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