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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, 1995 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 .
PAGE
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 $3,476,599,515 as of March 25,
1996.
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 25, 1996: 79,128,246 shares.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Annual Report to Stockholders for the year
ended December 31, 1995 are incorporated by reference in
Parts I and II.
2. Portions of the Proxy Statement for the 1996 Annual Meeting
of Stockholders are incorporated by reference in Parts I and
III.
PAGE
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
Worldwide, Ammirati Puris Lintas and The Lowe Group. 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 market research, sales
promotion, product development, product design, direct marketing,
telemarketing and other related 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, cable, radio,
magazines, newspapers, transit, direct response media and
outdoor. 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 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.
Interpublic also carries on a media buying business through its
ownership of Western International Media and its affiliates.
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:
PAGE
McCann-Erickson USA, Inc.......... New York, New York
Campbell-Ewald
Company.......................... Detroit (Warren),
Michigan
Ammirati Puris Lintas Inc......... New York, New York
Dailey & Associates............... Los Angeles, California
Lowe & Partners Inc............... New York, New York
Campbell Mithun Esty LLC.......... Minneapolis, Minnesota
In addition to domestic operations, the Company provides
advertising 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
Belgium Greece Netherlands Spain
Croatia Hungary Norway Sweden
Czech Republic Ireland Poland Switzerland
Denmark Italy Portugal Turkey
Finland Ivory Coast Romania United Arab Emirates
France Kenya Russia United Kingdom
Malawi Slovak Zimbabwe
Republic
LATIN AMERICA AND THE CARIBBEAN
Argentina Costa Rica Honduras Peru
Barbados Dominican Republic Jamaica Puerto Rico
Bermuda Ecuador Mexico Trinidad
Brazil El Salvador Panama Uruguay
Chile Guatemala Paraguay Venezuela
Colombia
PAGE
ASIA AND THE PACIFIC
Australia Japan People's Republic South Korea
Hong Kong Malaysia of China Taiwan
India Nepal Philippines Thailand
New Zealand Singapore
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 advertising agency services in
Aruba, the Bahamas, Bahrain, Belize, Bolivia, Bulgaria, Cambodia,
Cameroon, Egypt, Gabon, Ghana, Grand Cayman, Guadeloupe, Guam,
Guyana, Haiti, Reunion, Indonesia, Iran, Israel, Ivory Coast,
Jordan, Kuwait, Lebanon, Martinique, Mauritius, Morocco,
Nicaragua, Nigeria, Oman, Pakistan, Paraguay, Saudi Arabia,
Senegal, Sri Lanka, Surinam, Tunisia, Uganda, United Arab
Emirates (Dubai), Vietnam 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 13: Geographic Areas of
the Notes to the Consolidated Financial Statements in the
Company's Annual Report to Stockholders for the year ended
December 31, 1995, which Note is hereby incorporated by
reference.
Developments in 1995
The Company completed several acquisitions within the United
States and abroad in 1995.
Effective November 10, 1995, Anderson & Lembke,Inc. was
acquired. Anderson & Lembke, Inc. is an advertising agency with
headquarters in New York City and San Francisco.
As of June 29, 1995, the Company acquired a 50% interest in
a limited liability company, Campbell Mithun Esty LLC. The other
50% is owned by former employees of Campbell Mithun Esty Inc.
which are employed by the LLC.
PAGE
In 1995, the Company completed its integration of Ammirati &
Puris (acquired in 1994) with its Lintas Agency System. In 1995,
Ammirati & Puris Holdings, Inc. and Ammirati & Puris Inc. were
merged into Lintas, Inc. and the name of the surviving
corporation has been changed to Ammirati Puris Lintas Inc.
Ammirati Puris Lintas Inc. continues to be headquartered in New
York City. The Company also is in the process of changing the
names of the corporations comprising the Lintas Worldwide Agency
System to reflect the "Ammirati Puris Lintas" name.
See Note 3 to the Consolidated Financial Statements
incorporated by reference in this Report on Form 10-K for
discussion of additional acquisitions.
Income from Commissions, Fees and Publications
The Company generates income from planning, creating and
placing advertising in various media. 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 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 advertising 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.
PAGE
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 infomercials.
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.
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 1995 to income from commissions and fees
accounted individually for 2% to 11% of such income and in the
aggregate accounted for over 31% of such income. Twenty clients
of the Company accounted for approximately 45% of such income.
Based on income from commissions and fees, the three largest
clients of the Company are General Motors Corporation, Unilever
and The Coca-Cola Company. 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 The Coca-Cola Company began in 1942 in
Brazil and in 1955 in the United States. 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
PAGE
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 advertising 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 1995, however, 42%
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.
Personnel
As of January 1, 1996, the Company employed approximately
19,700 persons, of whom approximately 5,900 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, both large and
small, and also 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 advertising 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.
PAGE
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 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 from time to time exposed to the threat of forced
divestment in favor of local investors because they are
considered an integral factor in the communications process. A
provision of the present constitution in the Philippines is an
example.
Item 2. Properties
Most of the advertising 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
PAGE
which the Company does business throughout the world. However,
subsidiaries of the Company own office buildings in Louisville,
Kentucky; Warren, Michigan; Frankfurt, Germany; Sao Paulo,
Brazil; Lima, Peru; 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 15: Commitments and Contingent Liabilities - of the Notes to
the Consolidated Financial Statements in the Company's Annual
Report to Stockholders for the year ended December 31, 1995,
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) 61 Chairman of the Board, President
and Chief Executive Officer
Eugene P. Beard (1) 60 Vice Chairman-Finance and
Operations, Chief Financial Officer
PAGE
John J. Dooner, Jr. (1) 47 Chairman of McCann-Erickson
Worldwide, Inc.
Nicholas J. Camera 49 Vice President, Secretary and
General Counsel
Frank B. Lowe (1) 54 Chairman of The Lowe Group
C. Kent Kroeber 57 Senior Vice President-Human
Resources
Martin F. Puris (1) 57 Chairman, Chief Executive Officer
and Chief Creative Officer of
Ammirati Puris Lintas Worldwide
Thomas J. Volpe 60 Senior Vice President-Financial
Operations
Joseph M. Studley 43 Vice President and Controller
(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 1996 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 a Vice President in
1970 and Senior Vice President in May 1980.
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
PAGE
from February 1981 to February 1986 and Assistant Corporate
Controller prior thereto.
Mr. Studley was elected as Vice President and Controller of
Interpublic effective as of April 1, 1994, formerly he was Senior
Vice President and Chief Financial Officer of E.C. Television, a
division of Interpublic, since January 1, 1990. He was a Vice
President of Lintas New York, a division of one of Interpublic's
subsidiaries, from August 1, 1987 until December 31, 1989.
PAGE
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters
The response to this Item is incorporated by reference to
the Registrant's Annual Report to Stockholders for the year ended
December 31, 1995. See Note 12: Results by Quarter (Unaudited),
of the Notes to the Consolidated Financial Statements and
information under the heading Transfer Agent and Registrar for
Common Stock.
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, 1995 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, 1995 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, 1995 under the headings Financial
Statements and Notes to the Consolidated Financial Statements.
Reference is also made to the Financial Statement Schedules
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.
PAGE
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 1996 Annual
Meeting of Stockholders (the "Proxy Statement"), to be filed not
later than 120 days after the end of the 1995 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 Schedules, and Reports on
Form 8-K
PAGE
(a) Listed below are all financial statements, financial
statement schedules and exhibits filed as part of this Report on
Form 10-K.
1. Financial Statements:
See the Index to Financial Statements on page F-1.
2. Financial Statement Schedules:
See the Index to Financial Statement Schedules 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,
1995. 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 April 1, 1992, between
Interpublic and Morgan Guaranty Trust Company of New
York is not included as an Exhibit to this Report but
will be furnished to the Commission upon its request.
(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).
PAGE
10 Material Contracts.
(a) Underwriting Agreement, dated March 30, 1992, by and
between Interpublic and Goldman Sachs International
Limited is incorporated by reference to Registrant's
Report on Form 10-K for the year ended December 31,
1992. 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, 1994, inclusive, or filed
with the Registrant's Reports on Form 10-Q for the
periods ended March 31, 1995, June 30, 1995 and
September 30, 1995 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, 1995 and thereafter, unless previously submitted,
which are filed as exhibits to this Report on Form
10-K.
(i) John J. Dooner, Jr.
(a) Employment Agreement made as of August 1,
1984.
(b) Supplemental Agreement made as of June 1,
1985 to an Employment Agreement made as of
August 1, 1984.
(c) Supplemental Agreement made as of December 1,
1985 to an Employment Agreement made as of
August 1, 1984.
(d) Supplemental Agreement made as of June 1,
1986 to an Employment Agreement made as of
August 1, 1984.
PAGE
(e) Executive Special Benefit Agreement made as
of July 1, 1986.
(f) Deferred Bonus Agreement made as of November
12, 1986.
(g) Supplemental Agreement made as of June 1,
1987 to an Employment Agreement made as of
August 1, 1984.
(h) Executive Severance Agreement made as of
August 10, 1987.
(i) Supplemental Agreement made as of April 1,
1988 to an Employment Agreement made as of
August 1, 1984.
(j) Supplemental Agreement made as of November 1,
1988 to an Employment Agreement made as of
August 1, 1984.
(k) Supplemental Agreement made as of July 1,
1989 to an Employment Agreement made as of
August 1, 1984.
(l) Supplemental Agreement made as of May 23,
1990 to an Executive Special Benefit
Agreement made as of July 1, 1986.
(m) Supplemental Agreement made as of July 1,
1990 to an Employment Agreement made as of
August 1, 1984.
(n) Supplemental Agreement made as of October 1,
1991 to an Employment Agreement made as of
August 1, 1984.
(o) Supplemental Agreement made as of May 1, 1992
to an Employment Agreement made as of August
1, 1984.
(p) Supplemental Agreement made as of August 10,
1992 to an Executive Severance Agreement made
as of August 10, 1987.
PAGE
(q) Executive Special Benefit Agreement made as
of July 1, 1992.
(r) Employment Agreement made as of January 1,
1994.
(s) Executive Special Benefit Agreement made as
of June 1, 1994.
(t) Supplemental Agreement made as of July 1,
1995 to an Employment Agreement made as of
January 1, 1994.
(ii) Frank B. Lowe
(a) Employment Agreement made as of January
1,1996.
(b) Executive Special Benefit Agreement made as
of January 1, 1996.
(iii) Martin F. Puris
Employment Agreement made as of August 11,
1994.
(c) Executive Compensation Plans.
(i) Trust Agreement, dated as of June 1, 1990 between
The Interpublic Group of Companies, Inc., 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).
PAGE
(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.
(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.
PAGE
(d) Loan Agreements.
(i) Credit Agreement dated as of July 3, 1995, between
Interpublic and Lloyds Bank Plc.
(ii) Credit Agreement dated and effective December 21,
1995 between Interpublic and NBD Bank.
(iii)Note dated as of December 21, 1995 between
Interpublic and NBD Bank pursuant to the Credit
Agreement dated and effective as of December 21,
1995.
(iv) 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, a Note Purchase Agreement, dated
August 20, 1991, Guarantee, dated December 17,
1991, Notification dated March 14, 1991 by
Registrant and Intercreditor Agreements filed with
the Registrant's Report on Form
10-K for the years ended December 31, 1989 through
December 31, 1994, inclusive and filed with
Registrant's Reports on Form 10-Q for the periods
ended March 31, 1995, June 30, 1995 and September
30, 1995 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.
PAGE
(f) Acquisition Agreement for Purchase of Real Estate.
(i) 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.
PAGE
(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, 1995
which are included therein under the following headings:
Financial Highlights; 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; 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; Report
of Management; and Stockholders' Information; and (b)
Appendix to Exhibit 13.
21 Subsidiaries of the Registrant.
23 Consent of Independent Accountants.
24 Power of Attorney to sign Form 10-K and resolution of Board
of Directors re Power of Attorney.
27 Financial Data Schedules
99 No reports on Form 8-K were filed during the quarter ended
December 31, 1995.
PAGE
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 28, 1996 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
Frank J. Borelli Director March 28, 1996
Frank J. Borelli
Philip H. Geier, Jr. Chairman of the Board, March 28, 1996
Philip H. Geier, Jr. President and Chief Executive
Officer (Principal Executive
Officer) and Director
Eugene P. Beard Vice Chairman March 28, 1996
Eugene P. Beard -Finance and Operations
(Principal Financial
Officer) and Director
John J. Dooner, Jr. Director March 28, 1996
John J. Dooner, Jr
Frank B. Lowe Director March 28, 1996
Frank B. Lowe
PAGE
Leif H. Olsen Director March 28, 1996
Leif H. Olsen
Martin F. Puris Director March 28, 1996
Martin F. Puris
J. Phillip Samper Director March 28, 1996
J. Phillip Samper
Joseph J. Sisco Director March 28, 1996
Joseph J. Sisco
Joseph M. Studley Vice President and March 28, 1996
Joseph M. Studley Controller (Principal
Accounting Officer)
Allen Questrom Director March 28, 1996
Allen Questrom
By Philip H. Geier, Jr.
Philip H. Geier, Jr.
Attorney-in-fact
PAGE
INDEX TO FINANCIAL STATEMENTS
The Financial Statements appearing under the headings: Financial
Highlights, Management's Discussion and Analysis of Financial
Condition and Results of Operations, Consolidated Financial
Statements, Notes to Consolidated Financial Statements, Report of
Independent Accountants, Selected Financial Data for Five Years
and Report of Management accompanying Annual Report to
Stockholders for the year ended December 31, 1995, together with
the report thereon of Price Waterhouse LLP dated February 13,
1996 appearing on page 40 thereof, 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, 1995 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, 1995. 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 SCHEDULES
Page
Report of Independent Accountants on
Financial Statement Schedules F-2
Consent of Independent Accountants F-2
Financial Statement Schedules Required to be filed by
Item 8 of this form:
VIII Valuation and Qualifying Accounts F-3
F-1
PAGE
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULES
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 13, 1996 appearing in the 1995 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 Schedules listed in
Item 14 (a) of this Form 10-K. In our opinion, these Financial
Statement Schedules present fairly, in all material respects, the
information set forth therein when read in conjunction with the
related consolidated financial statements.
PRICE WATERHOUSE LLP
New York, New York
February 13, 1996
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Registration Statements on Form S-8 of The Interpublic Group of
Companies, Inc. (the "Company"), of our report dated February 13,
1996, appearing in the 1995 Annual Report to Stockholders which is
incorporated in this Annual Report on Form 10-K: Registration
Statements No. 2-79071; No. 2-43811; No. 2-56269; No. 2-61346; No.
2-64338; No. 2-67560; No. 2-72093; No. 2-88165; No. 2-90878,
No. 2-97440 and No. 33-28143, relating variously to the Stock Option
Plan (1971), the Stock Option Plan (1981), the Stock Option Plan
(1988) and the Achievement Stock Award Plan of the Company;
Registration Statements No. 2-53544; No. 2-91564, No. 2-98324, No.
33-22008, No. 33-64062 and No. 33-61371, relating variously to the
Employee Stock Purchase Plan (1975), the Employee Stock Purchase
Plan (1985) and the Employee Stock Purchase Plan of the Company
(1995); Registration Statements No. 33-20291 and No. 33-2830
relating to the Management Incentive Compensation Plan of the
Company; Registration Statement No. 33-5352 and No. 33-21605
relating to the 1986 Stock Incentive Plan and 1986 United Kingdom
Stock Option Plan of the Company; and Registration Statement
No. 33-10087 and No. 33-25555 relating to the Long-Term Performance
Incentive Plan of the Company. We hereby consent to the
incorporation by reference in the Prospectus constituting part of
the Registration Statement on Form S-3
(No. 33-37346) of the Interpublic Group of Companies, Inc. of our
report dated February 13, 1996, appearing in the 1995 Annual Report
to Stockholders which is incorporated in this Annual Report on Form
10-K. We also consent to the incorporation by reference of our
report on the Financial Statement Schedules, which appears above.
PRICE WATERHOUSE LLP
New York, New York
March 28, 1996
F-2
PAGE
SCHEDULE VIII
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended December 31, 1995, 1994 and 1993
(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:
1995 $22,656 $8,894 $1,324 $(9,619) $21,941
137 (819)
(632)
1994 $16,834 $6,522 $4,097 $ 6,109 $22,656
699
613
1993 $15,559 $5,600 $ 764 $ 3,823 $16,834
898 2,360
196
Allowance for doubtful accounts of acquired and newly consolidated
companies.
Foreign currency translation adjustment.
Principally amounts written off.
Reversal of previously written off accounts.
Miscellaneous.
F-3
PAGE
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,
1995. 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 April 1, 1992, between
Interpublic and Morgan Guaranty Trust Company of New
York is not included as an Exhibit to this Report but
will be furnished to the Commission upon its request.
(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) Underwriting Agreement, dated March 30, 1992, by and
between Interpublic and Goldman Sachs International
Limited is incorporated by reference to Registrant's
Report on Form 10-K for the year ended December 31,
1992. See Commission file number 1-6686.
(b) Employment, Consultancy and other Compensatory
Arrangements with Management.
PAGE
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, 1994, inclusive, or filed
with the Registrant's Reports on Form 10-Q for the
periods ended March 31, 1995, June 30, 1995 and
September 30, 1995 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, 1995 and thereafter, unless previously submitted,
which are filed as exhibits to this Report on Form
10-K.
(i) John J. Dooner, Jr.
(a) Employment Agreement made as of August 1,
1984.
(b) Supplemental Agreement made as of June 1,
1985 to an Employment Agreement made as of
August 1, 1984.
(c) Supplemental Agreement made as of December 1,
1985 to an Employment Agreement made as of
August 1, 1984.
(d) Supplemental Agreement made as of June 1,
1986 to an Employment Agreement made as of
August 1, 1984.
(e) Executive Special Benefit Agreement made as
of July 1, 1986.
(f) Deferred Bonus Agreement made as of November
12, 1986.
(g) Supplemental Agreement made as of June 1,
1987 to an Employment Agreement made as of
August 1, 1984.
(h) Executive Severance Agreement made as of
August 10, 1987.
PAGE
(i) Supplemental Agreement made as of April 1,
1988 to an Employment Agreement made as of
August 1, 1984.
(j) Supplemental Agreement made as of November 1,
1988 to an Employment Agreement made as of
August 1, 1984.
(k) Supplemental Agreement made as of July 1,
1989 to an Employment Agreement made as of
August 1, 1984.
(l) Supplemental Agreement made as of May 23,
1990 to an Executive Special Benefit
Agreement made as of July 1, 1986.
(m) Supplemental Agreement made as of July 1,
1990 to an Employment Agreement made as of
August 1, 1984.
(n) Supplemental Agreement made as of October 1,
1991 to an Employment Agreement made as of
August 1, 1984.
(o) Supplemental Agreement made as of May 1, 1992
to an Employment Agreement made as of August
1, 1984.
(p) Supplemental Agreement made as of August 10,
1992 to an Executive Severance Agreement made
as of August 10, 1987.
(q) Executive Special Benefit Agreement made as
of July 1, 1992.
(r) Employment Agreement made as of January 1,
1994.
(s) Executive Special Benefit Agreement made as
of June 1, 1994.
(t) Supplemental Agreement made as of July 1,
1995 to an Employment Agreement made as of
January 1, 1994.
PAGE
(ii) Frank B. Lowe
(a) Employment Agreement made as of January
1,1996.
(b) Executive Special Benefit Agreement made as
of January 1, 1996.
(iii) Martin F. Puris
Employment Agreement made as of August 11, 1994.
(c) Executive Compensation Plans.
(i) Trust Agreement, dated as of June 1, 1990 between
The Interpublic Group of Companies, Inc., 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.
PAGE
(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.
(d) Loan Agreements.
(i) Credit Agreement dated as of July 3, 1995 between
Interpublic and Lloyds Bank Plc.
(ii) Credit Agreement dated and effective December 21,
1995 between Interpublic and NBD Bank.
(iii) Note dated as of December 21, 1995 between
Interpublic and NBD Bank pursuant to the Credit
Agreement dated and effective as of December 21,
1995.
(iv) 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
PAGE
Agreements, a Note Purchase Agreement, dated
August 20, 1991, Guarantee, dated December 17,
1991, Notification dated March 14, 1991 by
Registrant and Intercreditor Agreements filed with
the Registrant's Report on Form 10-K for the years
ended December 31, 1989 through December 31, 1994,
inclusive and filed with Registrant's Reports on
Form 10-Q for the periods ended March 31, 1995,
June 30, 1995 and September 30, 1995 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.
PAGE
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, 1995
which are included therein under the following headings:
Financial Highlights; 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; 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; Report
of Management; and Stockholders' Information; and (b)
Appendix to Exhibit 13.
PAGE
21 Subsidiaries of the Registrant.
23 Consent of Independent Accountants.
24 Power of Attorney to sign Form 10-K and resolution of Board
of Directors re Power of Attorney.
27 Financial Data Schedules
99 No reports on Form 8-K were filed during the quarter ended
December 31, 1995.