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 September 30, 1999

                                       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 November 5, 1999 was 69,606,759.


<PAGE>



                  YOUNG & RUBICAM INC. AND SUBSIDIARY COMPANIES

                                    FORM 10-Q

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                                                                  <C>
PART I: FINANCIAL INFORMATION                                                                        PAGE NO.

   Item 1.     Financial Statements

                  Consolidated Balance Sheets as of
                  September 30, 1999 and December 31, 1998                                                 2

                  Consolidated Statements of Operations for the
                  Three Months and Nine Months Ended September 30, 1999 and 1998                           3

                  Consolidated Statements of Cash Flows for the
                  Nine Months Ended September 30, 1999 and 1998                                            4

                  Notes to Consolidated Financial Statements                                             5 - 7

   Item 2.     Management's Discussion and Analysis of Financial
               Condition and Results of Operations                                                      8 - 12

   Item 3.     Quantitative and Qualitative Disclosures About Market Risk                                 13

PART II: OTHER INFORMATION

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

SIGNATURES                                                                                                15

EXHIBIT INDEX                                                                                             16
</TABLE>

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,  (vi) our liquidity and financing plans
and  (vii)  risks   associated  with  our  efforts  to  comply  with  Year  2000
requirements.  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 BALANCE SHEETS
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
                                                                                            SEPTEMBER 30,    DECEMBER 31,
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)                                              1999            1998
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>            <C>
CURRENT ASSETS
   Cash and cash equivalents                                                                $    93,326    $   122,138
   Accounts  receivable,  net of allowance for doubtful accounts of $20,218 and
    $17,938 at September 30, 1999 and December 31, 1998, respectively                           953,574        835,284
   Costs billable to clients                                                                     92,389         55,187
   Other receivables                                                                             40,505         37,177
   Deferred income taxes                                                                         46,956         46,803
   Prepaid expenses and other assets                                                             33,167         25,979
                                                                                            -----------    -----------
        Total Current Assets                                                                  1,259,917      1,122,568
                                                                                            -----------    -----------
NONCURRENT ASSETS
   Property and equipment, net                                                                  172,248        150,413
   Deferred income taxes                                                                         98,970        158,510
   Goodwill and other intangibles,  less accumulated amortization of $84,608 and
    $87,283 at September 30, 1999 and December 31, 1998, respectively                           337,614        121,005
   Equity in net assets of and advances to unconsolidated companies                             193,131         38,397
   Other assets                                                                                  42,924         44,226
                                                                                            -----------    -----------
        Total Noncurrent Assets                                                                 844,887        512,551
                                                                                            -----------    -----------
        Total Assets                                                                        $ 2,104,804    $ 1,635,119
                                                                                            ===========    ===========

CURRENT LIABILITIES
   Accounts payable                                                                         $ 1,039,996    $ 1,008,624
   Accrued expenses and other liabilities                                                       203,211        202,433
   Accrued payroll and bonuses                                                                   64,721         77,078
   Income taxes payable                                                                          17,204         19,290
   Short-term debt                                                                               44,976         32,031
                                                                                            -----------    -----------
        Total Current Liabilities                                                             1,370,108      1,339,456
                                                                                            -----------    -----------
NONCURRENT LIABILITIES
   Long-term debt                                                                               299,446         31,894
   Deferred compensation                                                                         32,878         30,635
   Other liabilities                                                                            108,625        113,592
                                                                                            -----------    -----------
        Total Noncurrent Liabilities                                                            440,949        176,121
                                                                                            -----------    -----------
Commitments and Contingencies
Minority Interests                                                                                4,176          4,573
                                                                                            -----------    -----------
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 - 69,705,507 shares and 66,374,569 shares at September 30, 1999 and
    December 31, 1998, respectively (excluding 502,888 shares and 3,976,941 shares in
    treasury)                                                                                       702            704
   Capital surplus                                                                              929,154        934,676
   Accumulated deficit                                                                         (637,594)      (758,292)
   Unrealized appreciation in equity securities                                                  39,166             --
   Cumulative translation adjustment                                                            (19,170)       (10,810)
   Pension liability adjustment                                                                  (1,738)        (1,738)
                                                                                            -----------    -----------
                                                                                                310,520        164,540
   Common stock in treasury, at cost                                                            (20,949)       (49,571)
                                                                                            -----------    -----------
        Total Stockholders' Equity                                                              289,571        114,969
                                                                                            -----------    -----------
        Total Liabilities and Stockholders' Equity                                          $ 2,104,804    $ 1,635,119
                                                                                            ===========    ===========
</TABLE>

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

                                       2
<PAGE>

YOUNG & RUBICAM INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS, EXCEPT SHARE AND                             THREE MONTHS ENDED              NINE MONTHS ENDED
  PER SHARE AMOUNTS)                                           SEPTEMBER 30,                  SEPTEMBER 30,
                                                    -------------------------------   ------------------------------
                                                         1999            1998              1999            1998
--------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>             <C>             <C>             <C>
Revenues                                             $    428,452    $    375,419    $  1,226,686    $  1,095,720

Compensation expense, including employee benefits         250,457         227,184         724,491         659,449
General and administrative expenses                       122,690         106,057         359,498         324,783
Other charges                                                  --              --              --         234,449
                                                     ------------    ------------    ------------    ------------
Operating expenses                                        373,147         333,241       1,083,989       1,218,681
                                                     ------------    ------------    ------------    ------------
Operating profit (loss)                                    55,305          42,178         142,697        (122,961)
Interest expense, net                                       4,779           2,843           9,224          13,015
Other income                                               70,835              --          70,835           2,200
                                                     ------------    ------------    ------------    ------------
Income (loss) before income taxes                         121,361          39,335         204,308        (133,776)
Income tax provision (benefit)                             47,715          15,914          81,723         (22,291)
                                                     ------------    ------------    ------------    ------------
                                                           73,646          23,421         122,585        (111,485)
Equity in net income of unconsolidated companies            1,397           1,567           3,049           3,194
Minority interest in net income of consolidated
  subsidiaries                                             (1,101)           (682)         (1,406)           (604)
                                                     ------------    ------------    ------------    ------------
Income (loss) before extraordinary charge                  73,942          24,306         124,228        (108,895)
Extraordinary charge for early retirement of debt,
  net of tax benefit of $2,834                                 --              --              --          (4,433)
                                                     ------------    ------------    ------------    ------------
Net income (loss)                                    $     73,942    $     24,306    $    124,228    $   (113,328)
                                                     ------------    ------------    ------------    ------------
Earnings (loss) per share:
  Basic:
   Income (loss) before extraordinary charge         $       1.06    $       0.36    $       1.83    $      (1.84)
   Extraordinary charge                              $         --    $         --    $         --    $      (0.08)
                                                     ------------    ------------    ------------    ------------
   Net income (loss)                                 $       1.06    $       0.36    $       1.83           (1.92)
                                                     ============    ============    ============    ==============
  Diluted:
   Income (loss) before extraordinary charge         $       0.88    $       0.29    $       1.50    $      (1.84)
   Extraordinary charge                              $         --    $         --    $         --    $      (0.08)
                                                     ------------    ------------    ------------    --------------
   Net income (loss)                                 $       0.88    $       0.29    $       1.50    $      (1.92)
                                                     ============    ============    ============    ==============
Weighted average shares outstanding (Note 3):
  Basic                                                69,911,071      66,608,726      67,914,158      58,939,274
                                                     ============    ============    ============    ==============
  Diluted                                              83,805,721      82,764,754      82,595,373      58,939,274
                                                     ============    ============    ============    ==============
</TABLE>

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

                                       3
<PAGE>


YOUNG & RUBICAM INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                                                     NINE MONTHS ENDED SEPTEMBER 30,
                                                                                     --------------------------------
(IN THOUSANDS)                                                                              1999            1998
----------------------------------------------------------------------------------------------------------------------
<S>                                                                                        <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                                                       $ 124,228    $(113,328)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
  Depreciation and amortization                                                               51,535       43,061
  Other charges                                                                                   --      234,449
  Other income                                                                               (70,835)      (2,200)
  Extraordinary charge, net                                                                       --        4,433
  Deferred income tax expense (benefit)                                                       62,125      (34,589)
  Equity in net income of unconsolidated companies                                            (3,049)      (3,194)
  Dividends from unconsolidated companies                                                      3,577        1,427
  Minority interest in net income of consolidated subsidiaries                                 1,406          604
Change in assets and liabilities, excluding effects from acquisitions, dispositions and
  foreign exchange:
  Accounts receivable                                                                        (68,860)      15,450
  Costs billable to clients                                                                  (31,908)     (24,861)
  Other receivables                                                                           (4,120)      (3,247)
  Prepaid expenses and other assets                                                            2,284      (12,218)
  Accounts payable                                                                            53,334      (26,995)
  Accrued expenses and other liabilities                                                     (26,496)     (33,255)
  Accrued payroll and bonuses                                                                (14,942)      (5,901)
  Income taxes payable                                                                        (2,286)     (23,996)
  Deferred compensation                                                                        2,112        3,209
  Other                                                                                       (7,714)       3,224
                                                                                           ---------    ---------
Net cash provided by operating activities                                                     70,391       22,073
                                                                                           ---------    ---------
CASH FLOWS FROM INVESTING
  ACTIVITIES:
  Additions to property and equipment                                                        (53,947)     (34,784)
  Acquisitions, net of cash acquired                                                        (135,722)        (499)
  Investment in net assets of and advances to unconsolidated companies                       (22,036)      (4,316)
  Proceeds from notes receivable                                                                  --          339
                                                                                           ---------    ---------
Net cash used in investing activities                                                       (211,705)     (39,260)
                                                                                           ---------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from (repayments of) debt, net                                                    209,262     (203,436)
  Proceeds from issuance of common stock in initial public offering, net                          --      158,637
  Common stock issued                                                                          9,606        7,431
  Common stock repurchased                                                                  (100,328)     (31,892)
  Dividends paid                                                                              (3,494)          --
  Payment of deferred compensation                                                            (1,356)      (3,985)
  Other financing activities                                                                  (1,535)      (2,199)
                                                                                           ---------    ---------
Net cash provided by (used in) financing activities                                          112,155      (75,444)
                                                                                           ---------    ---------
Effect of exchange rate changes on cash and cash equivalents                                     347        3,549
Net decrease in cash and cash equivalents                                                    (28,812)     (89,082)
Cash and cash equivalents, beginning of period                                               122,138      160,263
                                                                                           ---------    ---------
Cash and cash equivalents, end of period                                                   $  93,326    $  71,181
                                                                                           =========    =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid                                                                              $  14,878    $  24,660
                                                                                           =========    =========
Income taxes paid                                                                          $  20,363    $  30,760
                                                                                           =========    =========
NONCASH INVESTING ACTIVITY:
  Common stock issued in acquisitions                                                      $  85,583    $     --
                                                                                           =========    =========
</TABLE>

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

                                       4
<PAGE>

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

NOTE 1 - OPERATIONS AND BASIS OF PRESENTATION

NATURE OF OPERATIONS:  Young and Rubicam Inc.  ("Y&R") is a global marketing and
communications  enterprise with integrated  services in advertising,  perception
management  and  public  relations,  branding  consultation  and  design,  sales
promotion, direct marketing and healthcare communications. Y&R operates, through
wholly owned subsidiaries,  joint ventures and non-equity  affiliations,  in the
United States,  Canada, Europe, Latin America, the Asia/Pacific region and other
parts of the world.

BASIS  OF  PRESENTATION:   The  accompanying  unaudited  consolidated  financial
statements of Y&R have been prepared pursuant to the rules 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  consolidated   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,
1998.  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  years' financial statements  to
conform to the 1999 presentation.

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

NOTE 2 - 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 3 - EARNINGS PER COMMON SHARE

Basic net earnings  (loss) per share is calculated by dividing net income (loss)
by the weighted  average shares of common stock  outstanding  during the period.
Diluted  earnings  per share  reflects  the  dilutive  effect of stock  options,
primarily  stock options  granted to employees  under  stock-based  compensation
plans, and other dilutive securities. Shares used in computing basic and diluted
earnings per share were as follows:

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED                     NINE MONTHS ENDED
                                                                     SEPTEMBER 30,                          SEPTEMBER 30,
                                                              ----------------------------          -----------------------------
                                                                 1999              1998                1999               1998
                                                                 ----              ----                ----               ----
<S>                                                           <C>               <C>                 <C>                <C>
Basic - weighted average shares                               69,911,071        66,608,726          67,914,158         58,939,274
Effect of dilutive securities                                 13,894,650        16,156,028          14,681,215                 --
                                                              ----------        ----------          ----------         ----------
Diluted - weighted average shares                             83,805,721        82,764,754          82,595,373         58,939,274
                                                              ==========        ==========          ==========         ==========
</TABLE>

In the nine months ended September 30, 1998, basic and dilutive weighted average
shares used in the  calculation  were the same since the inclusion of the effect
of stock options on loss per share would have been antidilutive.

                                       5
<PAGE>

NOTE 4 - COMPREHENSIVE INCOME

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

<TABLE>
<CAPTION>

                                                 THREE MONTHS ENDED        NINE MONTHS ENDED
                                                    SEPTEMBER 30,            SEPTEMBER 30,
                                               ---------------------    ---------------------
                                                   1999       1998         1999         1998
                                                   ----       ----         ----         ----
<S>                                            <C>         <C>          <C>         <C>
Net income (loss)                              $  73,942   $  24,306    $ 124,228   $(113,328)
Unrealized appreciation in equity securities      39,166          --       39,166          --
Foreign currency translation adjustment            6,186       5,036       (8,360)      2,927
                                               ---------   ---------    ---------   ---------
Total comprehensive income (loss)              $ 119,294   $  29,342    $ 155,034   $(110,401)
                                               =========   =========    =========   =========
</TABLE>


NOTE 5 - ACQUISITIONS

On September 21, 1999, Y&R contributed $15 million and certain net assets of its
Brand Dialogue operations (the "Brand Dialogue  Contributed Assets") in exchange
for an ownership  interest in Luminant  Worldwide  Corporation  ("Luminant"),  a
newly formed  internet and  e-commerce  services  firm that  provides  strategic
consulting,  content  development  and systems  integration  capabilities to its
clients. Under the terms of the contribution agreement between Luminant and Y&R,
Y&R is eligible to receive future contingent  consideration from Luminant in the
form of  non-voting  shares of Luminant  common stock and/or cash, at Luminant's
discretion,  based on the revenue and operating profit  performance of the Brand
Dialogue  Contributed  Assets for the period from July 1, 1999 through  December
31,  1999,  and on the  consolidated  performance  of Luminant for the first six
months of 2000. Y&R recognized a net after-tax gain of approximately $42 million
on the sale of the Brand  Dialogue  Contributed  Assets in the third  quarter of
1999.  (For  information  regarding  the  accounting  treatment for the Luminant
securities, see Note 6 below.)

Effective August 2, 1999, the ownership and management structure of Dentsu Young
& Rubicam ("DY&R") was amended. The agreement resulted in Y&R acquiring majority
ownership in and operational control of all DY&R companies  throughout principal
markets in Asia,  excluding  Japan.  In Japan,  Dentsu  has  acquired a majority
share. Y&R paid approximately $6 million for the incremental  ownership interest
and in the first  quarter of 2001,  will pay $4 million  and may pay  contingent
consideration  of up to an  additional  $1.5  million  in  connection  with this
transaction, subject to DY&R's financial performance.  Effective August 2, 1999,
Y&R commenced consolidating the results of DY&R for those markets where it holds
a majority ownership interest.  A preliminary  allocation of the cost to acquire
the  additional  interest in DY&R has been made based upon the fair value of the
net assets.

On May 21, 1999, Y&R acquired KnowledgeBase Marketing,  Inc. ("KBM"), a provider
of database and analytical  services,  in a stock and cash transaction valued at
approximately $175 million.  In connection with this transaction,  Y&R issued an
aggregate of 2.1 million  shares of common stock and agreed to grant  options to
purchase  approximately  275,000  additional  shares of common  stock,  of which
approximately  255,000 were granted as of September 30, 1999.  This  transaction
has been  accounted  for under the purchase  method of  accounting  for business
combinations.  A preliminary allocation of the cost to acquire KBM has been made
based upon the fair value of KBM's net assets.

Also during the nine months ended  September  30, 1999,  Y&R acquired The Direct
Impact Company, a company  specializing  grassroots issues  management,  Rainey,
Kelly, Campbell, Roalfe, a London-based advertising agency, a majority ownership
interest in The Banner  Corporation,  a European marketing  communications  firm
specializing in the technology  sector,  and made several other acquisitions and
equity  investments for which the aggregate purchase price was approximately $60
million. Some of these transactions may require Y&R to pay additional amounts as
contingent  consideration  over a period  not to  exceed  five  years,  based on
company


                                       6
<PAGE>

performance and the achievement of stipulated targets. 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.

NOTE 6 - INVESTMENTS

In September 1999, Y&R acquired an ownership interest in Luminant.  Y&R accounts
for its investment in Luminant under Statement of Financial Accounting Standards
No. 115 ("SFAS 115"),  "Accounting  for Certain  Investments  in Debt and Equity
Securities."  As of September  30,  1999,  the fair market value of the Luminant
stock was $154.6  million.  In accordance  with SFAS 115, the unrealized gain on
the  shares  of  Luminant   stock  owned  by  Y&R,   which  are   classified  as
available-for-sale  securities, is carried net of tax as a separate component of
stockholders'  equity under the consolidated  balance sheet caption  "Unrealized
appreciation   in  equity   securities."   Unrealized   appreciation  in  equity
securities,  net of income taxes,  included in stockholders' equity at September
30, 1999, was $39.2 million.

NOTE 7 - NEW DEBT FACILITY

On June 30, 1999,  Y&R increased its borrowing  capacity by entering into a $200
million  364-day  revolving  credit  facility.  This facility  contains  certain
financial  and operating  restrictions  and covenant  requirements,  including a
maximum  leverage  ratio and a minimum  interest  coverage  requirement.  Y&R is
required to pay varying rates of interest on outstanding  borrowings,  generally
based on LIBOR plus an applicable  margin ranging from 0.525% to 0.70% depending
on the leverage  ratio.  Y&R is also required to pay a facility fee ranging from
0.10% to 0.175% and, if the  outstanding  advances  exceed 50% of the  aggregate
facility,  a  utilization  fee will be charged  ranging from .075% to .125%.  At
September  30,  1999,  Y&R  had   approximately   $345  million  in  outstanding
indebtedness under its aggregate $600 million credit facilities.

NOTE 8 - CASH DIVIDEND

On June 15, 1999 and September  15, 1999 Y&R paid  quarterly  cash  dividends of
$0.025 per  common  share to all  stockholders  of record as of June 1, 1999 and
September 1, 1999, respectively.

NOTE 9 - SUBSEQUENT EVENTS

Since September 30, 1999, Y&R has also acquired  ownership  interests in certain
other  entities.  Cash  payments  made in  connection  with  these  transactions
amounted to approximately $40 million.


                                       7
<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, 1998 as filed with the Securities and Exchange Commission.

RESULTS OF OPERATIONS

THIRD QUARTER 1999 COMPARED TO THIRD QUARTER 1998

     Revenues  for the third  quarter of 1999  increased  by $53.0  million,  or
14.1%,  to  $428.5  million  compared  to the  third  quarter  of 1998.  Organic
worldwide  revenue  growth,  excluding  the effect of  acquisitions  and foreign
currency  fluctuations,  was  10.5%.  Acquisitions  contributed  6.3% of revenue
growth,  or $24.7  million.  Domestic  revenues  increased  by 18.6%,  or 12.3%,
excluding acquisitions, to $232.3 million for the third quarter of 1999 compared
to the third quarter of 1998. International revenues increased by 9.2% to $196.2
million. Excluding the effect of foreign currency fluctuations and acquisitions,
international  revenues increased 8.5% for the third quarter of 1999 compared to
the third quarter of 1998.

     Compensation  expense  increased by $23.3 million to $250.5 million for the
third quarter of 1999  compared to the third  quarter of 1998.  This increase in
compensation  expense was primarily due to normal salary increases to support an
increased  revenue  base  and  compensation  expense  attributable  to  acquired
entities,  offset by the  favorable  impact of a decrease  in  employee  benefit
expenses as a  percentage  of total  compensation.  Compensation  expense in the
third quarter of 1999  decreased as a percentage of revenues to 58.5% from 60.5%
in the third  quarter of 1998,  principally  reflecting  the savings in employee
benefit expenses as a percentage of total compensation.

     General and  administrative  expenses  increased by $16.6 million to $122.7
million for the third  quarter of 1999  compared  to the third  quarter of 1998.
This  increase was primarily  due to  additional  operating  expenses to support
revenue growth,  incremental  facilities costs associated with the expansion and
relocation of certain domestic and  international  offices,  and amortization of
goodwill  and  other  intangible  assets   attributable  to  acquired  entities,
partially   offset  by  ongoing  cost  containment   initiatives.   General  and
administrative  expenses in the third  quarter of 1999  increased  modestly as a
percentage  of  revenues  to 28.6%  from  28.3% in the  third  quarter  of 1998,
substantially  due to increased  facilities  expenses and goodwill  amortization
related to acquired entities.

     Operating  profit  was $55.3  million  for the third  quarter  of 1999,  as
compared to $42.2  million for the third quarter of 1998.  The operating  profit
margin in the third  quarter of 1999 was 12.9%,  a 170 basis  point  improvement
over an operating profit margin of 11.2% for the third quarter of 1998.

     Net  interest  expense  increased  by $1.9  million to $4.8 million for the
third quarter of 1999  compared to the third  quarter of 1998.  The increase was
due to higher  average  borrowing  levels to  support  acquisitions,  investment
activity and share  repurchases,  partially  offset by lower  average  borrowing
rates.

     Other income of $70.8 million  represented the net pre-tax gain on the sale
of certain assets of our Brand Dialogue  operations in exchange for an ownership
interest in Luminant Worldwide Corporation ("Luminant").

     Income tax expense was $47.7 million for the third quarter of 1999 compared
to a net income tax expense of $15.9 million for the third quarter of 1998.  The
effective tax rate for the third quarter of 1999 was 39.3%  compared to 40.5% in
the third quarter of 1998.  The decrease in the effective tax rate resulted from
various tax planning  initiatives and a shift in foreign income to jurisdictions
taxed at rates lower than the U.S.  statutory rate,  which continue to favorably
impact estimated full-year income tax expense.

                                       8
<PAGE>

     Effective August 2, 1999, we commenced  consolidating the results of Dentsu
Young & Rubicam  ("DY&R") for those  markets where we hold a majority  ownership
interest.  This  has  resulted  in  a  decrease  in  equity  in  net  income  of
unconsolidated  companies and an increase in minority  interest in net income of
consolidated  subsidiaries in the third quarter of 1999 as compared to the third
quarter of 1998.

     Net  income was $73.9  million,  or $0.88 per  diluted share, for the third
quarter of 1999. Excluding the net gain related to the Luminant transaction, net
income was $31.4  million,  or $0.38 per  diluted  share.  This  compares to net
income for the third  quarter  of 1998 of $24.3  million,  or $0.29 per  diluted
share, a 31% increase in earnings per diluted share,  principally due to revenue
growth, improved operating margins and a reduced effective tax rate.

NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1998

     Revenues for the nine months ended  September 30, 1999  increased by $131.0
million,  or 12.0%,  to  $1,226.7  million  compared  to the nine  months  ended
September 30, 1998.  Organic worldwide  revenue growth,  excluding the effect of
acquisitions  and  foreign  currency  fluctuations,   was  10.5%.   Acquisitions
contributed  3.4%  of  revenue  growth,  or  $38.3  million.  Domestic  revenues
increased by 17.1%, or 13.2% excluding  acquisitions,  to $665.4 million for the
nine months ended September 30, 1999 compared to the nine months ended September
30, 1998. International revenues increased by 6.4% to $561.3 million.  Excluding
the effect of foreign  currency  fluctuations  and  acquisitions,  international
revenues increased 7.5% for the nine months ended September 30, 1999 compared to
the nine months ended September 30, 1998.

     Compensation  expense  increased by $65.0 million to $724.5 million for the
nine months ended September 30, 1999 compared to the nine months ended September
30, 1998.  This  increase in  compensation  expense was  primarily due to normal
salary increases to support an increased  revenue base and compensation  expense
attributable to acquired entities,  offset by the favorable impact of a decrease
in employee benefit expenses as a percentage of total compensation. Compensation
expense in the nine months ended September 30, 1999 decreased as a percentage of
revenues  to 59.1% from  60.2% in the nine  months  ended  September  30,  1998,
principally  reflecting the savings in employee benefit expenses as a percentage
of total compensation and improved productivity.

     General and  administrative  expenses  increased by $34.7 million to $359.5
million for the nine months ended September 30, 1999 compared to the nine months
ended  September  30,  1998.  This  increase  was  primarily  due to  additional
operating expenses to support revenue growth, amortization of goodwill and other
intangible assets attributable to acquired entities,  and incremental facilities
costs  associated  with the  expansion and  relocation  of certain  domestic and
international  offices,   partially  offset  by  our  ongoing  cost  containment
initiatives.  General  and  administrative  expenses  in the nine  months  ended
September 30, 1999 decreased  modestly as a percentage of revenues to 29.3% from
29.6% in the nine months ended September 30, 1998.

     Effective upon the  consummation  of our initial public  offering of common
stock in May 1998,  we recognized  other  operating  charges of $234.4  million.
These  charges  consisted  of  non-recurring,   non-cash   compensation  charges
resulting from the vesting of shares of restricted stock allocated to employees.

     Operating profit was $142.7 million for the nine months ended September 30,
1999. As a result of the $234.4 million other operating  charge  associated with
our initial  public  offering,  operating  loss was $123.0  million for the nine
months ended September 30, 1998.  Excluding the other operating  charge in 1998,
operating  profit  increased  $31.2 million,  or 28.0%, in the nine months ended
September  30, 1999 compared to the nine months ended  September  30, 1998.  The
operating profit margin for the nine  months ended September 30, 1999 was 11.6%,
a 140  basis  point  improvement  over the pro  forma  1998  nine-month  period,
excluding the effect of certain  non-cash  charges related to our initial public
offering.

                                       9
<PAGE>

     Net interest expense decreased by $3.8 million to $9.2 million for the nine
months ended  September 30, 1999 compared to the nine months ended September 30,
1998.  The decline was due to lower average  borrowing  levels and lower average
borrowing  rates during the nine months ended September 30, 1999 compared to the
nine months ended September 30, 1998.

     Income tax expense was $81.7  million for the nine months  ended  September
30, 1999  compared to an income tax benefit of $22.3 million for the nine months
ended  September  30, 1998.  In 1998, an income tax benefit of $64.6 million was
attributable to other operating  charges incurred in connection with our initial
public  offering and reflected the  anticipated  federal,  state and foreign tax
effect of these charges after consideration of valuation  allowances for certain
non - U.S. deductions,  partially offset by income tax expense of $42.3 million.
The  effective  tax rate for the nine months ended  September 30, 1999 was 40.0%
compared to 42.0% in the nine months ended  September 30, 1998,  after excluding
the  benefit  derived  from the other  operating  charges.  The  decrease in the
effective tax rate resulted from various tax planning initiatives and a shift in
foreign  income to  jurisdictions  taxed at rates lower than the U.S.  statutory
rate.

     In May 1998, we incurred an extraordinary  charge of $4.4 million, net of a
tax  benefit of $2.8  million,  due to the  write-off  of  unamortized  deferred
financing costs related to a previous credit facility.

     Net income for the nine months ended September 30, 1999 was $124.2 million,
or $1.83 per  diluted  share,  inclusive  of the net gain of  approximately  $42
million related to the Luminant transaction.  The net loss of $113.3 million for
1998 reflects other  operating  charges  incurred in 1998 in connection with our
initial  public  offering.  Excluding  the  net  gain  related  to the  Luminant
transaction in 1999, and the other operating charges and extraordinary charge in
1998, net income increased 34% to $81.7 million,  or $0.99 per diluted share, in
the nine months ended  September 30, 1999.  This increase was principally due to
revenue growth,  acquisition  activity,  improved operating  margins,  lower net
borrowing costs and a reduced effective tax rate.

LIQUIDITY AND CAPITAL RESOURCES

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

     Cash  and cash  equivalents  were  $93.3  million  and  $122.1  million  at
September  30,  1999 and  December  31,  1998,  respectively.  Cash  provided by
operating  activities  in the nine  months  ended  September  30, 1999 was $70.4
million  compared to cash  provided by operating  activities of $22.1 million in
the nine  months  ended  September  30,  1998,  reflecting  business  growth and
improved  operating  margins.  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 is to bill and collect from our clients in  sufficient  time to pay
the amounts due the media.

     Cash used in investing  activities  in the nine months ended  September 30,
1999 was $211.7 million and included $53.9 million in capital  expenditures  and
$157.7 million for investments and  acquisitions,  net of cash acquired.  In the
nine months ended  September  30, 1998,  cash used in investing  activities  was
$39.3 million,  principally consisting of $34.8 million in capital expenditures.
The  majority  of  capital  expenditures  in the nine  months  of 1999  were for
leasehold improvements and information technology-related purchases.  Additional
capital  expenditures  are  estimated  to be  approximately  $25 million for the
remainder  of  1999.  Acquisitions  and  investments  in the nine  months  ended
September  30,  1999  consisted  primarily  of  the  purchase  of  KnowledgeBase
Marketing,  Inc.,  a provider  of  database  and  analytical  services,  and the
contribution  of $15  million  and  certain  net  assets of our  Brand  Dialogue
operations in exchange for an ownership interest in Luminant.

                                       10
<PAGE>

     Cash provided by financing  activities  in the nine months ended  September
30, 1999 was $112.2  million and included net borrowings of $209.3  million.  On
July 28, 1999, our Board of Directors approved an increase of 4.0 million shares
to our authorized  share  repurchase  program,  bringing the total shares we can
repurchase  through August 2001 under the repurchase  program to 12 million.  In
the nine months ended  September 30, 1999, we repurchased  2.5 million shares of
our common stock on the open market and in other  transactions  for an aggregate
of $100.3 million. From October 1, 1999 through November 5, 1999, we repurchased
an additional  approximately  900,000 shares of common stock at an average price
of $44.95 on the open market and in other transactions. This brings the total to
5.3 million shares repurchased under our authorized  repurchase  program. In the
nine months ended  September  30, 1998,  cash used in financing  activities  was
$75.4 million,  reflecting the repayment of our previous credit facility, offset
in part by the proceeds  received from the  consummation  of our initial  public
offering and borrowings under our current credit facility.

     On June 30, 1999, we increased  our borrowing  capacity by entering into an
additional  $200  million  credit  facility.  At  September  30,  1999,  we  had
approximately $345 million in outstanding  indebtedness under our aggregate $600
million credit facilities.  We expect to fund payments of principal and interest
under  these  credit  facilities  with cash from  operations.  During  the first
quarter of 1999, all interest rate protection  agreements to which we were party
either  matured or were retired.  Accordingly,  at September 30, 1999, we had no
such agreements outstanding.

     At  September  30, 1999,  our net  deferred tax assets were $145.9  million
consisting  primarily  of federal,  state and foreign net  operating  loss carry
forwards  and  deferred  tax assets  resulting  from prior  period  compensation
payments made in  connection  with our initial  public  offering in 1998 and our
recapitalization in 1996.

     Our credit  facilities  contain  financial and operating  restrictions  and
covenant  requirements,  and permit the payment of cash dividends  except in the
event of a continuing default under the credit agreements.  On June 15, 1999 and
September 15, 1999, we paid a quarterly cash dividend of $0.025 per common share
to all  stockholders  of  record  as of June 1,  1999  and  September  1,  1999,
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
contractual restrictions in our credit facilities.

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

     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.

YEAR 2000 COMPLIANCE

     We continue to work to resolve the potential impact of the year 2000 on the
ability of our computer  systems to accurately  process  information  with dates
later  than  December  31,  1999,  or  to  process  date-sensitive   information
accurately after the turn of the century (referred to as the "Year 2000" issue.)
We have modified or replaced all significant systems necessary for us to operate
our business that we have identified as requiring Year 2000 remediation. We have
completed the testing of all critical systems and continue working on finalizing
tests for the non-critical systems. We are also dependent in part on third-party
computer systems and  applications,  particularly  with respect to such critical
tasks as accounting,  billing and buying, planning and paying for media, as well
as on our own computer systems. We have performed tests of major systems in this
category and have received  assurances as to their readiness for compliance with
the Year 2000 issue.

     While we believe our process is designed to be  successful,  because of the
complexity of the Year 2000 issue and the interdependence of organizations using
computer  systems,  it is possible  that our efforts,  or those of third parties
with whom we interact, will not be satisfactorily completed in a timely fashion.


                                       11
<PAGE>

Our failure to satisfactorily  address the Year 2000 issue could have a material
adverse effect on our prospects,  business,  financial  condition and results of
operations.

     The  out-of-pocket  costs incurred in the first nine months of 1999 for the
Year 2000 issue  were  not  material to  consolidated  results of operations and
are expected to be  immaterial  for the year ended  December  31, 1999.  We have
funded all identified  remedial projects in connection with our program.  We may
experience  cost  overruns or delays as we replace or modify  systems,  however,
which could have a material adverse effect on our prospects, business, financial
condition and results of operations.

We have completed the assessment and compliance  testing phases and believe that
the  implementation  phase of the Year 2000 readiness plan will be substantially
completed during the fourth quarter.  Contingency planning for critical business
processes will continue  through the fourth quarter,  to seek to ensure a smooth
migration into the year 2000.

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. 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 1998  Form 10-K  provides  a more
detailed  discussion  of  the  market  risks  affecting  our  operations.  As of
September  30, 1999,  no material  change has occurred in the  Company's  market
risks,  as  compared  to the  disclosure  in its Form  10-K for the year  ending
December 31, 1998, except as noted below.

   At September 30, 1999, Y&R had $344.4 million in outstanding  indebtedness as
compared to $63.9 million at December 31, 1998. For floating rate debt, interest
rate changes  generally do not affect the fair market value but do impact future
earnings and cash flows,  assuming  other  factors are held  constant.  Based on
outstanding indebtedness as of September 30, 1999, the annual after-tax earnings
and related cash flows impact  resulting from a one percentage point increase or
decrease in interest  rates would be  approximately  $2 million,  holding  other
variables constant.

   On September 21, 1999, Y&R received equity  securities in Luminant  Worldwide
Corporation   ("Luminant"),   a  newly  formed,  publicly  traded  internet  and
e-commerce  services firm, in exchange for $15 million and certain net assets of
our Brand Dialogue  operations.  The value of these equity  securities has since
appreciated  significantly.  However,  the value of the  equity  securities  may
fluctuate  based on the  volatility of Luminant's  stock price and other general
market   conditions.   We  have   classified   these   Luminant   securities  as
available-for-sale  securities  and,  as such,  they are carried net of tax as a
separate component of stockholders'  equity under the consolidated balance sheet
caption "Unrealized appreciation in equity securities." (For further information
regarding the accounting  treatment for the Luminant  securities,  see Note 6 of
the Notes to the Consolidated Financial Statements.)

                                       13
<PAGE>

PART II: OTHER INFORMATION


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits: See Exhibit Index

     (b) Reports on Form 8-K: None.






                                       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:  November 12, 1999


                              /s/ Jacques Tortoroli
                  --------------------------------------------
                             Name: Jacques Tortoroli
                     Title: Senior Vice President of Finance
                          Principal Accounting Officer








                                       15
<PAGE>


                                  EXHIBIT INDEX

NUMBER     DESCRIPTION
------     -----------

10.1       Credit  Agreement, dated  as of June 30, 1999, among  Young & Rubicam
           Inc. and the banks named therein.

27.1       Financial Data Schedule







                                       16