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, 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 July 30, 1999 was 70,173,772.






<PAGE>

                  YOUNG & RUBICAM INC. AND SUBSIDIARY COMPANIES

                                    FORM 10-Q

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
PART I: FINANCIAL INFORMATION                                                                        PAGE NO.
                                                                                                     --------
<S>           <C>                                                                                     <C>
   Item 1.     Financial Statements

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

                  Consolidated Statements of Operations for the
                  Three Months and Six Months Ended June 30, 1999 and 1998                                 3

                  Consolidated Statements of Cash Flows for the
                  Six Months Ended June 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

PART II: OTHER INFORMATION

   Item 4.     Submission of Matters to a Vote of Security Holders                                        13

   Item 6.     Exhibits and Reports on Form 8-K

SIGNATURES

EXHIBIT INDEX

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
</TABLE>

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 Y&R's  performance.  It is  important  to note that Y&R's
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  revenues  pursuant  to  incentive
compensation  arrangements entered into by Y&R 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) the overall  level of
economic  activity in the principal  markets in which Y&R conducts  business and
other trends affecting Y&R's financial condition or results of operations,  (iv)
the impact of  competition  in the marketing and  communications  industry,  (v)
Y&R's liquidity and financing plans and (vi) risks associated with Y&R's efforts
to comply with Year 2000 requirements.  All  forward-looking  statements in this
document are based on information available to Y&R on the date hereof.


<PAGE>

PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
YOUNG & RUBICAM INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                                             June 30,  December 31,
(in thousands, except share and per share amounts)                                                             1999         1998
                                                                                                            ---------  ------------
<S>                                                                                                       <C>           <C>
Current Assets
   Cash and cash equivalents                                                                              $    79,572   $   122,138
   Accounts receivable, net of allowance for doubtful accounts of $16,846 and $17,938 at
    June 30, 1999 and December 31, 1998, respectively                                                         855,630       835,284
   Costs billable to clients                                                                                   88,410        55,187
   Other receivables                                                                                           37,604        37,177
   Deferred income taxes                                                                                       46,866        46,803
   Prepaid expenses and other assets                                                                           33,407        25,979
                                                                                                            ---------     ---------
        Total Current Assets                                                                                1,141,489     1,122,568
                                                                                                            ---------     ---------
Noncurrent Assets
   Property and equipment, net                                                                                159,072       150,413
   Deferred income taxes                                                                                      155,622       158,646
   Goodwill, less accumulated amortization of $77,277 and $84,292 at June 30, 1999 and
    December 31, 1998, respectively                                                                           264,204       120,075
   Equity in net assets of and advances to unconsolidated companies                                            45,277        38,397
   Other assets                                                                                                66,589        45,156
                                                                                                            ---------     ---------
        Total Noncurrent Assets                                                                               690,764       512,687
                                                                                                            ---------     ---------
        Total Assets                                                                                      $ 1,832,253   $ 1,635,255
                                                                                                            =========     =========
Current Liabilities
   Loans payable                                                                                          $    35,976   $    31,365
   Accounts payable                                                                                           995,296     1,008,624
   Accrued expenses and other liabilities                                                                     185,135       203,099
   Accrued payroll and bonuses                                                                                 45,914        77,078
   Income taxes payable                                                                                        17,177        19,290
                                                                                                            ---------     ---------
        Total Current Liabilities                                                                           1,279,498     1,339,456
                                                                                                            ---------     ---------
Noncurrent Liabilities
   Loans payable                                                                                              214,430        31,494
   Deferred compensation                                                                                       31,856        30,635
   Other liabilities                                                                                          108,822       114,128
                                                                                                            ---------     ---------
        Total Noncurrent Liabilities                                                                          355,108       176,257
                                                                                                            ---------     ---------
Commitments and Contingencies
Minority Interest                                                                                               3,532         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 - 70,056,836 shares and 66,374,569 shares at June 30, 1999 and December 31,
    1998, respectively (excluding 151,559 shares and 3,976,941 shares in treasury)                                702           704
   Capital surplus                                                                                            935,405       934,676
   Accumulated deficit                                                                                       (709,761)     (758,292)
   Cumulative translation adjustment                                                                          (25,356)      (10,810)
   Pension liability adjustment                                                                                (1,738)       (1,738)
                                                                                                            ---------     ---------
                                                                                                              199,252       164,540
   Common stock in treasury, at cost                                                                           (5,137)      (49,571)
                                                                                                            ---------     ---------
        Total Stockholders' Equity                                                                            194,115       114,969
                                                                                                            ---------     ---------
        Total Liabilities and Stockholders' Equity                                                        $ 1,832,253   $ 1,635,255
                                                                                                            =========     =========
</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 JUNE 30,         SIX MONTHS ENDED JUNE 30,
per share amounts)                                     -------------------------------     ------------------------------
                                                             1999             1998              1999              1998
<S>                                                    <C>               <C>               <C>               <C>
Revenues                                               $    414,361      $    372,128      $    798,234      $    720,301

Compensation expense, including employee benefits           239,016           218,667           474,034           432,265
General and administrative expenses                         122,511           109,484           236,808           218,726
Other operating charges                                          --           234,449                --           234,449
                                                         ----------        ----------        ----------        ----------
Operating expenses                                          361,527           562,600           710,842           885,440
                                                         ----------        ----------        ----------        ----------

Income (loss) from operations                                52,834          (190,472)           87,392          (165,139)
Interest expense, net                                        (2,799)           (4,597)           (4,445)          (10,172)
Other income                                                     --             1,373                --             2,200
                                                         ----------        ----------        ----------        ----------
Income (loss) before income taxes                            50,035          (193,696)           82,947          (173,111)
Income tax provision (benefit)                               20,514           (47,057)           34,008           (38,205)
                                                         ----------        ----------        ----------        ----------
                                                             29,521          (146,639)           48,939          (134,906)
Equity in net income of unconsolidated companies              1,668             1,512             1,652             1,627
Minority interest in net (income) loss of
  consolidated subsidiaries                                    (604)             (264)             (305)               78
                                                         ----------        ----------        ----------        ----------

Income (loss) before extraordinary charge                    30,585          (145,391)           50,286          (133,201)
Extraordinary charge for early retirement of debt,
  net of tax benefit of $2,834 in 1998                           --            (4,433)               --            (4,433)
                                                         ----------        ----------        ----------        ----------

Net income (loss)                                      $     30,585      $   (149,824)     $     50,286      $   (137,634)
                                                         ==========        ==========        ==========        ==========
Earnings (loss) per share:
  Basic:
   Income (loss) before extraordinary charge           $       0.45      ($      2.45)     $       0.75      ($      2.42)
   Extraordinary charge                                          --             (0.08)               --             (0.08)
                                                         ----------        ----------        ----------        ----------
   Net income (loss)                                   $       0.45      ($      2.53)     $       0.75      ($      2.50)
                                                         ==========        ==========        ==========        ==========
  Diluted:
   Income (loss) before extraordinary charge           $       0.37      ($      2.45)     $       0.61      ($      2.42)
   Extraordinary charge                                          --             (0.08)               --             (0.08)
                                                         ----------        ----------        ----------        ----------
   Net income (loss)                                   $       0.37      ($      2.53)     $       0.61      ($      2.50)
                                                         ==========        ==========        ==========        ==========
Weighted average shares outstanding (Note 3):
  Basic                                                  67,502,175        59,272,814        66,912,004        55,040,989
                                                         ==========        ==========        ==========        ==========
  Diluted                                                82,200,161        59,272,814        82,047,778        55,040,989
                                                         ==========        ==========        ==========        ==========
</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>
                                                                                                       SIX MONTHS ENDED JUNE 30,
                                                                                                  --------------------------------
(in thousands)                                                                                            1999            1998
<S>                                                                                                   <C>             <C>
Cash flows from operating activities:
   Net income (loss)                                                                                  $  50,286       $(137,634)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
  Depreciation and amortization                                                                          32,465          28,353
  Other operating charges                                                                                    --         234,449
  Extraordinary charge, net                                                                                  --           4,433
  Deferred income tax expense (benefit)                                                                  24,049         (64,329)
  Equity in net income of unconsolidated companies                                                       (1,652)         (1,627)
  Dividends from unconsolidated companies                                                                 1,181             908
  Minority interest income (loss) of consolidated subsidiaries                                              305             (78)
Change in assets and liabilities,excluding effect from acquisitions,
  dispositions and foreign exchange:
  Accounts receivable                                                                                    (7,967)        (20,259)
  Costs billable to clients                                                                             (33,194)        (13,061)
  Other receivables                                                                                        (304)          2,241
  Prepaid expenses and other assets                                                                      (3,681)         (4,102)
  Accounts payable                                                                                       15,534          16,933
  Accrued expenses and other liabilities                                                                (20,074)        (35,255)
  Accrued payroll and bonuses                                                                           (30,382)        (17,607)
  Income taxes payable                                                                                   (1,687)         (4,176)
  Deferred compensation                                                                                   1,090           1,957
  Other                                                                                                  (9,074)          5,101
                                                                                                      ---------       ---------
Net cash provided by (used in) operating activities                                                   $  16,895      $  (3,753)
                                                                                                      ---------       ---------

Cash flows from investing
  activities:
  Additions to property and equipment                                                                 $ (32,516)      $ (20,044)
  Acquisitions, net of cash acquired                                                                   (102,659)          (499)
  Investment in net assets of and advances to unconsolidated companies                                  (11,558)         (2,428)
  Proceeds from notes receivable                                                                             --             339
                                                                                                      ---------       ---------
Net cash used in investing activities                                                                 $(146,733)      $ (22,632)
                                                                                                      ---------       ---------
Cash flows from financing activities:
  Proceeds from (repayments of) loans payable, net                                                    $ 156,516       $(197,028)
  Proceeds from issuance of common stock in initial public offering, net                                     --         158,637
  Common stock issued                                                                                     8,351           3,081
  Common stock repurchased                                                                              (67,810)        (10,009)
  Dividends paid                                                                                         (1,752)             --
  Payment of deferred compensation                                                                       (1,356)         (3,302)
   deferred compensation
  Payment of installment notes, net                                                                          --          (5,229)
  Other financing activities                                                                             (1,001)         (1,873)
                                                                                                      ---------       ---------
Net cash provided by (used in) financing activities                                                   $  92,948       $ (55,723)
                                                                                                      ---------       ---------
Effect of exchange rate changes on cash and cash equivalents                                             (5,676)         (1,395)
Net decrease in cash and cash equivalents                                                               (42,566)        (83,503)
Cash and cash equivalents, beginning of period                                                          122,138         160,263
                                                                                                      ---------       ---------
Cash and cash equivalents, end of period                                                              $  79,572       $  76,760
                                                                                                      =========       ==========
Supplemental disclosure of cash flow information:
Interest paid                                                                                         $   7,479       $  12,279
                                                                                                      =========       ==========
Income taxes paid                                                                                     $  14,208       $  16,020
                                                                                                      =========       ==========
Noncash investing activity:
  Common stock issued in acquisitions                                                                 $  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 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 and 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 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                        Six months ended
                                                                      June 30,                                  June 30,
                                                            -------------------------------       --------------------------------
                                                                 1999            1998                  1999             1998
                                                            --------------- ---------------       ---------------- ---------------
<S>                                                           <C>               <C>                 <C>                <C>
Basic - weighted average shares                                  67,502,175      59,272,814             66,912,004      55,040,989
Effect of dilutive securities                                    14,697,986              --             15,135,774              --
                                                            --------------- ---------------       ---------------- ---------------

Diluted - weighted average shares                                82,200,161      59,272,814             82,047,778      55,040,989
                                                            =============== ===============       ================ ===============
</TABLE>

In 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 June 30,                 Six months ended
                                                                                                             June 30,
                                                            -------------------------------       --------------------------------
                                                                 1999            1998                  1999             1998
                                                            --------------- ---------------       ---------------- ---------------
<S>                                                         <C>            <C>                   <C>              <C>
Net income (loss)                                               $ 30,585       $ (149,824)           $  50,286        $ (137,634)
Foreign currency translation adjustment                           (7,332)             (55)             (14,546)           (2,109)
                                                            --------------- ---------------       ---------------- ---------------
Total comprehensive income (loss)                              $  23,253       $ (149,879)           $  35,740        $ (139,743)
                                                            =============== ===============       ================ ===============
</TABLE>

NOTE 5 - ACQUISITIONS AND INVESTMENTS

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 June 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 on the fair value of KBM's net assets.

On  March  31,  1999,  Y&R  acquired  The  Direct  Impact  Company,   a  company
specializing  in grassroots  issues  management.  Also,  effective in the second
quarter, Y&R completed several other acquisitions.  The aggregate purchase price
of acquisitions in the first half of 1999,  excluding KBM, was approximately $15
million.  All such  acquisitions were accounted for under the purchase method of
accounting.

In June 1999,  Y&R  announced  its  intention  to invest in  Luminant  Worldwide
Corporation  ("Luminant"),  a newly  formed  internet  and  e-commerce  services
consulting firm (formerly known as Clarant Worldwide Corporation). Luminant will
bring  together  eight  companies,  including the New York office of Y&R's Brand
Dialogue,  in the interactive  media services market.  Y&R expects to receive an
ownership  interest  in  Luminant  in  exchange  for certain net assets of Brand
Dialogue - New York. The closing of this  transaction,  which is contingent upon
the completion of Luminant's initial public offering, is expected to occur later
in the year.

NOTE 6 - 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%.

NOTE 7 - CASH DIVIDEND

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

                                       6
<PAGE>


NOTE 8 - SUBSEQUENT EVENTS

On August 3, 1999, Y&R announced  that it reached  agreement with Dentsu Inc. to
change the ownership and management structure of the joint venture, Dentsu Young
& Rubicam  ("DY&R").  This new agreement will generally  result in Y&R acquiring
majority ownership in and operational  control of all DY&R companies  throughout
the principal markets in Asia,  excluding Japan, for an estimated purchase price
of approximately  $11 million.  In Japan,  Dentsu will acquire a majority share.
This transaction is expected to close later in the year.

                                       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

SECOND QUARTER 1999 COMPARED TO SECOND QUARTER 1998

     Revenues  for the second  quarter of 1999  increased by $42.2  million,  or
11.3%,  to $414.4  million  compared to the second quarter of 1998. The increase
was primarily due to net new business,  including  business from new clients and
higher revenue from existing clients.  Acquisitions  contributed 2.9% of revenue
growth,  or $10.8 million.  United States revenues  increased by 19.1%, or 14.3%
excluding  acquisitions,  to  $224.6  million  for the  second  quarter  of 1999
compared to the second quarter of 1998. International revenues increased by 3.4%
to $189.8  million,  primarily due to strong  performance  in Europe,  which was
partially  offset by a decline in Latin  America  and the impact of the  overall
strengthening of the U.S. dollar against foreign  currencies.  Organic worldwide
revenue  growth,  excluding  the effect of  acquisitions  and  foreign  currency
fluctuations, was 10.6%, with the impact of the strengthening of the U.S. dollar
against  foreign  currencies  more than  offset by revenues  from  acquisitions.
Excluding  the  effect  of  foreign  currency   fluctuations  and  acquisitions,
international revenues increased 6.8% for the second quarter of 1999 compared to
the second quarter of 1998.

     Compensation  expense  increased by $20.3 million to $239.0 million for the
second quarter of 1999 compared to the second quarter of 1998.  This increase in
compensation   expense  was  primarily  due  to  normal  salary   increases  and
compensation expense attributable to acquired entities.  Compensation expense in
the second  quarter of 1999  decreased as a percentage of revenues to 57.7% from
58.8% in the second quarter of 1998,  reflecting  improved  productivity.

     General and  administrative  expenses  increased by $13.0 million to $122.5
million for the second  quarter of 1999 compared to the second  quarter of 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 relocation of certain domestic offices, partially offset by our ongoing
cost containment  measures.  General and  administrative  expenses in the second
quarter of 1999 increased as a percentage of revenues to 29.6% from 29.4% in the
second quarter of 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.

     Income from operations was $52.8 million for the second quarter of 1999. As
a result of the  $234.4  million  other  operating  charge  associated  with our
initial public offering,  loss from operations was $190.5 million for the second
quarter of 1998.  Excluding  the other  operating  charge in 1998,  income  from
operations  increased  $8.9  million,  or 20.1%,  in the second  quarter of 1999
compared to the second quarter of 1998.

     Net  interest  expense  decreased  by $1.8  million to $2.8 million for the
second  quarter of 1999 compared to the second  quarter of 1998. The decline was
due to lower average  borrowing levels and lower average  borrowing rates during
the second quarter of 1999 compared to the second quarter of 1998.

                                       8

<PAGE>

     We recognized income tax expense of $20.5 million for the second quarter of
1999  compared  to a net income  tax  benefit  of $47.1  million  for the second
quarter of 1998. An income tax benefit of $64.6 million in 1998 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 $17.5  million.  The
effective tax rate for the second quarter of 1999 was 41.0% compared to 43.0% in
the second quarter of 1998,  after  excluding the benefit derived from the other
operating charges.  The decrease in the effective tax rate resulted from various
international  tax  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 second quarter of 1999 was $30.6 million compared to net
loss of $149.8  million for 1998,  primarily as a result of the other  operating
charge  incurred  in  1998 in  connection  with  our  initial  public  offering.
Excluding  the other  operating  charge and  extraordinary  charge in 1998,  net
income increased $6.1 million,  or 24.9%, in the second quarter of 1999 compared
to the second  quarter of 1998.  This  increase was  principally  due to revenue
growth,  improved  operating  margins,  lower net borrowing  costs and a reduced
effective tax rate.


SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO SIX MONTHS ENDED JUNE 30, 1998

     Revenues for the six months ended June 30, 1999 increased by $77.9 million,
or 10.8%, to $798.2 million  compared to the six months ended June 30, 1998. The
increase was  primarily  due to net new  business,  including  business from new
clients and higher revenue from existing clients.  Acquisitions contributed 1.8%
of revenue growth, or $13.3 million.  United States revenues increased by 16.3%,
or 13.6% excluding acquisitions, to $433.2 million for the six months ended June
30, 1999 compared to the six months ended June 30, 1998.  International revenues
increased by 4.9% to $365.1  million,  primarily  due to strong  performance  in
Europe, which was partially offset by declines in Latin America and Asia and the
impact  of  the  overall  strengthening  of  the  U.S.  dollar  against  foreign
currencies.   Organic  worldwide   revenue  growth,   excluding  the  effect  of
acquisitions and foreign currency  fluctuations,  was 10.5%,  with the impact of
the strengthening of the U.S. dollar against foreign currencies more than offset
by  revenues  from  acquisitions.  Excluding  the  effect  of  foreign  currency
fluctuations and acquisitions, international revenues increased 7.0% for the six
months ended June 30, 1999 compared to the six months ended June 30, 1998.

     Compensation  expense  increased by $41.8 million to $474.0 million for the
six months  ended June 30, 1999  compared to the six months ended June 30, 1998.
This  increase  in  compensation  expense  was  primarily  due to normal  salary
increases  and   compensation   expense   attributable  to  acquired   entities.
Compensation  expense  in the six  months  ended June 30,  1999  decreased  as a
percentage  of  revenues  to 59.4% from  60.0% in the six months  ended June 30,
1998, reflecting improved productivity.

     General and  administrative  expenses  increased by $18.1 million to $236.8
million for the six months ended June 30, 1999  compared to the six months ended
June 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 relocation of certain domestic offices, partially offset by our ongoing
cost containment measures. General and administrative expenses in the six months
ended June 30, 1999 decreased as a percentage of revenues to 29.7% from 30.4% in
the six months ended June 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.

                                       9
<PAGE>

     Income from  operations was $87.4 million for the six months ended June 30,
1999. As a result of the $234.4 million other operating  charge  associated with
our initial public offering, loss from operations was $165.1 million for the six
months ended June 30, 1998. Excluding the other operating charge in 1998, income
from operations  increased $18.1 million, or 26.1%, in the six months ended June
30, 1999 compared to the six months ended June 30, 1998.

     Net interest expense  decreased by $5.7 million to $4.4 million for the six
months ended June 30, 1999  compared to the six months ended June 30, 1998.  The
decline was due to lower average  borrowing  levels and lower average  borrowing
rates during the six months ended June 30, 1999 compared to the six months ended
June 30, 1998.

     We recognized  income tax expense of $34.0 million for the six months ended
June 30, 1999  compared  to an income tax  benefit of $38.2  million for the six
months ended June 30, 1998.  An income tax benefit of $64.6  million in 1998 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 $26.4 million.
The effective tax rate for the six months ended June 30, 1999 was 41.0% compared
to 43.0% in the six months  ended June 30,  1998,  after  excluding  the benefit
derived from the other operating charges. The decrease in the effective tax rate
resulted  from  various  international  tax  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 six  months  ended  June 30,  1999 was  $50.3  million
compared to net loss of $137.6  million for 1998,  primarily  as a result of the
other  operating  charge  incurred in 1998 in connection with our initial public
offering. Excluding the other operating charge and extraordinary charge in 1998,
net income  increased $13.6 million,  or 37.1%, in the six months ended June 30,
1999  compared  to the six  months  ended  June  30,  1998.  This  increase  was
principally  due to  revenue  growth,  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 $79.6 million and $122.1 million at June 30,
1999 and December 31, 1998.  Cash  provided by operating  activities  in the six
months ended June 30, 1999 was $16.9 million  compared to cash used in operating
activities  of $3.8 million in the six months  ended June 30,  1998,  reflecting
strong  business  growth.  Quarterly  operating  cash  flows  are  significantly
impacted by the 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 six months ended June 30, 1999 was
$146.7  million and included  $32.5 million in capital  expenditures  and $114.2
million for investments and acquisitions net of cash acquired. In the six months
ended  June 30,  1998,  cash used in  investing  activities  was $22.6  million,
principally consisting of $20.0 million in capital expenditures. The majority of
capital   expenditures   in  the  first  half  of  1999  were  for   information
technology-related   purchases   and  leasehold   improvements.   These  capital
expenditures are estimated to be approximately  $50 million for the remainder of
1999. Acquisitions and investments in the first half of 1999 consisted primarily
of the  purchase of  KnowledgeBase  Marketing,  Inc., a provider of database and
analytical  services,  in a stock and cash  transaction  valued at approximately
$175  million,  and  the  purchase  of The  Direct  Impact  Company,  a  company
specializing in grassroots issues management.

                                       10

<PAGE>

     Cash provided by financing activities in the six months ended June 30, 1999
was $92.9  million and included net  borrowings  of $156.5  million.  In the six
months  ended June 30, 1999,  we  repurchased  1.7 million  shares of our common
stock on the open market and in other  transactions  for an  aggregate  of $67.8
million.  As of June 30, 1999, we had  repurchased a total of 3.6 million shares
under the existing 8.0 million shares repurchase  program. 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 remaining number of shares we can
repurchase to 8.4 million  through August 2001. In the six months ended June 30,
1998,  cash used in  financing  activities  was $55.7  million,  reflecting  the
repayment of our previous credit facility,  offset by the proceeds received from
the consummation of our initial public offering and borrowings under our current
credit facility.

     In the second  quarter of 1999,  we  increased  our  borrowing  capacity by
entering into an additional $200 million credit  facility.  At June 30, 1999, we
had approximately  $214 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 June 30, 1999, we had no
such agreements outstanding.

     At  June  30,  1999,  our net  deferred  tax  assets  were  $202.5  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 of common stock 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 agreement.  On June 15, 1999, we
paid a quarterly cash dividend of $0.025 per common share to all stockholders of
record as of June 1, 1999.  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 are  working 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 the majority of all affected systems and are in the
process  of  completing  the  tests of these  systems  to fully  validate  their
readiness for compliance with the Year 2000 issue. 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.  However,  we  continue  to  monitor  the
adequacy of the processes and progress of other less critical vendors of systems
and  applications  that may be  affected  by the  Year  2000  issue  and to seek
assurances from these vendors that their systems are Year 2000 compliant.

     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

                                       11
<PAGE>

with whom we  interact,  will not be  satisfactorily  completed  in   a   timely
fashion. 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.

     We do not expect the costs of our Year 2000 project to be material,  and we
have funded all  identified  remedial  projects in connection  with our program.
However,  we may  experience  cost  overruns  or delays as we  replace or modify
systems, which could have a material adverse effect on our prospects,  business,
financial condition and results of operations.

     We are presently  developing  transition and contingency plans for critical
business processes 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",  which is
required  to be  adopted  in years  beginning  after  June 15,  2001.  We do not
anticipate that the adoption of this statement will have a significant effect on
our financial condition.

                                       12


<PAGE>


PART II: OTHER INFORMATION

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

The Annual Meeting of the  Stockholders of Y&R was held on May 14, 1999. Y&R did
solicit  proxies.  The  holders 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 I Directors, each to serve for a term expiring at
       the Annual Meeting of Y&R's Stockholders to be held in 2002 and until his
       successor is duly elected and qualified.

                                      Number of Shares
         Name of Director         For               Withheld

         F. Warren Hellman        61,515,594           25,418
         Alan D. Schwartz         59,041,548        2,499,464
         Edward H. Vick           61,516,394           24,618

B.     Ratification and  approval of Y&R's 1997 Incentive  Compensation Plan, as
       amended.

                                       Number of Shares
                  For              Against        Abstentions

                  46,041,566      15,485,356           14,090

C.     Ratification of the appointment of the firm of PricewaterhouseCoopers LLP
       as Y&R's independent auditors for the year ending December 31,1999.

                                       Number of Shares
                  For              Against        Abstentions

                  61,376,922       160,550              3,540


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

  (a) Exhibits: See Exhibit Index

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

                                       13
<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 13, 1999

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




                                       14



<PAGE>


                                  EXHIBIT INDEX


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

27.1                    Financial Data Schedule

                                       15