.2

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of The Interpublic Group of Companies, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of The Interpublic Group of Companies, Inc. and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment Assessment for Indefinite-Lived Intangible Assets

As described in Notes 1 and 9 to the consolidated financial statements, the Company’s other intangible assets balance includes $165.3 million of indefinite-lived intangible assets as of December 31, 2024. For intangible assets not subject to amortization, management evaluates for impairment

annually or more frequently if events or changes in circumstances indicate that an impairment may exist. The determination of fair value is based on the relief from royalty method of the income approach, which incorporates the use of a discounted cash flow analysis. Management’s discounted cash flow analysis includes assumptions related to forecasted future revenues, royalty rates and discount rates.

The principal considerations for our determination that performing procedures relating to the impairment assessment for indefinite-lived intangible assets is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the indefinite-lived intangible assets; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumption related to the discount rate; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s impairment assessment, including controls over the valuation of the Company’s indefinite-lived intangible assets. These procedures also included, among others (i) testing management’s process for developing the fair value estimate for the indefinite-lived intangible assets; (ii) evaluating the appropriateness of the relief from royalty method; (iii) testing the completeness and accuracy of underlying data used in the relief from royalty method and (iv) evaluating the reasonableness of the significant assumption used by management related to the discount rate. Evaluating management’s assumption related to the discount rate involved evaluating whether the assumption used by management was reasonable considering whether the assumption was consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s relief from royalty method and (ii) the reasonableness of the discount rate assumption.

/s/ PricewaterhouseCoopers LLP

New York, New York

February 20, 2025

We have served as the Company’s auditor since 1952.

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in Millions, Except Per Share Amounts)

 

		Years ended December 31,
		2024				2023				2022
REVENUE:
Revenue before billable expenses		$	9,187.6			$	9,400.6			$	9,449.4
Billable expenses			1,504.1				1,488.7				1,478.4
Total revenue			10,691.7				10,889.3				10,927.8
OPERATING EXPENSES:
Salaries and related expenses			6,024.8				6,243.9				6,258.3
Office and other direct expenses			1,343.1				1,342.5				1,346.4
Billable expenses			1,504.1				1,488.7				1,478.4
Cost of services			8,872.0				9,075.1				9,083.1
Selling, general and administrative expenses			130.5				67.2				87.1
Depreciation and amortization			258.9				264.3				274.0
Impairment of goodwill			232.1				—				—
Restructuring charges			(5.0	)			0.1				102.4
Total operating expenses			9,488.5				9,406.7				9,546.6
OPERATING INCOME			1,203.2				1,482.6				1,381.2
EXPENSES AND OTHER INCOME:
Interest expense			(229.9	)			(225.6	)			(167.9	)
Interest income			151.7				140.8				56.6
Other (expense) income, net			(75.9	)			10.2				(1.0	)
Total (expenses) and other income			(154.1	)			(74.6	)			(112.3	)
Income before income taxes			1,049.1				1,408.0				1,268.9
Provision for income taxes			333.9				291.2				318.4
Income of consolidated companies			715.2				1,116.8				950.5
Equity in net income of unconsolidated affiliates			0.5				1.3				5.6
NET INCOME			715.7				1,118.1				956.1
Net income attributable to non-controlling interests			(26.2	)			(19.7	)			(18.1	)
NET INCOME AVAILABLE TO IPG COMMON STOCKHOLDERS		$	689.5			$	1,098.4			$	938.0
Earnings per share available to IPG common stockholders:
Basic		$	1.84			$	2.86			$	2.40
Diluted		$	1.83			$	2.85			$	2.37
Weighted-average number of common shares outstanding:
Basic			375.2				384.1				391.5
Diluted			377.7				385.9				395.1

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

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in Millions)

 

		Years ended December 31,
		2024				2023				2022
NET INCOME		$	715.7			$	1,118.1			$	956.1
OTHER COMPREHENSIVE (LOSS) INCOME
Foreign currency translation:
Foreign currency translation adjustments			(153.4	)			59.3				(131.8	)
Reclassification adjustments recognized in net income			0.2				0.5				4.3
			(153.2	)			59.8				(127.5	)
Derivative instruments:
Changes in fair value of derivative instruments			0.0				0.6				17.5
Recognition of previously unrealized gains included in net income			(3.8	)			(2.6	)			(1.4	)
Income tax effect			1.0				0.5				(4.0	)
			(2.8	)			(1.5	)			12.1
Defined benefit pension and other postretirement plans:
Net actuarial (losses) gains for the period			(24.1	)			(17.4	)			2.4
Amortization of unrecognized losses, transition obligation and prior service cost included in net income			7.5				6.8				6.3
Settlement and curtailment (gains) losses included in net income			(0.3	)			(0.3	)			0.0
Other			1.1				(2.1	)			4.8
Income tax effect			3.9				2.0				0.8
			(11.9	)			(11.0	)			14.3
Other comprehensive (loss) income, net of tax			(167.9	)			47.3				(101.1	)
TOTAL COMPREHENSIVE INCOME			547.8				1,165.4				855.0
Less: comprehensive income attributable to non-controlling interests			24.7				19.5				16.5
COMPREHENSIVE INCOME ATTRIBUTABLE TO IPG		$	523.1			$	1,145.9			$	838.5

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

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in Millions)

 

		December 31, 2024				December 31, 2023
ASSETS:
Cash and cash equivalents		$	2,187.1			$	2,386.1
Accounts receivable, net of allowance of $37.0 and $46.4, respectively			5,649.7				5,768.8
Accounts receivable, billable to clients			2,088.4				2,229.2
Prepaid expenses			552.4				415.8
Assets held for sale			51.4				21.9
Other current assets			77.0				128.6
Total current assets			10,606.0				10,950.4
Property and equipment, net of accumulated depreciation and amortization of $1,258.1 and $1,224.9, respectively			566.8				636.7
Deferred income taxes			249.2				265.0
Goodwill			4,689.4				5,080.9
Other intangible assets			659.9				743.6
Operating lease right-of-use assets			1,037.8				1,162.6
Other non-current assets			516.7				428.1
TOTAL ASSETS		$	18,325.8			$	19,267.3
LIABILITIES:
Accounts payable		$	8,286.1			$	8,355.0
Accrued liabilities			661.6				705.8
Contract liabilities			509.0				684.7
Short-term borrowings			40.5				34.2
Current portion of long-term debt			0.1				250.1
Current portion of operating leases			237.2				252.6
Liabilities held for sale			23.5				48.5
Total current liabilities			9,758.0				10,330.9
Long-term debt			2,920.5				2,917.5
Non-current operating leases			1,056.3				1,216.8
Deferred compensation			202.3				223.6
Other non-current liabilities			478.6				532.4
TOTAL LIABILITIES			14,415.7				15,221.2
Redeemable non-controlling interests (see Note 7)			45.6				42.3
STOCKHOLDERS’ EQUITY:
Common stock, $0.10 par value, shares authorized: 800.0 shares issued: 2024 - 372.4; 2023 - 383.0 shares outstanding: 2024 - 372.4; 2023 - 378.7			37.2				38.3
Additional paid-in capital			432.6				728.5
Retained earnings			4,440.2				4,254.5
Accumulated other comprehensive loss, net of tax			(1,112.6	)			(946.2	)
			3,797.4				4,075.1
Less: Treasury stock, at cost: 2024 - 0 shares; 2023 - 4.3 shares			—				132.5
Total IPG stockholders’ equity			3,797.4				3,942.6
Non-controlling interests			67.1				61.2
TOTAL STOCKHOLDERS’ EQUITY			3,864.5				4,003.8
TOTAL LIABILITIES AND EQUITY		$	18,325.8			$	19,267.3

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

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in Millions)

 

		Years ended December 31,
		2024				2023				2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	715.7			$	1,118.1			$	956.1
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			258.9				264.3				274.0
Impairment of goodwill			232.1				—				—
Amortization of restricted stock and other non-cash compensation			64.8				46.7				50.0
Net losses (gains) on sales of businesses			64.2				(17.9	)			11.3
Provision for uncollectible receivables			1.9				7.2				(8.9	)
Net amortization of bond discounts and deferred financing costs			1.0				2.0				3.0
Non-cash restructuring charges			(5.0	)			(0.9	)			101.8
Deferred income tax			(28.1	)			5.1				(27.0	)
Other			46.2				26.8				13.4
Changes in assets and liabilities, net of acquisitions and divestitures, providing (using) cash:
Accounts receivable			(121.2	)			(385.3	)			(362.7	)
Accounts receivable, billable to clients			42.2				(181.4	)			244.5
Prepaid Expenses			(159.4	)			(46.0	)			(55.6	)
Other current assets			44.2				(42.2	)			(5.5	)
Accounts payable			204.1				47.8				(408.0	)
Accrued liabilities			(14.7	)			(63.6	)			(102.8	)
Contract liabilities			(160.7	)			(5.4	)			17.8
Other non-current assets and liabilities			(131.0	)			(220.6	)			(59.3	)
Net cash provided by operating activities			1,055.2				554.7				642.1
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures			(141.8	)			(179.3	)			(178.1	)
Purchase of investments			(25.2	)			(4.2	)			(13.2	)
Purchase of short-term marketable securities			(1.2	)			(97.6	)			(0.2	)
Acquisitions, net of cash acquired			—				(6.3	)			(232.2	)
Deconsolidation of a subsidiary			—				—				(20.4	)
Maturity of short-term marketable securities			2.5				100.7				—
Net proceeds from investments			3.1				35.1				2.6
Proceeds from sale of businesses, net of cash sold			7.9				58.7				(22.4	)
Other investing activities			3.6				7.5				33.8
Net cash used in investing activities			(151.1	)			(85.4	)			(430.1	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock dividends			(496.5	)			(479.1	)			(457.3	)
Repayment of long-term debt			(250.1	)			(0.5	)			(0.7	)
Repurchases of common stock			(230.1	)			(350.2	)			(320.1	)
Distributions to non-controlling interests			(18.9	)			(17.7	)			(12.3	)
Tax payments for employee shares withheld			(14.1	)			(58.9	)			(40.3	)
Acquisition-related payments			(9.0	)			(12.9	)			(9.3	)
Settlement of senior note			—				—				(29.9	)
Net increase (decrease) in short-term borrowings			0.2				(8.2	)			(29.4	)
Proceeds from long-term debt			0.2				296.3				—
Other financing activities			(1.6	)			(3.1	)			(0.1	)
Net cash used in financing activities			(1,019.9	)			(634.3	)			(899.4	)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash			(82.9	)			7.0				(31.7	)
Net decrease in cash, cash equivalents and restricted cash			(198.7	)			(158.0	)			(719.1	)
Cash, cash equivalents and restricted cash at beginning of period			2,395.1				2,553.1				3,272.2
Cash, cash equivalents and restricted cash at end of period		$	2,196.4			$	2,395.1			$	2,553.1

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

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Amounts in Millions)

 

		Common Stock								Additional Paid-In Capital				Retained Earnings				Accumulated Other Comprehensive Loss, Net of Tax				Treasury Stock				Total IPG Stockholders’ Equity				Non-controlling Interests				Total Stockholders’ Equity
		Shares				Amount
Balance at December 31, 2021			394.3			$	39.3			$	1,226.6			$	3,154.3			$	(894.2	)		$	0.0			$	3,526.0			$	63.2			$	3,589.2
Net income															938.0												938.0				18.1				956.1
Other comprehensive loss																			(99.5	)							(99.5	)			(1.6	)			(101.1	)
Reclassifications related to redeemable non-controlling interests											(3.1	)															(3.1	)			0.5				(2.6	)
Distributions to non-controlling interests																															(12.3	)			(12.3	)
Change in redemption value of redeemable non-controlling interests															(3.0	)											(3.0	)							(3.0	)
Retirement of treasury stock			(7.2	)			(0.7	)			(199.2	)											199.9				0.0								0.0
Repurchases of common stock																							(320.1	)			(320.1	)							(320.1	)
Common stock dividends ($1.16 per share)															(457.2	)											(457.2	)							(457.2	)
Stock-based compensation			3.5				0.4				71.2																71.6								71.6
Shares withheld for taxes			(1.0	)			(0.1	)			(38.7	)															(38.8	)							(38.8	)
Other											0.7																0.7				(9.8	)			(9.1	)
Balance at December 31, 2022			389.6			$	38.9			$	1,057.5			$	3,632.1			$	(993.7	)		$	(120.2	)		$	3,614.6			$	58.1			$	3,672.7
Net income															1,098.4												1,098.4				19.7				1,118.1
Other comprehensive income																			47.5								47.5				(0.2	)			47.3
Reclassifications related to redeemable non-controlling interests																															0.3				0.3
Distributions to non-controlling interests																															(17.7	)			(17.7	)
Change in redemption value of redeemable non-controlling interests															2.6												2.6								2.6
Retirement of treasury stock			(9.3	)			(0.9	)			(339.5	)											340.4				0.0								0.0
Repurchases of common stock																							(352.7	)			(352.7	)							(352.7	)
Common stock dividends ($1.24 per share)															(478.6	)											(478.6	)							(478.6	)
Stock-based compensation			4.4				0.5				69.6																70.1								70.1
Shares withheld for taxes			(1.7	)			(0.2	)			(59.1	)															(59.3	)							(59.3	)
Other											0.0																0.0				1.0				1.0
Balance at December 31, 2023			383.0			$	38.3			$	728.5			$	4,254.5			$	(946.2	)		$	(132.5	)		$	3,942.6			$	61.2			$	4,003.8

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

THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Amounts in Millions)

 

		Common Stock								Additional Paid-In Capital				Retained Earnings				Accumulated Other Comprehensive Loss, Net of Tax				Treasury Stock				Total IPG Stockholders’ Equity				Non-controlling Interests				Total Stockholders’ Equity
		Shares				Amount
Balance at December 31, 2023			383.0			$	38.3			$	728.5			$	4,254.5			$	(946.2	)		$	(132.5	)		$	3,942.6			$	61.2			$	4,003.8
Net income															689.5												689.5				26.2				715.7
Other comprehensive loss																			(166.4	)							(166.4	)			(1.5	)			(167.9	)
Reclassifications related to redeemable non-controlling interests											(2.7	)															(2.7	)			(1.5	)			(4.2	)
Distributions to non-controlling interests																															(18.9	)			(18.9	)
Change in redemption value of redeemable non-controlling interests															(5.4	)											(5.4	)							(5.4	)
Retirement of treasury stock			(11.6	)			(1.2	)			(363.4	)											364.5				(0.1	)							(0.1	)
Repurchase of common stock																							(232.0	)			(232.0	)							(232.0	)
Common stock dividends ($1.32 per share)															(498.3	)											(498.3	)							(498.3	)
Stock-based compensation			1.4				0.1				88.8																88.9								88.9
Shares withheld for taxes			(0.4	)			0.0				(13.8	)															(13.8	)							(13.8	)
Other											(4.8	)			(0.1	)											(4.9	)			1.6				(3.3	)
Balance at December 31, 2024			372.4			$	37.2			$	432.6			$	4,440.2			$	(1,112.6	)		$	0.0			$	3,797.4			$	67.1			$	3,864.5

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

Notes to Consolidated Financial Statements

(Amounts in Millions, Except Per Share Amounts)

Note 1: Summary of Significant Accounting Policies

Business Description

The Interpublic Group of Companies, Inc. and subsidiaries (the “Company,” “IPG,” “we,” “us” or “our”) is one of the world’s premier global advertising and marketing services companies. Our agencies create customized marketing programs for clients that range in scale from large global marketers to regional and local clients. Comprehensive global services are critical to effectively serve our multinational and local clients in markets throughout the world, as they seek to build brands, increase sales of their products and services and gain market share.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and its consolidated subsidiaries, some of which are not wholly owned. Investments in companies over which we do not have control, but have the ability to exercise significant influence, are accounted for using the equity method of accounting. Investments in companies over which we have neither control nor have the ability to exercise significant influence are recorded at cost, less any impairment, adjusted for subsequent observable price changes. All intercompany accounts and transactions have been eliminated in consolidation.

We have consolidated certain entities meeting the definition of variable interest entities, and the inclusion of these entities does not have a material impact on our Consolidated Financial Statements.

Basis of Presentation

We conduct our business across three reportable segments described in Note 16. The three reportable segments are: Media, Data & Engagement Solutions (“MD&E”), Integrated Advertising & Creativity Led Solutions (“IA&C”), and Specialized Communications & Experiential Solutions (“SC&E”).

Cost of services is comprised of the expenses of our revenue-producing operating segments including salaries and related expenses, office and other direct expenses and billable expenses, as well as an allocation of the centrally managed expenses from Corporate and other. Office and other direct expenses include rent expense, professional fees, certain expenses incurred by our staff in servicing our clients and other costs directly attributable to client engagements.

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

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

Impairment of goodwill is disclosed as a separate operating expense.

Restructuring charges in 2024 consist of adjustments to the Company’s restructuring actions taken in 2022 and 2020, and primarily relate to real estate actions which were designed to reduce our real estate footprint and to better align our cost structure with revenue.

Reclassifications

Certain reclassifications and immaterial adjustments have been made to prior-period financial statements to conform to the current-period presentation, including the recast of certain prior period adjustments to reflect the transfer of certain agencies between reportable segments.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires us to make judgments, assumptions and estimates that affect the amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the reporting date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates under different assumptions or conditions. A further decline in macroeconomic conditions or increasing interest rates could have a negative impact on these estimates, including the fair value of certain estimates.

Revenue Recognition

Our revenues are primarily derived from the planning and execution of multi-channel advertising and communications, marketing services, including public relations, meeting and event production, sports and entertainment marketing, corporate and brand identity, strategic marketing consulting, and providing marketing data and technology services around the world.

Most of our client contracts are individually negotiated and, accordingly, the terms of client engagements and the basis on which we earn fees and commissions vary significantly. Our contracts generally provide for termination by either party on relatively short notice, usually 30 to 90 days, although our data management contracts typically have non-cancelable terms of more than one year. Our payment terms vary by client, and the time between invoicing date and due date is typically not significant. We generally have the legally enforceable right to payment for all services provided through the end of the contract or termination date.

We recognize revenue when we determine our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To determine revenue recognition, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue as or when we satisfy the performance obligation. We only apply the five-step model to contracts when it is probable that IPG will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, we assess the goods or services promised within each contract and determine those that are distinct performance obligations. We then assess whether we act as an agent or a principal for each identified performance obligation and include revenue within the transaction price for third-party costs when we determine that we act as principal. We typically do not capitalize costs to obtain a contract as these amounts would generally be recognized over a period of one year or less.

Revenue before billable expenses, primarily consisting of fees, commissions and performance incentives, represents the amount of our gross billings excluding billable expenses charged to a client. Generally, our compensation is based on a negotiated fixed price, rate per hour, a retainer, commission or volume. The majority of our fees are recognized over time as services are performed, either utilizing a function of hours incurred and rates per hour, as compared to periodically updated estimates to complete, or ratably over the term of the contract. For certain less-frequent commission-based contracts which contain clauses allowing our clients to terminate the arrangement at any time for no compensation, revenue is recognized at a point in time, typically the date of broadcast or publication. We report revenue net of taxes assessed by governmental authorities that are directly imposed on our revenue-producing transactions.

Contractual arrangements with clients may also include performance incentive provisions designed to link a portion of our revenue to our performance relative to mutually agreed-upon qualitative and/or quantitative metrics. Performance incentives are treated as variable consideration which is estimated at contract inception and included in revenue based on the most likely amount earned out of a range of potential outcomes. Our estimates are based on a combination of historical award experience, anticipated performance and our best judgment. These estimates are updated on a periodic basis and are not expected to result in a reversal of a significant amount of the cumulative revenue recognized.

The predominant component of billable expenses are third-party vendor costs incurred for performance obligations where we have determined that we are acting as principal. These third-party expenses are generally billed back to our clients. Billable expenses also includes incidental costs incurred in the performance of our services including airfare, mileage, hotel stays, out-of-town meals and telecommunication charges. We record these billable expenses within total revenue with a corresponding offset to operating expenses.

In international markets, we may receive rebates or credits from vendors based on transactions entered into on behalf of clients. Rebates and credits are remitted back to our clients in accordance with our contractual requirements or may be retained by us based on the terms of a particular client contract and local law. Amounts owed back to clients are recorded as a liability and amounts retained by us are recorded as revenue when earned.

In certain international markets, our media contracts may allow clients to terminate our arrangement at any time for no compensation to the extent that media has not yet run. For those contracts, we do not recognize revenue until the media runs which is the point in time at which we have a legally enforceable right to compensation.

In the normal course of business, certain agencies may enter into agreements with media suppliers to purchase an agreed value of media within a fixed timeframe. By entering into these agreements, the agency is taking a risk and may be required to pay a portion or all of the agreed value ahead of media being run. In order to participate in these arrangements and receive an agreed additional benefit from the agency, clients are required to contractually opt in.

Performance Obligations

Our client contracts may include various goods and services that are capable of being distinct, are distinct within the context of the contract and are therefore accounted for as separate performance obligations. We allocate revenue to each performance obligation in the contract at inception based on its relative standalone selling price.

Our advertising businesses include a wide range of services that involve the creation of an advertising idea, concept, campaign, or marketing strategy in order to promote the client’s brand (“creative services”), and to act as an agent to facilitate the production of advertisements by third-party suppliers (“production services”). Our clients can contract us to perform one or both of these services, as they can derive stand-alone benefit from each. Production services can include formatting creative material for different media and communication mediums including digital, large-scale reproduction such as printing and adaptation services, talent engagement and acquisition, television and radio production, and outdoor billboard production. Our contracts that include both services are typically explicit in the description of which activities constitute the creative advertising services and those that constitute the production services. Both the creative and production services are sold separately, the client can derive utility from each service on its own, we do not provide a significant service of integrating these activities into a bundle, the services do not significantly modify one another, and the services are not highly interrelated or interdependent. As such, we typically identify two performance obligations in the assessment of our advertising contracts.

Our media businesses include services to formulate strategic media plans (“media planning services”) and to act as an agent to purchase media (e.g. television and radio spots, outdoor advertising, digital banners, etc.) from vendors on our clients’ behalf (“media buying services”). Our contracts that include both services are typically explicit in the description of which activities constitute the planning services and those that constitute the buying services. Both the planning and buying services are sold separately, the client can derive utility from each service on its own, we do not provide a significant service of integrating these activities into a bundle, the services do not significantly modify one another, and the services are not highly interrelated or interdependent. As such, we typically identify two performance obligations in the assessment of our media contracts.

Our events businesses include creative services related to the conception and planning of custom marketing events as well as activation services which entail the carrying out of the event, including, but not limited to, set-up, design and staffing. Additionally, our public relations businesses include a broad range of services, such as strategic planning, social media strategy and the monitoring and development of communication strategies, among others. While our contracts in these businesses may include some or all of these services, we typically identify only one performance obligation in the assessment of our events and public relations contracts as we provide a significant service of integrating the individual services into a combined service for which the customer has contracted.

Our data and technology services businesses include data management, data and data strategy, identity resolution, and measurement and analytics products and services. While our contracts in these businesses may include some or all of these services, we typically identify each product and service as an individual performance obligation.

We have elected not to disclose information about remaining performance obligations that have original expected durations of one year or less. The majority of our contracts are for periods of one year or less with the exception of our data management contracts.

Principal vs. Agent

When a third-party is involved in the delivery of our services to the client, we assess whether or not we are acting as a principal or an agent in the arrangement. The assessment is based on whether we control the specified services at any time before they are transferred to the customer. We have determined that in our events and public relations businesses, we generally act as a principal as our agencies provide a significant service of integrating goods or services provided by third parties into the specified deliverable to our clients. In addition, we have determined that we are responsible for the performance of the third-party suppliers, which are combined with our own services, before transferring those services to the customer. We have also determined that we act as principal when providing creative services and media planning services, as we perform a significant integration service in these transactions. For performance obligations in which we act as principal, we record the gross amount billed to the customer within total revenue and the related incremental direct costs incurred as billable expenses.

In the vast majority of our business, when a third-party is involved in the production of an advertising campaign and for media buying services, we have determined that we act as the agent and are solely arranging for the third-party suppliers to provide services to the customer. Specifically, we do not control the specified services before transferring those services to the customer, we are not primarily responsible for the performance of the third-party services, nor can we redirect those services to fulfill any other contracts. We do not have inventory risk or discretion in establishing pricing in our contracts with customers. For performance obligations for which we act as the agent, we record our revenue as the net amount of our gross billings less amounts remitted to third parties.

Cash and Cash Equivalents

Cash equivalents are highly liquid investments, which include certificates of deposit, government securities, commercial paper and time deposits with original maturities of three months or less at the time of purchase and are stated at estimated fair value, which approximates cost. Cash is maintained at multiple high-credit-quality financial institutions.

Allowance for Expected Credit Losses

The allowance for credit losses on expected future uncollectible accounts receivable is estimated based on the aging of accounts receivable, reviews of client credit reports, industry trends and economic indicators, as well as reviews of recent payment history for specific customers. The estimate is based largely on a formula-driven calculation but is supplemented with economic indicators and knowledge of potential write-offs of specific client accounts.

Accounts Receivable, Billable to Clients

Accounts receivable, billable to clients are primarily comprised of production and media costs that have been incurred but have not yet been billed to clients, as well as fees that have been earned which have not yet been billed to clients. Unbilled amounts are presented in accounts receivable, billable to clients regardless of whether they relate to our fees or production and media costs. A provision is made for unrecoverable costs as deemed appropriate.

Accounts Payable

Accounts payable includes all operating payables, including those related to all media and production costs. These payables are due within one year.

Investments

Equity investments with readily determinable fair values, other than those accounted for using the equity method of accounting, will be measured at fair value. We regularly review our investments to determine whether a significant event or change in circumstances has occurred that may impact the fair value of each investment, with changes to fair value recorded in earnings. We evaluate fair value based on specific information (valuation methodologies, estimates of appraisals, financial statements, etc.) in addition to quoted market price, if available. We consider all known quantitative and qualitative factors in determining if a decline in value of an investment has occurred.

Derivatives

We are exposed to market risk related to interest rates, foreign currency rates and certain balance sheet items. From time to time we enter into derivative instruments for risk management purposes, and not for speculative purposes. All derivative instruments are recorded at fair value on our balance sheet. Changes in fair value are immediately included in earnings if the derivatives are not designated as a hedge instrument or if the derivatives do not qualify as effective hedges. For derivatives designated as hedge instruments, we evaluate for hedge accounting both at inception and throughout the hedge period. If a derivative is designated as a fair value hedge, then changes in the fair value of the derivative are offset against the changes in the fair value of the underlying hedged item. If a derivative is designated as a cash flow hedge, then the changes in the fair value of the derivative are recognized as a component of accumulated other comprehensive income and subsequently reclassified to earnings in our Consolidated Statement of Operations in the same period as the underlying hedged transaction affects earnings. If a derivative is a net investment hedge, then the changes in the fair value of the derivative are recognized in other comprehensive income in the same period as the change in fair value of the underlying hedged foreign investment.

Property and Equipment

Furniture, equipment, leasehold improvements and buildings are stated at cost, net of accumulated depreciation. Furniture and equipment are depreciated generally using the straight-line method over the estimated useful lives of the related assets, which range from 3 to 7 years for furniture and equipment, 10 to 35 years for buildings and the shorter of the useful life or the remaining lease term for leasehold improvements. Land is stated at cost and is not depreciated.

We capitalize certain internal and external costs incurred to acquire or create internal use software, principally related to our enterprise resource planning (“ERP”) systems. Our ERP systems are stated at cost, net of accumulated amortization, and are amortized using the straight-line method over 10 years. All other internal use computer software are stated at cost, net of accumulated amortization and are amortized using the straight-line method over the estimated useful lives of the related assets, which range from 3 to 7 years.

Leases

As of December 31, 2024, we do not have a material amount of finance leases and the majority of our operating leases, for which we serve as the lessee, consist primarily of real-estate property for our offices around the world. Both the right-of-use asset and lease liability are measured at the present value of the future lease payments, with the asset being subject to adjustments such as initial direct costs, prepaid lease payments, and lease incentives. Many of our leases provide for renewal and/or termination options, as well as escalation clauses, which are also factored into our lease payments when appropriate. The discount rate used to measure the lease asset and liability is determined at the beginning of the lease term using the rate implicit in the lease, if readily determinable, or using the Company’s collateralized credit-adjusted borrowing rate.

Goodwill and Other Intangible Assets

We account for our business combinations using the acquisition accounting method, which requires us to determine the fair value of net assets acquired and the related goodwill and other intangible assets. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and involves the use of significant estimates, including projections of future cash inflows and outflows, discount rates, asset lives and market multiples. Considering the characteristics of advertising, specialized marketing and communication services companies, our acquisitions usually do not have significant amounts of tangible assets, as the principal asset we typically acquire is creative talent. As a result, a substantial portion of the purchase price is allocated to goodwill and other intangible assets.

We review goodwill as of October 1st each year and whenever events or significant changes in circumstances indicate that the carrying value may not be recoverable. 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 for any of our reporting units. Additionally, we performed an interim impairment test as of August 31, 2024. Refer to Note 9 for details.

Intangible assets with indefinite useful lives are not amortized but are evaluated for impairment annually or more frequently if events or changes in circumstances indicate that impairment may exist. The Company first assesses qualitative factors to determine whether it is necessary to perform a quantitative impairment test for indefinite-lived intangible assets. Impairment exists if the fair value of the indefinite-lived intangible asset is less than the carrying value. The determination of fair value is based on the relief from royalty method of the income approach, which models the cash flows from indefinite-lived intangibles assuming royalties were received under a licensing arrangement. This discounted cash flow analysis includes assumptions related to forecasted future revenues attributable to indefinite-lived intangibles, royalty rates and risk-adjusted discount rates. If the carrying value of an indefinite-lived intangible asset exceeds its estimated fair value, the indefinite-lived intangible asset is considered impaired, and an impairment loss will be recognized in an amount equal to the excess of the carrying value over the fair 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.

For reporting units not included in the qualitative assessment, or for any reporting units identified in the qualitative assessment as “more likely than not” that the fair value is less than its carrying value, the quantitative impairment test is performed. For our annual impairment test, we compare the respective fair value of our reporting units’ equity to the carrying value of their net assets. The sum of the fair values of all our reporting units is also reconciled to our current market capitalization plus an estimated control premium. Goodwill allocated to a reporting unit whose fair value is equal to or greater than its carrying value is not impaired, and no further testing is required. Should the carrying amount for a reporting unit exceed its fair value, then the quantitative impairment test is failed and impaired goodwill is written down to its fair value with a charge to expense in the period the impairment is identified.

The fair value of each reporting unit for 2024 and 2023 was 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.

We review intangible assets with definite lives subject to amortization whenever events or circumstances indicate that a carrying amount of an asset may not be recoverable. Recoverability of these assets is determined by comparing the carrying value of these assets to the estimated undiscounted future cash flows expected to be generated by these asset groups. These asset groups are impaired when their carrying value exceeds their fair value. Impaired intangible assets with definite lives subject to amortization are written down to their fair value with a charge to expense in the period the impairment is identified. Intangible assets with definite lives are amortized on a straight-line basis with estimated useful lives generally between 10 and 15 years. Events or circumstances that might require impairment testing include the loss of a significant client, the identification of other impaired assets within a reporting unit, loss of key personnel, the disposition of a significant portion of a reporting unit, significant decline in stock price or a significant adverse change in business climate or regulations.

Foreign Currencies

The functional currency of our foreign operations is generally their respective local currency. Assets and liabilities are translated at the exchange rates in effect at the balance sheet date, and revenues and expenses are translated at the average exchange rates during the period presented. The resulting translation adjustments are recorded as a component of accumulated other comprehensive loss in the stockholders’ equity section of our Consolidated Balance Sheets. Currency transaction gains or losses primarily arising from transactions in currencies other than the functional currency are included in office and general expenses. Foreign currency transactions resulted in a pre-tax loss of $2.2 for the year ended December 31, 2024, a pre-tax loss of $5.7 for the year ended December 31, 2023, and a pre-tax gain of $2.5 for the year ended December 31, 2022.

We monitor the currencies of countries in which we operate in order to determine if the country should be considered a highly inflationary environment. A currency is determined to be highly inflationary when there is cumulative inflation of approximately 100% or more over a three-year period. If this occurs the functional currency of that country is changed to our reporting currency, the U.S. Dollar, and foreign exchange gains or losses are recognized on all monetary transactions, assets and liabilities in currencies other than the U.S. Dollar until the currency is no longer considered highly inflationary.

Income Taxes

The provision for income taxes includes U.S. federal, state, local and foreign taxes. Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences between the financial statement carrying amounts and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be reversed. We evaluate the realizability of our deferred tax assets and establish a valuation allowance when it is “more likely than not” that all or a portion of the deferred tax assets will not be realized. We evaluate our tax positions using the “more likely than not” recognition threshold and then apply a measurement assessment to those positions that meet the recognition threshold. The factors used in assessing valuation allowances include all available evidence, such as past operating results, estimates of future taxable income and the feasibility of tax planning strategies. We have established tax reserves that we believe to be adequate in relation to the potential for additional assessments in each of the jurisdictions in which we are subject to taxation. We regularly assess the likelihood of additional tax assessments in those jurisdictions and adjust our reserves as additional information or events require.

Redeemable Non-controlling Interests

Many of our acquisitions include provisions under which the non-controlling equity owners can require us to purchase additional interests in a subsidiary at their discretion. Payments for these redeemable non-controlling interests may be contingent on projected operating performance and satisfying other conditions specified in the related agreements. These payments are also subject to revision in accordance with the terms of the agreements. We record these redeemable non-controlling interests in “mezzanine equity” in our Consolidated Balance Sheets. Each reporting period, redeemable non-controlling interests are reported at their estimated redemption value, but not less than their initial fair value. Any adjustment to the redemption value above initial value prior to exercise will also impact retained earnings but will not impact net income. Adjustments as a result of currency translation will affect the redeemable non-controlling interest balance, but do not impact retained earnings or additional paid-in capital.

Earnings Per Share (“EPS”)

Basic EPS available to IPG common stockholders equals net income available to IPG common stockholders divided by the weighted-average number of common shares outstanding for the applicable period. Diluted EPS equals net income available to IPG common stockholders divided by the weighted-average number of common shares outstanding, plus any additional common shares that would have been outstanding if potentially dilutive shares had been issued.

Diluted EPS reflect the potential dilution that would occur if certain potentially dilutive securities were exercised. The potential issuance of common stock is assumed to occur at the beginning of the year (or at the time of issuance of the potentially dilutive instrument, if later) and the incremental shares are included using the treasury stock method. The proceeds utilized in applying the treasury stock method consist of the amount, if any, to be paid upon exercise and, as it relates to stock-based compensation, the amount of compensation cost attributed to future service not yet recognized. These proceeds are then assumed to be used to purchase common stock at the average market price of our stock during the period. The incremental shares (difference between the shares assumed to be issued and the shares assumed to be purchased), to the extent they would have been dilutive, are included in the denominator of the diluted EPS calculation.

We may be required to calculate basic EPS using the two-class method as a result of our redeemable non-controlling interests. To the extent that the redemption value increases and exceeds the then-current fair value of a redeemable non-controlling interest, net income available to IPG common stockholders (used to calculate EPS) could be negatively impacted by that increase, subject to certain limitations. The partial or full recovery of any reductions to net income available to IPG common stockholders (used to calculate EPS) is limited to any cumulative prior-period reductions. For the years ended December 31, 2024, 2023 and 2022, there was no impact to EPS for adjustments related to our redeemable non-controlling interests.

Pension and Postretirement Benefits

We have pension and postretirement benefit plans covering certain domestic and international employees. We use various actuarial methods and assumptions in determining our net pension and postretirement benefit costs and obligations, including the discount rate used to determine the present value of future benefits, expected long-term rate of return on plan assets and healthcare cost trend rates. The overfunded or underfunded status of our pension and postretirement benefit plans is recorded on our Consolidated Balance Sheet.

Stock-Based Compensation

Compensation costs related to share-based transactions, including employee stock options, are recognized in the Consolidated Financial Statements based on fair value. Stock-based compensation expense is generally recognized ratably over the requisite service period based on the estimated grant-date fair value, net of estimated forfeitures.

Treasury Stock

We account for repurchased common stock under the cost method and include such treasury stock as a component of our Consolidated Statements of Stockholders’ Equity. Upon retirement, we reduce common stock for the par value of the shares being retired and the excess of the cost of the shares over par value as a reduction to APIC, to the extent there is APIC in the same class of stock, and any remaining amount to retained earnings. These retired shares remain authorized but unissued.

In October 2024, we retired 11.6 shares of our treasury stock, which resulted in a reduction in common stock of $1.2, treasury stock of $364.5 and APIC of $363.4. In October 2023, we retired 9.3 shares of our treasury stock, which resulted in a reduction in common stock of $0.9, treasury stock of $340.4 and APIC of $339.5. In October 2022, we retired $7.2 shares of our treasury stock, which resulted in a reduction in common stock of $0.7, treasury stock of $199.9 and APIC of $199.2.

Note 2: Planned Acquisition of IPG by Omnicom

On December 8, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Omnicom Group Inc. (“Omnicom”) and EXT Subsidiary Inc., a direct wholly owned subsidiary of Omnicom (“Merger Sub”), pursuant to which Merger Sub will merge with and into IPG, with IPG surviving the merger as a direct wholly owned subsidiary of Omnicom.

As a result of the merger, each share of IPG common stock issued and outstanding immediately prior to the effective time of the merger (other than certain excluded shares) will be converted into the right to receive 0.344 shares of Omnicom common stock and, if applicable, cash in lieu of fractional shares. The exchange ratio is fixed and will not be adjusted to reflect stock price changes prior to closing the merger.

Following the close of the transaction, Omnicom shareholders will own 60.6% of the combined company and IPG shareholders will own 39.4%, on a fully diluted basis. As a result of the merger, we will cease to be a publicly traded company.

The Merger Agreement contains customary representations, warranties, and covenants. The stock-for-stock transaction is expected to be tax-free to IPG shareholders and is expected to close in the second half of 2025, subject to Omnicom and IPG shareholder approvals, required domestic and foreign regulatory approvals and other customary conditions.

If the Merger Agreement is terminated under certain circumstances, including if Omnicom terminates the agreement (i) following a change or withdrawal of the recommendation of the IPG’s board of directors to IPG stockholders to approve the merger, or (ii) as a result of a willful and material breach of our non-solicitation obligations under the Merger Agreement, then we will be obligated to pay a termination fee of $439.0 to Omnicom (the “IPG Termination Fee”). We will also be obligated to pay the IPG Termination Fee if (i) the IPG shareholders fail to approve the merger (and Omnicom has obtained shareholder approval), or (ii) we breach the Merger Agreement in a manner that Omnicom’s closing conditions not being satisfied and the breach cannot be cured by the specified outside date and, in any such case, within 12 months after the termination date a competing proposal to acquire 50% or more of the business, assets or outstanding shares of IPG has been publicly announced and consummated, or a definitive agreement in respect of such competing proposal has been signed. We will also be required to reimburse up to $25.0 of Omnicom’s merger-related fees, costs and expenses if the Merger Agreement is terminated as a result of the failure of the IPG shareholders to approve the merger (and Omnicom has obtained shareholder approval).

During the fourth quarter of 2024, $9.3 of deal costs were incurred related to the planned acquisition of IPG by Omnicom, which were recorded within selling, general and administrative expenses.

Note 3: Revenue

Disaggregation of Revenue

The following is a description of the principal activities, by reportable segment, from which we generate revenue. For more detailed information about reportable segments, see Note 16.

Media, Data & Engagement Solutions

The MD&E segment provides, and is distinguished by innovative capabilities and scale in, global media and communications services, digital services and products, advertising and marketing technology, e-commerce services, data management and analytics, strategic consulting, and digital brand experience. MD&E is comprised of IPG Mediabrands, UM, Initiative, KINESSO, Acxiom and MRM.

Integrated Advertising & Creativity Led Solutions

The IA&C segment provides advertising, corporate and brand identity services, and strategic consulting. IA&C is distinguished by the leading role of complex integrations of ideation and the execution of advertising and creative campaigns across all communications channels that are foundational to client brand identities. IA&C is comprised of leading global networks and agencies that provide a broad range of services, including McCann Worldgroup, IPG Health, MullenLowe Group, Foote, Cone & Belding (“FCB”), and our domestic integrated agencies.

Specialized Communications & Experiential Solutions

The SC&E segment provides best-in-class global public relations and other specialized communications services, events, sports and entertainment marketing, and strategic consulting. SC&E is comprised of agencies that provide a range of marketing services expertise, including Weber Shandwick, Golin, our sports, entertainment, and experiential agencies and IPG DXTRA Health.

Principal Geographic Markets

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

 

		Years ended December 31,
Total revenue:		2024				2023				2022
United States		$	6,837.4			$	7,033.1			$	7,031.0
International:
United Kingdom			944.3				891.5				902.7
Continental Europe			927.5				901.3				867.5
Asia Pacific			799.3				868.3				918.5
Latin America			473.7				477.0				454.9
Other			709.5				718.1				753.2
Total International			3,854.3				3,856.2				3,896.8
Total Consolidated		$	10,691.7			$	10,889.3			$	10,927.8

 

		Years ended December 31,
Revenue before billable expenses:		2024				2023				2022
United States		$	5,940.3			$	6,102.2			$	6,157.7
International:
United Kingdom			772.0				759.2				742.2
Continental Europe			805.1				795.7				764.6
Asia Pacific			659.6				729.8				772.7
Latin America			444.6				448.7				423.6
Other			566.0				565.0				588.6
Total International			3,247.3				3,298.4				3,291.7
Total Consolidated		$	9,187.6			$	9,400.6			$	9,449.4

MD&E		Years ended December 31,
Total revenue:		2024				2023				2022
United States		$	2,662.4			$	2,737.7			$	2,735.5
International			1,611.9				1,679.7				1,665.6
Total MD&E		$	4,274.3			$	4,417.4			$	4,401.1
Revenue before billable expenses:
United States		$	2,644.6			$	2,709.7			$	2,696.1
International			1,569.2				1,638.9				1,619.6
Total MD&E		$	4,213.8			$	4,348.6			$	4,315.7

 

IA&C		Years ended December 31,
Total revenue:		2024				2023				2022
United States		$	2,392.5			$	2,502.5			$	2,580.6
International			1,514.7				1,477.1				1,540.5
Total IA&C		$	3,907.2			$	3,979.6			$	4,121.1
Revenue before billable expenses:
United States		$	2,283.3			$	2,377.6			$	2,478.5
International			1,261.1				1,233.5				1,269.0
Total IA&C		$	3,544.4			$	3,611.1			$	3,747.5

 

SC&E		Years ended December 31,
Total revenue:		2024				2023				2022
United States		$	1,782.5			$	1,792.9			$	1,714.9
International			727.7				699.4				690.7
Total SC&E		$	2,510.2			$	2,492.3			$	2,405.6
Revenue before billable expenses:
United States		$	1,012.4			$	1,014.9			$	983.1
International			417.0				426.0				403.1
Total SC&E		$	1,429.4			$	1,440.9			$	1,386.2

Contract Balances

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

 

		December 31, 2024				December 31, 2023
Accounts receivable, net of allowance of $37.0 and $46.4, respectively		$	5,649.7			$	5,768.8
Accounts receivable, billable to clients			2,088.4				2,229.2
Contract assets			50.1				68.6
Contract liabilities (deferred revenue)			509.0				684.7

Contract assets are primarily comprised of contract incentives that are generally satisfied annually under the terms of our contracts and are transferred to accounts receivable when the right to payment becomes unconditional. Contract liabilities relate to advance consideration received from customers under the terms of our contracts primarily related to reimbursements of third-party expenses, whether we act as principal or agent, and to a lesser extent, periodic retainer fees, both of which are generally recognized shortly after billing.

The majority of our contracts are for periods of one year or less with the exception of our data management contracts. For those contracts with a term of more than one year, we had approximately $598.5 of unsatisfied performance obligations as of December 31, 2024, which will be recognized as services are performed over the remaining contractual terms through 2030.

Note 4: Leases

As of December 31, 2024 and 2023, the majority of our operating leases, for which we serve as the lessee, consist primarily of real-estate property for our offices around the world, and we do not have a material amount of finance leases. Both the right-of-use asset and lease liability are measured at the present value of the future lease payments, with the asset being subject to adjustments such as initial direct costs, prepaid lease payments, and lease incentives. Many of our leases provide for renewal and/or termination options, as well as escalation clauses, which are also factored into our lease payments when appropriate. As of December 31, 2024, our leases have remaining lease terms of 1 year to 12 years. The discount rate used to measure the lease asset and liability is determined at the beginning of the lease term using the rate implicit in the lease, if readily determinable, or using the Company’s collateralized credit-adjusted borrowing rate.

The following tables present information on our operating leases for the full years of 2024, 2023 and 2022.

 

		Years ended December 31,
		2024				2023				2022
Operating lease cost		$	266.1			$	268.4			$	290.7
Short-term lease cost			5.4				7.9				6.4
Sublease income			(30.1	)			(26.4	)			(23.8	)
Total lease cost		$	241.4			$	249.9			$	273.3
Cash paid related to operating lease liabilities		$	302.6			$	299.5			$	320.9
Right-of-use assets obtained in exchange for lease liabilities		$	109.4			$	83.0			$	93.0
		As of December 31,
		2024				2023				2022
Weighted-average remaining lease term			Seven years				Seven years				Eight years
Weighted-average discount rate			3.81	%			3.63	%			3.51	%

Our future payments of our operating leases as of December 31, 2024 are listed in the table below.

 

Period		Payments
2025		$	279.9
2026			264.8
2027			230.5
2028			180.5
2029			147.1
Thereafter			362.8
Total future lease payments			1,465.6
Less: imputed interest			172.1
Present value of future lease payments			1,293.5
Less: current portion of operating leases			237.2
Non-current operating leases		$	1,056.3

As of December 31, 2024, we had no additional operating leases that had not yet commenced.

 

Note 5: Debt and Credit Arrangements

Long-Term Debt

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

 

		Effective Interest Rate				December 31,
						2024 1				2023 1
4.200% Senior Notes due 2024			4.240	%		$	—			$	249.9
4.650% Senior Notes due 2028 (less unamortized discount and issuance costs of $0.7 and $1.7, respectively)			4.780	%			497.6				497.0
4.750% Senior Notes due 2030 (less unamortized discount and issuance costs of $2.2 and $3.2, respectively)			4.920	%			644.6				643.6
2.400% Senior Notes due 2031 (less unamortized discount and issuance costs of $0.5 and $2.9, respectively)			2.512	%			496.6				496.0
5.375% Senior Notes due 2033 (less unamortized discount and issuance costs of $3.3 and $2.7, respectively)			5.650	%			294.0				293.4
3.375% Senior Notes due 2041 (less unamortized discount and issuance costs of $0.9 and $4.7, respectively)			3.448	%			494.4				494.1
5.400% Senior Notes due 2048 (less unamortized discount and issuance costs of $2.5 and $4.4, respectively)			5.480	%			493.1				492.8
Other notes payable and capitalized leases							0.3				0.8
Total long-term debt							2,920.6				3,167.6
Less: current portion							0.1				250.1
Long-term debt, excluding current portion						$	2,920.5			$	2,917.5

 

1	See Note 14 for information on the fair value measurement of our long-term debt.

Annual maturities are scheduled as follows based on the book value as of December 31, 2024.

 

2025		$	0.1
2026			0.1
2027			0.1
2028			497.7
2029			0.0
Thereafter			2,422.6
Total long-term debt		$	2,920.6

For those debt securities that have a premium or discount at the time of issuance, we amortize the amount through interest expense based on the maturity date or the first date the holders may require us to repurchase the debt securities, if applicable. A premium would result in a decrease in interest expense, and a discount would result in an increase in interest expense in future periods. Additionally, we have debt issuance costs related to certain financing transactions which are also amortized through interest expense. As of December 31, 2024 and 2023, we had total unamortized debt issuance costs of $23.7 and $22.7, respectively. Our debt securities include covenants that, among other things, limit our liens and the liens of certain of our consolidated subsidiaries, but do not require us to maintain any financial ratios or specified levels of net worth or liquidity.

As of December 31, 2024 and 2023, the estimated fair value of the Company’s long-term debt was $2,702.0 and $2,975.3, respectively. Refer to Note 14 for details.

Debt Transactions

4.200% Senior Notes due 2024

Our 4.200% unsecured senior notes in aggregate principal amount of $250.0 matured on April 15, 2024. We used cash on hand to fund the principal repayment.

Credit Arrangement

We maintain a committed corporate credit facility, originally dated as of July 18, 2008, which has been amended and restated from time to time (the “Credit Agreement”). We use our Credit Agreement to increase our financial flexibility, to provide letters of credit primarily to support obligations of our subsidiaries and to support our commercial paper program. On May 29, 2024, we amended and restated the Credit Agreement. As amended, among other things, the maturity date of the Credit Agreement was extended to May 29, 2029 and the cost structure of the Credit Agreement was changed. The Credit Agreement continues to include a required leverage ratio, of not more than 3.50 to 1.00, among other customary covenants like limitations on our liens and the liens of our consolidated subsidiaries and limitations on the incurrence of subsidiary debt. At the election of the Company, the leverage ratio may be changed to not more than 4.00 to 1.00 for four consecutive quarters, beginning with the fiscal quarter in which there is an occurrence of one or more acquisitions with an aggregate purchase price of at least $200.0.

The Credit Agreement is a revolving facility, under which amounts borrowed by us or any of our subsidiaries designated under the Credit Agreement may be repaid and reborrowed, subject to an aggregate lending limit of $1,500.0, or the equivalent in other currencies. The Company has the ability to increase the commitments under the Credit Agreement from time to time by an additional amount of up to $250.0, provided the Company receives commitments for such increases and satisfies certain other conditions. The aggregate available amount of letters of credit outstanding may decrease or increase, subject to a sublimit on letters of credit of $50.0, or the equivalent in other currencies. Our obligations under the Credit Agreement are unsecured. As of both December 31, 2024 and 2023, there were no borrowings under the Credit Agreement; however, we had $9.3 and $9.5 of letters of credit under the Credit Agreement, which reduced our total availability to $1,490.7 and $1,490.5, respectively. In addition to other customary covenants, we are required to maintain the financial covenant listed below as of the end of each fiscal quarter for the period of four fiscal quarters then ended pursuant to our Credit Agreement. We were in compliance with all of our covenants in the Credit Agreement as of December 31, 2024.

Under the Credit Agreement, we can elect to receive advances bearing interest based on either the Base Rate or the Eurocurrency rate (each as defined in the Credit Agreement) plus an applicable margin that is determined based on our credit ratings. As of December 31, 2024, the applicable margin was 0.125% for Base Rate advances and 1.125% for Eurocurrency Rate borrowings. Letter of credit fees accrue on the average daily aggregate amount of letters of credit outstanding, at a rate equal to the applicable margin for Eurocurrency rate advances, and fronting fees accrue on the aggregate amount of letters of credit outstanding at an annual rate of 0.250%. We also pay a facility fee on each lender’s revolving commitment of 0.125%, which is an annual rate determined based on our credit ratings.

 

		Financial Covenant
Leverage ratio (not greater than): 1			3.50x

 

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.

Uncommitted Lines of Credit

We also have uncommitted lines of credit with various banks that permit borrowings at variable interest rates and that are primarily used to fund working capital needs. We have guaranteed the repayment of some of these borrowings made by certain subsidiaries. If we lose access to these credit lines, we would have to provide funding directly to some of our operations. As of December 31, 2024 and 2023, the Company had uncommitted lines of credit in an aggregate amount of $769.1 and $780.7, under which we had outstanding borrowings of $40.5 and $34.2 classified as short-term borrowings on our Consolidated Balance Sheets, respectively. The average amounts outstanding during 2024 and 2023 were $44.0 and $47.9, respectively, with weighted-average interest rates of approximately 7.6% and 7.9%, respectively.

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. Commercial paper proceeds are used for working capital and general corporate purposes, including the repayment of maturing indebtedness and other short-term liquidity needs. Commercial paper maturities vary but may not exceed 397 days from the date of issue. As of both December 31, 2024 and 2023, there was no commercial paper outstanding. There was no outstanding commercial paper under the program during both 2024 and 2023.

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. In these pooling arrangements, several IPG agencies agree with a single bank that the cash balances of any of the agencies with the bank will be subject to a full right of set-off against amounts other agencies owe the bank, and the bank provides for overdrafts as long as the net balance for all agencies does not exceed an agreed-upon level. Typically, each agency pays interest on outstanding overdrafts and receives interest on cash balances. Our Consolidated Balance Sheets reflect cash, net of bank overdrafts, under all of our pooling arrangements, and as of December 31, 2024 and 2023 the amounts netted were $2,132.7 and $2,718.0, respectively.

Note 6: Earnings Per Share

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

 

		Years ended December 31,
		2024				2023				2022
Net income available to IPG common stockholders		$	689.5			$	1,098.4			$	938.0
Weighted-average number of common shares outstanding - basic			375.2				384.1				391.5
Dilutive effect of stock options and restricted shares			2.5				1.8				3.6
Weighted-average number of common shares outstanding - diluted			377.7				385.9				395.1
Earnings per share available to IPG common stockholders:
Basic		$	1.84			$	2.86			$	2.40
Diluted		$	1.83			$	2.85			$	2.37

Note 7: Acquisitions

We continue to evaluate strategic opportunities to expand our industry expertise, strengthen our position in high-growth and key strategic geographical markets and industry sectors, advance technological capabilities and improve operational efficiency through both acquisitions and increased ownership interests in current investments. Our acquisitions typically provide for an initial payment at the time of closing and additional contingent purchase price payments based on the future performance of the acquired entity. We have entered into agreements that may require us to purchase additional equity interests in certain consolidated and unconsolidated subsidiaries. The amounts at which we record these transactions in our financial statements are based on estimates of the future financial performance of the acquired entity, the timing of the exercise of these rights, changes in foreign currency exchange rates and other factors.

During 2024, no acquisitions occurred and we did not record any additional goodwill or other intangible assets related to acquisitions.

On December 3, 2024, we entered into a definitive purchase agreement to acquire the outstanding shares of an e-commerce intelligence platform, the transaction is expected to close in the first quarter of 2025 for a cash payment of $50.4, subject to customary closing adjustments.

During 2023, we completed two acquisitions, one of which was included in the IA&C reportable segment, and one of which was included in the SC&E reportable segment. We paid $2.6, net of cash acquired and recorded approximately $11.7 of goodwill and $8.5 of other intangible assets related to the acquisitions.

During 2022, we completed one acquisition, recorded in the MD&E reportable segment. On September 23, 2022, we entered into a definitive purchase agreement to acquire approximately 83.9% of the outstanding shares of RafterOne with options to purchase the remaining outstanding shares. The transaction closed on October 3, 2022, subject to customary closing adjustments. We paid $232.2, net of cash acquired, related to the acquisition. The purpose of the acquisition is to combine the Company’s media, creative, marketing services and analytics capabilities, global scale and consumer insights, with RafterOne’s Salesforce capabilities for commerce, service, data, marketing and customer experience. We recorded approximately $211.7 of goodwill, of which approximately $2.2 was recorded during 2023, and $62.0 of other intangible assets related to the acquisition of RafterOne.

The results of operations of our acquired companies were included in our consolidated results from the closing date of each acquisition. We did not make any payments in stock related to our acquisitions in 2024, 2023 or 2022.

Details of cash paid for current and prior years’ acquisitions are listed below.

 

		Years ended December 31,
		2024				2023				2022
Cost of investment: current-year acquisitions		$	—			$	5.8			$	235.4
Cost of investment: prior-year acquisitions			9.0				16.6				9.3
Less: net cash acquired			—				3.2				3.2
Total cost of investment			9.0				19.2				241.5
Operating payments 1			0.3				2.7				9.6
Total cash paid for acquisitions 2		$	9.3			$	21.9			$	251.1

 

1

Represents cash payments for amounts that have been recognized in operating expenses since the date of acquisition either relating to adjustments to estimates in excess of the initial value of contingent payments recorded or were contingent upon the future employment of the former owners of the acquired companies. Amounts are reflected in the operating section of the Consolidated Statements of Cash Flows.

2

Of the total cash paid for acquisitions, $0.0, $6.3 and $232.2 for the years ended December 31, 2024, 2023 and 2022, respectively, are classified under the investing section of the Consolidated Statements of Cash Flows as acquisitions, net of cash acquired. These amounts relate to initial payments for new transactions, as well as adjustments made to upfront payments related to prior year acquisitions. Of the total cash paid for acquisitions, $9.0, $12.9 and $9.3 for the years ended December 31, 2024, 2023 and 2022, respectively, are classified under the financing section of the Consolidated Statements of Cash Flows as acquisition-related payments. These amounts relate to deferred payments and increases in our ownership interest for prior acquisitions.

For companies acquired, we estimate the fair values of the assets and liabilities based on 100% of the business for consolidation. The purchase price in excess of the estimated fair value of the tangible net assets acquired is allocated to identifiable intangible assets and then to goodwill. Due to the characteristics of advertising, specialized marketing and communication services companies, our acquisitions typically do not have significant amounts of tangible assets since the principal assets we acquire are client relationships and talent. As a result, a substantial portion of the purchase price is primarily allocated to customer lists, trade names and goodwill.

For acquisitions, we record deferred payment and redeemable non-controlling interest amounts on our Consolidated Balance Sheets based on their acquisition-date fair value. Deferred payments are recorded on a discounted basis and adjusted quarterly, if necessary, through operating income or net interest expense, depending on the nature of the arrangement, for both changes in estimate and accretion between the acquisition date and the final payment date. See Note 17 for further information on contingent acquisition obligations. Redeemable non-controlling interests are adjusted quarterly, if necessary, to their estimated redemption value, but not less than their initial fair value. Any adjustments to the redemption value impact retained earnings or additional paid in capital, except for foreign currency translation adjustments. The following table presents changes in our redeemable non-controlling interests.

 

		Years ended December 31,
		2024				2023				2022
Balance at beginning of period		$	42.3			$	38.3			$	15.6
Change in related non-controlling interests balance			1.5				(0.3	)			(0.5	)
Changes in redemption value of redeemable non-controlling interests:
Additions			2.7				7.4				30.3
Redemptions and other			(6.1	)			(0.4	)			(9.9	)
Redemption value adjustments			5.4				(2.6	)			3.0
Currency translation adjustments			(0.2	)			(0.1	)			(0.2	)
Balance at end of period		$	45.6			$	42.3			$	38.3

For all acquisitions, if a portion of the deferred payments and purchases of additional interests after the effective date of purchase are contingent upon employment terms, then that amount is accounted for separately from the business combination and recognized as compensation expense over the required earn-out period. Payments deemed as compensation are excluded from the fair value purchase price allocation to tangible net assets and intangible assets acquired.

Note 8: Supplementary Data

Valuation and Qualifying Accounts - Accounts Receivable, Allowance for Expected Credit Losses

 

		Years ended December 31,
		2024				2023				2022
Balance at beginning of period		$	46.4			$	48.6			$	68.5
Charges to costs and expenses 1			1.9				7.2				(5.8	)
Adjustments:
Acquisitions/(Dispositions)			2.0				(1.7	)			(0.9	)
Uncollectible accounts written off			(11.4	)			(7.8	)			(12.8	)
Recoveries			0.1				0.1				1.9
Foreign currency translation adjustments			(2.0	)			—				(2.3	)
Balance at end of period		$	37.0			$	46.4			$	48.6

 

1	Includes reversals of our allowance for credit losses as a result of improved credit outlook over the course of the COVID-19 pandemic for the year ended December 31, 2022.

Property and Equipment

 

		December 31,
		2024				2023
Furniture and equipment		$	581.9			$	632.8
Leasehold improvements			501.8				507.0
Internal-use computer software			603.2				585.1
Land and buildings			138.0				136.7
Gross property and equipment			1,824.9				1,861.6
Less: accumulated depreciation and amortization			(1,258.1	)			(1,224.9	)
Total property and equipment, net		$	566.8			$	636.7

Total depreciation and amortization expense, which excludes the amortization of acquired intangibles, for property and equipment for the years ended December 31, 2024, 2023 and 2022 was $177.1, $180.3 and $189.3, respectively.

Accrued Liabilities

The following table presents the components of accrued liabilities.

 

		December 31,
		2024				2023
Salaries, benefits and related expenses		$	432.1			$	507.5
Income taxes payable			80.3				56.8
Interest			37.5				40.2
Office and related expenses			18.7				22.3
Acquisition obligations			5.3				2.9
Restructuring charges			0.4				0.6
Other			87.3				75.5
Total accrued liabilities		$	661.6			$	705.8