FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ending September 30, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from_____________to________________
Commission file number 1-6686
THE INTERPUBLIC GROUP OF COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-1024020
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1271 Avenue of the Americas, New York, New York 10020
(Address of principal executive offices) (Zip Code)
(212) 399-8000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X . No .
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Common Stock outstanding at October 31, 1997: 125,953,776
shares.
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
I N D E X
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet
September 30, 1997 and
December 31, 1996 3-4
Consolidated Income Statement
Three months ended September 30, 1997
and 1996 5
Consolidated Income Statement
Nine months ended September 30, 1997
and 1996 6
Consolidated Statement of Cash Flows
Nine months ended September 30, 1997
and 1996 7
Notes to Consolidated Financial Statements 8
Computation of Earnings Per Share 9 - 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11 - 13
PART II. OTHER INFORMATION
Item 2. Changes in Securities 14 - 16
Item 5. Other Information 16
Item 6. Exhibits and Reports on Form 8-K 16 - 19
SIGNATURES 20
INDEX TO EXHIBITS 21 - 22
2
PART I - FINANCIAL INFORMATION
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
ASSETS
SEPTEMBER 30, DECEMBER 31,
1997 1996
Current Assets:
Cash and cash equivalents (includes
certificates of deposit: 1997-$124,247;
1996-$83,680) $ 451,595 $ 468,526
Marketable securities, at cost which
approximates market 39,635 35,408
Receivables (less allowance for doubtful
accounts: 1997-$39,645; 1996-$33,301) 2,684,633 2,646,259
Expenditures billable to clients 230,297 130,185
Prepaid expenses and other current assets 83,488 73,081
Total current assets 3,489,648 3,353,459
Other Assets:
Investment in unconsolidated affiliates 104,200 102,711
Deferred taxes on income 65,610 79,371
Other investments and miscellaneous assets 189,223 173,308
Total other assets 359,033 355,390
Fixed Assets, at cost:
Land and buildings 81,722 82,332
Furniture and equipment 463,098 413,029
544,820 495,361
Less accumulated depreciation 310,215 276,448
234,605 218,913
Unamortized leasehold improvements 92,366 88,045
Total fixed assets 326,971 306,958
Intangible Assets (less accumulated
amortization: 1997-$212,772;
1996-$186,189) 906,083 749,323
Total assets $5,081,735 $4,765,130
See accompanying notes to consolidated financial statements.
3
PAGE
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands Except Per Share Data)
LIABILITIES AND STOCKHOLDERS' EQUITY
SEPTEMBER 30, DECEMBER 31,
1997 1996*
Current Liabilities:
Payable to banks $ 146,536 $ 121,655
Accounts payable 2,701,526 2,626,695
Accrued expenses 279,577 317,157
Accrued income taxes 127,521 133,522
Total current liabilities 3,255,160 3,199,029
Noncurrent Liabilities:
Long-term debt 262,737 231,760
Convertible subordinated debentures 315,459 115,192
Deferred compensation and reserve
for termination liabilities 211,992 210,670
Accrued postretirement benefits 47,146 46,726
Other noncurrent liabilities 50,218 66,457
Minority interests in consolidated
subsidiaries 27,462 23,281
Total noncurrent liabilities 915,014 694,086
Stockholders' Equity:
Preferred Stock, no par value
shares authorized: 20,000,000
shares issued:none
Common Stock, $.10 par value
shares authorized: 225,000,000
shares issued:
1997 -138,923,546
1996 -136,410,542 13,892 13,641
Additional paid-in capital 482,749 465,945
Retained earnings 963,417 855,113
Adjustment for minimum pension
liability (12,979) (12,979)
Cumulative translation adjustments (136,994) (82,978)
1,310,085 1,238,742
Less:
Treasury stock, at cost:
1997 - 12,714,304 shares
1996 - 14,712,143 shares 339,172 319,377
Unamortized expense of restricted
stock grants 59,352 47,350
Total stockholders' equity 911,561 872,015
Total liabilities and stockholders'
equity $5,081,735 $4,765,130
See accompanying notes to consolidated financial statements.
* Restated to reflect 3 for 2 stock split paid on July 15, 1997.
4
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
THREE MONTHS ENDED SEPTEMBER 30
(Dollars in Thousands Except Per Share Data)
1997 1996*
Revenue $ 701,303 $ 554,981
Other income 22,195 12,737
Gross income 723,498 567,718
Costs and expenses:
Operating expenses 645,757 509,036
Interest 14,014 10,304
Total costs and expenses 659,771 519,340
Income before provision for income taxes 63,727 48,378
Provision for income taxes:
United States - federal 17,350 12,410
- state and local 6,554 4,253
Foreign 3,380 3,864
Total provision for income taxes 27,284 20,527
Income of consolidated companies 36,443 27,851
Income applicable to minority interests (3,611) (2,495)
Equity in net income of unconsolidated
affiliates 2,460 2,115
Net income $ 35,292 $ 27,471
Weighted average number of common shares 126,262,224 121,573,781
Earnings per common and common equivalent
share $ .28 $ .23
Cash dividends per common share $ .13 $ .113
See accompanying notes to consolidated financial statements.
* Restated to reflect 3 for 2 stock split paid on July 15, 1997.
5
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
NINE MONTHS ENDED SEPTEMBER 30
(Dollars in Thousands Except Per Share Data)
1997 1996*
Revenue $ 2,073,321 $ 1,678,774
Other income 59,728 70,448
Gross income 2,133,049 1,749,222
Costs and expenses:
Operating expenses 1,827,874 1,496,713
Interest 35,497 29,494
Total costs and expenses 1,863,371 1,526,207
Income before provision for income taxes 269,678 223,015
Provision for income taxes:
United States - federal 56,959 46,799
- state and local 17,700 12,051
Foreign 39,169 36,051
Total provision for income taxes 113,828 94,901
Income of consolidated companies 155,850 128,114
Income applicable to minority interests (14,184) (7,340)
Equity in net income of unconsolidated
affiliates 5,425 7,456
Net income $ 147,091 $ 128,230
Weighted average number of common shares 123,987,002 120,080,223
Earning per common and common equivalent
share $ 1.19 $ 1.07
Cash dividends per common share $ .37 $ .33
See accompanying notes to consolidated financial statements.
* Restated to reflect 3 for 2 stock split paid on July 15, 1997.
6
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30
(Dollars in Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES: 1997 1996
Net income $147,091 $128,230
Adjustments to reconcile net income to
Provided by/(used in) operating activities:
Depreciation and amortization of fixed assets 52,334 44,354
Amortization of intangible assets 26,583 21,366
Amortization of restricted stock awards 11,883 10,688
Equity in net income of unconsolidated
affiliates (5,425) (7,456)
Income applicable to minority interests 14,184 7,340
Translation losses 743 2,131
Net gain from sale of investments 0 (8,100)
Other (8,967) (3,592)
Changes in assets and liabilities, net of acquisitions:
Receivables 53,971 148,687
Expenditures billable to clients (66,907) (39,412)
Prepaid expenses and other assets (2,548) 85
Accounts payable and other liabilities (150,709) (178,981)
Accrued income taxes (27,698) (4,487)
Deferred income taxes 4,171 (6,497)
Deferred compensation and reserve for termination
liabilities (5,513) (1,187)
Net cash provided by operating
activities 43,193 113,169
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions (72,291) (64,653)
Proceeds from sale of assets 542 38,100
Capital expenditures (68,907) (49,673)
Net purchases of marketable securities (8,188) (5,649)
Other investments and miscellaneous assets (7,043) (20,634)
Investments in unconsolidated affiliates (5,742) (6,878)
Net cash used in investing activities (161,629) (109,387)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in short-term borrowings 11,958 76,100
Proceeds from long-term debt 252,913 33,687
Payments of long-term debt (18,820) (18,459)
Treasury stock acquired (105,787) (62,489)
Issuance of common stock 31,589 14,715
Cash dividends (44,932) (37,575)
Net cash provided by financing activities 126,921 5,979
Effect of exchange rates on cash and cash
equivalents (25,416) (3,377)
(Decrease)/increase in cash and cash equivalents (16,931) 6,384
Cash and cash equivalents at beginning of year 468,526 418,448
Cash and cash equivalents at end of period $451,595 $424,832
See accompanying notes to consolidated financial statements.
7
PAGE
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Consolidated Financial Statements
(a) In the opinion of management, the consolidated balance sheet as
of September 30, 1997, the consolidated income statements for
the three months and nine months ended September 30, 1997 and
1996 and the consolidated statement of cash flows for the nine
months ended September 30, 1997 and 1996, contain all
adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of
operations and cash flows at September 30, 1997 and for all
periods presented.
Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally
accepted accounting principles have been omitted. It is
suggested that these consolidated financial statements be read
in conjunction with the consolidated financial statements and
notes thereto included in The Interpublic Group of Companies,
Inc.'s (the "Company's") December 31, 1996 annual report to
stockholders.
(b) Statement of Financial Accounting Standards (SFAS) No. 95
"Statement of Cash Flows" requires disclosures of specific cash
payments and noncash investing and financing activities. The
Company considers all highly liquid investments with a maturity
of three months or less to be cash equivalents. Income tax
cash payments were approximately $86.1 million and $70 million
in the first nine months of 1997 and 1996, respectively.
Interest payments during the first nine months of 1997 were
approximately $21.3 million. Interest payments during the
comparable period of 1996 were approximately $18.0 million.
In July 1997, a three-for-two stock split was effected by payment
of a stock dividend. This split has been reflected in the
accompanying consolidated financial statements.
(d) On September 16, 1997, the Company issued $250 million face amount of
Convertible
Subordinated Notes due 2004 ("2004 Notes") with a coupon rate of 1.80%.
The Notes were
issued at an original price of 80% of the face amount, generating
proceeds of approximately $200 million. The Notes are
convertible into common stock of the Company at a conversion
rate of 13.386 shares per $1,000 face amount.
8
(e) Subsequent event
On November 14, 1997, the Company announced the redemption of its
outstanding 3-3/4%
Convertible Subordinated Debentures with a scheduled maturity in 2002.
The redemption of the
Debentures will be on December 15, 1997 at $889 per $1,000 principal
amount plus accrued interest. The Debentures are convertible
into common stock of the Company at a rate of 33.36 shares for
each $1,000 principal amount of Debentures. The right to
convert the Debentures into common stock will terminate at the
close of business on December 15,1997.
9
Exhibit 11
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Dollars in Thousands Except Per Share Data)
Three Months Ended September 30
Primary 1997 1996*
Net income $ 35,292 $ 27,471
Add:
Dividends paid net of related income
tax applicable to restricted stock 112 90
Net income, as adjusted $ 35,404 $ 27,561
Weighted average number of common shares
outstanding 121,604,548 118,024,329
Weighted average number of incremental shares
in connection with restricted stock
and assumed exercise of stock options 4,657,676 3,549,452
Total 126,262,224 121,573,781
Earnings per common and common equivalent
share .28 $ .23
Three Months Ended September 30
Fully Diluted 1997 1996*
Net income $ 35,292 $ 27,471
Add:
Dividends paid net of related income tax
applicable to restricted stock 125 98
Net income, as adjusted $ 35,417 $ 27,569
Weighted average number of common shares
outstanding 121,604,548 118,024,329
Weighted average number of incremental shares
in connection with restricted stock
and assumed exercise of stock options 5,103,420 3,766,035
Total 126,707,968 121,790,364
Earnings per common and common equivalent
share $ .28 $ .23
* Restated to reflect 3 for 2 stock split paid on July 15, 1997.
10
PAGE
Exhibit 11
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Dollars in Thousands Except Per Share Data)
Nine Months Ended September 30
Primary 1997 1996*
Net income $ 147,091 $ 128,230
Add:
Dividends paid net of related income tax
applicable to restricted stock 294 265
Net income, as adjusted $ 147,385 $ 128,495
Weighted average number of common shares
outstanding 119,911,616 116,479,685
Weighted average number of incremental shares
in connection with restricted stock
and assumed exercise of stock options 4,075,386 3,600,538
Total 123,987,002 120,080,223
Earnings per common and common equivalent
share $ 1.19 $ 1.07
Nine Months Ended September 30
Fully Diluted 1997 1996*
Net income $ 147,091 $ 128,230
Add:
After tax interest savings on assumed
conversion of subordinated debentures 4,839 4,766
Dividends paid net of related income tax
applicable to restricted stock 331 287
Net income, as adjusted $ 152,261 $ 133,283
Weighted average number of common shares
outstanding 119,911,616 116,479,685
Weighted average number of incremental shares
in connection with restricted stock
and assumed exercise of stock options 4,486,147 3,861,012
Assumed conversion of subordinated
debentures 4,436,207 4,503,195
Total 128,833,970 124,843,892
Earning per common and common equivalent
share $ 1.18 $ 1.07
* Restated to reflect 3 for 2 stock split paid on July 15, 1997.
11
PAGE
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Working capital at September 30, 1997 was $234.5 million, an increase
of $80.1 million from December 31, 1996. The ratio of current assets
to current liabilities was approximately 1.1 to 1 at September 30,
1997.
Historically, cash flow from operations has been the primary source of
working capital and management believes that it will continue to be in
the future. The principal use of the Company's working capital is to
provide for the operating needs of its advertising agencies, which
include payments for space or time purchased from various media on
behalf of its clients. The Company's practice is to bill and collect
from its clients in sufficient time to pay the amounts due media. Other
uses of working capital include the payment of cash dividends,
acquisitions, capital expenditures and the reduction of long-term debt.
In addition, during the first nine months of 1997, the Company acquired
2,122,669 shares of its own stock for approximately $105.8 million for
the purpose of fulfilling the Company's obligations under its various
compensation plans.
The proceeds received from the 2004 Notes, as described in Note (d)
to the consolidated financial statements, will
be used for general corporate purposes including retirement of
indebtedness.
12
PAGE
RESULTS OF OPERATIONS
Three Months Ended September 30, 1997 Compared to Three Months Ended
September 30, 1996
Total revenue for the three months ended September 30, 1997 increased
$146.3 million, or 26.4%, to $701.3 million compared to the same period
in 1996. Domestic revenue increased $104.5 million or 43.8% from 1996
levels. Foreign revenue increased $41.8 million or 13.2% during the
third quarter of 1997 compared to 1996. Other income increased by $9.5
million during the third quarter of 1997 compared to the same period in
1996.
Operating expenses increased $136.7 million or 26.9% during the three
months ended September 30, 1997 compared to the same period in 1996.
Interest expense increased 36.0% as compared to the same period in
1996.
Pretax income increased $15.3 million or 31.7% during the three months
ended September 30, 1997 compared to the same period in 1996.
The increase in total revenue, operating expenses, and pretax income is
primarily due to acquired companies, results of operations and
contributions from new business gains.
Net losses from exchange and translation of foreign currencies for the
three months ended September 30, 1997 were approximately $3.1 million
versus $1.1 million for the same period in 1996.
The effective tax rate for the three months ended September 30, 1997
was 42.8%, as compared to 42.4% in 1996.
The difference between the effective and statutory rates is primarily
due to foreign losses with no tax benefit, losses from translation of
foreign currencies which provided no tax benefit, state and local
taxes, foreign withholding taxes on dividends and nondeductible
goodwill expense.
Nine Months Ended September 30, 1997 Compared to Nine Months Ended
September 30, 1996
Total revenue for the nine months ended September 30, 1997 increased
$394.5 million, or 23.5%, to $2,073.3 million compared to the same
period in 1996. Domestic revenue increased $283.4 million or 40.7%
from 1996 levels. Foreign revenue increased $111.1 million or 11.3%
during the first nine months of 1997 compared to 1996. Other income
has decreased by $10.7 million in the first nine months of 1997
compared to the same period in 1996. The decrease in other income is
primarily from the proceeds resulting from the sale in 1996, of a
portion of the Company's interest in the CKS Group, Inc. The net gain
was approximately $8.1 million or $.07 per share.
Operating expenses increased $331.2 million or 22.1% during the nine
months ended September 30, 1997 compared to the same period in 1996.
Interest expense increased 20.4% during the nine months ended September
30, 1997 as compared to the same nine month period in 1996. The
increase in interest expense is attributable to the repurchasing of
shares and acquisitions.
Pretax income increased $46.7 million or 20.9% during the nine months
ended September 30, 1997 compared to the same period in 1996.
13PAGE
The increase in total revenue, operating expenses, and pretax income is
primarily due to acquired companies' results of operations and
contributions from new business gains.
Net losses from exchange and translation of foreign currencies for the
nine months ended September 30, 1997 were approximately $4.5 million
versus $1.9 million for the same period in 1996.
The effective tax rate for the nine months ended September 30, 1997 was
42.2%, as compared to 42.6% in 1996.
14
PART II - OTHER INFORMATION
Item 2. Changes In Securities
(C)Recent Sales In Unregistered Securities
(1) On July 2, 1997, the Registrant acquired a small company
in consideration for which it issued a total of 265,582 shares
of Common Stock, par value $.10 per share (the "Common
Stock"), to the company's former shareholders. The shares of
Common Stock had a market value of $10,900,000 on the date of
issuance.
The shares of Common Stock were issued by the Registrant
without registration in reliance on Rule 506 of Regulation D
under the Securities Act of 1933, as amended (the "Act"),
based on the accredited investor status or sophistication of
the company's former stockholders.
(2) On August 22, 1997, the Registrant acquired a small
company in consideration for which it issued a total of
370,664 shares of Common Stock to the company's former
shareholders. The shares of Common Stock had a market value
of $17,500,000 on the date of issuance.
The shares of Common Stock were issued by the Registrant
without registration in reliance on Rule 506 of Regulation D
under the Act based on the accredited investor status or
sophistication of the former shareholders of the company.
(3) On September 8, 1997, the Registrant acquired the assets
of a large promotion company in consideration for which it
issued a total of 327,689 shares of Common Stock to the
company. The shares of Common Stock had a market value of
approximately $15,073,000 on the date of issuance.
The shares of Common Stock were issued by the Registrant
without registration, in reliance on Rule 506 of Regulation D
under the Act, based on the accredited investor status of the
company's former stockholders or sophistication of the
company's former stockholders.
15
(4) On September 16, 1997 the Company issued $250,000,000
principal amount at maturity of 1.80% Convertible Subordinated
Notes with a scheduled maturity in 2004 (the "2004 Notes"). The
issue price of the 2004 Notes was 80.007% of the principal amount
at maturity. The 2004 Notes are convertible into Common Stock of
the Registrant at any time following 90 days after the latest
date of original issuance thereof through maturity, unless
previously redeemed or otherwise purchased by the Registrant, at
a conversion rate of 13.386 shares per $1,000 principal amount at
maturity of the 2004 Notes, subject to adjustment in certain
events. The 2004 Note holders have the right to require the
Registrant to redeem the 2004 Notes upon the occurrence of a
Fundamental Change, as defined in the 2004 Notes, as a whole or
in part, at a price initially equal to $800.70 per $1,000
principal amount and increasing thereafter in increments to
$876.944 per $1,000 on September 16, 2000 and thereafter at the
redemption price at which the Registrant may redeem the 2004
Notes. The Registrant may redeem the 2004 Notes, in whole or in
part, at any time after September 20, 2000 initially at $877.285
per $1,000 principal amount and at increasing prices thereafter
to $1,000 per $1,000 principal amount on September 16, 2004.
Unless the 2004 Notes are redeemed, repaid or converted prior
thereto, the 2004 Notes will mature on September 16, 2004 at
their principal amount. The proceeds of this issuance are to be
used for general corporate purposes, which may include the
retirement of indebtedness.
Morgan Stanley & Co. Incorporated, a Delaware corporation
("Morgan Stanley") acted as lead Initial Purchaser for the 2004
Notes. Of the total principal amount, (I) $247,880,000 in
principal amount 2004 Notes were distributed to "Qualified
Institutional Buyers" (as defined in Rule 144A under the Act) in
compliance with Rule 144A and (ii) $2,120,000 principal amount of
2004 Notes were distributed to a limited number of other
institutional "Accredited Investors" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Act that, prior to their
purchase of the 2004 Notes, delivered to the Registrant and
Morgan Stanley a letter containing certain representations and
agreements. The 2004 Notes and the shares of the Registrant's
Common Stock into which the 2004 Notes may be converted were not
registered under the Act, but the Registrant is under an
obligation to file a registration statement for the 2004 Notes
and such shares of Common Stock under the Act.
The 2004 Notes were issued by the Registrant without registration
in reliance upon Section 4(2) of the Act.
16
(5) On September 17, 1997, the Registrant acquired a small
company in consideration for which it issued a total of 60,961
shares of Common Stock to the company's former shareholders.
The shares of Common Stock had a market value of $3,000,000 on
the date of issuance.
The shares of Common Stock were issued by the Registrant without
registration in reliance on Rule 506 of Regulation D under the
Act, based on the accredited investor status or sophistication of
the company's former stockholders.
(6) During the three-month period ended September 30, 1997, the
Registrant issued a total of 83,885 shares of Common Stock to
holders of the Registrant's outstanding 3-3/4% Convertible
Subordinated Debentures with a scheduled maturity in 2002
(the 3-3/4% "Debentures"). The
shares of Common Stock were issued upon
conversion of the 3-3/4% Debentures in reliance upon Section
3(a)(9) of the Act. Each principal amount of $1,000 of
the 3-3/4% Debentures is convertible into
33.36 shares of the
Registrant's Common Stock.
Item 5 Other Information
On November 14, 1997, the Company announced the redemption of the
3-3/4% Debentures. The redemption of the 3 3/4% Debentures will
be on December 15, 1997 (the "Redemption Date"), at a redemption
price equal to $889.00 per $1,000 principal amount plus accrued
interest to the Redemption Date. Each principal amount of $1,000
of the 3-3/4% Debentures is convertible into 33.36 shares of the
Registrant's Common Stock. The right to convert the 3-3/4%
Debentures into Common Stock will terminate at the close of
business on the Redemption Date.
Item 6.Exhibits and Reports on Form 8-K.
(a)Exhibits
Exhibit 4(a) Purchase Agreement, dated September 10, 1997,
among The Interpublic Group of Companies, Inc.
("Interpublic"), Morgan Stanley &
Co.,Incorporated, Goldman Sachs and Co. and SBC
Warburg Dillon Read Inc. is not included as an
Exhibit to this Report, but will be furnished
to the Securities and Exchange Commission (the
"Commission") upon its request.
17
Exhibit 4(b) Indenture, dated as of September 16, 1997,
between Interpublic and The Bank of New York is
not included as an Exhibit to this Report, but
will be furnished to the Commission upon its
request.
Exhibit 10(a) Note Purchase Agreement, dated as of August 19,
1997, between Interpublic and The Prudential
Insurance Company of America ("Prudential").
Exhibit 10(b) Note of Interpublic, dated August 19, 1997 in
favor of Prudential in the principal amount of
$50,000,000.
Exhibit 10 Amendment No. 6, dated as of August 28, 1997, to a
Credit Agreement dated as of September 30, 1992 and
effective as of December 23, 1992 between
Interpublic and Chemical Bank.
Exhibit 10(d) Amendment No. 2, dated as of August 28, 1997,
to a Credit Agreement dated as of September 30,
1994 and effective as of December 1, 1994
between Interpublic and Bank of America NT and
SA.
Exhibit 10(e) Amendment No. 6, dated as of August 28, 1997,
to a Credit Agreement dated as of September 30,
1992 and effective as of December 22, 1992
between Interpublic and Citibank, N.A.
Exhibit 10(f) Amendment No. 1, dated as of August 28, 1997,
to a Credit Agreement dated July 3, 1995
between Interpublic and Lloyds Bank.
18
Exhibit 10(g) Amendment No. 6, dated as of August 28, 1997,
to a Credit Agreement dated as of September 30,
1992 and effective as of December 18, 1992
between Interpublic and Swiss Bank Corporation.
Exhibit 10(h) Amendment No. 6, dated as of August 28, 1997 to
a Credit Agreement dated as of September 30,
1992 and effective as of December 30, 1992
between Interpublic and Trust Company Bank.
Exhibit 10(I) Master Note of Interpublic, dated June 26, 1997
in favor of Comerica Bank in the principal
amount of $10,000,000.
Exhibit 10(j) Supplemental Agreement, made as of September 1,
1997, between Interpublic and Eugene P. Beard.
Exhibit 10(k) Supplemental Agreement, dated as of September
1, 1997, between Interpublic and John J.
Dooner.
Exhibit 10(l) Supplemental Agreement, made as of September 1,
1997, among Interpublic, Ammirati and Puris
Inc. (now Ammirati Puris Lintas Inc.) and
Martin F. Puris.
Exhibit 11 Computation of Earnings Per Share.
Exhibit 27 Financial Data Schedule.
19
PAGE
(b) Reports on Form 8-K
The following reports on Form 8-K were filed without
financial statements during the quarter ended September 30,
1997:
(1) Item 9 - Sale of Equity Securities Pursuant to
Regulation S, dated August 29, 1997.
(2) Item 9 - Sale of Equity Securities Pursuant to
Regulation S, dated August 29, 1997.
(3) Item 9 - Sale of Equity Securities Pursuant to
Regulation S, dated August 29, 1997.
(4) Item 9 - Sale of Equity Securities Pursuant to
Regulation S, dated August 30, 1997.
(5) Item 9 - Sale of Equity Securities Pursuant to
Regulation S, dated September 8, 1997.
(6) Item 9 - Sale of Equity Securities Pursuant to
Regulation S, dated September 17, 1997.
20
PAGE
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
THE INTERPUBLIC GROUP OF COMPANIES, INC.
(Registrant)
Date: November 14, 1997 By /S/ Philip H. Geier, Jr.
Philip H. Geier, Jr.
Chairman of the Board
President and Chief Executive Officer
Date: November 14, 1997 By /S/ Eugene P. Beard
Eugene P. Beard
Vice Chairman -
Finance and Operations
21
INDEX TO EXHIBITS
Exhibit No. Description
Exhibit 4(a) Purchase Agreement, dated September 10, 1997,
among The Interpublic Group of Companies,
Inc. ("Interpublic"), Morgan Stanley & Co.,
Incorporated, Goldman Sachs and Co. and SBC
Warburg Dillon Read Inc. is not included as
an Exhibit to this Report, but will be
furnished to the Securities and Exchange
Commission (the "Commission") upon its
request.
Exhibit 4(b) Indenture, dated as of September 16, 1997,
between Interpublic and The Bank of New York
is not included as an Exhibit to this Report,
but will be furnished to the Commission upon
its request.
Exhibit 10(a) Note Purchase Agreement, dated as of August
19, 1997, between The Interpublic Group of
Companies, Inc. ("Interpublic") and The
Prudential Insurance Company of America
("Prudential").
Exhibit 10(b) Note of Interpublic, dated August 19, 1997 in
favor of Prudential in the principal amount
of $50,000,000.
Exhibit 10 Amendment No. 6, dated as of August 28, 1997,
to a Credit Agreement dated as of September
30, 1992 and effective as of December 23,
1992 between Interpublic and Chemical Bank.
Exhibit 10(d) Amendment No. 2, dated as of August 28, 1997,
to a Credit Agreement dated as of September
30, 1994 and effective as of December 1, 1994
between Interpublic and Bank of America NT
and SA.
Exhibit 10(e) Amendment No. 6, dated as of August 28, 1997,
to a Credit Agreement dated as of September
30, 1992 and effective as of December 22,
1992 between Interpublic and Citibank, N.A.
22
Exhibit 10(f) Amendment No. 1, dated as of August 28, 1997,
to a Credit Agreement dated July 3, 1995
between Interpublic and Lloyds Bank.
Exhibit 10(g) Amendment No. 6, dated as of August 28, 1997
to a Credit Agreement dated as of September
30, 1992 and effective as of December 18,
1992 between Interpublic and Swiss Bank
Corporation.
Exhibit 10(h) Amendment No. 6, dated as of August 28, 1997
to a Credit Agreement dated as of September
30, 1992 and effective as of December 30,
1992 between Interpublic and Trust Company
Bank.
Exhibit 10(I) Master Note of Interpublic, dated June 26,
1997 in favor of Comerica Bank in the
principal amount of $10,000,000.
Exhibit 10(j) Supplemental Agreement, made as of September
1, 1997, between Interpublic and Eugene P.
Beard.
Exhibit 10(k) Supplemental Agreement, dated as of September
1, 1997, between Interpublic and John J.
Dooner.
Exhibit 10(l) Supplemental Agreement, made as of September
1, 1997, among Interpublic, Ammirati and
Puris Inc. (now Ammirati Puris Lintas Inc.
and Martin F. Puris.
Exhibit 11 Computation of Earnings Per Share.
Exhibit 27 Financial Data Schedule.
23