factors set out potential risks we have identified that could adversely affect us. The risks described below may not be the only risks we face. Additional risks that we do not yet know of, or that we currently think are immaterial, could also have a negative impact on our business operations or financial condition.
The risks described below may not be the only risks we face. Additional risks that we do not yet know of, or that we currently think are immaterial, could also have a negative impact on our business operations or financial condition. See also Statement Regarding Forward-Looking Disclosure .
Any prolonged disruption to business or financial markets in the United States, which accounted for approximately 65% of our consolidated total revenue in 2023, as a result of anticipated or actual governmental shutdowns or debt defaults could have an adverse impact on our clients and our business.
Any prolonged disruption to business or financial markets in the United States, which accounted for approximately 65% of our consolidated total revenue in 2024, as a result of disruptive changes in government economic, social or trade policies, could have an adverse impact on our clients and our business.
Our ability to attract new clients and to retain existing clients may also, in some cases, be limited by clients’ policies or perceptions about conflicts of interest, or our own exclusivity arrangements with certain clients.
Our ability to attract new clients and to retain existing clients may also, in some cases, be limited by clients’ policies or perceptions about conflicts of interest, or our own exclusivity arrangements with certain clients. We could lose business and revenue as a result of real or perceived conflicts engendered by our proposed combination with Omnicom.
If our business is significantly adversely affected by unfavorable economic conditions or other market disruptions that adversely affect client spending, the negative impact on our revenue could pose a challenge to our operating income and cash generation from operations. • The impact of the COVID-19 pandemic and any future public health crises may in the future adversely impact our business, financial condition and results of operations.
If our business is significantly adversely affected by unfavorable economic conditions or other market disruptions that adversely affect client spending, the negative impact on our revenue could pose a challenge to our operating income and cash generation from operations. Risks Related to Our Industry and Operations • We operate in a highly competitive industry.
Regulators and legislators in the European Union, United Kingdom, and United States are increasingly focused on the use of cookies, online tracking technologies, and the sharing of personal data with third parties for targeted or behavioral advertising.
Regulators and legislators in the European Union, United Kingdom, and United States are increasingly focused on the use of online tracking technologies and the sharing of personal data with third parties for targeted or behavioral advertising. This has resulted in the promulgation or consideration of new or updated regulations under the GDPR, the CCPA, and other U.S. state privacy laws.
This has resulted in the promulgation or consideration of new or updated regulations under the GDPR, the CCPA, and other U.S. state privacy laws. Our digital business could be adversely affected if such laws or regulations are adopted, interpreted or implemented in a manner that is inconsistent with, or that requires changes to, our current business practices.
Our digital business could be adversely affected if such laws or regulations are adopted, interpreted or implemented in a manner that is inconsistent with, or that requires changes to, our current business practices.
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The COVID-19 pandemic created both regional and worldwide operational volatility and uncertainty in certain markets and sectors that have been slower to rebound or continue to face lingering disruptions.
Added
In addition, we face risks related to our proposed transaction with Omnicom, including as a result of any failure to complete, or delays in completing, the proposed transaction, as well as risks that the proposed merger may adversely affect relationships with our clients, partners, suppliers, and employees, whether or not the transaction is completed, The following factors set out potential risks we have identified that could adversely affect us.
Removed
Some clients, particularly in the early months of the pandemic, responded to resulting weak or volatile economic and financial conditions by reducing their marketing budgets, thereby decreasing the market and demand for our services, or adjusted, reduced or suspended operating activities, which negatively impacted certain of the markets or industries we serve.
Added
The advertising and marketing communications business is highly competitive and constantly changing. Our agencies and media services compete with other agencies and other providers of creative, marketing or media services to maintain existing client relationships and to win new business.
Removed
These patterns may recur in future periods, including as a result of pandemic developments such as the emergence of new virus variants that may be more transmissible, virulent or both. Risks Related to Our Industry and Operations • We operate in a highly competitive industry. The advertising and marketing communications business is highly competitive and constantly changing.
Added
We could also lose key employees as a result of any uncertainty about the operations of the combined company following the proposed merger transaction with Omnicom.
Added
During the third quarter of 2024, we concluded that declines in the forecasted performance of one of our reporting units included within our MD&E segment, combined with the classification of R/GA and Huge, which comprised a significant portion of the reporting unit, as held for sale was a triggering event which required a goodwill impairment assessment, and we recorded non-cash goodwill impairment charges of $232.1 million.
Added
Risks Relating to the Proposed Merger with Omnicom • Because the exchange ratio is fixed and because the market prices of shares of Omnicom common stock and IPG common stock will fluctuate, IPG stockholders cannot be certain of the market value of the merger consideration they will receive in the merger or the difference between the market value of the merger consideration they will receive in the merger and the market value of their shares of IPG common stock immediately prior to the merger.
Added
At the time the merger is completed, each issued and outstanding share of IPG common stock will be converted into the right to receive the merger consideration of 0.344 shares of Omnicom common stock, together with cash paid in lieu of the issuance of any fractional shares of Omnicom common stock.
Added
The exchange ratio for the merger consideration is fixed, and there will be no adjustment to the merger consideration, regardless of whether the market price of Omnicom common stock or IPG common stock changes prior to the completion of the merger.
Added
The market prices of Omnicom common stock and IPG common stock have fluctuated since the date on which Omnicom and IPG announced they entered into the Merger Agreement and will continue to fluctuate to the date on which IPG stockholders actually receive the merger consideration.
Added
The market prices of Omnicom common stock and IPG common stock will fluctuate during these periods as a result of a variety of factors, including general market and economic conditions, changes in Omnicom’s and IPG’s respective businesses, operations and prospects, market assessments of Omnicom’s and IPG’s businesses, operations and prospects and of the likelihood that the merger will be completed and regulatory considerations.
Added
Such factors are difficult to predict and in many cases are beyond the control of Omnicom and IPG.
Added
Consequently, at the time IPG stockholders must decide whether to approve the transaction, they will not know the market value of the merger consideration they will receive, which will depend on the market value of the shares of Omnicom common stock as of the effective time of merger. • IPG stockholders will have reduced ownership in the combined company and less influence over management.
Added
Immediately after the completion of the merger, it is expected that Omnicom stockholders will own approximately 60.6% and IPG stockholders will own approximately 39.4% of the issued and outstanding shares of Omnicom common stock (As a result, current IPG stockholders will have less influence on the management and policies of the combined company than they currently have on the management and policies of IPG. • The merger may not be completed, and the Merger Agreement may be terminated in accordance with its terms.
Added
The merger is subject to a number of conditions that must be satisfied or waived prior to the completion of the merger. These conditions to the completion of the merger may not be satisfied or waived in a timely manner or at all, and, accordingly, the merger may be delayed or may not be completed.
Added
In addition, if the merger is not completed by December 8, 2025 (which date may be extended to June 8, 2026 in certain circumstances), either Omnicom or IPG may choose not to proceed with the merger by terminating the Merger Agreement, and the parties can mutually decide to terminate the Merger Agreement at any time, before or after stockholder approval.
Added
In addition, Omnicom and IPG may elect to terminate the Merger Agreement in certain other circumstances. • The Merger Agreement limits our ability to pursue alternatives to the merger, may discourage other companies from trying to acquire a significant interest in IPG common stock or assets and, in specified circumstances, could require us to pay Omnicom a termination fee.
Added
The Merger Agreement contains provisions that may discourage a third party from submitting a proposal for a competing transaction, including the acquisition of a significant interest in our common stock or assets. These provisions include a general 15 Table of Contents prohibition on IPG from soliciting or entering into discussions with any third party regarding any such competing proposal.
Added
Furthermore, the Merger Agreement provides that if Omnicom terminates the Merger Agreement because IPG breaches certain of its obligations under the agreement, IPG will be required to pay Omnicom $439 million.
Added
In addition, if the Merger Agreement is terminated due to our failure to obtain IPG stockholder approval, and at such time, Omnicom has obtained stockholder approval, IPG, may be required to reimburse the other party for its expenses incurred in connection with the transaction in an amount not to exceed $25 million. • Failure to complete the merger could negatively impact the price of shares of our common stock, as well as our business and financial results.
Added
The Merger Agreement contains a number of conditions that must be satisfied or waived prior to the completion of the merger. There can be no assurance that all of the conditions to the completion of the merger will be satisfied or waived. If these conditions are not satisfied or waived, Omnicom and IPG will be unable to complete the merger.
Added
If the merger is not completed for any reason, including the failure to receive the required approvals of the Omnicom stockholders or the IPG stockholders, Omnicom’s and IPG’s respective businesses and financial results may be adversely affected and, without realizing any of the benefits of having completed the merger, we would be subject to a number of risks, including: • we may experience negative reactions from the financial markets, including negative impacts on the market price of IPG common stock; • we may experience negative reactions from our clients, vendors, landlords, joint venture participants and other third parties with whom we do business, which in turn could affect our business operations or our ability to compete for new business or obtain renewals in the marketplace more broadly; • we may experience negative reactions from employees; • we would will still be required to pay certain significant costs relating to the merger, including legal, accounting, financial advisor and printing fees; and • our senior management team will have expended time and resources that could otherwise have been spent on our existing businesses and the pursuit of other opportunities that could have been beneficial to the Company, and our ongoing business and financial results may be adversely affected.
Added
In addition to the above risks, if the Merger Agreement is terminated and our directors seek an alternative transaction, the holders of IPG’s common stock cannot be certain that the Company will be able to find a party willing to engage in a transaction on more attractive terms than the merger. • Uncertainties associated with the merger may cause a loss of management personnel and other key employees, which could adversely affect the business and operations of the combined company following the merger.
Added
Each of Omnicom and IPG depends on the experience and industry knowledge of its officers and other key employees to execute its business plans. The success of the combined company after the merger will depend, in part, on its ability to retain key management personnel and other key employees.
Added
Current and prospective employees of Omnicom and IPG may experience uncertainty about their roles within the combined company following the merger or other concerns regarding the timing and completion of the merger or the operations of the combined company following the merger, any of which may have an adverse effect on Omnicom’s and IPG’s ability to retain or attract key management and other key personnel.
Added
If Omnicom or IPG are unable to retain personnel, including Omnicom’s or IPG’s key management, who are critical to the future operations of the companies, Omnicom and IPG could face disruptions in their operations, loss of existing clients, loss of key information, expertise or know-how and unanticipated additional recruitment and training costs.
Added
In addition, the loss of Omnicom’s and IPG’s key personnel could diminish the anticipated benefits of the merger.
Added
No assurance can be given that the combined company, following the merger, will be able to retain or attract Omnicom’s and IPG’s key management personnel and other key employees to the same extent that Omnicom and IPG have previously been able to retain or attract personnel. • Our and Omnicom’s business relationships may be subject to disruption due to uncertainty associated with the merger, which could have a material effect on our business, financial condition, cash flows and results of operations or those of the combined company following the merger.
Added
Parties with which we or Omnicom do business may experience uncertainty associated with the merger, including with respect to current or future business relationships with us or Omnicom or the combined company following the merger.
Added
Omnicom’s and IPG’s business relationships may be subject to disruption as clients, vendors, landlords, joint venture participants and other third parties with whom they do business may attempt to delay or defer entering into new business relationships, negotiate changes in existing business relationships or consider entering into business relationships with parties other than Omnicom or IPG.
Added
These disruptions could have a material and adverse effect on our and Omnicom’s business, 16 Table of Contents financial condition, cash flows and results of operations, regardless of whether the merger is completed, as well as a material and adverse effect on the combined company’s ability to realize the expected cost savings, operating synergies and other benefits of the merger.
Added
The risk, and adverse effects, of any disruption could be exacerbated by a delay in completion of the merger or termination of the Merger Agreement. • Completion of the merger may trigger change-in-control or other provisions in certain agreements to which we are a party.
Added
The completion of the merger may trigger change-in-control or other provisions in certain agreements, including certain of our debt arrangements, to which we are a party.
Added
If we are unable to negotiate amendments to or waivers of those provisions, the counterparties may exercise their rights and remedies under the applicable agreements, including in some instances potentially terminating the agreements or seeking monetary damages.
Added
Even if we are able to negotiate amendments or waivers, the counterparties may require a fee for such amendments or waivers or seek to renegotiate the agreements on terms less favorable to us or the combined company. • The Merger Agreement subjects us to restrictions on our business activities prior to the effective time of the merger.
Added
The Merger Agreement restricts us from entering into certain corporate transactions and taking other specified actions without the consent of Omnicom, and generally requires us to continue our operations in the ordinary course through the completion of the merger.
Added
These restrictions could be in place for an extended period of time if completion of the merger is delayed and could prevent us from pursuing attractive business opportunities that may arise prior to the completion of the merger. • We are expected to incur significant costs in connection with the merger and integration of the two companies, which may be in excess of those currently anticipated.
Added
We have incurred and expect to continue to incur a number of non-recurring costs associated with negotiating and completing the merger and combining our operations with those of Omnicom. These costs have been, and will continue to be, substantial.
Added
The substantial majority of non-recurring costs will consist of transaction costs related to the merger and include, among others, fees paid to financial, legal and accounting advisors, filing fees, employee retention and other employment-related costs, and debt restructuring costs. We will bear many of these costs even if the merger is not completed.
Added
We will also incur transaction costs related to formulating and implementing integration plans, including facilities, systems and service contract consolidation costs and employment-related costs. We may incur additional unanticipated costs in connection with the merger and the integration of our businesses with those of Omnicom.
Added
Although we expect that the elimination of duplicative costs, as well as the realization of other synergies related to the integration of the businesses, should allow the combined company to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all.
Added
For additional information, see the risk factor entitled “— The failure to integrate IPG's and Omnicom’s businesses and operations successfully in the expected time frame may adversely affect the combined company’s business and results of operations ” below.
Added
The costs described above, as well as other unanticipated costs and expenses, could adversely affect the financial condition, cash flows and results of operations of the combined company following the completion of the merger. • Litigation relating to the merger, if any, could result in an injunction preventing the completion of the merger and/or substantial costs to IPG.
Added
Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into acquisition, merger or other business combination agreements like the Merger Agreement. Even if such a lawsuit is without merit, defending against these claims can result in substantial costs and require management time and resources.
Added
An adverse judgment could result in monetary damages, which could have a negative impact on our liquidity and financial condition.
Added
Lawsuits that may be brought against us, Omnicom, or our respective directors could also seek, among other things, injunctive relief or other equitable relief, including a request to rescind parts of the Merger Agreement already implemented and to otherwise enjoin the parties from consummating the merger.
Added
One of the conditions to the closing of the merger is that no Law or Order (each as defined in the Merger Agreement) is promulgated, entered, enforced, enacted or issued by any governmental entity of competent jurisdiction in which either Omnicom and its subsidiaries (taken as a whole) or IPG and its subsidiaries (taken as a whole) have material assets or material business operations, which prohibits, restrains or makes illegal the consummation of the merger.
Added
Consequently, if a plaintiff is successful in obtaining an injunction prohibiting completion of the merger, that injunction may delay or prevent the merger from being completed within the expected timeframe or at all, which may adversely affect our or Omnicom’s respective businesses, financial condition, cash flows and results of operations.
Added
In addition, either Omnicom or IPG may terminate the Merger Agreement if any Law or Order has been promulgated, entered, enforced, enacted or issued by any governmental entity of competent jurisdiction in which either Omnicom and its subsidiaries (taken as a whole) or IPG and its subsidiaries (taken as a whole) have material assets or material business operations, which is in effect and permanently prohibits, restrains, enjoins or makes illegal the consummation of the merger, so long as a material breach by a party to the Merger Agreement of any of its obligations under the agreement has not been the primary cause of, or resulted in, the enactment or issuance of such Law or Order. 17 Table of Contents There can be no assurance that any of the defendants would be successful in the outcome of any potential future lawsuits.
Added
The defense or settlement of any lawsuit or claim that remains unresolved at the time the merger is completed may adversely affect the combined company’s business, financial condition, cash flows and results of operations. • The failure to integrate IPG's and Omnicom’s businesses and operations successfully in the expected time frame may adversely affect the combined company’s business and results of operations.
Added
IPG and Omnicom have operated and, until the completion of the merger, will continue to operate independently. Following the completion of the merger, our companies’ businesses may not be integrated successfully.
Added
It is possible that the integration process could result in the loss of key employees, the loss of clients, service providers, vendors or other business counterparties, the disruption of either company’s or both companies’ ongoing businesses, inconsistencies in standards, controls, procedures and policies, potential unknown liabilities and unforeseen expenses, delays, or regulatory conditions associated with and following completion of the merger; or higher-than-expected integration costs and an overall post-completion integration process that takes longer than originally anticipated.
Added
Specifically, the following challenges, among others, must be addressed in integrating IPG’s and Omnicom’s operations in order to realize the anticipated benefits of the merger: • combining the companies’ operations and corporate functions and the resulting difficulties associated with managing a larger, more complex, diversified business; • combining the companies’ businesses in a manner that permits the combined company to achieve the cost savings and operating synergies anticipated to result from the merger; • avoiding delays in connection with the completion of the merger or the integration process; • integrating personnel from the two companies and minimizing the loss of key employees; • identifying and eliminating redundant functions and assets; • harmonizing the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes and successfully implementing the foregoing; • maintaining existing agreements with clients, service providers, vendors and other business counterparties and avoiding delays in entering into new agreements with prospective clients, service providers, vendors and other business counterparties; • addressing possible differences in business backgrounds, corporate cultures and management philosophies; and • consolidating the companies’ operating, administrative and information technology infrastructure and financial systems In addition, at times the attention of certain members of either company’s or both companies’ management and resources may be focused on completion of the merger and the integration of the businesses of the two companies and may reduce their availability for day-to-day business operations or other opportunities that may be beneficial, which may disrupt each company’s ongoing operations and the operations of the combined company.
Added
Furthermore, following the merger, the board of directors and executive leadership of the combined company will consist of former directors from each of Omnicom and IPG and former executive officers from each of Omnicom and IPG.
Added
Combining the boards of directors and management teams of each company into a single board and a single management team could require the reconciliation of differing priorities and philosophies. • The merger may result in a loss of clients, service providers, vendors, joint venture participants and other business counterparties, and may result in the termination of existing contracts.
Added
Following the merger, some of Omnicom’s and IPG’s clients, service providers, vendors, joint venture participants and other business counterparties may terminate or scale back their current or prospective business relationships with the combined company.
Added
In addition, Omnicom and IPG have contracts with clients, service providers, vendors, joint venture participants and other business counterparties that may require Omnicom or IPG to obtain consents from these other parties in connection with the merger, which may not be obtained on favorable terms or at all.
Added
If relationships with clients, service providers, vendors, joint venture participants and other business counterparties are adversely affected by the merger, or if the combined company, following the merger, loses the benefits of the contracts of Omnicom or IPG, the business, financial condition, cash flows and results of operations of the combined company could be adversely affected. • The combined company may fail to realize all of the anticipated benefits of the merger.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+0 added−0 removed19 unchanged
Biggest changeAll incidents are documented and recorded and cataloged for further review by the CISO team. 16 Table of Contents While we, our clients and our vendors are regularly exposed to malicious technology-related events and threats, none of these threats or incidents, either individually or in the aggregate of related occurrences, have materially affected the Company in the period covered by this report.
Biggest changeAll incidents are documented and recorded and cataloged for further review by the CISO team. 20 Table of Contents While we, our clients and our vendors are regularly exposed to malicious technology-related events and threats, none of these threats or incidents, either individually or in the aggregate of related occurrences, have materially affected the Company in the period covered by this report.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−2 removed1 unchanged
Biggest changeWe believe that facilities leased or owned by us are adequate for the purposes for which they are currently used and are well maintained.
Biggest changeWe believe that facilities leased or owned by us are adequate for the purposes for which they are currently used and are well maintained. See the discussion under Note 4 in Part II, Item 8, Financial Statements and Supplementary Data, for further information on our lease commitments. 21
Removed
In the fourth quarter of 2022, the Company took actions to optimize our real estate footprint as a result of a shift in our hybrid model used to deliver and support our services in a post-pandemic economy. These real estate actions further reduced our occupied global real estate footprint by approximately 6.7%, or 500,000 square feet.
Removed
See the discussion under "2022 Real Estate Actions" and “2020 Restructuring Plan” in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations for further detail and Note 3 in Part II, Item 8, Financial Statements and Supplementary Data, for further information on our lease commitments. 17

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeSee Note 16 in Item 8, Financial Statements and Supplementary Data for further information relating to our legal matters.
Biggest changeSee Note 17 in Part II, Item 8, Financial Statements and Supplementary Data for further information relating to our legal matters.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+5 added−0 removed1 unchanged
Biggest changeWe repurchased 3,950 Withheld Shares in October 2023; 1,464 Withheld Shares in November 2023; and 959 Withheld Shares in December 2023, for a total of 6,373 Withheld Shares during the three-month period. 2 The average price per share for each of the months in the fiscal quarter and for the three-month period was calculated by dividing (a) the sum for the applicable period of the aggregate value of the tax withholding obligations and the aggregate amount we paid for shares acquired under our share repurchase program, described in Note 7 of Item 8, Financial Statements and Supplementary Data , by (b) the sum of the number of Withheld Shares and the number of shares acquired in our share repurchase program. 3 On February 8, 2023, the Board authorized a share repurchase program to repurchase from time to time up to $350.0 million, excluding fees, of our common stock.
Biggest changeWe purchased no shares under our share repurchase program during the three-month period. 2 The average price per share for each of the months in the fiscal quarter and for the three-month period was calculated by dividing (a) the sum for the applicable period of the aggregate value of the tax withholding obligations by (b) the sum of the number of Withheld Shares. 3 On February 7, 2024, the Company's Board of Directors authorized a share repurchase program to repurchase from time to time up to $320.0 million, excluding fees, of our common stock.
Equity Compensation Plans See Item 1 2 for information about our equity compensation plans. Sales of Unregistered Securities Not applicable. Repurchases of Equity Securities The following table provides information regarding our purchases of our equity securities during the period from October 1, 2023 to December 31, 2023.
Equity Compensation Plans See Item 1 2 for information about our equity compensation plans. Sales of Unregistered Securities Not applicable. Repurchases of Equity Securities The following table provides information regarding our purchases of our equity securities during the period from October 1, 2024 to December 31, 2024.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed and traded on the New York Stock Exchange under the symbol “IPG”. As of February 15, 2024, there were approximately 7,800 registered holders of our outstanding common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed and traded on the New York Stock Exchange ("NYSE") under the symbol “IPG”. As of February 14, 2025, there were approximately 7,300 registered holders of our outstanding common stock.
We announced on February 8, 2024 that our Board of Directors (the "Board") had declared a common stock cash dividend of $0.330 per share, payable on March 15, 2024 to holders of record as of the close of business on March 1, 2024.
We announced on February 12, 2025 that our Board of Directors (the "Board") had declared a common stock cash dividend of $0.330 per share, payable on March 17, 2025 to holders of record as of the close of business on March 3, 2025.
There is no expiration date associated with this share repurchase program. On February 7, 2024, the Board authorized a share repurchase program to repurchase from time to time up to $320.0, excluding fees, of our common stock, which was in addition to any amounts remaining under the 2023 share repurchase program.
On February 11, 2025, the Board authorized a share repurchase program to repurchase from time to time up to $155.0 million, excluding fees, of our common stock, which was in addition to any amounts remaining under the 2024 share repurchase program. There are no expiration dates associated with the share repurchase programs.
There are no expiration dates associated with the share repurchase programs. 19 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (Amounts in Millions, Except Per Share Amounts)
The timing and amount of the repurchases will depend on market conditions and other funding requirements. There are no expiration dates associated with the share repurchase programs. 24 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (Amounts in Millions, Except Per Share Amounts)
Total Number of Shares (or Units) Purchased 1 Average Price Paid per Share (or Unit) 2 Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs 3 Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs 3 October 1 - 31 3,950 $ 27.76 — $ 211,185,785 November 1 - 30 2,106,464 $ 29.49 2,105,000 $ 149,106,991 December 1 - 31 2,165,959 $ 31.89 2,165,000 $ 80,068,304 Total 4,276,373 $ 30.70 4,270,000 1 The total number of shares of our common stock purchased includes shares withheld under the terms of grants under employee stock-based compensation plans to offset tax withholding obligations that arose upon vesting and release of restricted shares (the “Withheld Shares”).
Total Number of Shares (or Units) Purchased 1 Average Price Paid per Share (or Unit) 2 Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs 3 Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs 3 October 1 - 31 353 $ 29.67 — $ 170,066,503 November 1 - 30 4,892 $ 30.76 — $ 170,066,503 December 1 - 31 — $ — — $ 170,066,503 Total 5,245 $ 30.69 — 1 The total number of shares of our common stock purchased includes shares withheld under the terms of grants under employee stock-based compensation plans to offset tax withholding obligations that arose upon vesting and release of restricted shares (the “Withheld Shares”).
We may effect our share repurchases through open market purchases, trading plans established in accordance with U.S. Securities and Exchange Commission ("SEC") rules, derivative transactions or other means. We expect to continue to repurchase our common stock in future periods, although the timing and amount of the repurchases will depend on market conditions and other funding requirements.
Our share repurchase program permits us to effect our share repurchases through open market purchases, trading plans established in accordance with U.S. Securities and Exchange Commission ("SEC") rules, derivative transactions or other means.
Added
On December 8, 2024, we entered into an Agreement and Plan of Merger (the "Merger Agreement") with Omnicom Group Inc. ("Omnicom"), pursuant to which a merger subsidiary of Omnicom will merge with and into IPG, with IPG surviving the merger as a direct wholly owned subsidiary of Omnicom.
Added
If the transaction is completed, shares of IPG will be delisted from the NYSE and deregistered under the Securities Exchange Act of 1934.
Added
Under the terms of the Merger Agreement, we may continue to pay regular dividends at a rate not in excess of $0.330 per share in accordance with past practice and made solely out of our cash on hand ("Permitted Dividends"). Any dividend in excess of the Permitted Dividend would require the consent of Omnicom.
Added
We repurchased 353 Withheld Shares in October 2024; 4,892 Withheld Shares in November 2024; and no Withheld Shares in December 2024, for a total of 5,245 Withheld Shares during the three-month period.
Added
Under the terms of the Merger Agreement, IPG may continue to purchase its common stock in the open market or pursuant to Rule 10b5-1 trading plans, up to $325.0 million in the aggregate per calendar year, and we expect to continue to 23 Table of Contents repurchase our common stock in future periods.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

150 edited+53 added−28 removed148 unchanged
Biggest changeA summary of the restructuring activities related to the 2020 Plan as of the year ended December 31, 2023 is as follows: 2020 Plan Liability at December 31, 2022 Restructuring Expense Non-Cash Items Cash Payments Liability at December 31, 2023 Severance and termination costs $ 2.3 $ 0.4 $ 0.0 $ 2.1 $ 0.6 Lease impairment costs 0.0 (0.3) (0.3) 0.0 0.0 Other restructuring costs 0.0 0.1 0.1 0.0 0.0 Total $ 2.3 $ 0.2 $ (0.2) $ 2.1 $ 0.6 A summary of the restructuring activities related to the 2020 Plan as of the year ended December 31, 2022 is as follows: 27 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (Amounts in Millions, Except Per Share Amounts) 2020 Plan Liability at December 31, 2021 Restructuring Expense Non-Cash Items Cash Payments Liability at December 31, 2022 Severance and termination costs $ 9.4 $ (0.1) $ 0.0 $ 7.0 $ 2.3 Lease impairment costs 0.0 1.0 1.0 0.0 0.0 Other restructuring costs 0.0 2.9 2.9 0.0 0.0 Total $ 9.4 $ 3.8 $ 3.9 $ 7.0 $ 2.3 A summary of the restructuring activities related to the 2020 Plan as of the year ended December 31, 2021 is as follows: 2020 Plan Liability at December 31, 2020 Restructuring Expense Non-Cash Items Cash Payments Liability at December 31, 2021 Severance and termination costs $ 74.6 $ 0.4 $ 0.3 $ 65.3 $ 9.4 Lease impairment costs 0.0 6.3 6.3 0.0 0.0 Other restructuring costs 0.0 3.9 3.2 0.7 0.0 Total $ 74.6 $ 10.6 $ 9.8 $ 66.0 $ 9.4 A summary of the restructuring activities related to the 2020 Plan by segment is as follows: Years ended December 31, 2023 2022 2021 Restructuring charges: MD&E $ (0.3) $ 0.1 $ 0.1 IA&C 0.5 7.7 2.6 SC&E 0.0 (4.2) 10.0 Corporate and other 0.0 0.2 (2.1) Total $ 0.2 $ 3.8 $ 10.6 Non cash lease impairment costs: MD&E $ (0.3) $ 0.0 $ (0.9) IA&C 0.0 7.0 (0.1) SC&E 0.0 (5.9) 7.3 Corporate and other 0.0 (0.1) 0.0 Total $ (0.3) $ 1.0 $ 6.3 EXPENSES AND OTHER INCOME Years ended December 31, 2023 2022 2021 Cash interest on debt obligations $ (223.2) $ (164.3) $ (165.6) Non-cash interest (2.4) (3.6) (5.0) Interest expense (225.6) (167.9) (170.6) Interest income 140.8 56.6 27.2 Net interest expense (84.8) (111.3) (143.4) Other income (expense), net 10.2 (1.0) (70.7) Total (expenses) and other income $ (74.6) $ (112.3) $ (214.1) Net Interest Expense 28 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (Amounts in Millions, Except Per Share Amounts) Net interest expense decreased by $26.5 in 2023 compared to a year ago, primarily attributable to higher interest rates on net deposits, partially offset by lower net cash balances.
Biggest changeEXPENSES AND OTHER INCOME Years ended December 31, 2024 2023 2022 Cash interest on debt obligations $ (228.1) $ (223.2) $ (164.3) Non-cash interest (1.8) (2.4) (3.6) Interest expense (229.9) (225.6) (167.9) Interest income 151.7 140.8 56.6 Net interest expense (78.2) (84.8) (111.3) Other (expense) income, net (75.9) 10.2 (1.0) Total (expenses) and other income $ (154.1) $ (74.6) $ (112.3) Net Interest Expense Net interest expense decreased by $6.6 in 2024 compared to a year ago, primarily attributable to more favorable interest rates on net deposits and higher average international cash balances.
Period-to-period comparisons of Adjusted EBITA help our management identify additional trends in our Company’s financial results that may not be shown solely by period-to-period comparisons of net income or operating income. In addition, we may use Adjusted EBITA in the incentive compensation programs applicable to some of our employees in order to evaluate our Company’s performance.
Period-to-period comparisons of Adjusted EBITA help our management identify additional trends in our Company’s financial results that may not be shown solely by period-to-period comparisons of net income or operating income. In addition, we use Adjusted EBITA in the incentive compensation programs applicable to some of our employees in order to evaluate our Company’s performance.
Year ended December 31, 2022 Components of Change Year ended December 31, 2023 Change Foreign Currency Net Acquisitions/ (Divestitures) Organic Organic Total Consolidated $ 9,449.4 $ (46.9) $ 9.0 $ (10.9) $ 9,400.6 (0.1) % (0.5) % Domestic 6,157.7 0.0 13.2 (68.7) 6,102.2 (1.1) % (0.9) % International 3,291.7 (46.9) (4.2) 57.8 3,298.4 1.8 % 0.2 % United Kingdom 742.2 4.0 0.0 13.0 759.2 1.8 % 2.3 % Continental Europe 764.6 14.1 0.0 17.0 795.7 2.2 % 4.1 % Asia Pacific 772.7 (27.0) 5.3 (21.2) 729.8 (2.7) % (5.6) % Latin America 423.6 (8.4) (1.4) 34.9 448.7 8.2 % 5.9 % Other 588.6 (29.6) (8.1) 14.1 565.0 2.4 % (4.0) % The (1.1)% organic decrease in our do mestic market was primarily due to revenue decreases at our digital project-based offerings and advertising businesses, partially offset by revenue increases at our media businesses.
Year ended December 31, 2022 Components of Change Year ended December 31, 2023 Change Foreign Currency Net Acquisitions/ (Divestitures) Organic Organic Total Consolidated $ 9,449.4 $ (46.9) $ 9.0 $ (10.9) $ 9,400.6 (0.1) % (0.5) % Domestic 6,157.7 0.0 13.2 (68.7) 6,102.2 (1.1) % (0.9) % International 3,291.7 (46.9) (4.2) 57.8 3,298.4 1.8 % 0.2 % United Kingdom 742.2 4.0 0.0 13.0 759.2 1.8 % 2.3 % Continental Europe 764.6 14.1 0.0 17.0 795.7 2.2 % 4.1 % Asia Pacific 772.7 (27.0) 5.3 (21.2) 729.8 (2.7) % (5.6) % Latin America 423.6 (8.4) (1.4) 34.9 448.7 8.2 % 5.9 % Other 588.6 (29.6) (8.1) 14.1 565.0 2.4 % (4.0) % The (1.1)% organic decrease in our domestic market was primarily due to revenue decreases at our digital project-based offerings and advertising businesses, partially offset by revenue increases at our media businesses.
See Note 3 in Item 8, Financial Statements and Supplementary Data for further information. 3 We have structured certain acquisitions with additional contingent purchase price obligations based on factors including future performance of the acquired entity.
See Note 4 in Item 8, Financial Statements and Supplementary Data for further information. 3 We have structured certain acquisitions with additional contingent purchase price obligations based on factors including future performance of the acquired entity.
CORPORATE AND OTHER Our corporate and other segment is primarily comprised of selling, general and administrative expenses, discussed in the Results of Operations section, including corporate office expenses as well as shared service center and certain other centrally managed expenses that are not fully allocated to operating divisions; salaries, long-term incentives, annual bonuses and other miscellaneous benefits for corporate office employees; professional fees related to internal control compliance, financial statement audits and legal, information technology and other consulting services that are engaged and managed through the corporate office; and rental expense for properties occupied by corporate office employees.
CORPORATE AND OTHER Corporate and other is primarily comprised of selling, general and administrative expenses, discussed in the Results of Operations section, including corporate office expenses as well as shared service center and certain other centrally managed expenses that are not fully allocated to operating divisions; salaries, long-term incentives, annual bonuses and other miscellaneous benefits for corporate office employees; professional fees related to internal control compliance, financial statement audits and legal, information technology and other consulting services that are engaged and managed through the corporate office; and rental expense for properties occupied by corporate office employees.
Changes in the rates are typically due to lower or higher expected future returns based on the mix of assets held. A lower expected rate of return would increase our net pension cost. A 25 basis-point increase or decrease in the expected return on plan assets would have decreased or increased the 2023 net pension cost by approximately $1.0.
Changes in the rates are typically due to lower or higher expected future returns based on the mix of assets held. A lower expected rate of return would increase our net pension cost. A 25 basis-point increase or decrease in the expected return on plan assets would have decreased or increased the 2024 net pension cost by approximately $1.0.
Home to some of the world’s best-known and most innovative communications specialists, IPG global brands include Acxiom, Craft, FCB, FutureBrand, Golin, Huge, Initiative, IPG Health, IPG Mediabrands, Jack Morton, KINESSO, MAGNA, McCann, Mediahub, Momentum, MRM, MullenLowe Global, Octagon, R/GA, UM, Weber Shandwick and more.
Home to some of the world’s best-known and most innovative communications specialists, IPG global brands include Acxiom, Craft, FCB, FutureBrand, Golin, Huge, Initiative, IPG Health, IPG Mediabrands, Jack Morton, KINESSO, MAGNA, McCann, Mediahub, Momentum, MRM, MullenLowe Global, Octagon, UM, Weber Shandwick and more.
The improvements we have made and continue to make in our financial reporting and business information systems in recent years 20 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (Amounts in Millions, Except Per Share Amounts) allow us more timely and actionable insights from our global operations.
The improvements we have made and continue to make in our financial reporting and business information systems in recent years 25 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (Amounts in Millions, Except Per Share Amounts) allow us more timely and actionable insights from our global operations.
There was no commercial paper activity during 2023 and as of December 31, 2023, there was no commercial paper outstanding. Cash Pooling We aggregate our domestic cash position on a daily basis. Outside the United States, we use cash pooling arrangements with banks to help manage our liquidity requirements.
There was no commercial paper activity during 2024 and as of December 31, 2024, there was no commercial paper outstanding. Cash Pooling We aggregate our domestic cash position on a daily basis. Outside the United States, we use cash pooling arrangements with banks to help manage our liquidity requirements.
The 2023 and 2022 fair values of reporting units for which we performed quantitative impairment tests were estimated using a combination of the income approach, which incorporates the use of the discounted cash flow method, and the market approach, which incorporates the use of earnings and revenue multiples based on market data.
The 2024 and 2023 fair values of reporting units for which we performed quantitative impairment tests were estimated using a combination of the income approach, which incorporates the use of the discounted cash flow method, and the market approach, which incorporates the use of earnings and revenue multiples based on market data.
Based on this analysis, for the indefinite lived-intangible asset for which we performed a quantitative impairment test as of October 1, 2023, we concluded that it was not impaired because its fair value was in excess of its carrying value.
Based on this analysis, for the indefinite lived-intangible asset for which we performed a quantitative impairment test as of October 1, 2024, we concluded that it was not impaired because its fair value was in excess of its carrying value.
A 25 basis-point increase or decrease in the discount rate would not have impacted the 2023 net pension and postretirement benefit cost. The discount rate used to measure our benefit obligations is determined at the end of each year.
A 25 basis-point increase or decrease in the discount rate would not have impacted the 2024 net pension and postretirement benefit cost. The discount rate used to measure our benefit obligations is determined at the end of each year.
RESULTS OF OPERATIONS provides an analysis of the consolidated and segment results of operations for 2023 compared to 2022 and 2022 compared to 2021. LIQUIDITY AND CAPITAL RESOURCES provides an overview of our cash flows, funding requirements, contractual obligations, financing and sources of funds, and debt credit ratings.
RESULTS OF OPERATIONS provides an analysis of the consolidated and segment results of operations for 2024 compared to 2023 and 2023 compared to 2022. LIQUIDITY AND CAPITAL RESOURCES provides an overview of our cash flows, funding requirements, contractual obligations, financing and sources of funds, and debt credit ratings.
Other – During 2023, the majority of the amounts recognized were primarily related to pension and postretirement costs.
Other – During 2024, the majority of the amounts recognized were primarily related to pension and postretirement costs. During 2023, the majority of the amounts recognized were primarily related to pension and postretirement costs.
See "Restructuring Charges" in MD&A and Note 11 of Item 8, Financial Statements and Supplementary Data for further information. 2 Adjusted EBITA is a financial measure that is not defined by U.S. GAAP.
See "Restructuring Charges" in MD&A and Note 12 of Item 8, Financial Statements and Supplementary Data for further information. 2 Adjusted EBITA is a financial measure that is not defined by U.S. GAAP.
See Note 4 in Item 8, Financial Statements and Supplementary Data for further information. 2 Non-cancellable operating lease obligations are presented net of future receipts on contractual sublease arrangements.
See Note 5 in Item 8, Financial Statements and Supplementary Data for further information. 2 Non-cancellable operating lease obligations are presented net of future receipts on contractual sublease arrangements.
During the year ended December 31, 2023, our Adjusted EBITA margin on revenue before billable expenses increased to 16.7% from 15.5% in the prior-year period as the decrease in revenue before billable expenses, discussed below in the “Results of Operations” section, was outpaced by the overall decrease in our operating expenses, excluding billable expenses and amortization of acquired intangibles.
During the year ended December 31, 2023, our Adjusted EBITA margin on revenue before billable expenses increased to 16.7% from 15.5% in the prior-year period as the decrease in revenue before billable expenses, discussed below in the “Results of Operations” section, was outpaced by the overall decrease in our operating expenses, exclud ing billable expenses and amortization of acquired intangibles.
Moody’s Investors Service S&P Global Ratings Fitch Ratings Short-term rating P-2 A-2 F2 Long-term rating Baa2 BBB BBB+ Outlook Stable Stable Stable A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning credit rating agency.
Moody’s Investors Service S&P Global Ratings Fitch Ratings Short-term rating P-2+ A-2+ F1 Long-term rating Baa2+ BBB+ BBB+ Outlook Positive Positive Stable A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning credit rating agency.
Segment EBITA margin increased during 2022 when compared to 2021, as the increase in revenue before billable expenses, outpaced the overall increase in our operating expenses, excluding billable expenses and amortization of acquired intangibles.
Segment EBITA margin increased during 2023 when compared to 2022, as the increase in revenue before billable expenses, outpaced the overall increase in our operating expenses, excluding billable expenses and amortization of acquired intangibles.
Investors should note that these items will recur in future periods. • Amortization of Acquired Intangibles . Amortization of acquired intangibles is a non-cash expense relating to intangible assets arising from acquisitions that are expensed on a straight-line basis over the estimated useful life of the related assets.
Investors should note that these items will recur in future periods. • Amortization of Acquired Intangibles and Impairment of Goodwill . Amortization of acquired intangibles is a non-cash expense relating to intangible assets arising from acquisitions that are expensed on a straight-line basis over the estimated useful life of the related assets.
In our international markets, the 1.8% organic increase was driven by revenue increases at our media businesses, public relations agencies and experiential businesses and was most notable in our Latin America and Conti nental Europe regions, partially offset by revenue decreases at our digital project-based offerings across all regions.
In our international markets, the 1.8% organic increase was driven by revenue increases at our media businesses, public relations agencies and experiential businesses and was most notable in our Latin America and Continental Europe regions, partially offset by revenue decreases at our digital project-based offerings across all regions.
RECENT ACCOUNTING STANDARDS See Note 17 in Item 8, Financial Statements and Supplementary Data for further information on certain accounting standards that have been adopted during 2023 or that have not yet been required to be implemented and may be applicable to our future operations. NON-GAAP FINANCIAL MEASURE This MD&A includes both financial measures in accordance with U.S.
RECENT ACCOUNTING STANDARDS See Note 18 in Item 8, Financial Statements and Supplementary Data for further information on certain accounting standards that have been adopted during 2024 or that have not yet been required to be implemented and may be applicable to our future operations. NON-GAAP FINANCIAL MEASURE This MD&A includes both financial measures in accordance with U.S.
Accordingly, we believe that this exclusion assists management and investors in making period-to-period comparisons of operating performance. Investors should note that the use of acquired intangible assets contributed to revenue in the periods presented and will contribute to future revenue generation and should also note that such expense may recur in future periods.
Accordingly, we believe that this exclusion assists management and investors in making period-to-period comparisons of operating performance. Investors should note that the use of intangible assets contributed to revenue in the periods presented and will contribute to future revenue generation and should also note that such expenses may recur in future periods.
The following table presents the reconciliation of Net Income Available to IPG Common Stockholders to Adjusted EBITA for the years ended December 31, 2023, 2022 and 2021.
The following table presents the reconciliation of Net Income Available to IPG Common Stockholders to Adjusted EBITA for the years ended December 31, 2024, 2023 and 2022.
Segment Results of Operations As discussed in Note 15 in Item 8, Financial Statements and Supplementary Data , we have three reportable segments as of December 31, 2023: MD&E, IA&C and SC&E. We also report results for the "Corporate and other" group. Segment information for the prior period has been recast to conform to the current-period presentation.
Segment Results of Operations As discussed in Note 16 in Item 8, Financial Statements and Supplementary Data , we have three reportable segments as of December 31, 2024: MD&E, IA&C and SC&E. We also report results for the "Corporate and other" group. Segment information for the prior period has been recast to conform to the current-period presentation.
If actual market conditions vary significantly from those currently 21 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (Amounts in Millions, Except Per Share Amounts) projected, these estimates and assumptions could materially change resulting in adjustments to the carrying values of our assets and liabilities. 22 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (Amounts in Millions, Except Per Share Amounts) The following table presents a summary of our financial performance for the years ended December 31, 2023, 2022 and 2021.
If actual market conditions vary significantly from those currently projected, these estimates and assumptions could materially change resulting in adjustments to the carrying values of our assets and liabilities. 27 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (Amounts in Millions, Except Per Share Amounts) The following table presents a summary of our financial performance for the years ended December 31, 2024, 2023 and 2022.
The decrease in office and other direct expenses was driven by decr eases in employment costs, occupancy expense and client service costs, partially offset by increases in bad debt expense, travel and entertainment expenses and software and cloud-based expenses, as well as foreign currency losses.
The decrease in office and other direct expenses was driven by decreases in employment costs, occupancy expense and client service costs, partially offset by increases in bad debt expense, travel and entertainment expenses and software and cloud-based expenses, as well as foreign currency losses.
For the 2023 and 2022 annual impairment tests, we performed a qualitative impairment assessment for seven and eight reporting units, respectively, and performed the quantitative impairment test for three and two reporting units, respectively.
For the 2024 and 2023 annual impairment tests, we performed a qualitative impairment assessment for eight and seven reporting units, respectively, and performed the quantitative impairment test for two and three reporting units, respectively.
Office and other direct expense increased mainly due to foreign currency losses and increases in travel and entertainment expenses, the year-over-year change in contingent acquisition obligations and client service costs, partially offset by decreases in occupancy expense.
Office and other direct expense increased mainly due to foreign currency losse s and increases in travel and entertainment expenses, the year-over-year change in contingent acquisition obligations and client service costs, partially offset by decreases in occupancy expense.
Office and Other Direct Expenses Years ended December 31, Change 2023 vs 2022 2022 vs 2021 2023 2022 2021 % Increase/ (Decrease) % Increase/ (Decrease) Office and other direct expenses $ 1,342.5 $ 1,346.4 $ 1,279.6 (0.3) % 5.2 % As a % of revenue before billable expenses: Office and other direct expenses 14.3 % 14.2 % 14.0 % Occupancy expense 4.6 % 4.8 % 5.0 % All other office and other direct expenses 1 9.7 % 9.4 % 9.0 % 1 Includes production expenses, travel and entertainment, professional fees, spending to support new business activity, telecommunications, office supplies, bad debt expense, adjustments to contingent acquisition obligations, foreign currency losses (gains) and other expenses.
Office and Other Direct Expenses Years ended December 31, Change 2024 vs 2023 2023 vs 2022 2024 2023 2022 % Increase/ (Decrease) % Increase/ (Decrease) Office and other direct expenses $ 1,343.1 $ 1,342.5 $ 1,346.4 0.0 % (0.3) % As a % of revenue before billable expenses: Office and other direct expenses 14.6 % 14.3 % 14.2 % Occupancy expense 4.1 % 4.1 % 4.4 % All other office and other direct expenses 1 10.5 % 10.2 % 9.8 % 1 Includes production expenses, travel and entertainment, professional fees, spending to support new business activity, telecommunications, office supplies, bad debt expense, adjustments to contingent acquisition obligations, foreign currency losses (gains) and other expenses.
GAAP, as well as a non-GAAP financial measure. The non-GAAP financial measure represents Net Income Available to IPG Common Stockholder before Provision for Income Taxes, Total (Expenses) and Other Income, Equity in Net Income of Unconsolidated Affiliates, Net Income Attributable to Non-controlling Interests and Amortization of Acquired Intangibles which we refer to as “Adjusted EBITA”.
GAAP, as well as a non-GAAP financial measure. The non-GAAP financial measure represents Net Income Available to IPG Common Stockholders before Provision for Income Taxes, Total (Expenses) and Other Income, Equity in Net Income of Unconsolidated Affiliates, Net Income Attributable to Non-controlling Interests, and Amortization of Acquired Intangibles and Impairment of Goodwill which we refer to as “Adjusted EBITA”.
Additionally, we may be required to make payments to minority shareholders in certain subsidiaries if they exercise their options to sell us their equity interests. Notable funding requirements include: • Debt service – Our 4.200% Senior Notes in aggregate principal amount of $250.0 mature on April 15, 2024. We expect to use available cash to fund the principal repayment.
Additionally, we may be required to make payments to minority shareholders in certain subsidiaries if they exercise their options to sell us their equity interests. Notable funding requirements include: • Debt service – Our 4.200% Senior Notes in aggregate principal amount of $250.0 matured on April 15, 2024. We used available cash to fund the principal repayment.
Intangible assets with definite lives are amortized on a straight-line basis with estimated useful lives generally between 7 and 15 years.
Intangible assets with definite lives are amortized on a straight-line basis with estimated useful lives generally between 10 and 15 years.
A 25 basis-point increase or decrease in the discount rate would have decreased or increased the benefit obligation as of December 31, 2023 by approximately $12.0, respectively. The expected rate of return on pension plan assets is another significant assumption that impacts our net pension cost and is determined at the beginning of the year.
A 25 basis-point increase or decrease in the discount rate would have decreased or increased the benefit obligation as of December 31, 2024 by approximately $9.0 and $10.0, respectively. The expected rate of return on pension plan assets is another significant assumption that impacts our net pension cost and is determined at the beginning of the year.
Refer to the segment discussion later in this MD&A for information on changes in revenue by segment. 24 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (Amounts in Millions, Except Per Share Amounts) Salaries and Related Expenses Years ended December 31, Change 2023 vs 2022 2022 vs 2021 2023 2022 2021 % Increase/ (Decrease) % Increase/ (Decrease) Salaries and related expenses $ 6,243.9 $ 6,258.3 $ 5,975.4 (0.2) % 4.7 % As a % of revenue before billable expenses: Salaries and related expenses 66.4 % 66.2 % 65.6 % Base salaries, benefits and tax 58.1 % 56.6 % 53.4 % Incentive expense 2.7 % 3.6 % 5.2 % Severance expense 1.3 % 0.8 % 0.9 % Temporary help 3.3 % 4.1 % 4.8 % All other salaries and related expenses 1.0 % 1.1 % 1.3 % Revenue before billable expenses decrease of (0.5)% outpaced the overall decrease in salaries and related expenses of (0.2)% during the year ended December 31, 2023 as compared to the prior-year period.
Refer to the segment discussion later in this MD&A for information on changes in revenue by segment. 29 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (Amounts in Millions, Except Per Share Amounts) Salaries and Related Expenses Years ended December 31, Change 2024 vs 2023 2023 vs 2022 2024 2023 2022 % Increase/ (Decrease) % Increase/ (Decrease) Salaries and related expenses $ 6,024.8 $ 6,243.9 $ 6,258.3 (3.5) % (0.2) % As a % of revenue before billable expenses: Salaries and related expenses 65.6 % 66.4 % 66.2 % Base salaries, benefits and tax 57.3 % 58.1 % 56.6 % Incentive expense 2.8 % 2.7 % 3.6 % Severance expense 1.5 % 1.3 % 0.8 % Temporary help 3.0 % 3.3 % 4.1 % All other salaries and related expenses 1.0 % 1.0 % 1.1 % Revenue before billable expenses decrease of (2.3)% was outpaced by the overall decrease in salaries and related expenses of (3.5)% during the year ended December 31, 2024 as compared to the prior-year period.
The decrease in salaries and related expenses was primarily driven by de creases in performance-based employee incentive compensation and temporary help expense, partially offset by increases in base salaries, benefits and tax and severance expense.
The decrease in salaries and related expenses was primarily driven by decreases in performance-based employee incentive compensation and temporary help expense, partially offset by increases in base salaries, benefits and tax and severance expense.
The sales of businesses and the classification of certain assets and liabilities as held for sale included cash, net of proceeds, of $58.7, $(22.4) and $(13.3) for the years ended 2023, 2022 and 2021, respectively, which is classified within the Proceeds from sale of businesses, net of cash sold line in our Consolidated Statements of Cash Flows in Item 8, Financial Statements and Supplementary Data .
The sales of businesses and the classification of certain assets and liabilities as held for sale included cash, net of proceeds, of $7.9, $58.7 and $(22.4) for the years ended 2024, 2023 and 2022, respectively, which is classified within the Proceeds from sale of businesses, net of cash sold line in our Consolidated Statements of Cash Flows in Item 8, Financial Statements and Supplementary Data .
EXECUTIVE SUMMARY Our Business We provide marketing, communications and business transformation services that help marketers and brands succeed in today's digital economy. Combining the power of creativity and technology, our approximately 57,400 employees and operations span all major world markets.
EXECUTIVE SUMMARY Our Business We provide marketing, communications and business transformation services that help marketers and brands succeed in today's digital economy. Combining the power of creativity and technology, our approximately 53,300 employees and operations span all major world markets.
Financing Activities Net cash used in financing activities during 2023 was $634.3, primarily driven by the payment of common stock dividends of $479.1 and common stock repurchases of $350.2, partially offset by net proceeds of $296.3 from the issuance of our $300.0 aggregate principal amount of 5.375% unsecured senior notes due 2033 (the "5.375% Senior Notes").
Net cash used in financing activities during 2023 was driven primarily by payments for common stock dividends of $479.1 and common stock repurchases of $350.2, partially offset by net proceeds of $296.3 from the issuance of our $300.0 aggregate amount of 5.375% unsecured senior notes due 2033.
RECENT ACCOUNTING STANDARDS, by reference to Note 17 to the Consolidated Financial Statements, provides a discussion of certain accounting standards that have been adopted during 2023 or that have not yet been required to be implemented and may be applicable to our future operations.
RECENT ACCOUNTING STANDARDS, by reference to Note 18 to the Consolidated Financial Statements, provides a discussion of certain accounting standards that have been adopted during 2024 or that have not yet been required to be implemented and may be applicable to our future operations.
Assuming we pay a quarterly dividend of $0.330 per share and there is no significant change in the number of outstanding shares as of December 31, 2023, we would expect to pay approximately $500.0 over the next twelve months.
Assuming we pay a quarterly dividend of $0.330 per share and there is no significant change in the number of outstanding shares as of December 31, 2024, we would expect to pay approximately $492.0 over the next twelve months.
See Note 6 and Note 16 in Item 8, Financial Statements and Supplementary Data for further information. 4 The amounts presented are estimates due to inherent uncertainty of tax settlements, including the ability to offset liabilities with tax loss carryforwards.
See Note 7 and Note 17 in Item 8, Financial Statements and Supplementary Data for further information. 4 The amounts presented are estimates due to inherent uncertainty of tax settlements, including the ability to offset liabilities with tax loss carryforwards.
Foreign Exchange Rate Changes The effect of foreign exchange rate changes on cash, cash equivalents and restricted cash included in the Consolidated Statements of Cash Flows resulted in a net increase of $7.0 in 2023. This increase was primarily a result of the U.S. dollar being weaker than several foreign currencies, including the Euro.
This decrease was primarily a result of the U.S. dollar being stronger than several foreign currencies, including the Euro, the Canadian Dollar and the Australian Dollar. The effect of foreign exchange rate changes on cash, cash equivalents and restricted cash included in the Consolidated Statements of Cash Flows resulted in a net increase of $7.0 in 2023.
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.
Share Repurchase Programs On February 10, 2022, our Board of Directors (the "Board") reauthorized a program to repurchase, from time to time, up to $400.0 of our common stock.
The Company has historically asserted that its unremitted foreign earnings are permanently reinvested, and therefore has not recorded any deferred taxes on such amounts. However, as of December 31, 2023, $121.0 of undistributed foreign earnings from certain international entities were not subject to the permanent reinvestment assertion, therefore, the Company has recorded deferred taxes on this amount.
The Company has historically asserted that its unremitted foreign earnings are permanently reinvested, and therefore has not recorded any deferred taxes on such amounts. However, as of December 31, 2024, $102.9 of undistributed foreign earnings from certain international entities were not subject to the permanent reinvestment assertion, therefore, the Company has recorded deferred taxes on this amount.
The average amount outstanding during 2023 was $47.9, with a weighted-average interest rate of approximately 7.9%. 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 commercial paper program are supported by the Credit Agreement described above.
The average amount outstanding during 2024 was $44.0, with a weighted-average interest rate of approximately 7.6%. 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 commercial paper program are supported by the Credit Agreement described above.
For the 2023 test, the revenue growth rates for our reporting units used in our analysis were generally between 1.5% and 9.0%. Factors influencing the revenue growth rates include the nature of the services the reporting unit provides for its clients, the geographic locations in which the reporting unit conducts business and the maturity of the reporting unit.
For the 2024 test, the revenue growth rates for our reporting units used in our analysis were generally between (5.0%) and 7.0%. Factors influencing the revenue growth rates include the nature of the services the reporting unit provides for its clients, the geographic locations in which the reporting unit conducts business and the maturity of the reporting unit.
Our orga nic change of reve nue before billable expenses of (0.1)% for the year ended December 31, 2023 was due to net client losses and lower spending from existing clients in the technology & telecom sector and net client losses in the retail sector, partially offset by net client wins in our healthcare and financial services sectors.
Our organic change of revenue before billable expenses of (0.1)% for the year ended December 31, 2023 was due to net client losses and lower spending from existing clients in the technology & telecom sector and net client losses in the retail sector, partially offset by net client wins in our healthcare and financial services sectors.
INCOME TAXES Years ended December 31, 2023 2022 2021 Income before income taxes $ 1,408.0 $ 1,268.9 $ 1,222.1 Provision for income taxes $ 291.2 $ 318.4 $ 251.8 Effective income tax rate 20.7 % 25.1 % 20.6 % Effective Tax Rate Our tax rates are affected by many factors, including our worldwide earnings from various countries, changes in legislation and tax characteristics of our income.
INCOME TAXES Years ended December 31, 2024 2023 2022 Income before income taxes $ 1,049.1 $ 1,408.0 $ 1,268.9 Provision for income taxes $ 333.9 $ 291.2 $ 318.4 Effective income tax rate 31.8 % 20.7 % 25.1 % Effective Tax Rate Our tax rates are affected by many factors, including our worldwide earnings from various countries, changes in legislation and tax characteristics of our income.
For the 2023 test, the discount rate we used for our reporting units tested ranged between 13.0% and 15.5%, and the terminal value growth rate ranged between 2.0% and 3.0%. The terminal value growth rate represents the expected long-term growth rate for our industry, which incorporates the type of services each reporting unit provides as well as the global economy.
For the 2024 test, the discount rate we used for our reporting units tested ranged between 11.5% and 13.5%, and the terminal value growth rate was 3.0%. The terminal value growth rate represents the expected long-term growth rate for our industry, which incorporates the type of services each reporting unit provides as well as the global economy.
As of December 31, 2023, there were no borrowings under the Credit Agreement; however, we had $9.5 of letters of credit under the Credit Agreement, which reduced our total availability to $1,490.5. We were in compliance with all of our covenants in the Credit Agreement as of December 31, 2023.
As of December 31, 2024, there were no borrowings under the Credit Agreement; however, we had $9.3 of letters of credit under the Credit Agreement, which reduced our total availability to $1,490.7. We were in compliance with all of our covenants in the Credit Agreement as of December 31, 2024.
We will continue to evaluate strategic opportunities to grow and continue to strengthen our market position, particularly in our digital and marketing services offerings, and to expand our presence in high-growth and key strategic world markets. • Dividends – During 2023, we paid four quarterly cash dividends of $0.310 per share on our common stock, which corresponded to aggregate dividend payments of $479.1.
We will continue to evaluate strategic opportunities to grow and continue to strengthen our market position, particularly in our digital and marketing services offerings, and to expand our presence in high-growth and key strategic world markets. • Dividends – During 2024, we paid four quarterly cash dividends of $0.330 per share on our common stock, which corresponded to aggregate dividend payments of $496.5.
Our cash balances are held in numerous jurisdictions throughout the world, including at the holding company level. Below is a summary of our sources of liquidity. At December 31, 2023, we held $531.2 of cash, cash equivalents and marketable securities in foreign subsidiaries.
Our cash balances are held in numerous jurisdictions throughout the world, including at the holding company level. Below is a summary of our sources of liquidity. At December 31, 2024, we held $725.9 of cash, cash equivalents and marketable securities in foreign subsidiaries.
Years ended December 31, Change 2023 vs 2022 2022 vs 2021 Statement of Operations Data 2023 2022 2021 % Increase/ (Decrease) % Increase/ (Decrease) REVENUE: Revenue before billable expenses $ 9,400.6 $ 9,449.4 $ 9,107.9 (0.5) % 3.7 % Billable expenses 1,488.7 1,478.4 1,132.8 0.7 % 30.5 % Total revenue $ 10,889.3 $ 10,927.8 $ 10,240.7 (0.4) % 6.7 % OPERATING INCOME 1 $ 1,482.6 $ 1,381.2 $ 1,436.2 7.3 % (3.8) % Adjusted EBITA 1, 2 $ 1,566.6 $ 1,465.9 $ 1,522.4 6.9 % (3.7) % NET INCOME AVAILABLE TO IPG COMMON STOCKHOLDERS $ 1,098.4 $ 938.0 $ 952.8 Earnings per share available to IPG common stockholders: Basic 1 $ 2.86 $ 2.40 $ 2.42 Diluted 1 $ 2.85 $ 2.37 $ 2.39 Operating Ratios Organic change in revenue before billable expenses (0.1) % 7.0 % 11.9 % Operating margin on revenue before billable expenses 1 15.8 % 14.6 % 15.8 % Operating margin on total revenue 1 13.6 % 12.6 % 14.0 % Adjusted EBITA margin on revenue before billable expenses 1, 2 16.7 % 15.5 % 16.7 % Expenses as a % of revenue before billable expenses: Salaries and related expenses 66.4 % 66.2 % 65.6 % Office and other direct expenses 14.3 % 14.2 % 14.0 % Selling, general and administrative expenses 0.7 % 0.9 % 1.3 % Depreciation and amortization 2.8 % 2.9 % 3.1 % Restructuring charges 1 0.0 % 1.1 % 0.1 % 1 For the years ended December 31, 2023, 2022 and 2021, results include restructuring charges of $0.1, $102.4 an d $10.6, respectively.
Years ended December 31, Change 2024 vs 2023 2023 vs 2022 Statement of Operations Data 2024 2023 2022 % Increase/ (Decrease) % Increase/ (Decrease) REVENUE: Revenue before billable expenses $ 9,187.6 $ 9,400.6 $ 9,449.4 (2.3) % (0.5) % Billable expenses 1,504.1 1,488.7 1,478.4 1.0 % 0.7 % Total revenue $ 10,691.7 $ 10,889.3 $ 10,927.8 (1.8) % (0.4) % OPERATING INCOME 1 $ 1,203.2 $ 1,482.6 $ 1,381.2 (18.8) % 7.3 % Adjusted EBITA 1, 2 $ 1,517.1 $ 1,566.6 $ 1,465.9 (3.2) % 6.9 % NET INCOME AVAILABLE TO IPG COMMON STOCKHOLDERS $ 689.5 $ 1,098.4 $ 938.0 Earnings per share available to IPG common stockholders: Basic 1 $ 1.84 $ 2.86 $ 2.40 Diluted 1 $ 1.83 $ 2.85 $ 2.37 Operating Ratios Organic change in revenue before billable expenses 0.2 % (0.1) % 7.0 % Operating margin on revenue before billable expenses 1 13.1 % 15.8 % 14.6 % Operating margin on total revenue 1 11.3 % 13.6 % 12.6 % Adjusted EBITA margin on revenue before billable expenses 1, 2 16.5 % 16.7 % 15.5 % Expenses as a % of revenue before billable expenses: Salaries and related expenses 65.6 % 66.4 % 66.2 % Office and other direct expenses 14.6 % 14.3 % 14.2 % Selling, general and administrative expenses 1.4 % 0.7 % 0.9 % Depreciation and amortization 2.8 % 2.8 % 2.9 % Restructuring charges 1 (0.1) % 0.0 % 1.1 % 1 For the years ended December 31, 2024, 2023 and 2022, results include restructuring charges of $(5.0) , $0.1 an d $102.4, respectively.
Depreciation and amortization, excluding amortization of acquired intangibles, as a percentage of segment revenue before billable expenses decreased to 1.6% in 2022 from the prior-year period.
Depreciation and amortization, excluding amortization of acquired intangibles, as a percentage of segment revenue before billable expenses decreased slightly to 1.4% in 2024 from the prior-year period.
Depreciation and amortization, excluding amortization of acquired intangibles, as a percentage of segment revenue before billable expenses decreased to 1.2% in 2022 from the prior-year period.
Depreciation and amortization, excluding amortization of acquired intangibles, as a percentage of segment revenue before billable expenses decreased slightly to 1.5% in 2023 from the prior-year period.
Segment EBITA Years ended December 31, Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 Segment EBITA 1 $ 265.2 $ 234.5 $ 188.6 13.1 % 24.3 % Segment EBITA margin on revenue before billable expenses 1 18.4 % 16.9 % 14.4 % 1 Segment EBITA and Segment EBITA margin on revenue before billable expenses include $1.1, $3.8 and $10.0 of restructuring charges in the year ended December 31, 2023, 2022 and 2021 respectively.
Segment EBITA Years ended December 31, Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 Segment EBITA 1 $ 259.4 $ 265.2 $ 234.5 (2.2) % 13.1 % Segment EBITA margin on revenue before billable expenses 1 18.1 % 18.4 % 16.9 % 1 Segment EBITA and Segment EBITA margin on revenue before billable expenses include $0.3, $1.1 and $3.8 of restructuring charges in the year ended December 31, 2024, 2023 and 2022 respectively.
See "Restructuring Charges" in MD&A and Note 11 of Item 8, Financial Statements and Supplementary Data for further information. Segment EBITA margin increased during 2023 when compared to 2022, as the increase in revenue before billable expenses, outpaced the overall decrease in our operating expenses, excluding billable expenses and amortization of acquired intangibles.
See "Restructuring Charges" in MD&A and Note 12 of Item 8, Financial Statements and Supplementary Data for further information. Segment EBITA margin increased during 2024 when compared to 2023, as the decrease in revenue before billable expenses, was outpaced by the overall decrease in our operating expenses, excluding billable expenses, amortization of acquired intangibles and impairment of goodwill.
Revenue b efore billable expenses growth of 0.7% was outpaced by the increase in salaries and related expenses as compared to the prior-year period, primarily due to increases in base salaries, benefits and tax and severance expense, partially offset by decreases in temporary help expense and performance-based incentive compensation.
Revenue before billable expenses growth of 0.8% was outpaced by the increase in salaries and related expenses as compare d to the prior-year period, primarily due to increases in base salaries, benefits and tax and severance expense, partially offset by decreases in temporary help expense and performance-based incentive compensation.
See "Restructuring Charges" in MD&A and Note 11 of Item 8, Financial Statements and Supplementary Data for further information. Segment EBITA margin decreased during 2023 when compared to 2022, as the decrease in revenue before billable expenses, exceeded the overall decrease in our operating expenses, excluding billable expenses and amortization of acquired intangibles.
See "Restructuring Charges" in MD&A and Note 12 of Item 8, Financial Statements and Supplementary Data for further information. Segment EBITA margin decreased during 2024 when compared to 2023, as the decrease in revenue before billable expenses, outpaced the overall decrease in our operating expenses, excluding billable expenses and amortization of acquired intangibl es.
Years ended December 31, 2023 2022 2021 Net gains/(losses) on sales of businesses $ 17.9 $ (11.3) $ (19.4) Loss on early extinguishment of debt 0.0 0.0 (74.0) Other (7.7) 10.3 22.7 Total other income (expense), net $ 10.2 $ (1.0) $ (70.7) Net gains/(losses) on sales of businesse s – During 2023, 2022 and 2021, the amounts recognized were related to sales of businesses and the classification of certain assets and liabilities, consisting primarily of accounts receivable and accounts payable, as held for sale within our MD&E, IA&C, and SC&E reportable segments.
Years ended December 31, 2024 2023 2022 Net gains/(losses) on sales of businesses $ (64.2) $ 17.9 $ (11.3) Other (11.7) (7.7) 10.3 Total other (expense) income, net $ (75.9) $ 10.2 $ (1.0) Net gains/(losses) on sales of businesse s – During 2024, 2023 and 2022, the amounts recognized were related to sales of businesses and the classification of certain assets and liabilities, consisting primarily of goodwill, accounts receivable and accounts payable, as held for sale within our MD&E, IA&C, and SC&E reportable segments.
Corporate and other expenses in 2022 decreased by $34.9 to $94.5 compared to 2021, primarily attributable to decreases in selling, general and administrative expenses, partially offset by an increase in restructuring charges. During the years ended December 31, 2023, 2022 and 2021 corporate and other expense includes $0.1, $0.8 and $(2.1) of restructuring charges, respectively.
Corporate and other expenses in 2023 decreased by $22.2 to $72.3 compared to 2022, primarily attributable to decreases in selling, general and administrative expenses, partially offset by an increase in restructuring charges. During the years ended December 31, 2024, 2023 and 2022 corporate and other expense includes $3.8, $0.1 and $0.8 of restructuring charges, respectively.
Four Quarters Ended Four Quarters Ended Financial Covenant December 31, 2023 Credit Agreement EBITDA Reconciliation 1 December 31, 2023 Leverage ratio (not greater than) 1 3.50x Net income available to IPG common stockholders $ 1,098.4 Actual leverage ratio 1.79x Non-operating adjustments 2 384.2 Operating income 1,482.6 Add: Depreciation and amortization 311.8 Other non-cash charges reducing operating income (1.2) Credit Agreement EBITDA 1 $ 1,793.2 1 The leverage ratio is defined as debt as of the last day of such fiscal quarter to EBITDA (as defined in the Credit Agreement) for the four quarters then ended. 2 Includes adjustments of the following items from our Consolidated Statement of Operations in Item 8, Financial Statements and Supplementary Data : provision for income taxes, total (expenses) and other income, equity in net income of unconsolidated affiliates, and net income attributable to noncontrolling interests .
Four Quarters Ended Four Quarters Ended Financial Covenant December 31, 2024 Credit Agreement EBITDA Reconciliation 1 December 31, 2024 Leverage ratio (not greater than) 1 3.50x Net income available to IPG common stockholders $ 689.5 Actual leverage ratio 1.69x Non-operating adjustments 2 513.7 Operating income 1,203.2 Add: Depreciation and amortization 324.4 Other non-cash charges reducing operating income 226.4 Credit Agreement EBITDA 1 $ 1,754.0 1 The leverage ratio is defined as debt as of the last day of such fiscal quarter to EBITDA (as defined in the Credit Agreement) for the four quarters then ended. 2 Includes adjustments of the following items from our Consolidated Statement of Operations in Item 8, Financial Statements and Supplementary Data : provision for income taxes, total (expenses) and other income, equity in net income of unconsolidated affiliates, and net income attributable to noncontrolling interests .
Whether to declare and the amount of any such future dividend is at the discretion of our Board and will depend upon factors such as our earnings, financial position and cash requirements. • U.K.
Whether to declare and the amount of any such future dividend is at the discretion of our Board and will depend upon factors such as our earnings, financial position and cash requirements. • U.K. Pension Plan - In December 2023, the Interpublic Limited Pension Plan in the U.K., (the "U.K.
The table below displays the midpoint of the fair value range for each reporting unit tested in the 2023 and 2022 annual impairment tests, indicating that the fair value exceeded the carrying value for all reporting units by greater than 20%. 2023 Impairment Test 2022 Impairment Test Reporting Unit Goodwill Fair value exceeds carrying value by: Reporting Unit Goodwill Fair value exceeds carrying value by: A $ 483.7 > 70% A $ 448.6 > 200% B $ 735.5 > 25% B $ 528.3 > 100% C $ 99.7 > 45% Based on the analysis described above, for the reporting units for which we performed the quantitative impairment test, we concluded that our goodwill was not impaired as of October 1, 2023, because these reporting units passed the test as the fair values of each of the reporting units were substantially in excess of their respective carrying values.
The table below displays the midpoint of the fair value range for each reporting unit tested in the 2024 and 2023 annual impairment tests, indicating that the fair value exceeded the carrying value for all reporting units. 2024 Impairment Test 2023 Impairment Test Reporting Unit Goodwill Fair value exceeds carrying value by: Reporting Unit Goodwill Fair value exceeds carrying value by: A $ 402.9 > 10% A $ 483.7 > 70% B $ 1,410.0 > 185% B $ 735.5 > 25% C $ 99.7 > 45% Based on the analysis described above, for the reporting units for which we performed the quantitative impairment test, we concluded that our goodwill was not impaired as of October 1, 2024, because these reporting units passed the test as the fair values of each of the reporting units were substantially in excess of their respective carrying values.
If we lose access to these credit lines, we would have to provide funding directly to some of our operations. As of December 31, 2023, the Company had uncommitted lines of credit in an aggregate amount of $780.7, under which we had outstanding borrowings of $34.2 classified as short-term borrowings on our Consolidated Balance Sheet.
If we lose access to these credit lines, we would have to provide funding directly to some of our operations. As of December 31, 2024, the Company had uncommitted lines of credit in an aggregate amount of $769.1, under which we had outstanding borrowings of $40.5 classified as short-term borrowings on our Consolidated Balance Sheet.
Pension Plan - In December 2023, the Interpublic Limited Pension Plan in the U.K., (the "U.K .Pension Plan") the Company's U.K. defined benefit pension plan, entered into an agreement with an insurance company to purchase a group annuity, or "buy-in", that matches the plans future projected benefit obligations to covered participants.
Pension Plan") the Company's U.K. defined benefit pension plan, entered into an agreement with an insurance company to purchase a group annuity, or "buy-in", that matches the plans future projected benefit obligations to covered participants. As part of the annuity purchase contract, the U.K.
In addition, as more fully described below, we believe that providing Adjusted EBITA, together with a reconciliation of this non-GAAP financial measure to net income, helps 44 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (Amounts in Millions, Except Per Share Amounts) investors make comparisons between our Company and other companies that may have different capital structures, different effective income tax rates and tax attributes, different capitalized asset values and/or different forms of employee compensation.
In addition, as more fully described below, we believe that providing Adjusted EBITA, together with a reconciliation of this non-GAAP financial measure to net income, helps investors make comparisons between our Company and other companies that may have different capital structures, different effective income tax rates and tax attributes, different capitalized asset values and/or different forms of employee compensation.
Segment EBITA Years ended December 31, Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 Segment EBITA 1 $ 541.3 $ 581.4 $ 597.9 (6.9) % (2.8) % Segment EBITA margin on revenue before billable expenses 1 14.9 % 15.4 % 16.2 % 1 Segment EBITA and Segment EBITA margin on revenue before billable expenses include $0.2, $28.7 and $2.6 of restructuring charges in the year ended December 31, 2023, 2022 and 2021 respectively.
Segment EBITA Years ended December 31, Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 Segment EBITA 1 $ 542.6 $ 536.8 $ 577.5 1.1 % (7.0) % Segment EBITA margin on revenue before billable expenses 1 15.3 % 14.9 % 15.4 % 1 Segment EBITA and Segment EBITA margin on revenue before billable expenses include $(2.3), $0.2 and $28.7 of restructuring charges in the year ended December 31, 2024, 2023 and 2022 respectively.
As of December 31, 2023, we had outstanding short-term borrowings of $34.2 from our uncommitted lines of credit used primarily to fund short-term working capital needs.
As of December 31, 2024, we had outstanding short-term borrowings of $40.5 from our uncommitted lines of credit used primarily to fund short-term working capital needs.
On February 8, 2024, we announced that our Board of Directors (the "Board") had declared a common stock cash dividend of $0.330 per share, payable on March 15, 2024 to holders of record as of the close of business on March 1, 2024.
On February 12, 2025, we announced that our Board of Directors (the "Board") had declared a common stock cash dividend of $0.330 per share, payable on March 17, 2025 to holders of record as of the close of business on March 3, 2025.
As of December 31, 2023, we used discount rates of 5.40% for both the domestic pension plan and the domestic postretirement benefit plan and a weighted-average discount rate of 4.32% for our significant foreign pension plans to measure our benefit obligations.
As of December 31, 2024, we used discount rates of 4.60% for the domestic pension plan, 5.80% for the domestic postretirement benefit plan and a weighted-average discount rate of 5.13% for our significant foreign pension plans to measure our benefit obligations.
For 2023, the weighted-average expected rates of return of 6.00% and 5.62% were used in the calculation of net pension costs for the domestic and significant foreign pension plans, respectively. For 2024, we plan to use expected rates of return of 4.25% and 4.20% for the domestic and significant foreign pension plans, respectively.
For 2024, the weighted-average expected rates of return of 4.25% and 4.21% were used in the calculation of net pension costs for the domestic and significant foreign pension plans, respectively. For 2025, we plan to use expected rates of return of 4.25% and 5.35% for the domestic and significant foreign pension plans, respectively.
Years ended December 31, 2023 2022 2021 Revenue before billable expenses $ 9,400.6 $ 9,449.4 $ 9,107.9 Adjusted EBITA Reconciliation: Net Income Available to IPG Common Stockholders 1 $ 1,098.4 $ 938.0 $ 952.8 Add Back: Provision for income taxes 291.2 318.4 251.8 Subtract: Total (expenses) and other income (74.6) (112.3) (214.1) Equity in net income of unconsolidated affiliates 1.3 5.6 2.5 Net income attributable to non-controlling interests (19.7) (18.1) (20.0) Operating Income 1 1,482.6 1,381.2 1,436.2 Add Back: Amortization of acquired intangibles 84.0 84.7 86.2 Adjusted EBITA 1 $ 1,566.6 $ 1,465.9 $ 1,522.4 Adjusted EBITA Margin on Revenue before billable expenses 1 16.7 % 15.5 % 16.7 % 1 Calculations include restructuring charges of $0.1 in 2023, $102.4 in 2022 and $10.6 in 2021.
Years ended December 31, 2024 2023 2022 Revenue before billable expenses $ 9,187.6 $ 9,400.6 $ 9,449.4 Adjusted EBITA Reconciliation: Net Income Available to IPG Common Stockholders 1,2 $ 689.5 $ 1,098.4 $ 938.0 Add Back: Provision for income taxes 333.9 291.2 318.4 Subtract: Total (expenses) and other income (154.1) (74.6) (112.3) Equity in net income of unconsolidated affiliates 0.5 1.3 5.6 Net income attributable to non-controlling interests (26.2) (19.7) (18.1) Operating Income 1,2 1,203.2 1,482.6 1,381.2 Add Back: Amortization of acquired intangibles 81.8 84.0 84.7 Impairment of goodwill 232.1 — — Adjusted EBITA 1,2 $ 1,517.1 $ 1,566.6 $ 1,465.9 Adjusted EBITA Margin on Revenue before billable expenses 1,2 16.5 % 16.7 % 15.5 % 1 Calculations include restructuring charges of $(5.0) in 2024, $0.1 in 2023 and $102.4 in 2022.
We have 10 reporting units that were subject to the 2023 annual impairment testing. Our annual impairment review as of October 1, 2023 did not result in an impairment charge at any of our reporting units.
We evaluate the recoverability of goodwill at a reporting unit level. We have 10 reporting units that were subject to the 2024 annual impairment testing. Our annual impairment review as of October 1, 2024 did not result in an impairment charge at any of our reporting units.
Specialized Communications & Experiential Solutions Revenue before billable expenses Year ended December 31, 2022 Components of Change Year ended December 31, 2023 Change Foreign Currency Net Acquisitions/ (Divestitures) Organic Organic Total Consolidated $ 1,386.2 $ (1.9) $ (0.6) $ 57.2 $ 1,440.9 4.1 % 3.9 % Domestic 983.1 — (0.6) 32.4 1,014.9 3.3 % 3.2 % International 403.1 (1.9) 0.0 24.8 426.0 6.2 % 5.7 % The organic increase was mainly attributable to net client wins and increased spending from existing clients in our healthcare, other, food & beverage and auto & transportation sectors, partially offset by lower spending from existing clients and net client losses in our technology & telecom sector.
Specialized Communications & Experiential Solutions Revenue before billable expenses Year ended December 31, 2023 Components of Change Year ended December 31, 2024 Change Foreign Currency Net Acquisitions/ (Divestitures) Organic Organic Total Consolidated $ 1,440.9 $ 1.7 $ (32.0) $ 18.8 $ 1,429.4 1.3 % (0.8) % Domestic 1,014.9 — (24.9) 22.4 1,012.4 2.2 % (0.2) % International 426.0 1.7 (7.1) (3.6) 417.0 (0.8) % (2.1) % The organic increase was mainly attributa ble to increased spending from existing clients and net client wins in our food & beverage and consumer goods sectors, partially offset by lower spending from existing clients in our auto and transportation and technology & telecom sectors.
Office and other direct expense increased due to increases in travel and entertainment expense, client service costs and new business development, partially offset by decreases in occupancy expense and professional consulting fees and a reduction in the year-over-year change in contingent acquisition obligations.
Office and other direct expense increased mainly due to increases in client service costs as well as new business development, the year-over-year change in contingent acquisition obligations as well as increases in professional consulting fees and company meetings and conferences, partially offset by decreases in occupancy expense.
We exclude amortization of acquired intangibles because we believe that (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired intangible assets.
We exclude amortization of acquired intangibles and impairment of goodwill because we believe that (i) the amounts of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization, or changes in the carrying values or fair values of goodwill reporting units.
A deterioration in profitability, adverse market conditions, significant client losses, changes in spending levels of our existing clients or a different economic outlook than currently 42 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (Amounts in Millions, Except Per Share Amounts) estimated by management could have a significant impact on the estimated fair value of our reporting units and could result in an impairment charge in the future.
A deterioration in profitability, adverse market conditions, significant client losses, changes in spending levels of our existing clients or a different economic outlook than currently estimated by management could have a significant impact on the estimated fair value of our reporting units and could result in an impairment charge in the future.
We continue to maintain a disciplined approach to managing liquidity, with flexibility over significant uses of cash, including our capital expenditures, cash used for new acquisitions, our common stock repurchase program and our common stock dividends.
Borrowings under our commercial paper program are supported by our committed corporate credit agreement. We continue to maintain a disciplined approach to managing liquidity, with flexibility over significant uses of cash, including our capital expenditures, cash used for new acquisitions, our common stock repurchase program and our common stock dividends.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe foreign currencies that most adversely impacted our results during the year ended December 31, 2023 were the Argentine Peso, the Israeli Shekel, the Canadian Dollar, the Indian Rupee and the Japanese Yen. The foreign currencies that most favorably impacted our results during the year ended December 31, 2023 were the Euro and the Mexican Peso.
Biggest changeThe foreign currencies that most adversely impacted our results during the year ended December 31, 2024 were the Argentine Peso, the Brazilian Real, the Japanese Yen and the Chilean Peso. The foreign currencies that most favorably impacted our results during the year ended December 31, 2024 were he British Pound Sterling, the Colombian Peso and the Euro.
Dollar until the currency is no longer considered highly inflationary. 46 Table of Contents Credit and Market Risks Balance sheet items that potentially subject us to concentrations of credit risk are primarily cash and cash equivalents, short-term marketable securities, accounts receivable and accounts receivable billable to clients.
Dollar until the currency is no longer considered highly inflationary. 50 Table of Contents Credit and Market Risks Balance sheet items that potentially subject us to concentrations of credit risk are primarily cash and cash equivalents, short-term marketable securities, accounts receivable and accounts receivable billable to clients.
The fair value of our pension plan assets may appreciate or depreciate during the year, which can result in lower or higher pension expense and funding requirements in future periods. 47
The fair value of our pension plan assets may appreciate or depreciate during the year, which can result in lower or higher pension expense and funding requirements in future periods. 51
Based on 2023 exchange rates and operating results, if the U.S. Dollar were to strengthen or weaken by 10%, we currently estimate operating income would decrease or increase approximately 3%, assuming that all currencies are impacted in the same manner and our international revenue and expenses remain constant at 2023 levels.
Based on 2024 exchange rates and operating results, if the U.S. Dollar were to strengthen or weaken by 10%, we currently estimate operating income would decrease or increase approximately 4%, assuming that all currencies are impacted in the same manner and our international revenue and expenses remain constant at 2024 levels.
Based on our 2023 results, a 100 basis-point increase or decrease in interest rates would affect our interest income by approximately $23.9, assuming that all cash, cash equivalents and marketable securities are impacted in the same manner and balances remain constant from year-end 2023 levels.
Based on our 2024 results, a 100 basis-point increase or decrease in interest rates would affect our interest income by approximately $21.9, assuming that all cash, cash equivalents and marketable securities are impacted in the same manner and balances remain constant from year-end 2024 levels.
The majority of our debt (approximately 99% and 98% as of December 31, 2023 and 2022, respectively) bears interest at fixed rates. We do have debt with variable interest rates, but a 10% increase or decrease in interest rates would not be material to our interest expense or cash flows.
The majority of our debt (approximately 99% as of both December 31, 2024 and 2023) bears interest at fixed rates. We do have debt with variable interest rates, but a 10% increase or decrease in interest rates would not be material to our interest expense or cash flows.
The interest income generated primarily from these investments is subject to both domestic and foreign interest rate movements. During 2023 and 2022, we had interest income of $140.8 and $56.6, respectively.
The interest income generated primarily from these investments is subject to both domestic and foreign interest rate movements. During 2024 and 2023, we had interest income of $151.7 and $140.8, respectively.
Increase/(Decrease) in Fair Market Value As of December 31, 10% Increase in Interest Rates 10% Decrease in Interest Rates 2023 $ (115.3) $ 111.0 2022 (99.2) 127.1 We had $2,388.3 of cash, cash equivalents and marketable securities as of December 31, 2023 that we generally invest in conservative, short-term bank deposits or securities.
Increase/(Decrease) in Fair Market Value As of December 31, 10% Increase in Interest Rates 10% Decrease in Interest Rates 2024 $ (97.5) $ 113.1 2023 (115.3) 111.0 We had $2,187.7 of cash, cash equivalents and marketable securities as of December 31, 2024 that we generally invest in conservative, short-term bank deposits or securities.

Other IPG 10-K year-over-year comparisons