# Table	of	Contents

# UNITED	STATES	SECURITIES	AND	EXCHANGE	COMMISSION

# x ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

For	the	fiscal	year	ended	December	31,	2008

Commission	file	number	1-6686

# THE	INTERPUBLIC	GROUP	OF	COMPANIES,	INC.

(Exact	name	of	registrant	as	specified	in	its	charter)

Delaware

State	or	other	jurisdiction	of incorporation	or	organization

(I.R.S.	Employer Identification	No.)

(Address	of	principal	executive	offices)	(Zip	Code)

(Registrant's	telephone	number,	including	area	code)

# Securities	registered	pursuant	to	Section	12(b)	of	the	Act:

Title	of	each	class

Name	of	each	exchange	on	which	registered

# Securities	Registered	Pursuant	to	Section	12(g)	of	the	Act:	None

Indicate	by	check	mark	if	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.	Yes	¨				No	x

Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	Section	15(d)	of	the	Act.	Yes	¨				No	x

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	the	filing	requirements	for	at	least	the past	90	days.				Yes	x				No	¨

Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	(§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.				¨

Indicate	by	check	mark	whether	the	registrant	is	a	large	accelerated	filer,	an	accelerated	filer,	a	non-accelerated	filer,	or	a	smaller	reporting	company.	See	the definitions	of	"large	accelerated	filer,"	"accelerated	filer,"	and	"smaller	reporting	company"	in	Rule	12b-2	of	the	Exchange	Act.

Indicate	by	check	mark	whether	the	registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Exchange	Act).				Yes	¨				No	x

As	of	June	30,	2008,	the	aggregate	market	value	of	the	shares	of	registrant's	common	stock	held	by	non-affiliates	was	$4,097,496,952.	The	number	of	shares	of	the registrant's	common	stock	outstanding	as	of	February	17,	2009	was	476,421,138.

# DOCUMENTS	INCORPORATED	BY	REFERENCE

The	following	sections	of	the	Proxy	Statement	for	the	Annual	Meeting	of	Stockholders	to	be	held	on	May	28,	2009	are	incorporated	by	reference	in	Part	III: "Election	of	Directors,"	"Director	Selection	Process,"	"Code	of	Conduct,"	"Principal	Committees	of	the	Board	of	Directors,"	"Audit	Committee,"	"Section	16(a) Beneficial	Ownership	Reporting	Compliance,"	"Compensation	of	Executive	Officers,"	"Non-Management	Director	Compensation,"	"Compensation	Discussion	and Analysis,"	"Compensation	Committee	Report,"	"Outstanding	Shares,"	"Securities	Authorized	for	Issuance	under	Equity	Compensation	Plans",	"Review	and	Approval	of Transactions	with	Related	Persons,"	"Director	Independence"	and	"Appointment	of	Independent	Registered	Public	Accounting	Firm."

# Part	I.

|  | TABLE	OF	CONTENTS<br>Part	I. | Page |
| :--- | :--- | :--- |
| Item\t1. | Business | 2 |
| Item\t1A. | Risk\tFactors | 6 |
| Item\t1B. | Unresolved\tStaff\tComments | 9 |
| Item\t2. | Properties | 9 |
| Item\t3. | Legal\tProceedings | 9 |
| Item\t4. | Submission\tof\tMatters\tto\ta\tVote\tof\tSecurity\tHolders | 10 |
|  | Part\tII. |  |
| Item\t5. | Market\tfor\tRegistrant's\tCommon\tEquity,\tRelated\tStockholder\tMatters\tand\tIssuer\tPurchases\tof\tEquity\tSecurities | 12 |
| Item\t6. | Selected\tFinancial\tData | 14 |
| Item\t7. | Management's\tDiscussion\tand\tAnalysis\tof\tFinancial\tCondition\tand\tResults\tof\tOperations | 15 |
| Item\t7A. | Quantitative\tand\tQualitative\tDisclosures\tAbout\tMarket\tRisk | 39 |
| Item\t8. | Financial\tStatements\tand\tSupplementary\tData | 41 |
| Item\t9. | Changes\tin\tand\tDisagreements\tWith\tAccountants\ton\tAccounting\tand\tFinancial\tDisclosure | 89 |
| Item\t9A. | Controls\tand\tProcedures | 89 |
| Item\t9B. | Other\tInformation | 89 |
|  | Part\tIII. |  |
| Item\t10. | Directors,\tExecutive\tOfficers\tand\tCorporate\tGovernance | 90 |
| Item\t11. | Executive\tCompensation | 90 |
| Item\t12. | Security\tOwnership\tof\tCertain\tBeneficial\tOwners\tand\tManagement\tand\tRelated\tStockholder\tMatters | 90 |
| Item\t13. | Certain\tRelationships\tand\tRelated\tTransactions,\tand\tDirector\tIndependence | 90 |
| Item\t14. | Principal\tAccountant\tFees\tand\tServices | 90 |
|  | Part\tIV. |  |
| Item\t15. | Exhibits,\tFinancial\tStatements\tSchedules | 91 |

# STATEMENT	REGARDING	FORWARD-LOOKING	DISCLOSURE

This	annual	report	on	Form	10-K	contains	forward-looking	statements.	Statements	in	this	report	that	are	not	historical	facts,	including	statements	about management's	beliefs	and	expectations,	constitute	forward-looking	statements.	Without	limiting	the	generality	of	the	foregoing,	words	such	as	"may,"	"will,"	"expect," "believe,"	"anticipate,"	"intend,"	"could,"	"would,"	"estimate,"	or	"continue"	or	the	negative,	or	other	variations	or	comparable	terminology	are	intended	to	identify forward-looking	statements.	These	statements	are	based	on	current	plans,	estimates	and	projections,	and	are	subject	to	change	based	on	a	number	of	factors,	including those	outlined	under	Item	1A,	Risk	Factors,	in	this	report.	Forward-looking	statements	speak	only	as	of	the	date	they	are	made,	and	we	undertake	no	obligation	to	update publicly	any	of	them	in	light	of	new	information	or	future	events.

Forward-looking	statements	involve	inherent	risks	and	uncertainties.	A	number	of	important	factors	could	cause	actual	results	to	differ	materially	from	those contained	in	any	forward-looking	statement.	Such	factors	include,	but	are	not	limited	to,	the	following:

•potential	effects	of	a	weakening	economy,	for	example,	on	the	demand	for	our	advertising	and	marketing	services,	on	our	clients'	financial	condition	and	on our	business	or	financial	condition;

•our	ability	to	attract	new	clients	and	retain	existing	clients;

•our	ability	to	retain	and	attract	key	employees;

•risks	associated	with	assumptions	we	make	in	connection	with	our	critical	accounting	estimates,	including	changes	in	assumptions	associated	with	any	effects of	a	weakened	economy;

•potential	adverse	effects	if	we	are	required	to	recognize	impairment	charges	or	other	adverse	accounting-related	developments;

•risks	associated	with	the	effects	of	global,	national	and	regional	economic	and	political	conditions,	including	counterparty	risks	and	fluctuations	in	economic growth	rates,	interest	rates	and	currency	exchange	rates;	and

•developments	from	changes	in	the	regulatory	and	legal	environment	for	advertising	and	marketing	and	communications	services	companies	around	the	world.

Investors	should	carefully	consider	these	factors	and	the	additional	risk	factors	outlined	in	more	detail	under	Item	1A,	Risk	Factors,	in	this	report.

# Item	1. Business

The	Interpublic	Group	of	Companies,	Inc.	(IPG)	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.	The	Company	has	operated	under	the	Interpublic name	since	January	1961.

# About	Us

We	are	one	of	the	world's	premier	advertising	and	marketing	services	companies.	Our	agency	brands	create	marketing	solutions	on	behalf	of	clients	in	every major	world	market.	Our	companies	cover	the	spectrum	of	marketing	disciplines	and	specialties,	from	traditional	services	such	as	consumer	advertising	and	public relations	to	emerging	services	such	as	mobile	and	search	engine	marketing.

The	work	we	produce	for	our	clients	is	specific	to	their	unique	needs.	Our	solutions	vary	from	project-based	activity	involving	one	agency	and	its	client	to	long- term,	fully-integrated	campaigns	created	by	a	group	of	our	companies	working	together	on	behalf	of	a	client.	With	offices	in	over	100	countries,	we	can	operate	in	a single	region	or	align	work	globally	across	all	major	world	markets.

The	role	of	our	holding	company	is	to	provide	resources	and	support	to	ensure	that	our	agencies	can	best	meet	clients'	needs.	Based	in	New	York	City,	our holding	company	also	sets	company-wide	financial	objectives	and	corporate	strategy,	directs	collaborative	inter-agency	programs,	establishes	financial	management	and operational	controls,	guides	personnel	policy,	conducts	investor	relations	and	oversees	mergers	and	acquisitions.	In	addition,	we	provide	limited	centralized	functional services	that	offer	our	companies	operational	efficiencies,	including	accounting	and	finance,	marketing	information	retrieval	and	analysis,	legal	services,	real	estate expertise,	travel	services,	recruitment	assistance,	employee	benefits	and	executive	compensation	management.

To	keep	our	company	well-positioned	in	an	evolving	industry,	we	support	our	agencies'	talent	and	operational	initiatives	to	expand	high-growth	capabilities	and build	offerings	in	key	developing	markets.	When	appropriate,	we	also	develop	relationships	with	companies	that	are	building	leading-edge	marketing	tools	that complement	our	agencies	and	the	programs	they	are	developing	for	clients.	In	addition,	we	look	for	opportunities	within	our	company	to	modernize	operations	through mergers,	strategic	alliances	and	the	development	of	internal	programs	that	encourage	intra-company	collaboration.

# Market	Strategy

We	have	taken	several	major	strategic	steps	in	recent	years	to	position	our	agencies	as	leaders	in	the	global	advertising	and	communications	market.

We	operate	in	a	media	landscape	that	has	vastly	changed	since	the	start	of	the	decade.	Media	markets	continue	to	fragment	and	clients	face	an	increasingly complex	consumer	environment.	To	stay	ahead	of	these	challenges	and	to	achieve	our	objectives,	we	have	invested	in	creative	and	strategic	talent	in	high-growth	areas and	have	realigned	a	number	of	our	capabilities	to	meet	market	demand.	At	our	McCann	Worldgroup	unit,	a	premier	global	integrated	network,	we	have	continued	to invest	in	talent	so	as	to	upgrade	the	group's	integrated	marketing	services	offering	at	MRM,	Momentum	and	McCann	Healthcare.	We	combined	accountable	marketing and	consumer	advertising	agencies	to	form	the	unique	global	offering	of	Draftfcb.	We	have	taken	significant	actions	to	realign	resources	behind	a	more	focused	and strategic	offering	at	Lowe	in	recent	years.	And	at	our	marketing	services	group,	Constituency	Management	Group	("CMG"),	we	continue	to	strengthen	our	public relations	and	events	marketing	specialists.	We	have	also	taken	a	unique	approach	to	our	media	offering	by	installing	a	single	management	structure	(Mediabrands)	to oversee	all	media	operations,	while	concurrently

aligning	our	global	media	networks	with	our	global	brand	agencies.	This	approach	ensures	that	the	ideas	we	develop	for	clients	work	across	new	and	traditional	media channels.	Starting	at	the	end	of	2007	and	continuing	through	2008,	this	differentiated	media	strategy	has	begun	to	gain	significant	traction	in	the	marketplace.

Strong,	multi-channel	talent	is	vital	to	our	long-term	success	as	a	marketing	partner	to	our	clients.	The	aspects	of	our	business	addressing	digital	media	continue	to evolve	rapidly.	In	order	to	grow	with	our	clients,	we	have	accelerated	our	investment	in	digital	talent,	professional	training	and	technology	throughout	the	organization. This	reflects	our	belief	that	digital	marketing	should	not	be	treated	as	a	silo,	but	instead,	should	be	incorporated	within	all	of	our	assets.	Recruiting	and	developing digitally	conversant	talent	at	all	our	agencies	and	in	all	marketing	disciplines	is	therefore	an	area	where	we	continue	to	invest.

To	meet	these	changing	needs	of	the	marketplace,	it	is	at	times	necessary	to	acquire	or	build	specialty	digital	assets,	such	as	Reprise	Media	(search	engine marketing),	The	Interpublic	Emerging	Media	Lab,	HUGE	(e-commerce	solutions)	or	Ansible	(mobile	marketing).	R/GA,	a	stand-alone	digital	agency,	is	an	industry leader	in	the	development	of	award-winning	interactive	campaigns	for	global	clients.	These	specialty	assets	have	unique	capabilities	and	service	their	own	client	rosters, while	also	serving	as	key	digital	partners	to	many	of	the	agencies	within	IPG.

Likewise,	we	continue	to	look	for	strategic	investments	that	will	position	us	to	capitalize	on	emerging	markets.	In	2007,	we	made	investments	in	India	and	Brazil, further	strengthening	our	presence	in	these	high-growth,	developing	markets.	In	2008,	we	built	on	this	strategy	and	completed	an	important	transaction	that	increased	our stake	in	the	Middle	East	Communication	Networks	(MCN)	to	a	majority	position.	Headquartered	in	Dubai,	MCN	is	the	region's	premier	marketing	services	management company,	with	60	offices	across	14	countries.	Our	partner	in	Russia	is	the	acknowledged	advertising	leader	in	that	country.	In	China,	where	we	operate	with	all	of	our global	networks	and	across	the	full	spectrum	of	marketing	services,	we	continue	to	invest	behind	our	companies.

In	the	latter	part	of	2008,	the	economy	and	financial	markets	throughout	the	world	deteriorated	rapidly,	and	are	expected	to	remain	weak	for	much	of	2009.	These conditions	present	potentially	significant	challenges	to	the	revenue	growth	of	our	company	and	others	in	the	advertising	and	marketing	sector	during	the	upcoming	year. The	demand	for	our	services,	as	well	as	the	financial	condition	of	some	of	our	clients,	has	been	adversely	affected.	While	it	is	unclear	how	long	these	conditions	will persist,	we	believe	that	our	broad	range	of	service	offerings,	our	diversified	client	base,	our	geographic	diversification,	our	strong	talent,	our	liquidity	position	and	our enhanced	expense	management	capabilities	provide	a	measure	of	protection	in	a	harsh	economic	climate.

# Our	Offering

Interpublic	is	home	to	some	of	the	world's	best	known	and	most	innovative	communications	specialists.	We	have	three	global	brands	that	provide	integrated, large-scale	solutions	for	clients,	McCann	Worldgroup	("McCann"),	Draftfcb,	and	Lowe	Worldwide	("Lowe"),	as	well	as	our	premier	domestic	integrated	agencies	and global	media	networks.

•	 McCann	offers	best-in-class	communications	tools	and	resources	to	many	of	the	world's	top	companies	and	most	famous	brands.	We	believe	McCann	is exceptionally	qualified	to	meet	client	demands	in	all	regions	of	the	world	and	in	all	marketing	disciplines	through	its	operating	units:	McCann	Erickson Advertising,	with	operations	in	over	100	countries;	MRM	Worldwide	for	relationship	marketing	and	digital	expertise;	Momentum	Worldwide	for	experiential marketing	and	promotions;	and	McCann	Healthcare	Worldwide	for	healthcare	communications.

•Launched	in	2006,	Draftfcb	is	a	modern	agency	model	for	clients	seeking	creative	and	accountable	marketing	programs.	With	more	than	130	years	of combined	expertise,	the	company	has	its	roots	in	both	consumer	advertising	and	behavioral,	data-driven	direct	marketing.	We	believe	the	agency	is	the	first global,	behavior-based,	creative	and	accountable	marketing	communications	organization	operating	as	a	financially	and	structurally	integrated	business	unit.

•Lowe	is	a	premier	creative	agency	that	operates	in	the	world's	largest	advertising	markets.	Lowe	is	focused	on	delivering	and	sustaining	high-value	ideas	for some	of	the	world's	largest	clients.	The	quality	of	the	agency's	product	is	evident	in	its	high	global	creative	rankings	and	its	standing	in	major	markets.	By partnering	with	Interpublic's	marketing	services	companies,	Lowe	amplifies	the	effectiveness	of	its	creativity	through	smart	communication	channel	planning.

•	 Our	domestic	independent	agencies	include	some	of	the	larger	full-service	agency	brands,	Campbell-Ewald,	Campbell	Mithun,	Deutsch,	Hill	Holliday,	The Martin	Agency	and	Mullen.	The	integrated	marketing	programs	created	by	this	group	have	helped	build	some	of	the	most	powerful	brands	in	the	U.S.,	across all	sectors	and	industries.

•	 We	have	exceptional	marketing	specialists	across	a	range	of	channels.	These	include	FutureBrand	(corporate	branding),	Jack	Morton	(experiential	marketing), Octagon	(sports	marketing),	public	relations	specialists	like	WeberShandwick	and	Golin	Harris,	and	best-in-class	digital	agencies,	led	by	R/GA.	Our healthcare	communications	specialists	reside	within	our	three	global	brands,	McCann,	Draftfcb	and	Lowe.

•	 We	created	a	management	entity	called	Mediabrands	in	2008	to	oversee	our	two	global	media	networks,	Initiative	and	Universal	McCann,	which	provide specialized	services	in	media	planning	and	buying,	market	intelligence	and	return-on-marketing	investment	analysis	for	clients.	Initiative	and	Universal McCann	operate	independently	but	often	work	closely	with	Draftfcb	and	McCann	Erickson,	respectively.	Aligning	the	efforts	of	our	major	media	and	our integrated	communications	networks	improves	cross-media	communications	and	our	ability	to	deliver	integrated	marketing	programs.

We	list	approximately	90	companies	on	our	website's	"Company	Finder"	tool,	with	descriptions	and	office	locations	for	each.	To	learn	more	about	our	broad range	of	capabilities,	visit	www.interpublic.com.

# Financial	Reporting	Segments

We	have	two	reportable	segments:	Integrated	Agency	Network	("IAN"),	which	is	comprised	of	McCann,	Draftfcb,	Lowe,	Mediabrands	and	our	domestic integrated	agencies;	and	Constituency	Management	Group	("CMG"),	which	is	comprised	of	the	bulk	of	our	specialist	marketing	service	offerings.	We	also	report	results for	the	"Corporate	and	other"	group.	See	Note	14	to	the	Consolidated	Financial	Statements	for	further	discussion.

# Principal	Markets

Our	agencies	are	located	in	over	100	countries,	including	every	significant	world	market.	For	2008,	our	geographic	revenue	breakdown	is	as	follows:

For	further	information	concerning	revenues	and	long-lived	assets	on	a	geographical	basis	for	each	of	the	last	three	years,	see	Note	14	to	the	Consolidated Financial	Statements.

# Sources	of	Revenue

Our	revenues	are	primarily	derived	from	the	planning	and	execution	of	advertising,	marketing	and	communications	programs	in	various	media	around	the	world. Most	of	our	client	contracts	are	individually	negotiated	and,	accordingly,	the	terms	of	client	engagements	and	the	basis	on	which	we	earn	commissions	and	fees	vary significantly.	Our	client	contracts	are	complex	arrangements	that	may	include	provisions	for	incentive	compensation	and	govern	vendor	rebates	and	credits.	Our	largest clients	are	multinational	entities	and,	as	such,	we	often	provide	services	to	these	clients	out	of	multiple	offices	and	across	many	of	our	agencies.	In	arranging	for	such services	to	be	provided,	we	may	enter	into	global,	regional	and	local	agreements.

Revenues	for	the	creation,	planning	and	placement	of	advertising	are	determined	primarily	on	a	negotiated	fee	basis	and,	to	a	lesser	extent,	on	a	commission	basis. Fees	are	usually	calculated	to	reflect	hourly	rates	plus	proportional	overhead	and	a	mark-up.	Many	clients	include	an	incentive	compensation	component	in	their	total compensation	package.	This	provides	added	revenue	based	on	achieving	mutually	agreed-upon	qualitative	and/or	quantitative	metrics	within	specified	time	periods. Commissions	are	earned	based	on	services	provided	and	are	usually	derived	from	a	percentage	or	fee	over	the	total	cost	to	complete	the	assignment.	Commissions	can also	be	derived	when	clients	pay	us	the	gross	rate	billed	by	media	and	we	pay	for	media	at	a	lower	net	rate;	the	difference	is	the	commission	that	we	earn,	which	is	either retained	in	total	or	shared	with	the	client	depending	on	the	nature	of	the	services	agreement.

We	also	generate	revenue	in	negotiated	fees	from	our	public	relations,	sales	promotion,	event	marketing,	sports	and	entertainment	marketing	and	corporate	and brand	identity	services.

In	most	of	our	businesses,	our	agencies	enter	into	commitments	to	pay	production	and	media	costs	on	behalf	of	clients.	To	the	extent	possible,	we	pay	production and	media	charges	after	we	have	received	funds	from	our	clients.	Generally,	we	act	as	the	client's	agent	rather	than	the	primary	obligor.	In	some	instances	we	agree	with the	provider	that	we	will	only	be	liable	to	pay	the	production	and	media	costs	after	the	client	has	paid	us	for	the	charges.

Our	revenue	is	directly	dependent	upon	the	advertising,	marketing	and	corporate	communications	requirements	of	our	clients.	Our	revenue	tends	to	be	higher	in the	second	half	of	the	calendar	year	as	a	result	of	the	holiday	season	and	lower	in	the	first	half	as	a	result	of	the	post-holiday	slow-down	in	client	activity.

| (Amounts	in	Millions) | Consolidated	Revenues	for	the	Three	Months	Ended | Consolidated	Revenues	for	the	Three	Months	Ended | Consolidated	Revenues	for	the	Three	Months	Ended | Consolidated	Revenues	for	the	Three	Months	Ended | Consolidated	Revenues	for	the	Three	Months	Ended | Consolidated	Revenues	for	the	Three	Months	Ended |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2008 | 2008 | 2007 | 2007 | 2006 | 2006 |
| March\t31 | $1,485.2 | 21.3% | $1,359.1 | 20.7% | $1,327.0 | 21.4% |
| June\t30 | 1,835.7 | 26.4% | 1,652.7 | 25.2% | 1,532.9 | 24.8% |
| September\t30 | 1,740.0 | 25.0% | 1,559.9 | 23.8% | 1,453.8 | 23.5% |
| December\t31 | 1,901.8 | 27.3% | 1,982.5 | 30.3% | 1,877.1 | 30.3% |
|  | $6,962.7 |  | $6,554.2 |  | $6,190.8 |  |

Depending	on	the	terms	of	the	client	contract,	fees	for	services	performed	can	be	recognized	in	three	principal	ways:	proportional	performance,	straight-line	(or monthly	basis)	or	completed	contract.	Fee	revenue	recognized	on	a	completed	contract	basis	also	contributes	to	the	higher	seasonal	revenues	experienced	in	the	fourth quarter	because	the	majority	of	our	contracts	end	at	December	31.	As	is	customary	in	the	industry,	our	contracts	generally	provide	for	termination	by	either	party	on relatively	short	notice,	usually	90	days.	See	Note	1	to	the	Consolidated	Financial	Statements	for	further	discussion	of	our	revenue	recognition	accounting	policies.

# Clients

Our	holding	company	structure	allows	us	to	work	with	clients	within	the	same	business	sector	through	our	different	agencies,	as	well	as	maintain	a	diversified client	base	by	sector.	In	the	aggregate,	our	top	ten	clients	based	on	revenue	accounted	for	approximately	26%	of	revenue	in	2008	and	2007.	However,	our	largest	client accounted	for	approximately	5%	and	6%	of	revenue	for	2008	and	2007,	respectively.	Based	on	revenue	for	the	year	ended	December	31,	2008,	our	largest	clients	(in alphabetical	order)	were	General	Motors	Corporation,	Johnson	&	Johnson,	Microsoft,	Unilever	and	Verizon.	We	represent	several	different	brands	or	divisions	of	each of	these	clients	in	a	number	of	geographic	markets,	as	well	as	provide	services	across	multiple	advertising	and	marketing	disciplines,	in	each	case	through	more	than	one of	our	agency	systems.	Representation	of	a	client	rarely	means	that	we	handle	advertising	for	all	brands	or	product	lines	of	the	client	in	all	geographical	locations.	Any client	may	transfer	its	business	from	one	of	our	agencies	to	another	one	of	our	agencies	or	to	a	competing	agency,	and	a	client	may	reduce	its	marketing	budget	at	any time.

# Personnel

As	of	December	31,	2008,	we	employed	approximately	45,000	persons,	of	whom	approximately	19,000	were	employed	in	the	U.S.	Because	of	the	service character	of	the	advertising	and	marketing	communications	business,	the	quality	of	personnel	is	of	crucial	importance	to	our	continuing	success.	There	is	keen competition	for	qualified	employees.

# Available	Information

Our	annual	reports	on	Form	10-K,	quarterly	reports	on	Form	10-Q,	current	reports	on	Form	8-K	and	any	amendments	to	these	reports	will	be	made	available	free of	charge	on	our	website	at	http://www.interpublic.com	as	soon	as	reasonably	practicable	after	we	electronically	file	such	reports	with,	or	furnish	them	to,	the	SEC.

Our	Corporate	Governance	Guidelines,	Code	of	Conduct	and	the	charters	for	each	of	the	Audit	Committee,	Compensation	Committee	and	the	Corporate Governance	Committee	are	available	free	of	charge	on	our	website	at	http://www.interpublic.com,	or	by	writing	to	The	Interpublic	Group	of	Companies,	Inc.,	1114 Avenue	of	the	Americas,	New	York,	New	York	10036,	Attention:	Secretary.	Information	on	our	website	is	not	part	of	this	report.

# Item	1A. Risk	Factors

We	are	subject	to	a	variety	of	possible	risks	that	could	adversely	impact	our	revenues,	results	of	operations	or	financial	condition.	Some	of	these	risks	relate	to general	economic	and	financial	conditions	of	the	industry	in	which	we	operate,	while	others	are	more	specific	to	us.	The	following	factors	set	out	potential	risks	we	have identified	that	could	adversely	affect	us.	The	risks	described	below	may	not	be	the	only	risks	we	face.	Additional	risks	that	we	do	not	yet	know	of,	or	that	we	currently think	are	immaterial,	could	also	impair	our	business	operations	or	financial	condition.	See	also	Statement	Regarding	Forward-Looking	Disclosure.

# •	 We	operate	in	a	highly	competitive	industry.

The	marketing	communications	business	is	highly	competitive.	Our	agencies	and	media	services	must	compete	with	other	agencies,	and	with	other	providers	of creative	or	media	services,	in	order	to	maintain	existing	client	relationships	and	to	win	new	clients.	Our	competitors	include	not	only	other	large	multinational advertising	and	marketing	communications	companies,	but	also	smaller	entities	that	operate	in	local	or	regional	markets.	New	market	participants	include	systems integrators,	database	marketing	and	modeling	companies,	telemarketers	and	internet	companies.

The	client's	perception	of	the	quality	of	an	agency's	creative	work,	our	reputation	and	the	agencies'	reputations	are	important	factors	in	determining	our competitive	position.	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	a	small	agency	is,	on	occasion,	able	to	take	all	or	some	portion	of	a	client's	account	from	a	much larger	competitor.

Many	companies	put	their	advertising	and	marketing	communications	business	up	for	competitive	review	from	time	to	time.	We	have	won	and	lost	client accounts	in	the	past	as	a	result	of	such	periodic	competitions.	In	the	aggregate,	our	top	ten	clients	based	on	revenue	accounted	for	approximately	26%	of	revenue	in	2008. While	we	believe	it	unlikely	that	we	would	lose	the	entire	business	of	any	one	of	our	largest	clients	at	the	same	time	due	to	competitive	considerations,	a	substantial decline	in	a	large	client's	advertising	and	marketing	spending,	or	the	loss	of	its	entire	business,	could	have	a	material	adverse	effect	upon	our	business	and	results	of operations.

Our	ability	to	attract	new	clients	and	to	retain	existing	clients	may	also,	in	some	cases,	be	limited	by	clients'	policies	or	perceptions	about	conflicts	of	interest. These	policies	can,	in	some	cases,	prevent	one	agency,	or	even	different	agencies	under	our	ownership,	from	performing	similar	services	for	competing	products	or companies.

# •	 Deteriorating	economic	and	financial	conditions	could	adversely	impact	our	financial	condition	and	results.

Economic	and	financial	conditions	deteriorated	sharply	in	the	latter	part	of	2008,	and	the	deterioration	is	persisting	in	2009.	The	effects	could	adversely	affect	our financial	condition	and	results	of	operations.

a) As	a	marketing	services	company,	our	revenues	are	highly	susceptible	to	declines	as	a	result	of	unfavorable	economic	conditions.

Economic	downturns	could	affect	the	marketing	services	industry	more	severely	than	other	industries,	and	the	recovery	of	the	marketing	services	industry	could lag	that	of	the	economy	generally.	In	the	past,	some	clients	have	responded	to	weakening	economic	conditions	with	reductions	to	their	marketing	budgets,	which	include discretionary	components	that	are	easier	to	reduce	in	the	short	term	than	other	operating	expenses.	This	pattern	may	recur	in	the	future.	A	decrease	in	our	revenue	could pose	a	challenge	to	our	cash	generation	from	operations.

b) If	our	clients	experience	financial	distress,	their	weakened	financial	position	could	negatively	affect	our	own	financial	position	and	results.

We	have	a	large	and	diverse	client	base,	and	at	any	given	time,	one	or	more	of	our	clients	may	experience	financial	difficulty,	file	for	bankruptcy	protection	or	go out	of	business.	The	current	unfavorable	economic	and	financial	conditions	that	are	impacting	most	sectors	of	the	economy	could	result	in	an	increase	in	client	financial difficulties	that	affect	us.	The	direct	impact	on	us	could	include	reduced	revenues	and	write-offs	of	accounts	receivable	and	expenditures	billable	to	clients,	and	if	these effects	were	severe,	the	indirect	impact	could	include	impairments	of	goodwill,	credit	facility	covenant	violations	or	reduced	liquidity.	Our	largest	single	client accounted	for	approximately	5%	of	revenue	in	2008	and	approximately	4%	of	accounts	receivable	at	December	31,	2008.	For	a	description	of	our	client	base,	see	Item	1, Business	—	Clients.

# c) Our	financial	condition	could	be	adversely	affected	if	our	available	liquidity	is	insufficient.

We	maintain	committed	credit	facilities	to	increase	our	financial	flexibility.	The	$335	million	credit	facility	we	entered	into	in	July	2008	includes	commitments from	a	syndicate	of	financial	institutions,	and	if	any	of	them	were	unable	to	perform	and	no	other	bank	assumed	that	institution's	commitment,	the	availability	of	credit under	that	agreement	would	be	correspondingly	reduced.	Furthermore,	that	agreement	contains	financial	covenants,	and	the	current	economic	difficulties	could adversely	affect	our	ability	to	comply	with	them,	for	example,	if	we	experience	substantially	lower	revenues,	a	substantial	increase	in	client	defaults	or	sizable	asset impairment	charges.	If	we	were	to	fail	to	comply	with	any	of	the	financial	covenants	contained	in	that	agreement,	we	could

be	required	to	seek	an	amendment	or	waiver,	and	our	costs	under	the	agreement	could	increase.	If	we	were	unable	to	obtain	a	necessary	amendment	or	waiver,	the agreement	could	be	terminated.	The	$750	million	credit	facility	we	entered	into	in	June	2006	expires	in	June	2009,	and	we	do	not	plan	on	replacing	the	full	amount	of that	facility.	If	credit	under	our	credit	facilities	were	unavailable	or	insufficient,	our	liquidity	could	be	adversely	affected.

If	our	business	is	significantly	adversely	affected	by	further	deterioration	in	the	economic	environment	or	otherwise,	it	could	lead	us	to	seek	new	or	additional sources	of	liquidity	to	fund	our	needs.	Currently,	for	a	non-investment-grade	company	such	as	ours,	the	capital	markets	are	challenging,	with	limited	available	financing and	at	higher	costs	than	in	recent	years.	There	can	be	no	guarantee	that	we	would	be	able	to	access	any	new	sources	of	liquidity	on	commercially	reasonable	terms	or	at all.	For	further	discussion	of	our	liquidity	profile	and	outlook,	see	"Liquidity	and	Capital	Resources"	in	Part	II,	Item	7.

# •	 Our	earnings	would	be	adversely	affected	if	we	were	required	to	recognize	asset	impairment	charges	or	increase	our	deferred	tax	valuation	allowances.

We	evaluate	all	of	our	long-lived	assets	(including	goodwill,	other	intangible	assets	and	fixed	assets),	investments	and	deferred	tax	assets	for	possible	impairment or	realizability	at	least	annually	and	whenever	there	is	an	indication	of	impairment	or	lack	of	realizability.	If	certain	criteria	are	met,	we	are	required	to	record	an impairment	charge	or	valuation	allowance.	In	2006	and	prior	years,	we	have	recorded	substantial	amounts	of	goodwill,	investment	and	other	impairment	charges,	and have	been	required	to	establish	substantial	valuation	allowances	with	respect	to	deferred	tax	assets	and	loss	carry-forwards.

As	of	December	31,	2008,	we	have	substantial	amounts	of	long-lived	assets,	investments	and	deferred	tax	assets	on	our	Consolidated	Balance	Sheet,	including approximately	$3.2	billion	of	goodwill.	Future	events,	including	our	financial	performance,	market	valuation	of	us	or	comparable	companies,	loss	of	a	significant	client's business	or	strategic	decisions,	could	cause	us	to	conclude	that	impairment	indicators	exist	and	that	the	asset	values	associated	with	long-lived	assets,	investments	and deferred	tax	assets	may	have	become	impaired.	We	discuss	our	policies	related	to	goodwill	and	other	intangible	assets,	and	our	sensitivity	analysis	of	our	valuation	of these	assets,	below	under	"Critical	Accounting	Estimates"	in	Part	II,	Item	7.	Any	resulting	impairment	loss	would	have	an	adverse	impact	on	our	reported	earnings	in the	period	in	which	the	charge	is	recognized.

# •	 We	may	lose	or	fail	to	attract	and	retain	key	employees	and	management	personnel.

Our	employees,	including	creative,	research,	media	and	account	specialists,	and	their	skills	and	relationships	with	clients,	are	among	our	most	important	assets. An	important	aspect	of	our	competitiveness	is	our	ability	to	attract	and	retain	key	employees	and	management	personnel.	Our	ability	to	do	so	is	influenced	by	a	variety of	factors,	including	the	compensation	we	award,	and	could	be	adversely	affected	by	our	financial	or	market	performance.

# •	 Downgrades	of	our	credit	ratings	could	adversely	affect	us.

Our	long-term	debt	is	currently	rated	Ba3	with	positive	outlook	by	Moody's,	B+	with	positive	outlook	by	Standard	and	Poor's,	and	BB+	with	positive	outlook	by Fitch.	Any	ratings	downgrades	or	ratings	weaker	than	those	of	our	competitors	can	adversely	affect	us,	because	ratings	are	an	important	factor	influencing	our	ability	to access	capital	and	the	terms	of	any	new	indebtedness,	including	covenants	and	interest	rates.	Our	clients	and	vendors	may	also	consider	our	credit	profile	when negotiating	contract	terms,	and	if	they	were	to	change	the	terms	on	which	they	deal	with	us,	it	could	have	an	adverse	effect	on	our	liquidity.

# •	 We	may	not	be	able	to	meet	our	performance	targets	and	milestones.

From	time	to	time,	we	communicate	to	the	public	certain	targets	and	milestones	for	our	financial	and	operating	performance	that	are	intended	to	provide	metrics against	which	to	evaluate	our	performance.	They	should	not	be	understood	as	predictions	or	guidance	about	our	expected	performance.	Our	ability	to	meet	any

target	or	milestone	is	subject	to	inherent	risks	and	uncertainties,	and	we	caution	investors	against	placing	undue	reliance	on	them.	See	"Statement	Regarding	Forward- Looking	Disclosure."

# •International	business	risks	could	adversely	affect	our	operations.

International	revenues	represent	a	significant	portion	of	our	revenues,	approximately	45%	in	2008.	Our	international	operations	are	exposed	to	risks	that	affect foreign	operations	of	all	kinds,	including	local	legislation,	monetary	devaluation,	exchange	control	restrictions	and	unstable	political	conditions.	These	risks	may	limit our	ability	to	grow	our	business	and	effectively	manage	our	operations	in	those	countries.	In	addition,	because	a	significant	portion	of	our	business	is	denominated	in currencies	other	than	the	U.S.	dollar,	such	as	the	Euro,	Pound	Sterling,	Brazilian	Real,	Japanese	Yen,	Canadian	Dollar	and	South	African	Rand,	fluctuations	in	exchange rates	between	the	U.S.	dollar	and	such	currencies	may	materially	affect	our	financial	results.

# •	 We	are	subject	to	regulations	and	other	governmental	scrutiny	that	could	restrict	our	activities	or	negatively	impact	our	revenues.

Our	industry	is	subject	to	government	regulation	and	other	governmental	action,	both	domestic	and	foreign.	There	has	been	an	increasing	tendency	on	the	part	of advertisers	and	consumer	groups	to	challenge	advertising	through	legislation,	regulation,	the	courts	or	otherwise,	for	example	on	the	grounds	that	the	advertising	is	false and	deceptive	or	injurious	to	public	welfare.	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	government	bodies,	both	domestic	and	foreign,	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	and	consequently	our	revenues.

# Item	1B. Unresolved	Staff	Comments

# None.

# Item	2. Properties

Substantially	all	of	our	office	space	is	leased	from	third	parties.	Certain	leases	are	subject	to	rent	reviews	or	contain	escalation	clauses,	and	certain	of	our	leases require	the	payment	of	various	operating	expenses,	which	may	also	be	subject	to	escalation.	Physical	properties	include	leasehold	improvements,	furniture,	fixtures	and equipment	located	in	our	offices.	We	believe	that	facilities	leased	or	owned	by	us	are	adequate	for	the	purposes	for	which	they	are	currently	used	and	are	well maintained.	See	Note	16	to	the	Consolidated	Financial	Statements	for	a	discussion	of	our	lease	commitments.

# Item	3. Legal	Proceedings

Information	about	our	legal	proceedings	is	set	forth	in	Note	16	to	the	Consolidated	Financial	Statements	included	in	this	report.

# Item	4. Submission	of	Matters	to	a	Vote	of	Security	Holders

Not	applicable.

# Executive	Officers	of	Interpublic

1 Also	a	Director

There	is	no	family	relationship	among	any	of	the	executive	officers.

Mr.	Roth	became	our	Chairman	of	the	Board	and	Chief	Executive	Officer,	effective	January	19,	2005.	Prior	to	that	time,	Mr.	Roth	served	as	our	Chairman	of	the Board	from	July	13,	2004	to	January	2005.	Mr.	Roth	served	as	Chairman	and	Chief	Executive	Officer	of	The	MONY	Group	Inc.	from	February	1994	to	June	2004. Mr.	Roth	has	been	a	member	of	the	Board	of	Directors	of	Interpublic	since	February	2002.	He	is	also	a	director	of	Pitney	Bowes	Inc.	and	Gaylord	Entertainment Company.

Mr.	Camera	was	hired	in	May	1993.	He	was	elected	Vice	President,	Assistant	General	Counsel	and	Assistant	Secretary	in	June	1994,	Vice	President,	General Counsel	and	Secretary	in	December	1995,	and	Senior	Vice	President,	General	Counsel	and	Secretary	in	February	2000.

Mr.	Carroll	was	named	Senior	Vice	President,	Controller	and	Chief	Accounting	Officer	in	April	2006.	Prior	to	joining	us,	Mr.	Carroll	served	as	Senior	Vice President	and	Controller	of	McCann	Worldgroup	from	November	2005	to	March	2006.	Mr.	Carroll	served	as	Chief	Accounting	Officer	and	Controller	at	Eyetech Pharmaceuticals	from	June	2004	to	October	2005.	Prior	to	that	time,	Mr.	Carroll	served	as	Chief	Accounting	Officer	and	Controller	at	MIM	Corporation	from	January 2003	to	June	2004	and	served	as	a	Financial	Vice	President	at	Lucent	Technologies,	Inc.	from	July	2001	to	January	2003.

Mr.	Dooner	became	Chairman	and	Chief	Executive	Officer	of	the	McCann	Worldgroup,	effective	February	27,	2003.	Prior	to	that	time,	Mr.	Dooner	served	as Chairman	of	the	Board,	President	and	Chief	Executive	Officer	of	Interpublic	from	December	2000	to	February	2003,	and	as	President	and	Chief	Operating	Officer	of Interpublic	from	April	2000	to	December	14,	2000.

Mr.	Dowling	was	hired	in	January	2000	as	Vice	President	and	General	Auditor.	He	was	elected	Senior	Vice	President,	Financial	Administration	of	Interpublic	in February	2001,	and	Senior	Vice	President,	Chief	Risk	Officer	in	November	2002.	Prior	to	joining	us,	Mr.	Dowling	served	as	Vice	President	and	General	Auditor	for Avon	Products,	Inc.	from	April	1992	to	December	1999.

Mr.	Krakowsky	was	hired	in	January	2002	as	Senior	Vice	President,	Director	of	Corporate	Communications.	He	was	elected	Executive	Vice	President,	Strategy and	Corporate	Relations	in	December	2005.	Prior	to	joining	us,	he	served	as	Senior	Vice	President,	Communications	Director	for	Young	&	Rubicam	from	August	1996 to	December	2000.	During	2001,	Mr.	Krakowsky	was	complying	with	the	terms	of	a	non-competition	agreement	entered	into	with	Young	&	Rubicam.

Mr.	Mergenthaler	was	hired	in	August	2005	as	Executive	Vice	President	and	Chief	Financial	Officer.	Prior	to	joining	us,	he	served	as	Executive	Vice	President and	Chief	Financial	Officer	for	Columbia	House	Company

from	July	2002	to	July	2005.	Mr.	Mergenthaler	served	as	Senior	Vice	President	and	Deputy	Chief	Financial	Officer	for	Vivendi	Universal	from	December	2001	to March	2002.	Prior	to	that	time	Mr.	Mergenthaler	was	an	executive	at	Seagram	Company	Ltd.	from	November	1996	to	December	2001.

Mr.	Sompolski	was	hired	in	July	2004	as	Executive	Vice	President,	Chief	Human	Resources	Officer.	Prior	to	joining	us,	he	served	as	Senior	Vice	President	of Human	Resources	and	Administration	for	Altria	Group	from	November	1996	to	January	2003.

# PART	II

# Item	5. Market	for	Registrant's	Common	Equity,	Related	Stockholder	Matters	and	Issuer	Purchases	of	Equity	Securities

# Price	Range	of	Common	Stock

Our	common	stock	is	listed	and	traded	on	the	New	York	Stock	Exchange	("NYSE")	under	the	symbol	"IPG."	The	following	table	provides	the	high	and	low closing	sales	prices	per	share	for	the	periods	shown	below	as	reported	on	the	NYSE.	As	of	February	17,	2009,	there	were	approximately	24,100	registered	holders	of	our common	stock.

| Period | High | Low |
| :--- | :--- | :--- |
| 2008: |  |  |
| Fourth\tQuarter | $7.70 | $2.61 |
| Third\tQuarter | $9.57 | $7.21 |
| Second\tQuarter | $10.39 | $7.90 |
| First\tQuarter | $8.98 | $7.40 |
| 2007: |  |  |
| Fourth\tQuarter | $10.55 | $8.10 |
| Third\tQuarter | $11.61 | $9.75 |
| Second\tQuarter | $12.97 | $11.31 |
| First\tQuarter | $13.81 | $12.17 |

# Dividend	Policy

No	dividend	has	been	paid	on	our	common	stock	since	the	fourth	quarter	of	2002.	Our	future	dividend	policy	will	be	determined	on	a	quarter-by-quarter	basis	and will	depend	on	earnings,	financial	condition,	capital	requirements	and	other	factors.	Our	future	dividend	policy	may	also	be	influenced	by	the	terms	of	the	2008	Credit Agreement	and	certain	of	our	outstanding	securities.	The	2008	Credit	Agreement	places	certain	limitations	on	the	amount	of	common	stock	dividends	that	we	may	pay in	any	year.	The	terms	of	our	outstanding	series	of	preferred	stock	do	not	permit	us	to	pay	dividends	on	our	common	stock	unless	all	accumulated	and	unpaid	dividends have	been	or	are	contemporaneously	declared	and	paid	or	provision	for	the	payment	thereof	has	been	made.	In	the	event	we	pay	dividends	on	our	common	stock,	holders of	our	4.50%	Convertible	Senior	Notes	will	be	entitled	to	additional	interest	and	the	conversion	terms	of	our	4.75%	Convertible	Senior	Notes,	4.25%	Convertible	Senior Notes	and	our	Series	B	Convertible	Preferred	Stock,	and	the	exercise	prices	of	our	outstanding	warrants,	will	be	adjusted	(see	Notes	8,	9	and	10	to	the	Consolidated Financial	Statements).

# Transfer	Agent	and	Registrar	for	Common	Stock

The	transfer	agent	and	registrar	for	our	common	stock	is:

BNY	Mellon	Shareowner	Services,	Inc. 480	Washington	Boulevard

# Sales	of	Unregistered	Securities

# Repurchase	of	Equity	Securities

The	following	table	provides	information	regarding	our	purchases	of	equity	securities	during	the	fourth	quarter	of	2008:

|  | Total | Average | Total	Number	of	Shares | that	May	Yet	Be |
| :--- | :--- | :--- | :--- | :--- |
|  | Number | Price | Purchased\tas\tPart\tof | Purchased |
|  | of\tShares | Paid\tper | Publicly\tAnnounced | Under\tthe\tPlans |
|  | Purchased | Share2 | Plans\tor\tPrograms | or\tPrograms |
| October\t1-31 | 29,704 | $5.99 | — | — |
| November\t1-30 | 4,468 | $3.24 | — | — |
| December\t1-31 | 12,850 | $3.98 | — | — |
| Total1 | 47,022 | $5.18 | — | — |

1 Consists	of	restricted	shares	of	our	common	stock	withheld	under	the	terms	of	grants	under	employee	stock	compensation	plans	to	offset	tax	withholding	obligations	that	occurred	upon	vesting	and	release	of restricted	shares	during	each	month	of	the	fourth	quarter	of	2008	(the	"Withheld	Shares").

2 The	average	price	per	month	of	the	Withheld	Shares	was	calculated	by	dividing	the	aggregate	value	of	the	tax	withholding	obligations	for	each	month	by	the	aggregate	number	of	shares	of	our	common	stock withheld	each	month.

# Item	6. Selected	Financial	Data

# THE	INTERPUBLIC	GROUP	OF	COMPANIES,	INC.	AND	SUBSIDIARIES

# Selected	Financial	Data

# (Amounts	in	Millions,	Except	Per	Share	Amounts	and	Ratios)

# (Unaudited)

|  | 2008 | 2007 | 2006 | 2005 | 2004 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Revenue | $6,962.7 | $6,554.2 | $6,190.8 | $6,274.3 | $6,387.0 |
| Salaries\tand\trelated\texpenses | 4,342.6 | 4,139.2 | 3,944.1 | 3,999.1 | 3,733.0 |
| Office\tand\tgeneral\texpenses | 2,013.3 | 2,044.8 | 2,079.0 | 2,288.1 | 2,250.4 |
| Restructuring\tand\tother\treorganization-related\tcharges\t(reversals) | 17.1 | 25.9 | 34.5 | (7.3) | 62.2 |
| Long-lived\tasset\timpairment\tand\tother\tcharges | — | — | 27.2 | 98.6 | 322.2 |
| Motorsports\tcontract\ttermination\tcosts | — | — | — | — | 113.6 |
| Operating\tincome\t(loss) | 589.7 | 344.3 | 106.0 | (104.2) | (94.4) |
| Total\t(expenses)\tand\tother\tincome | (118.2) | (108.6) | (111.0) | (82.4) | (172.6) |
| Provision\tfor\tincome\ttaxes | 156.6 | 58.9 | 18.7 | 81.9 | 262.2 |
| Income\t(loss)\tfrom\tcontinuing\toperations | 295.0 | 167.6 | (36.7) | (271.9) | (544.9) |
| Income\tfrom\tdiscontinued\toperations,\tnet\tof\ttax | — | — | 5.0 | 9.0 | 6.5 |
| Net\tincome\t(loss)\tapplicable\tto\tcommon\tstockholders | $265.2 | $131.3 | $(79.3) | $(289.2) | $(558.2) |
| Earnings\t(loss)\tper\tshare\tof\tcommon\tstock— |  |  |  |  |  |
| Basic: |  |  |  |  |  |
| Continuing\toperations | $0.57 | $0.29 | $(0.20) | $(0.70) | $(1.36) |
| Discontinued\toperations | — | — | 0.01 | 0.02 | 0.02 |
| Total | $0.57 | $0.29 | $(0.19) | $(0.68) | $(1.34) |
| Diluted: |  |  |  |  |  |
| Continuing\toperations | $0.52 | $0.26 | $(0.20) | $(0.70) | $(1.36) |
| Discontinued\toperations | — | — | 0.01 | 0.02 | 0.02 |
| Total | $0.52 | $0.26 | $(0.19) | $(0.68) | $(1.34) |
| Weighted\taverage\tshares— |  |  |  |  |  |
| Basic | 461.5 | 457.7 | 428.1 | 424.8 | 415.3 |
| Diluted | 518.3 | 503.1 | 428.1 | 424.8 | 415.3 |
| OTHER\tDATA |  |  |  |  |  |
| As\tof\tDecember\t31, |  |  |  |  |  |
| Cash\tand\tcash\tequivalents\tand\tmarketable\tsecurities | $2,274.9 | $2,037.4 | $1,957.1 | $2,191.5 | $1,970.4 |
| Total\tassets | \t 12,125.2 | \t 12,458.1 | \t 11,864.1 | \t 11,945.2 | \t 12,253.7 |
| Long-term\tdebt | 1,786.9 | 2,044.1 | 2,248.6 | 2,183.0 | 1,936.0 |
| Total\tliabilities | 9,649.6 | \t 10,125.9 | 9,923.5 | 9,999.9 | \t 10,535.4 |
| Preferred\tstock—Series\tA | — | — | — | 373.7 | 373.7 |
| Preferred\tstock—Series\tB | 525.0 | 525.0 | 525.0 | 525.0 | — |
| Total\tstockholders'\tequity | 2,475.6 | 2,332.2 | 1,940.6 | 1,945.3 | 1,718.3 |
| Ratios\tof\tearnings\tto\tfixed\tcharges1 | 2.2 | 1.6 | N/A | N/A | N/A |

# Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations

# (Amounts	in	Millions,	Except	Per	Share	Amounts)

# Item	7. Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations

The	following	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	("MD&A")	is	intended	to	help	you	understand	The Interpublic	Group	of	Companies,	Inc.	and	its	subsidiaries	(the	"Company",	"Interpublic",	"we",	"us"	or	"our").	MD&A	should	be	read	in	conjunction	with	our Consolidated	Financial	Statements	and	the	accompanying	notes.	Our	MD&A	includes	the	following	sections:

EXECUTIVE	SUMMARY	provides	a	description	of	our	business	strategy	as	well	as	an	overview	of	our	results	of	operations	and	liquidity.

CRITICAL	ACCOUNTING	ESTIMATES	provides	a	discussion	of	our	accounting	policies	that	require	critical	judgment,	assumptions	and	estimates.

RESULTS	OF	OPERATIONS	provides	an	analysis	of	the	consolidated	and	segment	results	of	operations	for	2008	compared	to	2007	and	2007	compared	to	2006.

LIQUIDITY	AND	CAPITAL	RESOURCES	provides	an	overview	of	our	cash	flows,	funding	requirements,	contractual	obligations,	financing	and	sources	of funds.

RECENT	ACCOUNTING	STANDARDS,	by	reference	to	Note	17	to	the	Consolidated	Financial	Statements,	provides	a	description	of	accounting	standards which	we	have	not	yet	been	required	to	implement	and	may	be	applicable	to	our	future	operations.

# EXECUTIVE	SUMMARY

We	are	one	of	the	world's	premier	global	advertising	and	marketing	services	companies.	Our	agencies	create	marketing	programs	for	clients	to	improve	business results	for	them	and	generate	sales,	earnings	and	cash	flow	for	us.	Our	agencies	deliver	services	across	the	full	spectrum	of	marketing	disciplines	and	specialties, including	advertising,	direct	marketing,	public	relations,	mobile	marketing,	internet	and	search	engine	marketing,	social	media	marketing,	and	media	buying	and planning.	Major	global	brands	in	our	portfolio	of	companies	include	Draftfcb,	FutureBrand,	GolinHarris,	Initiative,	Jack	Morton,	Lowe,	McCann	Erickson,	Momentum, MRM,	Octagon,	Universal	McCann	and	Weber	Shandwick.	Leading	domestic	brands	include	Campbell-Ewald,	Carmichael	Lynch,	Deutsch,	Hill	Holliday,	The	Martin Agency,	Mullen	and	R/GA.

In	early	2006,	the	senior	management	team	of	Interpublic	announced	a	three-year	strategic	plan	to	return	the	company	to	competitive	growth	and	significantly enhance	profitability,	while	concurrently	addressing	a	range	of	legacy	issues	stemming	largely	from	previous	under-investment	in	talent	and	shortcomings	in	our financial	control	environment.	The	first	two	years	of	this	plan	saw	us	invest	to	strengthen	leadership	and	talent	at	the	parent	company	and	across	our	agencies,	including programs	to	foster	diversity	and	inclusion	throughout	our	organization,	and	we	strategically	realigned	and	refocused	certain	key	operating	units.	We	also	enhanced	the company's	financial	strength,	liquidity	and	flexibility	and	succeeded	in	remediating	the	weaknesses	in	our	internal	control	structure.	Progress	in	all	of	these	areas	led	to significantly	improved	financial	performance.	During	2008,	the	third	year	of	our	program,	we	continued	to	build	on	our	momentum,	achieving	organic	revenue	growth that	was	fully	competitive	with	that	of	our	global	peer	group,	and	operating	margins	significantly	higher	than	we	reported	in	2005,	preceding	the	implementation	of	our strategic	plan.

The	global	economic	environment	in	which	we	operate	deteriorated	significantly	over	the	course	of	2008,	at	first	relatively	slowly,	then	accelerating	in	the	latter part	of	the	year.	We	believe	that	our	performance	in	this	challenging	environment	further	reflects	the	success	of	our	turnaround	strategies.	For	2009	and	beyond,	our strategic	outlook	is	for	a	media	landscape	that	continues	to	grow	more	complex,	and	that	our	high-quality,

# Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	—	(Continued)

comprehensive	global	services	will	remain	critical	to	the	competitiveness	of	our	clients.	Our	objectives	are	to	continue	to	build	our	talent	across	the	full	range	of marketing	competencies,	while	focusing	our	investment	on	the	fastest	growing	markets	and	disciplines.	Our	financial	objectives	include	furthering	our	margin	progress to	achieve	peer-level	operating	margin	over	the	long	term.	Accordingly,	we	remain	focused	on	cost	control	and	resource	utilization,	including	the	productivity	of	our employees,	real	estate	and	information	technology.

We	begin	2009	with	the	global	economy	in	recession	and	widespread	uncertainty	in	financial	markets,	which	has	made	business	conditions	more	challenging	for nearly	all	companies.	It	is	apparent	that	these	conditions	will	adversely	affect	the	demand	for	advertising	and	marketing	services	in	2009,	and,	as	a	result,	present	a challenge	to	the	revenue	and	profit	growth	of	our	company	and	our	sector.	While	we	cannot	predict	the	magnitude	and	duration	of	the	economic	downturn	or	its	impact on	the	demand	for	our	services,	we	believe	that	we	will	continue	to	derive	benefits	from	our	diversified	client	base,	global	presence	and	broad	range	of	services.	Recent improvements	in	our	financial	reporting	and	business	information	systems	provide	us	with	timely	and	actionable	insights	from	our	businesses	around	the	world.	Our extensive	operating	improvements	over	the	past	three	years	have	greatly	strengthened	our	cash	flow	generation,	and	our	balance	sheet	and	liquidity	are	important	sources of	financial	flexibility.	These	should	provide	a	measure	of	protection	in	a	harsh	business	environment.

# Highlights

|  | 2008 | 2008 | 2007 | 2007 |
| :--- | :--- | :--- | :--- | :--- |
| %\tincrease/(decrease)\tvs.\tprior\tyear | Total | Organic | Total | Organic |
| Revenue | 6.2% | 3.8% | 5.9% | 3.8% |
| Salaries\tand\trelated\texpenses | 4.9% | 2.5% | 4.9% | 2.7% |
| Office\tand\tgeneral\texpenses | (1.5%) | (2.6%) | (1.6%) | (2.7%) |

|  | Years	ended	December	31, | Years	ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2008 | 2007 | 2006 |
| Operating\tmargin | 8.5% | 5.3% | 1.7% |
| Expenses\tas\t%\tof\trevenue |  |  |  |
| Salaries\tand\trelated\texpenses | 62.4% | 63.2% | 63.7% |
| Office\tand\tgeneral\texpenses | 28.9% | 31.2% | 33.6% |
| Net\tincome\t(loss)\tapplicable\tto\tcommon\tstockholders | $265.2 | $131.3 | $(79.3) |
| Diluted\tearnings\t(loss)\tper\tshare | $0.52 | $0.26 | $(0.19) |
| Operating\tCash\tFlow | $865.3 | $298.1 | $9.0 |

We	analyze	period-to-period	changes	in	our	operating	performance	by	determining	the	portion	of	the	change	that	is	attributable	to	foreign	currency	rates	and	the change	attributable	to	the	net	effect	of	acquisitions	and	divestitures,	and	consider	the	remainder	to	be	the	organic	change.	For	purposes	of	analyzing	this	change, acquisitions	and	divestitures	are	treated	as	if	they	occurred	on	the	first	day	of	the	quarter	during	which	the	transaction	occurred.	During	the	past	few	years,	we	have acquired	companies	that	we	believe	will	enhance	our	offering	and	disposed	of	businesses	that	are	not	consistent	with	our	strategic	plan.	For	additional	information	on our	acquisitions,	see	Note	4	to	the	Consolidated	Financial	Statements.	An	analysis	of	2008	compared	to	2007	shows	net	acquisitions	increased	revenue	and	operating expenses,	while	an	analysis	of	2007	compared	to	2006	shows	net	divestitures	decreased	revenue	and	operating	expenses.	Additionally,	in	certain	of	our	discussions	we analyze	revenue	by	business	sector	and	geographic	region.	In	our	business	sector	analysis,	we	focused	on	our	top	100	clients,	which	represent	over	50%	of	our consolidated	revenue.

On	July	9,	2008	we	announced	the	creation	of	a	management	entity	called	Mediabrands	to	oversee	our	media	assets	that	are	included	in	our	Integrated	Agency Networks	("IAN")	segment.	The	new	entity	provides	oversight	to	ensure	operational	efficiency	and	increased	collaboration	across	our	media	units.	Our	global	media networks,	Initiative	and	Universal	McCann,	continue	to	operate	as	independent	entities,	each	aligned	where	appropriate	with	a	full-service	marketing	network	partner. The	businesses	that	comprise	Mediabrands	remain	in	the	IAN	segment.	The	financial	results	for	these	units	are	analyzed	together	in	the	MD&A	for	2008	compared	to 2007	and	2007	compared	to	2006.

Although	the	U.S.	Dollar	is	our	reporting	currency,	a	substantial	portion	of	our	revenues	is	generated	in	foreign	currencies.	Therefore,	our	reported	results	are affected	by	fluctuations	in	the	currencies	in	which	we	conduct	our	international	businesses.	We	do	not	use	derivative	financial	instruments	to	manage	this	translation risk.	As	a	result,	both	positive	and	negative	currency	fluctuations	against	the	U.S.	Dollar	will	continue	to	affect	our	results	of	operations.	Foreign	currency	fluctuations resulted	in	increases	of	approximately	1%	in	revenues	and	operating	expenses	which	resulted	in	an	increase	of	approximately	4%	in	operating	income	for	2008	as compared	to	2007.	In	the	second	half	of	the	year	the	U.S.	Dollar	strengthened	against	several	foreign	currencies,	and	if	this	trend	continues,	it	could	have	a	negative impact	on	our	consolidated	results	of	operations.

# CRITICAL	ACCOUNTING	ESTIMATES

Our	Consolidated	Financial	Statements	are	prepared	in	accordance	with	generally	accepted	accounting	principles	in	the	United	States	of	America.	Preparation	of the	Consolidated	Financial	Statements	and	related	disclosures	requires	us	to	make	judgments,	assumptions	and	estimates	that	affect	the	amounts	reported	and	disclosed in	the	accompanying	financial	statements	and	notes.	We	believe	that	of	our	significant	accounting	policies,	the	following	critical	accounting	estimates	involve management's	most	difficult,	subjective	or	complex	judgments.	We	consider	these	accounting	estimates	to	be	critical	because	changes	in	the	underlying	assumptions	or estimates	have	the	potential	to	materially	impact	our	financial	statements.	Management	has	discussed	with	our	Audit	Committee	the	development,	selection,	application and	disclosure	of	these	critical	accounting	estimates.	We	regularly	evaluate	our	judgments,	assumptions	and	estimates	based	on	historical	experience	and	various	other factors	that	we	believe	to	be	relevant	under	the	circumstances.	Actual	results	may	differ	from	these	estimates	under	different	assumptions	or	conditions.

# Revenue	Recognition

Our	revenues	are	primarily	derived	from	the	planning	and	execution	of	advertising,	marketing	and	communications	programs	in	various	media	around	the	world. Most	of	our	client	contracts	are	individually	negotiated	and	accordingly,	the	terms	of	client	engagements	and	the	bases	on	which	we	earn	commissions	and	fees	vary significantly.	Our	client	contracts	are	complex	arrangements	that	may	include	provisions	for	incentive	compensation	and	vendor	rebates	and	credits.	Our	largest	clients are	multinational	entities	and,	as	such,	we	often	provide	services	to	these	clients	out	of	multiple	offices	and	across	many	of	our	agencies.	In	arranging	for	such	services,	it is	possible	that	we	will	enter	into	global,	regional	and	local	agreements.	Multiple	agreements	of	this	nature	are	reviewed	by	legal	counsel	to	determine	the	governing terms	to	be	followed	by	the	offices	and	agencies	involved.	Critical	judgments	and	estimates	are	involved	in	determining	both	the	amount	and	timing	of	revenue recognition	under	these	arrangements.

Revenue	for	our	services	is	recognized	when	all	of	the	following	criteria	are	satisfied:	(i)	persuasive	evidence	of	an	arrangement	exists;	(ii)	the	price	is	fixed	or determinable;	(iii)	collectibility	is	reasonably	assured;	and	(iv)	services	have	been	performed.	Depending	on	the	terms	of	a	client	contract,	fees	for	services	performed can	be	recognized	in	three	principal	ways:	proportional	performance,	straight-line	(or	monthly	basis)	or	completed	contract.	See	Note	1	to	the	Consolidated	Financial Statements	for	further	discussion.

Depending	on	the	terms	of	the	client	contract,	revenue	is	derived	from	diverse	arrangements	involving	fees	for	services	performed,	commissions,	performance incentive	provisions	and	combinations	of	the	three.	Commissions	are	generally	earned	on	the	date	of	the	broadcast	or	publication.	Contractual	arrangements	with	clients may	also	include	performance	incentive	provisions	designed	to	link	a	portion	of	our	revenue	to	our	performance	relative	to	both	qualitative	and	quantitative	goals. Performance	incentives	are	recognized	as	revenue	for	quantitative	targets	when	the	target	has	been	achieved	and	for	qualitative	targets	when	confirmation	of	the incentive	is	received	from	the	client.	The	classification	of	client	arrangements	to	determine	the	appropriate	revenue	recognition	involves	judgments.	If	the	judgments change	there	can	be	a	material	impact	on	our	financial	statements,	and	particularly	on	the	allocation	of	revenues	between	periods.	Incremental	direct	costs	incurred related	to	contracts	where	revenue	is	accounted	for	on	a	completed	contract	basis	are	generally	expensed	as	incurred.	There	are	certain	exceptions	made	for	significant contracts	or	for	certain	agencies	where	the	majority	of	the	contracts	are	project-based	and	systems	are	in	place	to	properly	capture	appropriate	direct	costs.

Substantially	all	of	our	revenue	is	recorded	as	the	net	amount	of	our	gross	billings	less	pass-through	expenses	charged	to	a	client.	In	most	cases,	the	amount	that	is billed	to	clients	significantly	exceeds	the	amount	of	revenue	that	is	earned	and	reflected	in	our	financial	statements,	because	of	various	pass-through	expenses	such	as production	and	media	costs.	In	compliance	with	Emerging	Issues	Task	Force	("EITF")	Issue	No.	99-19,	Reporting	Revenue	Gross	as	a	Principal	versus	Net	as	an	Agent, we	assess	whether	our	agency	or	the	third-party	supplier	is	the	primary	obligor.	We	evaluate	the	terms	of	our	client	agreements	as	part	of	this	assessment.	In	addition,	we give	appropriate	consideration	to	other	key	indicators	such	as	latitude	in	establishing	price,	discretion	in	supplier	selection	and	credit	risk	to	the	vendor.	Because	we operate	broadly	as	an	advertising	agency,	based	on	our	primary	lines	of	business	and	given	the	industry	practice	to	generally	record	revenue	on	a	net	versus	gross	basis, we	believe	that	there	must	be	strong	evidence	in	place	to	overcome	the	presumption	of	net	revenue	accounting.	Accordingly,	we	generally	record	revenue	net	of	pass- through	charges	as	we	believe	the	key	indicators	of	the	business	suggest	we	act	as	an	agent	on	behalf	of	our	clients	in	our	primary	lines	of	business.	In	those	businesses (primarily	sales	promotion,	event,	sports	and	entertainment	marketing)	where	the	key	indicators	suggest	we	act	as	a	principal,	we	record	the	gross	amount	billed	to	the client	as	revenue	and	the	related	costs	incurred	as	office	and	general	expenses.	Revenue	is	reported	net	of	taxes	assessed	by	governmental	authorities	that	are	directly imposed	on	our	revenue-producing	transactions.

The	determination	as	to	whether	revenue	in	a	particular	line	of	business	should	be	recognized	net	or	gross	involves	complex	judgments.	If	we	make	these judgments	differently	it	could	significantly	affect	our	financial	performance.	If	it	were	determined	that	we	must	recognize	a	significant	portion	of	revenues	on	a	gross basis	rather	than	a	net	basis	it	would	positively	impact	revenues,	have	no	impact	on	our	operating	income	and	have	an	adverse	impact	on	operating	margin.

We	receive	credits	from	our	vendors	and	media	outlets	for	transactions	entered	into	on	behalf	of	our	clients	that,	based	on	the	terms	of	our	contracts	and	local	law, are	either	remitted	to	our	clients	or	retained	by	us.	If	amounts	are	to	be	passed	through	to	clients	they	are	recorded	as	liabilities	until	settlement	or,	if	retained	by	us,	are recorded	as	revenue	when	earned.	Negotiations	with	a	client	at	the	close	of	a	current	engagement	could	result	in	either	payments	to	the	client	in	excess	of	the	contractual liability	or	in	payments	less	than	the	contractual	liability.	These	items,	referred	to	as	concessions,	relate	directly	to	the	operations	of	the	period	and	are	recorded	as operating	expense	or	income.	Concession	income	or	expense	may	also	be	realized	in	connection	with	settling	vendor	discount	or	credit	liabilities	that	were	established	as part	of	the	restatement	we	presented	in	our	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2004	that	we	filed	in	September	2005	(the	"2004 Restatement").	In	these	situations,	and	given	the	historical	nature	of	these	liabilities,	we	have	recorded	such	items	as	other	income	or	expense	in	order	to	prevent distortion	of	current	operating	results.

# Income	Taxes

The	provision	for	income	taxes	includes	federal,	state,	local	and	foreign	taxes.	Deferred	tax	assets	and	liabilities	are	recognized	for	the	estimated	future	tax consequences	of	temporary	differences	between	the	financial	statement	carrying	amounts	and	their	respective	tax	bases.	Deferred	tax	assets	and	liabilities	are	measured using	enacted	tax	rates	expected	to	apply	to	taxable	income	in	the	year	in	which	the	temporary	differences	are	expected	to	be	reversed.	Changes	to	enacted	tax	rates would	result	in	either	increases	or	decreases	in	the	provision	for	income	taxes	in	the	period	of	changes.

Under	SFAS	No.	109,	Accounting	for	Income	Taxes	("SFAS	109"),	we	are	required	to	evaluate	the	realizability	of	our	deferred	tax	assets.	The	realization	of	our deferred	tax	assets	is	primarily	dependent	on	future	earnings.	SFAS	109	requires	that	a	valuation	allowance	be	recognized	when,	based	on	available	evidence,	it	is	more likely	than	not	that	all	or	a	portion	of	deferred	tax	assets	will	not	be	realized	due	to	the	inability	to	generate	sufficient	taxable	income	in	future	periods.	In	circumstances where	there	is	significant	negative	evidence,	establishment	of	a	valuation	allowance	must	be	considered.	We	believe	that	cumulative	losses	in	the	most	recent	three-year period	represent	significant	negative	evidence	under	the	provisions	of	SFAS	109.	A	pattern	of	sustained	profitability	is	considered	significant	positive	evidence	when evaluating	a	decision	to	reverse	a	valuation	allowance.	Further,	in	those	cases	where	a	pattern	of	sustained	profitability	exists,	projected	future	taxable	income	may	also represent	positive	evidence,	to	the	extent	that	such	projections	are	determined	to	be	reliable	given	the	current	economic	environment.	Accordingly,	the	increase	and decrease	of	valuation	allowances	has	had	and	could	have	a	significant	negative	or	positive	impact	on	our	current	and	future	earnings.	In	2008,	2007	and	2006	we recorded	a	net	reversal	of	valuation	allowances	of	$48.0,	$22.3	and	$29.6,	respectively.

Financial	Accounting	Standards	Board	("FASB")	Interpretation	No.	48,	Accounting	for	Uncertainty	in	Income	Taxes	("FIN	48"),	prescribes	a	recognition threshold	and	measurement	attribute	for	the	financial	statement	recognition	and	measurement	of	a	tax	position	that	an	entity	takes	or	expects	to	take	in	a	tax return.	Additionally,	FIN	48	provides	guidance	on	de-recognition,	classification,	interest	and	penalties,	accounting	in	interim	periods,	disclosure	and	transition.	The assessment	of	recognition	and	measurement	requires	critical	estimates	and	the	use	of	complex	judgments.	We	evaluate	our	tax	positions	using	a	"more	likely	than	not" recognition	threshold	and	then	we	apply	a	measurement	assessment	to	those	positions	that	meet	the	recognition	threshold.	We	have	established	tax	reserves	that	we believe	to	be	adequate	in	relation	to	the	potential	for	additional	assessments	in	each	of	the	jurisdictions	in	which	we	are	subject	to	taxation.	We	regularly	assess	the likelihood	of	additional	tax	assessments	in	those	jurisdictions	and	adjust	our	reserves	as	additional	information	or	events	require.	See	Note	7	to	the	Consolidated Financial	Statements	for	further	information.

# Goodwill	and	Other	Intangible	Assets

We	account	for	our	business	combinations	using	the	purchase	accounting	method.	The	total	costs	of	the	acquisitions	are	allocated	to	the	underlying	net	assets, based	on	their	respective	estimated	fair	values	and	the	remainder	allocated	to	goodwill	and	other	intangible	assets.	Determining	the	fair	value	of	assets	acquired	and liabilities	assumed	requires	management's	judgment	and	involves	the	use	of	significant	estimates,	including	future	cash	inflows	and	outflows,	discount	rates,	asset	lives and	market	multiples.	Considering	the	characteristics	of	advertising,	specialized	marketing	and	communication	services	companies,	our	acquisitions	usually	do	not	have significant	amounts	of	tangible	assets	as	the	principal	asset	we	typically	acquire	is	creative	talent.	As	a	result,	a	substantial	portion	of	the	purchase	price	is	allocated	to goodwill	and	other	intangible	assets.

We	review	goodwill	and	other	intangible	assets	with	indefinite	lives	not	subject	to	amortization	as	of	October	1st	of	each	year	and	whenever	events	or	significant changes	in	circumstances	indicate	that	the	carrying	value	may	not	be	recoverable.	We	evaluate	the	recoverability	of	goodwill	at	a	reporting	unit	level.	We	have	16

reporting	units	subject	to	the	2008	annual	impairment	testing	that	are	either	entities	at	the	operating	segment	level	or	one	level	below	the	operating	segment	level.	Our annual	impairment	reviews	as	of	October	1,	2008	did	not	result	in	an	impairment	charge	at	any	of	our	reporting	units.	During	2008,	we	added	a	reporting	unit	due	to	a recent	acquisition	and	changed	the	structure	of	certain	reporting	units	due	to	the	creation	of	Mediabrands.	Besides	the	aforementioned	changes,	our	reporting	unit structure	has	not	changed	from	2007.

We	review	intangible	assets	with	definite	lives	subject	to	amortization	whenever	events	or	circumstances	indicate	that	a	carrying	amount	of	an	asset	may	not	be recoverable.	Intangible	assets	with	definite	lives	are	amortized	on	a	straight-line	basis	with	estimated	useful	lives	generally	between	7	and	15	years.	Events	or circumstances	that	might	require	impairment	testing	include	the	loss	of	a	significant	client,	the	identification	of	other	impaired	assets	within	a	reporting	unit,	loss	of	key personnel,	the	disposition	of	a	significant	portion	of	a	reporting	unit,	significant	decline	in	stock	price	or	a	significant	adverse	change	in	business	climate	or	regulations.

SFAS	No.	142,	Goodwill	and	Other	Intangible	Assets	("SFAS	142"),	specifies	a	two-step	process	for	goodwill	impairment	testing	and	measuring	the	magnitude	of any	impairment.	The	first	step	of	the	impairment	test	is	a	comparison	of	the	fair	value	of	a	reporting	unit	to	its	carrying	value,	including	goodwill.	The	sum	of	the	fair values	of	all	our	reporting	units	is	reconciled	to	our	current	market	capitalization	plus	an	estimated	control	premium.	Goodwill	allocated	to	a	reporting	unit	whose	fair value	is	equal	to	or	greater	than	its	carrying	value	is	not	impaired,	and	no	further	testing	is	required.	Should	the	carrying	amount	for	a	reporting	unit	exceed	its	fair	value, then	the	first	step	of	the	impairment	test	is	failed	and	the	magnitude	of	any	goodwill	impairment	is	determined	under	the	second	step,	which	is	a	comparison	of	the implied	fair	value	of	a	reporting	unit's	goodwill	to	its	carrying	value.	Goodwill	of	a	reporting	unit	is	impaired	when	its	carrying	value	exceeds	its	implied	fair	value. Impaired	goodwill	is	written	down	to	its	implied	fair	value	with	a	charge	to	expense	in	the	period	the	impairment	is	identified.

The	fair	value	of	a	reporting	unit	for	2008	was	estimated	using	the	income	approach,	which	incorporates	the	use	of	the	discounted	cash	flow	method.	In	prior years,	we	have	used	a	combination	of	the	income	approach	and	the	market	approach,	which	incorporates	the	use	of	earnings	and	revenue	multiples	based	on	market	data. However,	due	to	the	deterioration	and	extreme	volatility	of	the	credit	markets	in	the	latter	part	of	2008,	we	determined	that	the	market	approach	was	not	appropriate. Therefore,	we	used	only	the	income	approach	to	determine	the	fair	value	of	our	reporting	units	in	2008.	This	approach	uses	projections	which	require	the	use	of significant	estimates	and	assumptions	for	each	reporting	unit	as	to	matters	such	as	revenue	growth,	profit	margins,	terminal	value	growth	rates,	capital	expenditures, assumed	tax	rates	and	discount	rates.	These	estimates	and	assumptions	will	vary	between	each	reporting	unit	depending	on	the	facts	and	circumstances	specific	to	that unit.	The	discount	rate	for	each	reporting	unit	is	influenced	by	general	market	conditions	as	well	as	factors	specific	to	the	reporting	unit.	Our	discount	rates	used	for	our reporting	units	for	our	2008	annual	impairment	review	were	between	11%	and	15.5%.	We	believe	that	the	estimates	and	assumptions	made	are	reasonable,	but	they	are susceptible	to	change	from	period	to	period.	Actual	results	of	operations,	cash	flows	and	other	factors	will	likely	differ	from	the	estimates	used	in	a	discounted	cash	flow valuation	and	it	is	possible	that	differences	and	changes	could	be	material.

We	have	performed	a	sensitivity	analysis	to	detail	the	impact	that	changes	in	assumptions	may	have	on	the	outcome	of	the	first	step	of	the	impairment	test.	Our sensitivity	analysis	provides	a	range	of	value	for	each	reporting	unit	where	the	low	end	of	the	range	reduces	growth	rates	by	0.5%	and	increases	discount	rates	by	0.5% and	the	high	end	of	the	range	increases	growth	rates	by	0.5%	and	decreases	discount	rates	by	0.5%.	For	purposes	of	our	comparison	between	carrying	value	and	fair value	for	the	first	step	of	the	impairment	test	we	use	the	average	of	our	range	of	values.

The	following	table	shows	the	number	of	reporting	units	we	tested	in	our	2008	and	2007	annual	impairment	reviews	and	the	related	goodwill	value	associated with	the	reporting	units	at	the	low	end,	average	and	high	end	of

the	valuation	range	for	a)	fair	values	exceeding	carrying	values	by	less	than	10%,	b)	fair	values	between	10%	and	20%	above	carrying	value,	c)	fair	values	more	than 20%	above	carrying	value	and	d)	carrying	values	that	exceed	fair	value.

1 For	purposes	of	our	comparison	between	carrying	value	and	fair	value	for	the	first	step	of	the	impairment	test	we	used	the	average	of	our	range	of	values.

2 In	accordance	with	SFAS	142,	we	did	not	test	certain	reporting	units	in	2007	because	we	determined	we	could	carry	forward	the	fair	value	of	the	reporting	unit	from	the	last	test,	as	the	fair	value	significantly exceeded	the	book	value.

During	the	latter	part	of	the	fourth	quarter	of	2008	our	stock	price	declined	significantly	after	our	annual	impairment	review	date,	and	our	market	capitalization was	less	than	our	book	value	as	of	December	31,	2008.	We	considered	whether	there	were	any	events	or	circumstances	indicative	of	a	triggering	event	and	determined that	the	decline	in	our	stock	price	during	the	fourth	quarter	was	an	event	that	would	"more	likely	than	not"	reduce	the	fair	value	of	our	individual	reporting	units	below their	book	value,	requiring	us	to	perform	an	interim	impairment	test	for	goodwill	at	the	reporting	unit	level.	Based	on	the	interim	impairment	test	conducted,	we concluded	that	there	was	no	impairment	of	our	goodwill	as	of	December	31,	2008.	However,	current	economic	conditions	could	continue	or	worsen	in	2009	and	could alter	the	assumptions	we	made	with	respect	to	our	discounted	cash	flow	models	as	of	December	31,	2008.	Therefore,	we	will	continue	to	monitor	our	market capitalization	and	the	fair	values	of	our	individual	reporting	units	throughout	2009.

# Pension	and	Postretirement	Benefits

We	use	various	actuarial	assumptions	in	determining	our	net	pension	and	postretirement	benefit	costs	and	obligations.	These	assumptions	include	discount	rates and	expected	returns	on	plan	assets	and	are	updated	annually	or	more	frequently	with	the	occurrence	of	significant	events.

The	discount	rate	is	one	of	the	significant	assumptions	that	impacts	our	net	pension	and	postretirement	costs	and	obligations.	For	the	domestic	pension	and postretirement	benefit	plans,	we	determine	our	discount	rate	based	on	the	estimated	rate	at	which	annuity	contracts	could	be	purchased	to	effectively	settle	the	respective benefit	obligations.	To	assist	in	this	we	utilize	a	yield	curve	based	on	Moody's	Aa-rated	corporate	non-callable	bonds.	Each	plan's	projected	cash	flow	is	matched	to	this yield	curve	and	a	present	value	is	developed,	which	is	then	used	to	develop	a	single	equivalent	discount	rate.	For	the	foreign	pension	plans,	we	determine	a	discount	rate by	referencing	market	yields	on	high	quality	corporate	bonds	in	the	local	markets	with	the	appropriate	term	as	of	December	31,	2008.	For	2009,	we	plan	to	use	weighted average	discount	rates	of	6.01%,	5.38%	and	6.00%	for	the	domestic	pension	plans,	foreign	plans	and	the	postretirement	plan,	respectively.	Changes	in	the	discount	rates are	generally	due	to	increases	or	decreases	in	long-term	interest	rates.	A	higher	discount	rate	will	decrease	our	pension	cost.	A	25	basis	point	increase	or	decrease	in	the discount	rate	would	have	decreased	or	increased	the	2008	net	pension	and	postretirement	cost	by	$2.1	and	$2.2,	respectively.	In	addition,	a	25	basis	point	increase	or decrease	in	the	discount	rate	would	have	decreased	or	increased	the	December	31,	2008	benefit	obligation	by	$17.3	and	$18.0,	respectively.

The	expected	rate	of	return	on	pension	plan	assets	is	another	significant	assumption	that	impacts	our	net	pension	cost	and	is	determined	at	the	beginning	of	the year.	For	the	domestic	pension	plans,	our	expected	rate	of	return	considers	the	historical	trends	of	asset	class	index	returns	over	various	market	cycles	and	economic conditions,	current	market	conditions,	risk	premiums	associated	with	asset	classes	and	long-term	inflation	rates.	We	determine	both	a	short-term	and	long-term	view	and then	attempt	to	select	a	long-term	rate	of	return	assumption	that	matches	the	duration	of	our	liabilities.	For	the	foreign	pension	plans,	primarily	the	U.K.	Pension	Plan, we	determine	the	expected	rate	of	return	by	utilizing	a	weighted	average	approach	based	on	the	current	long-term	expected	rates	of	return	for	each	asset	category.	The long-term	expected	rate	of	return	for	the	equity	category	is	based	on	the	current	long-term	rates	of	return	available	on	government	bonds	and	applying	suitable	risk premiums	that	consider	historical	market	returns	and	current	market	expectations.	For	2009,	we	plan	to	use	weighted	average	expected	rates	of	return	of	8.16%	and 5.05%	for	the	domestic	and	foreign	pension	plans,	respectively.	Changes	in	the	rates	are	due	to	lower	or	higher	expected	future	returns	based	on	the	mix	of	assets	held.	A lower	expected	rate	of	return	will	increase	our	net	pension	cost.	A	25	basis	point	increase	or	decrease	in	the	expected	return	on	plan	assets	would	have	decreased	or increased	the	2008	net	pension	cost	by	$1.0.

# RESULTS	OF	OPERATIONS

# Consolidated	Results	of	Operations

# REVENUE

Our	revenue	is	directly	impacted	by	our	ability	to	win	new	clients	and	retain	existing	ones,	and	spending	levels	of	all	our	clients.	Our	revenue	is	also	subject	to fluctuations	related	to	seasonal	spending	by	our	clients.	Most	of	our	expenses	are	recognized	ratably	throughout	the	year	and	are	less	seasonal	than	revenue.	Our	revenue is	typically	lowest	in	the	first	quarter	and	highest	in	the	fourth	quarter.	This	reflects	the	seasonal	holiday	spending	of	our	clients,	incentives	earned	at	year-end	on	various contracts	and	project	work	completed	that	is	typically	recognized	during	the	fourth	quarter.	Additionally,	revenues	can	fluctuate	throughout	the	year	due	to	the	timing	of completed	projects	in	the	events	marketing	business,	as	revenue	is	typically	recognized	when	the

project	is	complete.	Furthermore,	we	generally	act	as	principal	for	these	projects	and	as	such	record	the	gross	amount	billed	to	the	client	as	revenue	and	the	related	costs incurred	as	pass-through	costs	in	office	and	general	expenses.

|  |  | Components	of	change | Components	of	change | Components	of	change |  | Change | Change |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Year\tended |  | Net |  | Year\tended |  |  |
|  | December\t31, | Foreign | acquisitions/ |  | December\t31, |  |  |
|  | 2007 | currency | (divestitures) | Organic | 2008 | Organic | Total |
| Consolidated | $6,554.2 | 71.5 | 87.6 | 249.4 | $6,962.7 | 3.8% | 6.2% |
| Domestic | 3,651.3 | — | 18.8 | 116.2 | 3,786.3 | 3.2% | 3.7% |
| International | 2,902.9 | 71.5 | 68.8 | 133.2 | 3,176.4 | 4.6% | 9.4% |
| United\tKingdom | 603.6 | (41.9) | 8.1 | 43.1 | 612.9 | 7.1% | 1.5% |
| Continental\tEurope | 1,070.2 | 81.4 | (19.5) | 18.3 | 1,150.4 | 1.7% | 7.5% |
| Asia\tPacific | 581.3 | 22.3 | 21.3 | 32.4 | 657.3 | 5.6% | 13.1% |
| Latin\tAmerica | 314.1 | 12.4 | (2.8) | 29.7 | 353.4 | 9.5% | 12.5% |
| Other | 333.7 | (2.7) | 61.7 | 9.7 | 402.4 | 2.9% | 20.6% |

During	2008	our	revenue	increased	by	$408.5,	consisting	of	organic	revenue	growth	of	$249.4,	led	by	the	technology	and	telecommunications	sector	and	the	retail sector.	The	domestic	organic	growth	was	primarily	driven	by	expanding	business	with	existing	clients	and	winning	new	clients	in	the	advertising,	media	and	public relations	businesses.	The	international	organic	increase	occurred	throughout	all	regions.	The	increase	in	the	United	Kingdom	was	primarily	due	to	the	completion	of several	projects	with	existing	clients	and	net	client	wins	in	the	events	marketing	business	and	winning	new	clients	in	the	advertising	business.	The	international	growth was	also	driven	by	increased	client	spending	and	net	client	wins	primarily	in	Brazil,	China	and	Spain.

The	deteriorating	economic	conditions	in	the	latter	part	of	2008	negatively	impacted	our	revenue	in	the	fourth	quarter	of	2008.	Our	revenue	decreased	by	4.1%	in the	fourth	quarter	of	2008	compared	to	the	fourth	quarter	of	2007,	which	reflects	an	organic	revenue	decrease	for	the	quarter	of	2.2%.	If	weak	global	economic conditions	persist	in	2009,	our	revenues	may	remain	under	pressure	across	many	of	our	service	offerings	and	client	sectors.

|  |  | Components	of	change | Components	of	change | Components	of	change |  | Change | Change |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Year\tended |  | Net |  | Year\tended |  |  |
|  | December\t31, | Foreign | acquisitions/ |  | December\t31, |  |  |
|  | 2006 | currency | (divestitures) | Organic | 2007 | Organic | Total |
| Consolidated | $6,190.8 | 197.5 | (70.7) | 236.6 | $6,554.2 | 3.8% | 5.9% |
| Domestic | 3,443.4 | — | (9.3) | 217.2 | 3,651.3 | 6.3% | 6.0% |
| International | 2,747.4 | 197.5 | (61.4) | 19.4 | 2,902.9 | 0.7% | 5.7% |
| United\tKingdom | 574.5 | 51.1 | (35.5) | 13.5 | 603.6 | 2.3% | 5.1% |
| Continental\tEurope | 1,034.1 | 94.4 | (24.0) | (34.3) | 1,070.2 | (3.3%) | 3.5% |
| Asia\tPacific | 512.0 | 25.7 | 12.5 | 31.1 | 581.3 | 6.1% | 13.5% |
| Latin\tAmerica | 303.4 | 18.4 | (10.6) | 2.9 | 314.1 | 1.0% | 3.5% |
| Other | 323.4 | 7.9 | (3.8) | 6.2 | 333.7 | 1.9% | 3.2% |

During	2007	our	revenue	increased	by	$363.4,	consisting	of	organic	revenue	growth	of	$236.6	and	favorable	foreign	currency	rate	impact	of	$197.5.	The	domestic organic	growth	was	primarily	driven	through	expanding	business	with	existing	clients,	winning	new	clients	in	advertising	and	public	relations	and	completing	several projects	within	the	events	marketing	business.	The	international	organic	revenue	increase	was	primarily	driven	by	increases	in	spending	by	existing	clients	in	the	Asia Pacific	region,	partially	offset	by	net	client	losses	in	Continental	Europe,	primarily	in	France.

Refer	to	the	segment	discussion	later	in	this	MD&A	for	information	on	changes	in	revenue	by	segment.

# OPERATING	EXPENSES

|  | 2008 | 2008 | 2007 | 2007 | 2006 | 2006 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | %\tof | %\tof | %\tof | %\tof | %\tof | %\tof |
|  | $Revenue | $Revenue | $Revenue | $Revenue | $Revenue | $Revenue |
| Salaries\tand\trelated\texpenses | $4,342.6 | 62.4% | $4,139.2 | 63.2% | $3,944.1 | 63.7% |
| Office\tand\tgeneral\texpenses | \t 2,013.3 | 28.9% | \t 2,044.8 | 31.2% | \t 2,079.0 | 33.6% |
| Restructuring\tand\tother\treorganization-\trelated\tcharges | 17.1 |  | 25.9 |  | 34.5 |  |
| Long-lived\tasset\timpairment\tand\tother\tcharges | — |  | — |  | 27.2 |  |
| Total\toperating\texpenses | $6,373.0 |  | $6,209.9 |  | $6,084.8 |  |

Total	operating	expenses	decreased	as	a	percentage	of	revenue	in	2008	when	compared	to	2007.	We	consider	the	change	in	operating	expenses	as	a	percentage	of revenue,	which	we	refer	to	as	operating	expense	leverage,	to	be	a	key	performance	metric.

Our	staff	cost	ratio,	defined	as	salaries	and	related	expenses	as	a	percentage	of	revenue,	declined	to	62.4%	in	2008	from	63.2%	in	2007.	The	improvement	was driven	by	higher	revenues	and	better	utilization	of	base	salaries	and	benefits	expenses.	Our	office	and	general	expense	ratio,	defined	as	office	and	general	expenses	as	a percentage	of	revenue,	declined	to	28.9%	in	2008	from	31.2%	in	2007.	This	improvement	was	also	driven	by	higher	revenue	and	by	a	reduction	in	key	expense categories,	primarily	professional	fees.

# Salaries	and	Related	Expenses

Salaries	and	related	expenses	consist	of	payroll	costs,	employee	performance	incentives,	including	cash	bonus	and	long-term	incentive	stock	awards,	and	other benefits	associated	with	client	service	professional	staff	and	administrative	staff.	Salaries	and	related	expenses	do	not	vary	significantly	with	short-term	changes	in revenue	levels.	However,	salaries	may	fluctuate	due	to	the	timing	of	hiring	freelance	contractors	who	are	utilized	to	support	business	development,	changes	in	the performance	levels	and	types	of	employee	incentive	awards,	changes	in	foreign	currency	exchange	rates	and	acquisitions	and	dispositions	of	businesses.	Changes	in	our incentive	awards	mix	can	impact	future	period	expense	as	bonus	awards	are	expensed	during	the	year	they	are	earned	and	long-term	incentive	stock	awards	are	expensed over	the	performance	period,	generally	three	years.	Other	factors	impacting	the	expense	associated	with	long-term	incentive	awards	are	the	actual	number	of	awards vesting	and	the	change	in	our	stock	price.	Additionally,	changes	can	occur	based	on	projected	results	and	could	impact	trends	between	periods	in	the	future.

|  |  | Components	of	change	during | Components	of	change	during |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | the\tyear |  |  | Change | Change |
|  |  |  | Net |  |  |  |  |
|  | Prior\tyear | Foreign | acquisitions/ |  | Total |  |  |
|  | amount | currency | (divestitures) | Organic | amount | Organic | Total |
| 2008 | $4,139.2 | 40.8 | 59.4 | 103.2 | $4,342.6 | 2.5% | 4.9% |
| 2007 | 3,944.1 | 122.2 | (32.5) | 105.4 | \t 4,139.2 | 2.7% | 4.9% |

The	following	table	details	our	salary	and	related	expenses	as	a	percentage	of	consolidated	revenue.

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| Base\tsalaries,\tbenefits\tand\ttax | 51.6% | 51.9% | 52.3% |
| Incentive\texpense | 3.4% | 3.7% | 3.3% |
| Severance\texpense | 1.3% | 1.2% | 1.6% |
| Temporary\thelp | 3.1% | 3.5% | 3.6% |
| All\tother\tsalaries\tand\trelated\texpenses | 3.0% | 2.9% | 2.9% |

Salaries	and	related	expenses	in	2008	increased	by	$203.4,	compared	to	2007,	consisting	of	an	organic	salary	increase	of	$103.2,	net	acquisitions	of	$59.4	and	an adverse	foreign	currency	rate	impact	of	$40.8.	The	organic	increase	was	primarily	to	support	business	growth	(an	organic	revenue	increase	of	$249.4)	during	2008, resulting	in	higher	base	salaries,	benefits	and	temporary	help	of	$100.4,	predominantly	at	our	largest	networks.	There	was	no	significant	change	in	incentive	award expense	compared	to	the	prior	year	as	stock-based	compensation	expense	was	unchanged,	and	annual	bonus	award	expense	decreased	by	$15.1.

As	economic	conditions	deteriorated	in	the	latter	part	of	2008,	we	took	measures	to	realign	our	businesses,	resulting	in	severance	charges	of	$48.4	in	the	fourth quarter,	which	was	an	increase	of	$16.4	over	the	comparable	prior	year	period.	These	expenses	were	spread	across	multiple	business	units	and	geographic	regions.

Salaries	and	related	expenses	in	2007	increased	by	$195.1,	compared	to	2006,	consisting	of	an	adverse	foreign	currency	rate	impact	of	$122.2	and	an	organic salary	increase	of	$105.4.	The	organic	increase	was	primarily	to	support	business	growth	(an	organic	revenue	increase	of	$236.6)	resulting	in	higher	base	salaries, benefits	and	temporary	help	of	$99.1,	predominantly	at	our	largest	networks.	Additionally,	incentive	awards	increased	by	$31.7,	primarily	due	to	improved	operating performance	versus	financial	targets	at	certain	operating	units,	higher	stock-based	compensation	awards	due	to	the	effect	of	equity	awards	granted	in	June	2006	and	a one-time	performance-based	equity	award	granted	in	2006	to	a	limited	number	of	senior	executives	across	the	Company.	These	increases	were	offset	by	a	decrease	in severance	expense	of	$22.4.

# Office	and	General	Expenses

Office	and	general	expenses	primarily	include	rent	expense,	professional	fees,	certain	expenses	incurred	by	our	staff	in	servicing	our	clients	and	depreciation	and amortization	costs.	Office	and	general	expenses	also	include	costs	directly	attributable	to	client	engagements,	including	production	costs,	out-of-pocket	costs	such	as travel	for	client	service	staff,	and	other	direct	costs	that	are	rebilled	to	our	clients.	Production	expenses	can	vary	significantly	between	periods	depending	upon	the	timing of	completion	of	certain	projects	where	we	act	as	principal,	which	could	impact	trends	between	various	periods	in	the	future.

|  |  | Components	of	change	during | Components	of	change	during |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | the\tyear |  |  | Change | Change |
|  |  |  | Net |  |  |  |  |
|  | Prior\tyear | Foreign | acquisitions/ |  | Total |  |  |
|  | amount | currency | (divestitures) | Organic | amount | Organic | Total |
| 2008 | $2,044.8 | 16.5 | 5.7 | (53.7) | $2,013.3 | (2.6%) | (1.5%) |
| 2007 | 2,079.0 | 66.0 | (43.8) | (56.4) | \t 2,044.8 | (2.7%) | (1.6%) |

The	following	table	details	our	office	and	general	expenses	as	a	percentage	of	consolidated	revenue.	All	other	office	and	general	expenses	primarily	include production	expenses	and	to	a	smaller	extent	depreciation	and	amortization,	bad	debt	expense,	foreign	currency	gains	(losses)	and	other	expenses.

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| Professional\tfees | 2.0% | 2.5% | 3.9% |
| Occupancy\texpense\t(excluding\tdepreciation\tand\tamortization) | 7.6% | 8.1% | 8.6% |
| Travel\t&amp;\tentertainment,\toffice\tsupplies\tand\ttelecom | 4.3% | 4.7% | 4.8% |
| All\tother\toffice\tand\tgeneral\texpenses | 15.0% | 15.9% | 16.3% |

Office	and	general	expenses	in	2008	decreased	by	$31.5	compared	to	2007,	including	an	organic	decrease	of	$53.7.	The	organic	improvement	was	primarily	due to	reductions	in	professional	fees,	occupancy	costs,	depreciation	and	amortization	as	well	as	a	higher	focus	on	managing	discretionary	expenses.	The	organic	decrease	in professional	fees	of	$29.0	was	primarily	due	to	reduced	legal	consultations	as	a	result	of	the	resolution	of	the	SEC	investigation	and	further	improvements	in	our financial	systems,	back	office	processes	and	internal	controls.	Occupancy	costs	and	depreciation	and	amortization	declined	and	there	were	favorable	foreign	currency changes	on	certain	balance	sheet	items	in	2008	when	compared	to	2007.	These	decreases	were	partially	offset	by	an	increase	in	production	expenses	of	$33.6	related	to higher	pass-through	costs	for	certain	projects	where	we	act	as	principal	and	an	increase	in	bad	debt	expense	related	to	collection	concerns	for	certain	clients.

Office	and	general	expenses	in	2007	decreased	by	$34.2	compared	to	2006,	consisting	of	an	organic	decrease	of	$56.4	and	net	divestitures	of	$43.8,	partially offset	by	an	adverse	foreign	currency	rate	impact	of	$66.0.	The	organic	decrease	was	primarily	due	to	improvements	in	our	financial	systems,	back-office	processes	and internal	controls	we	made	throughout	2007	that	resulted	in	a	reduction	in	professional	fees	of	$75.8.	Additionally,	occupancy	costs,	including	depreciation	and amortization,	declined	by	$13.6.	These	decreases	were	partially	offset	by	an	increase	in	production	expenses	of	$34.2	related	to	pass-through	costs	for	certain	projects where	we	acted	as	principal	during	2007.

# Restructuring	and	Other	Reorganization-Related	Charges

The	components	of	restructuring	and	other	reorganization-related	charges	were	as	follows:

|  | Years	ended	December	31, | Years	ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | \t\t2008 | \t\t2007 | \t\t2006 |
| Restructuring\tcharges: |  |  |  |
| Lease\ttermination\tand\tother\texit\tcosts | $5.2 | $(0.4) | $1.5 |
| Severance\tand\ttermination\tcosts | 0.6 | 13.8 | — |
|  | 5.8 | 13.4 | 1.5 |
| Other\treorganization-related\tcharges | 11.3 | 12.5 | 33.0 |
| Total | $17.1 | $25.9 | $34.5 |

Restructuring	charges	relate	to	the	2003	and	2001	restructuring	programs	and	a	restructuring	program	entered	into	at	Lowe	Worldwide	("Lowe")	during	the	third quarter	of	2007.	Included	in	these	net	charges	are	adjustments	primarily	resulting	from	severance	and	termination	costs	and	accelerated	leasehold	amortization	for	the 2007	program	at	Lowe	and	changes	in	management's	estimates	relating	to	sublease	rental	income	assumptions	and	prior	severance	and	termination	related	actions.

Other	reorganization-related	charges	relate	to	our	realignment	of	our	media	businesses	into	a	newly	created	management	entity	called	Mediabrands	and	the	2006 merger	of	Draft	Worldwide	and	Foote,	Cone	and	Belding	Worldwide	to	create	Draftfcb.	Charges	relate	to	severance	and	terminations	costs	and	lease	termination	and other	exit	costs.	We	expect	charges	associated	with	Mediabrands	to	be	completed	during	the	first	half	of	2009.	Charges	related	to	the	creation	of	Draftfcb	in	2006	are complete.	The	charges	were	separated	from	the	rest	of	our	operating	expenses	within	the	Consolidated	Statements	of	Operations	because	they	did	not	result	from	charges that	occurred	in	the	normal	course	of	business.

# Long-Lived	Asset	Impairment	and	Other	Charges

During	our	annual	impairment	review	as	of	October	1,	2006,	our	discounted	future	operating	cash	flow	projections	at	one	of	our	domestic	advertising	reporting units	indicated	that	the	implied	fair	value	of	the	goodwill	at	this	reporting	unit	was	less	than	its	book	value,	primarily	due	to	client	losses.	As	a	result,	we	recorded	a goodwill	impairment	charge	of	$27.2	in	2006	in	our	IAN	segment.

# EXPENSES	AND	OTHER	INCOME

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| Cash\tinterest\ton\tdebt\tobligations | $(183.2) | $(205.9) | $(186.9) |
| Non-cash\tamortization | (28.7) | (30.8) | (31.8) |
| Interest\texpense | (211.9) | (236.7) | (218.7) |
| Interest\tincome | 90.6 | 119.6 | 113.3 |
| Net\tinterest\texpense | (121.3) | (117.1) | (105.4) |
| Other\tincome\t(expense) | 3.1 | 8.5 | (5.6) |
| Total | $(118.2) | $(108.6) | $(111.0) |

# Net	Interest	Expense

For	2008	as	compared	to	2007,	cash	interest	expense	decreased	primarily	due	to	the	repurchase	of	the	majority	of	the	4.50%	Convertible	Senior	Notes	in	the	first quarter	of	2008,	lower	interest	rates	paid	on	the	Floating	Rate	Senior	Unsecured	Notes,	lower	short-term	debt	balances	and	lower	interest	rates	at	our	international agencies.	Interest	income	decreased	due	to	more	conservative	investment	strategies	in	the	U.S.	compared	to	the	prior	year	and	lower	interest	rates	in	the	U.S.	For	2007	as compared	to	2006,	cash	interest	expense	increased	due	to	higher	short-term	debt	balances,	and	interest	income	increased	due	to	higher	average	cash	balances	and	higher interest	rates	at	some	of	our	international	agencies.

Non-cash	amortization	expense	primarily	consists	of	amortization	of	debt	issuance	costs	and	deferred	warrant	costs	in	connection	with	our	2006	committed	credit agreement	that	expires	in	June	2009,	and	as	a	result,	non-cash	amortization	expense	is	expected	to	decrease	in	2009.	Additionally,	non-cash	amortization	is	offset primarily	by	the	amortization	of	the	loss	on	extinguishment	of	$400.0	of	our	4.50%	Convertible	Senior	Notes	in	2006.

# Other	Income	(Expense)

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| Loss\ton\tearly\textinguishment\tof\tdebt | $— | $(12.5) | $(80.8) |
| (Losses)\tgains\ton\tsales\tof\tbusinesses\tand\tinvestments | (3.1) | (9.4) | 44.2 |
| Vendor\tdiscount\tand\tcredit\tadjustments | 20.7 | 24.3 | 28.2 |
| Litigation\tsettlement | (12.0) | 2.8 | — |
| Investment\timpairments | (2.9) | (6.2) | (0.3) |
| Other\tincome | 0.4 | 9.5 | 3.1 |
| Total | $3.1 | $8.5 | $(5.6) |

Loss	on	Early	Extinguishment	of	Debt	—	Non-cash	charges	related	to	the	extinguishment	of	$200.0	of	our	4.50%	Convertible	Senior	Notes	in	2007	and	$400.0	of our	4.50%	Convertible	Senior	Notes	in	2006.	For	additional	information,	see	Note	8	to	the	Consolidated	Financial	Statements.

Sale	of	Businesses	and	Investments	—	Primarily	includes	realized	gains	and	losses	relating	to	the	sales	of	businesses,	cumulative	translation	adjustment	balances from	the	liquidation	of	entities,	and	sales	of	marketable	securities	and	investments	in	publicly	traded	and	privately	held	companies	in	our	Rabbi	Trusts.	Losses	in	2007 primarily	related	to	the	sale	of	several	businesses	within	Draftfcb	for	a	loss	of	$9.3	and	charges	at	Lowe	of	$7.8	as	a	result	of	the	realization	of	cumulative	translation adjustment	balances	from	the	liquidation	of	several	businesses.	Gains	in	2006	primarily	related	to	a	net	gain	of	$20.9	from	the	sale	of	an	investment	located	in	Asia Pacific	and	the	sale	of	our	remaining	ownership	interest	in	an	agency	within	Lowe.	We	also	sold	our	interest	in	a	German	advertising	agency	and	recognized	its remaining	cumulative	translation	adjustment	balance,	which	resulted	in	a	non-cash	benefit	of	$17.0.

Vendor	Discount	and	Credit	Adjustments	—	We	are	in	the	process	of	settling	our	liabilities	related	to	vendor	discounts	and	credits	established	during	the	2004 Restatement.	Amounts	included	in	other	income	(expense)	reflect	the	reversal	of	certain	of	these	liabilities	as	a	result	of	settlements	with	clients	or	vendors	or	where	the statute	of	limitations	has	lapsed.	For	additional	information	see	Note	5	to	the	Consolidated	Financial	Statements.

Litigation	Settlement	—	During	May	2008,	the	SEC	concluded	its	investigation	that	began	in	2002	into	our	financial	reporting	practices,	resulting	in	a	settlement charge	of	$12.0.

Investment	Impairments	—	In	2007	we	realized	an	other-than-temporary	charge	of	$5.8	relating	to	a	$12.5	investment	in	auction	rate	securities,	representing	our total	investment	in	auction	rate	securities.	For	additional	information,	see	Note	15	to	the	Consolidated	Financial	Statements.

|  | Years	ended	December	31, | Years	ended	December	31, | Years	ended	December	31, |
| :--- | :--- | :--- | :--- |
|  | 2008 | 2007 | 2006 |
| Income\t(loss)\tfrom\tcontinuing\toperations\tbefore\tprovision\tfor\tincome\ttaxes | $471.5 | $235.7 | $(5.0) |
| Provision\tfor\tincome\ttaxes\t—\tcontinuing\toperations | $156.6 | $58.9 | $18.7 |
| Benefit\tof\tincome\ttaxes\t—\tdiscontinued\toperations | — | — | (5.0) |
| Total\tprovision\tfor\tincome\ttaxes | $156.6 | $58.9 | $13.7 |

In	2008,	our	effective	tax	rate	was	negatively	impacted	by	losses	in	certain	foreign	locations	where	we	receive	no	tax	benefit	due	to	100%	valuation	allowances, the	non-deductible	SEC	settlement	provision	and	additional	net	tax	reserves	for	uncertain	tax	positions.	Our	effective	tax	rate	was	positively	impacted	in	2008	by	the utilization	of	tax	loss	carryforwards	against	taxable	profits	and	by	the	net	reversal	of	certain	valuation	allowances	in	jurisdictions	where	entities	have	demonstrated	a sustained	period	of	profitability	and	future	projections	indicate	that	the	trend	will	continue.	Additionally,	we	recognized	tax	benefits	from	tax	law	and	other	changes	in certain	U.S.	states,	which	impacted	the	effective	tax	rate.

During	2008,	we	recorded	a	net	reversal	of	valuation	allowances	of	$48.0	relating	to	deferred	tax	assets	in	jurisdictions	where	the	available	evidence	was sufficiently	positive	for	us	to	believe	that	it	is	now	more	likely	than	not	that	the	corresponding	tax	loss	carryforward	will	be	utilized.	We	believe	we	have	appropriately considered	the	current	economic	climate	in	relying	on	the	level	of	projected	taxable	income.	During	2007	and	2006,	we	had	net	reversals	in	our	valuation	allowances	of $22.3	and	$29.6,	respectively,	on	existing	deferred	tax	assets.

The	tax	provision	for	2007	was	primarily	impacted	by	the	effective	settlement	of	the	IRS	examination	for	2003	and	2004	which	resulted	in	the	realization	of previously	unrecognized	tax	benefits,	of	which	approximately	$80.0	was	attributable	to	certain	worthless	securities	deductions.	The	favorable	impact	of	this	item	and other	net	reserve	releases	are	primary	reasons	for	the	change	in	the	effective	tax	rate	compared	to	2006.	The	tax	provision	for	2007	was	also	impacted	by	foreign	profits subject	to	tax	at	different	rates	and	losses	in	certain	foreign	locations	where	we	receive	no	tax	benefit	due	to	100%	valuation	allowances.

The	tax	provision	for	2006	was	primarily	impacted	by	domestic	losses,	foreign	profits	subject	to	tax	at	different	rates	and	losses	in	certain	foreign	locations	where we	receive	no	tax	benefit	due	to	100%	valuation	allowances.

For	additional	information	see	Note	7	to	the	Consolidated	Financial	Statements.

# Segment	Results	of	Operations

As	discussed	in	Note	14	to	the	Consolidated	Financial	Statements,	we	have	two	reportable	segments	as	of	December	31,	2008:	Integrated	Agency	Networks ("IAN")	and	Constituency	Management	Group	("CMG").	We	also	report	results	for	the	Corporate	and	other	group.

|  |  | Components	of	change | Components	of	change | Components	of	change |  | Change | Change |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Year\tended |  | Net |  | Year\tended |  |  |
|  | December\t31, | Foreign | acquisitions/ |  | December\t31, |  |  |
|  | 2007 | currency | (divestitures) | Organic | 2008 | Organic | Total |
| Consolidated | $5,505.7 | 70.8 | 109.4 | 184.8 | $5,870.7 | 3.4% | 6.6% |
| Domestic | 2,972.1 | — | 18.8 | 84.5 | 3,075.4 | 2.8% | 3.5% |
| International | 2,533.6 | 70.8 | 90.6 | 100.3 | 2,795.3 | 4.0% | 10.3% |

During	2008	our	revenue	increased	by	$365.0,	consisting	of	organic	growth	of	$184.8,	led	by	the	technology	and	telecommunications	sector	as	well	as	the	retail sector.	The	domestic	organic	revenue	increase	was	primarily	a	result	of	higher	revenues	with	existing	clients	and	net	client	wins,	primarily	at	McCann	and	Mediabrands.

Partially	offsetting	this	domestic	organic	increase	was	decreased	revenue	from	Lowe	and	certain	independent	agencies	that	are	largely	dependent	on	the	automobile sector	due	to	lower	revenues	with	existing	clients	and	net	client	losses.	The	international	organic	revenue	increase	occurred	throughout	all	regions.	McCann's	revenue increased	due	to	higher	revenue	from	existing	clients	in	the	Continental	Europe	region	and	net	client	wins	and	higher	revenue	from	existing	clients	in	the	Asia	Pacific region,	primarily	in	China.	Lowe's	revenue	increase	was	primarily	due	to	higher	revenue	from	existing	clients	and	net	client	wins	predominantly	in	the	Asia	Pacific,	the United	Kingdom	and	Continental	Europe	regions,	primarily	in	Spain	and	France.	Mediabrands	contributed	to	the	revenue	increase	in	the	Continental	Europe	region, primarily	in	Spain.	Draftfcb's	revenue	increased	in	Latin	America	due	to	higher	revenues	with	existing	clients	primarily	in	Brazil.

|  |  | Components	of	change | Components	of	change | Components	of	change |  | Change | Change |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Year\tended |  | Net |  | Year\tended |  |  |
|  | December\t31, | Foreign | acquisitions/ |  | December\t31, |  |  |
|  | 2006 | currency | (divestitures) | Organic | 2007 | Organic | Total |
| Consolidated | $5,230.6 | 170.3 | (45.5) | 150.3 | $5,505.7 | 2.9% | 5.3% |
| Domestic | 2,842.2 | — | (9.3) | 139.2 | 2,972.1 | 4.9% | 4.6% |
| International | 2,388.4 | 170.3 | (36.2) | 11.1 | 2,533.6 | 0.5% | 6.1% |

During	2007	our	revenue	increased	by	$275.1,	consisting	of	a	favorable	foreign	currency	impact	of	$170.3	and	organic	revenue	growth	of	$150.3.	The	domestic organic	revenue	increase	was	a	result	of	higher	revenue	from	existing	clients	and	net	client	wins,	primarily	at	McCann	and	Hill	Holliday.	Partially	offsetting	this domestic	organic	increase	was	decreased	revenue	from	existing	clients	at	Lowe	and	net	client	losses	at	Draftfcb.	The	international	organic	revenue	increase	occurred primarily	throughout	the	United	Kingdom	and	Asia	Pacific	regions	driven	by	increases	in	client	spending	at	McCann,	partially	offset	by	net	client	losses	at	Draftfcb	and Lowe	across	most	international	regions.

# SEGMENT	OPERATING	INCOME

|  | Years	ended	December	31, | Years	ended	December	31, | Years	ended	December	31, | Change | Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2008 | 2007 | 2006 | '08\tvs\t'07 | '07\tvs\t'06 |
| Segment\toperating\tincome | $690.8 | $528.2 | $391.4 | 30.8% | 35.0% |
| Operating\tmargin | 11.8% | 9.6% | 7.5% |  |  |

Operating	income	increased	during	2008	due	to	an	increase	in	revenue	of	$365.0,	and	decreased	office	and	general	expenses	of	$15.1,	partially	offset	by	increases in	salaries	and	related	expenses	of	$217.5.	The	decrease	in	office	and	general	expenses	was	due	to	lower	internal	expense	allocations	from	corporate,	favorable	foreign currency	changes	on	certain	balance	sheet	items	in	2008	and	lower	production	expenses.	The	decrease	in	office	and	general	expenses	is	partially	offset	by	increased	bad debt	expense	and	higher	amortization	of	intangibles	primarily	related	to	acquisitions	made	in	2008.	Higher	salaries	and	related	expenses	were	primarily	due	to	an increase	in	base	salaries,	benefits	and	temporary	help	of	$183.1	to	support	growth	in	2008,	primarily	at	McCann	and	Mediabrands.

Operating	income	increased	during	2007	due	to	an	increase	in	revenue	of	$275.1,	partially	offset	by	increases	in	salaries	and	related	expenses	of	$122.9	and	office and	general	expenses	of	$15.4.	Higher	salaries	and	related	expenses	were	due	to	an	increase	in	base	salaries,	benefits	and	temporary	help	of	$131.2	to	support	growth, primarily	at	McCann.	Higher	office	and	general	expenses	were	due	to	increases	in	shared	service	expenses	which	were	not	allocated	in	prior	years	and	the	increased allocation	of	technology	expenses	from	Corporate,	partially	offset	by	lower	occupancy	costs,	primarily	due	to	lease	termination	and	other	exit	costs	related	to	facilities exited	in	2006.

|  |  | Components	of	change | Components	of	change | Components	of	change |  | Change | Change |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Year\tended |  | Net |  | Year\tended |  |  |
|  | December\t31, | Foreign | acquisitions/ |  | December\t31, |  |  |
|  | 2007 | currency | (divestitures) | Organic | 2008 | Organic | Total |
| Consolidated | $1,048.5 | 0.7 | (21.8) | 64.6 | $1,092.0 | 6.2% | 4.1% |
| Domestic | 679.2 | — | — | 31.7 | 710.9 | 4.7% | 4.7% |
| International | 369.3 | 0.7 | (21.8) | 32.9 | 381.1 | 8.9% | 3.2% |

During	2008	revenue	increased	by	$43.5	due	to	organic	revenue	growth	of	$64.6,	led	by	public	relations,	which	covers	a	broad	range	of	services	and	client	sectors. The	domestic	organic	revenue	increase	was	primarily	due	to	net	client	wins	and	increased	spending	from	existing	clients	in	the	public	relations	business.	The international	organic	revenue	increase	was	primarily	from	the	completion	of	several	projects	with	existing	clients	and	net	client	wins	in	the	events	marketing	business	in the	United	Kingdom.	Revenues	in	the	events	marketing	business	can	fluctuate	due	to	timing	of	completed	projects	where	we	act	as	principal,	as	revenue	is	typically recognized	when	the	project	is	complete.

|  |  | Components	of	change | Components	of	change | Components	of	change |  | Change | Change |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Year\tended |  | Net |  | Year\tended |  |  |
|  | December\t31, | Foreign | acquisitions/ |  | December\t31, |  |  |
|  | 2006 | currency | (divestitures) | Organic | 2007 | Organic | Total |
| Consolidated | $960.2 | 27.2 | (25.2) | 86.3 | $1,048.5 | 9.0% | 9.2% |
| Domestic | 601.2 | — | — | 78.0 | 679.2 | 13.0% | 13.0% |
| International | 359.0 | 27.2 | (25.2) | 8.3 | 369.3 | 2.3% | 2.9% |

During	2007	revenue	increased	by	$88.3,	due	to	organic	growth	of	$86.3.	The	domestic	organic	revenue	increase	was	primarily	due	to	client	wins	and	expanding business	with	existing	clients	in	the	public	relations	business,	the	completion	of	several	projects	with	existing	clients	in	the	events	marketing	business	and	expanding business	with	existing	clients	in	the	sports	marketing	business.	The	international	organic	revenue	increase	in	the	Europe	and	Asia	Pacific	regions	was	primarily	from existing	clients	in	the	public	relations	business.	The	international	revenue	increase	was	partially	offset	by	decreased	revenues	from	existing	clients	in	Europe	primarily due	to	project-based	events	in	2006	that	did	not	recur	in	2007	related	to	the	sports	marketing	business.

|  | Years	ended	December	31, | Years	ended	December	31, | Years	ended	December	31, | Change | Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | \t\t2008 | \t\t2007 | \t\t2006 | '08\tvs\t'07 | '07\tvs\t'06 |
| Segment\toperating\tincome | $86.6 | $57.9 | $51.6 | 49.6% | 12.2% |
| Operating\tmargin | 7.9% | 5.5% | 5.4% |  |  |

Operating	income	increased	during	2008	due	to	an	increase	in	revenue	of	$43.5	and	decreased	office	and	general	expenses	of	$9.1,	partially	offset	by	increased salaries	and	related	expenses	of	$23.9.	Office	and	general	expenses	decreased	primarily	due	to	lower	occupancy	costs,	as	a	result	of	lease	termination	and	other	exit	costs related	to	facilities	exited	in	2007	and	due	to	favorable	foreign	currency	changes	on	certain	balance	sheet	items	in	2008	when	compared	to	2007,	partially	offset	by	higher production	expenses	related	to	several	projects	with	new	and	existing	clients	in	the	events	marketing	business.	Salaries	and	related	expenses	increased	primarily	due	to	an 31

increase	in	base	salaries,	benefits	and	temporary	help	of	$17.8	related	to	the	events	marketing	and	public	relations	businesses	to	support	revenue	growth.

Operating	income	increased	during	2007	due	to	an	increase	in	revenue	of	$88.3,	partially	offset	by	increases	in	office	and	general	expenses	of	$46.1	and	salaries and	related	expenses	of	$35.9.	Salaries	and	related	expenses	increased	primarily	due	to	an	increase	in	base	salaries,	benefits	and	temporary	help	of	$28.4	to	support revenue	growth.	Office	and	general	expenses	increased	primarily	due	to	higher	production	expenses	of	$32.0	related	to	the	completion	of	several	projects	in	the	events marketing	business	and	higher	occupancy	costs,	primarily	due	to	lease	termination	charges	and	accelerated	depreciation	and	amortization	related	to	certain	leasehold improvements	in	facilities	exited	in	2007.

# CORPORATE	AND	OTHER

Certain	corporate	and	other	charges	are	reported	as	a	separate	line	item	within	total	segment	operating	income	and	include	corporate	office	expenses	and	shared service	center	expenses,	as	well	as	certain	other	centrally	managed	expenses	that	are	not	fully	allocated	to	operating	divisions.	Salaries	and	related	expenses	include salaries,	long-term	incentives,	bonus,	and	other	miscellaneous	benefits	for	corporate	office	employees.	Office	and	general	expenses	primarily	include	professional	fees related	to	internal	control	compliance,	financial	statement	audits,	legal,	information	technology	and	other	consulting	services,	which	are	engaged	and	managed	through the	corporate	office.	In	addition,	office	and	general	expenses	also	include	rental	expense	and	depreciation	of	leasehold	improvements	for	properties	occupied	by corporate	office	employees.	A	portion	of	these	expenses	are	allocated	to	operating	divisions	based	on	a	formula	that	uses	the	revenues	of	each	of	the	operating	units. Amounts	allocated	also	include	specific	charges	for	information	technology-related	projects,	which	are	allocated	based	on	utilization.	Allocation	methodologies	are consistent	with	prior	years.

Corporate	and	other	expenses	decreased	during	2008	by	$45.3	to	$170.6.	This	was	primarily	due	to	lower	professional	fees,	partially	offset	by	the	impact	of unfavorable	foreign	currency	changes	on	certain	balance	sheet	items	when	compared	to	2007.	Lower	professional	fees	were	primarily	due	to	improvements	in	our financial	systems,	back	office	processes	and	internal	controls	as	well	as	reduced	legal	consultations	associated	with	the	resolution	of	our	SEC	investigation	and	other financial	matters.	In	addition,	base	salaries,	benefits	and	temporary	help	decreased	due	to	lower	headcount	and	reduced	technology	projects.	As	a	result,	we	had	lower internal	expenses	allocated	to	our	operating	divisions.

Corporate	and	other	expenses	decreased	during	2007	by	$59.4	to	$215.9.	This	was	primarily	driven	by	improvements	in	our	financial	systems,	back-office processes	and	internal	controls,	which	resulted	in	a	reduction	in	professional	fees.	Partially	offsetting	this	reduction	were	higher	salaries	and	related	expenses,	primarily related	to	long-term	incentive	award	accruals	for	a	one-time	performance-based	equity	award	granted	in	2006	to	a	limited	number	of	senior	executives	across	the Company	and	the	transfer	of	resources	into	a	global	finance	organization	as	part	of	a	regional	monitoring	program.	In	addition,	amounts	allocated	to	operating	divisions increased	primarily	due	to	the	charging	of	shared	services	expenses	that	were	not	previously	allocated	as	well	as	for	costs	relating	to	the	consolidation	of	certain	global processes	into	our	shared	service	center.

# LIQUIDITY	AND	CAPITAL	RESOURCES

# CASH	FLOW	OVERVIEW

The	following	tables	summarize	key	financial	data	relating	to	our	liquidity,	capital	resources	and	uses	of	capital:

| Cash	Flow	Data | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| Net\tcash\tprovided\tby\toperating\tactivities | $865.3 | $298.1 | $9.0 |
| Net\tcash\t(used\tin)\tprovided\tby\tinvesting\tactivities | (404.3) | (267.8) | 11.6 |
| Net\tcash\tused\tin\tfinancing\tactivities | (275.8) | (37.3) | (129.7) |
| Working\tcapital\tsource\t(usage)\t(included\tin\toperating\tactivities) | $193.5 | $(171.0) | $ (250.6) |

|  | December	31, | December	31, |
| :--- | :--- | :--- |
| Balance\tSheet\tData | 2008 | 2007 |
| Cash,\tcash\tequivalents\tand\tmarketable\tsecurities | $2,274.9 | $2,037.4 |
| Short-term\tdebt | $332.8 | $305.1 |
| Long-term\tdebt | 1,786.9 | 2,044.1 |
| Total\tdebt | $2,119.7 | $2,349.2 |

Cash,	cash	equivalents	and	marketable	securities	increased	by	$237.5	during	2008,	even	after	the	repurchase	of	approximately	$191.0	of	our	4.50%	Notes	during March.	A	component	of	this	change	was	an	increase	in	marketable	securities	of	$145.2,	primarily	due	to	the	purchase	of	a	time	deposit	with	a	maturity	greater	than ninety	days.

# Operating	Activities

Cash	provided	by	operating	activities	of	$865.3	for	2008	reflects	a	significant	improvement	over	2007	and	2006.	The	improvement	from	2007	to	2008	was	driven by	improvements	in	working	capital	of	$364.5	and	increased	net	income	of	$127.4.

Net	cash	provided	by	operating	activities	primarily	consists	of	net	income	of	$295.0,	working	capital	cash	generation	of	$193.5	and	net	non-cash	expense	items	of $403.0.	Net	non-cash	expense	items	primarily	include	depreciation	and	amortization	of	fixed	assets,	amortization	of	intangible	assets,	restricted	stock	awards,	non-cash compensation,	and	bond	discounts	and	deferred	financing	costs.

Cash	from	changes	in	working	capital	reflects	changes	in	accounts	receivable,	expenditures	billable	to	clients,	prepaid	expenses	and	other	current	assets,	accounts payable	and	accrued	liabilities.	In	2008	we	generated	cash	from	working	capital	of	$193.5	compared	to	a	use	of	$171.0	in	2007	and	$250.6	in	2006.	This	improvement	is primarily	due	to	growth	in	our	businesses	and	improved	working	capital	management	at	certain	of	our	operating	units.

The	timing	of	media	buying	on	behalf	of	our	clients	affects	our	working	capital	and	operating	cash	flow.	In	most	of	our	businesses,	our	agencies	enter	into commitments	to	pay	production	costs	and	media	costs	on	behalf	of	clients.	To	the	extent	possible	we	pay	production	and	media	charges	after	we	have	received	funds from	our	clients.	The	amounts	involved	substantially	exceed	our	revenues,	and	primarily	affect	the	level	of	accounts	receivable,	expenditures	billable	to	clients,	accounts payable	and	accrued	media	and	production	liabilities.	Our	assets	include	both	cash	received	and	accounts	receivable	from	clients	for	these	pass-through	arrangements, while	our	liabilities	include	amounts	owed	on	behalf	of	clients	to	media	and	production	suppliers.

Our	accrued	liabilities	are	also	affected	by	the	timing	of	certain	other	payments.	For	example,	while	cash	incentive	awards	are	accrued	throughout	the	year,	they are	generally	paid	during	the	first	quarter	of	the	subsequent	year.

# Investing	Activities

Cash	used	in	investing	activities	during	2008	includes	net	purchases	of	short-term	marketable	securities	and	payments	for	capital	expenditures	and	acquisitions. Net	purchases	of	short-term	marketable	securities	of	$154.3	primarily	relates	to	a	time	deposit	with	a	maturity	greater	than	ninety	days.	Capital	expenditures	of	$138.4 relate	to	costs	associated	with	leasehold	improvements,	computer	hardware	and	furniture	and	fixtures.	Payments	for	acquisitions	of	$106.0,	primarily	relate	to	new acquisitions	and	to	a	lesser	extent	deferred	payments	on	prior	acquisitions.

# Financing	Activities

In	March	2008,	holders	of	approximately	$191.0	in	aggregate	principal	amount	of	our	4.50%	Notes	due	2023	exercised	their	put	option	that	required	us	to repurchase	their	4.50%	Notes.	Payment	for	the	purchased	4.50%	Notes	was	made	with	available	cash.	In	addition,	cash	used	in	financing	activities	during	2008	reflects dividend	payments	of	$27.6	on	our	Series	B	Preferred	Stock	and	decreases	in	short-term	bank	borrowings	related	to	our	international	uncommitted	credit	facilities.

# LIQUIDITY	OUTLOOK

We	generated	significant	cash	from	operations	in	2008	and	ended	the	year	with	$2,274.9	in	cash,	cash	equivalents	and	marketable	securities.	Based	on	our	cash flow	forecasts	we	expect	our	cash	flow	from	operations,	cash	and	cash	equivalents	to	be	sufficient	to	meet	our	anticipated	operating	requirements	at	a	minimum	for	the next	twelve	months.	In	addition,	we	have	back-up	credit	facilities	available	to	support	our	operating	needs.	Our	policy	is	to	maintain	a	conservative	approach	to	liquidity, which	we	believe	is	appropriate	for	our	Company	in	view	of	the	current	conditions	in	the	economy	and	financial	markets.	In	2008,	our	lowest	month-end	total	cash	and marketable	securities	balance	was	$1,512.3	on	March	31st,	and	our	highest	month-end	total	cash	and	marketable	securities	balance	was	$2,274.9	on	December	31st.	In 2007,	the	lowest	month-end	total	cash	and	marketable	securities	balance	was	$1,440.0	on	July	31st,	and	the	highest	month-end	total	cash	and	marketable	securities balance	was	$2,037.4	on	December	31st.

Economic	and	financial	conditions	deteriorated	sharply	in	the	latter	part	of	2008	and	the	current	economic	conditions	are	expected	to	persist	throughout	2009. Current	market	conditions	may	affect	the	financial	condition	of	some	of	our	clients	which	can	cause	a	decrease	in	demand	for	advertising	and	marketing	services.	A decrease	in	revenue,	should	it	occur,	could	pose	a	challenge	to	our	level	of	cash	generation	from	operations.	Furthermore,	we	have	accounts	receivable	related	to revenues	earned	and	for	pass-through	costs	incurred	on	behalf	of	our	clients	as	well	as	expenditures	billable	to	clients	related	to	costs	incurred	and	fees	earned	that	have not	yet	been	billed.	Although	we	have	not	experienced	a	material	increase	in	client	defaults,	and	as	of	December	31,	2008	our	largest	client,	based	on	revenue,	accounted for	approximately	4%	of	our	accounts	receivable	and	expenditures	billable	to	clients,	current	market	conditions	increase	the	likelihood	that	we	could	experience	future losses.

We	maintain	committed	credit	facilities	to	increase	our	financial	flexibility.	We	have	not	drawn	on	any	of	our	corporate	credit	facilities	since	2003,	although	we use	them	to	obtain	letters	of	credit	to	support	commitments	on	behalf	of	certain	clients.	As	discussed	below	under	"	—	Financing	and	Sources	of	Funds	—	Credit Facilities,"	in	July	2008	we	entered	into	a	$335.0	three-year	credit	agreement	(the	"2008	Credit	Agreement").	This	credit	facility	includes	commitments	from	a	syndicate of	financial	institutions.	If	any	of	the	financial	institutions	in	the	syndicate	were	unable	to	perform	and	no	other	bank	assumed	that	institution's	commitment,	the	total size	of	the

facility	would	be	reduced	by	the	size	of	that	institution's	commitment.	We	also	have	a	$750.0	three-year	credit	agreement	(the	"2006	Credit	Agreement")	that	matures	in June	2009.	We	replaced	a	portion	of	this	facility	in	July	of	2008	with	our	2008	Credit	Agreement.	We	do	not	currently	plan	on	replacing	the	full	amount	of	the	2006 Credit	Agreement.

If,	however,	our	business	is	significantly	impacted	by	further	deterioration	in	the	economic	environment	or	otherwise,	it	could	lead	us	to	seek	new	or	additional sources	of	liquidity	to	fund	our	working	capital	needs	or	enhance	our	financial	flexibility.	Our	ability	to	access	the	capital	markets	depends	on	a	number	of	factors,	which include	those	specific	to	us,	such	as	our	credit	rating,	and	those	related	to	the	capital	markets,	such	as	the	amount	of	available	credit.	Currently,	for	a	non-investment grade	company	such	as	ours,	the	capital	markets	are	challenging,	with	limited	available	financing	at	higher	costs	than	in	recent	years.	There	can	be	no	guarantee	that	we would	be	able	to	access	new	sources	of	liquidity	on	commercially	reasonable	terms,	or	at	all.

# Funding	Requirements

Our	most	significant	funding	requirements	include:	our	operations,	non-cancelable	operating	lease	obligations,	acquisitions,	capital	expenditures,	payments related	to	vendor	discounts	and	credits,	debt	service,	preferred	stock	dividends,	contributions	to	pension	and	postretirement	plans,	and	taxes.	In	any	twelve	month	period, we	maintain	substantial	flexibility	over	significant	uses	of	cash,	including	our	capital	expenditures	and	cash	used	for	new	acquisitions.

•	 Acquisitions	—	We	continue	to	evaluate	strategic	opportunities	to	grow	and	to	increase	our	ownership	interests	in	current	investments,	particularly	in	our	digital and	marketing	services	offerings	and	to	expand	our	presence	in	high-growth	markets.

•Payments	related	to	vendor	discounts	and	credits	—	Of	the	liabilities	recognized	as	part	of	the	2004	Restatement,	we	estimate	that	we	will	pay	approximately $20.0	primarily	related	to	vendor	discounts	and	credits	over	the	next	12	months.	As	of	December	31,	2008	our	liability	balance	for	these	payments	was	$126.0.

•	 Debt	service	—	Our	$250.0	5.40%	Senior	Unsecured	Notes	mature	on	November	15,	2009.	The	remainder	of	our	debt	is	primarily	long-term,	with	maturities scheduled	from	2010	to	2023.	See	table	below	for	the	maturity	schedule	of	our	long-term	debt.

•Preferred	stock	dividends	—	We	pay	regular	quarterly	dividends	on	our	Series	B	Preferred	Stock	of	$6.9,	or	$27.6	annually.

•	 Contributions	to	pension	and	postretirement	plans	—	Our	funding	policy	regarding	our	pension	plan	is	to	contribute	amounts	necessary	to	satisfy	minimum pension	funding	requirements	plus	such	additional	amounts	from	time	to	time	as	determined	to	be	appropriate	to	improve	the	plans'	funded	status.	For	the	year ended	December	31,	2008,	we	made	contributions	of	$28.3	to	our	foreign	pension	plans	and	$2.3	to	our	domestic	pension	plans.	For	2009,	we	expect	to	contribute $19.3	to	our	foreign	pension	plans	and	$10.0	to	our	domestic	pension	plans.

The	following	summarizes	our	estimated	contractual	cash	obligations	and	commitments	as	of	December	31,	2008,	and	their	effect	on	our	liquidity	and	cash	flow in	future	periods:

|  | 2009 | 2010 | 2011 | 2012 | 2013 | Thereafter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Long-term\tdebt1 | $254.1 | $252.2 | $501.4 | $0.8 | $20.7 | $958.9 | $1,988.1 |
| Interest\tpayments\ton\tlong-term\tdebt | 113.9 | 97.5 | 86.7 | 48.8 | 48.8 | 277.3 | 673.0 |
| Non-cancelable\toperating\tlease\tobligations2 | 305.7 | 277.6 | 247.6 | 209.4 | 183.7 | 814.1 | 2,038.1 |
| Contingent\tacquisition\tpayments3 | 79.3 | 66.4 | 103.7 | 75.3 | 75.9 | 2.2 | 402.8 |
| Uncertain\ttax\tpositions | 44.3 | 15.7 | 23.5 | 6.5 | 4.6 | 54.2 | 148.8 |
|  | $797.3 | $709.4 | $962.9 | $340.8 | $333.7 | $2,106.7 | $5,250.8 |

1 Amounts	represent	maturity	at	par.	Holders	of	our	4.25%	Notes	may	require	us	to	repurchase	their	Notes	for	cash	at	par	in	March	2012	and	holders	of	our	4.75%	and	4.50%	Notes	may	require	us	to	repurchase	their Notes	for	cash,	stock	or	a	combination,	at	our	election,	at	par	in	March	2013.	All	of	these	Notes	will	mature	in	2023	if	not	converted	or	repurchased.

2 Non-cancelable	operating	lease	obligations	are	presented	net	of	future	receipts	on	contractual	sublease	arrangements.

3 We	have	structured	certain	acquisitions	with	additional	contingent	purchase	price	obligations	in	order	to	reduce	the	potential	risk	associated	with	negative	future	performance	of	the	acquired	entity.	See	Note	16	to the	Consolidated	Financial	Statements	for	further	information.

# FINANCING	AND	SOURCES	OF	FUNDS

Substantially	all	of	our	operating	cash	flow	is	generated	by	our	agencies.	Our	liquid	assets	are	held	primarily	at	the	holding	company	level,	and	to	a	lesser	extent at	our	largest	subsidiaries.	Below	is	a	summary	of	sources	of	liquidity	as	of	December	31,	2008:

|  |  |  | Letters |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Total\nFacility | Amount\nOutstanding | of\nCredit | Total\nAvailable |
| Cash,\tcash\tequivalents\tand\tmarketable\tsecurities |  |  |  | $2,274.9 |
| Committed |  |  |  |  |
| 2006\tCredit\tAgreement | $750.0 | $— | $128.11 | $621.9 |
| 2008\tCredit\tAgreement | $335.0 | $— | $— | $335.0 |
| Uncommitted |  |  |  |  |
| Non-U.S. | $386.3 | $78.8 | $1.1 | $306.4 |

1 We	are	required	from	time	to	time	to	post	letters	of	credit,	primarily	to	support	our	commitments,	or	those	of	our	subsidiaries,	to	purchase	media	placements,	mostly	in	locations	outside	the	U.S.,	or	to	satisfy	other obligations.	These	letters	of	credit	have	historically	not	been	drawn	upon.

# Debt	Transactions

In	March	2008,	holders	required	us	to	repurchase	approximately	$191.0	of	our	4.50%	Convertible	Senior	Notes	due	2023,	pursuant	to	the	terms	of	the	Notes.	We funded	the	repurchase	from	available	cash.	This	reduced	the	outstanding	amount	of	the	4.50%	Notes	to	$8.7.	The	4.50%	Notes	were	initially	issued	in	March	2003	in	an aggregate	principal	amount	of	$800.0,	but	in	November	2006	we	exchanged	$400.0	of	4.50%	Notes	for	the	same	aggregate	principal	amount	of	our	4.25%	Convertible Senior	Notes	due	2023,	and	in	November	2007	we	exchanged	a	further	$200.0	for	the	same	aggregate	principal	amount	of	our	4.75%	Convertible	Senior	Notes	due 2023.

In	June	2008	we	entered	into	an	interest	rate	swap	agreement	related	to	$125.0	in	notional	amount	of	our	7.25%	Senior	Unsecured	Notes	due	2011	(the	"7.25% Notes"),	which	we	subsequently	terminated	in	September	2008.	For	additional	information,	see	Note	8	to	the	Consolidated	Financial	Statements.

# Credit	Facilities

In	July	2008	we	entered	into	the	2008	Credit	Agreement.	The	2008	Credit	Agreement	is	a	revolving	facility,	under	which	amounts	borrowed	by	us	or	any	of	our subsidiaries	designated	under	the	2008	Credit	Agreement	may	be	repaid	and	reborrowed,	subject	to	an	aggregate	lending	limit	of	$335.0	or	the	equivalent	in	other currencies,	and	the	aggregate	available	amount	of	letters	of	credit	outstanding	may	decrease	or	increase,	subject	to	a	limit	on	letters	of	credit	of	$200.0	or	the	equivalent in	other	currencies.	Our	obligations	under	the	2008	Credit	Agreement	are	unsecured.	The	terms	of	the	2008	Credit	Agreement	allow	us	to	increase	the	aggregate	lending commitment	to	a	maximum	amount	of	$485.0	if	lenders	agree	to	the	additional	commitments.	In	addition,	the	2008	Credit	Agreement	includes	covenants	that,	among other	things,	(i)	limit	our	liens	and	the	liens	of	our	consolidated	subsidiaries,	(ii)	restrict	our	payments	for	cash	capital	expenditures,	acquisitions,	common	stock dividends,	share	repurchases	and	certain	other	purposes,	and	(iii)	limit	subsidiary	debt.

The	2008	Credit	Agreement	also	contains	financial	covenants	that	require	us	to	maintain,	on	a	consolidated	basis	as	of	the	end	of	each	fiscal	quarter,	(i)	an	interest coverage	ratio,	(ii)	a	leverage	ratio,	and	(iii)	minimum	EBITDA	for	the	four	quarters	then	ended.	As	of	December	31,	2008,	we	were	in	compliance	with	all	applicable covenants	as	seen	in	the	table	below.

If	we	believed	we	would	not	be	able	to	comply	with	these	financial	covenants	in	the	future,	we	would	seek	an	amendment	and/or	waiver	from	our	lenders,	but there	is	no	assurance	that	our	lenders	would	grant	an	amendment	or	waiver.	If	we	do	not	comply	with	these	financial	covenants	and	are	unable	to	obtain	the	necessary amendment	or	waiver,	the	2008	Credit	Agreement	could	be	terminated	and	our	lenders	could	accelerate	payments	of	any	outstanding	principal.	In	addition,	under	those circumstances	we	could	be	required	to	deposit	with	one	of	our	lenders	funds	in	an	amount	equal	to	any	outstanding	letters	of	credit.	As	of	December	31,	2008	there	was no	outstanding	principal	or	letters	of	credit.	For	additional	information,	see	Note	8	to	the	Consolidated	Financial	Statements.

In	June	2006	we	entered	into	the	2006	Credit	Agreement,	which	we	can	utilize	for	cash	advances	and	for	letters	of	credit	in	an	aggregate	amount	not	to	exceed $750.0	outstanding	at	any	time.	The	2006	Credit	Agreement	is	a	revolving	facility,	under	which	amounts	borrowed	by	us	or	any	of	our	subsidiaries	designated	under	the 2006	Credit	Agreement	may	be	repaid	and	reborrowed,	subject	to	an	aggregate	lending	limit	of	$750.0	or	the	equivalent	in	other	currencies.	The	aggregate	face	amount of	letters	of	credit	may	not	exceed	$600.0	at	any	time.	Our	obligations	under	the	2006	Credit	Agreement	are	unsecured,	and	we	are	not	subject	to	any	financial	or	other material	restrictive	covenants	under	this	facility.	This	facility	expires	in	June	of	2009.	We	have	not	drawn

on	it,	and	we	plan	to	use	the	2008	Credit	Agreement	to	replace	the	letters	of	credit	currently	outstanding	under	the	2006	Credit	Agreement.	For	additional	information, see	Note	8	to	the	Consolidated	Financial	Statements.

We	also	have	uncommitted	credit	facilities	with	various	banks	that	permit	borrowings	at	variable	interest	rates.	We	use	our	uncommitted	credit	lines	for	working capital	needs	at	some	of	our	operations	outside	the	U.S.,	and	the	amount	outstanding	as	of	December	31,	2008	and	2007	was	$78.8	and	$95.9,	respectively.	We	have guaranteed	the	repayment	of	some	of	these	borrowings	made	by	certain	subsidiaries.	If	we	lose	access	to	these	credit	lines	we	would	have	to	provide	funding	directly	to some	of	our	international	operations.	The	weighted-average	interest	rate	on	outstanding	balances	under	the	uncommitted	short-term	facilities	as	of	December	31,	2008 and	2007	was	approximately	3%	and	5%,	respectively.

# Cash	Pooling

We	aggregate	our	net	domestic	cash	position	on	a	daily	basis.	Outside	the	U.S.,	we	use	cash	pooling	arrangements	with	banks	to	help	manage	our	liquidity requirements.	In	these	pooling	arrangements,	several	Interpublic	agencies	agree	with	a	single	bank	that	the	cash	balances	of	any	of	the	agencies	with	the	bank	will	be subject	to	a	full	right	of	setoff	against	amounts	the	other	agencies	owe	the	bank,	and	the	bank	provides	for	overdrafts	as	long	as	the	net	balance	for	all	the	agencies	does not	exceed	an	agreed-upon	level.	Typically	each	agency	pays	interest	on	outstanding	overdrafts	and	receives	interest	on	cash	balances.	Our	Consolidated	Balance	Sheets reflect	cash	net	of	overdrafts	under	all	of	our	pooling	arrangements.	As	of	December	31,	2008	and	2007	the	amounts	netted	were	$858.7	and	$1,295.7,	respectively.

# Debt	Ratings

Our	long-term	debt	credit	ratings	as	of	February	13,	2009	were	as	follows:

The	most	recent	change	in	our	credit	ratings	occurred	on	July	9,	2008	when	Moody's	Investors	Service	upgraded	our	outlook	from	stable	to	positive.	A	credit rating	is	not	a	recommendation	to	buy,	sell	or	hold	securities	and	may	be	subject	to	revision	or	withdrawal	at	any	time	by	the	assigning	credit	rating	agency.	The	rating	of each	credit	rating	agency	should	be	evaluated	independently	of	any	other	rating.

# RECENT	ACCOUNTING	STANDARDS

See	Note	17	to	the	Consolidated	Financial	Statements	for	a	complete	description	of	recent	accounting	pronouncements	that	have	affected	us	or	may	affect	us.

# Item	7A. Quantitative	and	Qualitative	Disclosures	About	Market	Risk (Amounts	in	millions)

In	the	normal	course	of	business,	we	are	exposed	to	market	risks	related	to	interest	rates,	foreign	currency	rates	and	certain	Balance	Sheet	items.	From	time	to time,	we	use	derivatives,	pursuant	to	established	guidelines	and	policies,	to	manage	some	portion	of	these	risks.	Derivative	instruments	utilized	in	our	hedging	activities are	viewed	as	risk	management	tools,	involve	little	complexity	and	are	not	used	for	trading	or	speculative	purposes.

# Interest	Rates

Our	exposure	to	market	risk	for	changes	in	interest	rates	relates	primarily	to	the	fair	market	value	of	our	debt	obligations	as	the	majority	of	our	debt (approximately	84%	as	of	December	31,	2008)	bore	interest	at	fixed	rates.	We	do	have	debt	with	variable	interest	rates,	but	a	10%	increase	or	decrease	in	interest	rates would	not	be	material	to	our	interest	expense	or	cash	flows.	The	fair	market	value	of	our	debt	is	sensitive	to	changes	in	interest	rates	and	for	2008	this	fair	market	value would	decrease	by	approximately	$22.0	if	interest	rates	were	to	increase	by	10%	and	would	increase	by	approximately	$23.0	if	interest	rates	were	to	decrease	by	10%. For	2007,	the	fair	market	value	of	our	debt	would	decrease	by	approximately	$18.0	if	interest	rates	were	to	increase	by	10%	and	would	increase	by	approximately	$19.0 if	interest	rates	were	to	decrease	by	10%.	We	have	used	interest	rate	swaps	to	manage	the	mix	of	our	fixed	and	variable	rate	debt	obligations,	but	currently	have	none outstanding	as	we	terminated	our	interest	rate	swap	agreement	on	the	7.25%	Senior	Unsecured	Notes	in	September	2008.

# Foreign	Currencies

We	face	translation	and	transaction	risks	related	to	changes	in	foreign	currency	exchange	rates.	Since	we	report	revenues	and	expenses	in	U.S.	Dollars,	changes	in exchange	rates	may	either	positively	or	negatively	affect	our	consolidated	revenues	and	expenses	(as	expressed	in	U.S.	Dollars)	from	foreign	operations.	Based	on	2008 exchange	rates	and	operating	results,	if	the	U.S.	dollar	were	to	strengthen	by	10%,	we	currently	estimate	operating	income	would	decrease	between	3%	and	5%.	This assumes	that	all	currencies	are	impacted	in	the	same	manner	and	our	international	revenue	and	expenses	remain	constant	from	current	levels.	As	the	functional	currency of	our	foreign	operations	is	generally	their	respective	local	currency,	our	foreign	operations	are	translated	into	U.S.	Dollars	at	the	exchange	rates	in	effect	at	the	balance sheet	date	for	assets	and	liabilities	and	average	exchange	rates	during	the	period	presented	for	revenues	and	expenses.	The	resulting	translation	adjustments	are	recorded as	a	component	of	accumulated	other	comprehensive	income	or	loss	in	the	stockholders'	equity	section	of	our	Consolidated	Balance	Sheets.	Our	foreign	subsidiaries generally	collect	revenues	and	pay	expenses	in	their	functional	currency,	mitigating	transaction	risk.	However,	certain	subsidiaries	may	enter	into	transactions	in currencies	other	than	their	functional	currency.	Assets	and	liabilities	denominated	in	currencies	other	than	the	functional	currency	are	susceptible	to	movements	in foreign	currency	until	final	settlement.	Currency	transaction	gains	or	losses	primarily	arising	from	transactions	in	currencies	other	than	the	functional	currency	are included	in	office	and	general	expenses.	We	have	not	entered	into	a	material	amount	of	foreign	currency	forward	exchange	contracts	or	other	derivative	financial instruments	to	hedge	the	effects	of	adverse	fluctuations	in	foreign	currency	exchange	rates.

# Credit	and	Market	Risks

Certain	Balance	Sheet	items	that	potentially	subject	us	to	concentrations	of	credit	risk	are	primarily	cash	and	cash	equivalents,	short-term	marketable	securities, accounts	receivable	and	expenditures	billable	to	clients.	We	invest	our	excess	cash	in	investment-grade,	short-term	securities	with	financial	institutions	and	limit	the amount	of	credit	exposure	to	any	one	counterparty.	Concentrations	of	credit	risk	with	accounts	receivable	are	mitigated	by	our	large	number	of	clients	and	their dispersion	across	different	industries	and	geographical	areas.	We	perform	ongoing	credit	evaluations	of	our	clients	and	maintain	an	allowance	for	doubtful	accounts based	upon	the	expected	collectability	of	all	accounts	receivable.

As	of	December	31,	2008,	we	held	$12.5	in	par	value	of	asset-backed	auction	rate	securities.	With	the	liquidity	issues	experienced	in	the	credit	and	capital markets	worldwide,	the	auctions	have	failed	due	to	insufficient	bids	from	buyers	and	as	a	result	we	adjusted	these	securities	to	a	new	book	value	of	$6.7	during	2007.	We believe	we	have	the	ability	and	currently	intend	to	hold	our	auction	rate	securities	until	we	can	recover	the	full	principal.	We	do	not	believe	that	the	lack	of	liquidity	of these	investments	will	affect	our	ability	to	operate	our	business.	For	additional	information,	see	Note	15	to	the	Consolidated	Financial	Statements.

As	a	result	of	the	market	decline	in	2008,	the	fair	value	of	our	pension	plan	assets	have	declined	by	approximately	12%	(excluding	foreign	currency	impacts), resulting	in	higher	pension	expense	and	funding	requirements	in	2009,	and,	if	unchanged,	could	result	in	higher	pension	expense	and	funding	requirements	in	periods beyond	2009.

# Item	8. Financial	Statements	and	Supplementary	Data

# INDEX

|  | Page |
| :--- | :--- |
| Report\tof\tIndependent\tRegistered\tPublic\tAccounting\tFirm | 42 |
| Consolidated\tStatements\tof\tOperations\tfor\tthe\tyears\tended\tDecember\t31,\t2008,\t2007\tand\t2006 | 43 |
| Consolidated\tBalance\tSheets\tas\tof\tDecember\t31,\t2008\tand\t2007 | 44 |
| Consolidated\tStatements\tof\tCash\tFlows\tfor\tthe\tyears\tended\tDecember\t31,\t2008,\t2007\tand\t2006 | 45 |
| Consolidated\tStatements\tof\tStockholders'\tEquity\tand\tComprehensive\tIncome\t(Loss)\tfor\tthe\tyears\tended\tDecember\t\t31,\t2008,\t2007\tand\t2006 | 46 |
| Notes\tto\tConsolidated\tFinancial\tStatements | 47 |
| 1.\tSummary\tof\tSignificant\tAccounting\tPolicies | 47 |
| 2.\tRestructuring\tand\tOther\tReorganization-Related\tCharges | 53 |
| 3.\tEarnings\t(loss)\tper\tshare | 55 |
| 4.\tAcquisitions\tand\tDispositions | 56 |
| 5.\tSupplementary\tData | 58 |
| 6.\tIntangible\tAssets | 60 |
| 7.\tProvision\tfor\tIncome\tTaxes | 61 |
| 8.\tDebt\tand\tCredit\tArrangements | 65 |
| 9.\tWarrants | 70 |
| 10.\tConvertible\tPreferred\tStock | 70 |
| 11.\tAccumulated\tOther\tComprehensive\tLoss | 71 |
| 12.\tStock-Based\tCompensation | 71 |
| 13.\tEmployee\tBenefits | 74 |
| 14.\tSegment\tInformation | 80 |
| 15.\tFair\tValue\tMeasurements | 82 |
| 16.\tCommitments\tand\tContingencies | 84 |
| 17.\tRecent\tAccounting\tStandards | 86 |
| 18.\tOut-of-Period\tAdjustments | 87 |
| 19.\tResults\tby\tQuarter\t(Unaudited) | 88 |

# REPORT	OF	INDEPENDENT	REGISTERED	PUBLIC	ACCOUNTING	FIRM

To	The	Board	of	Directors	and	Stockholders	of	The	Interpublic	Group	of	Companies,	Inc.

In	our	opinion,	the	accompanying	Consolidated	Balance	Sheets	and	the	related	Consolidated	Statements	of	Operations,	of	cash	Flows	and	of	Stockholders'	Equity and	Comprehensive	Income	(Loss)	present	fairly,	in	all	material	respects,	the	financial	position	of	The	Interpublic	Group	of	Companies,	Inc.	and	its	subsidiaries	(the "Company")	at	December	31,	2008	and	2007,	and	the	results	of	their	operations	and	their	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2008	in conformity	with	accounting	principles	generally	accepted	in	the	United	States	of	America.	Also	in	our	opinion,	the	Company	maintained,	in	all	material	respects, effective	internal	control	over	financial	reporting	as	of	December	31,	2008,	based	on	criteria	established	in	Internal	Control—Integrated	Framework	issued	by	the Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(COSO).	The	Company's	management	is	responsible	for	these	financial	statements,	for maintaining	effective	internal	control	over	financial	reporting	and	for	its	assessment	of	the	effectiveness	of	internal	control	over	financial	reporting,	included	in Management's	Report	on	Internal	Control	Over	Financial	Reporting	appearing	under	Item	9A.	Our	responsibility	is	to	express	opinions	on	these	financial	statements	and on	the	Company's	internal	control	over	financial	reporting	based	on	our	integrated	audits.	We	conducted	our	audits	in	accordance	with	the	standards	of	the	Public Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan	and	perform	the	audits	to	obtain	reasonable	assurance	about	whether	the financial	statements	are	free	of	material	misstatement	and	whether	effective	internal	control	over	financial	reporting	was	maintained	in	all	material	respects.	Our	audits	of the	financial	statements	included	examining,	on	a	test	basis,	evidence	supporting	the	amounts	and	disclosures	in	the	financial	statements,	assessing	the	accounting principles	used	and	significant	estimates	made	by	management,	and	evaluating	the	overall	financial	statement	presentation.	Our	audit	of	internal	control	over	financial reporting	included	obtaining	an	understanding	of	internal	control	over	financial	reporting,	assessing	the	risk	that	a	material	weakness	exists,	and	testing	and	evaluating the	design	and	operating	effectiveness	of	internal	control	based	on	the	assessed	risk.	Our	audits	also	included	performing	such	other	procedures	as	we	considered necessary	in	the	circumstances.	We	believe	that	our	audits	provide	a	reasonable	basis	for	our	opinions.

A	company's	internal	control	over	financial	reporting	is	a	process	designed	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and	the preparation	of	financial	statements	for	external	purposes	in	accordance	with	generally	accepted	accounting	principles.	A	company's	internal	control	over	financial reporting	includes	those	policies	and	procedures	that	(i)	pertain	to	the	maintenance	of	records	that,	in	reasonable	detail,	accurately	and	fairly	reflect	the	transactions	and dispositions	of	the	assets	of	the	company;	(ii)	provide	reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit	preparation	of	financial	statements	in accordance	with	generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of	the	company	are	being	made	only	in	accordance	with	authorizations	of management	and	directors	of	the	company;	and	(iii)	provide	reasonable	assurance	regarding	prevention	or	timely	detection	of	unauthorized	acquisition,	use,	or disposition	of	the	company's	assets	that	could	have	a	material	effect	on	the	financial	statements.

Because	of	its	inherent	limitations,	internal	control	over	financial	reporting	may	not	prevent	or	detect	misstatements.	Also,	projections	of	any	evaluation	of effectiveness	to	future	periods	are	subject	to	the	risk	that	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance	with	the policies	or	procedures	may	deteriorate.

# /S/	PRICEWATERHOUSECOOPERS	LLP

New	York,	New	York

# Consolidated	Statements	of	Operations

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| REVENUE | $6,962.7 | $ 6,554.2 | $6,190.8 |
| OPERATING\tEXPENSES: |  |  |  |
| Salaries\tand\trelated\texpenses | 4,342.6 | 4,139.2 | 3,944.1 |
| Office\tand\tgeneral\texpenses | 2,013.3 | 2,044.8 | 2,079.0 |
| Restructuring\tand\tother\treorganization-related\tcharges | 17.1 | 25.9 | 34.5 |
| Long-lived\tasset\timpairment\tand\tother\tcharges | — | — | 27.2 |
| Total\toperating\texpenses | 6,373.0 | 6,209.9 | 6,084.8 |
| OPERATING\tINCOME | 589.7 | 344.3 | 106.0 |
| EXPENSES\tAND\tOTHER\tINCOME: |  |  |  |
| Interest\texpense | (211.9) | (236.7) | (218.7) |
| Interest\tincome | 90.6 | 119.6 | 113.3 |
| Other\tincome\t(expense) | 3.1 | 8.5 | (5.6) |
| Total\t(expenses)\tand\tother\tincome | (118.2) | (108.6) | (111.0) |
| Income\t(loss)\tfrom\tcontinuing\toperations\tbefore\tincome\ttaxes | 471.5 | 235.7 | (5.0) |
| Provision\tfor\tincome\ttaxes | 156.6 | 58.9 | 18.7 |
| Income\t(loss)\tfrom\tcontinuing\toperations\tof\tconsolidated\tcompanies | 314.9 | 176.8 | (23.7) |
| Income\tapplicable\tto\tminority\tinterests,\tnet\tof\ttax | (23.0) | (16.7) | (20.0) |
| Equity\tin\tnet\tincome\tof\tunconsolidated\taffiliates,\tnet\tof\ttax | 3.1 | 7.5 | 7.0 |
| Income\t(loss)\tfrom\tcontinuing\toperations | 295.0 | 167.6 | (36.7) |
| Income\tfrom\tdiscontinued\toperations,\tnet\tof\ttax | — | — | 5.0 |
| NET\tINCOME\t(LOSS) | 295.0 | 167.6 | (31.7) |
| Dividends\ton\tpreferred\tstock | 27.6 | 27.6 | 47.6 |
| Allocation\tto\tparticipating\tsecurities | 2.2 | 8.7 | — |
| NET\tINCOME\t(LOSS)\tAPPLICABLE\tTO\tCOMMON\tSTOCKHOLDERS | $265.2 | $131.3 | $(79.3) |
| Earnings\t(loss)\tper\tshare\tof\tcommon\tstock— |  |  |  |
| Basic: |  |  |  |
| Continuing\toperations | $0.57 | $0.29 | $(0.20) |
| Discontinued\toperations | — | — | 0.01 |
| Total | $0.57 | $0.29 | $(0.19) |
| Diluted: |  |  |  |
| Continuing\toperations | $0.52 | $0.26 | $(0.20) |
| Discontinued\toperations | — | — | 0.01 |
| Total | $0.52 | $0.26 | $(0.19) |
| Weighted-average\tnumber\tof\tcommon\tshares\toutstanding— |  |  |  |
| Basic | 461.5 | 457.7 | 428.1 |
| Diluted | 518.3 | 503.1 | 428.1 |

The	accompanying	notes	are	an	integral	part	of	these	financial	statements.

# Consolidated	Balance	Sheets

# (Amounts	in	Millions,	Except	Par	Value	Amounts)

|  | 2008 | 2007 |
| :--- | :--- | :--- |
| ASSETS: |  |  |
| Cash\tand\tcash\tequivalents | $2,107.2 | $2,014.9 |
| Marketable\tsecurities | 167.7 | 22.5 |
| Accounts\treceivable,\tnet\tof\tallowance\tof\t$63.9\tand\t$61.8 | 3,746.5 | 4,132.7 |
| Expenditures\tbillable\tto\tclients | 1,099.5 | 1,210.6 |
| Other\tcurrent\tassets | 366.7 | 305.1 |
| Total\tcurrent\tassets | 7,487.6 | 7,685.8 |
| Furniture,\tequipment\tand\tleasehold\timprovements,\tnet | 561.5 | 620.0 |
| Deferred\tincome\ttaxes | 416.8 | 479.9 |
| Goodwill | 3,220.9 | 3,231.6 |
| Other\tassets | 438.4 | 440.8 |
| TOTAL\tASSETS | $12,125.2 | $12,458.1 |
| LIABILITIES: |  |  |
| Accounts\tpayable | $4,022.6 | $4,124.3 |
| Accrued\tliabilities | 2,521.6 | 2,691.2 |
| Short-term\tdebt | 332.8 | 305.1 |
| Total\tcurrent\tliabilities | 6,877.0 | 7,120.6 |
| Long-term\tdebt | 1,786.9 | 2,044.1 |
| Deferred\tcompensation\tand\temployee\tbenefits | 549.8 | 553.5 |
| Other\tnon-current\tliabilities | 435.9 | 407.7 |
| TOTAL\tLIABILITIES | 9,649.6 | 10,125.9 |
| Commitments\tand\tcontingencies\t(Note\t16) |  |  |
| STOCKHOLDERS'\tEQUITY: |  |  |
| Preferred\tstock,\tno\tpar\tvalue,\tshares\tauthorized:\t20.0 |  |  |
| Series\tB\tshares\tissued\tand\toutstanding:\t0.5 | 525.0 | 525.0 |
| Common\tstock,\t$0.10\tpar\tvalue,\tshares\tauthorized:\t800.0 |  |  |
| shares\tissued:\t2008—477.1;\t2007—471.7 |  |  |
| shares\toutstanding:\t2008—476.6;\t2007—471.2 | 46.4 | 45.9 |
| Additional\tpaid-in\tcapital | 2,682.8 | 2,635.0 |
| Accumulated\tdeficit | (446.1) | (741.1) |
| Accumulated\tother\tcomprehensive\tloss,\tnet\tof\ttax | (318.5) | (118.6) |
|  | 2,489.6 | 2,346.2 |
| Less:\nTreasury\tstock,\tat\tcost:\t0.4\tshares | (14.0) | (14.0) |
| TOTAL\tSTOCKHOLDERS'\tEQUITY | 2,475.6 | 2,332.2 |
| TOTAL\tLIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY | $12,125.2 | $12,458.1 |

# Consolidated	Statements	of	Cash	Flows

# (Amounts	in	Millions)

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| CASH\tFLOWS\tFROM\tOPERATING\tACTIVITIES: |  |  |  |
| Net\tincome\t(loss) | $295.0 | $167.6 | $(31.7) |
| Income\tfrom\tdiscontinued\toperations,\tnet\tof\ttax | — | — | (5.0) |
| Adjustments\tto\treconcile\tnet\tincome\t(loss)\tto\tnet\tcash\tprovided\tby\toperating\tactivities: |  |  |  |
| Depreciation\tand\tamortization\tof\tfixed\tassets\tand\tintangible\tassets | 173.3 | 177.2 | 173.6 |
| Provision\tfor\t(recovery\tof)\tbad\tdebt | 17.0 | (3.6) | 1.2 |
| Amortization\tof\trestricted\tstock\tand\tother\tnon-cash\tcompensation | 80.1 | 79.7 | 55.1 |
| Amortization\tof\tbond\tdiscounts\tand\tdeferred\tfinancing\tcosts | 28.7 | 30.8 | 31.8 |
| Deferred\tincome\ttax\tprovision\t(benefit) | 51.9 | (22.4) | (57.9) |
| Long-lived\tasset\timpairment\tand\tother\tcharges | — | — | 27.2 |
| Loss\ton\tearly\textinguishment\tof\tdebt | — | 12.5 | 80.8 |
| Losses\t(gains)\ton\tsales\tof\tbusinesses\tand\tinvestments | 3.1 | 9.4 | (44.2) |
| Income\tapplicable\tto\tminority\tinterests,\tnet\tof\ttax | 23.0 | 16.7 | 20.0 |
| Other | 25.9 | 15.8 | 6.8 |
| Change\tin\tassets\tand\tliabilities,\tnet\tof\tacquisitions\tand\tdispositions: |  |  |  |
| Accounts\treceivable | 283.9 | 43.5 | 235.4 |
| Expenditures\tbillable\tto\tclients | 69.7 | (124.5) | (87.7) |
| Prepaid\texpenses\tand\tother\tcurrent\tassets | (19.2) | 9.7 | (6.9) |
| Accounts\tpayable | 6.8 | (221.5) | (370.0) |
| Accrued\tliabilities | (147.7) | 121.8 | (21.4) |
| Other\tnon-current\tassets\tand\tliabilities | (26.2) | (14.6) | (3.1) |
| Net\tchange\tin\tassets\tand\tliabilities\trelated\tto\tdiscontinued\toperations | — | — | 5.0 |
| Net\tcash\tprovided\tby\toperating\tactivities | 865.3 | 298.1 | 9.0 |
| CASH\tFLOWS\tFROM\tINVESTING\tACTIVITIES: |  |  |  |
| Acquisitions,\tincluding\tdeferred\tpayments,\tnet\tof\tcash\tacquired | (106.0) | (151.4) | (15.1) |
| Capital\texpenditures | (138.4) | (147.6) | (127.8) |
| Sales\tand\tmaturities\tof\tshort-term\tmarketable\tsecurities | 5.6 | 702.7 | 951.8 |
| Purchases\tof\tshort-term\tmarketable\tsecurities | (159.9) | (720.8) | (839.1) |
| Proceeds\tfrom\tsales\tof\tbusinesses\tand\tinvestments,\tnet\tof\tcash\tsold | 27.9 | 69.6 | 76.4 |
| Purchases\tof\tinvestments | (35.6) | (25.0) | (36.4) |
| Other\tinvesting\tactivities | 2.1 | 4.7 | 1.8 |
| Net\tcash\t(used\tin)\tprovided\tby\tinvesting\tactivities | (404.3) | (267.8) | 11.6 |
| CASH\tFLOWS\tFROM\tFINANCING\tACTIVITIES: |  |  |  |
| Net\t(decrease)\tincrease\tin\tshort-term\tbank\tborrowings | (23.7) | 10.0 | 34.3 |
| Repayment\tof\t4.50%\tConvertible\tSenior\tNotes | (190.8) | — | — |
| Net\tpayments\tof\tlong-term\tdebt | (11.0) | (4.2) | (3.4) |
| Issuance\tcosts\tand\tconsent\tfees | (11.3) | (3.5) | (50.6) |
| Call\tspread\ttransactions\tin\tconnection\twith\tELF\tFinancing | — | — | (29.2) |
| Distributions\tto\tminority\tinterests | (14.6) | (18.1) | (24.4) |
| Preferred\tstock\tdividends | (27.6) | (27.6) | (47.0) |
| Other\tfinancing\tactivities | 3.2 | 6.1 | (9.4) |
| Net\tcash\tused\tin\tfinancing\tactivities | (275.8) | (37.3) | (129.7) |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tcash\tequivalents | (92.9) | 66.2 | (11.1) |
| Net\tincrease\t(decrease)\tin\tcash\tand\tcash\tequivalents | 92.3 | 59.2 | (120.2) |
| Cash\tand\tcash\tequivalents\tat\tbeginning\tof\tyear | 2,014.9 | 1,955.7 | 2,075.9 |
| Cash\tand\tcash\tequivalents\tat\tend\tof\tperiod | $ 2,107.2 | $ 2,014.9 | $1,955.7 |
| SUPPLEMENTAL\tCASH\tFLOW\tINFORMATION |  |  |  |
| Cash\tpaid\tfor\tinterest | $183.2 | $205.9 | $186.9 |
|  | $104.4 | $88.3 | $111.0 |

# Consolidated	Statements	of	Stockholders'	Equity	and	Comprehensive	Income	(Loss)

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| PREFERRED\tSTOCK |  |  |  |
| Balance\tat\tbeginning\tof\tyear,\tSeries\tA | $— | $— | $373.7 |
| Conversion\tto\tcommon\tstock | — | — | (373.7) |
| Balance\tat\tend\tof\tyear,\tSeries\tA | — | — | — |
| Balance\tat\tbeginning\tand\tend\tof\tyear,\tSeries\tB | 525.0 | 525.0 | 525.0 |
| COMMON\tSTOCK |  |  |  |
| Balance\tat\tbeginning\tof\tyear | 45.9 | 45.6 | 43.0 |
| Series\tA\tconversion\tto\tcommon\tstock | — | — | 2.8 |
| Reclassification\tupon\tadoption\tof\tSFAS\tNo.\t123R | — | — | (1.0) |
| Other | 0.5 | 0.3 | 0.8 |
| Balance\tat\tend\tof\tyear | 46.4 | 45.9 | 45.6 |
| ADDITIONAL\tPAID\tIN\tCAPITAL |  |  |  |
| Balance\tat\tbeginning\tof\tyear | 2,635.0 | 2,586.2 | 2,224.1 |
| Cumulative\teffect\tof\tthe\tadoption\tof\tSAB\tNo.\t108 | — | — | 23.3 |
| Stock-based\tcompensation | 82.1 | 81.8 | 60.0 |
| Reclassification\tupon\tadoption\tof\tSFAS\tNo.\t123R | — | — | (88.4) |
| Series\tA\tconversion\tto\tcommon\tstock | — | — | 370.9 |
| Issuance\tof\tshares\tfor\tacquisitions\tand\tinvestments | 0.9 | 0.4 | 11.3 |
| Preferred\tstock\tdividends | (27.6) | (27.6) | (47.6) |
| Call\tspread\ttransactions\tin\tconnection\twith\tELF\tFinancing | — | — | (29.2) |
| Warrants\tissued\tto\tinvestors | — | — | 63.4 |
| Other | (7.6) | (5.8) | (1.6) |
| Balance\tat\tend\tof\tyear | 2,682.8 | 2,635.0 | 2,586.2 |
| ACCUMULATED\tDEFICIT |  |  |  |
| Balance\tat\tbeginning\tof\tyear | (741.1) | (899.2) | (841.1) |
| Cumulative\teffect\tof\tthe\tadoption\tof\tSAB\tNo.\t108 | — | — | (26.4) |
| Cumulative\teffect\tof\tthe\tadoption\tof\tFIN\tNo.\t48 | — | (9.5) | — |
| Net\tincome\t(loss) | 295.0 | 167.6 | (31.7) |
| Balance\tat\tend\tof\tyear | (446.1) | (741.1) | (899.2) |
| ACCUMULATED\tOTHER\tCOMPREHENSIVE\tLOSS |  |  |  |
| Balance\tat\tbeginning\tof\tyear | (118.6) | (303.0) | (276.0) |
|  | — | — | 39.7 |
|  | (36.0) | 46.5 | — |
|  | (5.7) | (5.2) | (9.0) |
| Foreign\tcurrency\ttranslation\tadjustment,\tnet\tof\ttax | (161.2) | 142.1 | (23.3) |
| Reclassification\tof\tinvestment\tgain\tto\tnet\tearnings | — | — | 17.0 |
| Recognition\tof\tpreviously\tunrealized\t(gain)\tloss\ton\tsecurities\tavailable-for-sale,\tnet\tof\ttax | 3.0 | 1.0 | (8.8) |
| Net\tother\tcomprehensive\t(loss)\tincome\tadjustments | (199.9) | 184.4 | 15.6 |
| Adoption\tof\tSFAS\tNo.\t158 | — | — | (42.6) |
| Balance\tat\tend\tof\tyear | (318.5) | (118.6) | (303.0) |
| TREASURY\tSTOCK |  |  |  |
| Balance\tat\tbeginning\tand\tend\tof\tyear | (14.0) | (14.0) | (14.0) |
| UNAMORTIZED\tDEFERRED\tCOMPENSATION |  |  |  |
| Balance\tat\tbeginning\tof\tyear | — | — | (89.4) |
| Reclassification\tupon\tadoption\tof\tSFAS\tNo.123R | — | — | 89.4 |
| Balance\tat\tend\tof\tyear | — | — | — |
| TOTAL\tSTOCKHOLDERS'\tEQUITY | $2,475.6 | $2,332.2 | $1,940.6 |
| COMPREHENSIVE\tINCOME\t(LOSS) |  |  |  |
| Net\tincome\t(loss)\tapplicable\tto\tcommon\tstockholders | $265.2 | $131.3 | $(79.3) |
| Preferred\tstock\tdividends | 27.6 | 27.6 | 47.6 |
| Allocation\tto\tparticipating\tsecurities | 2.2 | 8.7 | — |
| Net\tother\tcomprehensive\t(loss)\tincome\tadjustments | (199.9) | 184.4 | 15.6 |
| Total\tcomprehensive\tincome\t(loss) | $95.1 | $352.0 | $(16.1) |
| NUMBER\tOF\tCOMMON\tSHARES |  |  |  |
| Balance\tat\tbeginning\tof\tyear | 471.7 | 469.0 | 430.3 |
| Restricted\tstock,\tnet\tof\tforfeitures | 6.0 | 3.1 | 4.3 |
| Series\tA\tconversion\tto\tcommon\tstock | — | — | 27.7 |
| Other | (0.6) | (0.4) | 6.7 |
| Balance\tat\tend\tof\tyear | 477.1 | 471.7 | 469.0 |

# Notes	to	Consolidated	Financial	Statements

# Note	1:				Summary	of	Significant	Accounting	Policies

# Business	Description

The	Interpublic	Group	of	Companies,	Inc.	and	subsidiaries	(the	"Company",	"Interpublic",	"we",	"us"	or	"our")	is	one	of	the	world's	premier	advertising	and marketing	services	companies.	Our	agency	brands	deliver	custom	marketing	solutions	to	many	of	the	world's	largest	marketers.	Our	companies	cover	the	spectrum	of marketing	disciplines	and	specialties,	from	consumer	advertising	and	direct	marketing	to	mobile	and	search	engine	marketing	and	develop	marketing	programs	that	build brands,	influence	consumer	behavior	and	sell	products.

# Principles	of	Consolidation

The	Consolidated	Financial	Statements	include	the	accounts	of	the	Company	and	its	consolidated	subsidiaries,	most	of	which	are	wholly	owned.	Investments	in companies	over	which	we	do	not	have	control,	but	the	ability	to	exercise	significant	influence,	are	accounted	for	using	the	equity	method	of	accounting.	Investments	in companies	over	which	we	have	neither	control	nor	the	ability	to	exercise	significant	influence	are	accounted	for	under	the	cost	method.	All	intercompany	accounts	and transactions	have	been	eliminated	in	consolidation.

In	accordance	with	Financial	Accounting	Standards	Board	("FASB")	Interpretation	No.	46(R),	Consolidation	of	Variable	Interest	Entities	(revised	December 2003),	an	Interpretation	of	ARB	No.	51,	along	with	certain	revisions,	we	have	consolidated	certain	entities	meeting	the	definition	of	variable	interest	entities.	The inclusion	of	these	entities	does	not	have	a	material	impact	on	our	Consolidated	Financial	Statements.

# Reclassifications

Certain	reclassifications	have	been	made	to	the	prior	period	financial	statements	to	conform	to	the	current	year	presentation.

# Use	of	Estimates

The	preparation	of	financial	statements	in	conformity	with	accounting	principles	generally	accepted	in	the	United	States	of	America	("GAAP")	requires	us	to make	estimates	and	assumptions	that	affect	the	reported	amounts	of	assets	and	liabilities,	the	disclosure	of	contingent	assets	and	liabilities	at	the	reporting	date	and	the reported	amounts	of	revenues	and	expenses	during	the	reporting	period.	Significant	estimates	and	assumptions	are	used	for,	but	not	limited	to,	allowance	for	doubtful accounts,	asset	impairments,	depreciable	lives	of	assets,	useful	lives	of	intangible	assets,	income	tax	valuation	allowances,	uncertain	tax	positions,	net	pension	and postretirement	benefit	costs	and	obligations,	and	fair	value	of	stock-based	compensation.	Actual	results	could	differ	from	those	estimates.

Our	revenues	are	primarily	derived	from	the	planning	and	execution	of	advertising,	marketing	and	communications	programs	in	various	media	around	the	world. Our	revenue	is	directly	dependent	upon	the	advertising,	marketing	and	corporate	communications	requirements	of	our	clients.	Our	revenue	tends	to	be	higher	in	the second	half	of	the	calendar	year	as	a	result	of	the	holiday	season	and	lower	in	the	first	half	as	a	result	of	the	post-holiday	slow-down	in	client	activity.

Most	of	our	client	contracts	are	individually	negotiated	and	accordingly,	the	terms	of	client	engagements	and	the	bases	on	which	we	earn	commissions	and	fees vary	significantly.	Our	client	contracts	are	complex	arrangements	that	may	include	provisions	for	incentive	compensation	and	vendor	rebates	and	credits.	Our	largest 47

# Notes	to	Consolidated	Financial	Statements—(Continued)

clients	are	multinational	entities	and,	as	such,	we	often	provide	services	to	these	clients	out	of	multiple	offices	and	across	many	of	our	agencies.	In	arranging	for	such services,	it	is	possible	that	we	will	enter	into	global,	regional	and	local	agreements.	Multiple	agreements	of	this	nature	are	reviewed	by	legal	counsel	to	determine	the governing	terms	to	be	followed	by	the	offices	and	agencies	involved.

Revenue	for	our	services	is	recognized	when	all	of	the	following	criteria	are	satisfied:	(i)	persuasive	evidence	of	an	arrangement	exists;	(ii)	the	price	is	fixed	or determinable;	(iii)	collectibility	is	reasonably	assured;	and	(iv)	services	have	been	performed.	Depending	on	the	terms	of	a	client	contract,	fees	for	services	performed can	be	recognized	in	three	principal	ways:	proportional	performance,	straight-line	(or	monthly	basis)	or	completed	contract.

•Fees	are	generally	recognized	as	earned	based	on	the	proportional	performance	method	of	revenue	recognition	in	situations	where	our	fee	is	reconcilable	to	the actual	hours	incurred	to	service	the	client	as	detailed	in	a	contractual	staffing	plan,	where	the	fee	is	earned	on	a	per	hour	basis,	or	where	actual	hours	incurred are	provided	to	the	client	on	a	periodic	basis	(whether	or	not	the	fee	is	reconcilable),	with	the	amount	of	revenue	recognized	in	these	situations	limited	to	the amount	realizable	under	the	client	contract.	We	believe	an	input	based	measure	(the	'hour')	is	appropriate	in	situations	where	the	client	arrangement	essentially functions	as	a	time	and	out-of-pocket	expense	contract	and	the	client	receives	the	benefit	of	the	services	provided	throughout	the	contract	term.

•Fees	are	recognized	on	a	straight-line	or	monthly	basis	when	service	is	provided	essentially	on	a	pro	rata	basis	and	the	terms	of	the	contract	support	monthly basis	accounting.

•	 Certain	fees	(such	as	for	major	marketing	events)	are	deferred	until	contract	completion	as	the	final	act	is	so	significant	in	relation	to	the	service	transaction taken	as	a	whole.	Fees	are	also	recognized	on	a	milestone	basis	if	the	terms	of	the	contract	call	for	the	delivery	of	discrete	projects,	or	on	the	completed	contract basis	if	any	of	the	criteria	of	Staff	Accounting	Bulletin	("SAB")	No.	104,	Revenue	Recognition,	were	not	satisfied	prior	to	job	completion	or	if	the	terms	of	the contract	do	not	otherwise	qualify	for	proportional	performance	or	monthly	basis	recognition.

Depending	on	the	terms	of	the	client	contract,	revenue	is	derived	from	diverse	arrangements	involving	fees	for	services	performed,	commissions,	performance incentive	provisions	and	combinations	of	the	three.	Commissions	are	generally	earned	on	the	date	of	the	broadcast	or	publication.	Contractual	arrangements	with	clients may	also	include	performance	incentive	provisions	designed	to	link	a	portion	of	our	revenue	to	our	performance	relative	to	both	qualitative	and	quantitative	goals. Performance	incentives	are	recognized	as	revenue	for	quantitative	targets	when	the	target	has	been	achieved	and	for	qualitative	targets	when	confirmation	of	the incentive	is	received	from	the	client.	Incremental	direct	costs	incurred	related	to	contracts	where	revenue	is	accounted	for	on	a	completed	contract	basis	are	generally expensed	as	incurred.	There	are	certain	exceptions	made	for	significant	contracts	or	for	certain	agencies	where	the	majority	of	the	contracts	are	project-based	and systems	are	in	place	to	properly	capture	appropriate	direct	costs.

Substantially	all	of	our	revenue	is	recorded	as	the	net	amount	of	our	gross	billings	less	pass-through	expenses	charged	to	a	client.	In	most	cases,	the	amount	that	is billed	to	clients	significantly	exceeds	the	amount	of	revenue	that	is	earned	and	reflected	in	our	financial	statements,	because	of	various	pass-through	expenses	such	as production	and	media	costs.	In	compliance	with	Emerging	Issues	Task	Force	("EITF")	Issue	No.	99-19,	Reporting	Revenue	Gross	as	a	Principal	versus	Net	as	an	Agent, we	assess	whether	our	agency	or	the	third-party	supplier	is	the	primary	obligor.	We	evaluate	the	terms	of	our	client	agreements	as	part	of	this	assessment.	In	addition,	we give	appropriate	consideration	to	other	key	indicators	such	as	latitude	in	establishing	price,	discretion	in	supplier	selection	and	credit	risk	to	the	vendor.	Because	we operate	broadly	as	an	advertising	agency,	based	on	our	primary	lines	of	business	and	given	the	industry	practice	to	generally	record	revenue	on	a

net	versus	gross	basis,	we	believe	that	there	must	be	strong	evidence	in	place	to	overcome	the	presumption	of	net	revenue	accounting.	Accordingly,	we	generally	record revenue	net	of	pass-through	charges	as	we	believe	the	key	indicators	of	the	business	suggest	we	generally	act	as	an	agent	on	behalf	of	our	clients	in	our	primary	lines	of business.	In	those	businesses	(primarily	sales	promotion,	event,	sports	and	entertainment	marketing)	where	the	key	indicators	suggest	we	act	as	a	principal,	we	record	the gross	amount	billed	to	the	client	as	revenue	and	the	related	costs	incurred	as	office	and	general	expenses.	Revenue	is	reported	net	of	taxes	assessed	by	governmental authorities	that	are	directly	imposed	on	our	revenue-producing	transactions.

As	we	provide	services	as	part	of	our	core	operations,	we	generally	incur	incidental	expenses,	which,	in	practice,	are	commonly	referred	to	as	"out-of-pocket" expenses.	These	expenses	often	include	expenses	related	to	airfare,	mileage,	hotel	stays,	out	of	town	meals	and	telecommunication	charges.	In	accordance	with	EITF Issue	No.	01-14,	Income	Statement	Characterization	of	Reimbursements	Received	for	'Out-of-Pocket'	Expenses	Incurred,	we	record	the	reimbursements	received	for incidental	expenses	as	revenue	with	a	corresponding	offset	to	office	and	general	expense.

We	receive	credits	from	our	vendors	and	media	outlets	for	transactions	entered	into	on	behalf	of	our	clients	that,	based	on	the	terms	of	our	contracts	and	local	law, are	either	remitted	to	our	clients	or	retained	by	us.	If	amounts	are	to	be	passed	through	to	clients	they	are	recorded	as	liabilities	until	settlement	or,	if	retained	by	us,	are recorded	as	revenue	when	earned.	Negotiations	with	a	client	at	the	close	of	a	current	engagement	could	result	in	either	payments	to	the	client	in	excess	of	the	contractual liability	or	in	payments	less	than	the	contractual	liability.	These	items,	referred	to	as	concessions,	relate	directly	to	the	operations	of	the	period	and	are	recorded	as operating	expense	or	income.	Concession	income	or	expense	may	also	be	realized	in	connection	with	settling	vendor	discount	or	credit	liabilities	that	were	established	as part	of	the	restatement	we	presented	in	our	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2004	that	we	filed	in	September	2005	(the	"2004 Restatement").	In	these	situations,	and	given	the	historical	nature	of	these	liabilities,	we	have	recorded	such	items	as	other	income	or	expense	in	order	to	prevent distortion	of	current	operating	results.	We	release	certain	of	these	credit	liabilities	when	the	statute	of	limitations	has	lapsed,	unless	the	liabilities	are	associated	with customers	with	whom	we	are	in	the	process	of	settling	such	liabilities.	These	amounts	are	reported	in	other	income	(expense).

# Cash	Equivalents

Cash	equivalents	are	highly	liquid	investments,	including	certificates	of	deposit,	government	securities,	commercial	paper	and	time	deposits	with	original maturities	of	three	months	or	less	at	the	time	of	purchase	and	are	stated	at	estimated	fair	value,	which	approximates	cost.	Cash	is	maintained	at	high	credit	quality financial	institutions.

As	of	December	31,	2008	and	2007,	we	held	restricted	cash	of	$50.9	and	$45.8,	respectively,	included	in	other	current	assets.	Restricted	cash	primarily	represents cash	equivalents	that	are	maintained	on	behalf	of	our	clients	and	are	legally	restricted	for	a	specified	business	purpose.

# Short-Term	Marketable	Securities

We	classify	short-term	marketable	debt	and	equity	securities	as	available-for-sale,	which	are	carried	at	fair	value	with	the	corresponding	unrealized	gains	and losses	reported	as	a	separate	component	of	other	comprehensive	income	(loss),	which	is	a	component	of	stockholders'	equity.	The	cost	of	securities	sold	is	determined based	upon	the	average	cost	of	the	securities	sold.

# Allowance	for	Doubtful	Accounts

The	allowance	for	doubtful	accounts	is	estimated	based	on	the	aging	of	accounts	receivable,	reviews	of	client	credit	reports,	industry	trends	and	economic indicators,	as	well	as	analysis	of	recent	payment	history	for	specific	customers.	The	estimate	is	based	largely	on	a	formula-driven	calculation	but	is	supplemented	with economic	indicators	and	knowledge	of	potential	write-offs	of	specific	client	accounts.

# Expenditures	Billable	to	Clients

Expenditures	billable	to	clients	are	primarily	comprised	of	production	and	media	costs	that	have	been	incurred	but	have	not	yet	been	billed	to	clients,	as	well	as fees	that	have	been	earned	which	have	not	yet	been	billed	to	clients.	Unbilled	amounts	are	presented	in	expenditures	billable	to	clients	regardless	of	whether	they	relate to	our	fees	or	production	and	media	costs.	A	provision	is	made	for	unrecoverable	costs	as	deemed	appropriate.

# Investments

Publicly	traded	investments	in	companies	over	which	we	do	not	exert	a	significant	influence	are	classified	as	available-for-sale	and	reported	at	fair	value	with	net unrealized	gains	and	losses	reported	as	a	component	of	other	comprehensive	income	(loss).	Non-publicly	traded	investments	and	all	other	publicly	traded	investments are	accounted	for	on	the	equity	basis	or	cost	basis,	including	investments	to	fund	certain	deferred	compensation	and	retirement	obligations.	We	regularly	review	our equity	and	cost	method	investments	to	determine	whether	a	significant	event	or	change	in	circumstances	has	occurred	that	may	have	an	adverse	effect	on	the	fair	value	of each	investment.	In	the	event	a	decline	in	fair	value	of	an	investment	occurs,	we	determine	if	the	decline	has	been	other-than-temporary.	We	consider	our	investments strategic	and	long-term	in	nature,	so	we	determine	if	the	fair	value	decline	is	recoverable	within	a	reasonable	period.	For	investments	accounted	for	using	the	equity	basis or	cost	basis,	we	evaluate	fair	value	based	on	specific	information	(valuation	methodologies,	estimates	of	appraisals,	financial	statements,	etc.)	in	addition	to	quoted market	price,	if	available.	We	consider	all	known	quantitative	and	qualitative	factors	in	determining	if	an	other-than-temporary	decline	in	value	of	an	investment	has occurred.

Dividends	received	from	our	investments	in	unconsolidated	affiliated	companies	were	$5.4,	$3.1	and	$4.4	in	2008,	2007	and	2006,	respectively,	and	reduced	the carrying	values	of	the	related	investments.

# Furniture,	Equipment	and	Leasehold	Improvements

Furniture,	equipment	and	leasehold	improvements	are	stated	at	cost,	net	of	accumulated	depreciation.	Furniture	and	equipment	are	depreciated	generally	using	the straight-line	method	over	the	estimated	useful	lives	of	the	related	assets,	which	range	from	3	to	7	years	for	furniture,	equipment	and	computer	software	costs,	10	to	35 years	for	buildings	and	the	shorter	of	the	useful	life	or	the	remaining	lease	term	for	leasehold	improvements.	The	total	depreciation	and	amortization	expense	for	the years	ended	December	31,	2008,	2007	and	2006	was	$158.9,	$168.7	and	$167.4,	respectively.

We	account	for	our	business	combinations	using	the	purchase	accounting	method.	The	total	costs	of	the	acquisitions	are	allocated	to	the	underlying	net	assets, based	on	their	respective	estimated	fair	values	and	the	remainder	allocated	to	goodwill	and	other	intangible	assets.	Determining	the	fair	value	of	assets	acquired	and liabilities	assumed	requires	management's	judgment	and	involves	the	use	of	significant	estimates,	including

future	cash	inflows	and	outflows,	discount	rates,	asset	lives	and	market	multiples.	Considering	the	characteristics	of	advertising,	specialized	marketing	and communication	services	companies,	our	acquisitions	usually	do	not	have	significant	amounts	of	tangible	assets	as	the	principal	asset	we	typically	acquire	is	creative talent.	As	a	result,	a	substantial	portion	of	the	purchase	price	is	allocated	to	goodwill	and	other	intangible	assets.

We	review	goodwill	and	other	intangible	assets	with	indefinite	lives	not	subject	to	amortization	as	of	October	1st	each	year	or	whenever	events	or	significant changes	in	circumstances	indicate	that	the	carrying	value	may	not	be	recoverable.	We	evaluate	the	recoverability	of	goodwill	at	a	reporting	unit	level.	We	have	16 reporting	units	subject	to	the	2008	annual	impairment	testing	that	are	either	entities	at	the	operating	segment	level	or	one	level	below	the	operating	segment	level.

We	review	intangible	assets	with	definite	lives	subject	to	amortization	whenever	events	or	circumstances	indicate	that	a	carrying	amount	of	an	asset	may	not	be recoverable.	Intangible	assets	with	definite	lives	subject	to	amortization	are	amortized	on	a	straight-line	basis	with	estimated	useful	lives	generally	between	7	and	15 years.	Events	or	circumstances	that	might	require	impairment	testing	include	the	loss	of	a	significant	client,	the	identification	of	other	impaired	assets	within	a	reporting unit,	loss	of	key	personnel,	the	disposition	of	a	significant	portion	of	a	reporting	unit,	significant	decline	in	stock	price	or	a	significant	adverse	change	in	business	climate or	regulations.

The	fair	value	of	a	reporting	unit	for	2008	is	estimated	using	the	income	approach,	which	incorporates	the	use	of	the	discounted	cash	flow	method.	In	prior	years, we	have	used	a	combination	of	the	income	approach	and	the	market	approach,	which	incorporates	the	use	of	earnings	and	revenue	multiples	based	on	market	data.

However,	due	to	the	deterioration	and	extreme	volatility	of	the	credit	markets	in	the	latter	part	of	2008,	we	determined	the	market	approach	was	not	appropriate. Therefore,	we	used	only	the	income	approach	to	determine	the	fair	value	of	our	reporting	units	in	2008.

As	the	functional	currency	of	our	foreign	operations	is	generally	the	local	currency	our	foreign	operations	are	translated	into	U.S.	Dollars	at	the	exchange	rates	in effect	at	the	balance	sheet	date	for	assets	and	liabilities	and	average	exchange	rates	during	the	period	presented	for	revenues	and	expenses.	The	resulting	translation adjustments	are	recorded	as	a	component	of	accumulated	other	comprehensive	income	(loss),	which	is	a	component	of	stockholders'	equity.	Currency	transaction	gains or	losses	arising	from	transactions	in	currencies	other	than	the	functional	currency	are	included	in	office	and	general	expenses.

The	provision	for	income	taxes	includes	federal,	state,	local	and	foreign	taxes.	Income	taxes	are	accounted	for	under	the	liability	method.	Deferred	tax	assets	and liabilities	are	recognized	for	the	estimated	future	tax	consequences	of	temporary	differences	between	the	financial	statement	carrying	amounts	and	their	respective	tax bases.	Deferred	tax	assets	and	liabilities	are	measured	using	enacted	tax	rates	expected	to	apply	to	taxable	income	in	the	year	in	which	the	temporary	differences	are expected	to	be	reversed.	We	evaluate	the	realizability	of	our	deferred	tax	assets	and	establish	a	valuation	allowance	when	it	is	more	likely	than	not	that	all	or	a	portion	of deferred	tax	assets	will	not	be	realized.

# Earnings	(Loss)	Per	Share

In	periods	when	we	generate	income,	we	calculate	basic	earnings	per	share	("EPS")	using	the	two-class	method,	pursuant	to	EITF	Issue	No.	03-6,	Participating Securities	and	the	Two-Class	Method	under	SFAS	Statement	No.	128	("EITF	03-6").	The	two-class	method	is	required	as	our	4.50%	Convertible	Senior	Notes	qualify	as participating	securities,	having	the	right	to	receive	dividends	or	dividend	equivalents	should	dividends	be	declared	on	common	stock.	Under	this	method,	earnings	for the	period	(after	deduction	for	contractual	preferred	stock	dividends)	are	allocated	on	a	pro-rata	basis	to	the	common	stockholders	and	to	the	holders	of	participating securities	based	on	their	right	to	receive	dividends.	We	do	not	use	the	two-class	method	in	periods	when	we	generate	a	loss	as	the	holders	of	the	4.50%	Convertible Notes	do	not	participate	in	losses.

Diluted	earnings	(loss)	per	share	reflect	the	potential	dilution	that	would	occur	if	certain	potentially	dilutive	securities	or	debt	obligations	were	exercised	or converted	into	common	stock.	The	potential	issuance	of	common	stock	is	assumed	to	occur	at	the	beginning	of	the	year	(or	at	the	time	of	issuance	of	the	potentially dilutive	instrument,	if	later),	and	the	incremental	shares	are	included	using	the	treasury	stock	or	"if-converted"	method.	The	proceeds	utilized	in	applying	the	treasury stock	method	consist	of	the	amount,	if	any,	to	be	paid	upon	exercise	and,	as	it	relates	to	stock-based	compensation,	the	amount	of	compensation	cost	attributed	to	future service	not	yet	recognized	and	any	tax	benefits	credited	to	additional	paid-in-capital	related	to	the	exercise.	These	proceeds	are	then	assumed	to	be	used	by	us	to	purchase common	stock	at	the	average	market	price	of	our	stock	during	the	period.	The	incremental	shares	(difference	between	the	shares	assumed	to	be	issued	and	the	shares assumed	to	be	purchased),	to	the	extent	they	would	have	been	dilutive,	are	included	in	the	denominator	of	the	diluted	EPS	calculation.

We	have	pension	and	postretirement	benefit	plans	covering	certain	domestic	and	international	employees.	We	use	various	actuarial	methods	and	assumptions	in determining	our	pension	and	postretirement	benefit	costs	and	obligations,	including	the	discount	rate	used	to	determine	the	present	value	of	future	benefits,	expected long-term	rate	of	return	on	plan	assets	and	healthcare	cost	trend	rates.	SFAS	No.	158,	Employers'	Accounting	for	Defined	Benefit	Pension	and	Other	Postretirement Plans	("SFAS	158")	requires,	among	other	things,	balance	sheet	recognition	of	the	overfunded	or	underfunded	status	of	pension	and	postretirement	benefit	plans.

# Stock-Based	Compensation

We	account	for	stock-based	compensation	in	accordance	with	SFAS	No.	123	(revised	2004),	Share-Based	Payment	("SFAS	123R").	SFAS	123R	requires compensation	costs	related	to	share-based	transactions,	including	employee	stock	options,	to	be	recognized	in	the	financial	statements	based	on	fair	value.	Under	SFAS 123R,	the	compensation	expense	recognized	beginning	January	1,	2006	includes	compensation	expense	for	(i)	all	stock-based	payments	granted	prior	to,	but	not	yet vested	as	of	January	1,	2006,	based	on	the	grant-date	fair	value

estimated	in	accordance	with	the	original	provisions	of	SFAS	No.	123,	Accounting	for	Stock-Based	Compensation	("SFAS	123"),	and	(ii)	all	stock-based	payments granted	subsequent	to	December	31,	2005	based	on	the	grant-date	fair	value	estimated	in	accordance	with	the	provisions	of	SFAS	123R.	Stock-based	compensation expense	is	generally	recognized	ratably	over	the	requisite	service	period,	net	of	estimated	forfeitures.

# Note	2:				Restructuring	and	Other	Reorganization-Related	Charges

The	components	of	restructuring	and	other	reorganization-related	charges	consist	of	the	following:

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| Restructuring\tcharges: |  |  |  |
| Lease\ttermination\tand\tother\texit\tcosts | $5.2 | $(0.4) | $1.5 |
| Severance\tand\ttermination\tcosts | 0.6 | 13.8 | — |
|  | 5.8 | 13.4 | 1.5 |
| Other\treorganization-related\tcharges | 11.3 | 12.5 | 33.0 |
| Total | $17.1 | $25.9 | $34.5 |

# Restructuring	Charges

The	2007	program	was	initiated	to	realign	resources	with	our	strategic	business	objectives	within	Lowe	as	a	result	of	changes	in	the	business	environment.	The 2003	program	was	initiated	in	response	to	softness	in	demand	for	advertising	and	marketing	services.	The	2001	program	was	initiated	following	the	acquisition	of	True North	Communications	Inc.	and	was	designed	to	integrate	the	acquisition	and	improve	productivity.	Since	their	inception,	total	net	charges	for	the	2007,	2003	and	2001 programs	were	$23.4,	$222.2	and	$640.3,	respectively.	Substantially	all	activities	under	the	2007,	2003	and	2001	programs	have	been	completed.

Net	restructuring	charges	for	the	year	ended	December	31,	2008	was	comprised	of	net	charges	of	$4.2	at	Integrated	Agency	Networks	("IAN")	and	$1.6	at Constituency	Management	Group	("CMG").	Net	restructuring	charges	for	the	year	ended	December	31,	2007	was	comprised	of	net	charges	of	$14.5	at	IAN,	partially offset	by	net	reversals	of	$1.1	at	CMG.	For	the	year	ended	December	31,	2006	net	restructuring	charges	consisted	of	net	charges	of	$1.5	at	CMG.

A	summary	of	the	remaining	liability	for	the	2007,	2003	and	2001	restructuring	programs	is	as	follows:

|  | 2007 | 2003 | 2001 |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Program | Program | Program | Total |
| Liability\tat\tDecember\t31,\t2006 | $— | $12.6 | $19.2 | $31.8 |
| Net\tcharges\t(reversals)\tand\tadjustments | 19.1 | (0.5) | (5.2) | 13.4 |
| Payments\tand\tother1 | (7.2) | (3.1) | (5.3) | (15.6) |
| Liability\tat\tDecember\t31,\t2007 | $11.9 | $9.0 | $8.7 | $29.6 |
| Net\tcharges\tand\tadjustments | 4.3 | 0.8 | 0.7 | 5.8 |
| Payments\tand\tother1 | (15.0) | (4.1) | (3.5) | (22.6) |
| Liability\tat\tDecember\t31,\t2008 | $1.2 | $5.7 | $5.9 | $12.8 |

1 Includes	amounts	representing	adjustments	to	the	liability	for	changes	in	foreign	currency	exchange	rates.

# Other	Reorganization-Related	Charges

Other	reorganization-related	charges	relate	to	our	realignment	of	our	media	businesses	into	a	newly	created	management	entity	called	Mediabrands	and	the	2006 merger	of	Draft	Worldwide	and	Foote,	Cone	and	Belding	Worldwide	to	create	Draftfcb.	Charges	related	to	severance	and	terminations	costs	and	lease	termination	and other	exit	costs.	We	expect	charges	associated	with	Mediabrands	to	be	completed	during	the	first	half	of	2009.	Charges	related	to	the	creation	of	Draftfcb	in	2006	are complete.	The	charges	were	separated	from	the	rest	of	our	operating	expenses	within	the	Consolidated	Statements	of	Operations	because	they	did	not	result	from	charges that	occurred	in	the	normal	course	of	business.

# Note	3:				Earnings	(Loss)	Per	Share

Earnings	(loss)	per	basic	common	share	equals	net	income	(loss)	applicable	to	common	stockholders	divided	by	the	weighted	average	number	of	common	shares outstanding	for	the	period.	Diluted	earnings	(loss)	per	share	equals	net	income	(loss)	applicable	to	common	stockholders	adjusted	to	exclude,	if	dilutive,	preferred	stock dividends,	allocation	to	participating	securities	and	interest	expense	related	to	potentially	dilutive	securities	calculated	using	the	effective	interest	rate,	divided	by	the weighted	average	number	of	common	shares	outstanding,	plus	any	additional	common	shares	that	would	have	been	outstanding	if	potentially	dilutive	shares	had	been issued.	The	following	sets	forth	basic	and	diluted	earnings	(loss)	per	common	share	applicable	to	common	stock:

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| Income\t(loss)\tfrom\tcontinuing\toperations | $295.0 | $167.6 | $(36.7) |
| Less:\tPreferred\tstock\tdividends | 27.6 | 27.6 | 47.6 |
| Allocation\tto\tparticipating\tsecurities1 | 2.2 | 8.7 | — |
| Continuing\tincome\t(loss)\tapplicable\tto\tcommon\tstockholders\t—\tbasic | \t 265.2 | \t 131.3 | (84.3) |
| Add:\tEffect\tof\tdilutive\tsecurities |  |  |  |
| Interest\ton\t4.25%\tConvertible\tSenior\tNotes | 1.4 | 1.4 | — |
| Interest\ton\t4.75%\tConvertible\tSenior\tNotes | 4.0 | 0.5 | — |
| Continuing\tincome\t(loss)\tapplicable\tto\tcommon\tstockholders\t—\tdiluted | $270.6 | $133.2 | $(84.3) |
| Income\tfrom\tdiscontinued\toperations,\tnet\tof\ttax | — | — | 5.0 |
| Net\tincome\t(loss)\tapplicable\tto\tcommon\tstockholders\t—\tbasic | $265.2 | $131.3 | $(79.3) |
| Net\tincome\t(loss)\tapplicable\tto\tcommon\tstockholders\t—\tdiluted | $270.6 | $133.2 | $(79.3) |
| Weighted-average\tnumber\tof\tcommon\tshares\toutstanding\t—\tbasic | \t 461.5 | \t 457.7 | \t 428.1 |
| Effect\tof\tdilutive\tsecurities: |  |  |  |
| Restricted\tstock\tand\tstock\toptions | 8.5 | 7.7 | — |
| ELF\tWarrants\t—\tCapped\t(See\tNote\t9) | — | 3.5 | — |
| 4.25%\tConvertible\tSenior\tNotes | 32.2 | 32.2 | — |
| 4.75%\tConvertible\tSenior\tNotes | 16.1 | 2.0 | — |
| Weighted-average\tnumber\tof\tcommon\tshares\toutstanding\t—\tdiluted | \t 518.3 | \t 503.1 | \t 428.1 |
| Earnings\t(loss)\tper\tshare\tfrom\tcontinuing\toperations | $0.57 | $0.29 | $(0.20) |
| Earnings\tper\tshare\tfrom\tdiscontinued\toperations | — | — | 0.01 |
| Earnings\t(loss)\tper\tshare\t—\tbasic | $0.57 | $0.29 | $(0.19) |
| Earnings\t(loss)\tper\tshare\tfrom\tcontinuing\toperations | $0.52 | $0.26 | $(0.20) |
| Earnings\tper\tshare\tfrom\tdiscontinued\toperations | — | — | 0.01 |
| Earnings\t(loss)\tper\tshare\t—\tdiluted | $0.52 | $0.26 | $(0.19) |

1 Pursuant	to	EITF	03-6,	net	income	for	purposes	of	calculating	basic	earnings	per	share	is	adjusted	based	on	an	earnings	allocation	formula	that	attributes	earnings	to	participating	securities	and	common	stock according	to	dividends	declared	and	participation	rights	in	undistributed	earnings.	Our	4.50%	Convertible	Senior	Notes	are	considered	participating	securities	and	for	2006	these	securities	have	no	impact	on	our	net loss	applicable	to	common	stockholders	since	these	securities	do	not	participate	in	our	losses.

Basic	and	diluted	shares	outstanding	and	loss	per	share	are	equal	for	the	year	ended	December	31,	2006	because	our	potentially	dilutive	securities	are	antidilutive as	a	result	of	the	net	loss	applicable	to	common	stockholders.

The	following	table	presents	the	potential	shares	excluded	from	diluted	earnings	(loss)	per	share	because	the	effect	of	including	these	potential	shares	would	be antidilutive:

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| Stock\tOptions\tand\tNon-vested\tRestricted\tStock\tAwards | — | — | 5.5 |
| 4.25%\tConvertible\tSenior\tNotes | — | — | 4.1 |
| 4.50%\tConvertible\tSenior\tNotes | 3.9 | 30.2 | 60.3 |
| Series\tA\tMandatory\tConvertible\tPreferred\tStock | — | — | 26.5 |
| Series\tB\tCumulative\tConvertible\tPerpetual\tPreferred\tStock | 38.4 | 38.4 | 38.4 |
| Total | 42.3 | 68.6 | 134.8 |
| Securities\texcluded\tfrom\tthe\tdiluted\tearnings\t(loss)\tper\tshare\tcalculation\tbecause\tthe\texercise\tprice\twas\tgreater\tthan\tthe |  |  |  |
| average\tmarket\tprice: |  |  |  |
| Stock\tOptions1 | 24.7 | 22.4 | 26.3 |
| Warrants\t2 | 67.9 | 38.8 | 37.4 |

1 These	options	are	outstanding	at	the	end	of	the	respective	year.	In	any	period	in	which	the	exercise	price	is	less	than	the	average	market	price,	these	options	have	the	potential	to	be	dilutive	and	application	of	the treasury	stock	method	would	reduce	this	amount.

2 The	potential	dilutive	impact	of	the	warrants	is	based	upon	the	difference	between	the	market	price	of	one	share	of	our	common	stock	and	the	stated	exercise	prices	of	the	warrants.	See	Note	9	for	further discussion.

# Note	4:				Acquisitions	and	Dispositions

# Acquisitions

We	continue	to	evaluate	strategic	opportunities	to	grow	and	to	increase	our	ownership	interests	in	current	investments,	particularly	in	our	digital	and	marketing services	offerings	and	to	expand	our	presence	in	high-growth	markets.	The	majority	of	our	acquisitions	include	an	initial	payment	at	the	time	of	closing	and	provide	for additional	contingent	purchase	price	payments	over	a	specified	time.	The	contingent	purchase	price	payments	are	recorded	in	the	financial	statements	as	an	increase	to goodwill	and	other	intangible	assets	once	the	terms	and	conditions	of	the	contingent	acquisition	obligations	have	been	met	and	the	consideration	is	determinable	and distributable,	or	expensed	as	compensation	in	our	Consolidated	Statements	of	Operations	based	on	the	acquisition	agreement	and	the	terms	and	conditions	of employment	for	the	former	owners	of	the	acquired	businesses.	See	Note	16	for	further	discussion.

During	2008,	we	completed	ten	acquisitions,	of	which	the	most	significant	were:	a)	the	remaining	interests	in	an	entertainment-marketing	agency	in	North America	in	which	we	previously	held	a	40%	interest,	b)	a	digital	advertising	and	communications	agency	in	the	United	Kingdom,	c)	a	marketing	services	agency	in France,	d)	a	51%	interest	in	a	digital	marketing	agency	in	North	America,	and	e)	an	additional	31.1%	interest	in	a	full-service	advertising	agency	in	the	Middle	East which	increases	our	total	interest	in	that	agency	to	51%.	Total	cash	paid	for	our	2008	acquisitions	was	$107.2,	and	we	have	accrued	an	additional	$51.7	for	known deferred	payments,	primarily	related	to	our	acquisition	in	the	Middle	East.	Of	our	2008	acquisitions,	nine	are	included	in	the	IAN	operating	segment	and	one	is	included in	the	CMG	operating	segment.

For	companies	acquired	during	2008,	we	made	estimates	of	the	fair	values	of	the	assets	and	liabilities	for	consolidation.	The	purchase	price	in	excess	of	the estimated	fair	value	of	the	tangible	net	assets	acquired	was	allocated	to	goodwill	and	identifiable	intangible	assets.	Considering	the	characteristics	of	advertising, specialized	marketing	and	communication	services	companies,	our	acquisitions	usually	do	not	have	significant	amounts	of	tangible	assets,	as	the	principal	asset	we typically	acquire	is	creative	talent.	As	a	result,	a	substantial	portion	of

the	purchase	price	of	these	acquisitions	is	allocated	to	goodwill	and	other	identifiable	intangible	assets	(approximately	$168.0,	which	includes	purchase	price adjustments).	The	purchase	price	allocations	for	our	acquisitions	are	substantially	complete;	certain	of	these	allocations,	however,	are	based	on	estimates	and assumptions	and	are	subject	to	change.	The	final	determination	of	the	estimated	fair	value	of	the	acquired	net	assets	will	be	completed	as	soon	as	possible,	but	no	later than	one	year	from	the	acquisition	date.

During	2007,	we	made	eight	acquisitions,	of	which	the	most	significant	were:	a)	a	full-service	advertising	agency	in	Latin	America,	b)	Reprise	Media,	a	full- service	search	engine	marketing	firm	in	North	America,	c)	the	remaining	interests	in	two	full-service	advertising	agencies	in	India	in	which	we	previously	held	49%	and 51%	interests,	d)	a	professional	healthcare	services	business	in	the	U.K.,	and	e)	a	branded	entertainment	business	in	the	U.S.	Total	cash	paid	for	our	2007	acquisitions was	$140.4	and	a	substantial	portion	of	this	consideration	has	been	allocated	to	goodwill	and	identifiable	intangible	assets.	All	acquisitions	during	2007	are	included	in the	IAN	operating	segment.

Pro	forma	information,	as	required	by	SFAS	No.	141,	Business	Combinations,	related	to	our	2008	and	2007	acquisitions	are	not	presented	because	the	impact	of these	acquisitions,	either	individually	or	in	the	aggregate,	on	the	Company's	consolidated	results	of	operations	is	not	significant.	We	did	not	complete	any	acquisitions during	2006.

Cash	paid	and	stock	issued	for	acquisitions	are	comprised	of:	(i)	initial	acquisition	payments;	(ii)	contingent	payments	as	described	above;	(iii)	further	investments in	companies	in	which	we	already	have	an	ownership	interest;	and	(iv)	other	payments	related	to	loan	notes	and	guaranteed	deferred	payments	that	have	been	previously recognized	on	the	Consolidated	Balance	Sheets.

The	results	of	operations	of	our	acquired	companies	were	included	in	our	consolidated	results	from	the	closing	date	of	each	acquisition.	We	made	stock	payments related	to	acquisitions	initiated	in	prior	years	of	$1.0,	$0.3	and	$11.3	during	2008,	2007	and	2006,	respectively.	Details	of	cash	paid	for	current	and	prior	years' acquisitions	are	as	follows:

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| Cash\tpaid\tfor\tcurrent\tyear\tacquisitions: |  |  |  |
| Cost\tof\tinvestment | $104.2 | $139.7 | $— |
| Compensation\texpense\t—\trelated\tpayments | 3.0 | 0.7 | — |
| Cash\tpaid\tfor\tprior\tyear\tacquisitions: |  |  |  |
| Cost\tof\tinvestment | 23.9 | 16.1 | 15.1 |
| Compensation\texpense\t—\trelated\tpayments | — | 1.4 | 7.8 |
| Less:\tcash\tacquired | (22.1) | (4.4) | — |
| Total\tcash\tpaid\tfor\tacquisitions | $109.0 | $153.5 | $22.9 |

In	addition,	in	2007,	we	acquired	$8.1	of	marketable	securities	held	by	one	of	our	acquisitions.

# Dispositions

In	connection	with	the	sale	of	our	NFO	World	Group	Inc.	("NFO")	operations	in	the	fourth	quarter	of	2003,	we	established	reserves	for	certain	income	tax contingencies	with	respect	to	the	determination	of	our	tax	basis	in	NFO	for	income	tax	purposes	at	the	time	of	the	disposition	of	NFO.	During	the	third	quarter	of	2006 we	finalized	the	tax	basis	of	our	investment	and	we	determined	that	the	remaining	reserve	of	$5.0	should	be	reversed	as	the	related	contingency	is	no	longer	considered probable.	This	was	reversed	through	income	from	discontinued	operations	for	the	year	ended	December	31,	2006.

# Note	5:				Supplementary	Data

# Valuation	and	Qualifying	Accounts	—	Allowance	for	uncollectible	accounts	receivable

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| Balance\tat\tbeginning\tof\tperiod | $61.8 | $81.3 | $105.5 |
| Charges\t(reversals)\tto\tcosts\tand\texpenses | 17.0 | (3.6) | 1.2 |
| Charges\tto\tother\taccounts1 | 7.4 | 3.9 | 0.2 |
| Deductions: |  |  |  |
| Dispositions | (0.2) | (0.5) | (5.3) |
| Uncollectible\taccounts\twritten\toff | (17.1) | (24.3) | (25.4) |
| Foreign\tcurrency\ttranslation\tadjustment | (5.0) | 5.0 | 5.1 |
| Balance\tat\tend\tof\tperiod | $63.9 | $61.8 | $81.3 |

1 Amounts	relate	to	allowance	for	doubtful	accounts	of	acquired	and	newly	consolidated	companies,	miscellaneous	other	amounts	and	reclassifications.

|  | December	31, |  |
| :--- | :--- | :--- |
|  | 2008 | 2007 |
| Furniture\tand\tequipment | $915.7 | $983.2 |
| Leasehold\timprovements | 590.9 | 599.7 |
| Land\tand\tbuildings | 110.7 | 126.1 |
|  | 1,617.3 | 1,709.0 |
| Less:\taccumulated\tdepreciation | (1,055.8) | (1,089.0) |
|  | $561.5 | $620.0 |

# Accrued	Liabilities

|  | December	31, |  |
| :--- | :--- | :--- |
|  | 2008 | 2007 |
| Media\tand\tproduction\texpenses | $1,708.3 | $1,943.5 |
| Salaries,\tbenefits\tand\trelated\texpenses | 466.5 | 471.9 |
| Office\tand\trelated\texpenses | 69.6 | 90.9 |
| Professional\tfees | 24.7 | 27.7 |
| Restructuring\tand\tother\treorganization-related | 10.0 | 30.1 |
| Interest | 30.6 | 33.8 |
| Acquisition\tobligations | 53.9 | 5.4 |
| Other | 158.0 | 87.9 |
| Total | $2,521.6 | $2,691.2 |

# 2004	Restatement	Liabilities

As	part	of	the	2004	Restatement,	we	recognized	liabilities	related	to	vendor	discounts	and	credits	where	we	had	a	contractual	or	legal	obligation	to	rebate	such amounts	to	our	clients	or	vendors.	Reductions	to	these	liabilities	are	achieved	through	settlements	with	clients	and	vendors	but	also	may	occur	if	the	applicable	statute	of limitations	in	a	jurisdiction	has	lapsed.	A	portion	of	the	decline	for	2008	is	also	attributable	to	favorable	foreign	currency	effects.	Also	as	part	of	the	2004	Restatement, we	recognized	liabilities	related	to	internal	investigations	and	international	compensation	arrangements.	A	summary	of	these	liabilities	and	the	vendor	discounts	and credits	liabilities	is	as	follows:

Loss	on	Early	Extinguishment	of	Debt	—	Non-cash	charges	related	to	the	extinguishment	of	$200.0	of	our	4.50%	Convertible	Senior	Notes	in	2007	and	$400.0	of our	4.50%	Convertible	Senior	Notes	in	2006.	For	additional	information	see	Note	8.

Vendor	Discount	and	Credit	Adjustments	—	We	are	in	the	process	of	settling	our	liabilities	related	to	vendor	discounts	and	credits	established	during	the	2004 Restatement.	Amounts	included	in	other	income	(expense)	reflect	the	reversal	of	certain	of	these	liabilities	as	a	result	of	settlements	with	clients	or	vendors	or	where	the statute	of	limitations	has	lapsed.

Investment	Impairments	—	In	2007	we	realized	an	other-than-temporary	charge	of	$5.8	relating	to	a	$12.5	investment	in	auction	rate	securities,	representing	our total	investment	in	auction	rate	securities.	For	additional	information	see	Note	15.

# Note	6:				Intangible	Assets

# Goodwill

Goodwill	is	the	excess	purchase	price	remaining	from	an	acquisition	after	an	allocation	of	purchase	price	has	been	made	to	identifiable	assets	acquired	and liabilities	assumed	based	on	estimated	fair	values.	The	changes	in	the	carrying	value	of	goodwill	by	segment	for	the	years	ended	December	31,	2008	and	2007	are	as follows:

|  | IAN | CMG | Total |
| :--- | :--- | :--- | :--- |
| Balance\tas\tof\tDecember\t31,\t2006 | $2,632.5 | $435.3 | $3,067.8 |
| Current\tyear\tacquisitions | 86.0 | — | 86.0 |
| Contingent\tand\tdeferred\tpayments\tfor\tprior\tacquisitions | 4.7 | 3.7 | 8.4 |
| Amounts\tallocated\tto\tbusiness\tdispositions | (5.7) | — | (5.7) |
| Other\t(primarily\tforeign\tcurrency\ttranslation) | 72.2 | 2.9 | 75.1 |
| Balance\tas\tof\tDecember\t31,\t2007 | \t 2,789.7 | 441.9 | 3,231.6 |
| Current\tyear\tacquisitions | 99.5 | 1.8 | 101.3 |
| Contingent\tand\tdeferred\tpayments\tfor\tprior\tacquisitions | 28.9 | 1.1 | 30.0 |
| Amounts\tallocated\tto\tbusiness\tdispositions | (0.4) | — | (0.4) |
| Other\t(primarily\tforeign\tcurrency\ttranslation) | (127.7) | (13.9) | (141.6) |
| Balance\tas\tof\tDecember\t31,\t2008 | $2,790.0 | $430.9 | $3,220.9 |

During	the	latter	part	of	the	fourth	quarter	of	2008	our	stock	price	declined	significantly	after	our	annual	impairment	review	as	of	October	1,	2008,	and	our	market capitalization	was	less	than	our	book	value	as	of	December	31,	2008.	We	considered	whether	there	were	any	events	or	circumstances	indicative	of	a	triggering	event	and determined	that	the	decline	in	stock	price	during	the	fourth	quarter	was	an	event	that	would	"more	likely	than	not"	reduce	the	fair	value	of	our	individual	reporting	units below	their	book	value,	requiring	us	to	perform	an	interim	impairment	test	for	goodwill	at	the	reporting	unit	level.	Based	on	the	interim	impairment	test	conducted,	we concluded	that	there	was	no	impairment	of	our	goodwill	as	of	December	31,	2008.	We	will	continue	to	monitor	our	stock	price	as	it	relates	to	the	reconciliation	of	our market	capitalization	and	the	fair	values	of	our	individual	reporting	units	throughout	2009.

During	our	annual	impairment	reviews	as	of	October	1,	2006	our	discounted	future	operating	cash	flow	projections	at	one	of	our	domestic	advertising	reporting units	indicated	that	the	implied	fair	value	of	the	goodwill	at	this	reporting	unit	was	less	than	its	book	value,	primarily	due	to	client	losses,	resulting	in	a	goodwill impairment	charge	of	$27.2	in	2006	in	our	IAN	segment.

# Other	Intangible	Assets

Included	in	other	intangible	assets	are	assets	with	indefinite	lives	not	subject	to	amortization	and	assets	with	definite	lives	subject	to	amortization.	Other	intangible assets	include	non-compete	agreements,	license	costs,	trade	names	and	customer	lists.	Intangible	assets	with	definitive	lives	subject	to	amortization	are	amortized	on	a

straight-line	basis	with	estimated	useful	lives	generally	between	7	and	15	years.	Amortization	expense	for	other	intangible	assets	for	the	years	ended	December	31,	2008, 2007	and	2006	was	$14.4,	$8.5	and	$6.2,	respectively.	Expected	annual	amortization	expense	of	other	intangible	assets	for	the	next	five	years	is	as	follows:	$18.2	in 2009,	$16.6	in	2010,	$15.0	in	2011,	$13.7	in	2012	and	$11.8	in	2013.	The	following	table	provides	a	summary	of	other	intangible	assets,	which	are	included	in	other assets	on	our	Consolidated	Balance	Sheets:

|  | 2008 | 2008 | 2008 | 2007 | 2007 | 2007 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Gross | Accumulated | Net | Gross | Accumulated | Net |
|  | amount | amortization | amount | amount | amortization | amount |
| Customer\tlist | $122.5 | $(41.0) | $81.5 | $66.2 | $(27.9) | $38.3 |
| Trade\tnames | 33.2 | (5.9) | 27.3 | 23.3 | (3.8) | 19.5 |
| Other | 16.5 | (3.2) | 13.3 | 23.7 | (11.5) | 12.2 |

# Note	7:				Provision	for	Income	Taxes

The	components	of	income	(loss)	from	continuing	operations	before	provision	for	income	taxes,	equity	earnings,	and	minority	interest	expense	are	as	follows:

|  | Years	ended	December	31, | Years	ended	December	31, | Years	ended	December	31, |
| :--- | :--- | :--- | :--- |
|  | 2008 | 2007 | 2006 |
| Domestic | $241.3 | $112.6 | $(103.5) |
| Foreign | \t 230.2 | \t 123.1 | 98.5 |
| Total | $471.5 | $235.7 | $(5.0) |

The	provision	for	income	taxes	on	continuing	operations	consists	of:

|  | Years	ended	December	31, | Years	ended	December	31, | Years	ended	December	31, |
| :--- | :--- | :--- | :--- |
|  | 2008 | 2007 | 2006 |
| Federal\tincome\ttaxes\t(including\tforeign\twithholding\ttaxes): |  |  |  |
| Current | $19.7 | $13.8 | $(0.7) |
| Deferred | 78.8 | (42.0) | (14.8) |
|  | 98.5 | (28.2) | (15.5) |
| State\tand\tlocal\tincome\ttaxes: |  |  |  |
| Current | 17.8 | 15.1 | 14.8 |
| Deferred | 13.1 | 11.3 | (24.8) |
|  | 30.9 | 26.4 | (10.0) |
| Foreign\tincome\ttaxes: |  |  |  |
| Current | 67.2 | 52.4 | 62.5 |
| Deferred | (40.0) | 8.3 | (18.3) |
|  | 27.2 | 60.7 | 44.2 |
| Total | $156.6 | $58.9 | $18.7 |

A	reconciliation	of	the	effective	income	tax	rate	on	continuing	operations	before	equity	earnings	and	minority	interest	expense	as	reflected	in	the	Consolidated Statements	of	Operations	to	the	U.S.	federal	statutory	income	tax	rate	is	as	follows:

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| U.S.\tfederal\tstatutory\tincome\ttax\trate | 35.0% | 35.0% | 35.0% |
| Federal\tincome\ttax\tprovision\t(benefit)\tat\tstatutory\trate | $165.0 | $82.5 | $(1.8) |
| State\tand\tlocal\tincome\ttaxes,\tnet\tof\tfederal\tincome\ttax\tbenefit | 20.1 | 17.2 | (6.5) |
| Impact\tof\tforeign\toperations,\tincluding\twithholding\ttaxes | (0.9) | 44.3 | 56.7 |
| Change\tin\tnet\tvaluation\tallowance1 | (48.0) | (22.3) | (29.6) |
| Goodwill\tand\tother\tlong-lived\tasset\timpairment\tcharges | 0.4 | (0.3) | 3.8 |
| Increases\t(decreases)\tin\tunrecognized\ttax\tbenefits,\tnet | 11.8 | (73.6) | (9.7) |
| Restricted\tstock | 4.0 | 6.7 | 5.3 |
| Capital\t(losses)\tgains | (1.5) | (5.5) | (5.6) |
| Other | 5.7 | 9.9 | 6.1 |
| Provision\tfor\tincome\ttaxes | $156.6 | $58.9 | $18.7 |
| Effective\ttax\trate\ton\toperations | 33.2% | 25.0% | (374.0%) |

1 Reflects	changes	in	valuation	allowance	that	impacted	the	effective	tax	rate	for	each	year	presented.

In	2008,	our	effective	tax	rate	was	negatively	impacted	by	losses	in	certain	foreign	locations	where	we	receive	no	tax	benefit	due	to	100%	valuation	allowances, the	non-deductible	SEC	settlement	provision	and	additional	net	tax	reserves	for	uncertain	tax	positions.	Our	effective	tax	rate	was	positively	impacted	in	2008	by	the utilization	of	tax	loss	carryforwards	against	taxable	profits	and	by	the	net	reversal	of	certain	valuation	allowances	in	jurisdictions	where	entities	have	demonstrated	a sustained	period	of	profitability	and	future	projections	indicate	that	the	trend	will	continue.	Due	to	tax	law	and	other	changes	in	certain	U.S.	states,	we	recognized	tax benefits	of	$9.3	which	also	impacted	the	effective	tax	rate.

The	components	of	deferred	tax	assets	consist	of	the	following	items:

|  | December	31, | December	31, |
| :--- | :--- | :--- |
|  | 2008 | 2007 |
| Postretirement/post-employment\tbenefits | $35.1 | $38.8 |
| Deferred\tcompensation | 189.5 | 184.2 |
| Pension\tcosts | 35.3 | 27.4 |
| Basis\tdifferences\tin\tfixed\tassets | 57.6 | 68.6 |
| Rent | 17.1 | 19.6 |
| Interest | 66.7 | 44.6 |
| Accruals\tand\treserves | 74.1 | 78.4 |
| Allowance\tfor\tdoubtful\taccounts | 10.5 | 13.1 |
| Basis\tdifferences\tin\tintangible\tassets | (204.9) | (153.6) |
| Investments\tin\tequity\tsecurities | 15.5 | 14.0 |
| Tax\tloss/tax\tcredit\tcarry\tforwards | 532.1 | 649.1 |
| Restructuring\tand\tother\treorganization-related\tcosts | 5.9 | 6.7 |
| Other | 51.5 | 47.7 |
| Total\tdeferred\ttax\tassets,\tnet | 886.0 | \t 1,038.6 |
| Valuation\tallowance | (379.5) | (481.6) |
| Net\tdeferred\ttax\tassets | $506.5 | $557.0 |

As	required	by	SFAS	No.	109,	Accounting	for	Income	Tax	("SFAS	109"),	we	evaluate	on	a	quarterly	basis	the	realizability	of	our	deferred	tax	assets.	SFAS	109 requires	a	valuation	allowance	to	be	established	when	it	is	more	likely	than	not	that	all	or	a	portion	of	deferred	tax	assets	will	not	be	realized.	In	circumstances	where there	is	sufficient	negative	evidence,	establishment	of	a	valuation	allowance	must	be	considered.	We	believe	that	cumulative	losses	in	the	most	recent	three-year	period represent	significant	negative	evidence	under	the	provisions	of	SFAS	109,	and	as	a	result,	we	determined	that	certain	of	our	deferred	tax	assets	required	the establishment	of	a	valuation	allowance.	The	realization	of	our	deferred	tax	assets	is	primarily	dependent	on	future	earnings.	The	amount	of	the	deferred	tax	assets considered	realizable	could	be	reduced	in	the	near	future	if	estimates	of	future	taxable	income	are	lower	than	anticipated.	The	deferred	tax	assets	for	which	an	allowance was	recognized	relate	primarily	to	tax	credit	carryforwards,	foreign	tax	loss	carryforwards	and	U.S.	capital	loss	carryforwards.	The	change	in	the	valuation	allowance during	the	period	is	as	follows:

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| Balance\tat\tbeginning\tof\tperiod | $481.6 | $504.0 | $501.0 |
| (Reversed)\tcharged\tto\tcosts\tand\texpenses | (68.1) | (49.0) | 63.6 |
| (Reversed)\tcharged\tto\tgross\ttax\tassets\tand\tother\taccounts | (34.0) | 26.6 | (60.6) |
| Balance\tat\tend\tof\tperiod | $379.5 | $481.6 | $504.0 |

In	2008,	amounts	reversed	to	costs	and	expenses	primarily	relate	to	the	reversal	of	valuation	allowances	in	the	UK,	Spain	and	Germany	where	we	believe	that	it	is more	likely	than	not	that	the	corresponding	tax	losses	will	be	utilized,	based	on	sufficient	positive	evidence	in	the	form	of	sustained	profitability	and	projected	taxable income.	We	believe	we	have	appropriately	considered	the	current	economic	climate	in	relying	on	the	level	of	projected	taxable	income.	Amounts	reversed	to	gross	tax assets	and	other	accounts	relate	primarily	to	the	effect	of	foreign	currency	translation.

In	2007,	amounts	reversed	to	costs	and	expenses	primarily	relate	to	a	reversal	from	the	write-down	of	deferred	tax	assets	in	certain	jurisdictions	with	existing valuation	allowances	due	to	tax	law	changes.	The	remainder	relates	to	reversals	of	valuation	allowances	in	various	countries	where	we	believe	that	it	is	now	more	likely than	not	that	tax	loss	carryforwards	will	be	utilized.	Amounts	charged	to	gross	tax	assets	and	other	accounts	relate	primarily	to	the	effect	of	foreign	currency	translation.

The	change	during	2006	in	the	deferred	tax	valuation	allowance	relates	to	uncertainties	regarding	future	utilization	of	tax	loss	carryforwards,	offset	primarily	by reversals	of	$45.0	of	valuation	allowances	in	two	European	countries	where	we	believed	that	it	was	more	likely	than	not	that	the	corresponding	tax	loss	carryforwards will	be	utilized.	In	addition,	we	believed	that	it	was	more	likely	than	not	that	approximately	$29.0	of	U.S.	capital	loss	carryforwards	and	$17.0	of	foreign	tax	credits would	not	be	utilized.	We	also	wrote	off	previously	reserved	deferred	tax	assets	that	were	deemed	to	be	permanently	unrealizable	due	to	the	expiration	of	tax	loss carryforwards	and	sales	of	certain	businesses.

As	of	December	31,	2008,	there	are	$68.1	of	tax	credit	carryforwards	with	expiration	periods	beginning	in	2009	and	ending	in	2013.	There	are	also	$1,401.6	of loss	carryforwards,	of	which	$397.7	are	U.S.	capital	and	tax	loss	carryforwards	that	expire	in	the	years	2009	through	2026.	The	remaining	$1,003.9	are	non-U.S.	tax	loss carryforwards	of	which	$742.9	have	unlimited	carryforward	periods	and	$261.0	have	expiration	periods	from	2009	through	2028.

As	of	December	31,	2008	and	December	31,	2007,	we	had	$1,561.0	and	$1,260.6,	respectively,	of	undistributed	earnings	attributable	to	foreign	subsidiaries.	It	is our	intention	to	permanently	reinvest	undistributed	earnings	of	our	foreign	subsidiaries.	We	have	not	provided	deferred	U.S.	income	taxes	or	foreign

withholding	taxes	on	temporary	differences	resulting	from	earnings	for	certain	foreign	subsidiaries	which	are	permanently	reinvested	outside	the	U.S.	It	is	not practicable	to	determine	the	amount	of	unrecognized	deferred	tax	liability	associated	with	these	temporary	differences.

Pursuant	to	the	provisions	of	FASB	Interpretation	No.	48,	Accounting	for	Uncertainty	in	Income	Taxes	("FIN	48"),	the	following	table	summarizes	the	activity related	to	our	unrecognized	tax	benefits:

|  | 2008 | 2007 |
| :--- | :--- | :--- |
| Balance\tat\tbeginning\tof\tperiod | $134.8 | $266.9 |
| Increases\tas\ta\tresult\tof\ttax\tpositions\ttaken\tduring\ta\tprior\tyear | 22.8 | 7.9 |
| Decreases\tas\ta\tresult\tof\ttax\tpositions\ttaken\tduring\ta\tprior\tyear | (21.3) | (156.3) |
| Settlements\twith\ttaxing\tauthorities | (4.5) | (1.0) |
| Lapse\tof\tstatutes\tof\tlimitation | (1.7) | (2.4) |
| Increases\tas\ta\tresult\tof\ttax\tpositions\ttaken\tduring\tthe\tcurrent\tyear | 18.7 | 19.7 |
| Balance\tat\tend\tof\tperiod | $148.8 | $134.8 |

Included	in	the	total	amount	of	unrecognized	tax	benefits	of	$148.8	as	of	December	31,	2008,	is	$131.8	of	tax	benefits	that,	if	recognized,	would	impact	the effective	tax	rate	and	$17.1	of	tax	benefits	that,	if	recognized,	would	result	in	adjustments	to	other	tax	accounts,	primarily	deferred	taxes.	The	total	amount	of	accrued interest	and	penalties	as	of	December	31,	2008	and	2007	is	$33.5	and	$33.6,	of	which	$0.7	and	$9.2	is	included	in	the	2008	and	2007	Consolidated	Statement	of Operations,	respectively.	In	accordance	with	our	accounting	policy,	interest	and	penalties	accrued	on	unrecognized	tax	benefits	are	classified	as	income	taxes	in	the Consolidated	Statements	of	Operations.	We	have	not	elected	to	change	this	classification	with	the	adoption	of	FIN	48.

With	respect	to	all	tax	years	open	to	examination	by	U.S.	federal	and	various	state,	local,	and	non-U.S.	tax	authorities,	we	currently	anticipate	that	the	total unrecognized	tax	benefits	will	decrease	by	an	amount	between	$45.0	and	$55.0	in	the	next	twelve	months,	a	portion	of	which	will	affect	the	effective	tax	rate,	primarily as	a	result	of	the	settlement	of	tax	examinations	and	the	lapsing	of	statutes	of	limitation.	This	net	decrease	is	related	to	various	items	of	income	and	expense,	including transfer	pricing	adjustments	and	restatement	adjustments.	For	this	purpose,	we	expect	to	complete	our	discussions	with	the	IRS	appeals	division	regarding	the	years	1997 through	2004	within	the	next	twelve	months.	We	also	expect	to	effectively	settle,	within	the	next	twelve	months,	various	uncertainties	for	2005	and	2006.

In	December	2007,	the	IRS	commenced	its	examination	for	the	2005	and	2006	tax	years.	In	addition,	we	have	various	tax	years	under	examination	by	tax authorities	in	various	countries,	such	as	the	U.K.,	and	in	various	states,	such	as	New	York,	in	which	we	have	significant	business	operations.	It	is	not	yet	known	whether these	examinations	will,	in	the	aggregate,	result	in	our	paying	additional	taxes.	We	have	established	tax	reserves	that	we	believe	to	be	adequate	in	relation	to	the	potential for	additional	assessments	in	each	of	the	jurisdictions	in	which	we	are	subject	to	taxation.	We	regularly	assess	the	likelihood	of	additional	tax	assessments	in	those jurisdictions	and	adjust	our	reserves	as	additional	information	or	events	require.

On	May	1,	2007,	the	IRS	completed	its	examination	of	our	2003	and	2004	income	tax	returns	and	proposed	a	number	of	adjustments	to	our	taxable	income.	We have	appealed	a	number	of	these	items.	In	addition,	during	the	second	quarter	of	2007,	there	were	net	reversals	of	tax	reserves,	primarily	related	to	previously unrecognized	tax	benefits	related	to	various	items	of	income	and	expense,	including	approximately	$80.0	for	certain	worthless	securities	deductions	associated	with investments	in	consolidated	subsidiaries,	which	was	a	result	of	the	completion	of	the	tax	examination.

We	are	effectively	settled	with	respect	to	U.S.	income	tax	audits	for	years	prior	to	2005.	With	limited	exceptions,	we	are	no	longer	subject	to	state	and	local income	tax	audits	for	years	prior	to	1999,	or	non-U.S.	income	tax	audits	for	years	prior	to	2000.

On	February	17th,	the	American	Recovery	and	Reinvestment	Act	of	2009	was	signed	into	law.	We	are	currently	reviewing	its	tax	provisions	to	determine	the potential	impact.	Based	on	our	preliminary	review,	we	do	not	anticipate	that	the	act	will	have	an	adverse	impact	on	our	income	tax	accounts.

# Note	8:				Debt	and	Credit	Arrangements

# Long-Term	Debt

A	summary	of	the	carrying	amounts	and	fair	values	of	our	long-term	debt	is	as	follows:

1 Excludes	the	effect	of	related	gains/losses	on	interest	rate	swaps.

2 On	November	15,	2009	our	5.40%	Senior	Unsecured	Notes	mature,	so	we	have	included	these	Notes	in	short-term	debt	on	our	2008	Consolidated	Balance	Sheet.

3 Holders	of	our	4.25%	Convertible	Senior	Notes	may	require	us	to	repurchase	their	Notes	for	cash	at	par	in	March	2012.

4 Holders	of	our	4.75%	and	4.50%	Convertible	Senior	Notes	may	require	us	to	repurchase	their	Notes	for	cash,	stock	or	a	combination,	at	our	election,	at	par	in	March	2013.

For	those	Notes	that	have	a	premium	or	discount,	we	amortize	the	amount	through	interest	expense	based	on	the	maturity	date	or	the	first	date	the	holders	may require	us	to	repurchase	the	Notes,	if	applicable.	A	premium	would	result	in	a	decrease	to	interest	expense	and	a	discount	would	result	in	an	increase	to	interest	expense in	future	periods.	We	also	have	recorded	debt	issuance	costs	related	to	certain	financing	transactions	in	other	assets	of	our	Consolidated	Balance	Sheets,	which	are	also amortized	through	interest	expense.	As	of	December	31,	2008,	we	had	$32.8	of	debt	issuance	costs.

# Interest	Rate	Swap

In	June	2008,	we	entered	into	an	interest	rate	swap	agreement	related	to	$125.0	in	notional	amount	of	our	7.25%	Senior	Unsecured	Notes	due	2011	(the	"7.25% Notes"),	which	we	subsequently	terminated	in	September	2008.	We	will	receive	a	total	of	approximately	$3.0	in	cash	to	be	paid	in	equal	semi-annual	installments	and	a gain	of	$2.4	will	be	amortized	as	a	reduction	to	interest	expense	over	the	remaining	term	of	the	7.25%	Notes,	resulting	in	an	effective	interest	rate	of	7.1%	per	annum.

# Convertible	Senior	Notes

In	March	2008,	holders	required	us	to	repurchase	approximately	$191.0	of	our	4.50%	Convertible	Senior	Notes	due	2023	(the	"4.50%	Notes"),	pursuant	to	the terms	of	the	4.50%	Notes.	We	funded	the	repurchase	from	available	cash.	We	can	redeem	the	remaining	$8.7	of	4.50%	Notes	for	cash	on	or	after	September	15,	2009. The	4.50%	Notes	were	initially	issued	in	March	2003	in	an	aggregate	principal	amount	of	$800.0,	but	in	November	2006	we	exchanged	$400.0	of	4.50%	Notes	for	the same	aggregate	principal	amount	of	our	4.25%	Convertible	Senior	Notes	due	2023.

In	November	2007,	we	exchanged	a	further	$200.0	of	our	4.50%	Notes	for	$200.0	aggregate	principal	amount	of	4.75%	Convertible	Senior	Notes	due	2023	(the "4.75%	Notes").	In	accordance	with	EITF	Issue	No.	96-19,	Debtor's	Accounting	for	a	Modification	or	Exchange	of	Debt	Instruments,	and	EITF	Issue	No.	06-6,	Debtor's Accounting	for	a	Modification	(or	Exchange)	of	Convertible	Debt	Instruments,	this	exchange	was	treated	as	an	extinguishment	of	the	4.50%	Notes	and	an	issuance	of 4.75%	Notes	for	accounting	purposes	because	the	fair	value	of	the	embedded	conversion	option	under	the	terms	of	the	original	instrument	was	substantially	different from	that	of	the	new	instrument.	As	a	result,	the	4.75%	Notes	were	reflected	on	our	Consolidated	Balance	Sheet	at	their	fair	value	at	issuance,	or	$212.0.	We	recorded	a non-cash	charge	in	the	fourth	quarter	of	2007	of	$12.0	reflecting	the	difference	between	the	fair	value	of	the	new	debt	and	the	carrying	value	of	the	4.50%	Notes exchanged.	The	difference	between	the	fair	value	and	carrying	value	will	be	amortized	through	March	15,	2013,	which	is	the	first	date	holders	may	require	us	to repurchase	the	4.75%	Notes.

# Convertible	Senior	Note	Terms

# Conversion	Features

Our	4.25%,	4.50%	and	4.75%	Notes	("Convertible	Notes")	are	convertible	into	our	common	stock	at	a	conversion	price	of	$12.42	per	share,	subject	to	adjustment in	specified	circumstances	including,	for	the	4.25%	and	4.75%	Notes,	any	payment	of	cash	dividends	on	our	common	stock.	The	conversion	rates	of	our	Convertible Notes	are	also	subject	to	adjustment	for	certain	events	arising	from	stock	splits	and	combinations,	stock	dividends	and	certain	other	actions	by	us	that	modify	our	capital structure.	The	Convertible	Notes	provide	for	an	additional	"make-whole"	adjustment	to	the	conversion	rate	in	the	event	of	a	change	of	control	meeting	specified conditions.

Our	Convertible	Notes	are	convertible	at	any	time	if	the	average	price	of	our	common	stock	for	20	trading	days	immediately	preceding	the	conversion	date	is greater	than	or	equal	to	a	specified	percentage	of	the	conversion	price;	this	percentage	was	equal	to	117.5%	in	2008	and	declines	0.5%	each	year	until	it	reaches	110%	at maturity.	Each	series	of	our	Convertible	Notes	is	also	convertible,	regardless	of	the	price	of	our	common	stock,	if:	(i)	we	call	that	series	of	Convertible	Notes	for redemption;	(ii)	we	make	specified	distributions	to	shareholders;	(iii)	we	become	a	party	to	a	consolidation,	merger	or	binding	share	exchange	pursuant	to	which	our common	stock	would	be	converted	into	cash	or	property	(other	than	securities);	or	(iv)	the	credit	ratings	assigned	to	that	series	of	Convertible	Notes	by	any	two	of Moody's	Investors	Service,	Standard	&	Poor's	and	Fitch	Ratings	are	lower	than	Ba2,	BB	and	BB,	respectively,	or	that	series	of	Convertible	Notes	is	no	longer	rated	by at	least	two	of	these	ratings	services.	Because	of	our	current	credit	ratings,	all	of	our	Convertible	Notes	are	currently	convertible.	As	a	result	of	certain	conversion features	our	Convertible	Notes	contain	embedded	derivatives	whose	fair	values	as	of	December	31,	2008	are	negligible.	Our	4.25%	and	4.75%	Notes	are	also convertible,	whether	or	not	the	above	conditions	are	met,	from	February	15	to	March	15,	2023.

# Repurchase	/	Redemption	Options

Holders	of	our	Convertible	Notes	may	require	us	to	repurchase	the	Convertible	Notes	on	certain	dates	for	cash	only,	and	on	other	dates	for	cash	or	our	common stock	or	a	combination	of	cash	and	common	stock,	at	our	election.	Additionally,	investors	may	require	us	to	repurchase	our	Convertible	Notes	in	the	event	of	certain change	of	control	events	that	occur	prior	to	certain	dates,	for	cash	or	our	common	stock	or	a	combination	of	cash	and	common	stock,	at	our	election.	At	our	option,	we may	redeem	our	Convertible	Notes	on	or	at	any	time	after	certain	dates	for	cash.	The	redemption	price	in	each	of	these	instances	will	be	100%	of	the	principal	amount	of the	Convertible	Notes	being	redeemed,	plus	accrued	and	unpaid	interest,	if	any.	The	following	table	details	when	the	repurchase	and	redemption	options	occur	for	each of	our	Convertible	Notes:

# Participating	Security	Features

In	accordance	with	EITF	03-6,	the	4.50%	Notes	are	considered	securities	with	participation	rights	in	earnings	available	to	common	stockholders	due	to	the	feature of	these	securities	that	allows	investors	to	participate	in	cash	dividends	paid	on	our	common	stock.	For	periods	in	which	we	generate	net	income,	the	impact	of	these securities'	participation	rights	is	included	in	the	calculation	of	earnings	per	share.	For	periods	in	which	we	incur	a	net	loss,	the	4.50%	Notes	have	no	impact	on	the calculation	of	earnings	per	share	due	to	the	fact	that	the	holders	of	these	securities	do	not	participate	in	our	losses.	The	4.25%	Notes	and	4.75%	Notes	are	not	considered securities	with	participation	rights	in	earnings	available	to	common	stockholders	as	there	are	no	features	attached	to	these	securities	that	allow	holders	to	participate	in our	undistributed	earnings.

# Credit	Arrangements

We	have	committed	credit	agreements	and	uncommitted	credit	facilities	with	various	banks	that	permit	borrowings	at	variable	interest	rates.	As	of	December	31, 2008	and	2007,	there	were	no	borrowings	under	our	committed	credit	facilities.	However,	there	were	borrowings	under	the	uncommitted	facilities	made	by	several	of

our	subsidiaries	outside	the	U.S.	We	have	guaranteed	the	repayment	of	some	of	these	borrowings	made	by	certain	subsidiaries.	The	weighted-average	interest	rate	on outstanding	balances	under	the	uncommitted	short-term	facilities	as	of	December	31,	2008	and	2007	was	approximately	3%	and	5%,	respectively.	A	summary	of	our credit	facilities	is	as	follows:

| 2008 | 2008 | 2008 | 2008 | 2007 | 2007 | 2007 | 2007 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Total\nFacility | Amount\nOutstanding | Letters\nof\tCredit | Total\nAvailable | Total\nFacility | Amount\nOutstanding | Letters\nof\tCredit | Total\nAvailable |
| $750.0 | $— | $ 128.1 | $621.9 | $750.0 | $— | $ 222.9 | $527.1 |
| $335.0 | $— | $— | $335.0 | $— | $— | $— | $— |
| $386.3 | $78.8 | $1.1 | $306.4 | $537.4 | $95.9 | $1.1 | $440.4 |

We	entered	into	a	$750.0	Three-Year	Credit	Agreement,	dated	as	of	June	13,	2006	(the	"2006	Credit	Agreement")	as	part	of	a	transaction	we	refer	to	as	the	"ELF Financing."	Under	the	2006	Credit	Agreement,	a	special-purpose	entity	called	ELF	Special	Financing	Ltd.	("ELF")	acts	as	the	lender	and	letter	of	credit	issuer.	ELF	is obligated	at	our	request	to	make	cash	advances	to	us	and	to	issue	letters	of	credit	for	our	account,	in	an	aggregate	amount	not	to	exceed	$750.0	outstanding	at	any	time. The	aggregate	face	amount	of	letters	of	credit	may	not	exceed	$600.0	at	any	time.	Our	obligations	under	the	2006	Credit	Agreement	are	unsecured.	The	2006	Credit Agreement	is	a	revolving	facility	expiring	June	15,	2009,	under	which	amounts	borrowed	may	be	repaid	and	borrowed	again,	and	the	aggregate	available	amount	of letters	of	credit	may	decrease	or	increase,	subject	to	the	overall	limit	of	$750.0	and	the	$600.0	limit	on	letters	of	credit.	We	are	not	subject	to	any	financial	or	other material	restrictive	covenants	under	the	2006	Credit	Agreement.

We	pay	commitment	fees	on	the	undrawn	amount,	less	the	letters	of	credit,	under	the	2006	Credit	Agreement	at	0.78%	per	annum,	and	we	pay	commissions	of 0.78%	per	annum	on	the	amounts	available	to	be	drawn	under	the	letters	of	credit.	In	addition,	we	pay	a	facility	fee	equal	to	0.15%	per	annum	on	the	undrawn	amount, including	letters	of	credit,	under	the	facility.	If	we	draw	under	the	facility,	interest	is	payable	on	any	outstanding	advances	at	3-month	LIBOR	plus	0.78%	per	annum.

ELF	is	a	special-purpose	entity	incorporated	in	the	Cayman	Islands,	in	which	we	have	no	equity	or	other	interest	and	which	we	do	not	consolidate	for	financial reporting	purposes.	In	the	ELF	Financing,	institutional	investors	purchased	debt	securities	issued	by	ELF	(the	"ELF	Notes")	and	warrants	issued	by	us	(refer	to	Note	9). ELF	received	$750.0	in	proceeds	from	these	sales,	which	it	used	to	purchase	Aaa-rated	liquid	assets.	It	will	hold	the	liquid	assets	pending	any	request	for	borrowing	from us	or	any	drawing	on	any	letters	of	credit	issued	for	our	account	under	the	2006	Credit	Agreement,	which	ELF	will	fund	by	selling	liquid	assets.	We	are	not	the	issuer	of the	ELF	Notes	and	are	not	party	to	the	indenture	governing	the	ELF	Notes.

Under	certain	circumstances,	including	certain	events	of	default	involving	us	or	occurring	under	the	ELF	Notes,	the	commitment	to	make	advances	and	issue letters	of	credit	under	the	2006	Credit	Agreement	may	be	terminated	by	ELF,	acting	on	instruction	of	the	holders	of	the	ELF	Notes.	We	will	be	entitled,	prior	to	any	such termination,	to	make	a	borrowing	of	up	to	the	entire	available	amount	of	the	commitment	under	the	2006	Credit	Agreement	(regardless	of	whether	our	obligations	under the	2006	Credit	Agreement	have	been	accelerated).	Upon	termination	of	the	commitment,	the	holders	of	the	ELF	Notes	will	automatically	receive	interests	in	the outstanding	loans	in	exchange	for	their	ELF	Notes.	Thereafter	we	will	not	be	able	to	borrow	or	reborrow

additional	funds	under	the	2006	Credit	Agreement,	but	the	advances	will	remain	outstanding	as	term	loans	maturing	on	June	15,	2009	(subject	to	the	rights	of	the	holders to	accelerate	the	loans	upon	an	event	of	default).

In	July	2008	we	entered	into	a	$335.0	Three-Year	Credit	Agreement	(the	"2008	Credit	Agreement").	The	2008	Credit	Agreement	is	a	revolving	facility	expiring July	18,	2011,	under	which	amounts	borrowed	by	us	or	any	of	our	subsidiaries	designated	under	the	2008	Credit	Agreement	may	be	repaid	and	reborrowed,	subject	to	an aggregate	lending	limit	of	$335.0	or	the	equivalent	in	other	currencies,	and	the	aggregate	available	amount	of	letters	of	credit	outstanding	may	decrease	or	increase, subject	to	a	limit	on	letters	of	credit	of	$200.0	or	the	equivalent	in	other	currencies.	The	terms	of	the	2008	Credit	Agreement	allow	us	to	increase	the	aggregate	lending commitment	to	a	maximum	amount	of	$485.0	if	lenders	agree	to	the	additional	commitments.	Our	obligations	under	the	2008	Credit	Agreement	are	unsecured.

We	will	pay	interest	on	any	outstanding	advances	under	the	2008	Credit	Agreement	at	(i)	the	base	rate	(as	defined	in	the	2008	Credit	Agreement)	plus	an applicable	margin	of	1.00%	or	(ii)	the	Eurocurrency	rate	(as	defined	in	the	2008	Credit	Agreement)	plus	an	applicable	margin	of	2.00%.	We	will	pay	letter	of	credit	fees on	the	average	daily	aggregate	available	amount	of	all	letters	of	credit	outstanding	from	time	to	time	at	an	annual	rate	of	2.00%	and	fronting	fees	on	the	aggregate available	amount	of	all	letters	of	credit	outstanding	from	time	to	time	at	an	annual	rate	of	0.25%.	We	will	also	pay	a	facility	fee	at	an	annual	rate	of	1.00%	on	the aggregate	lending	commitment	under	the	2008	Credit	Agreement.	The	interest	rate	on	advances,	the	letter	of	credit	fee	and	the	facility	fee	are	subject	to	a	0.25 percentage	point	reduction	depending	on	our	leverage	ratio	(as	defined	in	the	2008	Credit	Agreement).

The	2008	Credit	Agreement	includes	covenants	that,	among	other	things,	(i)	limit	our	liens	and	the	liens	of	our	consolidated	subsidiaries,	(ii)	restrict	our	payments for	cash	capital	expenditures,	acquisitions,	common	stock	dividends,	share	repurchases	and	certain	other	purposes,	and	(iii)	limit	subsidiary	debt.	The	2008	Credit Agreement	also	contains	financial	covenants	that	require	us	to	maintain,	on	a	consolidated	basis	as	of	the	end	of	each	fiscal	quarter	beginning	with	the	quarter	ended September	30,	2008,	(i)	an	interest	coverage	ratio	(EBITDA	to	net	interest	expense	plus	cash	dividends	on	convertible	preferred	stock)	for	the	four	quarters	then	ended	of not	less	than	4.50	to	1,	(ii)	a	leverage	ratio	(debt	as	of	such	date	to	EBITDA)	for	the	four	quarters	then	ended	of	not	greater	than	3.50	to	1	through	December	31,	2008, 3.25	to	1	through	December	31,	2009	and	3.00	to	1	thereafter,	and	(iii)	minimum	EBITDA	for	the	four	quarters	then	ended	of	not	less	than	$600.0.	The	terms	used	in these	ratios,	including	EBITDA,	are	subject	to	specific	definitions	set	forth	in	the	2008	Credit	Agreement.	Under	the	definition	in	the	2008	Credit	Agreement,	EBITDA means	operating	income	or	loss	plus	depreciation	expense,	amortization	expense,	and	other	non-cash	charges	in	an	amount	not	to	exceed	$75.0	in	any	period	of	four fiscal	quarters.	As	of	December	31,	2008,	we	were	in	compliance	with	all	applicable	covenants.

# Cash	Poolings

As	part	of	the	ELF	Financing	completed	during	the	second	quarter	of	2006,	we	issued	67.9	warrants,	consisting	of	29.1	capped	warrants	("Capped	Warrants")	and 38.8	uncapped	warrants	("Uncapped	Warrants").	In	accordance	with	EITF	Issue	No.	00-19,	Accounting	for	Derivative	Financial	Instruments	Indexed	to,	and	Potentially Settled	in,	a	Company's	Own	Stock	("EITF	00-19"),	we	recorded	$63.4	of	deferred	warrant	cost	in	other	assets,	with	the	offset	recorded	to	additional	paid-in	capital within	stockholders'	equity.	This	amount	is	a	non-cash	transaction	and	represents	the	fair	value	of	the	warrants	at	the	transaction	close	date	estimated	using	the	Black- Scholes	option-pricing	model,	which	requires	reliance	on	variables	including	the	price	volatility	of	the	underlying	stock.	The	deferred	warrant	cost	will	be	amortized through	the	exercise	date	of	the	warrants	as	issuance	costs	on	a	straight-line	basis	as	a	non-cash	element	of	interest	expense	and	$21.1	was	amortized	for	both	the	2008 and	2007	periods.

The	stated	exercise	date	of	the	warrants	is	June	15,	2009.	Upon	exercise	of	the	warrants	each	warrant	will	entitle	the	warrant	holder	to	receive	an	amount	in	cash, shares	of	our	common	stock,	or	a	combination	of	cash	and	shares	of	our	common	stock,	at	our	option.	The	amount	will	be	based,	subject	to	customary	adjustments,	on the	difference	between	the	market	price	of	one	share	of	our	common	stock	(calculated	as	the	average	share	price	over	30	trading	days	following	expiration)	and	the stated	exercise	price	of	the	warrant.	For	the	Uncapped	Warrants,	the	exercise	price	is	$11.91	per	warrant.	For	the	Capped	Warrants,	the	exercise	price	is	$9.89	per warrant	but	the	amount	deliverable	upon	exercise	is	capped	so	a	holder	will	not	benefit	from	appreciation	of	the	common	stock	above	$12.36	per	share.	Concurrently with	the	issuance	of	the	warrants	described	above,	we	entered	into	call	spread	transactions	with	four	different	counterparties	to	reduce	the	potential	dilution	or	cash	cost upon	exercise	of	the	Uncapped	Warrants	to	the	extent	the	market	price	for	our	common	stock	exceeds	$11.91	per	share.	The	four	transactions	cover	an	aggregate notional	amount	of	38.8	shares,	equivalent	to	the	full	number	of	the	Uncapped	Warrants,	and	had	an	aggregate	purchase	price	of	$29.2.	In	accordance	with	EITF	00-19 the	cost	of	the	four	transactions	has	been	recorded	as	a	reduction	to	additional	paid-in	capital	within	stockholders'	equity.

In	accordance	with	EITF	03-6,	the	warrants	are	not	considered	securities	with	participation	rights	in	earnings	available	to	common	stockholders	due	to	the contingent	nature	of	the	exercise	feature	of	these	securities.

# Note	10:				Convertible	Preferred	Stock

Each	share	of	our	5.25%	Series	B	Cumulative	Convertible	Perpetual	Preferred	Stock	("Series	B	Preferred	Stock")	has	a	liquidation	preference	of	$1,000	per	share and	is	convertible	at	the	option	of	the	holder	at	any	time	into	73.1904	shares	of	our	common	stock,	subject	to	adjustment	upon	the	occurrence	of	certain	events,	which represents	a	conversion	price	of	$13.66.	On	or	after	October	15,	2010,	each	share	of	the	Series	B	Preferred	Stock	may	be	converted	at	our	option	if	the	closing	price	of our	common	stock	multiplied	by	the	conversion	rate	then	in	effect	equals	or	exceeds	130%	of	the	liquidation	preference	of	$1,000	per	share	for	20	trading	days	during any	consecutive	30	trading	day	period.	Holders	of	the	Series	B	Preferred	Stock	will	be	entitled	to	an	adjustment	to	the	conversion	rate	if	they	convert	their	shares	in connection	with	a	fundamental	change	meeting	certain	specified	conditions.	The	Series	B	Preferred	Stock	is	junior	to	all	of	our	existing	and	future	debt	obligations	and senior	to	our	common	stock,	with	respect	to	payments	of	dividends	and	rights	upon	liquidation,	winding	up	or	dissolution,	to	the	extent	of	the	liquidation	preference	of $1,000	per	share.

The	terms	of	our	Series	B	Preferred	Stock	do	not	permit	us	to	pay	dividends	on	our	common	stock	unless	all	accumulated	and	unpaid	dividends	on	the	Series	B Preferred	Stock	have	been	or	contemporaneously	are	declared	and	paid,	or	provision	for	the	payment	thereof	has	been	made.	We	paid	dividends	of	$27.6,	or	$52.50	per share,	on	our	Series	B	Preferred	Stock	during	2008.	Regular	quarterly	dividends,	if	declared,	are	$6.9,	or	$13.125	per

share.	Dividends	on	each	share	of	Series	B	Preferred	Stock	are	payable	quarterly	in	cash	or,	if	certain	conditions	are	met,	in	common	stock,	at	our	option,	on January	15,	April	15,	July	15	and	October	15	of	each	year.	Dividends	on	our	Series	B	Preferred	Stock	are	cumulative	from	the	date	of	issuance	and	are	payable	on	each payment	date	to	the	extent	that	we	have	assets	that	are	legally	available	to	pay	dividends	and	our	Board	of	Directors	or	an	authorized	committee	of	our	Board	declares	a dividend	payable.

The	terms	of	the	Series	B	Preferred	Stock	include	an	embedded	derivative	instrument,	the	fair	value	of	which	as	of	December	31,	2008	and	2007	was	negligible.

In	accordance	with	EITF	03-6,	the	Series	B	Preferred	Stock	is	not	considered	a	security	with	participation	rights	in	earnings	available	to	common	stockholders due	to	the	contingent	nature	of	the	conversion	feature	of	these	securities.

# Note	11:				Accumulated	Other	Comprehensive	Loss

Accumulated	other	comprehensive	loss,	net	of	tax,	is	reflected	in	the	Consolidated	Balance	Sheets	as	follows:

|  | 2008 | 2007 |
| :--- | :--- | :--- |
| Foreign\tcurrency\ttranslation\tadjustment,\tnet\tof\ttax | $(214.2) | $(53.0) |
| Unrealized\tholding\t(losses)\tgains\ton\tsecurities,\tnet | (0.5) | 2.2 |
| Unrecognized\tlosses,\ttransition\tobligation\tand\tprior\tservice\tcost,\tnet | (103.8) | (67.8) |
| Accumulated\tother\tcomprehensive\tloss,\tnet\tof\ttax | $(318.5) | $(118.6) |

# Note	12:				Stock-Based	Compensation

# 2006	Performance	Incentive	Plan

We	issue	stock	and	cash	based	incentive	awards	to	our	employees	under	a	plan	established	by	the	Compensation	Committee	of	the	Board	of	Directors	and approved	by	our	shareholders.	In	May	2006,	our	shareholders	approved	the	2006	Performance	Incentive	Plan	(the	"2006	PIP").	Under	the	2006	PIP,	up	to	6.0	shares	of common	stock	may	be	used	for	granting	stock	options	and	stock	appreciation	rights	and	up	to	33.0	shares	of	common	stock	may	be	used	for	granting	performance-based awards	and	other	stock-based	awards.	Subject	to	the	terms	of	the	2006	PIP,	additional	awards	may	be	granted	from	shares	available	for	issuance	under	previous	plans and	in	other	limited	circumstances.	Only	a	certain	number	of	shares	are	available	for	each	type	of	award	under	the	2006	PIP,	and	there	are	limits	on	the	number	of	shares that	may	be	awarded	to	any	one	participant.	The	vesting	period	of	awards	granted	is	generally	commensurate	with	the	requisite	service	period.	We	generally	issue	new shares	to	satisfy	the	exercise	of	stock	options	or	the	distribution	of	other	stock-based	awards.	We	granted	awards	under	the	2006	PIP	for	2008,	2007	and	2006.

The	following	table	summarizes	stock-based	compensation	expense	included	in	salaries	and	related	expenses:

|  | Years	ended	December	31, | Years	ended	December	31, | Years	ended	December	31, |
| :--- | :--- | :--- | :--- |
|  | \t\t2008 | \t\t2007 | \t\t2006 |
| Stock-based\tcompensation\texpense | $82.7 | $85.9 | $72.3 |
| Tax\tbenefit | 32.0 | 33.1 | 24.4 |

In	addition,	stock-based	compensation	expense	of	$4.9	is	included	in	other	reorganization-related	charges	for	the	year	ended	December	31,	2006.	Stock-based compensation	expense	included	in	other	reorganization-related	charges	was	negligible	for	the	years	ended	December	31,	2008	and	2007.

# Employee	Stock	Purchase	Plans

The	Interpublic	Group	of	Companies	Employee	Stock	Purchase	Plan	(2006)	(the	"2006	Plan")	became	active	April	1,	2007.	Under	the	2006	Plan,	eligible employees	may	purchase	our	common	stock	through	payroll	deductions	not	exceeding	10%	of	their	eligible	compensation	or	900	(actual	number)	shares	each	offering period.	The	price	an	employee	pays	for	a	share	of	common	stock	under	the	2006	Plan	is	90%	of	the	lesser	of	the	average	market	price	of	a	share	on	the	first	business	day of	the	offering	period	or	the	average	market	price	of	a	share	on	the	last	business	day	of	the	offering	period	of	three	months.	An	aggregate	of	15.0	shares	are	reserved	for issuance	under	the	2006	Plan,	of	which	0.5	shares	and	0.3	shares	were	issued	during	2008	and	2007.	Total	compensation	expense	associated	with	the	issued	shares	was $0.8	and	$0.6	for	the	years	ended	December	31,	2008	and	2007,	respectively.

# Stock	Options

Stock	options	are	granted	with	the	exercise	price	equal	to	the	fair	market	value	of	our	common	stock	on	the	grant	date,	are	generally	exercisable	between	two	and four	years	from	the	grant	date	and	expire	ten	years	from	the	grant	date	(or	earlier	in	the	case	of	certain	terminations	of	employment).

The	following	tables	are	a	summary	of	stock	option	activity	during	2008:

|  | Options | (per	option) | (in	years) |
| :--- | :--- | :--- | :--- |
| Non-vested\tas\tof\tJanuary\t1,\t2008 | 7.8 | $4.73 |  |
| Granted | 2.4 | 4.07 |  |
| Vested | (2.2) | 4.92 |  |
| Forfeited | (0.5) | 4.71 |  |
| Non-vested\tas\tof\tDecember\t31,\t2008 | 7.5 | 4.47 | 8.3 |

There	were	no	stock	options	exercised	in	2008,	and	there	were	0.3	and	0.1	stock	options	exercised	during	2007	and	2006,	respectively.	The	total	intrinsic	value	of stock	options	exercised	during	2007	and	2006	was	$0.9	and	$0.2,	respectively.	Accordingly,	the	related	excess	tax	benefit	classified	as	an	inflow	on	the	Consolidated

Statements	of	Cash	Flows	was	$0.3	and	$0.1	in	2007	and	2006,	respectively.	The	cash	received	from	the	stock	options	exercised	in	2007	and	2006	was	$3.0	and	$0.9, respectively.	As	of	December	31,	2008	there	was	$24.3	of	total	unrecognized	compensation	expense	related	to	non-vested	stock	options	granted,	which	is	expected	to	be recognized	over	a	weighted-average	period	of	2.3	years.	As	of	December	31,	2008,	the	aggregate	intrinsic	value	for	stock	options	outstanding,	vested	and	expected	to vest,	exercisable	and	non-vested	is	negligible.

We	use	the	Black-Scholes	option-pricing	model	to	estimate	the	fair	value	of	options	granted,	which	requires	the	input	of	subjective	assumptions	including	the option's	expected	term	and	the	price	volatility	of	the	underlying	stock.	Changes	in	the	assumptions	can	materially	affect	the	estimate	of	fair	value	and	our	results	of operations	could	be	materially	impacted.	The	weighted-average	option	grant-date	fair	value	during	the	years	ended	December	31,	2008,	2007	and	2006	was	$4.07,	$4.89, and	$3.91,	respectively.

The	fair	value	of	each	option	grant	has	been	estimated	with	the	following	weighted-average	assumptions:

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| Expected\tvolatility1 | 36.6% | 34.6% | 38.9% |
| Expected\tterm\t(years)2 | 6.1 | 6.0 | 5.9 |
| Risk\tfree\tinterest\trate3 | 3.5% | 4.8% | 5.1% |
| Expected\tdividend\tyield4 | 0.0% | 0.0% | 0.0% |

1 The	expected	volatility	for	the	years	ended	December	31,	2008,	2007	and	2006	used	to	estimate	the	fair	value	of	stock	options	awarded	is	based	on	a	blend	of:	(i)	historical	volatility	of	our	common	stock	for periods	equal	to	the	expected	term	of	our	stock	options	and	(ii)	implied	volatility	of	tradable	forward	put	and	call	options	to	purchase	and	sell	shares	of	our	common	stock.

2 The	estimate	of	our	expected	term	for	the	years	ended	December	31,	2008,	2007	and	2006	is	based	on	the	average	of	(i)	an	assumption	that	all	outstanding	options	are	exercised	upon	achieving	their	full	vesting date	and	(ii)	an	assumption	that	all	outstanding	options	will	be	exercised	at	the	midpoint	between	the	current	date	(i.e.,	the	date	awards	have	ratably	vested	through)	and	their	full	contractual	term.	In	determining the	estimate,	we	considered	several	factors,	including	the	historical	option	exercise	behavior	of	our	employees	and	the	terms	and	vesting	periods	of	the	options.

3 The	risk	free	rate	is	determined	using	the	implied	yield	currently	available	for	zero-coupon	U.S.	government	issuers	with	a	remaining	term	equal	to	the	expected	term	of	the	options.

4 No	dividend	yield	was	assumed	because	we	currently	do	not	pay	cash	dividends	on	our	common	stock	and	have	no	current	plans	to	reinstate	a	dividend.

# Incentive	Awards

We	grant	other	incentive	awards	such	as	stock-settled	awards,	cash-settled	awards	and	performance-based	awards	(settled	in	cash	or	shares)	to	certain	key employees.	The	number	of	shares	or	units	received	by	an	employee	for	performance-based	awards	depends	on	Company	and/or	individual	performance	against	specific performance	targets	and	could	range	from	0%	to	200%	of	the	target	amount	of	shares	originally	granted.	Incentive	awards	are	subject	to	certain	restrictions	and	vesting requirements	as	determined	by	the	Compensation	Committee.	The	vesting	period	is	generally	three	years.	Upon	completion	of	the	vesting	period	for	cash-settled	awards, which	include	restricted	stock	units	expected	to	be	settled	in	cash,	the	grantee	is	entitled	to	receive	a	payment	in	cash	or	in	shares	of	common	stock	based	on	the	fair market	value	of	the	corresponding	number	of	shares	of	common	stock.	No	monetary	consideration	is	paid	by	a	recipient	for	any	incentive	award,	and	the	fair	value	of	the shares	on	the	grant	date	is	amortized	over	the	vesting	period,	except	for	cash-settled	awards	where	the	quarterly-adjusted	fair	value	based	on	our	share	price	is	amortized over	the	vesting	period.	The	holders	of	cash-settled	and	performance-based	awards	have	no	ownership	interest	in	the	underlying	shares	of	common	stock	until	the awards	vest	and	the	shares	of	common	stock	are	issued.

Stock-based	compensation	awards	expected	to	be	settled	in	cash	have	been	classified	as	liabilities	in	the	Consolidated	Balance	Sheets	as	of	December	31,	2008 and	2007.

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| Stock-Settled\tAwards: |  |  |  |
| Awards\tgranted | 6.4 | 5.0 | 5.3 |
| Weighted-average\tgrant-date\tfair\tvalue\t(per\taward) | $9.46 | $11.68 | $8.77 |
| Total\tfair\tvalue\tof\tvested\tawards\tdistributed | $31.1 | $41.5 | $11.0 |
| Cash-Settled\tAwards: |  |  |  |
| Awards\tgranted | 1.3 | 0.9 | 2.2 |
| Weighted-average\tgrant-date\tfair\tvalue\t(per\taward) | $9.27 | $11.44 | $8.88 |
| Total\tfair\tvalue\tof\tvested\tawards\tdistributed | $9.2 | $6.7 | $0.2 |
| Performance-Based\tAwards: |  |  |  |
| Awards\tgranted | 3.7 | 2.9 | 9.9 |
| Weighted-average\tgrant-date\tfair\tvalue\t(per\taward) | $9.49 | $11.69 | $9.68 |
| Total\tfair\tvalue\tof\tvested\tawards\tdistributed | $15.8 | $1.4 | $0.1 |

A	summary	of	the	activity	of	our	non-vested	stock-settled	awards,	cash-settled	awards,	and	performance-based	awards	during	2008	is	presented	below (performance-based	awards	are	shown	at	100%	of	the	shares	originally	granted):

|  |  |  |  |  | Performance-Based | Performance-Based |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Stock-Settled\tAwards | Stock-Settled\tAwards | Cash-Settled\tAwards | Cash-Settled\tAwards | Awards | Awards |
|  |  | Weighted- |  | Weighted- |  | Weighted- |
|  |  | Average |  | Average |  | Average |
|  |  | Grant-Date |  | Grant-Date |  | Grant-Date |
|  |  | Fair\tValue |  | Fair\tValue |  | Fair\tValue |
|  | Awards | (per\taward) | Awards | (per\taward) | Awards | (per\taward) |
| Non-vested\tas\tof\tJanuary\t1,\t2008 | 12.6 | $10.73 | 3.7 | $10.33 | 13.3 | $10.49 |
| Granted | 6.4 | 9.46 | 1.3 | 9.27 | 3.7 | 9.49 |
| Vested | (3.3) | 11.98 | (0.9) | 11.95 | (1.6) | 11.83 |
| Forfeited | (1.1) | 10.30 | (0.5) | 9.96 | (1.5) | 10.37 |
| Non-vested\tas\tof\tDecember\t31,\t2008 | 14.6 | $9.92 | 3.6 | $9.59 | 13.9 | $10.08 |

# Note	13:				Employee	Benefits

# Pension	Plans

We	have	a	defined	benefit	pension	plan	("Domestic	Plan")	that	consists	of	approximately	4,300	participants	and	has	been	closed	to	new	participants	since March	31,	1998.	Some	of	our	agencies	have	additional	domestic	plans	covering	a	total	of	approximately	300	employees	and	are	also	closed	to	new	participants.	We	also have	numerous	plans	outside	the	U.S.,	some	of	which	are	funded,	while	others	provide	payments	at	the	time	of	retirement	or	termination	under	applicable	labor	laws	or agreements.	The	Interpublic	Pension	Plan	in	the	U.K.	("U.K.	Pension	Plan")	is	a	defined	benefit	plan	and	is	the	most	material	foreign	pension	plan	in	terms	of	the 74

benefit	obligation	and	plan	assets.	Differences	between	the	aggregate	balance	sheet	amounts	listed	in	the	tables	below	and	the	totals	reported	in	our	Consolidated Balance	Sheets	and	our	Consolidated	Statements	of	Stockholders'	Equity	and	Comprehensive	Income	(Loss)	relate	to	the	non-material	foreign	plans.

# Postretirement	Benefit	Plans

Some	of	our	domestic	subsidiaries	provide	postretirement	health	benefits	and	postretirement	life	insurance	to	eligible	employees	and,	in	certain	cases,	their dependents.	These	plans	consist	of	approximately	3,200	participants	and	are	closed	to	new	participants.	Our	postretirement	health	benefits	plans	are	unfunded,	and	we pay	claims	as	presented	by	the	plans'	administrator.	The	postretirement	life	insurance	plan	is	insured	and	we	pay	premiums	to	the	plan	administrator.

# Net	Periodic	Cost

|  | Domestic	Pension	Plans | Domestic	Pension	Plans | Domestic	Pension	Plans | Foreign	Pension	Plans | Foreign	Pension	Plans | Foreign	Pension	Plans | Postretirement	Benefit	Plans | Postretirement	Benefit	Plans | Postretirement	Benefit	Plans |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Years\tended\tDecember\t31, | 2008 | 2007 | 2006 | 2008 | 2007 | 2006 | 2008 | 2007 | 2006 |
| Service\tcost | $—\t\t $— | $—\t\t $— | $0.8 | $13.3 | $15.1 | $17.5 | $0.4 | $0.5 | $0.5 |
| Interest\tcost | 8.4 | 8.2 | 8.9 | 26.4 | 26.1 | 22.8 | 3.2 | 3.5 | 3.5 |
| Expected\treturn\ton\tplan\tassets | (10.4) | (10.3) | (9.3) | (23.9) | (24.0) | (19.8) | — | — | — |
| Curtailment\tgains | — | — | (0.1) | (0.4) | (0.1) | (2.3) | — | — | — |
| Settlement\tlosses\t(gains) | 0.1 | — | — | (0.6) | (0.9) | 0.5 | — | — | — |
| Amortization\tof: |  |  |  |  |  |  |  |  |  |
| Transition\tobligation | — | — | — | — | 0.1 | 0.2 | 0.2 | 0.2 | 0.1 |
| Prior\tservice\tcost\t(credit) | — | — | 0.1 | 0.3 | 0.2 | 0.2 | (0.1) | (0.1) | (0.1) |
| Unrecognized\tactuarial\tlosses | 5.7 | 6.8 | 7.0 | 0.7 | 2.8 | 6.5 | — | 0.9 | 0.7 |
| Other | — | — | — | — | — | (0.2) | — | — | — |
| Net\tperiodic\tcost | $3.8 | $4.7 | $7.4 | $15.8 | $19.3 | $25.4 | $3.7 | $5.0 | $4.7 |

# Pension	and	Postretirement	Benefit	Obligation

The	change	in	the	benefit	obligation,	the	change	in	plan	assets,	the	funded	status	and	amounts	recognized	for	the	domestic	pension	plans,	the	principal	foreign pension	plans,	and	the	postretirement	benefit	plans	are	as	follows:

|  | Domestic	Pension | Domestic	Pension | Foreign	Pension | Foreign	Pension | Postretirement | Postretirement |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Plans | Plans | Plans | Plans | Benefit\tPlans | Benefit\tPlans |
| December\t31, | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 |
| Projected\tbenefit\tobligation\tat\tJanuary\t1 | $143.8 | $156.4 | $535.4 | $508.4 | $63.6 | $69.9 |
| Service\tcost | — | — | 13.3 | 15.1 | 0.4 | 0.5 |
| Interest\tcost | 8.4 | 8.2 | 26.4 | 26.1 | 3.2 | 3.5 |
| Benefits\tpaid | (12.2) | (13.6) | (23.6) | (23.1) | (5.6) | (6.0) |
| Plan\tparticipant\tcontributions | — | — | 3.3 | 1.9 | 1.7 | 1.7 |
| Plan\tamendments | — | — | — | 1.7 | — | — |
| Actuarial\tlosses\t(gains) | 1.3 | (7.2) | (32.7) | (30.2) | (5.8) | (6.0) |
| Curtailments | — | — | (0.8) | (0.7) | — | — |
| Settlements | (0.8) | — | (5.7) | (4.9) | — | — |
| Business\tacquisitions\tand\tdivestitures | — | — | — | 1.6 | — | — |
| Foreign\tcurrency\teffect | — | — | (97.3) | 20.4 | — | — |
| Other | — | — | (4.0) | 19.1 | — | — |
| Projected\tbenefit\tobligation\tat\tDecember\t31 | $140.5 | $143.8 | $414.3 | $535.4 | $57.5 | $63.6 |
| Fair\tvalue\tof\tplan\tassets\tat\tJanuary\t1 | $134.0 | $133.1 | $363.7 | $312.7 | $—\t\t $— | $—\t\t $— |
| Actual\treturn\ton\tplan\tassets | (27.5) | 14.5 | (31.3) | 23.9 | — | — |
| Employer\tcontributions | 2.3 | — | 28.3 | 30.1 | 4.3 | 4.3 |
| Plan\tparticipant\tcontributions | — | — | 3.3 | 1.9 | 1.7 | 1.7 |
| Benefits\tpaid | (12.2) | (13.6) | (23.6) | (23.1) | (6.0) | (6.0) |
| Settlements | (0.8) | — | (5.7) | (4.5) | — | — |
| Foreign\tcurrency\teffect | — | — | (82.3) | 7.9 | — | — |
| Business\tacquisitions\tand\tdivestitures | — | — | 0.5 | 1.6 | — | — |
| Other | — | — | 1.5 | 13.2 | — | — |
| Fair\tvalue\tof\tplan\tassets\tat\tDecember\t31 | $95.8 | $134.0 | $254.4 | $363.7 | $— | $— |
| Funded\tstatus\tof\tthe\tplans | $(44.7) | $(9.8) | $(159.9) | $ (171.7) | $(57.5) | $(63.6) |

|  | Domestic	Pension | Domestic	Pension | Foreign	Pension | Foreign	Pension | Postretirement | Postretirement |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Plans | Plans | Plans | Plans | Benefit\tPlans | Benefit\tPlans |
| December\t31, | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 |
| Amounts\trecognized\tin\tconsolidated\tbalance\tsheet |  |  |  |  |  |  |
| Non-current\tasset | $1.5 | $3.5 | $5.3 | $6.5 | $—\t\t $— | $—\t\t $— |
| Current\tliability | — | — | (7.4) | (7.2) | (5.2) | (5.7) |
| Non-current\tliability | (46.2) | (13.3) | (157.8) | (171.0) | (52.3) | (57.9) |
| Net\tliability\trecognized | $(44.7) | $(9.8) | $(159.9) | $(171.7) | $ (57.5) | $(63.6) |
| Accumulated\tbenefit\tobligation | $140.5 | $143.8 | $389.4 | $493.0 |  |  |
| Amounts\trecognized\tin\taccumulated\tother\tcomprehensive\tloss |  |  |  |  |  |  |
| Net\tactuarial\tloss | $74.3 | $40.8 | $53.4 | $44.1 | $8.1 | $13.8 |
| Prior\tservice\tcost\t(credit) | 0.2 | 0.2 | 2.6 | 3.7 | (0.7) | (0.8) |
| Transition\tobligation | — | — | 0.1 | 0.9 | 0.6 | 0.8 |
| Total\tamount\trecognized | $74.5 | $41.0 | $56.1 | $48.7 | $8.0 | $13.8 |
| Plans\twith\tunderfunded\tor\tunfunded\taccumulated\tbenefit\tobligation |  |  |  |  |  |  |
| Aggregate\tprojected\tbenefit\tobligation | $130.4 | $129.9 | $401.5 | $520.1 |  |  |
| Aggregate\taccumulated\tbenefit\tobligation | 130.4 | 129.9 | 379.5 | 480.4 |  |  |
| Aggregate\tfair\tvalue\tof\tplan\tassets | 84.2 | 116.6 | 236.8 | 342.1 |  |  |

# Assumptions

|  |  | Domestic	Pension |  | Foreign	Pension | Foreign	Pension |  |  | Postretirement |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Plans | Plans | Plans | Plans | Plans | Plans | Benefit\tPlans | Benefit\tPlans | Benefit\tPlans |
| Years\tended\tDecember\t31, | 2008 | 2007 | 2006 | 2008 | 2007 | 2006 | 2008 | 2007 | 2006 |
| Net\tperiodic\tcost |  |  |  |  |  |  |  |  |  |
| Discount\trate | 5.89% | 5.68% | 5.41% | 5.31% | 4.64% | 4.38% | 6.00% | 5.75% | 5.50% |
| Rate\tof\tcompensation\tincrease | N/A | N/A | N/A | 3.79% | 3.50% | 3.29% | N/A | N/A | N/A |
| Expected\treturn\ton\tplan\tassets | 8.15% | 8.16% | 8.17% | 6.95% | 6.83% | 6.52% | N/A | N/A | N/A |
| Benefit\tobligation |  |  |  |  |  |  |  |  |  |
| Discount\trate | 6.01% | 5.89% |  | 5.38% | 5.33% |  | 6.00% | 6.00% |  |
| Rate\tof\tcompensation\tincrease |  |  |  | 3.38% | 3.81% |  |  |  |  |
| Healthcare\tcost\ttrend\trate\tassumed\tfor\tnext\tyear |  |  |  |  |  |  |  |  |  |
| Initial\trate\t(weighted-average) |  |  |  |  |  |  | 8.50% | 9.00% |  |

Discount	Rates	—	For	the	domestic	pension	and	postretirement	benefit	plans,	we	determine	our	discount	rate	based	on	the	estimated	rate	at	which	annuity contracts	could	be	purchased	to	effectively	settle	the	respective	benefit	obligations.	To	assist	in	this	we	utilize	a	yield	curve	based	on	Moody's	Aa-rated	corporate	non- callable	bonds.	Each	plan's	projected	cash	flow	is	matched	to	this	yield	curve	and	a	present	value	is	developed,	which	is	then	used	to	develop	a	single	equivalent	discount rate.	The	average	duration	of	our	domestic	pension	obligations	was	10	years	as	of	December	31,	2008.	The	average	duration	of	our	postretirement	healthcare	obligation was	8	years	as	of	December	31,	2008.	For	the	foreign	pension	plans,	we	determine	a	discount	rate	by	referencing	market	yields	on	high	quality	corporate	bonds	in	the local	markets	with	the	appropriate	term	as	of	December	31,	2008.

Expected	Return	on	Assets	—	For	the	domestic	pension	plans,	our	expected	rate	of	return	considers	the	historical	trends	of	asset	class	index	returns	over	various market	cycles	and	economic	conditions,	current	market	conditions,	risk	premiums	associated	with	asset	classes	and	long-term	inflation	rates.	We	determine	both	a	short- term	and	long-term	view	and	then	attempt	to	select	a	long-term	rate	of	return	assumption	that	matches	the	duration	of	our	liabilities.	For	the	foreign	pension	plans, primarily	the	U.K.	Pension	Plan,	we	determine	the	expected	rate	of	return	by	utilizing	a	weighted	average	approach	based	on	the	current	long-term	expected	rates	of return	for	each	asset	category.	The	long-term	expected	rate	of	return	for	the	equity	category	is	based	on	the	current	long-term	rates	of	return	available	on	government bonds	and	applying	suitable	risk	premiums	that	consider	historical	market	returns	and	current	market	expectations.

# Asset	Allocation

The	primary	investment	goal	for	our	plans'	assets	is	to	maximize	total	asset	returns	while	ensuring	the	plans'	assets	are	available	to	fund	the	plans'	liabilities	as they	become	due.	The	plans'	assets	in	aggregate	and	at	the	individual	portfolio	level	are	invested	so	that	total	portfolio	risk	exposure	and	risk-adjusted	returns	best achieve	this	objective.	The	aggregate	amount	of	our	own	stock	held	as	investment	for	our	domestic	and	foreign	pension	funds	is	considered	negligible	relative	to	the total	fund	assets.	As	of	December	31,	2008	target	asset	allocations	for	2009	as	well	as	actual	asset	allocations	as	of	December	31,	2008	and	2007	are	as	follows:

|  | 2009	Target	Allocation | 2009	Target	Allocation | Domestic | Domestic | Foreign | Foreign |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Asset\tcategory | Domestic | Foreign | 2008 | 2007 | 2008 | 2007 |
| Equity\tsecurities | 40% | 23% | 33% | 49% | 19% | 65% |
| Fixed\tincome\tsecurities | 35% | 42% | 41% | 26% | 23% | 23% |
| Real\testate | 10% | 4% | 10% | 8% | 0% | 3% |
| Other | 15% | 31% | 16% | 17% | 58% | 9% |
| Total | 100% | 100% | 100% | 100% | 100% | 100% |

# Cash	Flows

For	2009,	we	expect	to	contribute	$10.0	and	$19.3	to	our	domestic	pension	plans	and	foreign	pension	plans,	respectively.	During	2008	we	contributed	$2.3	and $28.3	to	our	domestic	pension	plans	and	foreign	pension	plans,	respectively.	The	following	estimated	future	benefit	payments,	which	reflect	future	service,	as appropriate,	are	expected	to	be	paid	in	the	years	indicated:

|  | Domestic | Foreign | Postretirement |
| :--- | :--- | :--- | :--- |
| Years | Pension\tPlans | Pension\tPlans | Benefit\tPlans |
| 2009 | $12.2 | $19.8 | $5.8 |
| 2010 | 15.9 | 21.0 | 5.9 |
| 2011 | 11.6 | 18.4 | 5.8 |
| 2012 | 11.5 | 21.9 | 5.8 |
| 2013 | 11.2 | 22.0 | 5.7 |
| 2014\t-\t2018 | 51.2 | 133.7 | 26.5 |

The	estimated	future	payments	for	our	postretirement	benefit	plans	are	before	any	estimated	federal	subsidies	expected	to	be	received	under	the	Medicare Prescription	Drug,	Improvement	and	Modernization	Act	of	2003.	Federal	subsidies	are	estimated	to	range	from	$0.6	in	2009	to	$0.8	in	2013	and	are	estimated	to	be	$4.4 for	the	period	2014-2018.

# Savings	Plans

We	sponsor	a	defined	contribution	plan	("Savings	Plan")	that	covers	substantially	all	domestic	employees.	The	Savings	Plan	permits	participants	to	make contributions	on	a	pre-tax	and/or	after-tax	basis.	The	Savings	Plan	allows	participants	to	choose	among	various	investment	alternatives.	We	match	a	portion	of	participant contributions	based	upon	their	years	of	service.	We	contributed	$33.4,	$32.5	and	$31.2	to	the	Savings	Plan	in	2008,	2007	and	2006,	respectively.	During	2008,	we	used approximately	$7.8	of	participant	forfeitures	to	offset	our	Savings	Plan	contributions.	We	contributed	$4.1	to	the	Savings	Plan	during	2008	for	the	performance-based discretionary	match	for	2007	and	during	2009,	we	expect	to	contribute	$4.0	for	2008.	In	addition,	we	maintain	defined	contribution	plans	in	various	foreign	countries and	contributed	$20.9,	$26.7	and	$11.8	to	these	plans	in	2008,	2007	and	2006,	respectively.

# Deferred	Compensation	and	Benefit	Arrangements

We	have	deferred	compensation	arrangements	which	(i)	permit	certain	of	our	key	officers	and	employees	to	defer	a	portion	of	their	salary	or	incentive compensation,	or	(ii)	require	us	to	contribute	an	amount	to	the	participant's	account.	The	arrangements	typically	provide	that	the	participant	will	receive	the	amounts deferred	plus	interest	upon	attaining	certain	conditions,	such	as	completing	a	certain	number	of	years	of	service	or	upon	retirement	or	termination.	As	of	December	31, 2008	and	2007,	the	deferred	compensation	liability	balance	was	$107.6	and	$137.6,	respectively.	Amounts	expensed	for	deferred	compensation	arrangements	in	2008, 2007	and	2006	were	$5.7,	$11.9	and	$10.3,	respectively.

We	have	deferred	benefit	arrangements	with	certain	key	officers	and	employees	which	provide	participants	with	an	annual	payment,	payable	when	the	participant attains	a	certain	age	and	after	the	participant's	employment	has	terminated.	The	deferred	benefit	liability	was	$182.1	and	$164.5	as	of	December	31,	2008	and	2007, respectively.	Amounts	expensed	for	deferred	benefit	arrangements	in	2008,	2007	and	2006	were	$14.9,	$15.5	and	$13.7,	respectively.

We	have	purchased	life	insurance	policies	on	participants'	lives	to	assist	in	the	funding	of	the	related	deferred	compensation	and	deferred	benefit	liabilities.	As	of December	31,	2008	and	2007,	the	cash	surrender	value	of	these	policies	was	$100.2	and	$109.7,	respectively.	In	addition	to	the	life	insurance	policies,	certain investments	are	held	for	the	purpose	of	paying	the	deferred	compensation	and	deferred	benefit	liabilities.	These	investments,	along	with	the	life	insurance	policies,	are held	in	a	separate	revocable	trust	for	the	purpose	of	paying	the	deferred	compensation	and	the	deferred	benefit	arrangement	liabilities.	As	of	December	31,	2008	and 2007,	the	value	of	such	investments	in	the	trust	was	$55.8	and	$93.5,	respectively.	The	short-term	investments	are	included	in	cash	and	cash	equivalents,	and	the	long- term	investments	and	cash	surrender	value	of	the	policies	are	included	in	other	assets.

# Long-Term	Disability	Plan

We	have	a	long-term	disability	plan	which	provides	income	replacement	benefits	to	eligible	participants	who	are	unable	to	perform	their	job	duties	during	the	first 24	months	of	disability.	Benefits	are	continued	thereafter	if	the	participant	is	unable	to	perform	any	job	related	to	his	or	her	education,	training	or	experience.	As	all income	replacement	benefits	are	fully	insured,	no	related	obligation	is	required	as	of	December	31,	2008	and	2007.	In	addition	to	income	replacement	benefits,	plan participants	may	remain	covered	for	certain	health	and	life	insurance	benefits	up	to	age	65	and	as	such,	we	have	recorded	an	obligation	of	$6.6	and	$7.1	as	of December	31,	2008	and	2007,	respectively.

# Note	14:				Segment	Information

As	of	December	31,	2008,	we	have	two	reportable	segments:	IAN,	which	is	comprised	of	Draftfcb,	Lowe,	McCann	Worldgroup,	Mediabrands	and	our	domestic integrated	agencies,	and	CMG,	which	is	comprised	of	the	bulk	of	our	specialist	marketing	service	offerings.	We	also	report	for	the	"Corporate	and	other"	group.	Changes to	our	organizational	structure	in	the	future	may	result	in	changes	to	the	reportable	segment	disclosure.

Within	IAN,	our	agencies	provide	a	comprehensive	array	of	global	communications	and	marketing	services,	each	offering	a	distinctive	range	of	solutions	for	our clients.	In	addition,	our	domestic	integrated	agencies,	including	Campbell-Ewald,	Hill	Holliday,	Deutsch	and	Mullen,	provide	a	full	range	of	advertising,	marketing communications	services	and/or	marketing	services	and	partner	with	our	global	operating	divisions	as	needed.	IAN's	operating	divisions	share	similar	economic characteristics	and	are	similar	in	other	areas,	specifically	related	to	the	nature	of	their	services,	the	manner	in	which	the	services	are	provided	and	the	similarity	of	their respective	customers.

CMG,	which	includes	Weber	Shandwick,	MWW	Group,	FutureBrand,	DeVries,	GolinHarris,	Jack	Morton,	and	Octagon	Worldwide,	provides	clients	with diversified	services,	including	public	relations,	meeting	and	event	production,	sports	and	entertainment	marketing,	corporate	and	brand	identity	and	strategic	marketing consulting.	CMG	shares	some	similarities	with	service	lines	offered	by	IAN;	CMG's	businesses,	however,	on	an	aggregate	basis,	have	a	higher	proportion	of arrangements	for	which	they	act	as	principal,	a	different	distribution	model	than	IAN	and	different	margin	structure.

The	profitability	measure	employed	by	our	chief	operating	decision	maker	for	allocating	resources	to	operating	divisions	and	assessing	operating	division performance	is	operating	income	(loss),	excluding	the	impact	of	restructuring	and	other	reorganization-related	charges	(reversals)	and	long-lived	asset	impairment charges.	With	the	exception	of	excluding	these	amounts	from	reportable	segment	operating	income	(loss),	all	segments	follow	the	same	accounting	policies	as	those described	in	Note	1.

Certain	Corporate	and	other	charges	are	reported	as	a	separate	line	item	within	total	segment	operating	income	and	include	corporate	office	expenses	and	shared service	center	expenses,	as	well	as	certain	other	centrally	managed	expenses	that	are	not	fully	allocated	to	operating	divisions.	Salaries	and	related	expenses	include salaries,	long-term	incentives,	bonus,	and	other	miscellaneous	benefits	for	corporate	office	employees.	In	addition,	salaries	and	related	expenses	include	long-term incentive	award	accruals	for	a	one-time	performance-based	equity	award	granted	in	2006	to	a	limited	number	of	senior	executives	across	the	Company.	Office	and general	expenses	primarily	include	professional	fees	related	to	internal	control	compliance,	financial	statement	audits,	legal,	information	technology	and	other	consulting services,	which	are	engaged	and	managed	through	the	corporate	office.	In	addition,	office	and	general	expenses	also	includes	rental	expense	and	depreciation	of leasehold	improvements	for	properties	occupied	by	corporate	office	employees.	A	portion	of	these	expenses	are	allocated	to	operating	divisions	based	on	a	formula	that uses	the	revenues	of	each	of	the	operating	units.	Amounts	allocated	also	include	specific	charges	for	information	technology-related	projects,	which	are	allocated	based on	utilization.

Summarized	financial	information	concerning	our	reportable	segments	is	shown	in	the	following	table:

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| Revenue: |  |  |  |
| IAN | $5,870.7 | $5,505.7 | $5,230.6 |
| CMG | 1,092.0 | 1,048.5 | 960.2 |
| Total | $6,962.7 | $6,554.2 | $6,190.8 |
| Segment\toperating\tincome\t(loss): |  |  |  |
| IAN | $690.8 | $528.2 | $391.4 |
| CMG | 86.6 | 57.9 | 51.6 |
| Corporate\tand\tother | (170.6) | (215.9) | (275.3) |
| Total | 606.8 | 370.2 | 167.7 |
| Restructuring\tand\tother\treorganization-related\tcharges | (17.1) | (25.9) | (34.5) |
| Long-lived\tasset\timpairment\tand\tother\tcharges | — | — | (27.2) |
| Interest\texpense | (211.9) | (236.7) | (218.7) |
| Interest\tincome | 90.6 | 119.6 | 113.3 |
| Other\tincome\t(expense) | 3.1 | 8.5 | (5.6) |
| Income\t(loss)\tfrom\tcontinuing\toperations\tbefore\tincome\ttaxes | $471.5 | $235.7 | $(5.0) |
| Depreciation\tand\tamortization\tof\tfixed\tassets\tand\tintangible\tassets: |  |  |  |
| IAN | $132.9 | $127.4 | $126.1 |
| CMG | 15.7 | 22.9 | 19.2 |
| Corporate\tand\tother | 24.7 | 26.9 | 28.3 |
| Total | $173.3 | $177.2 | $173.6 |
| Capital\texpenditures: |  |  |  |
| IAN | $112.5 | $119.9 | $92.8 |
| CMG | 13.5 | 12.4 | 11.4 |
| Corporate\tand\tother | 12.4 | 15.3 | 23.6 |
| Total | $138.4 | $147.6 | $127.8 |

|  | December	31, | December	31, |
| :--- | :--- | :--- |
| Total\tassets: | 2008 | 2007 |
| IAN | $9,712.2 | $10,195.2 |
| CMG | 929.1 | 961.2 |
| Corporate\tand\tother | 1,483.9 | 1,301.7 |
| Total | $12,125.2 | $12,458.1 |

Revenue	and	long-lived	assets	are	presented	below	by	major	geographic	area:

|  | Revenue | Revenue | Revenue | Long-Lived	Assets | Long-Lived	Assets |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | Years\tended\tDecember\t31, | Years\tended\tDecember\t31, | Years\tended\tDecember\t31, | December\t31, |  |
|  | 2008 | 2007 | 2006 | 2008 | 2007 |
| U.S. | $3,786.3 | $3,651.3 | $3,443.4 | $2,950.0 | $2,797.3 |
| International: |  |  |  |  |  |
| United\tKingdom | 612.9 | 603.6 | 574.5 | $189.1 | $298.4 |
| Continental\tEurope | 1,150.4 | 1,070.2 | 1,034.1 | 534.4 | 606.0 |
| Asia\tPacific | 657.3 | 581.3 | 512.0 | 161.8 | 203.6 |
| Latin\tAmerica | 353.4 | 314.1 | 303.4 | 104.8 | 130.6 |
| Other | 402.4 | 333.7 | 323.4 | 280.8 | 256.6 |
| Total\tinternational | 3,176.4 | 2,902.9 | 2,747.4 | 1,270.9 | 1,495.2 |
| Total\tconsolidated | $6,962.7 | $6,554.2 | $6,190.8 | $4,220.9 | $4,292.5 |

Revenue	is	attributed	to	geographic	areas	based	on	where	the	services	are	performed.	Furniture,	equipment	and	leasehold	improvements	are	allocated	based	upon physical	location.	Intangible	assets,	other	assets	and	investments	are	allocated	based	on	the	location	of	the	related	operations.

# Note	15:				Fair	Value	Measurements

Effective	January	1,	2008,	we	adopted	SFAS	No.	157,	Fair	Value	Measurements	("SFAS	157"),	which	defines	fair	value,	establishes	a	framework	for	measuring fair	value	and	expands	required	disclosures	about	fair	value	measurements.	Under	the	standard,	fair	value	refers	to	the	price	that	would	be	received	to	sell	an	asset	or paid	to	transfer	a	liability	in	an	orderly	transaction	between	market	participants	in	the	market	in	which	the	reporting	entity	transacts.	The	standard	clarifies	the	principle that	fair	value	should	be	based	on	the	assumptions	market	participants	would	use	when	pricing	the	asset	or	liability.	The	impact	of	adopting	SFAS	157	as	of	January	1, 2008	was	not	material	to	our	Consolidated	Financial	Statements.	FASB	Staff	Position	(FSP)	FAS	157-2,	Effective	Date	of	FASB	Statement	No.	157,	deferred	the effective	date	of	SFAS	157	for	the	Company	in	relation	to	all	nonfinancial	assets	and	nonfinancial	liabilities	to	January	1,	2009.	We	do	not	expect	the	adoption	of	this FSP	to	have	a	material	impact	to	our	Consolidated	Financial	Statements.

SFAS	157	establishes	a	fair	value	hierarchy	which	requires	us	to	maximize	the	use	of	observable	inputs	and	minimize	the	use	of	unobservable	inputs	when measuring	fair	value.	We	primarily	apply	the	market	approach	for	recurring	fair	value	measurements.	The	standard	describes	three	levels	of	inputs	that	may	be	used	to measure	fair	value:

Level	1 Quoted	prices	in	active	markets	for	identical	assets	or	liabilities. Level	2 Observable	inputs	other	than	Level	1	prices,	such	as	quoted	prices	for	similar	assets	or	liabilities;	quoted	prices	in	markets	that	are	not	active;	or	other inputs	that	are	observable	or	can	be	corroborated	by	observable	market	data	for	substantially	the	full	term	of	the	assets	or	liabilities.

Level	3 Unobservable	inputs	that	are	supported	by	little	or	no	market	activity	and	that	are	significant	to	the	fair	value	of	the	assets	or	liabilities.

The	following	table	presents	information	about	our	assets	and	liabilities	measured	at	fair	value	on	a	recurring	basis	as	of	December	31,	2008	and	indicates	the	fair value	hierarchy	of	the	valuation	techniques	utilized	to	determine	such	fair	value.

|  | Level	1 | Level	3 |
| :--- | :--- | :--- |
| Assets |  |  |
| Cash\tequivalents | $1,013.7 | $— |
| Short-term\tmarketable\tsecurities | 167.7 | — |
| Long-term\tinvestments | 15.0 | 6.7 |
| Foreign\tcurrency\tderivatives | — | 0.8 |
| Liabilities |  |  |
| Minority\tinterest\tput\tobligation1 | $— | $21.6 |

1 Relates	to	an	obligation	to	repurchase	49%	of	the	minority-owned	equity	shares	of	a	consolidated	subsidiary,	valued	pursuant	to	SFAS	No.	150, Accounting	for	Certain	Financial	Instruments	with	Characteristic	of Both	Liabilities	and	Equity.	Fair	value	measurement	of	the	obligation	was	based	upon	the	amount	payable	as	if	the	forward	contract	was	settled	as	of	December	31,	2008.

The	fair	value	of	our	long-term	debt	instruments	is	based	on	market	prices	for	debt	instruments	with	similar	terms	and	maturities.	See	Note	8	for	specific	fair values	of	our	long-term	debt	instruments.

We	hold	$12.5	in	par	value	of	asset	backed	auction	rate	securities.	Since	August	2007,	auctions	have	failed	due	to	insufficient	bids	from	buyers,	which	required us	to	adjust	the	securities	to	a	book	value	of	$6.7	during	the	fourth	quarter	of	2007.	We	intend	to	hold	our	auction	rate	securities	until	we	can	recover	the	full	principal and	have	classified	the	auction	rate	securities	as	long-term	investments	within	other	assets	in	our	Consolidated	Balance	Sheet	as	of	December	31,	2008.

In	October	2008,	the	FASB	issued	FSP	FAS	157-3,	Determining	the	Fair	Value	of	a	Financial	Asset	When	the	Market	for	That	Asset	Is	Not	Active,	which addresses	the	application	of	SFAS	157	for	illiquid	financial	instruments.	The	FSP	clarifies	that	approaches	to	determining	fair	value	other	than	the	market	approach	may be	appropriate	when	the	market	for	a	financial	asset	is	not	active.	We	believe	that	an	income	approach	valuation	technique	to	value	our	auction	rate	securities	is	more representative	of	fair	value	than	a	market	approach	valuation	technique.	Specifically,	we	used	the	discount	rate	adjustment	technique	derived	from	observed	rates	of return	for	comparable	assets	that	are	traded	in	the	market.	Based	on	our	analysis,	we	have	determined	that	the	fair	value	of	the	auction	rate	securities	adequately	supports its	book	value.

Gross	unrealized	and	realized	gains	and	losses	for	our	long-term	investments	are	as	follows:

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| Reported\tin\tother\tcomprehensive\tincome\t(loss) |  |  |  |
| Unrealized\tgains | 0.3 | 2.0 | 7.2 |
| Unrealized\tlosses | 7.4 | 6.0 | 13.5 |
| Reported\tin\tother\tincome\t(expense) |  |  |  |
| Realized\tgains | 0.4 | 4.8 | 19.2 |
| Realized\tlosses | 3.4 | 5.8 | — |

The	following	table	presents	additional	information	about	assets	and	liabilities	measured	at	fair	value	on	a	recurring	basis	and	for	which	we	utilize	Level	3	inputs to	determine	fair	value.

|  | Balance	as	of<br>January	1,	2008 | losses	included	in<br>net	income | Balance	as	of<br>December	31,	2008 |
| :--- | :--- | :--- | :--- |
| Assets |  |  |  |
| Auction\trate\tsecurities | $6.7 | $— | $6.7 |
| Foreign\tcurrency\tderivatives | 3.1 | (2.3) | 0.8 |
| Liabilities |  |  |  |
| Minority\tinterest\tput\tobligation | $18.8 | $(2.8) | $21.6 |

Net	realized	losses	included	in	net	income	for	foreign	currency	derivatives	and	a	minority	interest	put	obligation	are	reported	as	a	component	of	other	expense	and interest	expense,	respectively.

# Note	16:				Commitments	and	Contingencies

# Leases

We	lease	office	premises	and	equipment.	Where	leases	contain	escalation	clauses	or	concessions,	such	as	rent	holidays	and	landlord/tenant	incentives	or allowances,	the	impact	of	such	adjustments	is	recognized	on	a	straight-line	basis	over	the	minimum	lease	period.	Certain	leases	provide	for	renewal	options	and	require the	payment	of	real	estate	taxes	or	other	occupancy	costs,	which	are	also	subject	to	escalation	clauses.	Rent	expense	was	as	follows:

|  | 2008 | 2007 | 2006 |
| :--- | :--- | :--- | :--- |
| Gross\trent\texpense | $389.4 | $389.9 | $389.9 |
| Third-party\tsublease\trental\tincome | (24.9) | (23.5) | (20.7) |
| Net\trent\texpense | $364.5 | $366.4 | $369.2 |

Future	minimum	lease	commitments	for	office	premises	and	equipment	under	non-cancelable	leases,	along	with	minimum	sublease	rental	income	to	be	received under	non-cancelable	subleases,	are	as	follows:

|  |  | Sublease |  |
| :--- | :--- | :--- | :--- |
|  | Rent | Rental | Net |
| Period | Obligations | Income | Rent |
| 2009 | $350.2 | $(44.5) | $305.7 |
| 2010 | 317.4 | (39.8) | 277.6 |
| 2011 | 283.1 | (35.5) | 247.6 |
| 2012 | 237.5 | (28.1) | 209.4 |
| 2013 | 208.8 | (25.1) | 183.7 |
| 2014\tand\tthereafter | 832.0 | (17.9) | 814.1 |
| Total | $2,229.0 | $(190.9) | $2,038.1 |

# Guarantees

We	have	certain	contingent	obligations	under	guarantees	of	certain	of	our	subsidiaries	("parent	company	guarantees")	relating	principally	to	credit	facilities, guarantees	of	certain	media	payables	and	operating	leases.	The	amount	of	such	parent	company	guarantees	was	$255.7	and	$327.1	as	of	December	31,	2008	and	2007, respectively.	In	the	event	of	non-payment	by	the	applicable	subsidiary	of	the	obligations	covered	by	a	guarantee,	we	would	be	obligated	to	pay	the	amounts	covered	by that	guarantee.	As	of	December	31,	2008,	there	are	no	material	assets	pledged	as	security	for	such	parent	company	guarantees.

# Contingent	Acquisition	Obligations

We	have	structured	certain	acquisitions	with	additional	contingent	purchase	price	obligations	in	order	to	reduce	the	potential	risk	associated	with	negative	future performance	of	the	acquired	entity.	In	addition,	we	have	entered	into	agreements	that	may	require	us	to	purchase	additional	equity	interests	in	certain	consolidated	and unconsolidated	subsidiaries.	The	amounts	relating	to	these	transactions	are	based	on	estimates	of	the	future	financial	performance	of	the	acquired	entity,	the	timing	of	the exercise	of	these	rights,	changes	in	foreign	currency	exchange	rates	and	other	factors.	We	have	not	recorded	a	liability	for	these	items	since	the	definitive	amounts payable	are	not	determinable	or	distributable.	When	the	contingent	acquisition	obligations	have	been	met	and	consideration	is	determinable	and	distributable,	we	record the	fair	value	of	this	consideration	as	an	additional	cost	of	the	acquired	entity.	However,	certain	acquisitions	contain	deferred	payments	that	are	fixed	and	determinable on	the	acquisition	date.	In	such	cases,	we	record	a	liability	for	the	payment	and	record	this	consideration	as	an	additional	cost	of	the	acquired	entity	on	the	acquisition date.

If	deferred	payments	and	purchases	of	additional	interests	after	the	effective	date	of	purchase	are	contingent	upon	the	future	employment	of	the	former	owners then	we	recognize	these	payments	as	compensation	expense.	Compensation	expense	is	determined	based	on	the	terms	and	conditions	of	the	respective	acquisition agreements	and	employment	terms	of	the	former	owners	of	the	acquired	businesses.	This	future	expense	will	not	be	allocated	to	the	assets	and	liabilities	acquired	and	is amortized	over	the	required	employment	terms	of	the	former	owners.

The	following	table	details	the	estimated	liability	with	respect	to	our	contingent	acquisition	obligations	and	the	estimated	amount	that	would	be	paid	in	the	event of	exercise	at	the	earliest	exercise	date.	We	have	certain	put	options	that	are	exercisable	at	the	discretion	of	the	minority	owners	as	of	December	31,	2008.	As	such,	these estimated	acquisition	payments	of	$5.5	have	been	included	within	the	total	payments	expected	to	be	made	in	2009	in	the	table	below	and,	if	not	made	in	2009,	will continue	to	carry	forward	into	2010	or	beyond	until	they	are	exercised	or	expire.	All	payments	are	contingent	upon	achieving	projected	operating	performance	targets and	satisfying	other	conditions	specified	in	the	related	agreements	and	are	subject	to	revisions	as	the	earn-out	periods	progress.	As	of	December	31,	2008,	our	estimated future	contingent	acquisition	obligations	payable	in	cash	are	as	follows:

|  | 2009 | 2010 | 2011 | 2012 | 2013 | Thereafter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Deferred\tacquisition\tpayments | $67.5 | $32.1 | $30.1 | $4.5 | $5.7 | $— | $139.9 |
| Put\tand\tcall\toptions\twith\taffiliates1 | \t 11.8 | \t 34.3 | 73.6 | \t 70.8 | \t 70.2 | 2.2 | 262.9 |
| Total\tcontingent\tacquisition\tpayments | \t 79.3 | \t 66.4 | \t 103.7 | \t 75.3 | \t 75.9 | 2.2 | 402.8 |
| Less\tcash\tcompensation\texpense\tincluded\tabove | 2.6 | 1.3 | 0.7 | 0.7 | 0.3 | — | 5.6 |
| Total | $76.7 | $65.1 | $103.0 | $74.6 | $75.6 | $2.2 | $397.2 |

1 We	have	entered	into	certain	acquisitions	that	contain	both	put	and	call	options	with	similar	terms	and	conditions.	In	such	instances,	we	have	included	the	related	estimated	contingent	acquisition	obligation	in	the period	when	the	earliest	related	option	is	exercisable.	As	a	result	of	revisions	made	during	2008	to	EITF	Topic	No.	D-98,	Classification	and	Measurement	of	Redeemable	Securities	("EITF	D-98"),

effective	January	1,	2009,	we	will	be	required	to	retrospectively	reduce	our	stockholders'	equity	by	the	estimated	redemption	value	of	our	put	options	of	$254.0	as	of	December	31,	2008	and	establish	a	liability	of an	equal	amount	for	redeemable	securities.	Application	of	this	guidance	will	have	no	impact	on	our	previously	reported	net	income	or	earnings	per	share.

# Legal	Matters

In	May	2008,	we	reached	a	settlement	with	the	SEC	concluding	the	investigation	that	began	in	2002	into	our	financial	reporting	practices.	The	SEC	filed	a complaint	on	May	1,	2008	in	the	United	States	District	Court	for	the	Southern	District	of	New	York	charging	Interpublic	and	our	subsidiary	McCann-Erickson Worldwide	Inc.,	or	McCann,	with	violations	of	the	federal	securities	laws.	The	charges	under	the	antifraud	provisions	of	the	federal	securities	laws	relate	to	intercompany accounting	practices	at	McCann	that	were	addressed	in	our	restatement	of	results	from	1997	to	2002	first	announced	in	August	2002	and	that	were	also	the	subject	of	a class	action	under	the	federal	securities	laws	that	we	settled	in	2004.	The	charges	of	violations	of	the	disclosure,	internal	controls	and	books	and	records	provisions	of	the federal	securities	laws	also	relate	to	the	restatement	we	presented	in	our	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2004	and	the	restatement	of	the first	three	quarters	of	2005	that	we	made	in	our	2005	Annual	Report	on	Form	10-K,	as	well	as	the	restatement	we	first	announced	in	August	2002.	Without	admitting	or denying	the	allegations,	Interpublic	and	McCann	agreed	to	an	injunction	against	violating	the	applicable	provisions	of	the	federal	securities	laws,	and	McCann	agreed	to pay	a	$12.0	civil	penalty	and	disgorgement	of	one	dollar.

Other	Legal	Matters	—	We	are	or	have	been	involved	in	other	legal	and	administrative	proceedings	of	various	types.	While	any	litigation	contains	an	element	of uncertainty,	we	do	not	believe	that	the	outcome	of	such	proceedings	or	claims	will	have	a	material	adverse	effect	on	our	financial	condition.

# Note	17:				Recent	Accounting	Standards

In	December	2008,	the	FASB	issued	FSP	FAS	132R-1,	Employers'	Disclosures	about	Postretirement	Benefit	Plan	Assets,	which	is	effective	for	the	Company January	1,	2010.	The	FSP	provides	guidance	on	an	employers'	disclosures	about	plan	assets	of	a	defined	benefit	pension	or	other	postretirement	plan	regarding investment	policies	and	strategies,	major	categories	of	plan	assets,	inputs	and	valuation	techniques	used	to	measure	the	fair	value	of	plan	assets	and	significant concentrations	of	risk	within	plan	assets.	We	are	currently	evaluating	the	disclosure	requirements	of	this	FSP.

In	November	2008,	the	EITF	issued	Issue	No.	08-6,	Equity	Method	Investment	Accounting	Considerations	("EITF	08-6"),	which	is	effective	for	the	Company January	1,	2009.	EITF	08-6	addresses	the	impact	that	SFAS	141R	and	SFAS	160	might	have	on	the	accounting	for	equity	method	investments,	including	how	the	initial carrying	value	of	an	equity	method	investment	should	be	determined,	how	an	impairment	assessment	of	an	underlying	indefinite-lived	intangible	asset	of	an	equity method	investment	should	be	performed	and	how	to	account	for	a	change	in	an	investment	from	the	equity	method	to	the	cost	method.	We	are	currently	evaluating	the potential	impact	of	EITF	08-6	on	our	Consolidated	Financial	Statements.

In	May	2008,	the	FASB	issued	FSP	APB	14-1,	Accounting	for	Convertible	Debt	That	May	Be	Settled	in	Cash	upon	Conversion	(Including	Partial	Cash Settlement),	which	is	effective	for	the	Company	January	1,	2009.	The	FSP	includes	guidance	that	convertible	debt	instruments	that	may	be	settled	in	cash	upon conversion	should	be	separated	between	the	liability	and	equity	components,	with	each	component	being	accounted	for	in	a	manner	that	will	reflect	the	entity's nonconvertible	debt	borrowing	rate	when	interest	costs	are	recognized	in	subsequent	periods.	However,	because	our	existing	convertible	debt	instruments	are	settled	only in	stock	upon	conversion,	this	guidance	will	not	apply,	and	as	a	result	will	not	have	an	impact	on	our	Consolidated	Financial	Statements.

In	December	2007,	the	FASB	issued	SFAS	No.	141	(revised),	Business	Combinations	("SFAS	141R"),	which	replaces	SFAS	No.	141,	Business	Combinations. Under	the	standard,	an	acquiring	entity	is	required	to

record	assets	acquired	and	liabilities	assumed	in	a	business	combination	at	fair	value	on	the	date	of	acquisition.	Earn-out	payments	and	other	forms	of	contingent consideration	are	also	required	to	be	recorded	at	fair	value	on	the	acquisition	date.	The	standard	also	requires	fair	value	measurements	to	be	used	when	recording	non- controlling	interests	and	contingent	liabilities.	In	addition,	the	standard	requires	all	costs	associated	with	the	business	combination,	including	restructuring	costs,	to	be expensed	as	incurred.	For	the	Company,	SFAS	141R	is	effective	prospectively	for	business	combinations	having	an	acquisition	date	on	or	after	January	1,	2009,	with	the exception	of	the	accounting	for	valuation	allowances	on	deferred	taxes	and	acquired	contingencies.	SFAS	141R	amends	SFAS	109	such	that	adjustments	made	to valuation	allowances	on	deferred	taxes	and	acquired	tax	contingencies	associated	with	acquisitions	that	closed	prior	to	January	1,	2009	would	also	apply	the	provisions of	SFAS	141R.	Upon	adoption,	SFAS	141R	will	not	have	a	significant	impact	on	our	Consolidated	Financial	Statements,	however,	any	business	combination	entered into	after	the	adoption	may	impact	our	Consolidated	Financial	Statements	when	compared	to	business	combinations	accounted	for	under	SFAS	141	and	result	in potential	earnings	volatility	due	to	the	changes	described	above.

In	December	2007,	the	FASB	issued	SFAS	No.	160,	Noncontrolling	Interests	in	Consolidated	Financial	Statements	("SFAS	160"),	which	amends	ARB	No.	51, Consolidated	Financial	Statements.	This	standard	requires	a	noncontrolling	interest	in	a	subsidiary	to	be	reported	as	equity	on	the	consolidated	financial	statements separate	from	the	parent's	equity.	The	standard	also	requires	transactions	that	do	not	impact	a	parent's	controlling	ownership	and	do	not	result	in	the	deconsolidation	of the	subsidiary	to	be	recorded	as	equity	transactions,	while	those	transactions	that	do	result	in	a	change	in	ownership	and	a	deconsolidation	of	the	subsidiary	to	be recorded	in	net	income	(loss)	with	the	gain	or	loss	measured	at	fair	value.	For	the	Company,	SFAS	160	is	effective	January	1,	2009	and	should	be	applied	prospectively with	the	exception	of	the	presentation	and	disclosure	requirements	which	shall	be	applied	retrospectively	for	all	periods	presented.	SFAS	160	will	not	have	a	material impact	on	our	Consolidated	Financial	Statements.

# Note	18:				Out-of-Period	Adjustments

During	2006,	we	recorded	adjustments	to	certain	vendor	discounts	and	credits,	contractual	liabilities,	foreign	exchange,	tax	and	other	miscellaneous	items	which related	to	prior	periods.	For	the	year	ended	December	31,	2006,	these	adjustments	resulted	in	a	net	favorable	impact	to	revenue	of	$6.1,	a	net	favorable	impact	to	salaries and	related	expenses	of	$5.6,	a	net	unfavorable	impact	to	office	and	general	expenses	of	$6.5	and	a	net	favorable	impact	to	net	loss	of	$4.5.	The	operating	income	impact of	these	adjustments	primarily	affected	our	IAN	segment.	Because	these	changes	are	not	material	to	our	financial	statements	for	the	periods	prior	to	2006,	for	the quarters	of	2006	or	for	2006	as	a	whole,	we	recorded	these	out-of-period	amounts	in	their	respective	quarters	of	2006.

# Note	19:				Results	by	Quarter	(Unaudited)

|  | Three	Months | Three	Months | Three	Months | Three	Months | Three	Months | Three	Months | Three	Months | Three	Months |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Ended |  | Ended |  | Ended |  | Ended |  |
|  | March\t31, |  | June\t30, | June\t30, | September\t30, | September\t30, | December\t31, | December\t31, |
|  | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 |
| Revenue | $1,485.2 | $ 1,359.1 | $ 1,835.7 | $ 1,652.7 | $ 1,740.0 | $1,559.9 | $1,901.8 | $1,982.5 |
| Salaries\tand\trelated\texpenses | 1,064.8 | 988.8 | 1,103.2 | 1,009.7 | 1,093.5 | 1,034.7 | 1,081.1 | 1,106.0 |
| Office\tand\tgeneral\texpenses | 475.0 | 495.1 | 527.8 | 502.6 | 526.3 | 468.9 | 484.2 | 578.2 |
| Restructuring\tand\tother\treorganization-related\tcharges\t(reversals) | 3.2 | (0.6) | 4.1 | (5.2) | 3.9 | 5.2 | 5.9 | 26.5 |
| Operating\t(loss)\tincome | (57.8) | (124.2) | 200.6 | 145.6 | 116.3 | 51.1 | 330.6 | 271.8 |
| Other\t(expense)\tincome | (1.4) | (1.5) | 6.3 | 8.0 | (1.0) | (4.8) | (0.8) | 6.8 |
| Total\t(expenses)\tand\tother\tincome | (30.4) | (28.0) | (23.7) | (20.8) | (30.9) | (34.7) | (33.2) | (25.1) |
| (Benefit\tof)\tprovision\tfor\tincome\ttaxes | (23.7) | (25.7) | 79.1 | (11.4) | 35.5 | 35.8 | 65.7 | 60.2 |
| Net\t(loss)\tincome | (62.8) | (125.9) | 95.1 | 137.0 | 45.7 | (21.9) | 217.0 | 178.4 |
| Net\t(loss)\tincome\tapplicable\tto\tcommon\tstockholders | $(69.7) | $(132.8) | $88.1 | $121.5 | $38.7 | $(28.8) | $209.8 | $162.7 |
| (Loss)\tearnings\tper\tshare\tof\tcommon\tstock— |  |  |  |  |  |  |  |  |
| Basic | $(0.15) | $(0.29) | $0.19 | $0.27 | $0.08 | $(0.06) | $0.45 | $0.35 |
| Diluted | $(0.15) | $(0.29) | $0.17 | $0.24 | $0.08 | $(0.06) | $0.39 | $0.31 |

# Item	9. Changes	in	and	Disagreements	with	Accountants	on	Accounting	and	Financial	Disclosure

# Item	9A.				Controlsand	Procedures

# Evaluation	of	disclosure	controls	and	procedures

In	connection	with	the	preparation	of	this	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2008	we	have	carried	out	an	evaluation	under	the supervision	of,	and	with	the	participation	of,	our	management,	including	the	Chief	Executive	Officer	and	Chief	Financial	Officer,	of	the	effectiveness	of	the	design	and operation	of	our	disclosure	controls	and	procedures	(as	such	term	is	defined	in	Rules	13a-15(e)	and	15d-15(e)	under	the	Securities	Exchange	Act	of	1934,	as	amended (the	"Exchange	Act")).	Based	on	this	evaluation,	our	Chief	Executive	Officer	and	Chief	Financial	Officer	have	concluded	(1)	that	the	disclosure	controls	and	procedures were	effective	as	of	December	31,	2008	to	provide	reasonable	assurance	that	information	required	to	be	disclosed	in	reports	that	we	file	or	submit	under	the	Exchange Act	is	recorded,	processed,	summarized	and	reported	within	the	time	periods	specified	in	SEC	rules	and	forms	and	(2)	that	the	disclosure	controls	and	procedures	were effective	as	of	December	31,	2008	to	provide	reasonable	assurance	that	information	required	to	be	disclosed	in	the	reports	that	we	file	or	submit	under	the	Exchange	Act is	accumulated	and	communicated	to	our	management,	including	the	principal	executive	officer	and	principal	financial	officer,	as	appropriate	to	allow	timely	decisions regarding	required	disclosure.

There	are	inherent	limitations	to	the	effectiveness	of	any	system	of	disclosure	controls	and	procedures,	including	the	possibility	of	human	error	and	the circumvention	or	overriding	of	the	controls	and	procedures.	Accordingly,	even	effective	disclosure	controls	and	procedures	can	only	provide	reasonable	assurance	of achieving	their	control	objectives.

# Management's	report	on	internal	control	over	financial	reporting

Management	is	responsible	for	establishing	and	maintaining	adequate	internal	control	over	financial	reporting,	as	such	term	is	defined	in	Exchange	Act	Rule	13a- 15(f).	Management	(with	the	participation	of	our	Chief	Executive	Officer	and	Chief	Financial	Officer)	conducted	an	evaluation	of	the	effectiveness	of	internal	control over	financial	reporting	based	on	the	framework	in	Internal	Control—Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway Commission.	Based	on	this	evaluation,	management	concluded	that	the	Company's	internal	control	over	financial	reporting	was	effective	as	of	December	31,	2008. PricewaterhouseCoopers	LLP,	an	independent	registered	public	accounting	firm,	has	audited	the	effectiveness	of	the	Company's	internal	control	over	financial	reporting as	of	December	31,	2008,	as	stated	in	their	report	which	appears	in	this	annual	report.

# Changes	in	internal	control	over	financial	reporting

There	has	been	no	change	in	internal	control	over	financial	reporting	in	the	quarter	ended	December	31,	2008	that	has	materially	affected,	or	is	reasonably	likely to	materially	affect,	our	internal	control	over	financial	reporting.

# Item	9B.				OtherInformation

# PART	III

# Item	10.				Directors,Executive	Officers	and	Corporate	Governance

The	information	required	by	this	Item	is	incorporated	by	reference	to	the	"Election	of	Directors"	section,	the	"Director	Selection	Process"	section,	the	"Code	of Conduct"	section,	the	"Principal	Committees	of	the	Board	of	Directors"	section,	the	"Audit	Committee"	section	and	the	"Section	16(a)	Beneficial	Ownership	Reporting Compliance"	section	of	the	Proxy	Statement,	except	for	the	description	of	the	Company's	Executive	Officers,	which	appears	in	Part	I	of	this	Report	on	Form	10-K	under the	heading	"Executive	Officers	of	Interpublic."

# NYSE	Certification

In	2008,	our	CEO	provided	the	Annual	CEO	Certification	to	the	NYSE,	as	required	under	Section	303A.12(a)	of	the	New	York	Stock	Exchange	Listed	Company Manual.

# Item	11.				ExecutiveCompensation

The	information	required	by	this	Item	is	incorporated	by	reference	to	the	"Compensation	of	Executive	Officers"	section,	the	"Non-Management	Director Compensation"	section,	the	"Compensation	Discussion	and	Analysis"	section	and	the	"Compensation	Committee	Report"	section	of	the	Proxy	Statement.

# Item	12.				SecurityOwnership	of	Certain	Beneficial	Owners	and	Management	and	Related	Stockholder	Matters

The	information	required	by	this	Item	is	incorporated	by	reference	to	the	"Outstanding	Shares"	section	and	the	"Securities	Authorized	for	Issuance	under	Equity Compensation	Plans"	section	of	the	Proxy	Statement.

# Item	13.				CertainRelationships	and	Related	Transactions,	and	Director	Independence

The	information	required	by	this	Item	is	incorporated	by	reference	to	the	"Review	and	Approval	of	Transactions	with	Related	Persons"	section	and	the	"Director Independence"	section	of	the	Proxy	Statement.

# Item	14.				PrincipalAccountant	Fees	and	Services

The	information	required	by	this	Item	is	incorporated	by	reference	to	the	"Appointment	of	Independent	Registered	Public	Accounting	Firm"	section	of	the	Proxy Statement.

# PART	IV

# Item	15.				Exhibits,Financial	Statement	Schedules

(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:

The	Interpublic	Group	of	Companies,	Inc.	and	Subsidiaries	Report	of	Independent	Registered	Public	Accounting	Firm Consolidated	Statements	of	Operations	for	the	years	ended	December	31,	2008,	2007	and	2006 Consolidated	Balance	Sheets	as	of	December	31,	2008	and	2007

Consolidated	Statements	of	Cash	Flows	for	the	years	ended	December	31,	2008,	2007	and	2006 Consolidated	Statements	of	Stockholders'	Equity	and	Comprehensive	Income	(Loss)	for	the	years	ended December	31,	2008,	2007	and	2006

# 2.	Financial	Statement	Schedules:

All	financial	statement	schedules	are	omitted	because	they	are	either	not	applicable	or	the	required	information	is	otherwise	provided.

# 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	SEC	as	part	of	the	electronic	filing	of	this	Report.)

3(ii) By-Laws	of	the	Registrant,	as	amended	and	restated	through	July	24,	2008,	are	incorporated	by	reference	to	Exhibit	3(ii)	to	the	Registrant's Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	June	30,	2008	filed	with	the	SEC	on	July	30,	2008.

4(iii)(A) Certificate	of	Designations	of	5.25%	Series	B	Cumulative	Convertible	Perpetual	Preferred	Stock	of	the	Registrant,	as	filed	with	the	Delaware Secretary	of	State	on	October	24,	2005	is	incorporated	by	reference	to	Exhibit	4.1	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with the	SEC	on	October	24,	2005.

4(iii)(B) Senior	Debt	Indenture,	dated	as	of	October	20,	2000	(the	"2000	Indenture"),	between	the	Registrant	and	The	Bank	of	New	York,	as	trustee,	is incorporated	by	reference	to	Exhibit	99.1	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	October	24,	2000.

4(iii)(C) First	Supplemental	Indenture,	dated	as	of	August	22,	2001,	to	the	2000	Indenture,	with	respect	to	the	7.25%	Senior	Unsecured	Notes	due	2011 is	incorporated	by	reference	to	Exhibit	4.2	to	the	Registrant's	Registration	Statement	on	Form	S-4	filed	with	the	SEC	on	December	4,	2001.

4(iii)(D) Third	Supplemental	Indenture,	dated	as	of	March	13,	2003,	to	the	2000	Indenture,	with	respect	to	the	4.50%	Convertible	Senior	Notes	due 2023	is	incorporated	by	reference	to	Exhibit	4.1	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	March	18,	2003.

Exhibit	No. Description 4(iii)(E) Fifth	Supplemental	Indenture,	dated	as	of	March	28,	2005,	to	the	2000	Indenture,	as	modified	by	the	First	Supplemental	Indenture,	dated	as	of August	22,	2001,	with	respect	to	the	7.25%	Senior	Unsecured	Notes	due	2011	is	incorporated	by	reference	to	Exhibit	4.2	to	the	Registrant's Current	Report	on	Form	8-K	filed	with	the	SEC	on	April	1,	2005.

4(iii)(F) Sixth	Supplemental	Indenture,	dated	as	of	March	30,	2005,	to	the	2000	Indenture,	as	modified	by	the	Third	Supplemental	Indenture,	dated	as of	March	13,	2003,	with	respect	to	the	4.50%	Convertible	Senior	Notes	due	2023	is	incorporated	by	reference	to	Exhibit	4.3	to	the Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	April	1,	2005.

4(iii)(G) Seventh	Supplemental	Indenture,	dated	as	of	August	11,	2005,	to	the	2000	Indenture,	as	modified	by	the	Third	Supplemental	Indenture,	dated as	of	March	13,	2003,	and	the	Sixth	Supplemental	Indenture,	dated	as	of	March	30,	2005,	with	respect	to	the	4.50%	Convertible	Senior	Notes due	2023	is	incorporated	by	reference	to	Exhibit	4.1	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	August	15,	2005.

4(iii)(H) Senior	Debt	Indenture	dated	as	of	November	12,	2004	(the	"2004	Indenture"),	between	the	Registrant	and	Suntrust	Bank,	as	trustee,	is incorporated	by	reference	to	Exhibit	4.1	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	November	15,	2004.

4(iii)(I) First	Supplemental	Indenture,	dated	as	of	November	18,	2004,	to	the	2004	Indenture,	with	respect	to	the	5.40%	Notes	due	2009	is incorporated	by	reference	to	Exhibit	4.1	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	November	19,	2004.

4(iii)(J) Second	Supplemental	Indenture,	dated	as	of	November	18,	2004,	to	the	2004	Indenture,	with	respect	to	the	6.25%	Notes	due	2014	is incorporated	by	reference	to	Exhibit	4.2	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	November	19,	2004.

4(iii)(K) Third	Supplemental	Indenture,	dated	as	of	March	28,	2005,	to	the	2004	Indenture,	as	modified	by	the	Second	Supplemental	Indenture,	dated as	of	November	18,	2004,	with	respect	to	the	6.25%	Senior	Unsecured	Notes	due	2014	is	incorporated	by	reference	to	Exhibit	4.4	to	the Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	April	1,	2005.

4(iii)(L) Fourth	Supplemental	Indenture,	dated	as	of	March	29,	2005,	to	the	2004	Indenture,	as	modified	by	the	First	Supplemental	Indenture,	dated	as of	November	18,	2004,	with	respect	to	the	5.40%	Senior	Unsecured	Notes	due	2009	is	incorporated	by	reference	to	Exhibit	4.5	to	the Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	April	1,	2005.

4(iii)(M) Sixth	Supplemental	Indenture,	dated	as	of	December	8,	2006,	to	the	2004	Indenture,	with	respect	to	the	Floating	Rate	Notes	due	2010	is incorporated	by	reference	to	Exhibit	4.1	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	December	8,	2006.

4(iii)(N) Senior	Debt	Indenture,	dated	as	of	November	15,	2006	(the	"2006	Indenture"),	between	the	Registrant	and	The	Bank	of	New	York,	as	trustee, is	incorporated	by	reference	to	Exhibit	4.1	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	November	17,	2006.

4(iii)(O) First	Supplemental	Indenture,	dated	as	of	November	15,	2006,	to	the	2006	Indenture,	with	respect	to	the	4.25%	Convertible	Senior	Notes	Due 2023	is	incorporated	by	reference	to	Exhibit	4.2	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	November	17,	2006. 4(iii)(P) Second	Supplemental	Indenture,	dated	as	of	November	20,	2007,	to	the	2006	Indenture,	with	respect	to	the	4.75%	Convertible	Senior	Notes due	2023	is	incorporated	by	reference	to	Exhibit	4.1	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	November	21, 2007.

10(i)(A) Call	Option	Agreement,	dated	as	of	June	6,	2006,	between	the	Registrant	and	UBS	AG,	London	Branch,	is	incorporated	by	reference	to Exhibit	10.4	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	June	12,	2006.

10(i)(B) Call	Option	Agreement,	dated	as	of	June	6,	2006,	between	the	Registrant	and	Morgan	Stanley	&	Co.	International	Limited,	is	incorporated	by reference	to	Exhibit	10.3	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	June	12,	2006.

10(i)(C) Call	Option	Agreement,	dated	as	of	June	6,	2006,	between	the	Registrant	and	JP	Morgan	Chase	Bank,	National	Association,	London	Branch, is	incorporated	by	reference	to	Exhibit	10.2	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	June	12,	2006.

10(i)(D) Call	Option	Agreement,	dated	as	of	June	6,	2006,	between	the	Registrant	and	Citibank,	N.A.,	is	incorporated	by	reference	to	Exhibit	10.1	to the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	June	12,	2006.

10(i)(E) L/C	Issuance	Agreement,	dated	as	of	June	13,	2006,	between	the	Registrant,	as	Account	Party,	and	Morgan	Stanley	Capital	Services,	Inc.,	as L/C	Issuer,	is	incorporated	by	reference	to	Exhibit	10.4	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	June	19,	2006.

10(i)(F) Letter	of	Credit	Agreement,	dated	as	of	June	13,	2006,	between	the	Registrant	and	Citibank,	N.A.,	is	incorporated	by	reference	to Exhibit	10.3	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	June	19,	2006.

10(i)(G) 3-Year	Credit	Agreement,	dated	as	of	June	13,	2006,	among	the	Registrant,	as	Borrower,	ELF	Special	Financing	Ltd.,	as	Initial	Lender	and L/C	Issuer,	and	Morgan	Stanley	Capital	Services,	Inc.,	as	Administrative	Agent	and	L/C	Administrator,	is	incorporated	by	reference	to Exhibit	10.1	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	June	19,	2006.

10(i)(H) Registration	Rights	Agreement,	dated	as	of	November	15,	2006,	is	incorporated	by	reference	to	Exhibit	10.1	to	the	Registrant's	Current Report	on	Form	8-K	filed	with	the	SEC	on	November	17,	2006.

10(i)(I) Registration	Rights	Agreement,	dated	as	of	November	20,	2007	is	incorporated	by	reference	to	Exhibit	10.1	to	the	Registrant's	Current	Report on	Form	8-K	filed	with	the	SEC	on	November	21,	2007.

10(i)(J) 3-Year	Credit	Agreement,	dated	as	of	July	18,	2008,	among	the	Registrant,	the	initial	lenders	named	therein,	Citibank,	N.A.,	as	administrative agent	for	the	lenders,	JP	Morgan	Chase	Bank,	N.A.,	as	syndication	agent,	HSBC	USA,	National	Association	and	ING	Capital	LLC,	as	co- documentation	agents,	and	Citigroup	Global	Markets,	Inc.	and	JP	Morgan	Securities	Inc.,	as	joint	lead	arrangers	and	joint	bank	managers,	is incorporated	by	reference	to	Exhibit	10.1	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	July	21,	2008.

(i)	Michael	I.	Roth

10(iii)(A)(1) Employment	Agreement,	made	as	of	July	13,	2004,	by	and	between	the	Registrant	and	Michael	I.	Roth,	is	incorporated	by	reference	to Exhibit	10(iii)(A)(9)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	June	30,	2004.*

10(iii)(A)(2) Supplemental	Employment	Agreement,	dated	as	of	January	19,	2005,	between	the	Registrant	and	Michael	I.	Roth,	is	incorporated	by reference	to	Exhibit	10.2	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	January	21,	2005.*

10(iii)(A)(4) Amendment,	made	as	of	September	12,	2007,	to	an	Employment	Agreement,	made	as	of	July	13,	2004,	between	the	Registrant	and	Michael I.	Roth,	is	incorporated	by	reference	to	Exhibit	10(iii)(A)(7)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended September	30,	2007.*

10(iii)(A)(5) Executive	Change	of	Control	Agreement,	dated	as	of	September	12,	2007,	by	and	between	the	Registrant	and	Michael	I.	Roth,	is incorporated	by	reference	to	Exhibit	10(iii)(A)(8)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	September	30, 2007.*

10(iii)(A)(6) Amendment,	dated	May	1,	2008,	to	an	Employment	Agreement,	made	as	of	July	13,	2004,	between	the	Registrant	and	Michael	I.	Roth,	is incorporated	by	reference	to	Exhibit	10(iii)(A)(1)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	June	30,	2008.*

10(iii)(A)(7) The	Interpublic	Senior	Executive	Retirement	Income	Plan	Participation	Agreement,	dated	March	31,	2008,	between	The	Interpublic	Group of	Companies,	Inc.	and	Michael	Roth,	is	incorporated	by	reference	to	Exhibit	10(iii)(A)(1)	to	the	Registrant's	Quarterly	Report	on	Form	10- Q	for	the	quarter	ended	March	31,	2008.*

# (ii)	Philippe	Krakowsky

10(iii)(A)(9) Special	Deferred	Compensation	Agreement,	dated	as	of	April	1,	2002,	and	signed	as	of	July	1,	2002,	between	the	Registrant	and	Philippe Krakowsky,	is	incorporated	by	reference	to	Exhibit	10(iii)(A)(iv)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended September	30,	2002.*

10(iii)(A)(10) Executive	Special	Benefit	Agreement,	dated	September	30,	2002,	between	the	Registrant	and	Philippe	Krakowsky,	is	incorporated	by reference	to	Exhibit	10(iii)(A)(vi)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	September	30,	2002.*

10(iii)(A)(11) Employment	Agreement,	made	as	of	January	1,	2006	and	executed	on	March	20,	2006,	by	and	between	the	Registrant	and	Philippe Krakowsky,	is	incorporated	by	reference	to	Exhibit	10.1	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	March	24, 2006.*

10(iii)(A)(12) Amendment,	made	as	of	September	12,	2007,	to	an	Employment	Agreement,	made	as	of	January	1,	2006,	between	the	Registrant	and Philippe	Krakowsky,	is	incorporated	by	reference	to	Exhibit	10(iii)(A)(13)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the quarter	ended	September	30,	2007.*

10(iii)(A)(13) Executive	Change	of	Control	Agreement,	dated	as	of	September	12,	2007,	by	and	between	the	Registrant	and	Philippe	Krakowsky,	is incorporated	by	reference	to	Exhibit	10(iii)(A)(14)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	September	30, 2007.*

10(iii)(A)(14) Amendment,	dated	September	12,	2007,	to	an	Executive	Special	Benefit	Agreement,	dated	February	1,	2002,	between	the	Registrant	and Philippe	Krakowsky,	is	incorporated	by	reference	to	Exhibit	10(iii)(A)(15)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the quarter	ended	September	30,	2007.*

# (iii)	Frank	Mergenthaler

10(iii)(A)(16) Employment	Agreement,	made	as	of	July	13,	2005,	between	the	Registrant	and	Frank	Mergenthaler	is	incorporated	by	reference	to Exhibit	10.1	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	July	19,	2005.*

10(iii)(A)(17) Amendment,	made	as	of	September	12,	2007,	to	an	Employment	Agreement,	made	as	of	July	18,	2005,	between	the	Registrant	and	Frank Mergenthaler,	is	incorporated	by	reference	to	Exhibit	10(iii)(A)(9)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended September	30,	2007.*

10(iii)(A)(18) Executive	Change	of	Control	Agreement,	dated	as	of	September	12,	2007,	by	and	between	Registrant	and	Frank	Mergenthaler,	is incorporated	by	reference	to	Exhibit	10(iii)(A)(10)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	September	30, 2007.*

10(iii)(A)(19) Amendment,	dated	May	1,	2008,	to	an	Employment	Agreement,	made	as	of	July	18,	2005,	between	the	Registrant	and	Frank	Mergenthaler, is	incorporated	by	reference	to	Exhibit	10(iii)(A)(2)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	June	30, 2008.*

# (iv)	Timothy	A.	Sompolski

10(iii)(A)(20) Employment	Agreement,	made	as	of	July	6,	2004,	by	and	between	the	Registrant	and	Timothy	Sompolski,	is	incorporated	by	reference	to Exhibit	10(iii)(A)(11)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	March	31,	2004.*

10(iii)(A)(21) Amendment,	made	as	of	September	12,	2007,	to	an	Employment	Agreement,	made	as	of	July	6,	2004,	between	Interpublic	and	Timothy	A. Sompolski,	is	incorporated	by	reference	to	Exhibit	10(iii)(A)(16)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended September	30,	2007.*

10(iii)(A)(22) Executive	Change	of	Control	Agreement,	dated	as	of	September	12,	2007,	by	and	between	the	Registrant	and	Timothy	A.	Sompolski,	is incorporated	by	reference	to	Exhibit	10(iii)(A)(17)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	September	30, 2007.*

10(iii)(A)(23) Amendment,	dated	May	1,	2008,	to	an	Employment	Agreement,	made	as	of	July	6,	2004,	between	the	Registrant	and	Timothy	Sompolski, is	incorporated	by	reference	to	Exhibit	10(iii)(A)(4)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	June	30, 2008.*

10(iii)(A)(24) Executive	Special	Benefit	Agreement,	dated	as	of	July	1,	1986,	between	the	Registrant	and	John	J.	Dooner,	Jr.,	is	incorporated	by	reference to	Exhibit	10(e)	to	the	Registrant's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	1995.*

10(iii)(A)(25) Supplemental	Agreement,	dated	as	of	May	23,	1990,	to	an	Executive	Special	Benefit	Agreement,	dated	as	of	July	1,	1986,	between	the Registrant	and	John	J.	Dooner,	Jr.,	is	incorporated	by	reference	to	Exhibit	10(l)	to	the	Registrant's	Annual	Report	on	Form	10-K	for	the year	ended	December	31,	1995.*

Exhibit	No. Description 10(iii)(A)(26) Executive	Special	Benefit	Agreement,	dated	as	of,	July	1,	1992,	between	the	Registrant	and	John	J.	Dooner,	Jr.,	is	incorporated	by reference	to	Exhibit	10(q)	to	the	Registrant's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	1995.* 10(iii)(A)(27) Employment	Agreement,	dated	as	of	January	1,	1994,	between	the	Registrant	and	John	J.	Dooner,	Jr.,	is	incorporated	by	reference	to Exhibit	10(r)	to	the	Registrant's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	1995.*

10(iii)(A)(28) Executive	Special	Benefit	Agreement,	dated	as	of	June	1,	1994,	between	the	Registrant	and	John	J.	Dooner,	Jr.,	is	incorporated	by	reference to	Exhibit	10(s)	to	the	Registrant's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	1995.*

10(iii)(A)(29) Supplemental	Agreement,	dated	as	of	April	1,	2000,	to	an	Employment	Agreement	between	the	Registrant	and	John	J.	Dooner,	Jr.,	is incorporated	by	reference	to	Exhibit	10(b)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	March	31,	2000.*

10(iii)(A)(30) Executive	Special	Benefit	Agreement,	dated	as	of	May	20,	2002,	between	the	Registrant	and	John	J.	Dooner,	Jr.,	signed	as	of November	11,	2002,	is	incorporated	by	reference	to	Exhibit	10(b)(xv)(c)	to	the	Registrant's	Annual	Report	on	Form	10-K	for	the	year ended	December	31,	2002.*

10(iii)(A)(31) Supplemental	Agreement,	dated	as	of	November	7,	2002,	to	an	Employment	Agreement	between	the	Registrant	and	John	J.	Dooner,	Jr.,	is incorporated	by	reference	to	Exhibit	10(b)(xv)(a)	to	the	Registrant's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2002.*

10(iii)(A)(32) Supplemental	Agreement,	dated	as	of	November	7,	2002,	to	an	Executive	Special	Benefit	Agreement	between	the	Registrant	and	John	J. Dooner,	Jr.,	is	incorporated	by	reference	to	Exhibit	10(b)(xv)(b)	to	the	Registrant's	Annual	Report	on	Form	10-K	for	the	year	ended December	31,	2002.*

10(iii)(A)(33) Supplemental	Agreement,	made	as	of	March	31,	2003	and	executed	as	of	April	15,	2003,	to	an	Employment	Agreement,	made	as	of January	1,	1994,	by	and	between	the	Registrant	and	John	J.	Dooner,	Jr.,	is	incorporated	by	reference	to	Exhibit	10(iii)(A)(iv)(a)	to	the Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	June	30,	2003.*

10(iii)(A)(34) Supplemental	Agreement	dated	as	of	November	12,	2003,	to	an	Employment	Agreement	between	the	Registrant	and	John	J.	Dooner,	Jr.,	is incorporated	by	reference	to	Exhibit	10(b)(viii)(u)	to	the	Registrant's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31, 2003.*

10(iii)(A)(35) Executive	Change	of	Control	Agreement,	dated	as	of	September	12,	2007,	by	and	between	the	Registrant	and	John	J.	Dooner,	is incorporated	by	reference	to	Exhibit	10(iii)(A)(11)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	September	30, 2007.*

# (x)	Jill	M.	Considine

10(iii)(A)(37) Amended	and	Restated	Deferred	Compensation	Agreement,	dated	as	of	September	4,	2008,	between	the	Registrant	and	Jill	M.	Considine,	is incorporated	by	reference	to	Exhibit	10(iii)(A)(1)	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	September	30,	2008.*

# Exhibit	No.

# Description

10(iii)(A)(38) Letter,	dated	November	2,	2006,	from	Jill	M.	Considine	to	the	Registrant,	is	incorporated	by	reference	to	Exhibit	10(iii)(B)	to	the	Registrant's Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	September	30,	2006.*

# (xi)	Richard	A.	Goldstein

10(iii)(A)(39) Amended	and	Restated	Deferred	Compensation	Agreement,	dated	as	of	September	30,	2008,	between	the	Registrant	and	Richard	A. Goldstein,	is	incorporated	by	reference	to	Exhibit	10(iii)(A)(3)	to	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended September	30,	2008.*

10(iii)(A)(40) Letter,	dated	July	24,	2006,	from	Richard	A.	Goldstein	to	the	Registrant,	is	incorporated	by	reference	to	Exhibit	10(iii)(A)	to	the	Registrant's Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	September	30,	2006.*

# Compensation	Plans	and	Arrangements:

10(iii)(A)(41) Trust	Agreement,	dated	as	of	June	1,	1990,	between	the	Registrant,	Lintas	Campbell-Ewald	Company,	McCann-Erickson	USA,	Inc., McCann-Erickson	Marketing,	Inc.,	Lintas,	Inc.	and	Chemical	Bank,	as	Trustee,	is	incorporated	by	reference	to	the	Registrant's	Annual	Report on	Form	10-K	for	the	year	ended	December	31,	1990.*

10(iii)(A)(42) The	1997	Performance	Incentive	Plan	of	the	Registrant	is	incorporated	by	reference	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the quarter	ended	June	30,	1997.*

10(iii)(A)(43) True	North	Communications	Inc.	Stock	Option	Plan	is	incorporated	by	reference	to	Exhibit	4.5	of	Post-Effective	Amendment	No.	1	on Form	S-8	to	Registration	Statement	on	Form	S-4	(Registration	No.	333-59254).*

10(iii)(A)(44) Bozell,	Jacobs,	Kenyon	&	Eckhardt,	Inc.	Stock	Option	Plan	is	incorporated	by	reference	to	Exhibit	4.5	of	Post-Effective	Amendment	No.	1	on Form	S-8	to	Registration	Statement	on	Form	S-4	(Registration	No.	333-59254).*

10(iii)(A)(45) True	North	Communications	Inc.	Deferred	Compensation	Plan	is	incorporated	by	reference	to	Exhibit(c)(xiv)	of	the	Registrant's	Annual Report	on	Form	10-K	for	the	year	ended	December	31,	2002.*

10(iii)(A)(46) Resolution	of	the	Board	of	Directors	of	True	North	Communications	Inc.	adopted	on	March	1,	2002	amending	the	Deferred	Compensation Plan	is	incorporated	by	reference	to	Exhibit(c)(xv)	of	the	Registrant's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2002.*

10(iii)(A)(47) The	2002	Performance	Incentive	Plan	of	the	Registrant	is	incorporated	by	reference	to	Appendix	A	to	the	Registrant's	Proxy	Statement	on Schedule	14A,	filed	April	17,	2002.*

10(iii)(A)(48) The	Interpublic	Senior	Executive	Retirement	Income	Plan	(the	"SERIP")	is	incorporated	by	reference	to	the	Registrant's	Quarterly	Report	on Form	10-Q	for	the	quarter	ended	September	30,	2003.*

10(iii)(A)(49) The	Interpublic	Capital	Accumulation	Plan	(the	"CAP")	is	incorporated	by	reference	to	the	Registrant's	Quarterly	Report	on	Form	10-Q	for the	quarter	ended	September	30,	2003.*

10(iii)(A)(50) The	Interpublic	Outside	Directors	Stock	Incentive	Plan	of	the	Registrant,	as	amended	through	August	1,	2003,	is	incorporated	by	reference	to the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	September	30,	2003.*

10(iii)(A)(51) The	Interpublic	2004	Performance	Incentive	Plan	(the	"2004	PIP")	is	incorporated	by	reference	to	Appendix	B	to	the	Registrant's	Proxy Statement	on	Schedule	14A,	filed	with	the	SEC	on	April	23,	2004.*

10(iii)(A)(54) 2004	PIP	—	Form	of	Instrument	of	Restricted	Stock	is	incorporated	by	reference	to	Exhibit	10.2	to	the	Registrant's	Current	Report	on Form	8-K	filed	with	the	SEC	on	October	27,	2004.*

10(iii)(A)(55) 2004	PIP	—	Form	of	Instrument	of	Restricted	Stock	Units	is	incorporated	by	reference	to	Exhibit	10.3	to	the	Registrant's	Current Report	on	Form	8-K	filed	with	the	SEC	on	October	27,	2004.*

10(iii)(A)(56) Non-Management	Directors'	Plan	—	Form	of	Plan	Option	Certificate	is	incorporated	by	reference	to	Exhibit	10.4	of	the	Registrant's Current	Report	on	Form	8-K	filed	with	the	SEC	on	October	27,	2004.*

10(iii)(A)(57) Non-Management	Directors'	Plan	—	Form	of	Instrument	of	Restricted	Shares	is	incorporated	by	reference	to	Exhibit	10.5	to	the Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	October	27,	2004.*

10(iii)(A)(58) Non-Management	Directors'	Plan	—	Form	of	Instrument	of	Restricted	Share	Units	is	incorporated	by	reference	to	Exhibit	10.6	of	the Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	October	27,	2004.*

10(iii)(A)(59) The	SERIP	—	Form	of	Participation	Agreement	is	incorporated	by	reference	to	Exhibit	10.7	of	the	Registrant's	Current	Report	on Form	8-K	filed	with	the	SEC	on	October	27,	2004.*

10(iii)(A)(60) The	CAP	—	Form	of	Participation	Agreement	is	incorporated	by	reference	to	Exhibit	10.8	of	the	Registrant's	Current	Report	on Form	8-K	filed	with	the	SEC	on	October	27,	2004.*

10(iii)(A)(61) The	Employee	Stock	Purchase	Plan	(2006)	of	the	Registrant	is	incorporated	by	reference	to	Appendix	B	to	the	Registrant's	Proxy Statement	on	Schedule	14A,	filed	with	the	SEC	on	October	21,	2005.*

10(iii)(A)(67) 2006	PIP	—	Form	of	Instrument	of	Nonstatutory	Stock	Options,	is	incorporated	by	reference	to	Exhibit	10.5	to	the	Registrant's	Current Report	on	Form	8-K	filed	with	the	SEC	on	June	21,	2006.*

10(iii)(A)(69) The	SERIP,	Amended	and	Restated	(the	"Restated	SERIP"),	effective	January	1,	2007,	is	incorporated	by	reference	to	Exhibit	10(iii)(A)(1)	to the	Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	September	30,	2007.*

10(iii)(A)(70) The	CAP,	Amended	and	Restated	(the	"Restated	CAP"),	effective	January	1,	2007,	is	incorporated	by	reference	to	Exhibit	10(iii)(A)(4)	to	the Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	September	30,	2007.*

10(iii)(A)(71) Restated	SERIP	—	Form	of	Restated	Participation	Agreement,	is	incorporated	by	reference	to	Exhibit	10(iii)(A)(2)	to	the	Registrant's Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	September	30,	2007.*

10(iii)(A)(72) Restated	SERIP	—	Form	of	Participation	Agreement	(Form	For	New	Participants),	is	incorporated	by	reference	to	Exhibit	10(iii)(A)(3)	to	the Registrant's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	September	30,	2007.*

10(iii)(A)(73) Restated	CAP	—	Form	of	Restated	Participation	Agreement,	is	incorporated	by	reference	to	Exhibit	10(iii)(A)(5)	to	the	Registrant's	Quarterly Report	on	Form	10-Q	for	the	quarter	ended	September	30,	2007.*

* Management	contracts	and	compensation	plans	and	arrangements.

# 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.

(Registrant)

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.

# EXHIBIT	INDEX

4(iii)(E) Fifth	Supplemental	Indenture,	dated	as	of	March	28,	2005,	to	the	2000	Indenture,	as	modified	by	the	First	Supplemental	Indenture,	dated	as	of August	22,	2001,	with	respect	to	the	7.25%	Senior	Unsecured	Notes	due	2011	is	incorporated	by	reference	to	Exhibit	4.2	to	the	Registrant's Current	Report	on	Form	8-K	filed	with	the	SEC	on	April	1,	2005.

Exhibit	No. Description 4(iii)(K) Third	Supplemental	Indenture,	dated	as	of	March	28,	2005,	to	the	2004	Indenture,	as	modified	by	the	Second	Supplemental	Indenture,	dated as	of	November	18,	2004,	with	respect	to	the	6.25%	Senior	Unsecured	Notes	due	2014	is	incorporated	by	reference	to	Exhibit	4.4	to	the Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	April	1,	2005.

4(iii)(O) First	Supplemental	Indenture,	dated	as	of	November	15,	2006,	to	the	2006	Indenture,	with	respect	to	the	4.25%	Convertible	Senior	Notes	Due 2023	is	incorporated	by	reference	to	Exhibit	4.2	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	November	17,	2006.

4(iii)(P) Second	Supplemental	Indenture,	dated	as	of	November	20,	2007,	to	the	2006	Indenture,	with	respect	to	the	4.75%	Convertible	Senior	Notes due	2023	is	incorporated	by	reference	to	Exhibit	4.1	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	November	21, 2007.

4(iii)(Q) Warrant	Agreement,	dated	as	of	June	13,	2006,	between	the	Registrant	and	LaSalle	Bank	National	Association,	as	Warrant	Agent,	is incorporated	by	reference	to	Exhibit	10.2	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	June	19,	2006.

Exhibit	No. Description 10(i)(G) 3-Year	Credit	Agreement,	dated	as	of	June	13,	2006,	among	the	Registrant,	as	Borrower,	ELF	Special	Financing	Ltd.,	as	Initial	Lender	and L/C	Issuer,	and	Morgan	Stanley	Capital	Services,	Inc.,	as	Administrative	Agent	and	L/C	Administrator,	is	incorporated	by	reference	to Exhibit	10.1	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	June	19,	2006. 10(i)(H) Registration	Rights	Agreement,	dated	as	of	November	15,	2006,	is	incorporated	by	reference	to	Exhibit	10.1	to	the	Registrant's	Current Report	on	Form	8-K	filed	with	the	SEC	on	November	17,	2006.

10(iii)(A)(3) Supplemental	Employment	Agreement,	dated	as	of	February	14,	2005,	between	the	Registrant	and	Michael	I.	Roth,	is	incorporated	by reference	to	Exhibit	10.2	to	the	Registrant's	Current	Report	on	Form	8-K	filed	with	the	SEC	on	February	17,	2005.*

10(iii)(A)(26) Executive	Special	Benefit	Agreement,	dated	as	of,	July	1,	1992,	between	the	Registrant	and	John	J.	Dooner,	Jr.,	is	incorporated	by reference	to	Exhibit	10(q)	to	the	Registrant's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	1995.*

10(iii)(A)(27) Employment	Agreement,	dated	as	of	January	1,	1994,	between	the	Registrant	and	John	J.	Dooner,	Jr.,	is	incorporated	by	reference	to Exhibit	10(r)	to	the	Registrant's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	1995.*

10(iii)(A)(62) The	Interpublic	2006	Performance	Incentive	Plan	(the	"2006	PIP")	is	incorporated	by	reference	to	Appendix	A	to	the	Registrant's Definitive	Proxy	Statement	on	Schedule	14A	filed	with	the	SEC	on	April	27,	2006.*

10(iii)(A)(63) 2006	PIP	—	Form	of	Instrument	of	Performance	Shares,	is	incorporated	by	reference	to	Exhibit	10.1	to	the	Registrant's	Current	Report on	Form	8-K	filed	with	the	SEC	on	June	21,	2006.*

10(iii)(A)(64) 2006	PIP	—	Form	of	Instrument	of	Performance	Units	is	incorporated	by	reference	to	Exhibit	10.2	to	the	Registrant's	Current	Report	on Form	8-K	filed	with	the	SEC	on	June	21,	2006.*



Question: what percentage of balance of unrecognized tax benefits at the end of 2008 would impact the effective tax rate if recognized?
Calculation: unrecognized_tax_2008 = 131.8
unrecognized_tax_total = 148.8
percent_unrecognized = unrecognized_tax_2008 / unrecognized_tax_total
answer = percent_unrecognized * 100
Answer: 88.6%