SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended Commission file number
December 31, 1998 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 10020
New York, New York (Zip Code)
(Address of principal executive offices)
(212) 399-8000
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (Section 229.405 of this
chapter) is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. X .
1
The aggregate market value of the registrant's voting stock
(exclusive of shares beneficially owned by persons referred to in
response to Item 12 hereof) was $9,586,441,058 as of March 23,
1999.
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest
practicable date.
Common Stock outstanding at March 23, 1999: 139,985,134 shares.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Annual Report to Stockholders for the year
ended December 31, 1998 are incorporated by reference in
Parts I and II.
2. Portions of the Proxy Statement for the 1999 Annual Meeting
of Stockholders are incorporated by reference in Parts I and
III.
2
PART I
Item 1. Business
The Interpublic Group of Companies, Inc. was incorporated in
Delaware in September 1930 under the name of McCann-Erickson
Incorporated as the successor to the advertising agency
businesses founded in 1902 by A.W. Erickson and in 1911 by
Harrison K. McCann. It has operated under the Interpublic name
since January 1961. As used in this Annual Report, the
"Registrant" or "Interpublic" refers to The Interpublic Group of
Companies, Inc. while the "Company" refers to Interpublic and its
subsidiaries.
The advertising agency business is the primary business of
the Company. This business is conducted throughout the world
through three advertising agency systems, McCann-Erickson
WorldGroup, Ammirati Puris Lintas and The Lowe Group, plus a
number of stand alone local agencies. Interpublic also carries
on a media buying business through its ownership of Western
Initiative Media Worldwide and its affiliates, as well as a
separate direct and promotional marketing business through its
ownership of DraftWorldwide Inc., a global public relations
capability through International Public Relations, and a multi-
national sports and event marketing organization, Octagon. The
Company also offers advertising agency services through
association arrangements with local agencies in various parts of
the world. Other activities conducted by the Company within the
area of "marketing communications" include brand equity and
corporate identity services, graphic design, management
consulting, market research, sales promotion, interactive
services, sales meetings and events, and other related
specialized marketing and communications services.
The principal functions of an advertising agency are to plan
and create advertising programs for its clients and to place
advertising in various media such as television, cinema, radio,
magazines, newspapers, direct mail, outdoor and interactive
electronic media. The planning function involves analysis of the
market for the particular product or service, evaluation of
alternative methods of distribution and choice of the appropriate
media to reach the desired market most efficiently. The
advertising agency develops a communications strategy and then
creates an advertising program, within the limits imposed by the
client's advertising budget, and places orders for space or time
with the media that have been selected.
3
The principal advertising agency subsidiaries of Interpublic
operating within the United States directly or through
subsidiaries and the locations of their respective corporate
headquarters are:
Ammirati Puris Lintas Inc......... New York, New York
Campbell-Ewald Company............ Detroit (Warren),
Michigan
Campbell Mithun Esty LLC.......... Minneapolis, Minnesota
Dailey & Associates............... Los Angeles, California
DraftWorldwide, Inc............... Chicago, Illinois
Hill, Holliday, Connors
Cosmopulos, Inc................. Boston, Massachusetts
Lowe & Partners/SMS, Inc.......... New York, New York
McCann-Erickson USA, Inc.......... New York, New York
In addition to domestic operations, the Company provides
services for clients whose business is international in scope as
well as for clients whose business is restricted to a single
country or a small number of countries. It has offices in Canada
as well as in one or more cities in each of the following
countries:
EUROPE, AFRICA AND THE MIDDLE EAST
Austria Germany Namibia South Africa
Azerbaijan Greece Netherlands Spain
Belgium Hungary Nigeria Sweden
Bulgaria Israel Norway Switzerland
Cameroon Ireland Pakistan Tunisia
Croatia Italy Poland Turkey
Czech Republic Ivory Coast Portugal Ukraine
Denmark Kazakhstan Romania United Arab Emirates
Estonia Kenya Russia United Kingdom
Finland Mauritius Senegal Uzbekistan
France Morocco Slovakia Zambia
Slovenia Zimbabwe
4
LATIN AMERICA AND THE CARIBBEAN
Argentina Colombia Guatemala Peru
Barbados Costa Rica Honduras Puerto Rico
Bermuda Dominican Republic Jamaica Trinidad
Brazil Ecuador Mexico Uruguay
Chile El Salvador Panama Venezuela
ASIA AND THE PACIFIC
Australia Japan People's Republic Sri Lanka
Hong Kong Malaysia of China South Korea
India Nepal Philippines Taiwan
Indonesia New Zealand Singapore Thailand
Vietnam
Operations in the foregoing countries are carried on by one
or more operating companies, at least one of which is either
wholly owned by Interpublic or a subsidiary or is a company in
which Interpublic or a subsidiary owns a 51% interest or more,
except in Malawi and Nepal, where Interpublic or a subsidiary
holds a minority interest.
The Company also offers services in Albania, Aruba, the
Bahamas, Bahrain, Belize, Bolivia, Cambodia, Egypt, Gabon, Ghana,
Grand Cayman, Guadeloupe, Guam, Guyana, Haiti, Reunion, Ivory
Coast, Jordan, Kuwait, Lebanon, Martinique, Nicaragua, Nigeria,
Oman, Paraguay, Saudi Arabia, Senegal, Surinam, Uganda, United
Arab Emirates (Dubai) and Zaire through association arrangements
with local agencies operating in those countries.
For information concerning revenues, operating profits and
identifiable assets on a geographical basis for each of the last
three years, reference is made to Note 12: Geographic Areas of
the Notes to the Consolidated Financial Statements in the
Company's Annual Report to Stockholders for the year ended
December 31, 1998, which Note is hereby incorporated by
reference.
Developments in 1998
The Company completed a number of acquisitions within the
United States and abroad in 1998.
5
See Note 4 to the Consolidated Financial Statements
incorporated by reference in this Report on Form 10-K for a
discussion of acquisitions.
Income from Commissions and Fees
The Company generates income from planning, creating and
placing advertising in various media and from planning and
executing other communications or marketing programs.
Historically, the commission customary in the industry was 15% of
the gross charge ("billings") for advertising space or time; more
recently lower commissions have been negotiated, but often with
additional incentives for better performance. For example, an
incentive component is frequently included in arrangements with
clients based on improvements in an advertised brand's awareness
or image, or increases in a client's sales of the products or
services being advertised. Under commission arrangements, media
bill the Company at their gross rates. The Company bills these
amounts to its clients, remits the net charges to the media and
retains the balance as its commission. Some clients, however,
prefer to compensate the Company on a fee basis, under which the
Company bills its client for the net charges billed by the media
plus an agreed-upon fee. These fees usually are calculated to
reflect the Company's salary costs and out-of-pocket expenses
incurred on the client's behalf, plus proportional overhead and a
profit mark-up.
Normally, the Company, like other agencies, is primarily
responsible for paying the media with respect to firm contracts
for advertising time or space. This is a problem only if the
client is unable to pay the Company because of insolvency or
bankruptcy. The Company makes serious efforts to reduce the risk
from a client's insolvency, including (1) carrying out credit
clearances, (2) requiring in some cases payment of media in
advance, or (3) agreeing with the media that the Company will be
solely liable to pay the media only after the client has paid the
Company for the media charges.
The Company also receives commissions from clients for
planning and supervising work done by outside contractors in the
physical preparation of finished print advertisements and the
production of television and radio commercials and other forms of
advertising. This commission is customarily 17.65% of the
outside contractor's net charge, which is the same as 15% of the
outside contractor's total charges including commission. With
the spread of negotiated fees, the terms on which outstanding
contractors' charges are billed are subject to wide variations
and even include in some instances the elimination of commissions
entirely provided that there are adequate negotiated fees.
6
The Company derives income in many other ways, including the
planning and placement in media of advertising produced by
unrelated advertising agencies; the maintenance of specialized
media placement facilities; the creation and publication of
brochures, billboards, point of sale materials and direct
marketing pieces for clients; the planning and carrying out of
specialized marketing research; managing special events at which
clients' products are featured; and designing and carrying out
interactive programs for special uses.
The five clients of the Company that made the largest
contribution in 1998 to income from commissions and fees
accounted individually for 1.7% to 7.4% of such income and in the
aggregate accounted for over 18% of such income. Twenty clients
of the Company accounted for approximately 30% of such income.
Based on income from commissions and fees, the three largest
clients of the Company are General Motors Corporation, Nestle and
Unilever. General Motors Corporation first became a client of
one of the Company's agencies in 1916 in the United States.
Predecessors of several of the Lintas agencies have supplied
advertising services to Unilever since 1893. The client
relationship with Nestle began in 1940 in Argentina. While the
loss of the entire business of one of the Company's three largest
clients might have a material adverse effect upon the business of
the Company, the Company believes that it is very unlikely that
the entire business of any of these clients would be lost at the
same time, because it represents several different brands or
divisions of each of these clients in a number of geographical
markets - in each case through more than one of the Company's
agency systems.
Representation of a client rarely means that the Company
handles advertising for all brands or product lines of the client
in all geographical locations. Any client may transfer its
business from an advertising agency within the Company to a
competing agency, and a client may reduce its advertising budget
at any time.
The Company's agencies in many instances have written
contracts with their clients. As is customary in the industry,
these contracts provide for termination by either party on
relatively short notice, usually 90 days but sometimes shorter or
longer. In 1998, however, 23% of income from commissions and
fees was derived from clients that had been associated with one
or more of the Company's agencies or their predecessors for 20 or
more years.
7
Personnel
As of January 1, 1999, the Company employed more than 34,000
persons, of whom nearly 14,000 were employed in the United
States. Because of the personal service character of the
marketing communications business, the quality of personnel is of
crucial importance to continuing success. There is keen
competition for qualified employees. Interpublic considers its
employee relations to be satisfactory.
The Company has an active program for training personnel.
The program includes meetings and seminars throughout the world.
It also involves training personnel in its offices in New York
and in its larger offices worldwide.
Competition and Other Factors
The advertising agency and other marketing communications
businesses are highly competitive. The Company's agencies and
media services must compete with other agencies and with other
providers of creative or media services which are not themselves
advertising agencies, in order to maintain existing client
relationships and to obtain new clients. Competition in the
advertising agency business depends to a large extent on the
client's perception of the quality of an agency's "creative
product". An agency's ability to serve clients, particularly
large international clients, on a broad geographic basis is also
an important competitive consideration. On the other hand,
because an agency's principal asset is its people, freedom of
entry into the business is almost unlimited and quite small
agencies are, on occasion, able to take all or some portion of a
client's account from a much larger competitor.
Moreover, increasing size brings limitations to an agency's
potential for securing new business, because many clients prefer
not to be represented by an agency that represents a competitor.
Also, clients frequently wish to have different products
represented by different agencies. The fact that the Company
owns three separate worldwide agency systems and interests in
other advertising agencies gives it additional competitive
opportunities.
The advertising business is subject to government
regulation, both domestic and foreign. There has been an
increasing tendency in the United States on the part of
advertisers to resort to the courts, industry and self-regulatory
8
bodies to challenge comparative advertising on the grounds that
the advertising is false and deceptive. Through the years, there
has been a continuing expansion of specific rules, prohibitions,
media restrictions, labeling disclosures and warning requirements
with respect to the advertising for certain products.
Representatives within state governments and the federal
government as well as foreign governments continue to initiate
proposals to ban the advertising of specific products and to
impose taxes on or deny deductions for advertising which, if
successful, may have an adverse effect on advertising
expenditures.
Some countries are relaxing commercial restrictions as part
of their efforts to attract foreign investment. However, with
respect to other nations, the international operations of the
Company still remain exposed to certain risks which affect
foreign operations of all kinds, such as local legislation,
monetary devaluation, exchange control restrictions and unstable
political conditions. In addition, international advertising
agencies are still subject to ownership restrictions in certain
countries because they are considered an integral factor in the
communications process.
Statement Regarding Forward Looking Disclosure
Certain sections of this report, including "Business",
"Competition and Other Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations"
contain forward looking statements concerning future events and
developments that involve risks and uncertainties, including
those associated with the effect of national and regional
economic conditions, the ability of the Company to attract new
clients and retain existing clients, the financial success of
clients of the Company, other developments of clients of the
Company, and developments from changes in the regulatory and
legal environment for advertising agencies around the world.
Year 2000 Compliance
Many currently installed computer systems and software
products are coded to accept only two-digit entries in the date
code field. Beginning in the year 2000, these date code fields
will need to accept four-digit entries to distinguish 21st
century dates from 20th century dates. As a result, computer
systems and/or software used by the Company will need to be
upgraded to comply with such "Year 2000" requirements. Further
discussion of this issue is contained in the section of this
Report entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
9
Item 2. Properties
Most of the operations of the Company are conducted in
leased premises, and its physical property consists primarily of
leasehold improvements, furniture, fixtures and equipment. These
facilities are located in various cities in which the Company
does business throughout the world. However, subsidiaries of the
Company own office buildings in Louisville, Kentucky; Garden
City, New York; Blair, Nebraska; Warren, Michigan; Frankfurt,
Germany; Sao Paulo, Brazil; Lima, Peru; Mexico City, Mexico;
Santiago, Chile ; and Brussels, Belgium and own office
condominiums in Buenos Aires, Argentina; Bogota, Colombia;
Manila, the Philippines; in England, subsidiaries of the Company
own office buildings in London, Manchester, Birmingham and Stoke-
on-Trent.
The Company's ownership of the office building in Frankfurt
is subject to three mortgages which became effective on or about
February 1993. These mortgages terminate at different dates,
with the last to expire in February 2003. Reference is made to
Note 10: Long-Term Debt, of the Notes to the Consolidated
Financial Statements in the Company's Annual Report to
Stockholders for the year ended December 31, 1998, which Note is
hereby incorporated by reference.
Item 3. Legal Proceedings
Neither the Company nor any of its subsidiaries are subject
to any pending material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Executive Officers of the Registrant
There follows the information disclosed in accordance with
Item 401 of Regulation S-K of the Securities and Exchange
Commission (the "Commission") as required by Item 10 of Form 10-K
with respect to executive officers of the Registrant.
Name Age Office
Philip H. Geier, Jr. (1) 64 Chairman of the Board, President
and Chief Executive Officer
10
Eugene P. Beard (1) 63 Vice Chairman-Finance and
Operations, Chief Financial Officer
Nicholas J. Camera 52 Vice President, General Counsel
and Secretary
John J. Dooner, Jr. (1) 50 Chairman and Chief Executive
Officer of McCann-Erickson
WorldGroup
C. Kent Kroeber 60 Senior Vice President-Human
Resources
Barry R. Linsky 57 Senior Vice President-Planning
and Business Development
Frank B. Lowe (1) 57 Chairman of the Board and Chief
Executive Officer of The Lowe Group
Frederick Molz 42 Vice President and Controller
Martin F. Puris (1) 60 Chairman, Chief Executive Officer
and Chief Creative Officer of
Ammirati Puris Lintas Worldwide
Thomas J. Volpe 63 Senior Vice President-Financial
Operations
(1) Also a Director
There is no family relationship among any of the executive
officers.
The employment histories for the past five years of Messrs.
Geier, Beard, Dooner, Puris and Lowe are incorporated by
reference to the Proxy Statement for Interpublic's 1999 Annual
Meeting of Stockholders.
Mr. Camera joined Interpublic on May 17, 1993. He was
elected Vice President, Assistant General Counsel and Assistant
Secretary on June 1, 1994 and Vice President, General Counsel and
Secretary on December 15, 1995.
Mr. Kroeber joined Interpublic in January 1966 as Manager of
Compensation and Training. He was elected Vice President in 1970
and Senior Vice President in May 1980.
11
Mr. Linsky joined Interpublic in January, 1991 when he was
elected Senior Vice President-Planning and Business Development.
Prior to that time, he was Executive Vice President, Account
Management of Lowe & Partners, Inc. Mr. Linsky was elected to
that position in July, 1980, when the corporation was known as
The Marschalk Company and was a subsidiary of Interpublic.
Mr. Molz was elected Vice President and Controller of
Interpublic effective January 1, 1999. He joined Interpublic in
August, 1982, and his most recent position was Senior Vice
President- Financial Operations of Ammirati Puris Lintas
Worldwide, a subsidiary of Interpublic, since April, 1994. He
also held previous positions in the Interpublic Controller's
Department and Tax Department.
Mr. Volpe joined Interpublic on March 3, 1986. He was
appointed Senior Vice President-Financial Operations on March 18,
1986. He served as Treasurer from January 1, 1987 through May
17, 1988 and the Treasurer's office continues to report to him.
He was Vice President and Treasurer of Colgate-Palmolive Company
from February 1981 to February 1986 and Assistant Corporate
Controller prior thereto.
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters
The response to this Item is incorporated (i) by reference
to the Registrant's Annual Report to Stockholders for the year
ended December 31, 1998. See Note 11: Results by Quarter
(Unaudited), and Note 2: Stockholders' Equity, of the Notes to
the Consolidated Financial Statements and information under the
heading Transfer Agent and Registrar for Common Stock, and (ii)
on December 11, 1998, the Registrant acquired the assets and
assumed the liabilities of two companies in consideration for
which it paid cash and issued a total of 18,228 shares of its
common stock par value $.10 per share ("Interpublic Stock"), to
the acquired companies' shareholders. The shares of Interpublic
Stock had a market value of $1,250,000 on the date of issuance.
The shares of Interpublic 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
"Securities Act"), based on the accredited investor status or
sophistication of the shareholders of the acquired companies.
12
Item 6. Selected Financial Data
The response to this Item is incorporated by reference to
the Registrant's Annual Report to Stockholders for the year ended
December 31, 1998 under the heading Selected Financial Data for
Five Years.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The response to this Item is incorporated by reference to
the Registrant's Annual Report to Stockholders for the year ended
December 31, 1998 under the heading Management's Discussion and
Analysis of Financial Condition and Results of Operations.
Item 7A. Quantitative and Qualitative Disclosures About Market
Risk
The response to this Item is incorporated by reference to
the Registrant's Annual Report to Stockholders for the year ended
December 31, 1998 under the heading Management's Discussion and
Analysis of Financial Condition and Results of Operations.
Item 8. Financial Statements and Supplementary Data
The response to this Item is incorporated in part by
reference to the Registrant's Annual Report to Stockholders for
the year ended December 31, 1998 under the headings Financial
Statements and Notes to the Consolidated Financial Statements.
Reference is also made to the Financial Statement Schedule listed
under Item 14(a) of this Report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Not applicable.
13
PART III
Item 10. Directors and Executive Officers of the Registrant
The information required by this Item is incorporated by
reference to the Registrant's Proxy Statement for its 1998 Annual
Meeting of Stockholders (the "Proxy Statement"), to be filed not
later than 120 days after the end of the 1998 calendar year,
except for the description of Interpublic's Executive Officers
which appears in Part I of this Report on Form 10-K under the
heading "Executive Officers of the Registrant".
Item 11. Executive Compensation
The information required by this Item is incorporated by
reference to the Proxy Statement. Such incorporation by
reference shall not be deemed to incorporate specifically by
reference the information referred to in Item 402(a)(8) of
Regulation S-K.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The information required by this Item is incorporated by
reference to the Proxy Statement.
Item 13. Certain Relationships and Related Transactions
The information required by this Item is incorporated by
reference to the Proxy Statement. Such incorporation by
reference shall not be deemed to incorporate specifically by
reference the information referred to in Item 402(a)(8) of
Regulation S-K.
PART IV
Item 14. Exhibits, Financial Statement Schedule, and Reports on
Form 8-K
(a) Listed below are all financial statements, financial
statement schedules and exhibits filed as part of this Report on
Form 10-K.
14
1. Financial Statements:
See the Index to Financial Statements on page F-1.
2. Financial Statement Schedule:
See the Index to Financial Statement Schedule on
page F-1.
3. Exhibits:
(Numbers used are the numbers assigned in Item 601 of
Regulation S-K and the EDGAR Filer Manual. An additional copy of
this exhibit index immediately precedes the exhibits filed with
this Report on Form 10-K and the exhibits transmitted to the
Commission as part of the electronic filing of the Report.)
Exhibit No. Description
3 (i) The Restated Certificate of Incorporation of the
Registrant, as amended is incorporated by reference
to its Report on Form 10-Q for the quarter ended June
30, 1997. See Commission file number 1-6686.
(ii) The By-Laws of the Registrant, amended as of February
19, 1991, are incorporated by reference to its Report
on Form 10-K for the year ended December 31, 1990.
See Commission file number 1-6686.
4 Instruments Defining the Rights of Security Holders.
(i) Indenture, dated as of September 16, 1997 between
Interpublic and The Bank of New York is incorporated
by reference to the Registrant's Report on Form 10-Q
for the quarter ended September 30, 1998. See
Commission file number 1-6686.
(ii) The Preferred Share Purchase Rights Plan as adopted
on July 18, 1989 is incorporated by reference to
Registrant's Registration Statement on Form 8-A dated
August 1, 1989 (No. 00017904) and, as amended, by
reference to Registrant's Registration Statement on
Form 8 dated October 3, 1989 (No. 00106686).
15
10 Material Contracts.
(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 incorporated by reference to the Registrant's
Report on Form 10-Q for the quarter ended September
30, 1998. See Commission file number 1-6686.
(b) Employment, Consultancy and other Compensatory
Arrangements with Management.
Employment and Consultancy Agreements and any
amendments or supplements thereto and other
compensatory arrangements filed with the Registrant's
Reports on Form 10-K for the years ended December 31,
1980 through December 31, 1997 inclusive, or filed
with the Registrant?s Reports on Form 10-Q for the
periods ended March 31, 1998, June 30, 1998 and
September 30, 1998 are incorporated by reference in
this Report on Form 10-K. See Commission file number
1-6686. Listed below are agreements or amendments to
agreements between the Registrant and its executive
officers which remain in effect on and after the date
hereof or were executed during the year ended
December 31, 1998 and thereafter, unless previously
submitted, which are filed as exhibits to this Report
on Form 10-K.
(i) Eugene P. Beard
Supplemental Agreement dated as of March 1, 1999
to an Employment Agreement dated as of July 1,
1995 between Interpublic and Eugene P. Beard.
(ii) Frank B. Lowe
Supplemental Agreement dated as of March 1, 1999
to an Employment Agreement dated as of January
1, 1996 between Interpublic and Frank B. Lowe.
(iii) Martin F. Puris
Supplemental Agreement dated as of March 1, 1999
to an Employment Agreement dated as of August
11, 1994 between Interpublic, APL and Martin F.
Puris.
16
(iv) Barry R. Linsky
Executive Severance Agreement dated as of
January 1, 1998 between Interpublic and Barry R.
Linsky.
(c) Executive Compensation Plans.
(i) Trust Agreement, dated as of June 1, 1990
between Interpublic, Lintas Campbell-Ewald
Company, McCann-Erickson USA, Inc., McCann-
Erickson Marketing, Inc., Lintas, Inc. and
Chemical Bank, as Trustee, is incorporated by
reference to Registrant's Annual Report on Form
10-K for the year ended December 31, 1990. See
Commission file number 1-6686.
(ii) The Stock Option Plan (1988) and the Achievement
Stock Award Plan of the Registrant are
incorporated by reference to Appendices C and D
of the Prospectus dated May 4, 1989 forming part
of its Registration Statement on Form S-8 (No.
33-28143).
(iii) The Management Incentive Compensation Plan of
the Registrant is incorporated by reference to
the Registrant?s Report on Form 10-Q for the
quarter ended June 30, 1995. See Commission
file number 1-6686.
(iv) The 1986 Stock Incentive Plan of the Registrant
is incorporated by reference to Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1993. See Commission file number
1-6686.
(v) The 1986 United Kingdom Stock Option Plan of the
Registrant is incorporated by reference to
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1992. See Commission
file number 1-6686.
(vi) The Employee Stock Purchase Plan (1985) of the
Registrant, as amended, is incorporated by
reference to Registrant's Annual Report on Form
10-K for the year ended December 31, 1993. See
Commission file number 1-6686.
17
(vii) The Long-Term Performance Incentive Plan of the
Registrant is incorporated by reference to
Appendix A of the Prospectus dated December 12,
1988 forming part of its Registration Statement
on Form S-8 (No. 33-25555).
(viii) Resolution of the Board of Directors adopted on
February 16, 1993, amending the Long-Term
Performance Incentive Plan is incorporated by
reference to Registrant's Annual Report on Form
10-K for the year ended December 31, 1992. See
Commission file number 1-6686.
(ix) Resolution of the Board of Directors adopted on
May 16, 1989 amending the Long-Term Performance
Incentive Plan is incorporated by reference to
Registrant's Report on Form 10-K for the year
ended December 31, 1989. See Commission file
number 1-6686.
(x) The 1996 Stock Incentive Plan of the Registrant
is incorporated by reference to the Registrant's
Report on Form 10-Q for the quarter ended June
30, 1996. See Commission file number 1-6686.
(xi) The 1997 Performance Incentive Plan of the
Registrant is incorporated by reference to the
Registrant's Report on Form 10-Q for the quarter
ended June 30, 1997. See Commission file number
1-6686.
(d) Loan Agreements.
(i) Credit Agreement Extension dated as of June 30,
1998 to a Credit Agreement dated as of July 3,
1995 between Interpublic and Lloyds Bank PLC.
(ii) Amendment No. 7, dated as of November 23, 1998
to a Credit Agreement dated as of September 30,
1992 between Interpublic and Citibank N.A.
(iii) Credit Agreement dated as of October 1, 1998
between Interpublic and Wachovia Bank.
(iv) Amendment No. 8 to a Credit Agreement dated as
of November 23, 1998 to a Credit Agreement dated
as of September 30, 1992 between Interpublic and
The First National Bank of Chicago.
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(v) Amendment No. 2, dated as of November 23, 1998
to a Credit Agreement dated as of July 3, 1995
between Interpublic and Lloyds Bank PLC.
(vi) Amendment No. 7 dated as of November 23, 1998 to
a Credit Agreement dated as of September 30,
1992 between Interpublic and The Bank of New
York.
(vii) Amendment No. 6, dated as of November 23, 1998
to a Credit Agreement dated as of September 30,
1992 between Interpublic and UBS AG (formerly
known as Union Bank of Switzerland).
(viii) Amendment No. 7, dated as of November 23, 1998
to a Credit Agreement dated as of September 30,
1992 between Interpublic and The Chase Manhattan
Bank (as successor to Chemical Bank).
(ix) Amendment No. 7 dated as of November 23, 1998 to
a Credit Agreement dated as of September 30,
1992 between Interpublic and SunTrust Bank,
Atlanta (formerly Trust Company Bank).
(x) Amendment No. 3, dated as of November 23, 1998
to a Credit Agreement dated as of December 1,
1994 between Interpublic and Bank of America NT
& SA.
(xi) Other Loan and Guaranty Agreements filed with
the Registrant's Annual Report on Form 10-K for
the years ended December 31, 1988 and December
31, 1986 are incorporated by reference in this
Report on Form 10-K. Other Credit Agreements,
amendments to various Credit Agreements,
Supplemental Agreements, Termination Agreements,
Loan Agreements, Note Purchase Agreements,
Guarantees and Intercreditor Agreements filed
with the Registrant's Report on Form 10-K for
the years ended December 31, 1989 through
December 31, 1997, inclusive and filed with
Registrant's Reports on Form 10-Q for the
periods ended March 31, 1998, June 30, 1998 and
September 30, 1998 are incorporated by reference
into this Report on Form 10-K. See Commission
file number 1-6686.
19
(e) Leases.
Material leases of premises are incorporated by
reference to the Registrant's Annual Report on Form
10-K for the years ended December 31, 1980 and December
31, 1988. See Commission file number 1-6686.
(f) Acquisition Agreement for Purchase of Real Estate.
Acquisition Agreement (in German) between
Treuhandelsgesellschaft Aktiengesellschaft & Co.
Grundbesitz OHG and McCann-Erickson Deutschland GmbH &
Co. Management Property KG ("McCann-Erickson
Deutschland") and the English translation of the
Acquisition Agreement are incorporated by reference to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1992. See Commission file number
1-6686.
(g) Mortgage Agreements and Encumbrances.
(i) Summaries in German and English of Mortgage
Agreements between McCann-Erickson Deutschland
and Frankfurter Hypothekenbank
Aktiengesellschaft ("Frankfurter
Hypothekenbank"), Mortgage Agreement, dated
January 22, 1993, between McCann-Erickson
Deutschland and Frankfurter Hypothekenbank,
Mortgage Agreement, dated January 22, 1993,
between McCann-Erickson Deutschland and
Hypothekenbank are incorporated by reference to
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1993. See Commission
file number 1-6686. Summaries in German and
English of Mortgage Agreement, between
McCann-Erickson Deutschland and Frankfurter
Sparkasse and Mortgage Agreement, dated January
7, 1993, between McCann-Erickson Deutschland and
Frankfurter Sparkasse are incorporated by
reference to Registrant's Annual Report on Form
10-K for the year ended December 31, 1992. See
Commission file number 1-6686.
20
(ii) Summaries in German and English of Documents
creating Encumbrances in favor of Frankfurter
Hypothekenbank and Frankfurter Sparkasse in
connection with the aforementioned Mortgage
Agreements, Encumbrance, dated January 15, 1993,
in favor of Frankfurter Hypothekenbank, and
Encumbrance, dated January 15, 1993, in favor of
Frankfurter Sparkasse are incorporated by
reference to Registrant's Annual Report on Form
10-K for the year ended December 31, 1992. See
Commission file number 1-6686.
(iii) Loan Agreement (in English and German), dated
January 29, 1993 between Lintas Deutschland GmbH
and McCann-Erickson Deutschland is incorporated
by reference to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1992.
See Commission file number 1-6686.
11 Computation of Earnings Per Share.
13 This Exhibit includes: (a) those portions of the Annual
Report to Stockholders for the year ended December 31, 1998
which are included therein under the following headings:
Financial Highlights; Vice-Chairman's Report of Management;
Management's Discussion and Analysis of Financial Condition
and Results of Operations; Consolidated Balance Sheet;
Consolidated Statement of Income; Consolidated Statement of
Cash Flows; Consolidated Statement of Stockholders' Equity
and Comprehensive Income; Notes to Consolidated Financial
Statements (the aforementioned Consolidated Financial
Statements together with the Notes to Consolidated Financial
Statements hereinafter shall be referred to as the
"Consolidated Financial Statements"); Report of Independent
Accountants; Selected Financial Data for Five Years; and
Stockholders Information.
21 Subsidiaries of the Registrant.
23 Consent of Independent Accountants:
PricewaterhouseCoopers LLP
Consent of Independent Auditors: Ernst & Young
Consent of Independent Auditors: Ernst & Young LLP
24 Power of Attorney to sign Form 10-K and resolution of Board
of Directors re Power of Attorney.
21
27 Financial Data Schedules
99 The Company filed the following reports on Form 8-K during
the quarter ended December 31, 1998:
(a) Item 9: Sale of Equity Securities pursuant to
Regulation S, dated October 27, 1993.
(b) Item 9: Sale of Equity Securities pursuant to
Regulation S, dated October 29, 1998.
(c) Item 9: Sale of Equity Securities pursuant to
Regulation S, dated November 30, 1998.
(d) Item 9: Sale of Equity Securities pursuant to
Regulation S, dated December 4, 1998.
(e) Item 9: Sale of Equity Securities pursuant to
Regulation S, dated December 11, 1998.
(f) Item 9: Sale of Equity Securities pursuant to
Regulation S, dated December 16, 1998.
(g) Item 9: Sale of Equity Securities pursuant to
Regulation S, dated December 18, 1998.
(h) Item 9: Sale of Equity Securities pursuant to
Regulation S, dated December 18, 1998.
(i) Item 9: Sale of Equity Securities pursuant to
Regulation S, dated December 19, 1998.
(j) Item 9: Sale of Equity Securities pursuant to
Regulation S, dated December 22, 1998.
22
SIGNATURES
Pursuant to the requirements of Section 13 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)
March 25, 1999 BY: Philip H. Geier, Jr. __
Philip H. Geier, Jr.,
Chairman of the Board,
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Name Title Date
Philip H. Geier, Jr. Chairman of the Board, March 25, 1999
Philip H. Geier, Jr. President and Chief Executive
Officer (Principal Executive
Officer) and Director
Eugene P. Beard Vice Chairman March 25, 1999
Eugene P. Beard -Finance and Operations,
Chief Financial Officer,
(Principal Financial
Officer) and Director
*/s/ Frank J. Borelli Director March 25, 1999
Frank J. Borelli
*/s/ Reginald K. Brack Director March 25, 1999
Reginald K. Brack
*/s/ Jill M. Considine Director March 25, 1999
Jill M. Considine
23
*/s/ John J. Dooner, Jr. Director March 25, 1999
John J. Dooner, Jr.
*/s/ Frank B. Lowe Director March 25, 1999
Frank B. Lowe
Frederick Molz Vice President and March 25, 1999
Frederick Molz Controller (Principal
Accounting Officer)
*/s/ Leif H. Olsen Director March 25, 1999
Leif H. Olsen
*/s/ Martin F. Puris Director March 25, 1999
Martin F. Puris
*/s/ Allen Questrom Director March 25, 1999
Allen Questrom
*/s/ J. Phillip Samper Director March 25, 1999
J. Phillip Samper
*By Nicholas J. Camera
Nicholas J. Camera
Attorney-in-fact
24
INDEX TO FINANCIAL STATEMENTS
The Financial Statements appearing under the headings: Financial
Highlights, Vice-Chairman's Report of Management; Management?s Discussion
and Analysis of Financial Condition and Results of Operations, Consolidated
Financial Statements, Notes to Consolidated Financial Statements, Report of
Independent Accountants, and Selected Financial Data for Five Years
accompanying the Annual Report to Stockholders for the year ended December
31, 1998, together with the report thereon of PricewaterhouseCoopers LLP
dated February 19, 1999 are incorporated by reference in this report on
Form 10-K. With the exception of the aforementioned information and the
information incorporated in Items 5, 6 and 7, no other data appearing in
the Annual Report to Stockholders for the year ended December 31, 1998 is
deemed to be filed as part of this report on Form 10-K.
The following financial statement schedule should be read in
conjunction with the financial statements in such Annual Report to
Stockholders for the year ended December 31, 1998. Financial statement
schedules not included in this report on Form 10-K have been omitted
because they are not applicable or the required information is shown in the
financial statements or the notes thereto.
Separate financial statements for the companies which are 50% or less owned
and accounted for by the equity method have been omitted because,
considered in the aggregate as a single subsidiary, they do not constitute
a significant subsidiary.
INDEX TO FINANCIAL STATEMENT SCHEDULE
Page
Report of Independent Accountants on
Financial Statement Schedule F-2
Financial Statement Schedule Required to be filed by
Item 8 of this form:
VIII Valuation and Qualifying Accounts F-3
F-1
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of
The Interpublic Group of Companies, Inc.
Our audits of the consolidated financial statements referred to in our report
dated February 19, 1999 appearing in the 1998 Annual Report to Stockholders
of The Interpublic Group of Companies, Inc. (which report and consolidated
financial statements are incorporated by reference in this Annual Report on
Form 10-K) also included an audit of the Financial Statement Schedule listed
in Item 14 (a) of this Form 10-K. In our opinion, this Financial Statement
Schedule presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements.
PRICEWATERHOUSECOOPERS LLP
New York, New York
February 19, 1999
F-2
SCHEDULE VIII
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(Dollars in Thousands)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Additions
Balance Charged Charged
at to to Other Balance
Beginning Costs & Accounts- Deductions- at End
Description of Period Expenses Describe Describe of Period
Allowance for
Doubtful Accounts -
deducted from
Receivables in the
Consolidated
Balance Sheet:
1998 $44,110 $18,362 $6,471 <F1> $(15,247)<F3> $53,093
2,111 <F5> (3,310)<F4>
596 <F2>
1997 $37,049 $16,753 $2,256 <F1> $ (2,553(<F2> $44,110
848 <F5> (7,869)<F3>
(2,374)<F4>
1996 $24,571 $18,544 $ 240 <F1> $ (645)<F2> $37,049
1,060 <F5> (6,393)<F3>
(328)<F4>
<FN>
<F1> Allowance for doubtful accounts of acquired and newly consolidated
companies
<F2> Foreign currency translation adjustment
<F3> Principally amounts written off
<F4> Reversal of previously recorded allowances on accounts receivable
<F5> Miscellaneous
</FN>
F-3
INDEX TO DOCUMENTS
Exhibit No. Description
3 (i) The Restated Certificate of Incorporation of the Registrant, as
amended is incorporated by reference to its Report on Form 10-Q
for the quarter ended June 30, 1998. See Commission file number
1-6686.
(ii) The By-Laws of the Registrant, amended as of February 19, 1991,
are incorporated by reference to its Report on Form 10-K for the
year ended December 31, 1990. See Commission file number 1-6686.
4 Instruments Defining the Rights of Security Holders.
(i) Indenture, dated as of September 16, 1997 between Interpublic and
The Bank of New York is incorporated by reference to the
Registrant's Report on Form 10-Q for the quarter ended September
30, 1998. See Commission file number 1-6686.
(ii) The Preferred Share Purchase Rights Plan as adopted on July 18,
1989 is incorporated by reference to Registrant's Registration
Statement on Form 8-A dated August 1, 1989 (No. 00017904) and, as
amended, by reference to Registrant's Registration Statement on
Form 8 dated October 3, 1989 (No. 00106686).
10 Material Contracts.
(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 incorporated by reference to the
Registrant's Report on Form 10-Q for the quarter ended September
30, 1998. See Commission file number 1-6686.
(b) Employment, Consultancy and other Compensatory Arrangements with
Management.
Employment and Consultancy Agreements and any amendments or
supplements thereto and other compensatory arrangements filed
with the Registrant's
Reports on Form 10-K for the years ended December 31, 1980
through December 31, 1997, inclusive, or filed with the
Registrant?s Reports on Form 10-Q for the periods ended March 31,
1998, June 30, 1998 and September 30, 1998 are incorporated by
reference in this Report on Form 10-K. See Commission file
number 1-6686. Listed below are agreements or amendments to
agreements between the Registrant and its executive officers
which remain in effect on and after the date hereof or were
executed during the year ended December 31, 1997 and thereafter,
unless previously submitted, which are filed as exhibits to this
Report on Form 10-K.
(i) Eugene P. Beard
Supplemental Agreement dated as of March 1, 1999 to an
Employment Agreement dated as of July 1, 1995 between
Interpublic and Eugene P. Beard.
(ii) Frank B. Lowe
Supplemental Agreement dated as of March 1, 1999 to an
Employment Agreement dated as of January 1, 1996 between
Interpublic and Frank B. Lowe.
(iii) Martin F. Puris
Supplemental Agreement dated as of March 1, 1999 to an
Employment Agreement dated as of August 11, 1994 between
Interpublic, APL and Martin F. Puris.
(iv) Barry R. Linsky
Executive Severance Agreement dated as of January 1, 1998
between Interpublic and Barry R. Linsky.
(c) Executive Compensation Plans.
(i) Trust Agreement, dated as of June 1, 1990 between
Interpublic, Lintas Campbell-Ewald Company, McCann-
Erickson USA, Inc., McCann-Erickson Marketing, Inc.,
Lintas, Inc. and Chemical Bank, as Trustee, is
incorporated by reference to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1990. See
Commission file number 1-6686.
(ii) The Stock Option Plan (1988) and the Achievement Stock
Award Plan of the Registrant are incorporated by reference
to Appendices C and D of the Prospectus dated May 4, 1989
forming part of its Registration Statement on Form S-8
(No. 33-28143).
(iii) Management Incentive Compensation Plan of the Registrant
is incorporated by reference to the Registrant?s Report on
Form 10-Q for the quarter ended June 30, 1995. See
Commission file number 1-6686.
(iv) The 1986 Stock Incentive Plan of the Registrant is
incorporated by reference to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1993. See
Commission file number 1-6686.
(v) The 1986 United Kingdom Stock Option Plan of the
Registrant is incorporated by reference to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1992. See Commission file number 1-6686.
(vi) The Employee Stock Purchase Plan (1985) of the Registrant,
as amended, is incorporated by reference to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1993. See Commission file number 1-6686.
(vii) The Long-Term Performance Incentive Plan of the Registrant
is incorporated by reference to Appendix A of the
Prospectus dated December 12, 1988 forming part of its
Registration Statement on Form S-8 (No. 33-25555).
(viii) Resolution of the Board of Directors adopted on February
16, 1993, amending the Long-Term Performance Incentive
Plan is incorporated by reference to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1992.
See Commission file number 1-6686.
(ix) Resolution of the Board of Directors adopted on May 16,
1989 amending the Long-Term Performance Incentive Plan is
incorporated by reference to Registrant's Report on Form
10-K for the year ended December 31, 1989. See Commission
file number 1-6686.
(x) The 1996 Stock Incentive Plan of the Registrant is
incorporated by reference to the Registrant's Report on
Form 10-Q for the quarter ended June 30, 1996. See
Commission file number 1-6686.
(xi) The 1997 Performance Incentive Plan of the Registrant is
incorporated by reference to the Registrant's Report on
Form 10-Q for the quarter ended June 30, 1997. See
Commission file number 1-6686.
(d) Loan Agreements.
(i) Credit Agreement Extension dated as of June 30, 1998 to a
Credit Agreement dated as of July 3, 1995 between
Interpublic and Lloyds Bank PLC.
(ii) Amendment No. 7, dated as of November 23, 1998 to a Credit
Agreement dated as of September 30, 1992 between
Interpublic and Citibank N.A.
(iii) Credit Agreement dated as of October 1, 1998 between
Interpublic and Wachovia Bank.
(iv) Amendment No. 8 to a Credit Agreement dated as of November
23, 1998 to a Credit Agreement dated as of September 30,
1992 between Interpublic and The First National Bank of
Chicago.
(v) Amendment No. 2, dated as of November 23, 1998 to a Credit
Agreement dated as of July 3, 1995 between Interpublic and
Lloyds Bank PLC.
(vi) Amendment No. 7 dated as of November 23, 1998 to a Credit
Agreement dated as of September 30, 1992 between
Interpublic and The Bank of New York.
(vii) Amendment No. 6, dated as of November 23, 1998 to a Credit
Agreement dated as of September 30, 1992 between
Interpublic and UBS AG (formerly known as Union Bank of
Switzerland).
(viii) Amendment No. 7, dated as of November 23, 1998 to a Credit
Agreement dated as of September 30, 1992 between
Interpublic and The Chase Manhattan Bank (as successor to
Chemical Bank).
(ix) Amendment No. 7 dated as of November 23, 1998 to a Credit
Agreement dated as of September 30, 1992 between
Interpublic and SunTrust Bank, Atlanta (formerly Trust
Company Bank).
(x) Amendment No. 3, dated as of November 23, 1998 to a Credit
Agreement dated as of December 1, 1994 between Interpublic
and Bank of America NT & SA.
(xi) Other Loan and Guaranty Agreements filed with the
Registrant's Annual Report on Form 10-K for the years
ended December 31, 1988 and December 31, 1986 are
incorporated by reference in this Report on Form 10-K.
Other Credit Agreements, amendments to various Credit
Agreements, Supplemental Agreements, Termination
Agreements, Loan Agreements, Note Purchase Agreements,
Guarantees and Intercreditor Agreements filed with the
Registrant's Report on Form 10-K for the years ended
December 31, 1989 through December 31, 1997, inclusive and
filed with Registrant's Reports on Form 10-Q for the
periods ended March 31, 1998, June 30, 1998 and September
30, 1998 are incorporated by reference into this Report on
Form 10-K. See Commission file number 1-6686.
(e) Leases.
Material leases of premises are incorporated by reference to the
Registrant's Annual Report on Form
10-K for the years ended December 31, 1980 and December
31, 1988. See Commission file number 1-6686.
(f) Acquisition Agreement for Purchase of Real Estate.
Acquisition Agreement (in German) between Treuhandelsgesellschaft
Aktiengesellschaft & Co. Grundbesitz OHG and McCann-Erickson
Deutschland GmbH & Co. Management Property KG ("McCann-Erickson
Deutschland") and the English translation of the Acquisition
Agreement are incorporated by reference to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1992. See
Commission file number 1-6686.
(g) Mortgage Agreements and Encumbrances.
(i) Summaries in German and English of Mortgage Agreements
between McCann-Erickson Deutschland and Frankfurter
Hypothekenbank Aktiengesellschaft ("Frankfurter
Hypothekenbank"), Mortgage
Agreement, dated January 22, 1993, between
McCann-Erickson Deutschland and Frankfurter Hypothekenbank,
Mortgage Agreement, dated January 22, 1993, between McCann-
Erickson Deutschland and Hypothekenbank are incorporated by
reference to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1993. See Commission file number 1-
6686. Summaries in German and English of Mortgage
Agreement, between McCann-Erickson Deutschland and
Frankfurter Sparkasse and Mortgage Agreement, dated January
7, 1993, between McCann-Erickson Deutschland and Frankfurter
Sparkasse are incorporated by reference to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1992. See Commission file number 1-6686.
(ii) Summaries in German and English of documents creating
Encumbrances in favor of Frankfurter Hypothekenbank and
Frankfurter Sparkasse in connection with the aforementioned
Mortgage Agreements, Encumbrance, dated January 15, 1993, in
favor of Frankfurter Hypothekenbank, and Encumbrance, dated
January 15, 1993, in favor of Frankfurter Sparkasse are
incorporated by reference to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1992. See
Commission file number 1-6686.
(iii) Loan Agreement (in English and German), dated January 29,
1993 between Lintas Deutschland GmbH and McCann-Erickson
Deutschland is incorporated by reference to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1992. See Commission file number 1-6686.
11 Computation of Earnings Per Share.
13 This Exhibit includes: (a) those portions of the Annual Report to
Stockholders for the year ended December 31, 1998 which are included
therein under the following headings: Financial Highlights; Vice-
Chairman's Report of Management; Management's Discussion and Analysis
of Financial Condition and Results of Operations; Consolidated Balance
Sheet; Consolidated Statement of Income; Consolidated Statement of
Cash Flows; Consolidated Statement of Stockholders' Equity and
Comprehensive Income; Notes to Consolidated Financial Statements (the
aforementioned Consolidated Financial Statements together with the
Notes to Consolidated Financial Statements hereinafter shall be
referred to as the "Consolidated Financial Statements"); Report of
Independent Accountants; Selected Financial Data for Five Years and
Stockholders Information.
21 Subsidiaries of the Registrant.
23 Consent of Independent Accountants:
PricewaterhouseCoopers LLP
Consent of Independent Auditors: Ernst & Young
Consent of Independent Auditors: Ernst & Young LLP
24 Power of Attorney to sign Form 10-K and resolution of Board of
Directors re Power of Attorney.
27 Financial Data Schedule.
99 The Company filed the following reports on Form 8-K during the quarter
ended December 31, 1998:
(a) Item 9: Sale of Equity Securities pursuant to Regulation S,
dated October 27, 1993.
(b) Item 9: Sale of Equity Securities pursuant to Regulation S,
dated October 29, 1998.
(c) Item 9: Sale of Equity Securities pursuant to Regulation S,
dated November 30, 1998.
(d) Item 9: Sale of Equity Securities pursuant to Regulation S,
dated December 4, 1998.
(e) Item 9: Sale of Equity Securities pursuant to Regulation S,
dated December 11, 1998.
(f) Item 9: Sale of Equity Securities pursuant to Regulation S,
dated December 16, 1998.
(g) Item 9: Sale of Equity Securities pursuant to Regulation S,
dated December 18, 1998.
(h) Item 9: Sale of Equity Securities pursuant to Regulation S,
dated December 18, 1998.
(i) Item 9: Sale of Equity Securities pursuant to Regulation S,
dated December 19, 1998.
(j) Item 9: Sale of Equity Securities pursuant to Regulation S,
dated December 22, 1998.