Jerome J. Leshne - SVP of IR Michael Isor Roth - Chairman, CEO and Chairman of Executive Committee Frank Mergenthaler - CFO and EVP

Alexia Quadrani - JP Morgan Chase & Co. John Janedis - UBS Investment Bank David Bank - RBC Capital Markets Hersh Khadilkar - Morgan Stanley Brian Wieser - Pivotal Research James Dix - Wedbush Securities Inc.

Good morning. Welcome to the Interpublic Group Fourth Quarter and Full Year 2013 Earnings Conference Call. All participants are in a listen-only mode until the question-and-answer portion. (Operator Instructions). This conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to introduce Mr. Jerry Leshne, Senior Vice President of Investor Relations. Sir, you may begin. Jerome J. Leshne: Good morning. Thank you for joining us. We have posted our earnings release and our slide presentation on our website, interpublic.com and will refer to both in the course of this call. This morning, we are joined by Michael Roth and Frank Mergenthaler. We will begin with prepared remarks, to be followed by a Q&A. We plan to conclude before market open at 9:30 a.m. Eastern. During this call, we will refer to forward-looking statements about our company. These are subject to uncertainties in the cautionary statement included in our earnings release and the slide presentation and further detailed in our 10-K and other filings with the SEC. We will also refer to non-GAAP measures. We believe that these measures provide useful, supplemental data that while not a substitute for GAAP measures allow for greater transparency in the review of our financial and operational performance. At this point, it is my pleasure to turn things over to Michael Roth.

Thank you, Jerry, and thank you for joining us this morning as we review our results for the fourth quarter and full year. I'll start out by covering highlights of our performance as well as our outlook for 2014 and Frank will then provide additional details. I'll then conclude with an update on our agencies to be followed by a Q&A. Beginning with revenue, we're pleased to report a quarter of solid growth in most key world markets led by our outstanding U.S. performance. Fourth quarter organic growth was 3.7%, which is our strongest quarter in two years. For the full year organic growth was 2.8%. This was at the high end of the 2% to 3% range we had targeted entering 2013. In the quarter, standout client categories were auto, retail, healthcare and food and beverage. Regionally, U.S. organic growth in the fourth quarter was 6.9% which reflects the revenue momentum of new business wins and notable strength in digital, media and marketing services. U.S. organic growth for the full year was 3.7%. In Asia-Pac our largest international region, Q4 organic growth was 5.3%, which is on top of a double-digit increase a year ago. We saw a very strong increase in China in both the quarter and full year. For the year, our revenue in Asia-Pac was up 6.4% organically and grew 8.9% including revenue from acquisitions mainly in India. Organic growth in LatAm was 4.5% during Q4. Brazil continues to be strong and we had a double-digit growth in Argentina and Colombia. For the full year, LatAm grew 10.2% organically, reflecting our very competitive position across the region. In the UK fourth quarter organic growth was 4.3% led by increase in digital, marketing services and media. For the full year, organic growth was 0.8% but that includes a very challenging Olympics comparison in the third quarter. For the full year, our underlying growth in the UK was approximately 4%. Continental Europe continued to be the exception in terms of top line performance. Our organic decrease was a negative 4.3% in the quarter which brought the full year to negative 5.9% with decreases in most national markets. Business conditions remained challenging and we have taken important steps to strengthen our offerings in the margin, including new senior hires and recent agency acquisitions such as Profero, a leading UK based global digital agency and Inferno, a respected integrated agency in London. Turning to expenses and margin, as you have seen in our announcement earlier today, our fourth quarter included restructuring expense of $61 million, the majority of which is our investment to align costs with revenue in Europe following the year of significantly lower than anticipated revenue. You will recall then on a previous conference call in October, we indicated that we were considering Q4 actions to address this region. We anticipate savings from these actions of approximately $40 million in calendar year 2014. In combination with strong revenue growth and ongoing expense discipline, these actions strengthen of positioning to deliver growth in operating margin expansion this year and beyond. Excluding the restructuring charge, operating margin in the fourth quarter was 18.1% bringing margin for the full year to 9.3%. Except for currency, total operating profit in 2013 was relatively flat year-on-year. However, we did not attain our margin targets for the year, mainly due to the extent of our revenue decrease in Continental Europe and a significant impact it had on our salary leverage. Two other discrete factors weighed on our margin results. First, a few of our businesses that saw revenue decrease did not cut cost fast enough or the investment in talent for future growth. Second, the investment expense of new business; margin expansion remains a primary area of focus for us which I will detail in discussing our full year 2014 outlook. Our capital structure and financial strength continued to be a source of significant value creation in Q4. We repurchased 12 million common shares in the quarter using $201 million. That brought full year repurchases to 32 million shares using $482 million. At year-end, our total share count including restricted shares and options was 428 million shares which is a decrease over 20% in the past three years. That's the result of a shareholder capital return program that has put $1.6 billion to work over that timeframe. Another financial highlight was significantly stronger cash flow generation for the full year 2013. In addition, our run rate interest expense exiting the year means 2014 interest expense should be $30 million to $35 million lower than fiscal year 2013. Turning to our outlook for 2014, we begin with solid revenue momentum. The strength of our agency brands and our competitiveness on the new business front means we look forward to top line growth that is in line with our industry peers. Compared to this time a year ago, our businesses are also seeing improved climate for marketing investment in many key consumer market. Our agency leaders are generally positive in their outlooks and client projects spending is an important barometer of market sentiment has been healthy. The U.S., our big engine from a regional standpoint, is seeing momentum as we begin the new year. Our assets in important developing markets such as India and Brazil are very strong across the portfolio and the tone in the emerging markets is solid though tempered by some macro uncertainty. The upcoming World Cup should be a positive. We remain cautious in Europe considering all these factors, we believe growth in 2014 should exceed last year's and our organic growth target is a range of 3% to 4%, which is consistent with the forecast from MAGNA for improved growth in the broader media sector. With respect to profitability, we expect the return on our fourth quarter cost actions will contribute 40 to 50 basis points of margin expansion in calendar year '14. Combined with the appropriate level of conversion on 3% to 4% organic growth, our target is therefore to expand operating margin in total by at least 100 basis points in 2014 on top of this year's underlying base of 9.3%. The actions we announced earlier today on the dividend and share buybacks are indicative of our Board's confidence in our outlook. We've increased our dividend 27% to $0.095 per share quarterly or $0.38 per year. In addition, our Board authorized a new 300 million share repurchase plan. This new authorization brings our total outstanding program to 419 million pro forma for the beginning of this year. At this stage, I'll turn things over to Frank for some additional detail on our results and I'll join you after his remarks for an update on tone of business and our agencies to be followed by our Q&A.

Thank you, Michael. Good morning. As a reminder, I will be referring to the slide presentation that accompanies our webcast. On Slide 2, you'll see an overview of results many of which Michael touched on. Organic growth was 3.7% in the fourth quarter. The U.S. growth was a terrific 6.9%, our fifth consecutive quarter of stronger year-on-year domestic growth. Our international performance was mixed with growth in Asia-Pac, LatAm and the UK but decreases in Continental Europe and other markets. Q4 operating profit was 324 million including 61 million expensed for strategic cost actions, mainly in Continental Europe. Operating margin was 15.3% in the fourth quarter as reported. Before restructuring, Q4 margin was 18.1% and full year operating margin was 9.3%. The payback on our Q4 actions should result in 40 or 50 basis points of margin expansion in '14. For the quarter diluted earnings per share was $0.44 per share and $0.56 per share excluding the restructuring charge. For the full year, diluted EPS was $0.61 per share and would have been $0.78 per share excluding both the $0.11 per share impact of the Q4 restructuring charge and the $0.06 per share impact on our charge in the third quarter with the early redemption of our 10% notes. We provide a reconciliation of reported to an adjusted EPS in the Appendix to our presentation on Page 23. Michael mentioned our Board's actions today to increase our dividend and authorize a new share repurchase plan. These actions underscore the strength of our financial condition and competitiveness of our offerings. Turning to Slide 3, you'll see our P&L for the quarter. I'll cover revenue and operating expenses in detail in the slides that follow. Here it's worth noting that our tax rate in the quarter was 32.9% and an adjusted 30.1% excluding restructuring charge. For the full year, our tax rate 38.7% as reported and 36.2% adjusting for both the Q4 charge and the Q3 charge for debt redemption. This compares to an adjusted tax rate of 2012 of 30.4%, excluding the gain on the sale of our Facebook shares in 2012, which was included in other income. Turning to revenue on Slide 4, revenue was 2.12 billion in the quarter, an increase of 2.9%. Compared to Q4 2012, the impact of the change in exchange rate was a negative 130 basis points while net acquisition added 50 basis points. Resulting organic revenue increase was 3.7%. For the full year, revenue growth was 2.4% consistent with 2.8% organic growth and 70 basis points from net acquisitions while currency was a negative 1.1%. As you can see on the bottom half of this slide, fourth quarter organic growth at our integrated agency network segment was 2.2% with U.S. growth outpacing international growth. At our CMG segment, our organic growth was 11.7%. Growth in the U.S. was very strong across PR, events and sports marketing. Moving to Slide 5, revenue by region. In the U.S. Q4 organic growth was 6.9%. We had outstanding performance by our media business, our digital agencies and our marketing service specialists in CMG, notably events in PR. We also had strong growth in certain of our U.S. integrated independents. Leading client sectors were auto and healthcare. It is worth noting that our revenue with federal government clients increased modestly in Q4 after having decreased during the third quarter. Turning to international markets. The UK increased 4.3% organically in Q4 led by growth in digital, marketing services and media. For the full year, UK organic growth was 0.8% which reflects a challenging London Olympics comparison from 2012. Underlying growth was approximately 4% led by McCann, media and digital. Continental Europe decreased 4.3% organically in the quarter. We had decreases in Germany, Italy and Spain while France was flat. For the year, revenue decreased 5.9% on an organic basis. And our cost actions in Q4 addressed a similar percentage of our headcount in Europe as well as some office consolidation. In Asia-Pac organic revenue growth was 5.3% in Q4. We had double-digit increase in China which was driven by McCann, media and the marketing services companies within CMG. For the full year, Asia-Pac was 6.4% organically against double-digit growth the year before led by double-digit growth in Australia and China and mid single digit growth in India. Growth was 8.9% for the year including acquisition revenue notably in India. In LatAm we increased 4.5% organically in the quarter due to growth across many of our agencies including media, McCann, CMG and digital. Full year growth was terrific at 10.2% which was fueled by a very broad cross-section of our assets in the region. Our other markets group which was made up of Canada, the Middle East and Africa decreased 6.3% in the quarter on an organic basis, primarily the result of lower pass-through revenues and expenses. On Slide 6, we chart the longer view of our organic revenue change on a trailing 12-month basis. The most recent data point is 2.8% corresponding to calendar year 2013 increasing as the year progressed. Moving on to Slide 7, our operating expenses. In the fourth quarter, total operating expenses increased 5.1% from a year ago before the restructuring charge. Full year operating expenses increased 2.9% compared to 2.4% revenue growth. Our performance in Continental Europe has significant impact on our salaries leverage. As Michael mentioned, our revenue decreased deeper than we had anticipated. We need to align our cost base in this region to the revenue reality. Second, in some of our businesses where revenue decreased, we did not see a corresponding and timely reduction to our payroll or a decision was made to further invest in talent or capabilities to drive growth. Third, the volume of new business one in 2013 was positive, but investment was required to win the business and servicing the business also meant hiring ahead of revenue. That timing was detrimental to margins in 2013. Needless to say, margin will be a critical area of focus for us in 2014. There is no structural reason why we should not continue our progress to a competitive level of margin profitability, and nothing has changed in our outlook that we can drive high levels of incremental margin on our growth. Total headcount at year end was 45,400 which was an increase of 0.4% in Q4 of Q3. That includes some reductions from our restructuring with the majority of restructuring headcount we'll schedule to exit in Q1. From a year-over-year standpoint, total headcount increased 4.9% of which 3.4% was organic and 1.5% was due to acquisitions. Our additions where we are growing in LatAm, Asia Pac and in the U.S. for new business as well as our high growth digital, marketing services and media disciplines. In Q4 our ratio of base payroll benefits the tax expense to revenue was 44.9% compared with 44.3% a year ago. For the full year that ratio was 52.9% compared with 52.2% in the prior year. Q4 expense for temporary labor was 3.4% of revenue which is 20 basis points higher than last year and somewhat higher than we'd like to see. For the full year, our temp ratio of 3.6% was equal to the level over a year ago. Incentive expense was 3% of Q4 revenue and also 3% of revenue for the full year which was the same level as full year 2012. Our other salaries and related category was 4.6% of fourth quarter revenue and was 3.2% of revenue for the full year, which is an increase of 20 basis points for the year. Our increase for the full year is due to higher performance-based bonuses at the local and regional operating levels. Turning to office and general expenses on the lower half of the slide. O&G expense was 25.3% of Q4 revenue and 26.9% for the full year which is an improvement of 20 basis points for the full year. As you can see in the Appendix we held steady on both professional fees and our travel, supplies and telecom as a percentage of revenue. Our expense for occupancy grew a little faster than revenue resulting in 10 basis points of deleveraging. We leveraged the O&G category by 30 basis points for the year. On Slide 8, we share our operating margin history on a trailing 12-month basis. The most recent data point is 8.4% which includes our Q4 restructuring expense of about 61 million and 9.3% before that expense. Turning to the current portion of our balance sheet on Slide 9, we ended the year with 1.64 billion of cash and short-term marketable securities. You'll remember that our cash balance a year ago included 800 million that had been raised in November 2012 debt issuance to prefund debt redemption in 2013. Under the short-term liabilities section, the current portion of long-term debt reflects in November 2014 maturity of our six and a quarter notes. On Slide 10, we turn to cash flow. Cash from operations in Q4 was 1.02 billion compared with 802 million a year ago. The comparison includes 657 million of working capital in this year's fourth quarter which is a very strong result compared with 408 million a year ago. This continues to be an area of focus. For the full year, cash from operations was 593 million compared with 357 million in 2012. As a reminder, our operating cash flow is seasonal. Our business tends to generate significant cash working capital in the fourth quarter and a use of cash working capital in the first quarter. Investing activities in Q4 used 97 million, mainly for capital expenditures. For the full year, CapEx was 173 million while net cash used in acquisitions was 62 million. Our M&A pipeline continues to be very strong. While timing can shift between periods, we continue to target 150 million to 200 million annually. We remain focused primarily on high growth disciplines and markets expanding our digital capabilities and opportunistically strengthening our presence in world markets. Moving on, our financial activities used 256 million in Q4, mainly 201 million for the repurchase of our common stock and 32 million in common stock dividends. Order included the payment of our final quarterly preferred stock dividend which was 3 million. For the full year, our financing activities used 1.2 billion which chiefly reflects 602 million in retirement of our 10% notes, 482 million repurchase common stock and 126 million for dividends of our common shares. As I mentioned, we had pre-financed some of this activity with our November 2012 debt issuance which was 800 million. In 2013, our net decrease in cash and marketable securities for the full year was 949 million. Cash taxes for the year were 112 million which is 19.5% of our adjusted pretax income. We continue to benefit from our operating loss carryforwards and a cash tax rate lower than our effective book rate. In 2014 we estimate our cash tax rate will be in the range of approximately 20% to 22%. On Slide 11 we show our debt deleveraging are nearly 700 million from 2007 to 2013 which includes the temporary increase at year end 2012. Our debt level at year-end 2013 was 1.66 billion. Slide 12 shows the total of our average basic plus diluted shares over the last few years. On the far right shows the total as of year-end 2013. This has been a dynamic and positive area of focus for us. Average total shares have decreased approximately 21% between 2010 and 2013. Our starting position for 2014 is 428 million on the right which is 3.4% lower than 2013 average. As we have pointed out with our Board's actions announced this morning, our repurchase authorization currently totals 419 million. Turning to Slide 13, in summary, stronger U.S. growth was an encouraging note to conclude the year and look ahead to 2014. We began the new year in a stronger competitive position compared to a year ago and having taken necessary actions in Europe, our focus for 2014 will be to drive margin expansion. Our financial strength continues to be a source of value creation. As a result, we enter the year having significantly reduced our share count and lowered our cost of debt and with a higher dividend. With that, let me turn it back over to Michael.

Thank you, Frank. While we make significant progress on a number of important fronts in 2013, we enhanced the senior talent across the organization with particular focus on strategic, creative and digital leadership. We've retained major clients which was a key area of focus going into the year. We also built on those existing relationships and we showed well in the new business arena. This was particularly the case on holding company level consolidations where we won four of the five major reviews in which we participated. Our year-end organic revenue growth returned to competitive levels and we finished the year strongly in the United States. During 2013 we took additional steps to bolster the company's already strong financial position, which has allowed us to invest behind the high growth sectors within our portfolio, while we're also returning considerable capital to our shareholders. Overall, our offering is strong. We're meeting the needs of our clients, our effectively engaging with consumers in a fragmented, dynamic and fast-moving marketing landscape. This means putting strategic insights, digital capabilities and integrated ideas at the center of all our agencies. It's about being highly creative, fast and flexible and using data and analytics to promote accountability. Media brands and CMG both continue to lead the way, performing at very high levels and building outstanding digital capabilities notably in the areas of social media and content creation. We've taken a leadership position and (indiscernible) media buying and established the MAGNA Consortium, partnering with a number of major media owners. MAGNA also just released high definition buying, the industry's most comprehensive, scalable data stack to optimize audience targeting across all devices and media channels. Media brands also want significant reviews against top competitors, such as the global Hershey's assignment and nationwide. This led to media brands being made the Holding Company of the Year by MediaPost. CMG follows suit on the industry-leading PR capabilities at Weber Shandwick, Golin Harris and Devries contributed to IPG winning the first designation as Holding Company of the Year from The Holmes Report. As a result, we're seeing our CMG company particularly the PR agencies gain further market share. McCann showed very strongly major award shows around the world. The agency's Dumb Ways to Die work has become the most awarded creative campaign in the history of our industry, and the agency has become an attractive destination for top talents. Their competitive offering includes global consumer advertising, CRM digital and experiential capabilities. This is reflected in new client assignments from both existing partners like GM and new ones like the US Postal Service, Lockheed Martin and Zurich Insurance who have played a key role on our cross IPG team. Lowe continued to do great work with its largest client, particularly in high growth and BRIC markets. The agency was also essential to a number of new business wins, notably Cadillac which led to a merger with Campbell Ewald that is making good progress and will further be accelerated with the addition of Profero on the digital front. R/GA, HUGE and MRM are among the industry's most innovative agencies with best-in-class capabilities across the digital spectrum, including mobile, social, UX [ph] and tech development. All three of these agencies continue to grow and expand their geographic footprints. Our integrated U.S. independent includes some of the most dynamic agencies in the business such as Hill Holiday, Martin and Deutsch. Mullen in particular had a breakout year in 2013. Draftfcb has also shown the positive impact of talent upgrades across the network in offices such Shanghai and New York as well as capabilities by strategic planning and a new agency CMO. Carter and his team are working well together as evidenced by the recent win on Levi's, an uptick in new business activity and the soon to be announced win of Trulia. At the holding company level, we outperformed all of our competitors by winning 30% of the Grand Prix awarded at Cannes, the industry's most important creative competition and we recently outpaced our peers with three agencies on the preceded AdAge A list; Mullen, Weber Shandwick and R/GA as well as another three on the list of agencies to watch. This reflects the quality of our talent and the range of resources that we can bring to bear on behalf on our clients. We are equally strong in many of the world's high growth regions, which we see as a source of further growth for us. We have strong offerings in all of our global networks in Brazil and India where we've been active in M&A on behalf of media brands at CMG. We will continue to build in China largely through organic investment and the results there in 2013 validate that approach. We have a strong and effective partnership in Russia and we will remain active on the M&A front with targeted deals notably in digital, marketing services and media as well as tactically to address geographic areas of need, we'll capitalize on specific client opportunities. Our balance sheet has been and will continue to be a source of significant value creation. We've been very effective in deleveraging while returning 1.6 billion to shareholders since initiating the current dividend and share repurchase program in 2011. Our Board's actions announced today build on that success, which demonstrate their confidence in the strength of our financial position and our agencies as well as their belief in the opportunities that lie ahead of us. By achieving our 2014 growth target of 3% to 4% and given the cost actions we have taken in Q4, we are confident that we can convert at a high level and resume our long-term trajectory of margin expansion. This will result in at least 100 basis points improvement. Our margin goal is therefore 10.3% or better. This will position us to further enhance shareholder value in the years to come. We are looking forward to a strong 2014 and we thank you for your time and your continued support. At this time, I'll open it up for questions.

Thank you. (Operator Instructions). The first question today is from Alexia Quadrani with JP Morgan. Alexia Quadrani - JP Morgan Chase & Co.: Thank you. I just wanted to follow-up on the relatively weak margins in the quarter. I know Europe was a huge challenge in the quarter, but it looked like you had such good growth elsewhere? And I guess given the relatively small size of Europe, I'm surprised – I guess the positive offering that you probably had given the strong growth else, I'm surprised to see you didn't see much more of an offset?

Yes, that's a fair question and obviously Alexia, that's a key question that we try to address in our opening remarks. In particular since its yearend, we are a little more detailed in our presentation, so forgive us for that. But I look at it in a simple way. There are three buckets that we look at when we compare our targets and our actual results. The first obviously is weakness in Continental Europe which you point out. If you look at its percentages versus our goal, that's an excess of 60% of the mix, if you will, versus our target. If you add on top of that, so obviously the bulk of it is from Europe notwithstanding its size, okay. The second pieces as we talked about is the ramp up – the failure to reduce our salaries ahead of some revenue weakness as we had in some of our agencies. Part of that was that we were investing in the future in terms of talent. Remember, 2013 is a year where we had some changes in our structural agencies in terms of leadership and as a result, we had some replacements and obviously new leadership and new talent across strategic, creative and frankly management leading those agencies. So that's the second bucket. And obviously we didn't cut fast enough against some of the revenue shortages which is reflected in those ratios. The third bucket has to do with new business. Particularly, we saw a lot of new business expenses on the digital side from our agency and it's reflected in our new business wins which were positive in 2013, which is why we're comfortable when we talk about how all of this is going to convert into 2014. If you just look at the expense that we took in terms of the restructure, because we look at 40 million to 50 million return in 2014 which is a pretty good base return. The question is why aren't we seeing a 100% of it? And obviously when you take out people in Europe, it has caused us a little more than in the United States. The second part of it has to do with structurally in our refinancing, we have $30 million to $40 million of savings on our interest expense. So when you put all that together, we're disappointed in not achieving our margin in 2013 but I think what's clear is we took some significant actions to position ourselves for 2014 which is why we're comfortable with a 100 basis point expansion in our margin given the 3% to 4% organic revenue growth in 2014. So I hope that clarify – those three buckets are critical in terms of why we missed against our target. And let me just reiterate. The reason I talked about our target was as I said given – you pull out currency from an operating income point of view, we were relatively flat. So, the tone of our business wasn't as difficult as it was reflected in some of the deceases in margin that you saw. Alexia Quadrani - JP Morgan Chase & Co.: Yes, Michael, that's very helpful. But I guess on the two other buckets besides Europe spend and since you reiterated them, just two questions on that. One, when does the new business ramp become a positive contributor to margin, more of a tailwind than a headwind? And then on the two businesses that sort of dragged outside of Europe that you highlighted, did the restructuring also sort of address those, will we see better performance out of those two other businesses as well?

Clearly we keep that in mind when we look at performance in 2014. So the answer to that is yes. I'm sorry, what was the first part of the question? Alexia Quadrani - JP Morgan Chase & Co.: The new business ramp which has been very impressive now for a while, I guess when does that become a tailwind versus a headwind?

Well, it's a tailwind going into the first half of the year. So notwithstanding, we had a few client losses in the last part of 2013. But even that for the first half of the year '14, we should be positive and have tailwinds, which is part of the growth that we anticipate in 2014. Alexia Quadrani - JP Morgan Chase & Co.: Okay, thank you very much.

Thank you, Alexia.

Thank you. The next question is from John Janedis with UBS. John Janedis - UBS Investment Bank: Michael, sticking to Europe I think you went into last year thinking it would maybe be flattish to down slightly. So when you look out to this year, is the base case that organic grows? I need to clarify. Is that $40 million of savings all in Europe and can margins grow in a declining revenue environment there?

40 million is not in all Europe, all right. Obviously, the majority of it is. And yes, while we were disappointed in terms of how we managed in 2013 and the negative performance in Europe, which is what gave rise to the restructuring and how we starting looking at that. Our plans for 2014 did not call for a major recovery in Continental Europe but it does call for a leveling loss, if you will. So that's build into our forecast for 2014. John Janedis - UBS Investment Bank: Okay. And then maybe on a similar related note, you made some senior changes at your agencies, as you know. At this point, is it fair to say the leadership team and the associated cost are in place? I'm just trying to understand if there is risk to margin from future investment and talent?

You're right on. That's what I was alluding to rather than just focusing on revenue declines. When I said we made investments in growth, we saw major additions at McCann, at Draftfcb and Lowe and frankly some of our independent agencies which frankly is one of the reasons we saw improvement and our new business wins and how we're pretty excited about the pipeline that we have going into 2014. So 2013 the way I look at it was we finished very strong on the revenue side and we right-sized as best we can our European operations. Let's not forget we also did two acquisitions to help us. Inferno is a good addition for Draftfcb and we expect to see some improvement in Continental Europe as a result of that and Profero which a great addition for the Lowe network. So, yes, we made investments in talent. And, of course, McCann we saw additions of individuals like Rob Reilly in particular on the creative side and McCann reflecting in its new business win and it's a win in terms of recognition for its creative side. We're feeling very good about the prospects for McCann on a global basis going into 2014. So, yes, we continued to invest in our talent and I'm very comfortable with the leadership we now have across all of our networks. We made changes in some of our independents. Karen Kaplan was made Chairman and CEO of Hill Holliday. We have Alex in Mullen taking over there and we merged Campbell Ewald with Lowe. So, I think we are very well positioned from a competitive point of view going into 2014. John Janedis - UBS Investment Bank: Thanks, Michael. Let me do one last quickly to Frank, I'm sorry, but Frank on the 100 basis points as a base case for the margin, is it fair to say maybe 80 of that is SRS and 20 is O&G?

The majority, John, without putting a specific number is definitely coming out of SRS. We continue to make progress but we're ahead of the target that we had set with respect to percentage of revenue and we'll still chip away, but it's got to come out of SRS. John Janedis - UBS Investment Bank: Thanks, Frank.

You're welcome.

Thanks, John.

Thank you. The next question is from David Bank with RBC Capital Markets. David Bank - RBC Capital Markets: Thanks, guys. Switching back to the revenue side, I guess – from the outside, my general assumption would have been the bulk of the new business was sort of global as you've been winning it fairly evenly split and I'm trying to understand the massive SKU like, I sort of get the domestic for the European-related weakness on international, but just enormous growth domestically and then kind of overly anemic growth internationally, is there a SKU of new business wins? How much of it is about the market versus share gains? And how do we extrapolate a runway, like is that – does the next year look kind of really disproportionately big domestic growth and far more muted international or do you think that we see some convergence over the next couple of quarters?

Well, let's not forget the fact that 50% of our revenue comes from the United States, 56%. So obviously that's a very strong driver. And frankly that's been the exciting part of the growth in the United States because so much of our business comes from that place. If you look at our marketing services businesses as well, a fair chunk of that is coming here in the United States. If you look at the global part of it, we saw great growth in Brazil, China and India. There was slight pullback in Q4 for 2013 but on a year-to-date basis, we saw double-digit growth in most of those markets which pulled back a little in the fourth quarter. So we're expecting to see continued strong results in LatAm as well as in Asia Pac, but a lot of it SKU between 56% of business comes from the United States which frankly is a good thing from our perspective. But if you look at where we've made investments in acquisitions, we strengthened our disciplines in India with acquisitions, we did a few acquisitions in LatAm which helped us and obviously in Europe I already covered some of the acquisitions. Our pipeline for the future acquisitions is frankly more global than U.S. So our goal here is obviously to increase our exposure in the growth markets and participate that way. But I think we saw some pullback in the international markets that I just referred to in the fourth quarter and that led to the SKU-ing, if you will, of a greater portion in the U.S. David Bank - RBC Capital Markets: I guess just a follow-up, maybe ask one more question which would be, could you talk about of that domestic growth, how would you split it between sort of new business won versus – over the past trailing couple of quarters like new business won versus existing client spend? Can we look at it that way?

One thing I forget is our independent agencies. Obviously, we have very strong independent agencies which are frankly more domestic and there were very successful. We looked at Mullen with its win at Acura and a couple of our other independent agencies Deutsch, the Martin agency, we have new business wins there. Look, new business wins are great. It takes a while for them to really flow though in terms of our margin. We've always said our strength in our existing clients and if you look at our top clients, we saw 6% growth on a worldwide basis in our top 20 clients and that has been and will continue to be the source of strength and growth for our company. Obviously when we get up to bat in terms of new business wins as I indicated, we're doing fairly well and with the addition of all the new talents and just look this morning; Draftfcb, the announcement on – I gather. I said soon to be announced but here it was announced. They picked up Trulia. So, we added new talent obviously under Carter's leadership and we're seeing results already coming into place. So, new business is great. We're going to hopefully win more than we lose if there are any. But the key source of our strength is our existing global clients and existing clients and the growth from those. David Bank - RBC Capital Markets: Thank you very much.

You're welcome.

Thank you. The next question is from Benjamin Swinburne with Morgan Stanley.

We almost moved you there, Ben. Hersh Khadilkar - Morgan Stanley: Hi. This is Hersh Khadilkar actually on for Ben. Two question, actually. First, was there any impact from pass-through revenues in 4Q '13? And then second, I know you've taken a lot of questions on this already, but given the new business momentum that you had in '13, I mean relative to the industry, is it fair to assume you can outperform in '14 or are there other kind of headwinds we should thinking about? Thanks.

I'll let Frank answer the pass-through but we think given the talent, we should outperform our industry every year, okay. And by investing in our new talent across McCann, Draftfcb, Lowe and our independent from our perspective we think the answer to that should be yes. And frankly that's why we invested in the talent that we have. What I'm really pleased about is the result of these awards and where we stand. I know that doesn't put money in the bank per se, but the reputation overall for all of our networks on the creative side, on a competitive basis has really come through in 2013 and that should give rise to – an advantage to our kind of new business wins. No one wants to bring in the 10th rated creative agency when they're calling on consultants to bring in agencies. So that's in McCann, for example, Harris has been focusing on strengthening the creative bench there because you add that on top of the distribution and the strength and the offerings that they have on a global basis, it's just very competitive for us and the same with all our other agencies. So yes, we like to think we're going to outperform in the marketplace and frankly, I know the question is 3% to 4% guidance for 2014 may seem like – what I said was we should be competitive with our peers. So if the industry is above 4%, I certainly would expect us to be competitive. But going into the year it's kind of difficult for us. This industry is hard enough to predict where we're going to come out on a quarterly basis and we proved that. But on a full year basis we'd like to start the year out more on a macro basis which is why frankly MAGNA puts out a release and so does our competitors and our forecast for the year is consistent with that. Our goals of course are to do better.

Hersh, on the pass-through question, on a consolidated basis it was very small. Hersh Khadilkar - Morgan Stanley: Okay, great. Thank you.

You're welcome.

Thank you. The next question is from Brian Wieser with Pivotal Research.

Good morning, Brian. Brian Wieser - Pivotal Research: Good morning. Thanks for taking the question. First of all, there have to be some good signs in Europe. I mean last quarter alone I think with some key account wins. So the question is what aspect in particular is going badly? And maybe the reason I ask is if you were us and you were to try to look at what to look for, for signs of improvement in the country level, is it agency specific? Any color you can offer on that would be useful. And then a second question. Yesterday you saw the news obviously with Mediabrands and Comscore and Rentrak, but it's not – it occurred to me it's not as if you're replacing Nielsen for anything. I'm curious, when you think about spending money on research or when your agencies think about spending money on research, do they tend to think about it more as an investment in new client wins or when those incremental costs come up, is it more – there's a specific client who is willing to pay for it, I'm just wondering how to read through to that and getting in terms of the invest in the future versus an actual revenue generating opportunity?

Let me talk about the research. Research is obviously very important and everything we're trying to do at Mediabrands is to target those dollars and be most effective in where we put it. The more data we can access, of course all the different outlets whether it mobile, whether it Internet or TV, the better we are in allocating our client dollars to be more effective on a real-time basis. The stuff that we announced today in terms of high definition, we've already put the work on some clients, so the answer is obviously you work with your existing clients but when you're in competitive pitches, it's nice to show that you have a competitive advantage or an exclusive arrangement with these top providers of research that puts you ahead of the competition. So it's a combination of existing clients where we've continued to maximize the effectiveness of the dollars that we're managing on behalf of our clients and frankly to put us in a competitive advantage in the marketplace. And I think on the program side with respect to Mediabrands, the team – Matt and the team have been a great proponent of new ways of looking at spending those dollars that we effectively did. So, you can spend less dollars and be more effective and this is how you keep existing clients happy and you win new business. So we're very excited about what's happening over there. As far as Europe, we did have -- Lowe won (indiscernible), so we did have new business wins in Europe and frankly McCann in the UK is showing good signs of recovery and we had good performance both across our marketing services in McCann and UK. And now we're looking to expand our footprint in Continental Europe. We're not running away from it. But the fact is it is 11% of our – Continental Europe was 11% of our revenue. And if there's one client that pulls back, it has a more material impact on our results. The other side of that is if we win something big, we'll have a better performance in Continental Europe. So 11% is not insignificant and I don't want anyone to think we're not investing in Continental Europe. I think we have some good offerings and strong offerings and we will continue to focus on that market. It's an important market for us. But given the fact that it's 11%, sometimes we see volatility in those results that are client specific or frankly region specific. And so that's how we look at it. Brian Wieser - Pivotal Research: Okay. But is there any – based on what you're expecting for the year, even in a world that's flat, is it a particular discipline that – because it does seem like the CMG seems to be clearly doing well all around but is it more of a – on the media agency side, creative agency side, anything if you had to guess?

No, I think it's across the board. Obviously some of our agencies we had to make some senior management changes and we're looking at some strategic bolt-on transactions that will help us on the talent side. So, it's across the board and yes, McCann as I said is doing strong in the UK. CMG is performing well and we expect those kinds of investments to continue and to perform well in that market. And the right-sizing of our agencies is something we've been spending time with and that's why we said in October that we're going to take a hard look at matching our expenses and our revenue and frankly, if we overshot the runway on the expense side, we can always go to our talent base. And so, I think we really repositioned ourselves to take all of that into consideration for 2014. Brian Wieser - Pivotal Research: Okay. Thank you very much.

Thank you, Brian.

Thank you. The next question is from James Dix with Wedbush. James Dix - Wedbush Securities Inc.: Good morning, guys.

Good morning. James Dix - Wedbush Securities Inc.: Two questions. First, just Michael, you talked a little bit about the lift of the net new business heading into 2014. Any quantification you have on that because I know going into prior years, net new business has been more of a drag. So I just wanted to see whether there was anything we could focus on in contrasting your outlook for 2014? And then secondly, just following up on something you said, Frank, although, Michael, you've addressed it as well, in terms of there's really no structural reason why you can't get the competitive margins. Just wondering what you consider a structural reason versus a non-structural one? For example, a year ago, someone might have argued, well, your position in Europe, given its scale, could have been argued to be a structural impediment. It seems as though you've taken some actions with the restructuring and other things you're doing on the M&A side and other areas to address that. So, I just want to see if you could give a little more color on what you mean by that and how you feel like your structural position has improved over the past year, if you think it has? Thanks.

Structural by definition we have – most of our models at variable cost model. So as long as we have leverage we can pull when revenue isn't there, therefore we don't think that's a structural. Whether it be salaries or incentives is another variable cost that we had to pull. Structural is that if we can't weather the fixed cost, whether it be rent, whether it be markets where we can't take out the expenses and even our revenue, whether we have agencies in markets that don't perform and we can't exit those markets, those are all structural impediments that frankly in the past it took us years to overcome. We exited – in the early days we exited 50 different markets which frankly were impediments to our growth and we made tough decisions on that. So I think we – by going to certain global centers, if you will, we've minimized the effects of structural impacts and we're much more on a variable course at the structure right now. Did you want to add anything to that, Frank?

No. James I think Michael hit it. If there is a line of sight for us to get to a competitive margin and to get there we have to take actions or pull levers; that's where we are today. And if we don't think we can get there that's structural and we believe we've made the structural changes in our portfolio, so it comes down to execution. I think the challenge though is the decision every management team makes about cost reduction when there's pressure on revenue versus investment, because if you just live for short-term margins, eventually you're going to erode the value of your enterprise. So there's the debate that we saw in the fourth quarter where we saw some businesses where revenue pulled back and we made some tough decisions around headcount reductions primary Europe. We also made some decisions around the need to invest in positions for '14.

On your question of new business, you're right. We used to call out 3% headwind going into the year and we took the liberty of adding that to our results to show that we had competitive offerings. Going into '14 as I indicated in the first half of the year, I'd say we have tailwinds in the 1% range. Of course at the end of the year we did have some client losses that are taken into effect. But I'd use that as – but yes, that's about the right number. And obviously we helped to increase that. We had a number of pitches up in the review and hopefully we'll be successful on those. James Dix - Wedbush Securities Inc.: Great. Thanks very much for the color.

You're welcome.

Thank you. We are nearing the bottom of the hour, so I'll turn the call back over to speakers for any closing thoughts.

Well, as we've said, you can tell obviously 2013 was an interesting year for us. What we are excited about is going into 2014. We made some hard decisions in 2014 and we finished the year very strong. I had indicated we were looking for a strong close into '13 and we did it on the revenue side and we're repositioning our businesses for '14. So, we're looking forward to our next call and thank you all for your support.

Thank you. This does conclude today's conference. Thank you very much for joining. You may disconnect at this time.