<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549
                             _____________________

                                   Form 10-Q

              Quarterly Report Pursuant to Section 13 or 15(d) of
                      The Securities Exchange Act of 1934

               For the quarterly period ended September 30, 1999

                          Commission file no. 1-5029
                             ____________________


                        True North Communications Inc.
                        ------------------------------
            (Exact name of Registrant as specified in its charter)



              Delaware                                   36-108816
 -----------------------------------        -----------------------------------
   (State or other jurisdiction of            (I.R.S. Employer Identification
   incorporation or organization)                           No.)


         101 East Erie Street,
           Chicago, Illinois                               60611
 -----------------------------------                   -------------
         (Address of principal                           (Zip Code)
           executive offices)



                Registrant's Telephone Number:  (312) 425-6500
                                                --------------




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, and (2) has been subject to such filing requirements
for the past 90 days.  Yes X   No
                          ---    ---

The number of shares of Common Stock, 33 1/3 cents per share par value,
outstanding as of November 5, 1999 was 48,202,414.
<PAGE>

                        TRUE NORTH COMMUNICATIONS INC.
                                     INDEX

                                                                          Page
                                                                          Number
                                                                          ------
PART I.    FINANCIAL INFORMATION

  Item 1.  Financial Statements

           Unaudited Condensed Consolidated Statements of Income for
             the Three and Nine Months Ended September 30, 1999 and 1998.    3

           Condensed Consolidated Balance Sheets as of September 30, 1999
             (Unaudited) and December 31, 1998.                              4

           Unaudited Condensed Consolidated Statements of Cash Flows
             for the Nine Months Ended September 30, 1999 and 1998.          5

           Notes to Unaudited Condensed Consolidated Financial
             Statements.                                                     6

  Item 2.  Management's Discussion and Analysis of Financial
             Condition and Results of Operations.                           11

  Item 3.  Quantitative and Qualitative Disclosure about Market Risk.       16



PART II.   OTHER INFORMATION


  Item 1.  Legal Proceedings.                                               18


  Item 6.  Exhibits and Reports on Form 8-K.                                18

                                       2
<PAGE>

                TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
             UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
        FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
               (Amounts in thousands, except per share amounts)



<TABLE>
<CAPTION>
                                                         Three Months Ended                             Nine Months Ended
                                                           September 30,                                  September 30,
                                                ---------------------------------              ---------------------------------

                                                     1999                 1998                       1999                1998
                                                ------------         ------------              -------------        ------------

<S>                                               <C>                  <C>                       <C>                  <C>
Revenues                                            $356,722             $303,075                 $1,015,820            $910,084
                                                ------------         ------------              -------------        ------------

Operating Expenses:
    Salaries and employee benefits                   220,124              188,407                    640,004             575,565
    Office and general                               101,338               84,627                    289,573             259,370
    Restructuring and other charges                   76,400                4,344                     76,400               4,344
                                                ------------         ------------              -------------        ------------
        Total operating expenses                     397,862              277,378                  1,005,977             839,279
                                                ------------         ------------              -------------        ------------

Operating Income (Loss)                              (41,140)              25,697                      9,843              70,805

Other Income (Expense)                                  (968)                 149                     (1,870)             (7,443)
                                                ------------         ------------              -------------        ------------

Income (Loss) Before Taxes, Minority
    Interest and Equity Income                       (42,108)              25,846                      7,973              63,362

Provision (Benefit) For Taxes                        (11,283)              12,197                     10,502              29,869
                                                ------------         ------------              -------------        ------------

Income (Loss) Before Minority Interest
    and Equity Income                                (30,825)              13,649                     (2,529)             33,493

Minority Interest Expense                             (1,235)                (943)                    (2,014)             (3,246)

Equity Income                                            410                  518                      1,100               4,307
                                                ------------         ------------              -------------        ------------

Net Income (Loss)                                   $(31,650)            $ 13,224                 $   (3,443)           $ 34,554
                                                ============         ============              =============        ============


Per Share Information:
----------------------
  Basic earnings (loss) per share                   $  (0.66)            $   0.29                 $    (0.07)           $   0.76
                                                ============         ============              =============        ============
  Average common shares outstanding                   47,763               45,852                     46,996              45,613
                                                ============         ============              =============        ============

  Diluted earnings (loss) per share                 $  (0.66)            $   0.28                 $    (0.07)           $   0.73
                                                ============         ============              =============        ============
  Average common shares outstanding,
        assuming dilution                             47,763               47,734                     46,996              47,595
                                                ============         ============              =============        ============

   Cash dividends per common share                  $   0.15             $   0.15                 $     0.45            $   0.45
                                                ============         ============              =============        ============

</TABLE>



                See accompanying notes to financial statements.

                                       3
<PAGE>

                TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
              SEPTEMBER 30, 1999 (UNAUDITED) AND DECEMBER 31, 1998
                             (Amounts in thousands)



<TABLE>
<CAPTION>
                                                                              September 30,             December 31,
                                                                                   1999                     1998
                                                                           -----------------        -----------------
CURRENT ASSETS:
<S>                                                                          <C>               <C>    <C>
 Cash and cash equivalents                                                        $  122,317               $   88,685
 Short-term investments                                                               15,800                       --
 Marketable securities                                                                 6,406                  143,863
 Accounts receivable, net                                                            995,034                  873,675
 Other current assets                                                                114,299                   76,173
                                                                                  ----------               ----------
   Total current assets                                                            1,253,856                1,182,396
                                                                                  ----------               ----------

NONCURRENT ASSETS:
 Property and equipment, net                                                         139,712                  129,815
 Goodwill, net                                                                       484,769                  413,395
 Investment in affiliated companies                                                   27,009                   22,335
 Other noncurrent assets                                                              47,073                   41,137
                                                                                  ----------               ----------
   Total noncurrent assets                                                           698,563                  606,682
                                                                                  ----------               ----------
      Total assets                                                                $1,952,419               $1,789,078
                                                                                  ==========               ==========

CURRENT LIABILITIES:
 Accounts payable                                                                 $  996,605               $1,016,919
 Short-term bank borrowings                                                          193,551                  115,452
 Liability for federal and foreign taxes                                              11,383                   23,467
 Current portion of long-term debt                                                     7,109                   43,353
 Accrued expenses                                                                    212,387                  149,297
                                                                                  ----------               ----------
   Total current liabilities                                                       1,421,035                1,348,488
                                                                                  ----------               ----------

NONCURRENT LIABILITIES:
 Long-term debt                                                                       39,777                   15,300
 Liability for deferred compensation                                                  62,069                   69,193
 Other noncurrent liabilities                                                        122,839                   52,491
                                                                                  ----------               ----------
   Total noncurrent liabilities                                                      224,685                  136,984
                                                                                  ----------               ----------

STOCKHOLDERS' EQUITY:
 Preferred stock                                                                          --                       --
 Common stock                                                                         15,981                   15,479
 Paid-in capital                                                                     269,127                  231,899
 Retained earnings                                                                    45,705                   70,496
 Unrealized gain on marketable securities, net of tax                                  2,667                    5,102
 Cumulative translation adjustment                                                   (24,272)                 (14,220)
 Less-Treasury stock                                                                    (195)                  (5,150)
 Less-Deferred compensation                                                           (2,314)                      --
                                                                                  ----------               ----------
   Total stockholders' equity                                                        306,699                  303,606
                                                                                  ----------               ----------
      Total liabilities and stockholders' equity                                  $1,952,419               $1,789,078
                                                                                  ==========               ==========
</TABLE>


                See accompanying notes to financial statements.

                                       4
<PAGE>

                TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                             (Amounts in thousands)



<TABLE>
<CAPTION>
                                                                                      Nine Months Ended
                                                                                         September 30,
                                                                                 ------------------------------
                                                                                   1999                 1998
                                                                                 ---------            ---------
<S>                                                                              <C>                  <C>
Cash flows provided (used) by operating activities:
  Net income (loss)                                                              $ (3,443)            $  34,554
  Adjustments to reconcile net income to net cash
    provided (used) by operating activities:
      Depreciation and amortization                                                39,315                35,625
      Equity income                                                                  (686)               (4,306)
      Restructuring and other charges, net of tax                                  50,200                     -
      Other                                                                        12,590                   757
  Changes in assets and liabilities, net of acquisitions:
      Accounts receivable                                                         (59,304)              (41,249)
      Other current assets                                                        (19,400)              (13,269)
      Accounts payable and accrued expenses                                       (90,237)             (102,881)
                                                                                 --------             ---------
        Net cash used by operating activities                                     (70,965)              (90,769)
                                                                                 --------             ---------

Cash flows provided (used) by investing activities:
  Purchases of property and equipment                                             (35,494)              (23,819)
  Acquisitions and investments in businesses                                      (72,945)              (77,299)
  Purchases of short-term investments                                             (15,800)                    -
  Proceeds from sale of marketable securities                                     140,864                     -
                                                                                 --------             ---------
    Net cash provided (used) by investing activities                               16,625              (101,118)
                                                                                 --------             ---------

Cash flows provided (used) by financing activities:
  Payments of long-term debt                                                      (38,313)              (13,467)
  Additions to long-term debt                                                      26,545               137,913
  Increase (decrease) in short-term bank borrowings                                78,099                48,015
  Proceeds from issuance of common stock                                           12,728                13,813
  Proceeds from initial public offering of subsidiary                              42,048                     -
  Cash dividends paid                                                             (21,348)              (20,017)
  Payments for purchases of common stock                                          (10,424)               (2,994)
                                                                                 --------             ---------
    Net cash provided by financing activities                                      89,335               163,263
                                                                                 --------             ---------

Effects of exchange rates on cash and cash equivalents                             (1,363)                  642
                                                                                 --------             ---------

Net increase (decrease) in cash and cash equivalents                               33,632               (27,982)
Cash and cash equivalents at beginning of year                                     88,685               109,285
                                                                                 --------             ---------
Cash and cash equivalents at end of period                                       $122,317             $  81,303
                                                                                 ========             =========
</TABLE>



                See accompanying notes to financial statements.

                                       5
<PAGE>

                TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                (Amounts in millions, except per share amounts)

1. Basis of Presentation

     The condensed consolidated financial statements included herein have been
prepared by True North Communications Inc. (True North) without audit, and
include all adjustments, consisting only of normal recurring accruals, which
True North considers necessary for a fair presentation. The condensed
consolidated financial statements should be read in conjunction with the
financial statements and notes thereto included in True North's 1998 Annual
Report on Form 10-K.

     The operating results presented herein are not necessarily indicative of
the results for the year or other interim periods.

2. Restructuring and Other Charges

     In September 1999, management of True North committed to a formal plan to
restructure its operations and recorded a $76.4 million pre-tax charge ($50.2
million after-tax or $1.05 per basic share) in the third quarter, 1999. The
charge relates primarily to the costs to reduce employee positions and exit
facilities in connection with the combination and integration of True North's
two independent worldwide advertising agency networks. Bozell Worldwide's
international operations, along with Bozell Detroit and Bozell Costa Mesa, will
combine with FCB Worldwide and operate under the FCB Worldwide name. The
restructuring initiatives also include the sale or closing of certain
underperforming business units.

     A summary of the components of the restructuring charge is as follows:

<TABLE>
<CAPTION>

       <S>                                                     <C>
       Severance and termination benefits                      $41.4
       Lease terminations and other exit costs                  24.2
       Impairment loss on sale or closing of business units     10.8
                                                               -----
                                                               $76.4
                                                               =====
</TABLE>

     The involuntary severance and termination benefits portion of the charge
amounts to $41.4 million and reflects the elimination of approximately 640
positions worldwide, primarily in international locations. The employee groups
affected include executive and regional management, administrative, account
management, creative and media production personnel. True North anticipates that
the severance actions will be completed during 2000.

     The charge of $24.2 million associated with lease terminations and other
exit costs represents primarily the closure, abandonment and downsizing of
office space globally, including approximately 30 international locations. The
costs include $13.5 million of remaining lease obligations net of estimated
sublease income, as well as $5.9 million of impairment charges pertaining to
leasehold improvements and fixed assets that will no longer be used in the
combined operation. These actions are expected to be completed by mid-to-late
2000, with the cash portion of the charge to be paid out over the remaining
lease periods, which range from one to five years.

     The impairment loss on sale or closing of certain business units amounts to
$10.8 million and results from the decision to sell two business units, one in
the U.S., and one in the United Kingdom, and the closing of four other business
units and joint ventures, including the R/GA Digital Studios, which specializes
in digital production for advertising and film companies. The impairment loss
was computed based upon the difference between the estimated sales proceeds (if
any) and the carrying value of the related assets and investments and primarily
represents the impairment of goodwill associated with such units. These sales or
closures are expected to be completed by mid 2000.

                                       6
<PAGE>

                TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (CONTINUED)
                (Amounts in millions, except per share amounts)

     During the third quarter of 1998, True North reorganized its Poppe-Tyson
subsidiary prior to its merger with Modem Media into Modem Media.Poppe-Tyson,
Inc. The impact of the reorganization was a charge of $4.3 million. These costs
included severance, the write-down of computer equipment that was not being used
in the ongoing operations to net realizable value, and the costs to buyout
minority shareholders. To neutralize the earnings impact of these reorganization
costs, during the third quarter of 1998, True North sold a portion of its
investment in DoubleClick, Inc., resulting in a gain of $4.4 million, which has
been included as an element of "Other Income (Expense)."


3. Acquisitions

     In February 1999, True North issued approximately 1.2 million shares of its
Common Stock for all the outstanding capital stock of The Financial Relations
Board, Inc. ("FRB"), a Chicago-based investor relations firm. This acquisition
has been accounted for as a pooling of interests and, accordingly, the
consolidated financial statements have been restated for all periods prior to
the acquisition.

     The following summarizes the separate results of True North and FRB prior
to the restatement:

<TABLE>
<CAPTION>
                                               True North             FRB               Combined
                                            -----------------  ------------------  -------------------
<S>                                            <C>                   <C>                <C>
Year Ended December 31, 1998:
  Revenues                                          $1,242.3               $32.0             $1,274.3
  Net Income (Loss)                                     36.1                (8.9)                27.2

Year Ended December 31, 1997:
  Revenues                                          $1,204.9               $35.1             $1,240.0
  Net Income (Loss)                                    (50.0)                0.1                (49.9)
</TABLE>

     Included in the 1998 results of FRB are approximately $7.5 million of
merger related costs and other expense adjustments.

     Prior to the merger, FRB operated as an S-Corporation, therefore, their
results do not reflect corporate income taxes. Pro-forma net income for FRB,
assuming income taxes were charged (or credited) to operations, would be $(4.8
million) and $.01 million for the years ended December 31, 1998 and 1997,
respectively.

     In the first nine months of 1999, the cost of businesses acquired by True
North in transactions accounted for as purchases was $51.1 million, including
0.2 million shares of Common Stock and 0.2 million shares of treasury stock. The
excess of the purchase price over the fair value of net tangible assets acquired
was $46.8 million and is being amortized over periods not exceeding 40 years.

                                       7
<PAGE>

                TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (CONTINUED)
                (Amounts in millions, except per share amounts)

4. Comprehensive Income

     True North classifies its comprehensive income, which includes foreign
currency translation adjustments and unrealized gains and losses on marketable
securities available for sale, as a separate component of stockholders' equity.
Total comprehensive income for the three and nine months ended September 30,
1999 and 1998 was as follows:

<TABLE>
<CAPTION>
                                                 Three Months Ended                Nine Months Ended
                                                   September 30,                     September 30,
                                          -----------------------------     -----------------------------
                                               1999             1998             1999             1998
                                          ------------     ------------     ------------     ------------
<S>                                         <C>              <C>              <C>              <C>
Net income (loss)                               $(31.7)          $ 13.2           $ (3.4)           $34.6
Foreign currency translation                       1.5              4.9            (10.1)             1.9
Unrealized gains (loss) on marketable
     securities                                    0.9            (15.6)            (2.4)             2.7
                                          ------------     ------------     ------------     ------------
        Total comprehensive income (loss)       $(29.3)          $  2.5           $(15.9)           $39.2
                                          ============     ============     ============     ============
</TABLE>

5. Marketable Securities

     True North's marketable securities consisted of:

<TABLE>
<CAPTION>
                                            September 30,           December 31,
                                                1999                    1998
                                           --------------           ------------
<S>                                        <C>                      <C>
Publicis SA                                          $  -                 $140.9
DoubleClick, Inc.                                     3.0                    3.0
Other                                                 3.4
                                                ---------              ---------
                                                     $6.4                 $143.9
                                                =========              =========
</TABLE>

     True North has designated its investments in the above securities as
available-for-sale and the investments are carried at fair value, with any
unrealized gains or losses, net of tax, reported as a separate component of
comprehensive income.

     On June 14, 1999, True North sold its entire investment in Publicis SA for
net cash proceeds of $135.3 and realized a pre-tax gain of $1.4 million ($0.8
million after-tax or $0.02 per share).

     During the first nine months of 1999, True North sold 0.1 million shares
(adjusted for a 2 for 1 stock split) of DoubleClick, Inc. for net cash proceeds
of $5.5 million and realized a pre-tax gain of $5.1 million ($2.9 million after-
tax or $0.06 per share).

6. Contingencies

     On December 2, 1997, Mazda Motor of America, Inc. ("Mazda"), a former
client of the Company's subsidiary, Foote, Cone & Belding Advertising, Inc.
("FCB"), initiated an arbitration against FCB before the American Arbitration
Association in Los Angeles, California. Mazda seeks indemnity and reimbursement
for liabilities it incurred or expects to incur in connection with automobile
lease advertising that aired in 1996 and 1997. Mazda is currently seeking from
FCB approximately $9.0 million in damages, exclusive of interest, costs and
attorneys' fees, arising from (a) Mazda's settlement of false advertising claims
asserted by the Federal Trade Commission ("FTC"), various state attorneys
general, and a class of consumers and (b) Mazda's settlement on or about
September 30, 1999 of claims asserted by the FTC and various state attorneys
generals, which

                                       8
<PAGE>

                TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
         UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (CONTINUED)
                (Amounts in millions, except per share amounts)

alleged that Mazda violated the consent orders entered in the previous FTC and
state attorneys general actions. FCB intends to defend Mazda's claims
vigorously. In addition, FCB has filed a counterclaim in the arbitration seeking
approximately $5.5 million in unpaid commission for planning and placing
advertising during the final months of FCB's relationship with Mazda. The
arbitration hearing is scheduled to commence on January 24, 2000.

     On November 6, 1998, Publicis SA announced its intention to convert True
North's 26.5% investment in Publicis Communication to approximately 0.8 million
of its publicly traded shares. Despite True North's objections, this transaction
was approved by the shareholders of Publicis SA and Publicis Communication in
special shareholders' meetings held in December 1998 and closed shortly
thereafter. As a result, True North owned approximately 8.8% of Publicis SA,
which was recorded as an "available-for-sale security" in marketable securities.

     The book value of True North's 26.5% investment in Publicis Communication
at the date of conversion was $164.5 million. The fair value of the Publicis SA
shares (based upon a December 14, 1998 Publicis closing price of $169.15 per
share) was $134.0 million. Accordingly, True North recorded a pre-tax loss of
$30.5 million in the fourth quarter of 1998 as a result of the involuntary
conversion of its investment in Publicis Communication to shares of Publicis SA.
In addition, True North recorded a deferred tax obligation of approximately $3.1
million upon the exchange. As a result, the after tax impact of this transaction
was a loss of approximately $33.7 million.

     As described in Note 5, on June 14, 1999, True North sold its entire
investment in Publicis SA.

     On May 5, 1999 Publicis SA, a greater than 5% shareholder, filed
counterclaims in international arbitration proceedings which had been instituted
by True North with the London Court of International Arbitration. Publicis SA
seeks damages in the amount of 382 million French Francs (approximately $62
million) for among other things, the alleged breaches of the May 1997 Separation
Agreement between the parties and other actions which Publicis SA alleges
creates liabilities associated with the arbitration proceedings. The
counterclaims follow True North's direct claims against Publicis SA in the
amount of $106 million for alleged breaches by Publicis SA of its obligations
under the May 1997 Separation Agreement and for additional compensation for its
investment in Publicis Communication. True North believes it has meritorious
defenses to Publicis' counterclaims and intends to vigorously defend them. The
parties have also submitted claims for their respective attorney's fees and
expenses. True North and Publicis appeared before the arbitration tribunal from
September 27 through October 9, 1999 and presented evidence with regard to their
respective claims. The tribunal informed the parties that no decision with
regard to such claims would likely be issued until after the new year.

     True North is a party to several other lawsuits incidental to its business.
It is not possible at the present time to estimate the ultimate liability, if
any, of True North with respect to litigation matters; however, management
believes that any ultimate liability will not be material in relation to True
North's consolidated results of operations or financial position.

7. Subsidiary Initial Public Offering

     Effective February 10, 1999, a majority-owned subsidiary of True North,
Modem Media. Poppe Tyson, Inc. ("MMPT") completed an initial public offering
("IPO") of its common stock. The number of shares issued was 3.0 million at a
price of $16 per share, with net proceeds totaling $42.0 million. As a result of
the IPO, True North now owns approximately 50% of MMPT, down from its previous
70% ownership, and controls approximately 80% of the related stockholder votes.
MMPT will use the proceeds from the IPO for working capital and capital
expenditures.

     As a result of this transaction, True North recorded a $2.6 million gain,
net of $2.0 million of deferred income taxes, as a credit to stockholders'
equity.

                                       9
<PAGE>

                TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
         UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (CONTINUED)
                (Amounts in millions, except per share amounts)

     In May 1999, True North and MMPT entered into a stockholders' agreement
("Stockholders' Agreement") which stipulates, among other things, that upon the
earlier of (i) the date True North and its affiliates no longer own at least 35%
of the outstanding capital stock of MMPT and (ii) June 30, 2000, True North
agrees that it and its affiliates will convert all of their shares of Class B
common stock of MMPT into shares of Class A common stock of MMPT and thereby
entitled to only one vote per share versus the five votes per share of Class B
common stock.

     In August 1999, True North and MMPT entered into a registration rights
agreement that contains provisions granting the holders of Class B common stock
the right to participate in any underwritten public offering that MMPT may
initiate, subject to certain limitations. In addition, the agreement also
provides the holders of Class B common stock the right to initiate the
registration of their securities, subject to certain timing and other
limitations.

8. Stock-Based Compensation Plans

     Effective in 1998, True North initiated a Restricted Stock Program for
certain key employees whereby participants of the program can elect to exchange
one-third of their cash incentive compensation for 115% of such cash
compensation payable in restricted stock of the Company. One-third of the shares
vest upon grant and the remaining shares vest equally over the following two
years.

     During the first nine months of 1999, 0.2 million shares of restricted
stock were issued. The shares issued under this plan were recorded at their
market value on date of grant with a corresponding charge to stockholders'
equity for the unearned portion. The unearned portion is being amortized as
compensation expense on a straight-line basis over the vesting period.

                                       10
<PAGE>

                TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
           ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS
                (Amounts in millions, except per share amounts)

     Certain statements contained in this Form 10-Q under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" constitute "forward-looking statements" within the meaning of
Section 21E(i)(1) of the Securities Exchange Act of 1934. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results of True North to be materially different from
any future results expressed or implied by these statements. Such factors
include, among other things, the following: general economic and business
conditions, changes in demand for the company's services, changes in
competition, the ability of the company to integrate acquisitions or complete
future acquisitions, interest rate fluctuations, dependence upon and
availability of qualified personnel, and changes in government regulation. In
light of these and other uncertainties, the forward-looking statements included
in this document should not be regarded as a representation by True North that
True North's plans and objectives will be achieved.

THREE MONTHS ENDED SEPTEMBER 30, 1999 VERSUS 1998
-------------------------------------------------

Results of Operations
---------------------

     The net loss for the third quarter of 1999 was $31.7 million or $0.66 per
share on a diluted basis. This compares to net income of $13.2 million or $0.28
per share in the corresponding quarter of 1998. Excluding the impact of two pre-
tax unusual charges ($76.4 million in 1999 primarily for the FCB/Bozell
realignment; and $4.3 million in 1998 for the Modem Media.Poppe Tyson pre-IPO
reorganization) and gains on the sales of DoubleClick securities ($1.1 million
in 1999 and $4.4 million in 1998), net income for the third quarter ended
September 30, 1999 was $17.9 million or $0.36 diluted per share, compared with
$13.2 million or $0.28 diluted per share in the year-ago quarter. The results
for 1998 have been restated to reflect True North's February, 1999 pooling of
interests transaction with FRB.

     Consolidated revenues increased $53.6 million or 17.7% to $356.7 million in
the third quarter of 1999 from $303.1 million in the comparable period in 1998.
Revenues from the U.S. operations increased $47.1 million or 21.1% to $270.4
million while international revenues increased 8.2% to $86.3 million.
Approximately one-half of the worldwide growth in revenues was due to
acquisitions while changes in foreign currency rates had a slight negative
impact on international operations. Excluding acquisitions, divestitures and the
effects of foreign currency translation, consolidated revenues increased by 8.8%
from the prior year.

     Salaries and related benefits increased $31.7 million or 16.8% in the third
quarter of 1999 compared to the same year ago period. Excluding the impact of
acquisitions, divestitures and foreign exchange variances, total salaries and
related benefits increased 7.9%.

     Office and general expenses increased by 19.7% or $16.7 million in the
third quarter of 1999 over 1998. Excluding the impact of acquisitions,
divestitures and foreign exchange variances, this expense category increased
10.2%, primarily attributable to normal growth and Y2K compliance costs.

                                       11
<PAGE>

                TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
           ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)
                (Amounts in millions, except per share amounts)

     In September 1999, management of True North committed to a formal plan to
restructure its operations and recorded a $76.4 million pre-tax charge ($50.2
million after-tax or $1.05 per basic share) in the third quarter, 1999. The
charge relates primarily to the costs to reduce employee positions and exit
facilities in connection with the combination and integration of True North's
two independent worldwide advertising agency networks. Bozell Worldwide's
international operations, along with Bozell Detroit and Bozell Costa Mesa, will
combine with FCB Worldwide and operate under the FCB Worldwide name. The
restructuring initiatives also include the sale or closing of certain
underperforming business units.

     A summary of the components of the restructuring charge is as follows:

<TABLE>
<CAPTION>

                 <S>                                                     <C>
                 Severance and termination benefits                      $41.4
                 Lease terminations and other exit costs                  24.2
                 Impairment loss on sale or closing of business units     10.8
                                                                         -----
                                                                         $76.4
                                                                         =====
</TABLE>

     The involuntary severance and termination benefits portion of the charge
amounts to $41.4 million and reflects the elimination of approximately 640
positions worldwide, primarily in international locations. The employee groups
affected include executive and regional management, administrative, account
management, creative and media production personnel. True North anticipates that
the severance actions will be completed during 2000.

     The charge of $24.2 million associated with lease terminations and other
exit costs represents primarily the closure, abandonment and downsizing of
office space globally, including approximately 30 international locations. The
costs include $13.5 million of remaining lease obligations net of estimated
sublease income, as well as $5.9 million of impairment charges pertaining to
leasehold improvements and fixed assets that will no longer be used in the
combined operation. These actions are expected to be completed by mid-to-late
2000, with the cash portion of the charge to be paid out over the remaining
lease periods, which range from one to five years.

     The impairment loss on sale or closing of certain business units amounts to
$10.8 million and results from the decision to sell two business units, one in
the U.S., and one in the United Kingdom, and the closing of four other business
units and joint ventures, including the R/GA Digital Studios, which specializes
in digital production for advertising and film companies. The impairment loss
was computed based upon the difference between the estimated sales proceeds and
the carrying value of the related assets and investments and primarily
represents the impairment of goodwill associated with such units. These sales or
closures are expected to be completed by mid 2000.

     True North anticipates expense savings of close to pre-tax $25.0 million on
an annualized basis, with approximately half of such savings occurring in 2000
and the full amount realized in 2001 and thereafter.

     During the third quarter of 1998, True North reorganized its Poppe-Tyson
subsidiary prior to its merger with Modem Media into Modem Media.Poppe-Tyson,
Inc. The impact of the reorganization was a charge of $4.3 million. These costs
included severance, the write-down of computer equipment that was not being used
in the ongoing operations to net realizable value, and the costs to buyout
minority shareholders. To neutralize the earnings impact of these reorganization
costs, during the third quarter of 1998, True North sold a portion of its
investment in DoubleClick,

                                       12
<PAGE>

                TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
           ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)
                (Amounts in millions, except per share amounts)

Inc., resulting in a gain of $4.4 million, which has been included as an element
of "Other Income (Expense)."

Other Income (Expense) for both comparable periods was as follows:

<TABLE>
<CAPTION>
                                                                          Three Months Ended
                                                                             September 30,
                                                                  --------------------------------
                                                                        1999              1998
                                                                  --------------    --------------

<S>                                                                   <C>               <C>
Interest income                                                       $ 1.8             $ 1.7
Interest expense                                                       (3.9)             (5.9)
Gain on sale of marketable securities and other                         1.1               4.3
                                                                       ----             -----
                                                                      $(1.0)            $ 0.1
                                                                      =====             =====
</TABLE>

     Interest expense decreased by $2.0 million in the third quarter of 1999
versus 1998 due primarily to lower average debt levels resulting from the use of
the proceeds of the June, 1999 sale of True North's holdings in Publicis SA to
reduce short term borrowings.

     The effective tax rate in the third quarter of 1999 was a benefit of 26.8%
versus 47.2% in 1998. The 1999 benefit rate was negatively impacted by the
components of the restructuring charge, including the write off of intangible
assets and lower foreign tax rates. Excluding the restructuring and other
charges, the effective rate was 43.5%. The effective rate in 1998 was negatively
impacted by losses of foreign subsidiaries with no corresponding tax benefit.

     Minority interest expense was $1.2 million in three months ended September
30, 1999 compared to $0.9 million in 1998. This increase is due primarily to
favorable operating results at MMPT partially offset by lower net income in
certain Latin American and European operations.

     Equity income decreased by $0.1 million as a result of the Company no
longer reflecting an equity pick-up in its investment in Publicis Communication.

NINE MONTHS ENDED SEPTEMBER 30, 1999 VERSUS 1998
------------------------------------------------

Results of Operations
---------------------

     The net loss for the first nine months of 1999 was $3.4 million or $0.07
per share on a diluted basis. This compares to net income of $34.6 million or
$0.73 per share in the corresponding period of 1998. The results for 1998 have
been restated to reflect True North's February 1999 pooling of interests with
FRB. Excluding the impact of two pre-tax unusual charges ($76.4 million in 1999
primarily for the FCB/Bozell realignment; and $4.3 million in 1998 for the Modem
Media.Poppe Tyson pre-IPO reorganization) and gains on the sales of DoubleClick
securities ($5.1 million in 1999 and $4.4 million in 1998), net income for the
nine-month period ended September 30, 1999 was $43.9 million or $0.90 diluted
per share, compared with $34.5 million or $0.73 diluted per share in the first
nine months of last year.

                                       13
<PAGE>

                 TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
           ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)
                (Amounts in millions, except per share amounts)

     Consolidated revenues increased $105.7 million or 11.6% to $1,015.8 million
in the first nine months of 1999 from $910.1 million in the comparable period in
1998. Revenues from the U.S. operations increased $87.8 million or 13.1% to
$758.5 million while international revenues increased 7.5% to $257.3 million.
Approximately two-thirds of the worldwide growth in revenues was due to
acquisitions while changes in foreign currency rates had a slight negative
impact on international operations. Excluding acquisitions, divestitures and the
effects of foreign currency translation, consolidated revenues increased by 5.1%
period over period.

     Salaries and related benefits increased $64.4 million or 11.2% in the first
nine months of 1999 compared to the same year ago period. Excluding the impact
of acquisitions, divestitures and foreign exchange variances, total salaries and
related benefits increased 5.3%.

     Office and general expenses increased by 11.6% or $30.2 million in the
first nine months of 1999 over 1998. Excluding the impact of acquisitions,
divestitures and foreign exchange variances, this expense category increased
4.6%.

     As discussed earlier, True North recorded a pre-tax charge of $76.4 million
($50.2 million or $1.07 per basic share) in the third quarter of 1999.

Other Income (Expense) for both comparable periods was as follows:

<TABLE>
<CAPTION>
                                                                           Nine Months Ended
                                                                             September 30,
                                                                  --------------------------------
                                                                        1999              1998
                                                                  --------------    --------------

<S>                                                                   <C>               <C>
Interest income                                                       $  5.3            $  3.8
Interest expense                                                       (13.8)            (16.6)
Gain on sale of marketable securities and other                          6.6               5.4
                                                                      ------            -------
                                                                      $ (1.9)           $ (7.4)
                                                                      ======            =======
</TABLE>

     Interest income increased by $1.5 million in the first nine months of 1999
compared to 1998 due primarily to investment income at MMPT from the proceeds
from its initial public offering in February, 1999. Interest expense decreased
by $2.8 million in the first nine months of 1999 versus 1998 due primarily to
lower debt levels. During the first nine months of 1999, True North recognized a
pre-tax gain of $1.4 million ($0.8 million after-tax or $0.02 per share) on the
sale of its holdings in Publicis SA and a pre-tax gain of $5.1 million ($2.9
million or $0.06 per share) on the sale of a portion of its holdings in
DoubleClick, Inc.

     The 1999 effective tax rate for the nine months ended September 30, 1999
was impacted by the restructuring charge, including the write off of intangible
assets and lower foreign tax rates. Excluding the negative impact from the
restructuring charge, the effective tax rate in the first nine months of 1999
was 43.5% versus 47.1% in 1998. The effective rate in 1998 was negatively
impacted by losses of foreign subsidiaries with no corresponding tax benefit.

     Minority interest expense was $2.0 million in the nine months ended
September 30, 1999 compared to $3.2 million in 1998. This decrease is due
primarily to lower operating results in certain Latin American and European
operations.

                                      14

<PAGE>

                TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
           ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)
                (Amounts in millions, except per share amounts)

     Equity income decreased by $3.2 million as a result of True North no longer
reflecting an equity pick-up in its investment in Publicis Communication.

Liquidity and Capital Resources
-------------------------------

     At September 30, 1999, True North's cash and cash equivalents totaled
$122.3 million, which is an increase of $33.6 million over the 1998 year-end
balances of $88.7 million. The increase is due primarily to the proceeds
received by MMPT from the February 1999 initial public offering of its common
stock.

Operating Activities
--------------------

     True North's funds from operating activities consist primarily of net
income adjusted for non-cash items, including depreciation and amortization, and
changes in operating assets and liabilities.

     The net cash used by operating activities in the first nine months of 1999
was $71.0 million. This reflects payments typically made in the first half of
the year for bonuses and contributions to profit sharing plans for the prior
years performance. It also includes production costs of client commercials,
which will be shown later in the year with such costs billed to clients when the
commercials are completed.

Investing Activities
--------------------

     True North's net capital expenditures for property and equipment were $35.5
million for the first nine months of 1999. These expenditures were primarily
related to the Company's worldwide investment in technology coupled with
leasehold improvements related to office moves.

     In the first nine months of 1999, True North acquired several companies to
enhance its network, primarily in the U.S. These acquisitions were financed by
the issuance of 0.5 million shares of Common Stock and Treasury Stock and
additional short-term borrowings.

     In the first nine month of 1999, True North has received $140.8 million of
proceeds from the sale of marketable securities.

Financing Activities
--------------------

     The net change in short-term bank borrowings reflects the use of the $135.3
million cash proceeds from the sale of True North's investment in Publicis SA to
reduce such borrowings offset by additional debt used to finance the acquisition
program and seasonal needs.

     In May 1999, True North obtained two three year term loans totaling $25.0
million which refinanced similar loans expiring on May 24, 1999. A $15.0 million
loan carries a fixed interest rate of 6.52% and a $10.0 million loan carries a
fixed rate of 6.785%.

     On May 27, 1999, True North extended its 364-day credit agreement for up to
$75.0 million of borrowings as part of its $250.0 million revolving credit
agreement. The terms of the extension include the payment of a commitment fee to
the bank of 0.07% and the increase in the spread over the Euro currency rate of
0.25%. At September 30, 1999, True North had $75.0 million outstanding under its
$175.0 million five year revolving credit facility.

                                       15
<PAGE>

                TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
           ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)
                (Amounts in millions, except per share amounts)

     At September 30, 1999, True North was in compliance with all covenants and
conditions related to these agreements.


Year 2000 Compliance
--------------------

     True North relies on both information technology ("IT") and non-IT computer
systems in its operations. Critical IT systems include True North's operating
and accounting systems, such as IT software applications that allow True North
to maintain client advertising information and to communicate with its vendors
and clients. The non-IT systems are primarily telecommunications systems and the
embedded microprocessors that control building systems, such as security
systems, lighting, fire and safety systems, and heating, ventilating and air
condition systems.

     In 1997, True North began to address the year 2000 compliance issue (that
is, the fact that some systems may fail or produce inaccurate results using
dates in or around the year 2000). True North has formed a year 2000 task force
under its Chief Information Officer and this task force has developed a
comprehensive program to test the Company's principal hardware and software
applications for potential year 2000 problems. True North is assessing the
effect of the year 2000 compliance issue on its non-IT systems and intends to
replace non-IT systems as necessary to become year 2000 ready by December 1999.

     True North licenses substantially all of its systems from third party
software vendors. True North has received confirmation of year 2000 compliance
status from suppliers of its primary business and financial systems. Internal
testing, to the extent practical, is being done to ensure that such systems will
function properly. True North has also retained outside consultants to assist in
the testing and remediation efforts. Testing and remediation of all systems is
scheduled to be completed prior to year end 1999.

     True North is continuing to develop written contingency plans to address
the risks created by the year 2000 compliance issue. These plans include
procuring alternative vendors, if available, should True North conclude that an
existing supplier will not be year 2000 ready.

     During 1998 and 1997, True North incurred less than $0.5 million of
expenses related to this issue in each year, and expects to incur an additional
$3.0 million to $3.5 million of such expenses in 1999. Capital spending to
replace non-compliant hardware and software is expected to be approximately $5.0
million in 1999. Funding for year 2000 remediation will be generated from on-
going operations and available borrowings under the Company's various credit
agreements.

     True North is currently unaware of any events, trends, or conditions
regarding this issue that may have a material effect on True North's results of
operations, liquidity, and financial position. However, there can be no
assurance that year 2000 remediation by True North or third parties will be
properly and timely completed and failure to do so could have a material adverse
effect on True North's financial condition.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

       During 1993, True North entered into an interest rate swap contract with
a bank which became effective in June 1994. Under this arrangement, True North
received LIBOR and paid a fixed interest rate of 6.1% on a notional amount of
$25.0 million in borrowing during the

                                       16
<PAGE>

                TRUE NORTH COMMUNICATIONS INC. AND SUBSIDIARIES
           ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)
                (Amounts in millions, except per share amounts)

period from June 1994 to June 1999. Other than this interest rate swap contract,
True North has not entered into any market risk sensitive contracts during the
past three years.

     True North's consolidated financial statements are denominated in U.S.
dollars. In 1998 and in the first nine months of 1999, True North derived over
25% of its revenues from operations outside of the United States. Currency
fluctuations may give rise to translation gains and losses when financial
statements of foreign operating units are translated into U.S. dollars.
Significant strengthening of the U.S. dollar against major foreign currencies
could have an adverse impact on True North's results of operations. In general,
True North incurs most of its costs to support the related revenues in the same
currency in which these revenues are billed, thereby reducing exposure to
currency fluctuations. In the past, True North has not hedged foreign currency
profits into U.S. dollars, because its management has believed that, over time,
the costs of a hedging program outweigh any benefit of greater predictability in
the Company's U.S. dollar denominated profits. However, as True North continues
to extend the depth and breadth of its foreign operations, management will from
time-to-time reconsider the issue of whether a foreign currency hedging program
would be beneficial to its operations.

                                       17
<PAGE>

                     PART II.  OTHER INFORMATION



Item 1.   Legal proceedings

Response to this item is incorporated by reference to Note 6 to the Registrant's
unaudited notes to financial statement in this Quarterly Report.

Item 6.   Exhibits and Reports on Form 8-K.

     (a)  Exhibits:

          10.1 Stockholders Agreement dated as of May 4, 1999, by and among True
          North Communications Inc, Modem Media.Poppe Tyson, Inc., Gerald M.
          O'Connell and Robert C. Allen, II.

          10.2 Registration Rights Agreement dated as of August 1, 1999, by and
          among Modem Media.Poppe Tyson, Inc., the holders of Class A Common
          Stock listed on the signature page thereto and the holders of Class B
          Common Stock listed on the signature page thereto.

     (b)  Reports on Form 8-K:

          (1) Form 8-K filed on September 9, 1999, reported certain recent
          events concerning the Registrant's realignment and restructuring of
          agency operations.

                                       18
<PAGE>

                                   SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                TRUE NORTH COMMUNICATIONS INC.
                                         (Registrant)


                                           Kevin J. Smith
                                  -------------------------------
                                            (Signature)


                                  Kevin J. Smith
                                  Senior Vice President
                                  Chief Accounting Officer



Date: November 15, 1999

                                       19