FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
ACT OF 1934.

For the quarterly period ended June 30, 2000

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.

For the transition period from
Commission file number 001-14093

                              YOUNG & RUBICAM INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         Delaware                                                13-1493710
         --------                                                ----------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

285 Madison Avenue, New York, New York                            10017
--------------------------------------                            -----
(Address of principal executive offices)                          (Zip Code)

                                 (212) 210-3000
              (Registrant's telephone number, including area code)

Indicate by checkmark whether the registrant: (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [X]. No [ ].

The number of shares  outstanding of the  Registrant's  Common Stock,  $0.01 par
value, as of July 31, 2000 was 73,296,883.


<PAGE>

                  YOUNG & RUBICAM INC. AND SUBSIDIARY COMPANIES

                                    FORM 10-Q

                                TABLE OF CONTENTS

PART I: FINANCIAL INFORMATION                                           PAGE NO.

  Item 1.   Financial Statements

              Consolidated Condensed Statements of Operations for the
              Three and Six Months Ended June 30, 2000 and 1999                2

              Consolidated Condensed Balance Sheets as of
              June 30, 2000 and December 31, 1999                              3

              Consolidated Condensed Statements of Cash Flows for the
              Six Months Ended June 30, 2000 and 1999                          4

              Notes to Consolidated Condensed Financial Statements         5 - 8

  Item 2.   Management's Discussion and Analysis of Financial
            Condition and Results of Operations                           9 - 12

  Item 3.   Quantitative and Qualitative Disclosures About Market Risk        13

PART II: OTHER INFORMATION

  Item 4.   Submission of Matters to a Vote of Security Holders               14

  Item 6.   Exhibits and Reports on Form 8-K                                  14

SIGNATURES                                                                    15

EXHIBIT INDEX                                                                 16

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This  document,  information  included in future filings by Young & Rubicam Inc.
("Y&R") with the United States  Securities and Exchange  Commission (the "SEC"),
and  information  contained  in  written  materials,  press  releases  and  oral
statements  issued by or on behalf of Y&R contain,  or may  contain,  statements
that constitute  "forward-looking  statements" within the meaning of Section 27A
of the  Securities  Act of 1933, as amended,  and Section 21E of the  Securities
Exchange Act of 1934, as amended.  These statements include statements regarding
the intent,  belief or current  expectations  of Y&R or its officers  (including
statements preceded by, followed by or that include forward-looking  terminology
such  as  "may,"  "will,"  "should,"   "believes,"   "expects,"   "anticipates,"
"estimates,"  "continues"  or similar  expressions  or  comparable  terminology,
including  the  negative  thereof)  with  respect  to  various  matters.   These
forward-looking  statements include  statements in the "Management's  Discussion
and Analysis of Financial  Condition and Results of Operations"  section of this
document  relating to our  performance.  It is important to note that our actual
results could differ materially from those anticipated in these  forward-looking
statements  depending on, among other important  factors,  (i) revenues received
from clients,  including under incentive compensation  arrangements entered into
by us with certain clients,  (ii) gains or losses of clients and client business
and projects, as well as changes in the marketing and communications  budgets of
clients,  (iii) our ability to successfully  integrate  companies and businesses
that we acquire,  (iv) the overall  level of economic  activity in the principal
markets in which we conduct  business and other trends  affecting  our financial
condition  or  results  of  operations,  (v) the  impact of  competition  in the
marketing  and  communications  industry and (vi) our  liquidity  and  financing
plans. All forward-looking  statements in this document are based on information
available  to us on  the  date  hereof.  We  do  not  undertake  to  update  any
forward-looking  statements  that  may be made by or on  behalf  of us,  in this
document or otherwise.

<PAGE>

YOUNG & RUBICAM INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)       THREE MONTHS ENDED                SIX MONTHS ENDED
                                                               JUNE 30,                         JUNE 30,
                                                    -------------------------------   ----------------------------
                                                         2000            1999              2000            1999
------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>              <C>              <C>              <C>
Revenues                                            $   495,009      $   414,361      $   943,291      $   798,234

Compensation expense, including employee benefits       284,043          239,016          556,445          474,034
General and administrative expenses                     145,672          122,511          277,288          236,808
                                                    -----------      -----------      -----------      -----------
Operating expenses                                      429,715          361,527          833,733          710,842
                                                    -----------      -----------      -----------      -----------
Operating profit                                         65,294           52,834          109,558          87,392
Interest expense, net                                    (4,970)          (2,799)          (8,119)         (4,445)
Other income                                              1,359               --           12,155              --
                                                    -----------      -----------      -----------      -----------
Income before income taxes                               61,683           50,035          113,594          82,947
Income tax provision                                     24,674           20,514           45,438          34,008
                                                    -----------      -----------      -----------      -----------
                                                         37,009           29,521           68,156          48,939

Equity in net income of unconsolidated affiliates         1,520            1,668            2,247           1,652
Minority interest in net income of consolidated
  subsidiaries                                           (1,066)            (604)          (1,348)           (305)
                                                    -----------      -----------      -----------      -----------

Net income                                          $    37,463      $    30,585      $    69,055      $    50,286
                                                    ===========      ===========      ===========      ===========

Earnings per share:
  Basic                                             $      0.52      $     0.45       $     0.95       $      0.75
                                                    ===========      ===========      ===========      ===========
  Diluted                                           $      0.45      $     0.37       $     0.83       $      0.61
                                                    ===========      ===========      ===========      ===========

Weighted average shares outstanding (Note 2):
  Basic                                              72,442,663       67,502,175       72,627,811       66,912,004
                                                    ===========      ===========      ===========      ===========
  Diluted                                            86,220,419       82,200,161       86,388,529       82,047,778
                                                    ===========      ===========      ===========      ===========
</TABLE>

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


                                       2

<PAGE>
YOUNG & RUBICAM INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)                                             JUNE 30,    DECEMBER 31,
                                                                                                 2000          1999
----------------------------------------------------------------------------------------------------------------------
<S>                                                                                          <C>           <C>
CURRENT ASSETS

   Cash and cash equivalents                                                                 $   173,256   $   144,517
   Accounts  receivable,  net of allowance for doubtful  accounts of $24,223 and
     $25,012 at June 30, 2000 and December 31, 19999, respectively                             1,008,933     1,031,445
   Costs billable to clients                                                                     115,014        76,982
   Other receivables                                                                              41,994        43,138
   Deferred income taxes                                                                          50,566        50,302
   Prepaid expenses and other current assets                                                      29,250        27,803
                                                                                             -----------   -----------
        Total Current Assets                                                                   1,419,013     1,374,187
                                                                                             -----------   -----------

NONCURRENT ASSETS

   Property,  leasehold  improvements  and equipment at cost, net of accumulated
     depreciation and amortization of $263,824 and $248,112 at June 30, 2000 and
     December 31, 1999, respectively                                                             189,362       194,569
   Deferred income taxes                                                                         149,287        34,875
   Intangibles,   net  of  accumulated amortization of $98,627 and $91,285 at
     June 30, 2000 and December 31, 1999, respectively                                           371,873       353,860
   Equity in net assets of and advances to unconsolidated affiliates                              35,067        36,001
   Investments in equity securities                                                              151,884       366,590
   Other noncurrent assets                                                                        48,283        54,199
                                                                                             -----------   -----------
       Total Assets                                                                          $ 2,364,769   $ 2,414,281
                                                                                             ===========   ===========

CURRENT LIABILITIES
   Accounts payable                                                                          $ 1,201,938   $ 1,206,385
   Accrued expenses and other current liabilities                                                217,853       226,006
   Accrued payroll and bonuses                                                                    53,779        78,531
   Advance billings                                                                              134,400       132,130
   Accrued taxes on income                                                                        15,286        24,844
   Short-term debt                                                                                41,933        31,710
                                                                                             -----------   -----------
        Total Current Liabilities                                                              1,665,189     1,699,606
                                                                                             -----------   -----------

NONCURRENT LIABILITIES
   Long-term debt                                                                                297,920       127,568
   Deferred compensation                                                                          31,957        31,328
   Other noncurrent liabilities                                                                  104,390       117,405

Minority Interests                                                                                14,681        14,194
Commitments and Contingencies
                                                                                             -----------   -----------
STOCKHOLDERS' EQUITY

   Money Market Preferred Stock - cumulative variable dividend; liquidating value of $115
     per share; one-tenth of one vote per share; authorized - 50,000 shares; issued and
     outstanding - 87 shares                                                                                        --
   Cumulative Participating Junior Preferred Stock - minimum $1.00 dividend; liquidating
     value of $1.00 per share; 100 votes per share; authorized - 2,500,000 shares,
     issued and outstanding - 0 shares                                                                              --
   Common stock - par value $.01 per share; authorized - 250,000,000 shares; issued and
     outstanding - 73,160,024 shares and 72,950,004 shares at June 30, 2000 and
     December 31, 1999, respectively (excluding 192,684 shares and 2,471 shares in treasury)         734           730
   Capital surplus                                                                               872,870       908,969
   Accumulated deficit                                                                          (530,994)     (596,470)
   Net unrealized (depreciation) appreciation in equity securities, net of tax                   (27,792)      144,977
   Cumulative translation adjustment                                                             (53,915)      (33,092)
   Pension liability adjustment                                                                     (817)         (817)
                                                                                             -----------   -----------
                                                                                                 260,086       424,297
   Common stock in treasury, at cost                                                              (9,454)         (117)
                                                                                             -----------   -----------
        Total Stockholders' Equity                                                               250,632       424,180
                                                                                             -----------   -----------
        Total Liabilities and Stockholders' Equity                                           $ 2,364,769   $ 2,414,281
                                                                                             ===========   ===========
</TABLE>

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

                                       3
<PAGE>
YOUNG & RUBICAM INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                                                       SIX MONTHS ENDED JUNE 30,
                                                                                 -------------------------------------
(IN THOUSANDS)                                                                           2000                 1999
----------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

   Net income                                                                         $   69,055           $   50,286
Adjustments to reconcile net income to net cash provided by operating activities:
   Depreciation and amortization                                                          42,209               32,465
   Other income                                                                          (12,155)                  --
   Deferred income tax expense                                                            28,662               24,049
   Equity in net income of unconsolidated affiliates                                      (2,247)              (1,652)
   Dividends from unconsolidated affiliates                                                  418                1,181
   Minority interest in net income of consolidated companies                               1,348                  305
Change in assets and liabilities, excluding effects from acquisitions, dispositions
  and foreign exchange
   Accounts receivable                                                                    (8,212)              (7,967)
   Costs billable to clients                                                             (36,364)             (33,194)
   Other receivables                                                                      (2,381)                (304)
   Prepaid expenses and other assets                                                      (3,079)              (3,681)
   Accounts payable                                                                        3,902               23,858
   Accrued expenses and other current liabilities                                         (1,090)             (20,074)
   Accrued payroll and bonuses                                                           (19,143)             (30,382)
   Advance billings                                                                        2,270               (8,324)
   Accrued taxes on income                                                                (8,762)              (1,687)
   Deferred compensation                                                                     954                1,090
   Other                                                                                 (10,870)              (9,074)
                                                                                      ----------           ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES                                             $   44,515           $   16,895
                                                                                      ----------           ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to property, leasehold improvements and equipment                        $  (27,061)          $  (32,516)
   Acquisitions, net of cash acquired                                                    (48,550)            (102,659)
   Investments in equity securities                                                      (35,438)             (11,558)
   Proceeds from investing activities                                                      4,070                   --
                                                                                      ----------           ----------
NET CASH USED IN INVESTING ACTIVITIES                                                 $ (106,979)          $ (146,733)
                                                                                      ----------           ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net proceeds from convertible subordinated notes                                   $  282,469           $       --
   Proceeds from other long-term debt                                                      8,143              189,955
   Repayments of long-term debt                                                         (124,666)              (5,109)
   Net proceeds from short-term debt                                                      32,013              (28,330)
   Common stock issued                                                                     8,616                8,351
   Purchase of treasury shares                                                           (90,296)             (67,810)
   Dividends paid                                                                         (3,578)              (1,752)
   Payment of deferred compensation                                                       (3,456)              (1,356)
   Other financing activities                                                             (1,285)              (1,001)
                                                                                      ----------           ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                             $  107,960           $   92,948
                                                                                      ----------           ----------

Effect of exchange rate changes on cash and cash equivalents                             (16,757)              (5,676)


NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                      28,739              (42,566)
Cash and cash equivalents, beginning of period                                           144,517              122,138
                                                                                      ----------           ----------
Cash and cash equivalents, end of period                                              $  173,256           $   79,572
                                                                                      ==========           ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Interest paid                                                                         $    1,943           $    7,479
                                                                                      ==========           ==========

Income taxes paid                                                                     $   19,601           $   14,208
                                                                                      ==========           ==========
NONCASH INVESTING ACTIVITY:

Common stock issued in acquisitions                                                   $    2,310           $   83,700
                                                                                      ==========           ==========
</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                       4

<PAGE>

YOUNG & RUBICAM INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------
NOTE 1 - DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

BUSINESS:  Young & Rubicam Inc. ("Y&R") is a global marketing and communications
company which offers clients integrated  services in the creation and production
of  advertising,  strategic  media  planning and buying,  direct  marketing  and
customer  relationship  management,  perception management and public relations,
branding  consultancy and design services,  and healthcare  communications.  Y&R
operates  through  wholly owned  subsidiaries,  joint  ventures  and  non-equity
affiliations  worldwide.  Operations cover the major geographic regions of North
America, Europe, Latin America, the Far East, Australia, New Zealand, the Middle
East and Africa.

CONSOLIDATION:  The  accompanying  unaudited  consolidated  condensed  financial
statements of Y&R have been prepared  pursuant to the rules and  regulations  of
the  Securities  and  Exchange  Commission.  Certain  information  and  footnote
disclosures  normally  included in financial  statements  prepared in accordance
with generally  accepted  accounting  principles  have been condensed or omitted
pursuant to such rules and regulations.  These unaudited  consolidated condensed
financial statements should be read in conjunction with the audited consolidated
financial  statements and notes thereto  included in Y&R's Annual Report on Form
10-K for the year ended  December 31, 1999.  In the opinion of  management,  the
accompanying financial statements reflect all adjustments, which are of a normal
recurring  nature,  necessary  for a fair  presentation  of the  results for the
periods presented.  Certain reclassifications have been made to the prior year's
financial statements to conform to the 2000 presentation.

The results of operations for the interim periods  presented are not necessarily
indicative of the results expected for the full year.

USE OF ESTIMATES:  The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

NOTE 2 - EARNINGS PER SHARE

Basic  earnings per share are  calculated by dividing net income by the weighted
average shares of common stock outstanding during the three and six months ended
June 30, 2000 and 1999.  Diluted earnings per share for the three and six months
ended June 30, 2000 and 1999 are calculated as net income adjusted for after-tax
interest expense on our 3% Convertible  Subordinated  Notes in 2000,  divided by
weighted average shares of common stock  outstanding,  adjusted for the dilutive
effect of stock  options,  primarily  stock options  granted to employees  under
stock-based  compensation  plans, the convertible  subordinated  notes and other
dilutive securities.

Shares used in computing basic and diluted earnings per share were as follows:

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED                  SIX MONTHS ENDED
                                                                        JUNE 30,                           JUNE 30,
                                                            -------------------------------       -------------------------------
                                                                 2000            1999                  2000             1999
----------------------------------------------------------- --------------- ---------------       ---------------- --------------
<S>                                                           <C>               <C>                 <C>                <C>
Basic - weighted average shares                               72,442,663        67,502,175          72,627,811         66,912,004
Dilutive effect of stock options                               9,827,661        14,697,986          10,241,271         15,135,774
Dilutive effect of convertible notes                           3,950,095                --           3,519,447                 --
----------------------------------------------------------- --------------- ---------------       ---------------- --------------
Diluted - weighted average shares                             86,220,419        82,200,161          86,388,529         82,047,778
=========================================================== =============== ===============       ================ ==============
</TABLE>


                                       5
<PAGE>

NOTE 3 - COMPREHENSIVE INCOME

The  following  table  sets  forth  total  comprehensive  income  (loss) and its
components:

<TABLE>
<CAPTION>
                                                                           THREE MONTHS ENDED                 SIX MONTHS ENDED
                                                                                JUNE 30,                           JUNE 30,
                                                                   -------------------------------     ---------------------------
(IN THOUSANDS)                                                          2000            1999                2000            1999
------------------------------------------------------------------ ---------------- --------------     --------------- -----------
<S>                                                                   <C>           <C>                <C>                <C>
Net income                                                            $  37,463     $     30,585       $     69,055       $ 50,286
Unrealized depreciation in equity securities, net of tax:
     Unrealized depreciation arising during period                      (41,232)              --           (171,615)            --
     Less: Reclassification adjustment for gains included
              in net income                                                  --               --             (1,154)            --
                                                                   ---------------- --------------     --------------- -----------
     Net unrealized depreciation in equity securities, net of tax       (41,232)              --           (172,769)            --
Foreign currency translation adjustment                                 (14,529)          (7,332)           (20,823)       (14,546)
------------------------------------------------------------------ ---------------- --------------     --------------- -----------
Total comprehensive income                                            $ (18,298)    $     23,253       $   (124,537)      $ 35,740
================================================================== ================ ==============     =============== ===========
</TABLE>

NOTE 4 - INVESTMENTS IN EQUITY SECURITIES

At June 30, 2000,  all equity  securities  covered under  Statement of Financial
Accounting   Standards   No.   115  ("SFAS  No.   115")   were   designated   as
available-for-sale.  In  accordance  with SFAS No.  115,  these  securities  are
reported at fair value, adjusted for any other-than-temporary declines in value.
Such equity  securities  at June 30, 2000 had an aggregate  cost basis of $122.5
million  and  included   certain  equity   securities   received  as  additional
consideration  in the first half of 2000 as a result of  achieving  revenue  and
operating profit performance targets of the Brand Dialogue assets contributed to
Luminant  Worldwide  Corporation in 1999.  These securities are carried at their
fair value of $77.0 million and are included in investments in equity securities
on the balance sheet.  Differences  between cost and fair value of $45.5 million
are  carried  net of $17.7  million of related  income tax benefit as a separate
component  of  stockholders'   equity  under  the  balance  sheet  caption  "Net
unrealized (depreciation) appreciation in equity securities."

In January 2000, Y&R contributed cash and certain assets and rights known as Y&R
TeamSpace, a proprietary software tool, to eMotion Inc. ("eMotion"), a firm that
provides  digital  media  management  solutions  that  facilitate  the  creative
workflow,  sale, distribution and management of media rich broadband content, in
exchange for an ownership interest in eMotion. The equity securities received in
connection  with this  transaction are carried on the balance sheet at net cost,
as readily  determinable  fair values are not  available.  At June 30, 2000, the
carrying  value of this cost  investment  was $14.3  million.  In addition,  Y&R
recorded a gain on the  contribution  of Y&R  TeamSpace  to eMotion in the first
quarter of 2000 totaling approximately $7.6 million.

Also during the first half of 2000, Y&R invested an additional  $29.0 million in
equity  securities  that are  carried on the balance  sheet at cost.  These cost
investments  include Y&R's  investment  in Naviant  Inc., a leading  provider of
precision  marketing  solutions to web advertisers,  web publishers and consumer
marketers of approximately $15.0 million.

Under  certain  investment  agreements,  Y&R  is  eligible  to  share  with  the
respective  entities a portion of revenues,  if any,  generated  from the use or
referral by Y&R or its clients of the respective  entity's products or services.
In certain  instances,  Y&R may also be  required to make  payments  pursuant to
minimum revenue guarantees over a specified period.  While Y&R cannot reasonably
estimate the amount,  if any, that could be earned or become  payable under such
agreements,  such amounts are not expected to be material to Y&R's  consolidated
results of  operations,  financial  position or cash flow. To date no commission
fee revenue has been earned or recognized.


                                       6
<PAGE>

During the quarter ended June 30, 2000 revenue  guarantee  amounts totaling $1.0
million have been paid under such arrangements.

NOTE 5 - ACQUISITIONS

During the first half of 2000, Y&R acquired all outstanding membership interests
in Robinson  Lerer & Montgomery,  LLC ("RLM"),  a leading  public  relations and
strategy consulting firm in a cash and stock transaction,  and also made several
other  acquisitions.  All of these  acquisitions  were  accounted  for under the
purchase  method of  accounting  and a  preliminary  allocation  of the costs to
acquire  these  entities has been made based on the fair value of the net assets
acquired.  Certain  acquisitions  may require Y&R to pay incremental  amounts as
additional  consideration  in  future  years,  based  on the  operating  results
achieved by the companies  that were acquired.  The aggregate  purchase price of
acquisitions  completed in the first six months of 2000,  including  any amounts
paid  under  existing   contingent   consideration   obligations,   amounted  to
approximately $57 million.

NOTE 6 - LONG-TERM DEBT

Y&R's long-term debt is comprised of the following:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                                    JUNE 30, 2000             DECEMBER 31, 1999
-------------------------------------------------------------------------------------------------------------
<S>                                                           <C>                               <C>
Unsecured revolving credit facilities                         $          7,564                  $  123,500
3% Convertible subordinated notes                                      287,500                          --
Capital lease obligations                                                1,479                       2,197
Other borrowings                                                         3,249                       4,500
--------------------------------------------------------------------------------------------------------------------
                                                                       299,792                     130,197
Less - Current portion                                                   1,872                       2,629
--------------------------------------------------------------------------------------------------------------------
                                                              $        297,920                  $  127,568
====================================================================================================================
</TABLE>

Interest  expense was $6.6  million for the second  quarter of 2000  compared to
interest  expense  of $5.4  million  for the second  quarter  of 1999.  Interest
expense  was $12.2  million for the six months  ended June 30, 2000  compared to
interest expense of $9.1 million for the six months ended June 30, 1999.

On  January  20,  2000,  we  completed  the  placement  of $287.5  million of 3%
Convertible  Subordinated  Notes due  January  15,  2005.  At the  option of the
holder,  the  notes  are  convertible  into  shares  of our  common  stock  at a
conversion price of $73.36 per share,  subject to adjustment,  beginning 90 days
following  the issuance of the notes.  The notes may be redeemed at Y&R's option
on or after January 20, 2003. Additionally, under certain circumstances, holders
of the notes may have the right to require Y&R to repurchase the notes. Interest
on the notes is payable on  January  15 and July 15 of each year,  beginning  on
July 15, 2000. The notes are unsecured  obligations of Y&R and are  subordinated
in right of payment to all senior  indebtedness  and liabilities of subsidiaries
of Y&R.  Y&R used the net  proceeds of the  offering to repay  outstanding  debt
under our existing bank credit facilities and to fund operations,  acquisitions,
investment  activity and share repurchases.  See Note 8 for recent  developments
relating to the 3% Convertible Subordinated Notes.

NOTE 7 - CASH DIVIDEND

On June 15, 2000 and March 15, 2000, Y&R paid quarterly cash dividends of $0.025
per common share to all  stockholders  of record as of June 1, 2000 and March 1,
2000, respectively.


                                       7
<PAGE>

NOTE 8 - RECENT DEVELOPMENTS

On May 12, 2000, Y&R and WPP Group plc ("WPP")  announced that they have entered
into a definitive  merger  agreement  dated as of May 11, 2000  providing  for a
business  combination of Young & Rubicam and WPP. The  transaction is structured
as a merger of Young & Rubicam with a wholly owned subsidiary of WPP. Subject to
the terms of the definitive  merger agreement,  at the time of the merger,  each
share of common stock,  par value $0.01 per share, of Young & Rubicam,  together
with any associated  preferred share purchase rights, will be converted into the
right  to  receive  .835  American  Depositary  Shares  of  WPP.  Each  American
Depositary Share of WPP represents five ordinary shares, with a nominal value of
10 pence  each,  of WPP,  and Young & Rubicam  stockholders  will be entitled to
elect to receive WPP ordinary shares in lieu of the American Depositary Shares.

Subject to the completion of the merger,  WPP intends,  with the  cooperation of
Y&R, to solicit the  consent of the holders of the 3%  Convertible  Subordinated
Notes due  January 15,  2005 to amend the  indenture  relating to those notes to
provide that Y&R's  obligation  under the indenture to file with the  Securities
and  Exchange  Commission  ("SEC")  and  distribute  to  noteholders  annual and
quarterly financial  information may be satisfied by distributing to noteholders
the same  financial  information  WPP  distributes to its  shareholders.  If the
requisite  consent of the  noteholders  is obtained and the merger is completed,
Y&R has been informed by WPP that WPP will fully and  unconditionally  guarantee
Y&R's  obligations  under those notes and Y&R will  discontinue  filing periodic
reports with the SEC under the Securities Exchange Act of 1934.

The  Merger  is  expected  to close in the  fall of 2000 and is  subject  to the
approval of each company's  stockholders and other customary  conditions.  There
can be no assurance that such approvals will be obtained.

NOTE 9 - SUBSEQUENT EVENTS

On June 29, 2000,  Y&R announced  that it had agreed to acquire The Partners,  a
leading UK design agency and corporate identity specialist.  The transaction was
completed in July 2000.


                                       8
<PAGE>

ITEM 2: MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The  following  discussion  should  be  read in  conjunction  with  our  audited
consolidated  financial  statements and notes thereto, and the information under
the caption  "Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations"  contained in our Annual Report on Form 10-K for the year
ended December 31, 1999 as filed with the Securities and Exchange Commission.

RESULTS OF OPERATIONS

SECOND QUARTER 2000 COMPARED TO SECOND QUARTER 1999

     Revenues  for the second  quarter of 2000  increased by $80.6  million,  or
19.5%,  to $495.0  million  compared  to the  second  quarter  of 1999.  Organic
worldwide  revenue  growth,  excluding  the effect of  acquisitions  and foreign
currency  fluctuations,  was 14.0%,  due to the growth of  existing  businesses,
including net new business gains and net higher spending from existing  clients.
Acquisitions  contributed  9.6% of revenue  growth,  or $46.0 million.  Domestic
revenues increased by 15.5%, or 9.3% excluding  acquisitions,  to $259.5 million
for  the  second  quarter  of 2000  compared  to the  second  quarter  of  1999.
International  revenues  increased  by 24.1% to $235.5  million.  Excluding  the
effect of foreign currency fluctuations and acquisitions, international revenues
increased by 19.6% for the second quarter of 2000 compared to the second quarter
of 1999.  International  organic  revenue  growth  was broad  based  across  all
regions.  Europe,  our largest  international  region,  achieved  17.4%  organic
growth.

     Compensation  expense  increased by $45.0 million to $284.0 million for the
second  quarter of 2000 compared to the second quarter of 1999, but decreased as
a  percentage  of  revenues  to  57.4%  from  57.7%.   The  improvement  in  the
compensation  expense  margin was driven by continued  lower cost of  non-salary
related benefit expenses, as well as productivity gains.

     General and  administrative  expenses  increased by $23.2 million to $145.7
million for the second  quarter of 2000 compared to the second  quarter of 1999,
and  decreased  as a  percentage  of revenues  to 29.4% from  29.6%.  The margin
improvement is primarily the result of savings in domestic  facilities costs and
other ongoing cost containment  initiatives,  which more than offset incremental
amortization  of goodwill and other  intangible  assets  attributable  to assets
acquired since the second quarter of 1999.

     Operating  profit  was $65.3  million  for the second  quarter of 2000,  as
compared to $52.8  million for the second  quarter of 1999.  This  increase  was
primarily  due to net  new  business  gains  combined  with  improved  operating
margins.  The operating profit margin in the second quarter of 2000 was 13.2%, a
40 basis point improvement over the second quarter of 1999.

     Net  interest  expense  increased  by $2.2  million to $5.0 million for the
second  quarter of 2000 compared to the second quarter of 1999. The increase was
principally  due to higher  average  borrowing  levels to support  acquisitions,
investment activity,  share repurchases and dividend payments,  partially offset
by lower  average  borrowing  rates as  compared to 1999,  which is  primarily a
result of the 3% Convertible  Subordinated  Notes refinancing that was completed
on January 20, 2000.

     The income tax provision  was $24.7 million for the second  quarter of 2000
compared to $20.5 million for the second quarter of 1999. The effective tax rate
for the second quarter of 2000 was 40.0% compared to 41.0% in the second quarter
of 1999.  The decrease in the effective tax rate resulted from foreign  earnings
being taxed at an effective rate lower than the U.S.  statutory rate,  partially
offset by an increase in domestic nondeductible goodwill.

     Equity  in net  income of  unconsolidated  affiliates  decreased  from $1.7
million to $1.5 million in the second  quarter of 2000 and minority  interest in
net income of consolidated companies increased from $0.6 million to $1.1


                                       9
<PAGE>

million in the second quarter of 2000, both reflecting the  consolidation of the
results of Dentsu,  Young & Rubicam  companies  throughout  principal markets in
Asia, with the exception of Japan, effective August 2, 1999.

     Net income was $37.5 million,  or $0.45 per diluted  share,  for the second
quarter of 2000.  This compares to net income for the second  quarter of 1999 of
$30.6  million,  or $0.37 per  diluted  share.  Excluding  other  income of $1.4
million, which principally represents net gains from investment activities,  net
income was $36.6 million, or $0.44 per diluted share, an increase of 19.8%. This
increase was principally due to revenue growth,  acquisition activity,  improved
operating margins and a reduced effective tax rate.

SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO SIX MONTHS ENDED JUNE 30, 1999

     Revenues  for the six  months  ended  June 30,  2000  increased  by  $145.1
million,  or 18.2%, to $943.3 million  compared to the six months ended June 30,
1999. Organic worldwide revenue growth, excluding the effect of acquisitions and
foreign  currency  fluctuations,  was  12.7%,  due to  the  growth  of  existing
businesses,  including  net new  business  gains and net  higher  spending  from
existing  clients.  Acquisitions  contributed  9.4% of revenue growth,  or $85.9
million.  Domestic revenues increased by 15.1%, or 7.9% excluding  acquisitions,
to $498.6  million for the six months  ended June 30,  2000  compared to the six
months ended June 30, 1999.  International revenues increased by 21.8% to $444.7
million. Excluding the effect of foreign currency fluctuations and acquisitions,
international revenues increased by 18.3% for the six months ended June 30, 2000
compared to the six months ended June 30, 1999.  International  organic  revenue
growth was broad based across all  regions.  Europe,  our largest  international
region, achieved 14.3% organic growth.

     Compensation  expense  increased by $82.4 million to $556.4 million for the
six months  ended June 30, 2000  compared to the six months ended June 30, 1999,
but decreased as a percentage of revenues to 59.0% from 59.4%.  The  improvement
in the  compensation  expense  margin  was  driven by  continued  lower  cost of
non-salary related benefit expenses, as well as productivity gains.

     General and  administrative  expenses  increased by $40.5 million to $277.3
million for the six months ended June 30, 2000  compared to the six months ended
June 30, 1999,  but  decreased as a percentage  of revenues to 29.4% from 29.7%.
The margin improvement is primarily the result of savings in domestic facilities
costs and other  ongoing cost  containment  initiatives,  which more than offset
incremental amortization of goodwill and other intangible assets attributable to
acquired assets.

     Operating profit was $109.6 million for the six months ended June 30, 2000,
as  compared  to $87.4  million  for the six months  ended June 30,  1999.  This
increase was  primarily  due to net new business  gains  combined  with improved
operating  margins.  The  operating  profit margin in the first half of 2000 was
11.6%, a 70 basis point improvement over the six months ended June 30, 1999.

     Net interest expense  increased by $3.7 million to $8.1 million for the six
months ended June 30, 2000  compared to the six months ended June 30, 1999.  The
increase  was  principally  due to higher  average  borrowing  levels to support
acquisitions,  investment  activity,  share  repurchases and dividend  payments,
partially offset by lower average  borrowing rates as compared to 1999, which is
primarily a result of the 3% Convertible Subordinated Notes refinancing that was
completed on January 20, 2000.

      Other income of $12.2 million principally consists of the gain on the sale
in January 2000 of certain  assets and rights known as Y&R  TeamSpace to eMotion
Inc., a firm that provides  digital media  management  solutions;  and other net
gains from investing  activities in the first half of 2000, including additional
consideration  received as a result of achieving  revenue and  operating  profit
performance  targets  of the  Brand  Dialogue  assets  contributed  to  Luminant
Worldwide Corporation in 1999.

     The income tax  provision  was $45.4  million for the six months ended June
30, 2000 compared to $34.0  million for the six months ended June 30, 1999.  The
effective tax rate for the first half of 2000 was 40.0% compared to 41.0% in the
first half of 1999. The decrease in the effective tax rate resulted from foreign


                                       10
<PAGE>

earnings  being taxed at an effective rate lower than the U.S.  statutory  rate,
partially offset by an increase in domestic nondeductible goodwill.

     Equity  in net  income of  unconsolidated  affiliates  increased  from $1.7
million to $2.2 million for the six months ended June 30, 2000,  reflecting  the
consolidation of the results of DY&R companies  throughout  principal markets in
Asia,  with the  exception of Japan,  effective  August 2, 1999,  combined  with
operating improvements in equity affiliates, principally Dentsu, Young & Rubicam
("DY&R")  Japan.  Minority  interest  in net  income of  consolidated  companies
increased  from $0.3  million to $1.3  million for the six months ended June 30,
2000,  reflecting the consolidation of the results of DY&R companies  throughout
principal  markets in Asia,  with the  exception of Japan,  effective  August 2,
1999.

     Net income  was $69.1  million,  or $0.83 per  diluted  share,  for the six
months ended June 30, 2000. This compares to net income for the six months ended
June 30, 1999 of $50.3  million,  or $0.61 per diluted  share.  Excluding  other
income of $12.2  million in 2000,  net income  increased  by $11.5  million,  or
22.8%, for the six months ended June 30, 2000 as compared to 1999. This increase
was principally due to revenue growth, acquisition activity,  improved operating
margins and a reduced effective tax rate.

LIQUIDITY AND CAPITAL RESOURCES

     We   generally   finance  our  working   capital,   capital   expenditures,
acquisitions  and share  repurchases  from cash  generated  from  operations and
third-party borrowings.

     Cash and cash  equivalents  were $173.3  million and $144.5 million at June
30, 2000 and  December  31,  1999,  respectively.  Cash  provided  by  operating
activities for the six months ended June 30, 2000 was $44.5 million  compared to
$16.9 million in the six months ended June 30, 1999,  reflecting revenue and net
income  growth,  improved  operating  margins and improved  working  investment.
Quarterly  operating  cash flows are  significantly  impacted by seasonal  media
spending patterns of advertisers, including the timing of payments made to media
and  other  suppliers  on  behalf  of  clients  as  well as the  timing  of cash
collections  from  clients  to fund  these  expenditures.  Our  practice,  where
possible,  is to bill and collect from our clients in sufficient time to pay the
amounts due the media.

     Cash used in  investing  activities  for the six months ended June 30, 2000
was $107.0 million and included $27.1 million in capital  expenditures and $84.0
million for  investments  and  acquisitions,  net of cash  acquired.  In the six
months  ended  June 30,  1999,  cash used in  investing  activities  was  $146.7
million, consisting of $32.5 million in capital expenditures and $114.2  million
for  investments  and   acquisitions.  The   majority  of  capital  expenditures
in   2000   and   1999   were  for  leasehold   improvements   and   information
technology-related purchases.  Acquisitions and investments in 2000 included the
purchase of Robinson Lerer & Montgomery,  LLC, the cash  contribution to eMotion
Inc., and an investment in Naviant Inc.

     Free  cash  flow,  which is  defined  as net  cash  provided  by  operating
activities less capital expenditures, was $17.5 million for the six months ended
June 30, 2000,  compared to a use of $15.6 million for the six months ended June
30, 1999.

     Cash  provided by  financing  activities  for the six months ended June 30,
2000 was $108.0  million and included net borrowings of $198.0  million.  During
the first half of 2000, we repurchased 1.8 million shares of our common stock on
the open  market and in other  transactions  at an  average  price of $48.83 per
share for an  aggregate  cost of $90.3  million.  This  brings  the total to 7.3
million shares  repurchased  under our 12.0 million share authorized  repurchase
program.  In the first half of 1999,  cash provided by financing  activities was
$92.9 million and included net borrowings of $156.5 million.

     On January 20, 2000,  we completed  the  placement of $287.5  million of 3%
Convertible  Subordinated  Notes due  January  15,  2005.  At the  option of the
holder,  the  notes  are  convertible  into  shares  of our  common  stock  at a


                                       11
<PAGE>

conversion price of $73.36 per share,  subject to adjustment,  beginning 90 days
following  the issuance of the notes.  The notes may be redeemed at Y&R's option
on or after January 20, 2003. Additionally, under certain circumstances, holders
of the notes may have the right to require Y&R to repurchase the notes. Interest
on the notes is payable on  January  15 and July 15 of each year,  beginning  on
July 15, 2000. The notes are unsecured  obligations of Y&R and are  subordinated
in right of payment to all senior  indebtedness  and liabilities of subsidiaries
of Y&R.  Y&R used the net  proceeds of the  offering to repay  outstanding  debt
under our existing bank credit facilities and to fund operations,  acquisitions,
investment activity and share repurchases.

     On June 15, 2000 and March 15, 2000,  we paid a quarterly  cash dividend of
$0.025  per share of common  stock to all  shareholders  of record as of June 1,
2000 and March 1, 2000, respectively. The payment of additional dividends in the
future will be at the discretion of our Board of Directors and will depend upon,
among other factors,  our results of operations,  financial  condition,  capital
requirements and restrictions in our credit facilities.

     We may,  from time to time,  pursue  acquisition  opportunities  that would
expand or enhance  existing  capabilities or strengthen the geographic  scope of
our operations.

     At  June 30,  2000,  our net deferred  tax assets were $199.8  million,  an
increase of $114.7  million from December 31, 1999,  primarily  resulting from a
decrease  in  deferred  tax  liabilities  related to  unrealized  (depreciation)
appreciation in equity securities.

     We believe that cash provided by operations and funds  available  under our
credit  facilities will be sufficient to meet our anticipated cash  requirements
as presently contemplated.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

     In June 1998, the Financial Accounting Standards Board issued Statement No.
133,  "Accounting for Derivative  Instruments and Hedging Activities" ("SFAS No.
133"),   which  provides  a  comprehensive  and  consistent   standard  for  the
recognition and measurement of derivatives and hedging activities. In June 1999,
the Financial  Accounting  Standards Board issued Statement No. 137, "Accounting
for Derivative  Instruments  and Hedging  Activities - Deferral of the Effective
Date of FASB  Statement No. 133",  which delays  implementation  of SFAS No. 133
until fiscal years  beginning  after June 15, 2000. In June 2000,  the Financial
Accounting  Standards  Board issued  Statement No. 138,  "Accounting for Certain
Derivative  Instruments  and Certain  Hedging  Activities",  which  provides for
additional guidance related to accounting for derivative instruments and hedging
activities as addressed by SFAS No. 133. We do not anticipate  that the adoption
of SFAS No. 133 will have a significant effect on our financial condition.


                                       12
<PAGE>

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   Y&R's  market  risks  primarily  consist of the impact of changes in currency
exchange rates on assets and  liabilities of non-U.S.  operations and the impact
of  changes  in  interest  rates on debt.  Our 1999  Form 10-K  provides  a more
detailed discussion of the market risks affecting our operations. As of June 30,
2000, no material  change had occurred in Y&R's market risks, as compared to the
disclosure  in its Form 10-K for the year ending  December 31,  1999,  except as
noted below.

   Y&R  accounts  for  its   investments  in  equity   securities  with  readily
determinable  fair values under SFAS No. 115. The value of the equity securities
may fluctuate based on the volatility of the respective entity's stock price and
other  general  market  conditions.  The value of these  equity  securities  has
declined  since  December 31,  1999.  At June 30,  2000,  all equity  securities
covered  by SFAS No. 115 were  designated  as  available-for-sale.  Accordingly,
these  securities  are stated at fair value,  with  unrealized  holding gains or
losses, net of taxes,  reported in a separate component of shareholders' equity.
Such equity  securities at June 30, 2000,  had an aggregate cost basis of $122.5
million.  These  securities are carried at their fair value of $77.0 million and
are  included  in  investments  in  equity  securities  on  the  balance  sheet.
Differences  between  cost and fair value of $45.5  million  are  carried net of
$17.7  million of related  income tax as a separate  component of  stockholders'
equity  under  the  balance   sheet  caption  "Net   unrealized   (depreciation)
appreciation in equity securities."

   At  June  30,  2000,  we had  $339.9  million  in  outstanding  indebtedness,
principally  consisting of $287.5 million of 3% Convertible  Subordinated Notes.
At  December  31,  1999,  we had  $159.3  million in  outstanding  indebtedness,
consisting   primarily  of  floating  rate  debt.  Since  the  majority  of  our
indebtedness  is fixed,  future  earnings  and cash flows are not expected to be
materially  impacted  by  interest  rate  fluctuations.   Based  on  outstanding
indebtedness as of June 30, 2000, the annual after-tax earnings impact resulting
from a  one-percentage  point  increase or  decrease in interest  rates would be
approximately $0.3 million, holding other variables constant.

                                       13
<PAGE>

PART II: OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Annual Meeting of the  Stockholders of the Company was held on May 12, 2000.
The Company did solicit proxies.  The Stockholders of the shares of Common Stock
and Money Market Preferred Stock entitled to vote at the Annual Meeting voted on
and approved the following matters:

A.   Election of three Class II Directors,  each to serve for a term expiring at
     the Annual  Meeting of the  Company's  Stockholders  to be held in 2003 and
     until his or her successor is duly elected and qualified.

                                                      Number of Shares
                                                      ----------------
     Name of Director                            For                    Withheld
     ----------------                            ---                    --------

     Michael J. Dolan                          50,387,532                229,088
     Michael H. Jordan                         48,646,675              1,769,945
     Judith S. Rodin                           50,362,002                254,618

B.   Ratification and approval of the Company's Employee Share Purchase Plan.

                           Number of Shares
                           ----------------
     For                       Against                    Abstentions
     ---                       -------                    -----------

 48,282,380                   2,313,074                      21,166



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

     2.1  Agreement  and Plan of Merger,  dated as of May 11, 2000, by and among
          WPP Group plc,  Young & Rubicam Inc.  and York Merger Corp.  (filed as
          Exhibit 2.1 to Young & Rubicam Inc.'s Current Report on Form 8-K dated
          May 16, 2000 and incorporated herein by reference).

     4.1  Amendment No. 1 to Rights Agreement, dated as of May 11, 2000, between
          Young & Rubicam  Inc.  and The Bank of New York (filed as Exhibit 2 to
          Young & Rubicam Inc.'s Registration  Statement on Form 8-A/A filed May
          18, 2000 and incorporated herein by reference).

     11   Computation of Earnings Per Share.

     27.1 Financial Data Schedule.

(b)  Reports on Form 8-K: On May 16, 2000, the Company filed a Current Report on
     Form 8-K reporting that it had entered into a definitive  merger  agreement
     dated as of May 11, 2000  providing for a business  combination  of Young &
     Rubicam and WPP Group plc.


                                       14
<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.

                                                            Young & Rubicam Inc.
                                                            --------------------
                                                            (Registrant)

Date:  August 2, 2000

                              /s/ Jacques Tortoroli
                  --------------------------------------------
                             Name: Jacques Tortoroli
                         Title: Chief Financial Officer


                                       15
<PAGE>

                                  EXHIBIT INDEX

NUMBER   DESCRIPTION

   2.1   Agreement  and Plan of Merger,  dated as of May 11, 2000,  by and among
         WPP Group plc,  Young & Rubicam Inc.  and York Merger  Corp.  (filed as
         Exhibit 2.1 to Young & Rubicam  Inc.'s Current Report on Form 8-K dated
         May 16, 2000 and incorporated herein by reference).

   4.1   Amendment No. 1 to Rights Agreement,  dated as of May 11, 2000, between
         Young & Rubicam  Inc.  and The Bank of New York  (filed as Exhibit 2 to
         Young & Rubicam Inc.'s  Registration  Statement on Form 8-A/A filed May
         18, 2000 and incorporated herein by reference).

  11     Computation of Earnings Per Share.

  27.1   Financial Data Schedule.


                                       16