Item 2. 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 subsidiaries (the "Company," "Interpublic," "we," "us" or "our"). MD&A should be read in conjunction with our unaudited Consolidated Financial Statements and the accompanying notes included in this report, the 2008 Annual Report on Form 10-K as filed on February 27, 2009 and the revisions made on Form 8-K dated as of June 8, 2009, as well as our other reports on Form 8-K and other SEC filings. Our Annual Report includes additional information about our significant accounting policies and practices as well as details about our most significant risks and uncertainties associated with our financial and operating results. Our MD&A includes the following sections:

EXECUTIVE SUMMARY provides a discussion about our strategic outlook, factors influencing our business and an overview of our results of operations.

RESULTS OF OPERATIONS provides an analysis of the consolidated and segment results of operations for the periods presented.

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

CRITICAL ACCOUNTING ESTIMATES provides an update to the discussion of our accounting policies that require critical judgment, assumptions and estimates in our 2008 Annual Report on Form 10-K.

RECENT ACCOUNTING STANDARDS, by reference to Note 13 to the unaudited Consolidated Financial Statements, provides a discussion of certain accounting standards that have been adopted during 2009 and certain 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 achieve or improve their business results, which in turn, generates 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, events marketing, 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, R/GA, Octagon, UM and Weber Shandwick. Leading domestic brands include Campbell-Ewald, Carmichael Lynch, Deutsch, Hill Holliday, The Martin Agency and Mullen.

Our strategic outlook is for our high-quality, comprehensive global services to remain critical to the competitiveness of our clients for the remainder of 2009 and beyond as they look to build brands and market share in an increasingly complex and fragmented media landscape. Our business objectives are to continue to strengthen our full range of marketing expertise, while focusing our investment on the fastest growing geographic regions and marketing channels. Our long-term financial objectives include organic revenue growth at competitive levels while achieving operating margin expansion, ultimately to the level of our global peer group. Accordingly, we remain focused on cost control, effective resource utilization, including the productivity of our employees, real estate, and information technology, and reduction of certain discretionary expenses.

The global economic recession has made business conditions extremely challenging for nearly all companies during 2009. These conditions adversely affect the demand for advertising and marketing services and present a challenge to the revenue and profit growth of our Company and our sector as a whole for as long as the difficult economic conditions persist. Due to general economic conditions and their effect on our revenue, we initiated significant severance actions in the fourth

Management's Discussion and Analysis of Financial Condition and Results of Operations - (continued)

quarter of 2008, which have continued through the first nine months of 2009. The expense benefits from these actions will continue to be recognized in future periods. While we cannot predict the continuing 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. In addition, improvements in our financial reporting and business information systems provide us with timely and actionable insights from our businesses around the world, which allows us to more effectively manage our business. Our internal reporting improvements over the past several years have strengthened our ability to effectively manage our expenses.

Our balance sheet and liquidity are important sources of financial flexibility. We have taken recent measures to strengthen our debt maturity profile by issuing notes due in 2017 and repurchasing notes maturing in 2009, 2010 and 2011.

As a result of the challenging economic conditions and their impact on the projected profitability of certain reporting units, we performed an interim evaluation with respect to the recoverability of our goodwill at certain reporting units during the third quarter of 2009. Based on the interim analysis, we concluded that there was no impairment in the third quarter of 2009. Our annual impairment review of goodwill is as of October 1, 2009, and our review of our reporting units financial projections and assumptions in estimating fair value could result in an impairment charge in the fourth quarter of 2009. See the Critical Accounting Estimates section within this MD&A and Note 4 to the unaudited Consolidated Financial Statements for further information.

On October 15, 2009, we announced the alignment of Deutsch and Lowe in order to build on the complementary strengths of the two agencies to create a more powerful offering and accelerate our growth. We anticipate that Lowe will be strengthened by adding a dynamic U.S. agency to its strong global network, and that Deutsch will benefit from the multinational reach of Lowe. Deutsch will now be referred to as Deutsch, Inc., a Lowe & Partners Company. The combined entity will remain in the Integrated Agency Network ("IAN") segment. We are formalizing our plans and expect to incur certain reorganization charges in the fourth quarter of 2009 and into 2010 as we implement those plans.

Third Quarter and First Nine Months of 2009 and 2008 Highlights



                                                 Three months ended                 Nine months ended
                                                 September 30, 2009                 September 30, 2009
% decrease                                     Total           Organic            Total           Organic
Revenue                                          (18.0 %)         (14.2 %)          (16.5 %)         (11.8 %)
Salaries and related expenses                    (13.7 %)         (10.0 %)          (10.8 %)          (6.5 %)
Office and general expenses                      (19.2 %)         (15.1 %)          (18.6 %)         (13.4 %)

                                                 Three months ended                 Nine months ended
                                                   September 30,                      September 30,
                                               2009              2008             2009              2008
Operating margin                                   4.1 %            6.7 %             1.7 %            5.1 %
Expenses as % of revenue:
Salaries and related expenses                     66.1 %           62.8 %            68.8 %           64.4 %
Office and general expenses                       29.8 %           30.2 %            29.5 %           30.2 %

Net income (loss) available to IPG
common stockholders                          $    17.2         $   38.7         $   (35.8 )       $   56.7

Earnings (loss) per share available to
IPG common stockholders:
Basic                                        $    0.04         $   0.08         $   (0.08 )       $   0.12
Diluted                                      $    0.03         $   0.08         $   (0.08 )       $   0.12

When we analyze period-to-period changes in our operating performance we determine the portion of the change that is attributable to exchange rates and to the net effect of acquisitions and divestitures and the remainder, which we call organic

Management's Discussion and Analysis of Financial Condition and Results of Operations - (continued)

change, indicates how our underlying business performed. The performance metrics that we use to analyze our results include the organic change in revenue, salaries and related expenses and office and general expenses, and the components of operating expenses, expressed as a percentage of revenue. Additionally, in certain of our discussions we analyze revenue by business sector, where we focus on our top 100 clients, which typically constitute 50%-55% of our consolidated revenues, and geographic region.

The change in our operating performance attributable to foreign currency rates is determined by converting the prior-period results using the current period exchange rates and comparing the prior-period adjusted amounts to the prior-period results. Although the U.S. Dollar is our reporting currency, a substantial portion of our revenues and expenses are 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 consolidated results of operations. For the three months ended September 30, 2009, foreign currency fluctuations resulted in decreases of approximately 4% in revenues, salaries and related expenses and office and general expenses, which contributed to a net decrease in operating income of approximately 4% compared to the prior-year period. For the nine months ended September 30, 2009, foreign currency fluctuations resulted in decreases of approximately 6% in revenues and salaries and related expenses and approximately 7% in office and general expenses, which contributed to a net decrease in operating income of approximately 4% compared to the prior-year period. Since the second half of 2008 the U.S. Dollar has strengthened against several foreign currencies, which had a negative impact on our consolidated results of operations. However, in recent months the U.S. Dollar has weakened against several foreign currencies, and if this trend continues, it could have a positive impact on our consolidated results of operations.

For purposes of analyzing changes in our operating performance attributable to the net effect of acquisitions and divestitures, transactions 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 the third quarter of 2009, the net effect of acquisitions and divestitures had a minimal impact on revenue and operating expenses compared to the prior-year period. For the first nine months of 2009, the net effect of acquisitions and divestitures increased revenue and operating expenses compared to the prior-year period.

RESULTS OF OPERATIONS

Consolidated Results of Operations - Three and Nine Months Ended September 30, 2009 compared to Three and Nine Months Ended September 30, 2008