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IPG records nine month organic revenue growth of 5.9%

28-October-2014
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 IPG records nine month organic revenue growth of 5.9%

Interpublic Group has announced third quarter and nine months results for 2014. Reported revenue increased 8.3% and organic revenue increased 6.3% in the third quarter - bringing nine month organic revenue growth to 5.9%. Third quarter operating income grew 21% to $171.3 million, resulting in an operating margin of 9.3%. Nine months operating income growth was 30%.Third quarter diluted earnings per share was $0.21, a 24% increase from $0.17 per diluted share excluding the charge for early extinguishment of debt a year ago. Continued commitment to dividend and share buyback programs that have returned over $1.8 billion to shareholders since inception in 2011.

Revenues

• Third quarter 2014 revenue was $1.84 billion, compared to $1.70 billion in the third quarter of 2013, with an organic revenue increase of 6.3% compared to the prior- year period. This was comprised of an organic revenue increase of 7.9% in the U.S. and 4.2% internationally.

• For the first nine months of 2014, revenue was $5.33 billion, compared to $5.00 billion in the first nine months of 2013, with an organic revenue increase of 5.9% compared to the prior-year period. This was comprised of an organic revenue increase of 6.7% internationally and 5.2% in the U.S.

Operating Results

• Operating income in the third quarter of 2014 was $171.3 million, compared to operating income of $141.5 million in 2013. Operating margin was 9.3% for the third quarter of 2014, compared to 8.3% in 2013.

For the first nine months of 2014, operating income was $355.4 million, compared to operating income of $273.9 million in 2013. Operating margin was 6.7% for the first nine months of 2014, compared to 5.5% for the first nine months of 2013.

Net Results

• Third quarter 2014 net income available to IPG common stockholders was $89.7 million, resulting in earnings of $0.21 per basic and diluted share. This compares to net income available to IPG common stockholders a year ago of $45.4 million, or
$0.11 per basic and diluted share. Excluding the impact of the early extinguishment of the Company's 10.00% Senior Unsecured Notes due 2017 (the "10.00% Notes"), diluted earnings per share was $0.17 for the third quarter of 2013.

• For the first nine months 2014, net income available to IPG common stockholders was $168.2 million, resulting in earnings of $0.40 per basic and $0.39 per diluted share. This compares to net income available to IPG common stockholders a year ago of $66.1 million, or $0.16 per basic and diluted share. Excluding the impact of the early extinguishment of the Company's 6.25% Senior Unsecured Notes due 2014 (the "6.25% Notes") in the second quarter of 2014 and the 10.00% Notes in the third quarter of 2013, diluted earnings per share was $0.41 in the first nine months of 2014 compared with $0.22 in the year ago period.

“We are pleased with strong growth in revenue and profitability during the quarter and for the first nine months of 2014. These results reflect the competitiveness of our agencies and the high quality of our people and our offerings, in all marketing disciplines and around the world,” said Michael I. Roth, Interpublic’s Chairman and CEO. “Strategic actions taken over the years to develop our digital assets, creative talent and operations in the U.S. and emerging markets have positioned us to succeed in a marketing landscape that is increasingly fragmented, where offerings must be integrated, data-driven and focused wholly on the consumer. Our financial strength also remains a source of significant value creation. The performance we are reporting today puts us solidly on track to achieve or exceed our full year targets of 4% organic revenue growth and an improvement in operating margin of at least 100 basis points, to 10.3% or better. With our largest quarter ahead and increased macro uncertainty, we will remain focused on meeting or exceeding our targets for the year. This will, in turn, allow us to continue to deliver increased shareholder value.”

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