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                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                -----------------


                                    FORM 8-K

                Current Report Pursuant to Section 13 or 15(d) OF

                       THE SECURITIES EXCHANGE ACT OF 1934

Date of Report                                          Commission file number
January 5, 2001                                                 1-6686
                                                           -----------------


                    THE INTERPUBLIC GROUP OF COMPANIES, INC.
             (Exact name of registrant as specified in its charter)

           Delaware                                             13-1024020
-------------------------------                             --------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification  No.)

1271 Avenue of the Americas, New York, New York                    10020
-----------------------------------------------                  ---------
(Address of principal executive offices)                         (Zip Code)


       Registrant's telephone number, including area code: (212) 399-8000
                                ----------------

Item 5.  OTHER EVENTS

In November  2000,  the  Interpublic  Group of Companies,  Inc. (the  "Company")
acquired Deutsch,  Inc. and its affiliate companies ("Deutsch") in a transaction
accounted  for as a pooling of  interests.  This report on Form 8-K includes the
Company's  supplemental  consolidated  financial  statements and other financial
information restated to reflect the effect of the pooling of Deutsch.

These combined  results will become the  historical  results of the Company upon
publication of financial results for a period inclusive of at least 30 days of

the financial  results of Deutsch  subsequent to the date of consummation of the
Deutsch  transaction.  This report may be  incorporated  by reference into other
reports or  registration  statements  filed  with the  Securities  and  Exchange
Commission.

In April 2000, the Company acquired NFO Worldwide, Inc. ("NFO") in a transaction
accounted  for as a pooling of  interests.  The results of NFO and several other
recent  acquisitions,  all of which  have  been  accounted  for as  poolings  of
interests,  have been included in previously restated financial statements filed
on Form 8-K on September 15, 2000.

<PAGE>

Item 7.     FINANCIAL STATEMENTS AND EXHIBITS

(c)         Other Exhibits

Exhibit 99  Financial Statements, Financial Information and Exhibits

            Financial Highlights

            Management's Discussion and Analysis of Financial
            Condition and Results of Operations

Supplemental Consolidated Financial Statements

            Report of Independent Accountants

                 - PricewaterhouseCoopers LLP

                 - Arthur Andersen LLP

                 - Soteriou Banerji

                 - Ernst & Young

                 - Ernst & Young LLP

                 - J. H. Cohn LLP


            Supplemental Consolidated Balance Sheet
              December 31, 1999 and 1998

            Supplemental Consolidated Statement of Income for the Years Ended
              December 31, 1999, 1998 and 1997

            Supplemental  Consolidated  Statement  of Cash  Flows  for the Years
              Ended December 31, 1999, 1998 and 1997

            Supplemental Consolidated Statement of Stockholders' Equity and
              Comprehensive Income For the Years Ended December 31, 1999, 1998
              and 1997

            Notes to Supplemental Consolidated Financial Statements

            Selected Financial Data For Five Years

            Results by Quarter (Unaudited)

Supplemental Consolidated Financial Statement Schedule

            Schedule VIII: Valuation and Qualifying Accounts

Supplemental Consolidated Financial Statements

            Supplemental Consolidated Balance Sheet
               September 30, 2000 (unaudited) and December 31, 1999

            Supplemental  Consolidated  Statement  of Income for the Nine Months
               Ended September 30, 2000 and 1999 (unaudited)

            Supplemental Consolidated Statement of Comprehensive Income for
               the Nine Months Ended September 30, 2000 and 1999 (unaudited)

<PAGE>




            Supplemental Consolidated Statement of Cash Flows for the
               Nine Months Ended September 30, 2000 and 1999 (unaudited)

            Notes to Supplemental Consolidated Financial Statements (unaudited)

            Management's Discussion and Analysis of
             Financial Condition and Results of Operations (unaudited)


Exhibit 11  COMPUTATION OF EARNINGS PER SHARE

            For the Years Ended December 31, 1995, 1996, 1997, 1998 and 1999

            For the Three Months Ended September 30, 2000 and 1999

            For the Nine Months Ended September 30, 2000 and 1999

Exhibit 23  CONSENT OF INDEPENDENT ACCOUNTANTS

            PricewaterhouseCoopers LLP

            Arthur Andersen LLP

            Soteriou Banerji

            Ernst & Young

            Ernst & Young LLP

            J. H. Cohn LLP

Exhibit 27  RESTATED FINANCIAL DATA SCHEDULE

            For the Nine Months Ended September 30, 2000 and 1999

            For the Years Ended December 31, 1999, 1998 and 1997

<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.

                         THE INTERPUBLIC GROUP OF COMPANIES, INC.
                                        (Registrant)





Date:  January 5, 2001      BY /S/  FREDERICK MOLZ
                            ----------------------
                            Frederick Molz
                            Vice President and Controller




<PAGE>

                              FINANCIAL HIGHLIGHTS
                  (Amounts in Thousands Except Per Share Data)
--------------------------------------------------------------------------------
December 31
                                                                         Percent
                                                                       Increase/

                                        1999            1998         (decrease)
--------------------------------------------------------------------------------
Operating Data

 Revenue                            $ 4,977,823     $  4,218,657          18.0%
 Net Income                         $   331,287     $    339,907          (2.5%)
 Net Income Excluding
   Restructuring(1)                 $   382,724    $     339,907          12.6%
Per Share Data(2)
 Diluted EPS                        $      1.07     $       1.12          (4.5%)
 Diluted EPS Excluding
   Restructuring (1)                $      1.24     $       1.12          10.7%
 Cash Dividends                     $       .33     $        .29          13.8%
 Share Price at December 31         $  57 11/16     $     39 7/8          44.7%
 Weighted-average shares
  Diluted                               308,840          305,134           1.2%
  Diluted Excluding
   Restructuring(1)                     315,532          305,134           3.4%
Financial Position

 Cash and Cash Equivalents          $ 1,029,076     $    801,207          28.4%
 Total Assets                       $ 9,247,044     $  7,526,563          22.9%
 Book Value Per Share(2)            $      5.75     $       4.71          22.1%
 Return on Average
  Stockholders' Equity:
    As Reported                           20.7%            26.2%
    Excluding Restructuring(1)            23.6%            26.2%

Revenue

1999                               $4,977,823
1998                               $4,218,657
1997                               $3,610,706
Diluted Earnings Per Share(2)
1999 As Reported                       $ 1.07
1999 Excluding Restructuring(1)        $ 1.24
1998                                   $ 1.12
1997                                   $  .76
Cash Dividends Per Share(2)
1999                                   $  .33
1998                                   $  .29
1997                                   $  .25
Return On Average Stockholders' Equity
1999 As Reported                        20.7%
1999 Excluding Restructuring(1)         23.6%
1998                                    26.2%
1997                                    21.4%


All  periods  have  been  restated  to  reflect  the  aggregate  effect  of  the
acquisitions accounted for as poolings of interests. (See Notes 15 and 16).

-----------------
[FN]
(1)  Excludes the impact of restructuring and other merger-related costs.
(2)  All  share data  for  1998 and 1997  has  been adjusted to reflect the two-
     for-one stock split effective July 15, 1999.

<PAGE>

          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS

In November  2000,  The  Interpublic  Group of Companies,  Inc. (the  "Company")
acquired Deutsch,  Inc. and its affiliate companies ("Deutsch") in a transaction
accounted for as a pooling of interests.  Deutsch is a full service  advertising
agency servicing a broad range of clients. The Company's  consolidated financial
statements  and other  financial  information  have been restated to reflect the
effect  of the  Deutsch  pooling.  In  April  2000,  the  Company  acquired  NFO
Worldwide,  Inc.  ("NFO")  in  a  transaction  accounted  for  as a  pooling  of
interests.  The results of NFO and several  other  recent  acquisitions,  all of
which have been  accounted  for as poolings of interests  have been  included in
previously restated financial  statements.  The following  discussion relates to
the combined  results of the Company  after  giving  effect to all of the pooled
companies.

The Company  reported net income of $331.3 million or $1.07 diluted earnings per
share  for  the  year  ended   December  31,  1999.   Excluding  the  impact  of
restructuring  and  other  merger  related  costs,  which  are  described  in  a
subsequent section of this discussion, net income would have been $382.7 million
or $1.24 diluted earnings per share, compared to $339.9 million or $1.12 diluted
earnings per share for the year ended  December  31, 1998 and $224.2  million or
$.76 diluted earnings per share for the year ended December 31, 1997.

The  following  table sets forth net income and  earnings  per share  before and
after the restructuring and other merger related costs:

(Dollars in thousands)
                                          1999            1998            1997
                                          ----            ----            ----

Net income as reported                $  331,287      $  339,907      $  224,184

Earnings per share

    Basic                             $     1.11      $     1.15      $      .79
    Diluted                           $     1.07      $     1.12      $      .76

Net income before restructuring
  and other merger related costs      $  382,724      $  339,907      $  224,184

Earnings per share

    Basic                             $     1.28      $     1.15      $      .79
    Diluted                           $     1.24      $     1.12      $      .76


Revenue
-------
Worldwide  revenue for 1999 was $5.0  billion,  an  increase of $759  million or
18.0% over 1998. Domestic revenue, which represented 51% of worldwide revenue in
1999, increased $401 million or 18.6% over 1998.  International  revenue,  which
represented  49% of worldwide  revenue in 1999,  increased $358 million or 17.4%
over 1998.  International  revenue would have increased 22% excluding the effect
of the strengthening of the U.S. dollar against major  currencies.  The increase
in  worldwide  revenue is a result of both  growth from new  business  gains and
growth from  acquisitions.  Exclusive of  acquisitions,  worldwide  revenue on a
constant dollar basis increased 9% over 1998.
<PAGE>

Revenue from other specialized  marketing services,  which include media buying,
market research,  relationship (direct) marketing,  public relations, sports and
event   marketing,   healthcare   marketing  and   e-business   consulting   and
communications,  comprised approximately 44% of total worldwide revenue in 1999,
compared to 38% in 1998.

Worldwide  revenue for 1998 was $4.2  billion,  an  increase of $608  million or
16.8% over 1997.  Domestic revenue,  which represented 51% of worldwide revenue,
increased $306 million or 16.5% over 1997.  International revenue increased $302
million or 17.2% over  1997.  International  revenue  would have  increased  23%
excluding  the effect of the  strengthening  of the U.S.  dollar  against  major
currencies.

Operating Expenses
------------------
Worldwide operating expenses for 1999, excluding  restructuring and other merger
related  costs,  were $4.3  billion,  an increase of 18.4% over 1998.  Operating
expenses  outside the United States increased  16.7%,  while domestic  operating
expenses  increased 20.0%.  These increases were commensurate with the increases
in revenue. Worldwide operating expenses for 1998 were $3.6 billion, an increase
of 13.0% over 1997, comprised of an 17.8% increase in international expenses and
an 8.5% increase in domestic expenses.

Significant  portions of the Company's expenses relate to employee  compensation
and various employee  incentive and benefit programs,  which are based primarily
upon operating results.  Salaries and related expenses were $2.7 billion in 1999
or 55.2% of revenue as compared to $2.3 billion in 1998 or 55.4% of revenue and

$2.0 billion in 1997 or 56.0% of revenue.  The year over year dollar increase is
a result of growth from acquisitions and new business gains.

In  1997,  as part of its  continuing  cost  containment  efforts,  the  Company
announced that it was curtailing  its domestic  pension plan effective  April 1,
1998, and recorded pre-tax charges of approximately  $16.7 million.  The Company
continues to sponsor a domestic defined contribution plan.

Office and general expenses were $1.5 billion in 1999, $1.2 billion in 1998, and
$1.1 billion in 1997.  The year over year  increase is a result of the continued
growth of the Company.

In the fourth quarter of 1999, NFO recorded  special charges of $22 million as a
result of the difficult  competitive  environment due to client consolidation in
the  financial  services  industry.  Approximately  $16  million of the  special
charges  related  to the  write-off  of  intangible  assets  which  were  deemed
permanently impaired.

Income from Operations
----------------------
Income from operations for 1999 was $578 million.  Excluding  restructuring  and
other merger related costs, income from operations for 1999 was $663 million, an

increase of $90 million or 16% over 1998.  Exclusive  of  acquisitions,  foreign
exchange  fluctuations  and  amortization  of  intangible  assets,  income  from
operations increased 16% for 1999 compared to 1998.

Income from  operations  for 1998 was $573  million  compared to $383 million in
1997,  an increase of 50%. The increase is a result of growth from  acquisitions
and new business gains.

Special Compensation Charges
----------------------------
During 1997, Hill,  Holliday,  Connors,  Cosmopulos,  Inc. ("Hill Holliday"),  a
company acquired in a pooling of interests  transaction in the second quarter of
1998, recorded special compensation charges of approximately $32 million.
<PAGE>

Restructuring and Other Merger Related Costs
--------------------------------------------
In October  1999,  the Company  announced  the merger of two of its  advertising
networks.  The networks  affected,  Lowe & Partners Worldwide and Ammirati Puris
Lintas were combined to form a new agency  network called Lowe Lintas & Partners
Worldwide.  The merger involves the  consolidation  of operations in Lowe Lintas
agencies  in  approximately  24 cities in 22  countries  around the world.  Once
complete, the newly merged agency network will have offices in over 80 countries
around the world.

During  the  fourth  quarter  of  1999,   the  Company  began   execution  of  a
comprehensive  restructuring  plan in  connection  with  the  merger.  The  plan
includes  headcount  reductions,  consolidation  of real  estate and the sale or
disposition of certain investments,  and is expected to be completed by June 30,
2000. The Company is pleased with the progress of the merger to date and expects
the total costs to be in line with its original estimate.

The total pre-tax cost of the restructuring  plan is expected to be between $170
and $190 million,  ($100 to $115 million,  net of tax). In the fourth quarter of
1999, the Company recognized pre-tax costs of $84.2 million ($51.4 million,  net
of tax or $.17 per diluted share),  with the remainder expected to be recognized
in the first two quarters of 2000.

A summary of the components of the total  restructuring and other merger related
costs,  together  with an  analysis  of the cash and  non-cash  elements,  is as
follows:

(Dollars in millions)

                                               1999            Cash    Non-Cash
                                              ---------------------------------
TOTAL BY TYPE
-------------
   Severance and termination costs            $44.9           $27.0       $17.9
   Fixed asset write-offs                      11.1              --        11.1
   Lease termination costs                      3.8             3.8          --
   Investment write-offs and other             24.4             1.1        23.3
                                              ---------------------------------
Total                                         $84.2           $31.9       $52.3
                                              =================================


The severance and termination costs recorded in 1999 relate to approximately 230
employees who have been terminated or notified that they will be terminated. The
employee   groups   affected   include   executive   and  regional   management,
administrative,  account  management,  creative and media production  personnel,
principally  in the U.S.  and  U.K.  The  charge  related  to these  individuals
includes  the cost of  voluntary  programs  in certain  locations  and  includes
substantially all senior executives that will be terminated.  As of December 31,
1999, the amount accrued related to severance and termination was  approximately
$42.6 million.  During the fourth quarter of 1999, cash payments of $2.3 million
were made.

The fixed  assets  write-off  relates  largely to the  abandonment  of leasehold
improvements  as part of the merger.  The amount  recognized  in 1999 relates to
fixed asset write-offs in 6 offices principally in the United States.

Lease termination costs relate to the offices vacated as part of the merger. The
lease  terminations  are expected to be completed by mid-to-late  2000, with the
cash  portion to be paid out over a period of up to five  years.  As of December
31,  1999,  the  amount  accrued  related  to these  termination  costs was $3.8
million.
<PAGE>

The  investment  write-offs  relate to the loss on sale or  closing  of  certain
business  units.  In 1999,  $23  million  has been  recorded  as a result of the
decision  to sell or  abandon  4  European  businesses.  In the  aggregate,  the
businesses  being  sold or  abandoned  represent  an  immaterial  portion of the
revenue  and  operations  of Lowe Lintas & Partners.  The  write-off  amount was
computed based upon the difference between the estimated sales proceeds (if any)
and the  carrying  value of the related  assets.  These  sales or  closures  are
expected to be completed by mid 2000.

The Company expects to benefit from the resulting  reduction in employee related
costs, compensation,  benefits and space occupancy. These benefits will begin to
be realized in the second half of 2000.  It is  anticipated  that a  significant
portion  of the  savings  will be  offset by  investments  in  creative  talent,
technology and other  capabilities to support the  acceleration of growth in the
future.  The Company  anticipates  that beginning 2001 its after-tax  results of
operations will benefit by between $20 to $25 million.

Interest Expense
----------------
Interest expense was $81 million in 1999, $64 million in 1998 and $60 million in
1997.  The  increase  in 1999 was  attributable  to the  issuance  of the  1.87%
Convertible  Subordinated  Notes due 2006,  issued in June 1999,  in addition to
other  borrowings  to fund a  portion  of the  acquisition  of  Infratest  Burke
Aktiengesellschaft  Holdings,  one of the top custom marketing research firms in
Europe, in November 1998.

Other Income, Net
-----------------
Other income, net primarily  consists of interest income,  investment income and
net gains from equity  investments.  Other income,  net included  gains from the
Company's   investments  in  various  interactive  based  companies,   including
Nicholson NY, Inc.,  Lycos and USWEB in 1999,  gains related to  investments  in
USWEB, CKS Group,  Inc. and Lycos in 1998, and gains on the sale of investments,
including All American Communications,  Inc. and CKS Group, Inc. in 1997. In the
aggregate,  annual net equity  gains  remained  relatively  constant  during the
three-year period.

Other Items
-----------
Income applicable to minority interests increased by $5.5 million in 1999 and by
$3.7 million in 1998.  The 1999 and 1998  increases  were  primarily  due to the
strong  performance  of  companies  that were not wholly  owned,  as well as the
acquisition of additional such entities during 1999 and 1998.

The  Company's  effective  income tax rate was 40.6% in 1999,  40.5% in 1998 and
44.9% in 1997. The higher rate in 1997 was largely  attributable  to the special
compensation charges recorded by Hill Holliday.

As described in Note 4, prior to acquisition,  Deutsch had elected to be treated
as an "S" Corporation and accordingly,  its income tax expense was lower than it
would have been had Deutsch been treated as a "C" Corporation.  Deutsch became a
"C" Corporation  upon  acquisition.  Assuming Deutsch had been a "C" Corporation
since 1997,  the pro forma  effective  tax rate of the  Company  would have been
41.7%, 40.9% and 45.2% respectively for 1999, 1998 and 1997.
<PAGE>

Cash Based Earnings
-------------------
Management believes that cash based earnings are a relevant measure of financial
performance as it better  illustrates  the Company's  performance and ability to
support growth. The Company defines cash based earnings as net income,  adjusted
to exclude amortization of intangible assets, net of tax where applicable.  Cash
based  earnings are not  calculated  in the same manner by all companies and are
intended to supplement, not replace, the other measures calculated in accordance
with generally accepted accounting principles. Cash based earnings for the three
years ending December 31, 1999, 1998, and 1997 were as follows:

(Amounts in thousands except per share data)

                                         1999           1998            1997
                                       ---------------------------------------
Net income as reported                 $331,287       $339,907        $224,184
Restructuring and other
  merger related costs, net of tax       51,437             --              --
                                       ---------------------------------------
Net income, as adjusted                 382,724        339,907         224,184
Add back amortization
  of intangible assets                   99,326         61,396          45,682
Less related tax effect                 (13,031)        (6,146)         (5,228)
                                       ---------------------------------------
Cash based earnings (as
  defined above)                       $469,019       $395,157        $264,638
                                       =======================================

Per share amounts (diluted)               $1.51          $1.30            $.90





LIQUIDITY AND CAPITAL RESOURCES

The Company's financial position remained strong during 1999, with cash and cash
equivalents at December 31, 1999, of $1.0 billion, an increase of $227.9 million
over the 1998 year-end balance. Working capital at December 31, 1999, was $171.0
million,  which was $74.1 million  higher than the level at the end of 1998. The
increase  in  working   capital  was   largely   attributable   to  proceeds  of
approximately  $300 million from the 1.87%  Convertible  Subordinated  Notes due
2006 issued in June, 1999.

Historically,  cash flow from  operations has been the primary source of working
capital and  management  believes  that it will continue to be so in the future.
Net cash provided by operating  activities  was $610  million,  $552 million and
$292  million  for  the  years  ended   December  31,  1999,   1998,  and  1997,
respectively. The Company's working capital is used primarily to provide for the
operating needs of its  subsidiaries,  which includes payments for space or time
purchased from various media on behalf of clients.  The Company's practice is to
bill and collect from its clients in sufficient  time to pay the amounts due for
media on a timely basis. Other uses of working capital include the repurchase of
the Company's common stock, payment of cash dividends,  capital expenditures and
acquisitions.

The Company  acquires shares of its stock on an ongoing basis.  During 1999, the
Company purchased approximately 6.5 million shares of its common stock, compared
to 4.9 million shares in 1998. The Company repurchases its stock for the purpose
of fulfilling its obligations under various compensation plans.
<PAGE>

The Company,  excluding pooled entities,  paid $90.4 million ($.33 per share) in
dividends to stockholders in 1999, as compared to $76.9 million ($.29 per share)
paid during 1998.

The  Company's  capital  expenditures  in 1999 were $186.7  million  compared to
$159.6 million in 1998 and $123.3 million in 1997. The primary purposes of these
expenditures were to upgrade computer and  telecommunications  systems to better
serve clients and to modernize offices.

During 1999, the Company paid  approximately  $559 million in cash and stock for
new acquisitions,  including a number of marketing  communications  companies to
complement its existing  agency systems and to optimally  position itself in the
ever-broadening  communications  marketplace.  This amount includes the value of
stock issued for pooled companies.

The Company and its subsidiaries maintain credit facilities in the United States
and in countries  where they conduct  business to manage their future  liquidity
requirements.  The Company's  available  short-term  credit facilities were $510
million,  of which $80 million  were  utilized at December  31,  1999,  and $576
million, of which $118 million were utilized at December 31, 1998.

Return  on  average  stockholders'  equity  was 20.7% in 1999 and 26.2% in 1998.
Excluding  restructuring  and other  merger  related  costs,  return on  average
stockholders'  equity  was  23.6% in 1999.  The  decline  in 1999 was  primarily
attributable  to a $159  million  increase in net  unrealized  holding  gains on
equity investments, which are included in stockholders' equity.

As discussed in Note 12, revenue from international  operations was 49% of total
revenue in 1999, 1998 and 1997. The Company continuously  evaluates and attempts
to mitigate its exposure to foreign exchange,  economic and political risks. The
notional value and fair value of all outstanding  forwards and options contracts
at the  end of  the  year  were  not  significant.  In  addition,  the  economic
developments in Brazil,  which did not have a significant negative impact on the
Company,  were  partially  offset by the  favorable  impact due to the  economic
recovery in Japan.

The Company is not aware of any significant  occurrences  that could  negatively
impact its liquidity. However, should such a trend develop, the Company believes
that there are sufficient funds available under its existing lines of credit and
from internal cash-generating capabilities to meet future needs.

OTHER MATTERS
Internet-Services Companies
---------------------------
During 1999, the Company expanded its investment in internet-service and related
companies. In December 1999, the Company announced the establishment of Zentropy
Partners,  a new global  internet-services  company that integrates the building
and marketing of digital  businesses.  At its formation,  Zentropy  Partners had
annualized revenue exceeding $50 million and was positioned to serve clients out
of 11 offices in Europe and North America.

In April 1999, the Company invested $20 million for a minority  interest in Icon
Medialab International AB ("Icon"), a Swedish based internet consultancy.  Later
in  the  year,  the  Company  increased  its  investment  in  Icon  through  the
contribution of other investments and through additional cash purchases.
<PAGE>

On October 19, 1999, NFO announced the formation of  InsightExpress,  LLC, a new
Internet company formed to provide  real-time  consumer input to the desktops of
decision-makers  in companies of all sizes worldwide.  InsightExpress is a fully
automated  web-enabled  survey  system that will allow its customers to test new
ideas, screen new concepts, gauge customer satisfaction,  survey employees, test
advertising,  and gather  insight into the needs,  attitudes,  and  behaviors of
consumers.  InsightExpress  is  designed  to  provide  these  capabilities  at a
fraction  of the time and the cost of existing  market  research  methods  while
leveraging the worldwide  client  experience and panel expertise of NFO. To fund
its development and growth,  InsightExpress has raised a total of $25 million in
new venture capital from General Atlantic Partners and Engage Technologies.

In addition to the above,  the Company  maintains  internet-service  and related
divisions at several of its major  operating  divisions  and has made  strategic
investments in fourteen  companies whose objectives revolve around consulting on
the use of technology to benefit customers.

Year 2000 Issue
---------------
Pursuant to the Year 2000 issue,  the Company had developed  programs to address
the possible  exposures  related to the impact of computer  systems  incorrectly
recognizing the year 2000 or "00" as 1900. As a result of  implementation of its
programs,  the Company did not experience any significant  Year 2000 disruptions
during the  transition  from 1999 to 2000,  and since entering 2000, the Company
has not experienced any significant  Year 2000  disruptions to its business.  In
addition, the Company is not aware of any significant  disruptions impacting its
customers  or  suppliers.  The Company  will  continue  to monitor its  computer
systems over the next several months.  However,  the Company does not anticipate
any  significant  impact  related  to Year 2000  problems  that may  affect  its
internal  computer  systems.  The  Company  will also  continue  to monitor  the
activities  of its business  partners and critical  suppliers  and has developed
contingency plans should business partners or critical suppliers  experience any
Year 2000 disruptions in the coming months.

Costs incurred to achieve Year 2000  readiness,  which included  modification to
existing systems,  replacement of non-compliant systems and consulting resources
totaled $73 million.  A total of $47 million was capitalized  (related primarily
to hardware and software that  provided  both Year 2000  readiness and increased
the functionality of certain systems), and $26 million was expensed.

Cautionary Statement
--------------------
This Report on Form 8-K (the "Report"),  including  Management's  Discussion and
Analysis   of   Financial   Condition   and  Results  of   Operations   contains
forward-looking statements.  Statements that are not historical facts, including
statements about  Interpublic's  beliefs and expectations,  are  forward-looking
statements. These statements are based on current plans, expectations, estimates
and  projections,  and  therefore  you should not place undue  reliance on them.
Forward-looking  statements  speak  only  as of the  date  they  are  made,  and
Interpublic  undertakes no obligation to update publicly any of them in light of
new information, future events or otherwise.

Forward-looking statements involve inherent risks and uncertainties. Interpublic
cautions you that a number of important  factors  could cause actual  results to
differ materially from those contained in any  forward-looking  statement.  Such
factors  include,  but are not limited to, those  associated  with the effect of
national and regional economic conditions, the ability of Interpublic to attract
new  clients  and retain  existing  clients,  the  financial  success  and other
developments  of the clients of  Interpublic,  developments  from changes in the
regulatory and legal  environment  for advertising  companies  around the world,
Interpublic's   ability  to  effectively   integrate  recent   acquisitions  and
Interpublic's ability to attract and retain key management personnel.
<PAGE>

New Accounting Guidance
-----------------------
In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting  Standards No. 133, "Accounting for Derivative  Instruments
and Hedging  Activities"  (SFAS 133),  which had an initial adoption date by the
Company of January 1, 2000. In June 1999,  the FASB  postponed the adoption date
of SFAS 133 until  January 1, 2001.  The Company  does not believe the effect of
adopting  SFAS 133 will be material  to its  financial  condition  or results of
operations.

Conversion to the Euro
----------------------
On January 1, 1999,  certain member countries of the European Union  established
fixed  conversion  rates  between  their  existing  currencies  and the European
Union's common currency (the "Euro").  The Company  conducts  business in member
countries.  The  transition  period  for the  introduction  of the Euro  will be
between January 1, 1999, and June 30, 2002. The Company is addressing the issues
involved with the  introduction of the Euro. The major  important  issues facing
the Company include:  converting  information  technology  systems;  reassessing
currency  risk;  negotiating  and amending  contracts;  and  processing  tax and
accounting records.

Based upon progress to date, the Company  believes that use of the Euro will not
have a  significant  impact on the  manner  in which it  conducts  its  business
affairs  and  processes  its  business  and  accounting  records.   Accordingly,
conversion to the Euro has not, and is not expected to have a material effect on
the Company's financial condition or results of operations.


<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
The Interpublic Group of Companies, Inc.

In our opinion, based upon our audits and the reports of the other auditors, the
accompanying   supplemental   consolidated   balance   sheets  and  the  related
supplemental   consolidated   statements  of  income,  of  cash  flows,  and  of
stockholders'  equity and  comprehensive  income present fairly, in all material
respects, the financial position of The Interpublic Group of Companies, Inc. and
its subsidiaries  (the "Company") at December 31, 1999 and 1998, and the results
of their  operations  and their  cash  flows for each of the three  years in the
period ended December 31, 1999, in conformity with accounting principles

generally accepted in the United States of America.  These financial  statements
are the  responsibility of the Company's  management;  our  responsibility is to
express an opinion on these financial statements based on our audits. We did not
audit the financial  statements of International Public Relations plc ("IPR"), a
wholly-owned   subsidiary,   which  statements  reflect  revenues   constituting
approximately  6%  of  the  related  1997  supplemental  consolidated  financial
statements.  We did not  audit  the  financial  statements  of  Hill,  Holliday,
Connors,  Cosmopulos,  Inc. ("Hill  Holiday"),  a wholly-owned  subsidiary which
statements reflect total net loss constituting  approximately 15% of the related
1997  supplemental  consolidated  financial  statements.  We did not  audit  the
financial statements of NFO Worldwide,  Inc. ("NFO"), a wholly-owned subsidiary,
which  statements  reflect  total assets  constituting  approximately  5% of the
related 1999 supplemental  consolidated financial statements.  Additionally,  we
did not audit the  financial  statements  of Deutsch,  Inc. and  Subsidiary  and
Affiliates  ("Deutsch"),  a wholly-owned  subsidiary,  which statements  reflect
total net income constituting  approximately 5% of the related 1999 supplemental
consolidated  financial  statements.  Those  statements  were  audited  by other
auditors  whose  reports  thereon  have been  furnished  to us, and our  opinion
expressed  herein,  insofar as it relates to the amounts  included for IPR, Hill
Holiday,  NFO and Deutsch, is based solely on the reports of the other auditors.
We  conducted  our  audits  of these  statements  in  accordance  with  auditing
standards generally accepted in the United States of America, which require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates made by management,  and evaluating the overall financial
statement  presentation.  We believe  that our  audits and the  reports of other
auditors provide a reasonable basis for the opinion expressed above.

As described in Note 16, to the supplemental  consolidated financial statements,
on November 30, 2000, the Company merged with Deutsch in a transaction accounted
for as a pooling  of  interests.  The  accompanying  supplementary  consolidated
financial statements give retroactive effect of the merger of the Company with

Deutsch.  Accounting  principles  generally  accepted  in the  United  States of
America proscribe giving effect to a consummated business combination  accounted
for by the  pooling of  interests  method in  financial  statements  that do not
include  the date of  consummation.  These  financial  statements  do not extend
through  the date of  consummation;  however,  they will  become the  historical
consolidated  financial  statements  of the Company and its  subsidiaries  after
financial   statements  covering  the  date  of  consummation  of  the  business
combination are issued.

PricewaterhouseCoopers LLP
New York, New York

February 22,  2000,  except for Note 15 which is as of July 13, 2000 and Note 16
which is as of December 22,2000
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of NFO Worldwide, Inc.:

We have  audited  the  consolidated  balance  sheets of NFO  Worldwide,  Inc. (a
Delaware corporation) and subsidiaries as of December 31, 1999 and 1998, and the
related consolidated statements of income,  stockholders' equity, and cash flows
for each of the years in the three year period ended  December  31, 1999.  These
financial statements (not presented separately herein) are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial  statements  based on our audits.  We did not audit the 1997 financial
statements  of  The  MBL  Group  plc,  included  in the  consolidated  financial
statements of NFO Worldwide, Inc., which statements reflect total revenues of 26
percent of the related 1997  consolidated  total,  after  adjustment  to reflect
translation into U.S. dollars and accounting  principles  generally  accepted in
the United States. The financial statements of The MBL Group plc, prior to those
adjustments,  were  audited by other  auditors  whose  report  thereon  has been
furnished to us, and our opinion expressed herein,  insofar as it relates to the
amounts  included  for The MBL Group plc,  is based  solely on the report of the
other auditors.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We  believe  that our  audits  and the  report of other  auditors
provide a reasonable basis for our opinion.

In our opinion,  based on our audits and the report of the other  auditors,  the
consolidated  financial  statements  referred to above  present  fairly,  in all
material  respects,   the  financial   position  of  NFO  Worldwide,   Inc.  and
subsidiaries  as of  December  31,  1999  and  1998,  and the  results  of their
operations  and their cash flows for each of the years in the three year  period
ended  December 31, 1999, in conformity  with  accounting  principles  generally
accepted in the United States.

Our audits were made for the  purpose of forming an opinion on the  consolidated
financial  statements taken as a whole. The schedule referred to in Item 14 (not
presented  separately herein) is presented for the purpose of complying with the
Securities and Exchange  Commission's  rules and is not part of the consolidated
financial  statements.   This  schedule  has  been  subjected  to  the  auditing
procedures applied in our audits of the consolidated  financial  statements and,
in our  opinion,  based on our audit and the  report of other  auditors,  fairly
states in all material  respects  the  financial  data  required to be set forth
therein in relation to the consolidated financial statements taken as a whole.

Arthur Andersen LLP
New York, New York,

February 25, 2000

<PAGE>

         REPORT OF THE AUDITORS TO THE SHAREHOLDERS OF THE MBL GROUP plc

We have audited the financial statements of The MBL Group plc for the year ended
December 31, 1997, which have been prepared under the historical cost convention
and in accordance with generally accepted  accounting  principles  applicable in
the United Kingdom.

Respective Responsibilities of Directors and Auditors

The  Company's  directors  are  responsible  for the  preparation  of  financial
statements.  It is our responsibility to form an independent  opinion,  based on
our audit, on those statements and to report our opinion to you.

Basis of Opinion

We conducted  our audit in  accordance  with  Auditing  Standards  issued by the
Auditing  Practices Board which are  substantially the same as those followed in
the United States. An audit includes  examination,  on a test basis, of evidence
relevant to the amounts and  disclosures  in the financial  statements.  It also
includes an assessment of the  significant  estimates and judgements made by the
directors in the  preparation  of the financial  statements,  and of whether the
accounting policies are appropriate to the Company's circumstances, consistently
applied and adequately disclosed.

We  planned  and  performed  our audit so as to obtain all the  information  and
explanations  which  we  considered  necessary  in  order  to  provide  us  with
sufficient evidence to give reasonable  assurance that the financial  statements
are  free  from  material  misstatement,   whether  caused  by  fraud  or  other
irregularity  or error.  In forming our opinion,  we also  evaluated the overall
adequacy of the presentation of information in the financial statements.

Opinion

In our  opinion,  the  financial  statements  give a true and  fair  view of the
group's  profit and cash flows for the year ended  December 31,  1997,  and have
been  properly  prepared  in  accordance  with  generally  accepted   accounting
principles in the United Kingdom.

Soteriou Banerji

Registered Auditors and Chartered Accountants
253 Gray's Inn Road

London, WC1X 8QT

Date February 23, 1998

<PAGE>

REPORT OF  INDEPENDENT  AUDITORS TO THE  SHAREHOLDERS  AND BOARD OF DIRECTORS OF
INTERNATIONAL PUBLIC RELATIONS PLC

We have audited the consolidated statements of income,  shareholders' equity and
cash  flows of  International  Public  Relations  plc and  subsidiaries  for the
fourteen-month  period ended 31 December 1997, all expressed in pounds sterling.
These financial  statements,  which are not separately presented herein, are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance  with United  Kingdom  auditing  standards,
which do not differ in any  significant  respect  from United  States  generally
accepted  auditing  standards.  Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audit provides a reasonable  basis
for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,   the  consolidated   results  of  operations  and  the
consolidated  cash flows of International  Public Relations plc and subsidiaries
for the  fourteen-month  period ended 31 December 1997 in conformity with United
States generally accepted accounting principles.

Ernst & Young
London
3 February 1999

<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

Board of Directors

Hill, Holliday, Connors, Cosmopulos, Inc.

We have audited the consolidated statements of operations,  stockholders' equity
(deficit)  and cash  flows of Hill,  Holliday,  Connors,  Cosmopulos,  Inc.  and
Subsidiaries  (the Company) for the twelve months ended  December 31, 1997,  not
separately  presented herein.  These financial statements are the responsibility
of the  Company's  management.  Our  responsibility  is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the consolidated  results of operations and
cash flows of Hill, Holliday, Connors, Cosmopulos, Inc. and Subsidiaries for the
twelve-month  period  ended  December  31,  1997 in  conformity  with  generally
accepted accounting principles.

Ernst & Young LLP
Boston, Massachusetts

March 13, 1998

<PAGE>

                    Report of Independent Public Accountants
                    ----------------------------------------

To the Stockholder

Deutsch, Inc. and Subsidiary and Affiliates

         We have  audited  the  combined  balance  sheet of  Deutsch,  Inc.  and
Subsidiary  and  Affiliates  as of December 31, 1999,  and the related  combined
statements of income,  stockholder's  equity (deficiency) and cash flows for the
year then ended, which financial  statements are respectively  presented herein.
These combined financial  statements are not the responsibility of the Company's
management.  Our  responsibility  is to express  an  opinion  on these  combined
financial statements based on our audit.

         We conducted our audit in accordance with generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the combined financial statements.  An audit also
includes assessing the accounting principles used and significant estimates made
by management,  as well as evaluating the overall combined  financial  statement
presentation.  We believe  that our audit  provides a  reasonable  basis for our
opinion.

         In our opinion,  the combined  financial  statements  referred to above
present fairly,  in all material  respects,  the financial  position of Deutsch,
Inc. and Subsidiary and Affiliates as of December 31, 1999, and their results of
operations and cash flows for the year then ended,  in conformity with generally
accepted accounting principles.

         The combined  financial  statements  have been  restated to reflect the
correct  treatment  of  payments  made to the  Company's  sole  stockholder.  In
financial  statements  previously  issued for the years ended December 31, 1999,
1998 and 1997,  certain  payments had been  classified as bonuses which,  it has
been  determined,  should have been reflected as  distributions to the Company's
sole stockholder. Accordingly, the Company has restated the financial statements
to reflect the correct accounting for the payments and the related tax effects.

J.H. Cohn LLP
Roseland, New Jersey
November 28, 2000

<PAGE>

                              FINANCIAL STATEMENTS
          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                     SUPPLEMENTAL CONSOLIDATED BALANCE SHEET
                                   DECEMBER 31
                  (Dollars in Thousands Except Per Share Data)

ASSETS                                                1999            1998
                                                   --------------------------
CURRENT ASSETS:
Cash and cash equivalents (includes
  certificates of deposit: 1999-$150,343;
  1998-$152,064)                                   $1,029,076      $  801,207
Marketable securities                                  36,765          31,733
Receivables (net of allowance for doubtful
  accounts:  1999-$60,565; 1998-$54,060)            4,442,229       3,661,076
Expenditures billable to clients                      337,769         300,067
Prepaid expenses and other current assets             147,085         156,314
                                                   --------------------------
   Total current assets                             5,992,924       4,950,397
                                                   --------------------------
OTHER ASSETS:
Investment in unconsolidated affiliates                62,225          62,244
Deferred taxes on income                                   --          92,756
Other investments and miscellaneous assets            719,024         362,154
                                                   --------------------------
   Total other assets                                 781,249         517,154
                                                   --------------------------
FIXED ASSETS, AT COST:
Land and buildings                                    164,678         117,105
Furniture and equipment                               783,698         742,191
                                                   --------------------------
                                                      948,376         859,296
Less: accumulated depreciation                       (506,975)       (440,190)
                                                   --------------------------
                                                      441,401         419,106
Unamortized leasehold improvements                    151,870         119,461
                                                   --------------------------
   Total fixed assets                                 593,271         538,567
                                                   --------------------------
Intangible assets (net of accumulated
 amortization: 1999-$607,417; 1998-$525,792)        1,879,600       1,520,445
                                                   --------------------------
TOTAL ASSETS                                       $9,247,044      $7,526,563
                                                   ==========================

<PAGE>
<TABLE>

                              FINANCIAL STATEMENTS
          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                     SUPPLEMENTAL CONSOLIDATED BALANCE SHEET
                                   DECEMBER 31
                  (Dollars in Thousands Except Per Share Data)
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY                      1999             1998
                                                          ----             ----
<S>                                                 <C>              <C>
CURRENT LIABILITIES:
Payable to banks                                    $  262,483       $  215,078
Accounts payable                                     4,629,415        3,699,783
Accrued expenses                                       769,566          720,274
Accrued income taxes                                   160,484          218,381
                                                    ---------------------------
Total current liabilities                            5,821,948        4,853,516
                                                    ---------------------------
NONCURRENT LIABILITIES:
Long-term debt                                         530,117          498,517
Convertible subordinated debentures
  and notes                                            518,490          207,927
Deferred compensation and reserve
  for termination allowances                           348,172          325,007
Deferred taxes on income                                45,888               --
Accrued postretirement benefits                         50,226           49,919
Other noncurrent liabilities                            86,127          102,000
Minority interests in consolidated
  subsidiaries                                          81,612           59,246
                                                    ---------------------------
Total noncurrent liabilities                         1,660,632        1,242,616
                                                    ---------------------------
STOCKHOLDERS' EQUITY:
Preferred Stock, no par value
  shares authorized:  20,000,000
  shares issued:  none

Common Stock, $.10 par value
  shares authorized:  550,000,000
  shares issued:
    1999 - 315,921,839;
    1998 - 309,954,039                                  31,592           30,995
Additional paid-in capital                             783,897          574,246
Retained earnings                                    1,392,224        1,166,785
Accumulated other comprehensive
  loss, net of tax                                     (76,695)        (160,970)
                                                     --------------------------
                                                     2,131,018        1,611,056
Less:
Treasury stock, at cost:
1999 - 8,909,904 shares;
1998 - 6,411,028 shares                                289,519          109,277
Unamortized expense of restricted stock grants          77,035           71,348
                                                     --------------------------
Total stockholders' equity                           1,764,464        1,430,431
                                                     --------------------------
Commitments and contingencies

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $9,247,044       $7,526,563
                                                    ===========================


All  periods  have  been  restated  to  reflect  the  aggregate  effect  of  the
acquisitions accounted for as poolings of interests. (See Notes 15 and 16).

All share data for 1998 has been adjusted to reflect the two-for-one stock split
effective July 15, 1999.

The accompanying notes are an integral part of these financial statements.
</TABLE>

<PAGE>
                              FINANCIAL STATEMENTS
          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                  SUPPLEMENTAL CONSOLIDATED STATEMENT OF INCOME
                             YEAR ENDED DECEMBER 31
                  (Amounts in Thousands Except Per Share Data)

                                             1999           1998           1997
                                      -----------------------------------------
Revenue                               $ 4,977,823    $ 4,218,657    $ 3,610,706

Salaries and related expenses           2,745,956      2,339,894      2,020,243
Office and general expenses             1,469,862      1,244,771      1,129,639
Amortization of intangible assets          99,326         61,396         45,682
Special compensation charges                   --             --         32,229
Restructuring and other merger
   related costs                           84,183             --             --
                                      -----------------------------------------
Total operating expenses                4,399,327      3,646,061      3,227,793
                                      -----------------------------------------
Income from operations                    578,496        572,596        382,913

Interest expense                          (81,341)       (64,296)       (59,820)
Other income, net                         103,562         98,555        117,150
                                      -----------------------------------------
Income before provision
  for income taxes                        600,717        606,855        440,243

Provision for income taxes                243,971        245,636        197,665
                                      -----------------------------------------
Income of consolidated companies          356,746        361,219        242,578
Income applicable to
  minority interests                      (33,991)       (28,503)       (24,759)
Equity in net income of
  unconsolidated affiliates                 8,532          7,191          6,365
                                      -----------------------------------------
Net Income                            $   331,287    $   339,907    $   224,184
                                      =========================================

Per Share Data:
  Basic EPS                           $      1.11    $      1.15    $       .79
  Diluted EPS                         $      1.07    $      1.12    $       .76

Weighted average shares:
  Basic                                   297,992        294,756        283,796
  Diluted                                 308,840        305,134        301,602


All  periods  have  been  restated  to  reflect  the  aggregate  effect  of  the
acquisitions accounted for as poolings of interests. (See Notes 15 and 16).

All share data for 1998 and 1997 has been  adjusted to reflect  the  two-for-one
stock split effective July 15, 1999.

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

<PAGE>
<TABLE>
                              FINANCIAL STATEMENTS
          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                SUPPLEMENTAL CONSOLIDATED STATEMENT OF CASH FLOWS
                             YEAR ENDED DECEMBER 31
                             (Dollars in Thousands)
<CAPTION>
                                                        1999         1998         1997
                                                    -------------------------------------
<S>                                                 <C>           <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                          $  331,287    $ 339,907    $ 224,184
Adjustments to reconcile net income to
   cash provided by operating activities:
Depreciation and amortization of fixed assets          128,302      110,086       88,847
Amortization of intangible assets                       99,326       61,396       45,682
Amortization of restricted stock awards                 25,926       20,272       16,222
Stock bonus plans/ESOP                                      --           --        1,389
Provision for (benefit of) deferred income taxes         9,316      (11,972)       7,432
Noncash pension plan charges                                --           --       16,700
Equity in net income of unconsolidated affiliates       (8,533)      (7,191)      (6,366)
Income applicable to minority interests                 33,991       28,503       24,759
Translation losses/(gains)                                 690        1,034         (319)
Special compensation charges                                --           --       31,553
Net gain on investments                                (43,390)     (40,465)     (44,626)
Restructuring costs, non-cash                           52,264           --           --
Other                                                   (5,197)      12,667      (10,467)
Change in assets and liabilities,
   net of acquisitions:
Receivables                                           (820,510)    (269,536)    (357,380)
Expenditures billable to clients                       (24,413)     (31,199)     (51,247)
Prepaid expenses and other assets                     (121,945)     (39,790)     (30,892)
Accounts payable and accrued expenses                  996,630      336,799      317,165
Accrued income taxes                                   (64,423)      26,870          435
Deferred compensation and reserve for
   termination allowances                               20,496       14,537       18,571
                                                    ------------------------------------
Net cash provided by operating activities              609,817      551,918      291,642
                                                    ------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net                                     (248,406)    (255,995)    (110,317)
Capital expenditures                                  (186,669)    (159,596)    (123,275)
Proceeds from sales of assets                           72,542       28,346      114,494
Net (purchases of) proceeds from
   marketable securities                                (9,114)       3,934          324
Other investments and miscellaneous assets                (150)          --           --
Investment in unconsolidated affiliates                (10,531)     (16,725)      (9,191)
                                                    -------------------------------------
Net cash used in investing activities                 (382,328)    (400,036)    (127,965)
                                                    -------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in short-term borrowings                       47,592       15,304       31,188
Proceeds from long-term debt                           405,927      220,494      280,847
Payments of long-term debt                             (70,126)     (98,294)     (36,404)
Proceeds from ESOP                                          --        7,420           --
Treasury stock acquired                               (300,524)    (164,928)    (144,094)
Issuance of common stock                                66,130       35,239       38,664
Cash dividends - Interpublic                           (90,424)     (76,894)     (61,242)
Cash dividends - pooled companies                      (14,643)     (16,461)     (19,519)
                                                    ------------------------------------
Net cash provided by (used in) financing activities     43,932      (78,120)      89,440
                                                    ------------------------------------
Effect of exchange rates on
  cash and cash equivalents                            (43,552)      10,998      (43,279)
                                                    ------------------------------------
Increase in cash and cash equivalents                  227,869       84,760      209,838
Cash and cash equivalents at beginning of year         801,207      716,447      506,609
                                                     -----------------------------------
Cash and cash equivalents at end of year            $1,029,076    $ 801,207    $ 716,447
                                                    ====================================

All  periods  have  been  restated  to  reflect  the  aggregate  effect  of  the
acquisitions accounted for as poolings of interests. (See Notes 15 and 16).

The accompanying notes are an integral part of these financial statements.
</TABLE>

<PAGE>
<TABLE>
                                                              FINANCIAL STATEMENTS
                                         THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                              SUPPLEMENTAL CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                                               FOR THE THREE-YEAR PERIOD ENDED DECEMBER 31, 1999
                                                             (Dollars in Thousands)
<CAPTION>
                                                                  Accumulated                 Unamortized
                              Common    Additional                      Other                     Expense   Unearned
                               Stock       Paid-In   Retained   Comprehensive  Treasury     of Restricted       ESOP
                    (par value $.10)       Capital   Earnings   Income (loss)     Stock      Stock Grants       Plan       Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                            <C>      <C>          <C>          <C>            <C>           <C>            <C>        <C>
BALANCES, DECEMBER 31, 1998    $30,995  $574,246     $1,166,785   $(160,970)     $(109,277)    $(71,348)      $     --   $1,430,431
 Comprehensive income:
 Net income                                          $  331,287                                                          $  331,287
 Adjustment for minimum pension
   liability                                                         18,596                                                  18,596
Change in market value of
   securities available-for-sale                                    158,607                                                 158,607
 Foreign currency translation
   adjustment                                                       (92,928)                                                (92,928)
-----------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income                                                                                                 $415,562
Cash dividends - IPG                                    (90,424)                                                            (90,424)
Cash dividends - pooled companies                       (14,643)                                                            (14,643)
Equity adjustments - pooled companies                      (594)                                                               (594)
Awards of stock under
  Company plans:
 Achievement stock and
   incentive awards                          198                                       333                                      531
 Restricted stock,
   net of forfeitures               66    36,902                                    (7,927)      (5,687)                     23,354
Employee stock purchases            40    19,068                                                                             19,108
Exercise of stock options,
  including tax benefit            276    81,539                                                                             81,815
Purchase of Company's own stock                                                   (300,524)                                (300,524)
Issuance of shares
  for acquisitions                        63,447                                   127,876                                  191,323
Par value of shares issued
  for two-for-one stock split      187                     (187)                                                                 --
Other issuances                     28     8,497                                                                              8,525
------------------------------------------------------------------------------------------------------------------------------------
BALANCES, DECEMBER 31, 1999    $31,592  $783,897     $1,392,224   $ (76,695)     $(289,519)    $(77,035)      $     --   $1,764,464
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>
<TABLE>
                                                              FINANCIAL STATEMENTS
                                         THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                        SUPPLEMENTAL CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                                               FOR THE THREE-YEAR PERIOD ENDED DECEMBER 31, 1999
                                                             (Dollars in Thousands)
<CAPTION>
                                                                  Accumulated                 Unamortized
                              Common    Additional                      Other                     Expense   Unearned
                               Stock       Paid-In   Retained   Comprehensive  Treasury     of Restricted       ESOP
                    (par value $.10)       Capital   Earnings   Income (loss)     Stock      Stock Grants       Plan       Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                            <C>      <C>          <C>        <C>             <C>          <C>            <C>          <C>
BALANCES, DECEMBER 31, 1997    $30,564  $431,872     $920,448   $(159,064)      $      --    $(56,634)      $(7,420)     $1,159,766
Comprehensive income:
 Net income                                          $339,907                                                            $  339,907
 Adjustment for minimum pension
   liability                                                      (24,013)                                                  (24,013)
 Change in market value of
   securities available-for-sale                                   (2,576)                                                   (2,576)
 Foreign currency translation
   adjustment                                                      24,683                                                    24,683
-----------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income                                                                                               $  338,001
Cash dividends - IPG                                  (76,894)                                                              (76,894)
Cash dividends - pooled companies                     (16,461)                                                              (16,461)
Awards of stock under
 Company plans:
 Achievement stock and
   incentive awards                          274                                      110                                       384
 Restricted stock,
   net of forfeitures               63    36,619                                   (2,406)    (14,714)                       19,562
Employee stock purchases            26    13,325                                                                             13,351
Exercise of stock options,
  including tax benefit            123    42,518                                                                             42,641
Purchase of Company's own stock                                                  (164,928)                                 (164,928)
Issuance of shares
  for acquisitions                        36,714                                   57,947                                    94,661
Conversion of convertible
   debentures                        3     1,002                                                                              1,005
Payments from ESOP                                                                                            7,420           7,420
Par value of shares issued
  for two-for-one stock split      215                   (215)                                                                   --
Other issuances                      1    11,922                                                                             11,923
-----------------------------------------------------------------------------------------------------------------------------------
BALANCES, DECEMBER 31, 1998    $30,995 $ 574,246   $1,166,785   $(160,970)      $(109,277)   $(71,348)      $    --      $1,430,431
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>
<TABLE>

                                                              FINANCIAL STATEMENTS
                                         THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                        SUPPLEMENTAL CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                                               FOR THE THREE-YEAR PERIOD ENDED DECEMBER 31, 1999
                                                             (Dollars in Thousands)
<CAPTION>
                                                                  Accumulated                 Unamortized
                              Common    Additional                      Other                     Expense   Unearned
                               Stock       Paid-In   Retained   Comprehensive  Treasury     of Restricted       ESOP
                    (par value $.10)       Capital   Earnings   Income (loss)     Stock      Stock Grants       Plan       Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                            <C>      <C>          <C>        <C>             <C>          <C>            <C>          <C>
BALANCES, DECEMBER 31, 1996    $15,501  $272,790     $791,383   $ (93,572)      $      --    $(47,350)      $(7,800)     $  930,952
Comprehensive income:
 Net income                                          $224,184                                                            $  224,184
 Adjustment for minimum pension
   liability                                                           72                                                        72
 Change in market value of
   securities available-for-sale                                   12,465                                                    12,465
 Foreign currency translation
   adjustment                                                     (78,029)                                                  (78,029)
-----------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income                                                                                                 $158,692
Cash dividends - IPG                                  (61,242)                                                              (61,242)
Cash dividends - pooled companies                     (19,519)                                                              (19,519)
Awards of stock under
 Company plans:
 Achievement stock and
    incentive awards                          787                                      175                                       962
 Restricted stock,
   net of forfeitures               53    27,821                                   (3,664)     (9,284)                       14,926
Employee stock purchases            23     9,684                                                                              9,707
Exercise of stock options,
  including tax benefit            126    40,855                                                                             40,981
Purchase of Company's own stock                                                  (144,094)                                 (144,094)
Issuance of shares
  for acquisitions                       (72,129)                                 147,583                                    75,454
Conversion of convertible
   debentures                       443   118,357                                                                            118,800
Par value of shares issued
  for three-for-two stock split     59                                                                                           59
Payments from ESOP                                                                                              380             380
Special compensation charges              27,324                                                                             27,324
Deferred stock bonus charges              (4,876)                                                                            (4,876)
Par value of shares issued for
  two-for-one stock split       14,358                (14,358)                                                                   --
Other issuances                      1    11,259                                                                             11,260
-----------------------------------------------------------------------------------------------------------------------------------
BALANCES, DECEMBER 31, 1997    $30,564  $431,872     $920,448   $(159,064)      $      --    $(56,634)      $(7,420)     $1,159,766
-----------------------------------------------------------------------------------------------------------------------------------


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

All  periods  have  been  restated  to  reflect  the  aggregate  effect of  the acquisitions accounted for as poolings of interests.
(See Notes 15 and 16).

All share data for 1999, 1998 and 1997 has been adjusted to reflect the two-for-one stock split effective July 15, 1999.
</TABLE>

<PAGE>

             NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
The Company is a worldwide  provider of advertising agency and related services.
The   Company   conducts   business   through   the   following    subsidiaries:
McCann-Erickson  WorldGroup,  The Lowe Group,  DraftWorldwide,  Initiative Media
Worldwide,  International  Public Relations,  Octagon,  Zentropy  Partners,  NFO
Worldwide,   Allied  Communications  Group,  Deutsch,  Inc.  and  other  related
companies.  The Company also has  arrangements  through  association  with local
agencies in various parts of the world.  Other  specialized  marketing  services
conducted by the Company  include media buying,  market  research,  relationship
(direct)  marketing,  public relations,  sports and event marketing,  healthcare
marketing and e-business consulting and communications.

Principles of Consolidation
The consolidated  financial  statements  include the accounts of the Company and
its  subsidiaries,  most of which are wholly owned. The Company also has certain
investments in unconsolidated affiliates that are carried on the equity basis.

The Company's  consolidated  financial statements,  including the related notes,
have been restated as of the earliest period presented to include the results of
operations,  financial  position  and cash flows of the 2000 pooled  entities in
addition to all prior pooled entities.

The accompanying income statements have been prepared in a format different than
that used in the  originally  filed Form 10-K for the three years ended December
31, 1999. The changes made principally  relate to the introduction of a new line
item - "Income from operations".  Amounts previously  included in "Other income,
net" as part of "Gross  Income" are now included  elsewhere in the  Consolidated
Statement of Income.

Short-term and Long-term Investments
The Company's investments in marketable and equity securities are categorized as
available-for-sale  securities,  as defined by Statement of Financial Accounting
Standards No. 115 (SFAS 115),  "Accounting  for Certain  Investments in Debt and
Equity  Securities".  Unrealized holding gains and losses are reflected as a net
amount within stockholders'  equity until realized.  The cost of securities sold
is based on the average cost of securities  when  computing  realized  gains and
losses.

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.

Translation of Foreign Currencies
Balance  sheet  accounts  are  translated   principally  at  rates  of  exchange
prevailing  at the  end  of  the  year  except  for  fixed  assets  and  related
depreciation  in  countries  with  highly   inflationary   economies  which  are
translated  at rates in  effect on dates of  acquisition.  Revenue  and  expense
accounts are translated at average rates of exchange in effect during each year.
Translation  adjustments  are included  within  stockholders'  equity except for
countries with highly inflationary economies, in which case they are included in
current operations.
<PAGE>

Revenues and Agency Costs
Revenues are generally  recognized when media  placements  appear and production
costs are incurred.  Salaries and other agency costs are  generally  expensed as
incurred.

Depreciation and Amortization
Depreciation  is  computed  principally  using  the  straight-line  method  over
estimated  useful lives of the related  assets,  ranging  generally from 3 to 20
years for furniture and equipment and from 10 to 45 years for various  component
parts of buildings.

Leasehold  improvements  and  rights  are  amortized  over the terms of  related
leases. Company policy provides for the capitalization of all major expenditures
for renewal and  improvements  and for current charges to income for repairs and
maintenance.

Long-lived Assets
The excess of purchase price over the fair value of net tangible assets acquired
is  amortized  on a  straight-line  basis over  periods not  exceeding 40 years.
Customer lists are amortized on a  straight-line  basis over the expected useful
life of the customer lists (generally 5 to 40 years).

The Company  evaluates the  recoverability  of the carrying  value of long-lived
assets  whenever events or changes in  circumstances  indicate that the net book
value of an operation  may not be  recoverable.  If the sum of projected  future
undiscounted  cash flows of an  operation is less than its  carrying  value,  an
impairment loss is recognized.  The impairment loss is measured by the excess of
the  carrying  value over fair value based on estimated  discounted  future cash
flows or other valuation measures.

During 1999, the Company recorded a pre-tax charge of $16 million related to the
write-off of goodwill and customer lists within NFO's North American financial

services  division.  Cash  flow  analyses  were  performed,   resulting  in  the
determination by management that the intangible assets within this division were
deemed to be permanently impaired.

Income Taxes
Deferred  income taxes reflect the impact of temporary  differences  between the
amount of assets and liabilities recognized for financial reporting purposes and
such amounts recognized for income tax purposes.

Earnings per Common and Common Equivalent Share

The  Company  applies  the  principles  of  Statement  of  Financial  Accounting
Standards No. 128 (SFAS 128),  "Earnings Per Share". Basic earnings per share is
based on the  weighted-average  number of common shares  outstanding during each
year.  Diluted  earnings  per  share  also  includes  common  equivalent  shares
applicable  to grants under the stock  incentive  and stock option plans and the
assumed conversion of convertible subordinated debentures and notes, if they are
determined to be dilutive.

Treasury Stock
Treasury  stock is acquired at market  value and is recorded at cost.  Issuances
are accounted for on a first-in, first-out basis.

Concentrations of Credit Risk
The  Company's  clients are in various  businesses,  located  primarily in North
America, Latin America, Europe and the Asia Pacific Region. The Company performs
ongoing  credit  evaluations  of its  clients.  Reserves  for credit  losses are
maintained at levels considered adequate by management.  The Company invests its
excess cash in deposits with major banks and in money market  securities.  These
securities typically mature within 90 days and bear minimal risk.
<PAGE>

Segment Reporting
The Company  provides  advertising  and many other closely  related  specialized
marketing services.  All of these services fall within one reportable segment as
defined in  Statement  of  Financial  Accounting  Standards  No. 131 (SFAS 131),
"Disclosures about Segments of an Enterprise and Related Information."

Accounting for Derivative  Instruments and Hedging  Activities In June 1998, the
FASB issued Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative  Instruments and Hedging Activities" (SFAS 133), which had an initial
adoption  date by the  Company  of  January  1,  2000.  In June  1999,  the FASB
postponed  the adoption  date of SFAS 133 until  January 1, 2001.  SFAS 133 will
require  the  Company to record all  derivatives  on the  balance  sheet at fair
value.  Changes in derivative  fair values will either be recognized in earnings
as offsets to the changes in fair value of related  hedged  assets,  liabilities
and  firm  commitments  or  for  forecasted  transactions,  deferred  and  later
recognized in earnings at the same time as the related hedged transactions.  The
impact  of SFAS 133 on the  Company's  financial  statements  will  depend  on a
variety of factors,  including the future level of forecasted and actual foreign
currency transactions,  the extent of the Company's hedging activities, the type
of hedging instruments used and the effectiveness of such instruments.  However,
the Company does not believe the effect of adopting SFAS 133 will be material to
its financial condition or results of operations.

Reclassifications
Certain  amounts  for prior years have been  reclassified  to conform to current
year presentation.




NOTE 2:  STOCKHOLDERS' EQUITY
On July 15, 1999, the stockholders  approved a two-for-one stock split, effected
in the form of a payment of a 100  percent  stock  dividend to  stockholders  of
record on June 29,  1999.  The  number of shares of common  stock  reserved  for
issuance  pursuant to various plans under which stock is issued was increased by
100 percent. The two-for-one stock split has been reflected retroactively in the
consolidated  financial  statements and all per share data,  shares,  and market
prices of the  Company's  common stock  included in the  consolidated  financial
statements  and notes  thereto  have been  adjusted  to give effect to the stock
split.
<PAGE>

Comprehensive Income
Accumulated other  comprehensive  income (loss) amounts are reflected net of tax
in the consolidated financial statements as follows:

(Dollars in thousands)
                                                                           Total
                                                                     Accumulated
                                Foreign     Unrealized   Minimum        Other
                               Currency      Holding     Pension   Comprehensive
                               Translation    Gains/    Liability      Income/
                               Adjustment    (Losses)   Adjustment     (Loss)
                               -------------------------------------------------
Balances, December 31, 1996     $ (80,270)    $     --    $(13,302)   $ (93,572)
Current-period change             (78,029)      12,465          72      (65,492)
                                -----------------------------------------------

Balances, December 31, 1997     $(158,299)    $ 12,465    $(13,230)   $(159,064)
Current-period change              24,683       (2,576)    (24,013)      (1,906)
                                -----------------------------------------------

Balances, December 31, 1998     $(133,616)    $  9,889    $(37,243)   $(160,970)
Current-period change             (92,928)     158,607      18,596       84,275
                                -----------------------------------------------

Balances, December 31, 1999     $(226,544)    $168,496    $(18,647)   $ (76,695)
                                ===============================================


The foreign currency translation  adjustments are not tax-effected.  See Note 13
for additional discussion of unrealized holding gains on investments.



<PAGE>

NOTE 3:  EARNINGS PER SHARE

In accordance with SFAS 128, the following is a reconciliation of the components
of the basic  and  diluted  EPS  computations  for  income  available  to common
stockholders for the year ended December 31:
<TABLE>

(Dollars in Thousands Except Per Share Data)

<CAPTION>
                                            1999                                1998                             1997
                               -----------------------------------------------------------------------------------------------------
                                                        Per                                  Per                              Per
                                                        Share                                Share                            Share
                               Income      Shares       Amount      Income     Shares        Amount   Income     Shares       Amount
                               -----------------------------------------------------------------------------------------------------

<S>                            <C>         <C>          <C>         <C>           <C>        <C>      <C>            <C>      <C>
BASIC EPS
Income available
 to common stockholders        $331,287    297,992      $1.11       $339,907      294,756    $1.15    $224,184       283,796  $.79

Effect of Dilutive Securities:
 Options                                     7,311                                  6,924                              6,508
 Restricted stock                   631      3,537                       541        3,454                  447         3,277
 3 3/4% Convertible
    subordinated debentures          --             --                    --           --                5,929         8,021

DILUTED EPS                    $331,918    308,840      $1.07       $340,448      305,134    $1.12    $230,560       301,602  $.76
                               -----------------------------------------------------------------------------------------------------
</TABLE>

The  computation  of diluted EPS for 1999,  1998,  and 1997 excludes the assumed
conversion of the 1.80% Convertible  Subordinated Notes and the 1999 computation
also  excludes the 1.87%  Convertible  Subordinated  Notes (See Note 10) because
they were  antidilutive.  In the fourth  quarter of 1997,  the Company  redeemed
substantially all its 3 3/4% Convertible Subordinated Debentures due 2002.

All data for 1999,  1998,  and 1997 has been  restated to reflect the  aggregate
effect of the acquisitions accounted for as poolings of interests. (See Notes 15
and 16).

All share data for 1998 and 1997 has been  adjusted to reflect  the  two-for-one
stock split effective July 15, 1999.




NOTE 4: ACQUISITIONS
The Company acquired a number of advertising and communications companies during
the three-year  period ended December 31, 1999.  The aggregate  purchase  price,
including  cash  and  stock  payments  for new  acquisitions  (including  pooled
entities),  was $559  million,  $820 million and $378 million in 1999,  1998 and
1997, respectively.  The aggregate purchase price for new acquisitions accounted
for as purchases and equity investments was $293 million, $405 million, and $144
million in 1999, 1998, and 1997, respectively.
<PAGE>

1999
In 1999,  the Company paid $189 million in cash and issued  8,393,893  shares of
its common stock to acquire 56 companies. Of the acquisitions, 52 were accounted
for under the purchase  method of accounting  and 4 were accounted for under the
pooling  of  interests  method.  The  Company  also  recorded  a  liability  for
acquisition   related  deferred  payments  of  $28  million,   for  cases  where
contingencies related to acquisitions have been resolved.

For those entities accounted for as purchase transactions, the purchase price of
the acquisitions  has been allocated to assets acquired and liabilities  assumed
based on  estimated  fair  values.  The results of  operations  of the  acquired
companies  were included in the  consolidated  results of the Company from their
respective  acquisition dates which occurred  throughout the year. The companies
acquired  in  transactions  accounted  for as  purchases  included  The  Cassidy
Companies,  Inc.,  Spedic  France  S.A.,  Mullen  Advertising,   Inc.,  and  PDP
Promotions UK Ltd. None of the  acquisitions  was  significant  on an individual
basis.

In connection  with the 1999 purchase  transactions,  goodwill of  approximately
$254 million was  recorded.  The  purchase  price  allocations  made in 1999 are
preliminary and subject to adjustment.  Goodwill  related to the acquisitions is
being amortized on a straight-line basis over their estimated useful lives.

On  December  1, 1999,  the Company  acquired  Brands  Hatch  Leisure  Plc.  for
5,158,122  shares of stock.  The acquisition has been accounted for as a pooling
of interests.  Additionally,  during 1999 the Company  issued  641,596 shares to
acquire  3  other  companies  which  have  been  accounted  for as  poolings  of
interests.

The following  unaudited pro forma data  summarize the results of operations for
the periods indicated as if the 1999 purchase acquisitions had been completed as
of January 1, 1998. The pro forma data give effect to actual  operating  results
prior to the acquisition,  adjusted to include the estimated pro forma effect of
interest expense,  amortization of intangibles and income taxes. These pro forma
amounts do not purport to be  indicative of the results that would have actually
been  obtained if the  acquisitions  occurred as of the beginning of the periods
presented or that may be obtained in the future.

For the year ended December 31, 1999

(Amounts in thousands except per share data)

                                    Pre-        Pro forma IPG
                                 acquisition      with 1999
                     IPG           results      acquisitions
                (as reported)    (unaudited)     (unaudited)
                -------------    -----------     -----------
Revenues          $4,977,823      $104,529       $5,082,352
Net income           331,287         7,101          338,388

Earnings per share:

     Basic              1.11                           1.14
     Diluted            1.07                           1.10



Net income  amounts  shown in the table above  include  restructuring  and other
merger related costs of $51.4 million, net of tax.

<PAGE>

For the year ended December 31, 1998

(Amounts in thousands except per share data)

                                  Results      Pro forma IPG
                                  of 1999         with 1999
                     IPG        acquisitions    acquisitions
                (as reported)    (unaudited)     (unaudited)
                -------------    -----------     -----------
Revenues         $4,218,657       $446,833       $4,665,490
Net income          339,907         15,819          355,726

Earnings per share:

     Basic             1.15                            1.21
     Diluted           1.12                            1.17

Unaudited  pro forma  consolidated  results  after  giving  effect  to  business
acquired in  purchase  transactions  during 1998 would not have been  materially
different from the reported amounts for 1998.

1998
In 1998,  14,956,534  shares of the  Company's  common  stock  were  issued  for
acquisitions  accounted for as poolings of interests.  The companies  pooled and
the respective  shares of the Company's common stock issued were:  International
Public Relations Plc. - 5,280,346 shares,  Hill Holliday - 4,124,868 shares, The
Jack Morton Company - 4,271,992 shares,  Carmichael Lynch, Inc. - 973,808 shares
and KBA Marketing - 305,520 shares.

In 1998,  the Company paid $282 million in cash and issued  2,718,504  shares of
its common stock to acquire 77 companies,  all of which have been  accounted for
as purchases. These acquisitions included Gillespie, Ryan McGinn, CSI, Flammini,
Gingko,  Defederico,  Herrero Y Ochoa, Infratest Burke AG, CF Group,  MarketMind
Technologies,  and  Ross-Cooper-Lund.  The Company also recorded a liability for
acquisition related deferred payments of $24 million.

1997
In  1997,  the  Company  issued  10,789,079  shares  of  its  common  stock  for
acquisitions  accounted  for as poolings  of  interests.  Some of the  companies
pooled and the  respective  shares of the  Company's  common  stock issued were:
Complete Medical Group - 1,417,578 shares, The MBL Group plc - 1,126,114 shares,
Prognostics - 1,425,123 shares, Integrated Communications Corporation- 1,170,108
shares,  Advantage  International  -  1,158,412  shares and  Ludgate - 1,078,918
shares.  Additional  companies  accounted  for as poolings of interests  include
Adler Boschetto Peebles, Barnett Fletcher, Davies Baron, Diefenbach Elkins, D.L.
Blair, Rubin Barney & Birger, Inc. and Technology Solutions Inc.

In 1997,  the  Company  also paid  $101.1  million in cash and issued  2,792,950
shares of its common  stock for  acquisitions  accounted  for as  purchases  and
equity  investments.   These  acquisitions  included  Marketing  Corporation  of
America,  Medialog, The Sponsorship Group,  Kaleidoscope and Addis Wechsler (51%
interest).  The Company  increased its interest in Campbell  Mithun Esty by 25%.
The Company also recorded a liability for acquisition  related deferred payments
of $38 million.

Deferred Payments
Certain of the Company's acquisition agreements provide for deferred payments by
the  Company,  contingent  upon  future  revenues  or profits  of the  companies
acquired.  Deferred  payments  of both cash and shares of the  Company's  common
stock for prior years'  acquisitions  were $210  million,  $84 million,  and $51
million in 1999, 1998 and 1997, respectively.  Such payments are capitalized and
recorded as goodwill.
<PAGE>

Investments
During 1999,  the Company sold a portion of its  investments  in Lycos and USWEB
for combined  proceeds of approximately $56 million.  Additionally,  the Company
sold its minority  investment  in Nicholson  NY, Inc. to Icon for $19 million in
shares of Icon's common stock.

During 1998, the Company sold a portion of its investments in USWEB,  CKS Group,
Inc.  and Lycos with  combined  proceeds of  approximately  $20  million.  These
investments are being accounted for as available-for-sale  securities,  pursuant
to the requirements of SFAS 115.

During 1997,  the Company sold its  investment  in All American  Communications,
Inc. for approximately $77 million.

Restatement
As  discussed  in Note 16, the Company  acquired  Deutsch in November  2000 in a
transaction which was accounted for as a pooling of interests.  The accompanying
consolidated  financial  statements,  including  the  related  notes,  have been
restated  as of  the  earliest  period  presented  to  include  the  results  of
operations, financial position and cash flows of Deutsch.

In April 2000,  the Company  acquired NFO in a  transaction  accounted  for as a
pooling of interests.  The results of NFO and several other recent  acquisitions
accounted for as poolings of interests have been included in previously restated
financial statements.

Revenue and net income for Deutsch  included  in the  supplemental  consolidated
statement  of income for the years ending  December 31, 1999,  1998 and 1997 are
summarized below.

                                                          Net Income/
                                           Revenue          (Loss)
                                          ----------      -----------
For the year ended December 31, 1999:

     As Previously Restated               $4,892,912        $315,243
     Deutsch                                  84,911          16,044
     As Restated                          $4,977,823        $331,287

For the year ended December 31, 1998:

     As Previously Restated               $4,167,788        $333,593
     Deutsch                                  50,869           6,314
     As Restated                          $4,218,657        $339,907

For the year ended December 31, 1997:

     As Previously Restated               $3,582,601        $220,211
     Deutsch                                  28,105           3,973
     As Restated                          $3,610,706        $224,184



Prior to its acquisition by the Company, Deutsch elected to be treated as an "S"
Corporation  under  applicable  sections of the Internal Revenue Code as well as
for state income tax  purposes.  Accordingly,  income tax expense was lower than
would have been the case had Deutsch been treated as a "C" Corporation.  Deutsch
became a "C"  Corporation upon its  acquisition  by the Company.  On a pro forma
basis,  assuming "C" Corporation  status, net income for Deutsch and the Company
would have been as follows:
<PAGE>

(Dollars in thousands)

                                              1999       1998       1997
                                           -------------------------------
   Deutsch, as reported                     $ 16,044   $  6,314   $  3,973

   Deutsch, pro forma                          9,518      3,833      2,431
                                           -------------------------------
   Pro forma tax adjustment                   (6,526)    (2,481)    (1,542)
                                           -------------------------------
   IPG, as restated                          331,287    339,907    224,184
                                           -------------------------------
   IPG, pro forma                           $324,761   $337,426   $222,642
                                           ===============================




NOTE 5:  PROVISION FOR INCOME TAXES
The Company  accounts for income taxes under  Statement of Financial  Accounting
Standards No. 109 (SFAS 109), "Accounting for Income Taxes". SFAS 109 applies an
asset and  liability  approach  that  requires the  recognition  of deferred tax
assets and liabilities  with respect to the expected future tax  consequences of
events that have been recognized in the  consolidated  financial  statements and
tax returns.

The components of income before provision for income taxes are as follows:

(Dollars in thousands)                     1999            1998           1997
                                         ------            ----           ----
Domestic                                 $365,118        $322,651       $201,359
Foreign                                   235,599         284,204        238,884
                                         ---------------------------------------
Total                                    $600,717        $606,855       $440,243
                                         =======================================

The provision for income taxes consisted of:

Federal Income Taxes (Including
   Foreign Withholding Taxes):
  Current                                $ 92,018        $110,226       $ 75,736
  Deferred                                 19,891           4,335          3,683
                                         ---------------------------------------
                                          111,909         114,561         79,419
                                         ---------------------------------------
State and Local Income Taxes:
  Current                                  23,168          23,713         24,384
  Deferred                                  4,252             802            286
                                         ---------------------------------------
                                           27,420          24,515         24,670
                                         ---------------------------------------

Foreign Income Taxes:
  Current                                 119,469         123,669         90,113
  Deferred                                (14,827)        (17,109)         3,463
                                         ---------------------------------------
                                          104,642         106,560         93,576
                                         ---------------------------------------
Total                                    $243,971        $245,636       $197,665
                                         =======================================

<PAGE>

At December 31, 1999 and 1998 the deferred tax assets/(liabilities) consisted of
the following items:

(Dollars in thousands)                                      1999           1998
                                                            ----           ----
Postretirement/postemployment benefits                  $ 52,317       $ 49,207
Deferred compensation                                      4,940         34,285
Pension costs                                             10,036         13,715
Depreciation                                              (8,537)       (10,953)
Rent                                                      (8,674)        (6,424)
Interest                                                   4,100          4,598
Accrued reserves                                           9,399          9,155
Investments in equity securities                        (140,320)       (10,677)
Tax loss/tax credit carryforwards                         47,783         47,293
Restructuring and other merger related costs               9,497             --
Other                                                       (196)        (6,032)
                                                        -----------------------
Total deferred tax assets / (liabilities)                (19,655)       124,167
Deferred tax valuation allowance                          26,233         31,411
                                                        -----------------------
Net deferred tax assets / (liabilities)                 $(45,888)      $ 92,756
                                                        =======================



The valuation  allowance of $26.2 million and $31.4 million at December 31, 1999
and  1998,  respectively,  represents  a  provision  for  uncertainty  as to the
realization of certain  deferred tax assets,  including U.S. tax credits and net
operating loss carryforwards in certain jurisdictions. The change during 1999 in
the  deferred  tax  valuation  allowance  primarily  relates  to  changes in the
deferred  compensation  tax  item,  net  operating  loss  carryforwards  and tax
credits.   At  December  31,  1999,  there  were  $9.7  million  of  tax  credit
carryforwards  with  expiration  periods  through  2004 and net  operating  loss
carryforwards  with a tax  effect  of  $38.1  million  with  various  expiration
periods.

A  reconciliation  of the effective income tax rate as shown in the consolidated
statement of income to the federal statutory rate is as follows:

                                                    1999      1998      1997
                                                    ----      ----      ----
Statutory federal income tax rate                   35.0%     35.0%     35.0%
State and local income taxes,
  net of federal income tax benefit                  2.8       3.7       4.1
Impact of foreign operations, including
  withholding taxes                                  0.8       0.4       0.3
Goodwill and intangible assets                       3.6       2.8       2.7
Effect of pooled companies                           0.3      (0.8)      2.7
Other                                               (1.9)     (0.6)      0.1
                                                    ------------------------
Effective tax rate                                  40.6%     40.5%     44.9%
                                                    ========================


The  Company's  effective  income tax rate was 40.6% in 1999,  40.5% in 1998 and
44.9% in 1997. The higher rate in 1997 was largely  attributable  to the special
compensation charges recorded by Hill Holliday.
<PAGE>

As described  in Note 4, prior to its  acquisition  by the Company,  Deutsch had
elected to be  treated as an "S"  Corporation  and  accordingly,  its income tax
expense  was lower than it would have been had  Deutsch  been  treated as an "S"
Corporation.  Deutsch  became  a "C"  Corporation  upon its  acquisition  by the
Company.  Assuming Deutsch had been a "C" Corporation  since 1997, the pro forma
effective  tax rate for the  Company  would  have  been  41.7%,  40.9% and 45.2%
respectively for 1999, 1998 and 1997.

The total amount of  undistributed  earnings of foreign  subsidiaries for income
tax purposes  was  approximately  $585  million at December 31, 1999.  It is the
Company's   intention  to  reinvest   undistributed   earnings  of  its  foreign
subsidiaries and thereby indefinitely postpone their remittance. Accordingly, no
provision  has been made for foreign  withholding  taxes or United States income
taxes which may become payable if undistributed earnings of foreign subsidiaries
were paid as dividends to the Company.  The additional  taxes on that portion of
undistributed  earnings  which is available for  dividends  are not  practicably
determinable.




NOTE 6: SUPPLEMENTAL CASH FLOW INFORMATION
Cash and Cash Equivalents

For purposes of the consolidated  statement of cash flows, the Company considers
all highly liquid investments with a maturity of three months or less to be cash
equivalents.

Income Tax and Interest Payments
Cash paid for income taxes was approximately $186 million, $200 million and $133
million  in  1999,  1998  and  1997,   respectively.   Interest   payments  were
approximately $57 million,  $40 million and $32 million in 1999, 1998, and 1997,
respectively.

Noncash Financing Activity
During  1997,  the Company  redeemed  all  outstanding  issues  under the 3 3/4%
Convertible   Subordinated  Debentures  due  2002.   Substantially  all  of  the
outstanding  debentures were converted into  approximately 8.6 million shares of
the Company's common stock.

Acquisitions
As more  fully  described  in Note  4,  the  Company  issued  8,393,893  shares,
17,942,578  shares,  and  10,518,628  shares of the  Company's  common  stock in
connection with acquisitions during 1999, 1998 and 1997,  respectively.  Details
of  businesses  acquired in  transactions  accounted  for as  purchases  were as
follows:

(Dollars in thousands)

                                             1999          1998         1997
                                             ----          ----         ----
Fair value of assets acquired             $627,005      $726,601     $303,969
Liabilities assumed                        148,637       319,676       90,303
                                          -----------------------------------
Net assets acquired                        478,368       406,925      213,666
Less: noncash consideration                186,210        91,077       96,814
Less: cash acquired                         43,752        59,853        6,535
                                          -----------------------------------
Net cash paid for acquisitions            $248,406      $255,995     $110,317
                                          ===================================
<PAGE>


The amounts  shown above  exclude  future  deferred  payments due in  subsequent
years, but include cash deferred  payments of $120 million,  $55 million and $30
million made during 1999, 1998 and 1997, respectively.




NOTE 7: INCENTIVE PLANS
The 1997  Performance  Incentive  Plan  ("1997 PIP Plan")  was  approved  by the
Company's  stockholders  in May 1997 and  includes  both  stock  and cash  based
incentive  awards.  The maximum  number of shares of the Company's  common stock
which may be  granted  in any year  under the 1997 PIP Plan is equal to 1.85% of
the total  number of shares of the  Company's  common stock  outstanding  on the
first day of the year adjusted for additional  shares as defined in the 1997 PIP
Plan document (excluding management incentive compensation  performance awards).
The 1997 PIP Plan also  limits the number of shares  available  with  respect to
awards  made to any one  participant  as well as  limiting  the number of shares
available  under certain  awards.  Awards made prior to the 1997 PIP Plan remain
subject to the respective terms and conditions of the predecessor plans.  Except
as otherwise noted,  awards under the 1997 PIP Plan have terms similar to awards
made under the respective predecessor plans.

Stock Options
Outstanding  options  are  generally  granted  at the fair  market  value of the
Company's common stock on the date of grant and are exercisable as determined by
the  Compensation  Committee  of  the  Board  of  Directors  (the  "Committee").
Generally,  options become exercisable between two and five years after the date
of grant and expire ten years from the grant date.

Following is a summary of stock option transactions during the three-year period
ended December 31:

                               1999                1998                1997
                        --------------------------------------------------------
                                  Weighted            Weighted          Weighted
                                   Average             Average           Average
                                  Exercise            Exercise          Exercise
(Shares in thousands)   Shares       Price   Shares      Price    Shares   Price
                        --------------------------------------------------------
Shares under option,
  beginning of year     29,505     $ 19      25,466     $ 13     25,230    $ 11
Options granted          4,743       39       8,399       32      4,830      19
Options exercised       (4,497)      11      (3,108)       8     (3,549)      8
Options cancelled       (2,124)      25      (1,252)      15     (1,045)     12
                        ------               ------              ------
Shares under option,
   end of year          27,627     $ 23      29,505     $ 19     25,466    $ 13
                        ======               ======              ======
Options exercisable
   at year-end           7,955     $ 13       6,954     $ 11      9,158    $  9

<PAGE>

The following table summarizes  information about stock options  outstanding and
exercisable at December 31, 1999:

(Shares in thousands)

                                 Weighted-
                                   Average   Weighted-                Weighted-
                      Number     Remaining     Average        Number    Average
Range of         Outstanding   Contractual    Exercise   Exercisable   Exercise
Exercise Prices  at 12/31/99          Life       Price   at 12/31/99      Price
-------------------------------------------------------------------------------
$ 4.33 to $9.99       2,990           2            $ 7         2,865        $ 8

 10.00 to 14.99       3,422           5             11         3,093         11

 15.00 to 24.99       9,996           7             17         1,666         20

 25.00 to 56.28      11,220           9             36           612         30


Employee Stock Purchase Plan
Under the Employee  Stock  Purchase Plan (ESPP),  employees may purchase  common
stock of the Company  through  payroll  deductions  not  exceeding  10% of their
compensation.  The  price  an  employee  pays for a share of stock is 85% of the
market  price  on the  last  business  day  of the  month.  The  Company  issued
approximately .5 million shares in 1999, 1998, and 1997, respectively, under the
ESPP. An additional  15.5 million  shares were reserved for issuance at December
31, 1999.

SFAS 123 Disclosures
The  Company  applies  the  disclosure  principles  of  Statement  of  Financial
Accounting   Standards  No.  123  (SFAS  123),   "Accounting   for   Stock-Based
Compensation".  As permitted by the provisions of SFAS 123, the Company  applies
APB  Opinion  25,  "Accounting  for Stock  Issued  to  Employees",  and  related
interpretations in accounting for its stock-based  employee  compensation plans.
If compensation  cost for the Company's stock option plans and its ESPP had been
determined  based on the fair  value at the grant  dates as defined by SFAS 123,
the  Company's  pro forma net income and  earnings  per share would have been as
follows:

(Dollars in Thousands Except Per Share Data)

                                       1999             1998              1997
                                       ----             ----              ----
Net Income            As reported    $331,287          $339,907         $224,184
                      Pro forma      $303,645          $322,084         $211,223

Earnings Per Share

        Basic         As reported    $   1.11          $   1.15         $    .79
                      Pro forma      $   1.02          $   1.09         $    .74
        Diluted       As reported    $   1.07          $   1.12         $    .76
                      Pro forma      $   0.99          $   1.06         $    .72



For  purposes  of this pro forma  information,  the fair value of shares  issued
under  the ESPP  was  based  on the 15%  discount  received  by  employees.  The
weighted-average  fair  value  (discount)  on the  date of  purchase  for  stock
purchased under this plan was $5.28,  $3.82,  and $2.68 in 1999, 1998, and 1997,
respectively.
<PAGE>

The weighted  average fair value of options granted during 1999,  1998, and 1997
was $12.94, $8.85, and $5.91, respectively. The fair value of each option grant

has been estimated on the date of grant using the  Black-Scholes  option-pricing
model with the following assumptions:

                                              1999           1998          1997
                                              ----           ----          ----
Expected option lives                       6 years        6 years       6 years
Risk free interest rate                      5.72%          4.87%         6.51%
Expected volatility                         19.73%         19.17%        19.17%
Dividend yield                                .81%           .95%          1.3%


As required by SFAS 123,  this pro forma  information  is based on stock  awards
beginning in 1995 and accordingly is not likely to be  representative of the pro
forma  effects in future  years  because  options  vest over  several  years and
additional awards generally are made each year.

Restricted Stock
Restricted  stock  issuances  are  subject to certain  restrictions  and vesting
requirements  as determined by the  Committee.  The vesting  period is generally
five to seven  years.  No monetary  consideration  is paid by a recipient  for a
restricted  stock  award  and the  grant  date  fair  value of these  shares  is
amortized over the restriction  periods. At December 31, 1999, there was a total
of 7.0 million shares of restricted  stock  outstanding.  During 1999,  1998 and
1997, the Company awarded .9 million shares,  1.3 million shares and 1.4 million
shares of  restricted  stock  with a  weighted-average  grant date fair value of
$40.03, $28.99 and $19.48, respectively.  The cost recorded for restricted stock
awards  in 1999,  1998 and 1997 was  $25.9  million,  $20.3  million,  and $16.2
million, respectively.

Performance Units
Performance  units have been awarded to certain key employees of the Company and
its  subsidiaries.  The ultimate value of these  performance units is contingent
upon the annual  growth in profits (as  defined) of the Company,  its  operating
components or both, over the performance  periods. The awards are generally paid
in cash.  The  projected  value of these  units is  accrued by the  Company  and
charged  to  expense  over  the  performance   period.   The  Company   expensed
approximately $27 million,  $20 million and $20 million in 1999, 1998, and 1997,
respectively.

Hill Holliday
Due to the merger of Hill Holliday and the Company,  Hill Holliday  recognized a
one-time compensation charge of approximately $32 million in 1997. Hill Holliday
had an Equity  Participation  Plan and  certain  other  agreements  for  various
members of management,  which provided for  participants to receive a portion of
the proceeds in the event of the sale or merger of Hill Holliday.  Also included
in the charge were costs  primarily  relating  to  consulting  and  supplemental
retirement agreements.




NOTE 8: RETIREMENT PLANS
Defined Benefit Pension Plans
Through March 31, 1998 the Company and certain of its domestic  subsidiaries had
a defined  benefit plan  ("Domestic IPG Plan") which covered  substantially  all
regular domestic employees. Effective April 1, 1998 this Plan was curtailed, and
participants  with five or less  years of  service  became  fully  vested in the
Domestic Plan.  Participants  with five or more years of service as of March 31,
1998 retain their vested balances and participate in a new compensation plan.
<PAGE>

Under  the new plan,  each  participant's  account  is  credited  with an annual
allocation,  equal to the  projected  discounted  pension  benefit  accrual plus
interest,  while they continue to work for the Company.  Participants  in active
service are eligible to receive up to ten years of allocations  coinciding  with
the number of years of service  with the  Company  after  March 31,  1998.  As a
result of the change in the  Domestic  Plan,  the  Company  recorded  charges of
approximately $16.7 million in the fourth quarter of 1997.

Net periodic  pension  costs for the  Domestic IPG Plan for 1999,  1998 and 1997
were $1.3 million,  $.9 million and $15.0  million,  respectively.  The 1997 net
periodic pension cost included a $10 million  curtailment  charge and $4 million
of service costs.

Additionally,  NFO  maintains  a defined  benefit  plan  ("NFO  Plan")  covering
approximately one half of NFO's U.S.  employees.  The periodic pension costs for
this plan for  1999,  1998,  and 1997  were $.8  million,  $.6  million  and $.6
million, respectively.

The Company's  stockholders' equity balance includes a minimum pension liability
of $18.6 million, $37.2 million and $13.2 million at December 31, 1999, 1998 and
1997, respectively.

The Company also has several  foreign  pension plans in which benefits are based
primarily on years of service and  employee  compensation.  It is the  Company's
policy  to fund  these  plans in  accordance  with  local  laws and  income  tax
regulations.

Net periodic  pension costs for foreign  pension  plans for 1999,  1998 and 1997
included the following components:

(Dollars in thousands)

                                                   1999        1998        1997
                                                   ----        ----        ----
Service cost                                   $  9,619    $  6,847    $  5,460
Interest cost                                    11,759      10,908      10,633
Expected return on plan assets                   (9,380)     (9,437)    (10,537)
Amortization of unrecognized
transition obligation                               390         373         324
Amortization of
prior service cost                                  833         482         552
Recognized actuarial loss / (gain)                  508         (70)     (1,440)
Other                                                (9)         --          --
                                               --------------------------------
Net periodic pension cost                      $ 13,720    $  9,103    $  4,992
                                               ================================


<PAGE>

The following table sets forth the change in the benefit obligation,  the change
in plan assets,  the funded status and amounts  recognized for the pension plans
in the Company's consolidated balance sheet at December 31, 1999, and 1998:

(Dollars in thousands)
                                         Domestic                  Foreign
                                       Pension Plans             Pension Plans
                               ------------------------------------------------
                                    1999         1998         1999         1998
                               ------------------------------------------------
Change in benefit obligation
Beginning obligation           $ 166,538    $ 141,376    $ 220,964    $ 179,016
Service cost                         768          627        9,619        6,847
Interest cost                      9,869       10,367       11,759       10,908
Benefits paid                    (12,671)     (12,899)     (12,777)      (9,447)
Participant contributions              -            -        2,410        1,606
Actuarial (gains) / losses       (12,626)      27,067       (7,264)      29,882
Currency effect                       --           --        1,440        5,245
Other                                 --           --          352       (3,093)
                               ------------------------------------------------
Ending obligation                151,878      166,538      226,503      220,964
                               ------------------------------------------------
Change in plan assets
Beginning fair value             129,755      122,157      161,975      145,942
Actual return on plan assets      15,354       12,292       30,651       17,363
Employer contributions             3,072        8,205        7,887        2,473
Participant contributions             --           --        2,410        1,606
Benefits paid                    (12,671)     (12,899)     (12,777)      (9,447)
Currency effect                       --           --          156        1,300
Other                                 --           --        2,437        2,738
                               ------------------------------------------------
Ending fair value                135,510      129,755      192,739      161,975
                               ------------------------------------------------
Funded status of the plans       (16,368)     (36,783)     (33,764)     (58,989)
Unrecognized net actuarial
  loss/(gain)                     18,927       38,439      (18,163)      11,536
Unrecognized prior service cost      (13)         (20)       3,704        2,921
Unrecognized transition cost          --           --        1,838        3,796
                               ------------------------------------------------
Net asset/(liability)
  recognized                   $   2,546    $   1,636   $  (46,385)   $ (40,736)
                               ================================================


At December 31, 1999 and 1998,  the assets of the Domestic  Plan and the foreign
pension plans were primarily invested in fixed income and equity securities.

For the Domestic Plans, discount rates of 7.75% in 1999, 6.75% to 7% in 1998 and
7.25% to 7.5% in 1997 and salary  increase  assumptions of 4.5% in 1999 (the NFO
Plan)  4.5% to 6% in 1998 and 4.75% to 6% in 1997 were used in  determining  the
actuarial present value of the projected benefit obligation. The expected return
of Domestic Plan assets was 9% to 9.5% in 1999 and 9% to 10% in each of 1998 and
1997. For the foreign pension plans, discount rates ranging from 3.75% to 14% in
1999, 4% to 14% in 1998, and 3.5% to 14% in 1997 and salary increase assumptions
ranging  from 3% to 10% in 1999 and 2% to 10% in both 1998 and 1997 were used in
determining the actuarial present value of the projected benefit obligation. The
expected rates of return on the assets of the foreign  pension plans ranged from
2% to 14% in 1999, 2% to 14% in 1998 and 3.5% to 14% in 1997.
<PAGE>

The projected benefit obligation,  accumulated benefit obligation and fair value
of plan assets for the Domestic  Plan were $152  million,  $152 million and $136
million,  respectively, as of December 31, 1999, and $167 million, $167 million,
and $130 million,  respectively,  as of December 31, 1998. The projected benefit
obligation,  accumulated benefit  obligation,  and fair value of plan assets for
the foreign pension plans with accumulated benefit obligations in excess of plan
assets were $90 million, $72 million and $9 million respectively, as of December
31,  1999,  and $81  million,  $74  million and $3 million  respectively,  as of
December 31, 1998.

Other Benefit Arrangements
The Company also has special  unqualified  deferred  benefit  arrangements  with
certain key  employees.  Vesting is based upon the age of the  employee  and the
terms of the employee's  contract.  Life insurance contracts have been purchased
in amounts which may be used to fund these arrangements.

In addition to the defined  benefit  plans  described  above,  the Company  also
sponsors  other  defined   contribution   plans  ("Savings  Plan")  that  covers
substantially   all  domestic   employees  of  the  Company  and   participating
subsidiaries.  The Savings Plan permits  participants to make contributions on a
pre-tax and/or after-tax  basis. The Savings Plan allows  participants to choose
among  several  investment  alternatives.  The  Company  matches  a  portion  of
participants'  contributions  based  upon the  number of years of  service.  The
Company  contributed  $12 million,  $9.3 million and $7.2 million to the Savings
Plan in 1999, 1998 and 1997, respectively.

Postretirement Benefit Plans
The Company and its  subsidiaries  provide  certain  postretirement  health care
benefits  for  employees  who were in the employ of the Company as of January 1,
1988,  and life  insurance  benefits for employees who were in the employ of the
Company as of December 1, 1961. The plans cover certain  domestic  employees and
certain key  employees  in foreign  countries.  Effective  January 1, 1993,  the
Company's plan covering  postretirement  medical benefits was amended to place a
cap on annual benefits payable to retirees.

The coverage is self-insured, but is administered by an insurance company.

The Company  accrues the expected  cost of  postretirement  benefits  other than
pensions over the period in which the active  employees become eligible for such
postretirement benefits.

The net periodic  expense for these  postretirement  benefits for 1999, 1998 and
1997 was $2.2 million, $3 million and $2.8 million, respectively.
<PAGE>

The following table sets forth the change in benefit obligation,  change in plan
assets,  funded status and amounts  recognized for the Company's  postretirement
benefit plans in the consolidated balance sheet at December 31, 1999 and 1998:

(Dollars in thousands)
                                                             1999         1998
                                                           ---------------------
Change in benefit obligation
Beginning obligation                                       $ 41,793    $ 42,863
Service cost                                                    477         785
Interest cost                                                 2,795       3,154
Participant contributions                                        90          77
Benefits paid                                                (2,020)     (1,722)
Plan amendments                                                  --         (68)
Actuarial gain                                               (4,300)     (3,296)
                                                           --------------------
Ending obligation                                            38,835      41,793
                                                           --------------------
Change in plan assets
Beginning fair value                                             --          --
Actual return on plan assets                                     --          --
Employer contributions                                        1,930       1,645
Participant contributions                                        90          77
Benefits paid                                                (2,020)     (1,722)
                                                           --------------------
Ending fair value                                                --          --
                                                           --------------------
Funded status of the plans                                  (38,835)    (41,793)
Unrecognized net actuarial gain                              (9,440)     (5,234)
Unrecognized prior service cost                              (1,951)     (2,892)
                                                           --------------------
Net amount recognized                                      $(50,226)   $(49,919)
                                                           ====================


Discount  rates of 7.5% to 7.75%  in 1999,  6.75% in 1998 and  7.25% in 1997 and
salary increase assumption of 4% to 6% in 1999 and 1998, and 4.75% to 6% in 1997
were used in determining the accumulated postretirement benefit obligation. A 7%
to 7.4% and an 8% increase  in the cost of covered  health  care  benefits  were
assumed  for 1999 and 1998,  respectively.  This  rate is  assumed  to  decrease
incrementally  to  approximately  5.5% in the year 2002 and remain at that level
thereafter.  The  health  care  cost  trend  rate  assumption  does  not  have a
significant effect on the amounts reported.

Postemployment Benefits
In accordance with SFAS 112 "Employers' Accounting for Postemployment Benefits",
the Company  accrues costs  relating to certain  benefits  including  severance,
worker's compensation and health care coverage over an employee's service life.

The Company's  liability for postemployment  benefits totaled  approximately $64
million  and $50 million at December  31,  1999 and 1998,  respectively,  and is
included in deferred  compensation and reserve for termination  allowances.  The
net periodic  expense  recognized in 1999, 1998 and 1997 was  approximately  $34
million, $32 million and $31 million, respectively.


<PAGE>

NOTE 9: SHORT-TERM BORROWINGS
The  Company and its  domestic  subsidiaries  have lines of credit with  various
banks.  These credit lines  permit  borrowings  at  fluctuating  interest  rates
determined  by the banks.  Short-term  borrowings  by  subsidiaries  outside the
United States principally consist of drawings against bank overdraft  facilities
and lines of credit.  These  borrowings  bear interest at the  prevailing  local
rates.  Where  required,  the  Company has  guaranteed  the  repayment  of these
borrowings.  Unused  lines of  credit by the  Company  and its  subsidiaries  at
December  31,  1999  and  1998   aggregated   $430  million  and  $458  million,
respectively.  The  weighted-average  interest rate on  outstanding  balances at
December 31, 1999 was approximately  5.8%.  Current maturities of long-term debt
are included in the payable to banks balance.




NOTE 10:  LONG-TERM DEBT
Long-term debt at December 31 consisted of the following:

(Dollars in thousands)
                                                               1999       1998
                                                           ---------------------
Convertible Subordinated Notes - 1.87%                     $  304,076   $     --
Convertible Subordinated Notes - 1.80%                        214,414    207,927
Term loans - 4.20% to 7.91% (6.45% to 7.91% in 1998)          289,621    280,320
Senior Notes Payable to Banks under a Revolving Credit
  Agreement Due March 2003 - 4.3% to 6.9%                      35,603     53,045
Senior Notes Payable - 6.83% to 7.52%                         102,000     95,000
Subordinated Notes - 9.84%                                     25,000     17,000
Germany mortgage note payable - 7.64%                          26,779     31,680
Other mortgage notes payable and
  long-term loans - 2.80% to 9.84%                             75,026     44,370
                                                           ---------------------
                                                            1,072,519    729,342
Less: current portion                                          23,912     22,898
                                                           ---------------------
Long-term debt                                             $1,048,607   $706,444
                                                           =====================



On June 1, 1999,  the Company  issued $361  million  face amount of  Convertible
Subordinated  Notes due 2006. The 2006 notes were issued at an original price of
83% of the face amount,  generating proceeds of approximately $300 million.  The
notes are convertible into 6.4 million shares of the Company's common stock at a
conversion  rate of 17.616 shares per $1,000 face amount.  The fair value of the
2006 notes as of December  31,  1999,  was  approximately  $416  million and was
determined by obtaining quotes from brokers.

On  September  16,  1997,  the  Company  issued  $250  million  face  amount  of
Convertible  Subordinated  Notes due 2004 ("2004  Notes")  with a coupon rate of
1.80%.  The 2004  Notes  were  issued  at an  original  price of 80% of the face
amount,  generating  proceeds  of  approximately  $200  million.  The  notes are
convertible  into  6.7  million  shares  of  the  Company's  common  stock  at a
conversion  rate of 26.772 shares per $1,000 face amount.  The fair value of the
2004 Notes as of  December  31,  1999 was  approximately  $392  million  and was
determined by obtaining quotes from brokers.

On March 9, 1998,  the  Company  entered  into a $75  million  revolving  credit
agreement.  The $75 million  revolving credit facility has an ultimate  maturity
date of March 2003 and enables the Company to borrow in multiple  currencies  at
interest rates tied to LIBOR or the prime rate, at its option.
<PAGE>

In conjunction with the Infratest Burke  acquisition and the financing  thereof,
the Company  amended  its $75  million  revolving  credit  facility  and its $40
million  Senior  Notes,  each  originally  dated March 9, 1998.  The  amendments
provide,  among other things, that the Company obligations will be guaranteed by
certain  subsidiaries of the Company. In addition,  the amendments increased the
rates at which interest  annually  accrues under the  obligations  from 6.43% to
6.83%.

The Senior  Notes  Payable  consist of four  private  placements  of $40 million
Senior Notes both dated March 9, 1998 due March 1, 2008, $17 million Series A

Senior Notes and $38 million  Series B Senior Notes dated  November 20, 1998 due
November 15, 2005 and November 15, 2008,  respectively,  and $7 million Series B
Senior Notes dated March 26 due November 15, 2008.

The Subordinated  Notes consist of the private  placement of $8 million on March
26,  1999,  and $17 million on November 20, 1998.  The  Subordinated  Notes bear
interest at the fixed annual rate of 9.84%,  mature  November 15, 2008,  and are
repayable in equal annual installments of $8.3 million beginning in 2006.

Under various loan agreements, the Company must maintain specified levels of net
worth and meet  certain  cash flow  requirements  and is limited in the level of
indebtedness.  The Company has complied with the limitations  under the terms of
these loan agreements.

Long-term  debt maturing over the next five years and  thereafter is as follows:
2000-$24 million;  2001-$44.8 million;  2002-$113.8 million; 2003-$83.4 million;
2004-$277.9 million, and $528.6 million thereafter.

See Note 13 for discussion of fair market value of the Company's long-term debt.




NOTE 11:  RESTRUCTURING AND OTHER MERGER RELATED COSTS
In October  1999,  the Company  announced  the merger of two of its  advertising
networks.  The networks  affected,  Lowe & Partners Worldwide and Ammirati Puris
Lintas were combined to form a new agency  network called Lowe Lintas & Partners
Worldwide.  The merger involves the  consolidation  of operations in Lowe Lintas
agencies  in  approximately  24 cities in 22  countries  around the world.  Once
complete, the newly merged agency network will have offices in over 80 countries
around the world.

During  the  fourth  quarter  of  1999,   the  Company  began   execution  of  a
comprehensive  restructuring  plan in  connection  with  the  merger.  The  plan
includes  headcount  reductions,  consolidation  of real  estate and the sale or
disposition of certain investments,  and is expected to be completed by June 30,
2000. The Company is pleased with the progress of the merger to date and expects
the total costs to be in line with its original estimate.

The total pre-tax cost of the restructuring  plan is expected to be between $170
and $190 million,  ($100 to $115 million,  net of tax). In the fourth quarter of
1999, the Company recognized pre-tax costs of $84.2 million ($51.4 million,  net
of tax or $.17 per diluted share),  with the remainder expected to be recognized
in the first two quarters of 2000.

<PAGE>

A summary of the components of the total  restructuring and other merger related
costs,  together  with an  analysis  of the cash and  non-cash  elements,  is as
follows:

(Dollars in millions)

                                               1999            Cash     Non-Cash
                                              ----------------------------------
TOTAL BY TYPE
-------------
   Severance and termination costs            $44.9           $27.0        $17.9
   Fixed asset write-offs                      11.1              --         11.1
   Lease termination costs                      3.8             3.8           --
   Investment write-offs and other             24.4             1.1         23.3
                                              ----------------------------------
Total                                         $84.2           $31.9        $52.3
                                              ==================================



The severance and termination costs recorded in 1999 relate to approximately 230
employees who have been terminated or notified that they will be terminated. The
employee   groups   affected   include   executive   and  regional   management,
administrative,  account  management,  creative and media production  personnel,
principally  in the U.S.  and  U.K.  The  charge  related  to these  individuals
includes  the cost of  voluntary  programs  in certain  locations  and  includes
substantially all senior executives that will be terminated.  As of December 31,
1999, the amount accrued related to severance and termination was  approximately
$42.6 million.  During the fourth quarter of 1999, cash payments of $2.3 million
were made.

The fixed  assets  write-off  relates  largely to the  abandonment  of leasehold
improvements  as part of the merger.  The amount  recognized  in 1999 relates to
fixed asset write-offs in 6 offices principally in the United States.

Lease termination costs relate to the offices vacated as part of the merger. The
lease  terminations  are expected to be completed by mid-to-late  2000, with the
cash  portion to be paid out over a period of up to five  years.  As of December
31,  1999,  the  amount  accrued  related  to these  termination  costs was $3.8
million.

The  investment  write-offs  relate to the loss on sale or  closing  of  certain
business  units.  In 1999,  $23  million  has been  recorded  as a result of the
decision  to sell or  abandon  4  European  businesses.  In the  aggregate,  the
businesses  being  sold or  abandoned  represent  an  immaterial  portion of the
revenue  and  operations  of Lowe Lintas & Partners.  The  write-off  amount was
computed based upon the difference between the estimated sales proceeds (if any)
and the  carrying  value of the related  assets.  These  sales or  closures  are
expected to be completed by mid 2000.


<PAGE>

NOTE 12:  GEOGRAPHIC AREAS
Long-lived assets and revenue are presented below by major geographic area:

(Dollars in thousands)
                                               1999         1998         1997
                                            -----------------------------------
Long-Lived Assets:
United States                               $1,784,072  $1,198,067   $  918,674
                                            -----------------------------------
International

United Kingdom                                 477,774     393,348      215,963
All other Europe                               685,521     641,895      505,797
Asia Pacific                                   151,083     141,113       94,432
Latin America                                   79,401      58,134       51,790
Other                                           76,269      50,853       42,041
                                            -----------------------------------
Total International                          1,470,048   1,285,343      910,023
                                            -----------------------------------
Total Consolidated                          $3,254,120  $2,483,410   $1,828,697
                                            ===================================

Revenue:
United States                               $2,560,161  $2,158,777   $1,852,959
                                            -----------------------------------
International

United Kingdom                                 527,250     450,103      353,086
All other Europe                             1,140,532     902,602      748,720
Asia Pacific                                   346,205     325,758      348,707
Latin America                                  213,260     232,940      204,894
Other                                          190,415     148,477      102,340
                                            -----------------------------------
Total International                          2,417,662   2,059,880    1,757,747
                                            -----------------------------------
Total Consolidated                          $4,977,823  $4,218,657   $3,610,706
                                            ===================================



Revenue is  attributed  to  geographic  areas  based on where the  services  are
performed.  Property and equipment is allocated  based upon  physical  location.
Intangible  assets,  other assets,  and  investments  are allocated based on the
location of the related operation.

The largest client of the Company  contributed  approximately  7% in 1999, 7% in
1998 and 9% in 1997 to revenue.  The Company's second largest client contributed
approximately 4% in 1999, 4% in 1998 and 4% in 1997 to revenue.

Dividends  received from foreign  subsidiaries were approximately $47 million in
1999, $51 million in 1998 and $41 million in 1997.

Consolidated net income includes losses from exchange and translation of foreign
currencies  of $5.6  million,  $3.2 million and $5.6  million in 1999,  1998 and
1997, respectively.


<PAGE>

NOTE 13:  FINANCIAL INSTRUMENTS
Financial assets, which include cash and cash equivalents, marketable securities
and receivables,  have carrying values which  approximate fair value.  Long-term
equity securities, included in other investments and miscellaneous assets in the
Consolidated  Balance Sheet, are deemed to be  available-for-sale  as defined by
SFAS 115 and accordingly are reported at fair value,  with net unrealized  gains
and losses reported within stockholders' equity.

The following table  summarizes net unrealized  gains and losses before taxes at
December 31:

(Dollars in millions)

                                              1999       1998       1997
                                             ---------------------------
   Cost                                      $172.3     $121.3     $61.1
   Unrealized gains / (losses)
     - gains                                  302.3       20.2      22.0
     - losses                                 (12.2)      (1.5)       --
                                             ---------------------------
   Net unrealized gains                       290.1       18.7      22.0
                                             ---------------------------
   Fair market value                         $462.4     $140.0     $83.1
                                             ===========================



Net of tax, net unrealized holding gains were $168 million,  $10 million and $12
million at December 31, 1999, 1998 and 1997, respectively.

The above pre-tax gain amounts are net of reclassifications of $13.1 million and
$6.5 million in 1999 and 1998, which represent  amounts  previously  recorded in
other comprehensive income.

During 1999, the Company expanded its investment in internet-service and related
companies.  In April  1999,  the  Company  invested  $20  million for a minority
interest  in Icon,  a Swedish  based  internet  consultancy.  Subsequently,  the
Company  increased its investment  through the contribution of other investments
and through  additional  cash  purchases.  At December 31, 1999, the fair market
value of the Company's investment in Icon was $322 million.

Financial  liabilities  with carrying  values  approximating  fair value include
accounts payable and accrued expenses, as well as payable to banks and long-term
debt. As of December 31, 1999, the 1.87% Convertible Subordinated Notes due 2006
had a cost basis of $304  million  with a market  value of $416  million.  As of
December 31, 1999, the 1.80% Convertible  Subordinated Notes due 2004 had a cost
basis of $214 million with a market  value of $392  million.  As of December 31,
1998,  the cost  basis of the 1.80%  Convertible  Subordinated  Notes  were $208
million with a market value of $283 million.  The fair values were determined by
obtaining  quotes from brokers (refer to Note 10 for  additional  information on
long-term debt). As of December 31, 1999, the 6.83% to 7.52% Notes Payable had a
total cost  basis of $102  million  with a market  value of $88  million.  As of
December  31,  1998,  the 4.3% to 7.52%  Notes  Payable  had a total  cost basis
approximately  the same as the market  value.  The fair value was  determined by
using the expected  future cash flows  discounted  at market  interest  rates as
adjusted for conversion privileges.
<PAGE>

The Company occasionally uses forwards and options to hedge a portion of its net
investment in foreign  subsidiaries  and certain  intercompany  transactions  in
order to  mitigate  the impact of changes in foreign  exchange  rates on working
capital.  The  notional  value and fair value of all  outstanding  forwards  and
options  contracts at the end of the year as well as the net cost of all settled
contracts during the year were not significant.

The  Company's  management  continuously  evaluates and attempts to mitigate its
exposure  to foreign  exchange,  economic  and  political  risks.  The  economic
developments  in  Brazil  did not  have a  significant  negative  impact  on the
Company,  and were  partially  offset by a favorable  impact due to the economic
recovery in Japan.




NOTE 14:  COMMITMENTS AND CONTINGENCIES
At December 31, 1999 the Company's  subsidiaries operating primarily outside the
United States were  contingently  liable for discounted notes receivable of $7.4
million.

The Company and its subsidiaries lease certain  facilities and equipment.  Gross
rental expense amounted to approximately $293 million for 1999, $257 million for
1998 and $225  million for 1997,  which was reduced by sublease  income of $17.2
million in 1999, $16.4 million in 1998 and $30.7 million in 1997.

Minimum rental commitments for the rental of office premises and equipment under
noncancellable  leases,  some of which  provide  for rental  adjustments  due to
increased  property taxes and operating  costs for 2000 and  thereafter,  are as
follows:

(Dollars in thousands)

                                 Gross Rental         Sublease
                                  Commitment           Income
                                  ----------           ------
Period
2000                               $198,255            $17,745
2001                                174,910             15,180
2002                                146,225             10,224
2003                                116,207              6,335
2004                                 98,444              1,390
2005 and thereafter                 391,697              2,014



Certain of the Company's acquisition agreements provide for deferred payments by
the  Company,  contingent  upon  future  revenues  or profits  of the  companies
acquired.  Such contingent amounts would not be material taking into account the
future revenues or profits of the companies acquired.

The  Company  and  certain  of  its   subsidiaries  are  party  to  various  tax
examinations, some of which have resulted in assessments. The Company intends to
vigorously defend any and all assessments and believes that additional taxes (if
any) that may ultimately  result from the settlement of such assessments or open
examinations  would  not have a  material  adverse  effect  on the  consolidated
financial statements.

The  Company is  involved  in legal and  administrative  proceedings  of various
types.  While any  litigation  contains an element of  uncertainty,  the Company
believes that the outcome of such proceedings or claims will not have a material
adverse effect on the Company.
<PAGE>



NOTE 15:  NFO ACQUISITION
In April 2000,  the Company  acquired NFO in a  transaction  accounted  for as a
pooling of interests.  The results of NFO and several other recent  acquisitions
have been included in previously restated financial statements.




NOTE 16:  RECENT EVENTS
In November 2000, the Company acquired Deutsch in a transaction accounted for as
a pooling of interests.  Approximately  6 million  shares were issued to acquire
Deutsch. The Company's  consolidated  financial statements have been restated as
of the earliest period presented to include the results of operations, financial
position and cash flows of Deutsch.

<PAGE>
<TABLE>
                                                 SELECTED FINANCIAL DATA FOR FIVE YEARS
                                              (Amounts in Thousands Except Per Share Data)

                                       1999            1998         1997         1996         1995
                                       ----            ----         ----         ----         ----
<S>                                   <C>           <C>          <C>          <C>          <C>
OPERATING DATA
Revenue                               $ 4,977,823   $ 4,218,657  $ 3,610,706  $ 3,053,926  $ 2,650,192
Operating expenses                      4,315,144     3,646,061    3,195,564    2,695,038    2,353,970
Restructuring and other merger
  related costs                            84,183            --           --           --           --
Write-down of goodwill and other
related assets                                 --            --           --           --       38,687
Special compensation charge                    --            --       32,229           --           --
Interest expense                           81,341        64,296       59,820       53,321       49,105
Provision for income taxes                243,971       245,636      197,665      166,244      133,941
Net Income                            $   331,287   $   339,907  $   224,184  $   228,914  $   145,975

PER SHARE DATA
Basic

Net Income                            $      1.11   $      1.15  $       .79  $       .81  $       .52
Weighted-average shares                   297,992       294,756      283,796      284,219      278,303

Diluted

Net Income                            $      1.07   $      1.12  $       .76  $       .78  $       .51
Weighted-average shares                   308,840       305,134      301,602      300,802      286,307

FINANCIAL POSITION
Working capital                       $   170,976   $    96,881  $   244,361  $   149,919  $   118,147
Total assets                          $ 9,247,044   $ 7,526,563  $ 6,254,577  $ 5,253,456  $ 4,721,440
Total long-term debt                  $ 1,048,607   $   706,444  $   554,550  $   423,459  $   363,966
Book value per share                  $      5.75   $      4.71  $      3.79  $      3.34  $      2.79

OTHER DATA
Cash dividends - Interpublic          $    90,424   $    76,894    $  61,242    $  51,786  $    46,124
Cash dividends
  per share - Interpublic             $       .33   $       .29    $     .25    $     .22  $       .20
Number of employees                        42,400        38,100       33,000       27,000       25,200
                                      ----------------------------------------------------------------


All data has been restated to reflect the aggregate  effect of the  acquisitions accounted for as poolings
of interests. (See Notes 15 and 16).

All share data for prior periods have been  adjusted to reflect the  two-for-one stock split effective
July 15, 1999.
</TABLE>
<PAGE>

<TABLE>
                                                         RESULTS BY QUARTER (UNAUDITED)
                                                  (Amounts in Thousands Except Per Share Data)
<CAPTION>
                               1st Quarter               2nd Quarter            3rd Quarter                  4th Quarter
                          1999           1998         1999         1998           1999           1998          1999          1998
                       -------------------------------------------------------------------------------------------------------------
<S>                    <C>           <C>           <C>           <C>           <C>           <C>           <C>           <C>
Revenue                $1,037,860    $  883,615    $1,249,641    $1,094,214    $1,172,875    $  983,263    $1,517,447    $1,257,565
Operating expenses        944,013       810,382       995,159       876,417     1,038,041       878,462     1,337,931     1,080,800
Restructuring and other
  merger related charges       --            --            --            --            --            --        84,183            --
Income from operations     93,847        73,233       254,482       217,797        134,834      104,801        95,333       176,765
Interest expense          (17,475)      (13,524)      (20,591)      (15,809)      (21,714)      (17,175)      (21,561)      (17,788)
Other income, net          12,884        11,048        29,213        24,391        15,151        15,173        46,314        47,943
Income before provision
  for income taxes         89,256        70,757       263,104       226,379       128,271       102,799       120,086       206,920
Provision for

  income taxes             35,765        26,663       104,208        91,345        52,295        42,407        51,703        85,221
Net equity interests       (2,386)       (2,405)       (6,203)       (5,231)       (4,364)       (4,072)      (12,506)       (9,604)
                       -------------------------------------------------------------------------------------------------------------
Net income             $   51,105    $   41,689    $  152,693    $  129,803    $   71,612    $   56,320    $   55,877    $  112,095
                       ============================================================================================================

Per share data:
  Basic EPS            $      .17     $     .14    $      .51    $      .44    $      .24    $      .19    $      .19    $      .38
  Diluted EPS          $      .17     $     .14    $      .49    $      .42    $      .23    $      .19    $      .18    $      .37
Cash dividends per

 share - Interpublic   $     .075     $    .065    $     .085    $     .075    $     .085    $     .075    $     .085    $     .075

Weighted-Average Shares:
  Basic                   296,457       293,959       298,126       295,248       298,688       294,766       298,698       295,051
  Diluted                 307,701       304,461       317,381       313,057       309,298       304,497       309,790       311,926

Stock price:
  High                        $40      $31 5/16      $43 5/16       $32 1/4      $44 1/16      $32 7/16      $58 1/16       $39 7/8
  Low                     $34 7/8     $23 27/32     $34 19/32    $ 27 21/32       $36 1/2      $26 3/32       $35 3/4       $23 1/2
                       ------------------------------------------------------------------------------------------------------------



All data has been restated to reflect the aggregate  effect of the  acquisitions accounted for as poolings of interests.
(See Notes 15 and 16).

All share data for 1998 has been adjusted to reflect the two-for-one stock split effective July 15, 1999.
</TABLE>

<PAGE>


                                                                   SCHEDULE VIII

          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                        VALUATION AND QUALIFYING ACCOUNTS

              For the Years Ended December 31, 1999, 1998 and 1997

================================================================================

                             (Dollars in thousands)

COLUMN A     COLUMN B      COLUMN C   COLUMN D       COLUMN E           COLUMN F
--------------------------------------------------------------------------------

                             Additions/(Deductions)
                             ----------------------

                                         Charged
              Balance at  Charged to    to Other                         Balance
               Beginning     Costs &   Accounts-   Deductions-            at End
Description    of Period    Expenses    Describe      Describe         of Period
--------------------------------------------------------------------------------

Allowance for Doubtful  Accounts - deducted from Receivables in the Consolidated
Balance Sheet:

1999         $54,060       $24,013    $5,148(1)      $(23,765)(3)       $60,565
                                       2,934(5)        (1,215)(2)
                                                         (610)(4)

1998         $44,581       $20,421    $6,699(1)      $(17,038)(3)       $54,060
                                       2,111(5)        (3,310)(4)

                                         596(2)

1997         $37,496       $16,904    $2,256(1)      $ (2,680)(2)       $44,581
                                         848(5)        (7,869)(3)

                                                       (2,374)(4)


-------------------
[FN]

  (1)  Allowance for doubtful accounts of acquired and newly consolidated
       companies.
  (2)  Foreign currency translation adjustment.
  (3)  Principally amounts written off.
  (4)  Reversal of previously recorded allowances on accounts receivable.
  (5)  Miscellaneous.

<PAGE>

          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                     SUPPLEMENTAL CONSOLIDATED BALANCE SHEET
                             (Dollars in Thousands)
                                     ASSETS

                                                  September 30,   December 31,
                                                      2000           1999
                                                   (unaudited)
                                                   ------------   ------------
CURRENT ASSETS:
 Cash and cash equivalents (includes
   certificates of deposit: 2000-$72,593;
   1999-$150,343)                                   $  587,916      $1,029,076
 Marketable securities                                  42,893          36,765
 Receivables (net of allowance for doubtful
   accounts:  2000-$68,536; 1999-$60,565)            4,443,452       4,442,229
 Expenditures billable to clients                      457,838         337,769
 Prepaid expenses and other current assets             195,738         147,085
                                                    --------------------------
    Total current assets                             5,727,837       5,992,924
                                                    --------------------------
 OTHER ASSETS:
 Investment in unconsolidated affiliates                87,101          62,225
 Deferred taxes on income                               76,185              --
 Other investments and miscellaneous assets            607,739         719,024
                                                    --------------------------
    Total other assets                                 771,025         781,249
                                                    --------------------------
 FIXED ASSETS, at cost:
 Land and buildings                                    151,787         164,678
 Furniture and equipment                               855,691         783,698
                                                    --------------------------
                                                     1,007,478         948,376
 Less: accumulated depreciation                       (556,058)       (506,975)
                                                    --------------------------
                                                       451,420         441,401
 Unamortized leasehold improvements                    172,907         151,870
                                                    --------------------------
    Total fixed assets                                 624,327         593,271
                                                    --------------------------
 INTANGIBLE ASSETS (net of accumulated
  amortization: 2000-$684,892; 1999-$607,417)        2,536,326       1,879,600
                                                    --------------------------

 TOTAL ASSETS                                       $9,659,515      $9,247,044
                                                    ==========================

<PAGE>

<TABLE>
          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                  SUPPLEMENTAL CONSOLIDATED BALANCE SHEET
                  (Dollars in Thousands Except Per Share Data)
                      LIABILITIES AND STOCKHOLDERS' EQUITY
<CAPTION>
                                                   September 30,    December 31,
                                                        2000            1999
                                                     (unaudited)
                                                     ------------   ------------
<S>                                                 <C>              <C>
CURRENT LIABILITIES:
 Payable to banks                                   $  445,800       $  262,483
 Accounts payable                                    4,212,458        4,629,415
 Accrued expenses                                      727,990          769,566
 Accrued income taxes                                  156,457          160,484
                                                     --------------------------
 Total current liabilities                           5,542,705        5,821,948
                                                     --------------------------
 NONCURRENT LIABILITIES:
 Long-term debt                                      1,128,326          530,117
 Convertible subordinated debentures
   and notes                                           529,375          518,490
 Deferred compensation and reserve
   for termination allowances                          373,109          348,172
 Deferred taxes on income                                   --           45,888
 Accrued postretirement benefits                        50,701           50,226
 Other noncurrent liabilities                           80,066           86,127
 Minority interests in consolidated
   subsidiaries                                         77,397           81,612
                                                     --------------------------
 Total noncurrent liabilities                        2,238,974        1,660,632
                                                     --------------------------
 STOCKHOLDERS' EQUITY:
 Preferred Stock, no par value
   shares authorized:  20,000,000
   shares issued:  none

 Common Stock, $.10 par value
   shares authorized:  550,000,000
   shares issued:
     2000 - 318,990,931;
     1999 - 315,921,839                                 31,899           31,592
 Additional paid-in capital                            907,547          783,897
 Retained earnings                                   1,555,818        1,392,224
 Accumulated other comprehensive
   loss, net of tax                                   (331,853)         (76,695)
                                                     --------------------------
                                                     2,163,411        2,131,018
 Less:
 Treasury stock, at cost:
 2000 - 5,593,450 shares;
 1999 - 8,909,904 shares                               177,670          289,519
 Unamortized expense of restricted
   stock grants                                        107,905           77,035
                                                     --------------------------
 Total stockholders' equity                          1,877,836        1,764,464
                                                     --------------------------
 Commitments and contingencies

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $9,659,515       $9,247,044
                                                    ===========================

All  prior  periods  have been  restated  to  reflect  the  aggregate  effect of
acquisitions accounted for as poolings of interests. (See Note (a))

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</TABLE>

<PAGE>

          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                  SUPPLEMENTAL CONSOLIDATED STATEMENT OF INCOME
                         THREE MONTHS ENDED SEPTEMBER 30
                  (Amounts in Thousands Except Per Share Data)
                                   (unaudited)

                                                 2000             1999
                                                 ----             ----
Revenue                                      $ 1,353,081      $ 1,172,875
                                             -----------      -----------
Salaries and related expenses                    767,575          670,517
Office and general expenses                      380,905          346,240
Amortization of intangible assets                 30,101           21,284
Restructuring and other
  merger related costs                            27,305                -
                                             -----------      -----------
     Total operating expenses                  1,205,886        1,038,041
                                             -----------      -----------

Income from operations                           147,195          134,834

Interest expense                                 (32,339)         (21,714)
Other income, net                                 16,676           15,151
                                             -----------      -----------
Income before provision for income taxes         131,532          128,271

Provision for income taxes                        53,298           52,295
                                             -----------      -----------
Income of consolidated companies                  78,234           75,976

Income applicable to minority interests          (10,012)          (6,288)
Equity in net income of unconsolidated
  affiliates                                       1,856            1,924
                                             -----------      -----------
Net income                                   $    70,078      $    71,612
                                             ===========      ===========
Weighted average shares:
  Basic                                          305,929          298,688
  Diluted                                        314,958          309,298

Earnings Per Share:
  Basic                                      $       .23      $       .24
  Diluted                                    $       .22      $       .23

Dividends per share                          $       .095     $       .085


All  prior  periods  have been  restated  to  reflect  the  aggregate  effect of
acquisitions accounted for as poolings of interests. (See Note (a))

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

<PAGE>

          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                   SUPPLEMENTAL CONSOLIDATED INCOME STATEMENT
                         NINE MONTHS ENDED SEPTEMBER 30
                  (Dollars in Thousands Except Per Share Data)
                                   (unaudited)

                                                 2000             1999
                                                 ----             ----
Revenue                                      $ 4,024,984      $ 3,460,376
                                             -----------      -----------

Salaries and related expenses                  2,207,549        1,898,437
Office and general expenses                    1,148,757        1,021,174
Amortization of intangible assets                 77,475           57,602
Restructuring and other

  merger related costs                           116,131                -
                                             -----------      -----------
     Total operating expenses                  3,549,912        2,977,213
                                             -----------      -----------
Income from operations                           475,072          483,163

Interest expense                                 (74,835)         (59,780)
Other income, net                                 62,961           57,248
                                             -----------      -----------
Income before provision for income taxes         463,198          480,631

Provision for income taxes                       190,245          192,268
                                             -----------      -----------
Income of consolidated companies                 272,953          288,363

Income applicable to minority interests          (25,721)         (19,044)
Equity in net income of unconsolidated
  affiliates                                       8,242            6,091
                                             -----------      -----------
Net income                                   $   255,474      $   275,410
                                             ===========      ===========
Weighted average shares:
  Basic                                          302,038          297,757
  Diluted                                        311,863          315,215

Earnings Per Share:
  Basic                                      $       .85      $       .92
  Diluted                                    $       .82      $       .89

Dividends per share                          $       .275     $       .245


All  prior  periods  have been  restated  to  reflect  the  aggregate  effect of
acquisitions accounted for as poolings of interests. (See Note (a))

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


<PAGE>



          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
        SUPPLEMENTAL CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
                         THREE MONTHS ENDED SEPTEMBER 30
                             (Dollars in Thousands)

                                   (unaudited)

                                                  2000           1999
                                                  ----           ----
Net Income                                      $ 70,078      $ 71,612
                                                --------      --------
Other Comprehensive Income (Loss), net of tax:

Foreign Currency Translation Adjustments         (36,296)       15,908

Net Unrealized Gain on Securities                  2,305        25,293
                                                --------      --------
Other Comprehensive Income (Loss)                (33,991)       41,201
                                                --------      --------
Comprehensive Income                            $ 36,087      $112,813
                                                ========      ========

All  prior  periods  have been  restated  to  reflect  the  aggregate  effect of
acquisitions accounted for as poolings of interests. (See Note (a))

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


<PAGE>


          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
        SUPPLEMENTAL CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
                            NINE MONTHS ENDED SEPTEMBER 30
                             (Dollars in Thousands)
                                   (unaudited)

                                                  2000           1999
                                                  ----           ----
Net Income                                      $255,474      $275,410
                                                --------      --------
Other Comprehensive Income (Loss), net of tax:

Foreign Currency Translation Adjustments        (112,039)      (70,154)

Net Unrealized Gain (Loss) on Securities        (143,119)       24,614
                                                --------      --------
Other Comprehensive Loss                        (255,158)      (45,540)
                                                --------      --------
Comprehensive Income (Loss)                    $     316     $ 229,870
                                               =========      ========

All  prior  periods  have been  restated  to  reflect  the  aggregate  effect of
acquisitions accounted for as poolings of interests. (See Note (a))

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

<PAGE>

<TABLE>

          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                         NINE MONTHS ENDED SEPTEMBER 30
                             (Dollars in Thousands)
                                   (unaudited)
<CAPTION>
                                                           2000          1999
                                                           ----          ----
<S>                                                   <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                            $  255,474      $ 275,410
Adjustments to reconcile net income to cash (used in)
    provided by operating activities:
  Depreciation and amortization of fixed assets          111,733         88,092
  Amortization of intangible assets                       77,475         57,601
  Amortization of restricted stock awards                 27,197         19,067
  Equity in net income of unconsolidated
   affiliates                                             (8,241)        (6,091)
  Income applicable to minority interests                 25,721         19,044
  Translation losses                                       1,326          1,183
  Net gain from sale of investments                      (12,275)       (21,734)
  Restructuring charges, non cash                         32,100             --
  Miscellaneous other (grouped into "Accounts
   Payable and Other Liabilities")                      (19,812)       (17,384)
Changes in assets and liabilities, net of acquisitions:
  Receivables                                            (84,688)      (393,235)
  Expenditures billable to clients                      (111,236)       (94,711)
  Prepaid expenses and other assets                      (50,854)       (21,300)
  Accounts payable and other liabilities                (419,751)       165,310
  Accrued income taxes                                     3,856          7,570
  Deferred income taxes                                  (20,813)        (7,881)
  Deferred compensation and reserve for
    termination allowances                                34,391         11,202
                                                      ----------      ---------
Net cash (used in) provided by operating  activities    (158,397)        82,143
                                                      ----------      ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisitions                                          (439,229)      (182,206)
    Proceeds from sale of investments/assets              14,142         39,738
  Capital expenditures                                  (153,906)      (110,068)
  Net purchases of marketable securities                 (10,630)       (17,174)
  Dividends received from investments                         44             --
  Other investments and miscellaneous assets            (163,141)        10,358
  Investments in unconsolidated affiliates               (29,444)        (8,251)
                                                      ----------      ---------
Net cash used in investing activities                   (782,164)      (267,603)
                                                      ----------      ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase in short-term borrowings                      159,570         41,488
  Proceeds from long-term debt                           859,850        405,412
  Payments of long-term debt                            (228,301)       (56,873)
  Treasury stock acquired                               (182,040)      (209,024)
  Issuance of common stock                                36,192         54,295
  Cash dividends - pooled                                (11,424)        (7,550)
  Cash dividends - Interpublic                           (80,436)       (67,534)
                                                      ----------      ---------
Net cash provided by financing activities                553,411        160,214
                                                      ----------      ---------
Effect of exchange rates on cash and cash
  equivalents                                            (54,010)       (31,183)
                                                      ----------      ---------
Decrease in cash and cash equivalents                   (441,160)       (56,429)

Cash and cash equivalents at
  beginning of year                                    1,029,076        801,207
                                                      ----------      ---------
Cash and cash equivalents at end of period            $  587,916      $ 744,778
                                                      ==========      =========

All  prior  periods  have been  restated  to  reflect  the  aggregate  effect of
acquisitions accounted for as poolings of interests. (See Note (a))

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</TABLE>

<PAGE>

          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

  1. Consolidated Financial Statements

     (a)  In the opinion of  management,  the  consolidated  balance sheet as of
          September 30, 2000, the consolidated  income  statements for the three
          months  and  nine  months  ended  September  30,  2000 and  1999,  the
          consolidated  statement of  comprehensive  income for the three months
          and  nine  months  ended   September  30,  2000  and  1999,   and  the
          consolidated  statement  of cash  flows  for  the  nine  months  ended
          September 30, 2000 and 1999,  contain all  adjustments  (which include
          only normal  recurring  adjustments)  necessary to present  fairly the
          financial position,  results of operations and cash flows at September
          30,  2000  and for all  periods  presented.  Certain  information  and
          footnote   disclosures   normally  included  in  financial  statements
          prepared in accordance with generally accepted  accounting  principles
          have been omitted.  It is suggested that these consolidated  financial
          statements  be read in  conjunction  with the  consolidated  financial
          statements  and notes  thereto  included in The  Interpublic  Group of
          Companies,  Inc.'s (the "Company")  December 31, 1999 annual report to
          stockholders  and the  consolidated  financial  statements  and  notes
          thereto  included in the  Company's  Current  Report on Form 8-K dated
          September 15, 2000.

          The Company's consolidated financial statements, including the related
          notes,  have been restated for the prior periods  presented to include
          the  results  of  operations,  financial  position  and cash  flows of
          Deutsch,  Inc. and affiliate  companies  ("Deutsch").  (See Note (b)).
          Additionally,  the  results  of  several  other  recent  acquisitions,
          including  NFO  Worldwide,  Inc.  ("NFO"),  all  of  which  have  been
          accounted  for  as  poolings  of  interests,  have  been  included  in
          previously restated financial statements.  Other than Deutsch and NFO,
          none of the acquisitions was individually, or in aggregate, material.

          The  accompanying  income  statements  have been  prepared in a format
          different  than that used in the  originally  filed  Form 10-Q for the
          quarterly period ended September 30, 1999. The accompanying  financial
          statements  include  the  line -  "Income  from  operations".  Amounts
          previously  included in "Other income,  net" as part of "Gross Income"
          are now included elsewhere in the Consolidated Statement of Income.

     (b)  In November 2000, the Company issued approximately 6 million shares of
          its common stock in connection  with the  acquisition  of Deutsch.  In
          April 2000,  the Company issued  approximately  12.6 million shares of
          its common stock in connection  with the  acquisition  of NFO. Both of
          these acquisitions have been accounted for as poolings of interests.

     (c)  During the third quarter,  the Company recorded pre-tax  restructuring
          and other merger  related costs of $27.3 million ($17.2 million net of
          tax).  For the nine  months  ended  September  30,  2000,  the Company
          recorded  pre-tax  restructuring  and other  merger  related  costs of
          $116.1  million  ($72.9  million  net of tax).  Of the  total  pre-tax
          restructuring and other merger related costs, cash charges represented
          $14.8  million and $84  million  for the three  months and nine months
          ended  September  30, 2000,  respectively.  The key  components of the
          charge were the costs associated with the restructuring of Lowe Lintas
          & Partners  Worldwide.  The  remaining  costs  relate  principally  to
          transaction and other merger related costs arising from the previously
          announced merger with NFO.
<PAGE>

          Lowe Lintas & Partners
          -----------------------
          In  October  1999,  the  Company  announced  the  merger of two of its
          advertising networks. The networks affected, Lowe & Partners Worldwide
          and Ammirati Puris Lintas,  were combined to form a new agency network
          called  Lowe  Lintas & Partners  Worldwide.  The merger  involved  the
          consolidation  of operations in Lowe Lintas agencies in  approximately
          24 cities in 22 countries  around the world.  The newly merged  agency
          network  has  offices in over 80  countries  around  the world.  As of
          September 30, 2000, all restructuring activities have been completed.

          A summary of the components of the reserve for restructuring and other
          merger related costs for Lowe Lintas is as follows:
<TABLE>
               (Dollars in millions)

<CAPTION>
                                                           Year to Date September 30, 2000
                                                          ---------------------------------
                                              Balance       Expense        Cash     Asset          Balance
                                            at 12/31/99   recognized       Paid  Write-offs       at 9/30/00
                                            -----------   -------------    ----  ----------       ----------
<S>                                            <C>            <C>          <C>      <C>             <C>
               TOTAL BY TYPE
               Severance and

                 termination  costs            $43.6          $32.0        $24.6       --           $51.0
               Fixed asset write-offs           11.1           14.2           --     25.3              --
               Lease  termination costs          3.8           21.1          7.6       --            17.3
               Investment write-offs
                 and other                      23.4           20.5          6.4     37.5              --
                                               ----------------------------------------------------------
               Total                           $81.9          $87.8        $38.6    $62.8           $68.3
                                               ==========================================================
</TABLE>

          The  severance  and  termination  costs  recorded  in 2000  relate  to
          approximately  360 employees who have been terminated or notified that
          they  will  be  terminated.   The  employee  groups  affected  include
          management,  administrative,  account  management,  creative and media
          production  personnel,  principally  in the U.S. and several  European
          countries.

          The fixed  asset  write-offs  relate  largely  to the  abandonment  of
          leasehold improvements as part of the merger. The amount recognized in
          2000 relates to fixed asset  write-offs  in 4 offices,  the largest of
          which is in the U.K.

          Lease  termination  costs relate to the offices vacated as part of the
          merger.  The lease terminations are substantially  complete,  with the
          cash portion to be paid out over a period of up to five years.

          The  investment  write-offs  relate to the loss on sale or  closing of
          certain   business  units.  In  2000,   $12.7  million  of  investment
          write-offs has been  recorded,  the majority of which results from the
          decision to sell or abandon 3  businesses  located in Asia and Europe.
          In the aggregate,  the businesses being sold or abandoned represent an
          immaterial  portion of the  revenue  and  operations  of Lowe Lintas &
          Partners.  The write-off amount was computed based upon the difference
          between the estimated  sales  proceeds (if any) and the carrying value
          of the related assets.
<PAGE>

          NFO and Other Merger Related Costs
          ----------------------------------
          In addition to the  restructuring and other merger related costs noted
          above, additional charges, substantially all of which were cash costs,
          were  recorded   through   September  30,  2000.  These  costs  relate
          principally to the non-recurring  transaction and other merger related
          costs  arising from the recently  completed  acquisition  of NFO. (See
          Note (b)).

     (d)  In addition to the acquisition  mentioned in (b), the Company has made
          several other acquisitions in 2000, including  Nationwide  Advertising
          Services,  Waylon  Promotions,  Inc.  and  substantial  assets  of the
          Communications   Division  of   Caribiner   International,   Inc.  The
          acquisitions have been accounted for as purchases.

     (e)  On June 27, 2000, the Company entered into a syndicated multi-currency
          credit  agreement under which a total of $750 million may be borrowed;
          $375 million may be borrowed under a 364-day facility and $375 million
          under a five-year  facility.  The facilities bear interest at variable
          rates based on either LIBOR or a bank's base rates,  at the  Company's
          option. As of September 30, 2000,  approximately $534 million had been
          borrowed under the facilities.  The weighted-average  interest rate on
          the  borrowings at September 30, 2000 was 6.4%.  The proceeds from the
          syndicated credit agreement were used to refinance  borrowings and for
          general  corporate  purposes  including  acquisitions  and other  inv-
          estments.   Some  of  the  pre-existing   borrowing   facilities  were
          subsequently terminated.

          On August 25,  2000,  the  Company  entered  into a  revolving  credit
          facility under which up to $250 million may be borrowed.  The facility
          expires on November 30,  2000,  and bears  interest at variable  rates
          based on either LIBOR,  a bank's base rates or money market rates,  at
          the  Company's  option.  The Company  used the  proceeds to  refinance
          borrowings and for general corporate purposes,  including acquisitions
          and other investments.

          On October 20, 2000,  the Company  completed  the issuance and sale of
          $500 million  principal amount of senior unsecured notes due 2005. The
          notes bear an interest rate of 7.875% per annum.  The Company used the
          net proceeds of approximately  $496 million from the sale of the notes
          to  repay  outstanding   indebtedness  under  its  credit  facilities.
          Accordingly,  certain short-term  borrowings have been reclassified as
          long-term.

     (f)  In  June  1998,  the  Financial   Accounting  Standards  Board  issued
          Statement No. 133, "Accounting for Derivative  Instruments and Hedging
          Activities" ("SFAS No. 133"),  which sets out the required  accounting
          treatment for  derivatives and hedging  activities.  In June 1999, the
          Financial   Accounting  Standards  Board  issued  Statement  No.  137,
          "Accounting  for  Derivative  Instruments  and  Hedging  Activities  -
          Deferral of the  Effective  Date of FASB  Statement  No.  133",  which
          delays  implementation  of SFAS No. 133 until fiscal  years  beginning
          after June 15, 2000. In June 2000, the Financial  Accounting Standards
          Board issued  Statement No. 138,  "Accounting  for Certain  Derivative
          Instruments and Certain Hedging Activities", which provides additional
          guidance related to accounting for derivative  instruments and hedging
          activities  as addressed by SFAS No. 133. The Company does not believe
          that the  effect of  adopting  SFAS No.  133 and SFAS No.  138 will be
          material to its financial condition or results of operations.


<PAGE>

Item 2

          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS

As  discussed  in Note  (b),  the  Company  acquired  Deutsch  in a  transaction
accounted for as a pooling of interests.  Deutsch is a full service  advertising
agency servicing a broad range of clients. The Company's  consolidated financial
statements and other financial  information for prior periods have been restated
to reflect the effect of the Deutsch pooling.

In April 2000, the Company acquired NFO Worldwide, Inc. ("NFO") in a transaction
accounted for as a pooling of interest.  Results of NFO and several other recent
acquisitions, all of which have been accounted for as poolings of interests have
been  included  in  previously  restated  financial  statements.  The  following
discussion relates to the combined results of the Company after giving effect to
all of the pooled companies.

Three Months Ended September 30, 2000 Compared to Three Months Ended September
------------------------------------------------------------------------------
30, 1999
--------
The Company  reported net income of $70.1  million or $.22 diluted  earnings per
share for the three months ended  September  30, 2000.  Excluding  the impact of
restructuring  and other merger related costs,  which are discussed  below,  net
income was $87.2 million or $.28 diluted  earnings per share,  compared to $71.6
million or $.23 diluted  earnings per share for the three months ended September
30, 1999.

The  following  table sets forth net income and  earnings  per share  before and
after restructuring and other merger related costs:

(Dollars in thousands, except
  per share data)

                                          2000            1999
                                          ----            ----
Net income as reported                  $ 70,078        $ 71,612
Earnings per share:
 Basic                                       .23             .24
 Diluted                                     .22             .23

Net income before restructuring
 and other merger related costs         $ 87,243        $ 71,612
Earnings per share:
 Basic                                       .29             .24
 Diluted                                     .28             .23


Worldwide  revenue for the three months ended  September 30, 2000 increased $180
million,  or 15%, to $1.4 billion compared to the same period in 1999.  Domestic
revenue  increased $153 million or 25% from 1999 levels.  International  revenue
increased  $27 million or 5% during the third  quarter of 2000 compared to 1999.
International  revenue  would have  increased  18%,  excluding the effect of the
strengthening of the U.S. dollar.  The increase in worldwide revenue is a result
of both new  business  growth  and growth  from  acquisitions.  Organic  revenue
growth,  exclusive of acquisitions and currency  effects,  was 15% for the third
quarter of 2000 compared to the prior year quarter.
<PAGE>

Revenue from specialized marketing  communications services, which include media
buying, market research,  sales promotion,  direct marketing,  public relations,
sports and event marketing,  healthcare marketing and e-business  consulting and
communications,  comprised  approximately 48% of the total worldwide revenue for
the three months ended  September  30, 2000,  compared to 45% for the prior year
quarter.

Income from operations was $147 million for the third quarter of 2000. Excluding
restructuring  and other merger related costs,  income from  operations was $175
million for the third  quarter of 2000,  compared to $135  million for the third
quarter  of 1999,  an  increase  of 30%.  Exclusive  of  acquisitions,  currency
effects, and amortization of intangible assets, income from operations increased
24% for the third quarter of 2000 compared to the third quarter of 1999.

Worldwide operating expenses for the third quarter 2000, excluding restructuring
and other merger  related costs were $1.2  billion,  an increase of 14% over the
prior year  quarter.  Salaries and related  expenses were $768 million or 57% of
revenue  for the third  quarter of 2000 as  compared  to $671  million or 57% of
revenue for the third  quarter of 1999.  Office and general  expenses  were $381
million for the third  quarter of 2000  compared  to $346  million for the third
quarter of 1999.

Interest  expense was $32 million for the three months ended September 30, 2000,
compared to $22 million for the prior year quarter.  The increase is primarily a
result of higher debt levels and higher interest rates in 2000.

Other income, net, which consists of interest income,  investment income and net
gains from equity  investments,  increased slightly to $17 million for the third
quarter of 2000 as compared to $15 million for the third quarter of 1999.

The effective tax rate for the three months ended  September 30, 2000 was 40.5%,
compared to 40.8% in 1999.  The  difference  between the effective and statutory
rates is primarily due to state and local taxes,  foreign  withholding  taxes on
dividends and nondeductible goodwill expense.

Nine Months Ended September 30, 2000 Compared to Nine Months Ended September 30,
-------------------------------------------------------------------------------
1999
----
Net income  was $255  million or $.82  diluted  earnings  per share for the nine
months ended September 30, 2000. Excluding the impact of restructuring and other
merger related costs,  which are discussed  below, net income was $328.4 million
or $1.05 diluted earnings per share,  compared to $275.4 million or $.89 diluted
earnings per share for the nine months ended September 30, 1999.

The  following  table sets forth net income and  earnings  per share  before and
after restructuring and other merger related costs:

(Dollars in thousands, except
  per share data)
                                        2000            1999
                                        -----           ----
Net income as reported                 $255,474        $275,410
Earnings per share:
 Basic                                      .85             .92
 Diluted                                    .82             .89

Net income before restructuring
 and other merger related costs        $328,409        $275,410
Earnings per share:
 Basic                                     1.09             .92
 Diluted                                   1.05             .89
<PAGE>


Worldwide  revenue for the nine months ended September 30, 2000,  increased $565
million,  or 16%, to $4.0 billion compared to the same period in 1999.  Domestic
revenue  increased  $438  million or 24%  during  the first nine  months of 2000
compared to 1999.  International revenue increased $126 million or 8% during the
first nine months of 2000  compared to 1999.  International  revenue  would have
increased 16%, excluding the effect of the strengthening of the U.S. dollar. The
increase in worldwide revenue is a result of both new business growth and growth
from  acquisitions.  Organic  revenue  growth,  exclusive  of  acquisitions  and
currency  effects,  was 14% for the first nine  months of 2000  compared  to the
prior year period.

Revenue from specialized marketing  communications services, which include media
buying,  market research,  promotion sales, direct marketing,  public relations,
sports and event marketing,  healthcare marketing and e-business  consulting and
communications,  comprised  approximately 46% of the total worldwide revenue for
the nine months ended  September  30,  2000,  compared to 44% for the first nine
months of 1999.

Income from  operations was $475 million for the nine months ended September 30,
2000.  Excluding  restructuring  and other  merger  related  costs,  income from
operations was $591 million for the first nine months of 2000,  compared to $483
million for the first nine months of 1999,  an  increase  of 22%.  Exclusive  of
acquisitions,  currency  effects and amortization of intangible  assets,  income
from operations  increased 19% for the first nine months of 2000 compared to the
first nine months of 1999.

Worldwide  operating  expenses  for the nine months  ended  September  30, 2000,
excluding  restructuring  and other merger  related costs were $3.4 billion,  an
increase of 15% over the prior year period.  Salaries and related  expenses were
$2.2  billion or 55% of revenue for the first nine months of 2000 as compared to
$1.9  billion or 55% of revenue  for the first nine  months of 1999.  Office and
general expenses were $1.1 billion for the first nine months of 2000 compared to
$1.0 billion for the first nine months of 1999.

Interest expense was $74.8 million for the nine months ended September 30, 2000,
compared to $59.8 million for the prior year. The increase is primarily a result
of higher debt levels and higher interest rates in 2000.

Other income, net, which consists of interest income,  investment income and net
gains from equity  investments,  was $63.0  million  for the nine  months  ended
September  30,  2000,  as  compared to $57.2  million for the nine months  ended
September 30, 1999, an increase of 10%.

The effective  tax rate for the nine months ended  September 30, 2000 was 41.1%,
compared to 40.0% in 1999.  The  difference  between the effective and statutory
rates is primarily due to state and local taxes,  foreign  withholding  taxes on
dividends and nondeductible goodwill expense.

Restructuring and Other Merger Related Costs
--------------------------------------------
During the third quarter,  the Company recorded pre-tax  restructuring and other
merger  related costs of $27.3 million  ($17.2 million net of tax). For the nine
months ended September 30, 2000, the Company recorded pre-tax  restructuring and
other merger  related costs of $116.1 million ($72.9 million net of tax). Of the
total  pre-tax  restructuring  and other  merger  related  costs,  cash  charges
represented  $14.8  million and $84 million for the three months and nine months
ended  September 30, 2000,  respectively.  The key components of the charge were
the costs associated with the restructuring of Lowe Lintas & Partners Worldwide.
The remaining  costs relate  principally to transaction and merger related costs
arising from the previously announced merger with NFO.
<PAGE>

Lowe Lintas & Partners
----------------------
In October  1999,  the Company  announced  the merger of two of its  advertising
networks.  The networks  affected,  Lowe & Partners Worldwide and Ammirati Puris
Lintas, were combined to form a new agency network called Lowe Lintas & Partners
Worldwide.  The merger involved the  consolidation  of operations in Lowe Lintas
agencies in  approximately 24 cities in 22 countries around the world. The newly
merged agency network has offices in over 80 countries  around the world.  As of
September 30,2000, all restructuring activities have been completed.

The  restructuring  and other merger related costs for Lowe Lintas  included $31
million in  severance  and  termination  costs,  $14.2  million  in fixed  asset
write-offs,  $21.1  million  in lease  termination  costs and $21.5  million  in
investment write-offs and other costs.

The severance and termination  costs recorded 2000 relate to  approximately  360
employees who have been terminated or notified that they will be terminated. The
employee groups affected include management, administrative, account management,
creative and media  production  personnel,  principally  in the U.S. and several
European countries.

The fixed  asset  write-offs  relate  largely to the  abandonment  of  leasehold
improvements  as part of the merger.  The amount  recognized  in 2000 relates to
fixed asset  write-offs in 4 offices,  the largest of which is in the U.K. Lease
termination costs relate to the offices vacated as part of the merger.

The  investment  write-offs  relate to the loss on sale or  closing  of  certain
business  units.  In 2000,  $12.7  million  of  investment  write-offs  has been
recorded,  the majority of which  results from the decision to sell or abandon 3
businesses located in Asia and Europe.

NFO and Other Merger Related Costs
In addition to the  restructuring  and other merger  related  costs noted above,
additional  charges,  substantially  all of which were cash costs, were recorded
through September 30, 2000. These costs relate  principally to the non-recurring
transaction  and other merger related costs arising from the recently  completed
acquisition of NFO. (See Note (b)).




LIQUIDITY AND CAPITAL RESOURCES

The ratio of current assets to current  liabilities was  approximately 1 to 1 at
September 30, 2000.  Working capital  increased by $14 million from December 31,
1999 to September  30, 2000.  Total debt at September 30, 2000 was $2.1 billion,
an increase of $792  million from  December  31,  1999.  The increase in debt is
primarily  attributable to the net effect of payments made for  acquisitions and
other  investments.  Cash flow from operations and  availability  under existing
credit facilities will be the Company's primary source of working capital.

On June 27, 2000, the Company  entered into a syndicated  multi-currency  credit
agreement under which a total of $750 million may be borrowed;  $375 million may
be  borrowed  under a  364-day  facility  and  $375  million  under a  five-year
facility.  The facilities  bear interest at variable rates based on either LIBOR
or a bank's base rates,  at the  Company's  option.  As of  September  30, 2000,
approximately  $534  million  had  been  borrowed  under  the  facilities.   The
weighted-average interest rate on the borrowings at September 30, 2000 was 6.4%.
The  proceeds  from the  syndicated  credit  agreement  were  used to  refinance
borrowings and for general corporate purposes  including  acquisitions and other
investments.  Some of the pre-existing  borrowing  facilities were  subsequently
terminated.
<PAGE>

On August 25, 2000, the Company  entered into a revolving  credit facility under
which up to $250 million may be borrowed.  The facility  expires on November 30,
2000,  and bears interest at variable rates based on either LIBOR, a bank's base
rates or money  market  rates,  at the  Company's  option.  The Company used the
proceeds to refinance  borrowings and for general corporate purposes,  including
acquisitions and other investments.

On October 20, 2000, the Company completed the issuance and sale of $500 million
principal  amount of senior unsecured notes due 2005. The notes bear an interest
rate of 7.875% per annum.  The Company  used the net  proceeds of  approximately
$496 million from the sale of the notes to repay outstanding  indebtedness under
its credit  facilities.  Accordingly,  certain  short-term  borrowings have been
reclassified as long-term.

Net cash used in operating activities was $158 million for the nine months ended
September 30, 2000. Net cash provided by operations was $82 million for the nine
months ended  September 30, 1999.  The  principal  use of the Company's  working
capital is to provide for the operating needs of its advertising agencies, which
include payments for space or time purchased from various media on behalf of its
clients.  The  Company's  practice  is to bill and  collect  from its clients in
sufficient  time to pay the  amounts  due media.  Other uses of working  capital
include the payment of cash dividends, acquisitions and capital expenditures. In
addition, during the first nine months of 2000, the Company acquired 3.5 million
shares of its own stock for the purpose of fulfilling the Company's  obligations
under its various compensation plans.

OTHER MATTERS

Acquisitions
------------
In connection with the NFO acquisition  completed on April 20, 2000, the Company
assumed approximately $180 million in debt.  Additionally,  the Company has made
several other acquisitions,  including Nationwide  Advertising Services,  Waylon
Promotions,  Inc.  and  substantial  assets of the  Communications  Division  of
Caribiner  International,  Inc.  The  acquisitions  have been  accounted  for as
purchases.

Cautionary Statement
--------------------
This Report on Form 8-K (the "Report"),  including  Management's  Discussion and
Analysis   of   Financial   Condition   and  Results  of   Operations   contains
forward-looking statements.  Statements that are not historical facts, including
statements about  Interpublic's  beliefs and expectations,  are  forward-looking
statements. These statements are based on current plans, expectations, estimates
and  projections,  and  therefore  you should not place undue  reliance on them.
Forward-looking  statements  speak  only  as of the  date  they  are  made,  and
Interpublic  undertakes no obligation to update publicly any of them in light of
new information, future events or otherwise.

Forward-looking statements involve inherent risks and uncertainties. Interpublic
cautions you that a number of important  factors  could cause actual  results to
differ materially from those contained in any  forward-looking  statement.  Such
factors  include,  but are not limited to, those  associated  with the effect of
national and regional economic conditions, the ability of Interpublic to attract
new  clients  and retain  existing  clients,  the  financial  success  and other
developments  of the clients of  Interpublic,  developments  from changes in the
regulatory and legal  environment  for advertising  companies  around the world,
Interpublic's   ability  to  effectively   integrate  recent   acquisitions  and
Interpublic's ability to attract and retain key management personnel.
<PAGE>

New Accounting Guidance
-----------------------
In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting  Standards No. 133, "Accounting for Derivative  Instruments
and Hedging  Activities"  (SFAS No. 133),  which had an initial adoption date of
January 1, 2000. In June 1999,  the FASB postponed the adoption date of SFAS No.
133 until  January 1, 2001.  In June 2000,  the FASB  issued  SFAS No. 138 which
provides  additional  guidance on SFAS No. 133. The Company does not believe the
effect  of  adopting  SFAS  No.  133 and SFAS No.  138 will be  material  to its
financial condition or results of operations.


Conversion to the Euro
----------------------
On January 1, 1999,  certain member countries of the European Union  established
fixed  conversion  rates  between  their  existing  currencies  and the European
Union's common currency (the "Euro").  The Company  conducts  business in member
countries.  The transition  period for the  introduction  of the Euro is between
January  1, 1999,  and June 30,  2002.  The  Company  is  addressing  the issues
involved with the  introduction of the Euro. The major  important  issues facing
the Company include:  converting  information  technology  systems;  reassessing
currency  risk;  negotiating  and amending  contracts;  and  processing  tax and
accounting records.

Based upon progress to date, the Company  believes that use of the Euro will not
have a  significant  impact on the  manner  in which it  conducts  its  business
affairs  and  processes  its  business  and  accounting  records.   Accordingly,
conversion to the Euro has not, and is not expected to have a material effect on
the Company's financial condition or results of operations.




Item 3.  Quantitative and Qualitative Disclosures about Market Risk

The Company's  financial market risk arises from  fluctuations in interest rates
and foreign  currencies.  Most of the Company's  debt  obligations  are at fixed
interest  rates. A 10% change in market interest rates would not have a material
effect on the Company's pre-tax earnings, cash flows or fair value. At September
30, 2000, the Company had an insignificant amount of foreign currency derivative
financial  instruments  in  place.  The  Company  does not  hold  any  financial
instrument for trading purposes.
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================================================================================

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                -----------------

                                    FORM 8-K

                Current Report Pursuant to Section 13 or 15(d) OF

                       THE SECURITIES EXCHANGE ACT OF 1934

Date of Report                                          Commission file number
January 5, 2001                                                 1-6686
                                                           -----------------

                    THE INTERPUBLIC GROUP OF COMPANIES, INC.
             (Exact name of registrant as specified in its charter)

           Delaware                                             13-1024020
-------------------------------                             --------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification  No.)

1271 Avenue of the Americas, New York, New York                    10020
-----------------------------------------------                  ---------
(Address of principal executive offices)                         (Zip Code)

       Registrant's telephone number, including area code: (212) 399-8000
                                ----------------

Item 5.  OTHER EVENTS

In November  2000,  the  Interpublic  Group of Companies,  Inc. (the  "Company")
acquired Deutsch,  Inc. and its affiliate companies ("Deutsch") in a transaction
accounted  for as a pooling of  interests.  This report on Form 8-K includes the
Company's  supplemental  consolidated  financial  statements and other financial
information restated to reflect the effect of the pooling of Deutsch.

These combined  results will become the  historical  results of the Company upon
publication of financial results for a period inclusive of at least 30 days of

the financial  results of Deutsch  subsequent to the date of consummation of the
Deutsch  transaction.  This report may be  incorporated  by reference into other
reports or  registration  statements  filed  with the  Securities  and  Exchange
Commission.

In April 2000, the Company acquired NFO Worldwide, Inc. ("NFO") in a transaction
accounted  for as a pooling of  interests.  The results of NFO and several other
recent  acquisitions,  all of which  have  been  accounted  for as  poolings  of
interests,  have been included in previously restated financial statements filed
on Form 8-K on September 15, 2000.
Item 7.     FINANCIAL STATEMENTS AND EXHIBITS

(c)         Other Exhibits

Exhibit 99  Financial Statements, Financial Information and Exhibits

            Financial Highlights

            Management's Discussion and Analysis of Financial
            Condition and Results of Operations

Supplemental Consolidated Financial Statements

            Report of Independent Accountants

                 - PricewaterhouseCoopers LLP

                 - Arthur Andersen LLP

                 - Soteriou Banerji

                 - Ernst & Young

                 - Ernst & Young LLP

                 - J. H. Cohn LLP

            Supplemental Consolidated Balance Sheet
              December 31, 1999 and 1998

            Supplemental Consolidated Statement of Income for the Years Ended
              December 31, 1999, 1998 and 1997

            Supplemental  Consolidated  Statement  of Cash  Flows  for the Years
              Ended December 31, 1999, 1998 and 1997

            Supplemental Consolidated Statement of Stockholders' Equity and
              Comprehensive Income For the Years Ended December 31, 1999, 1998
              and 1997

            Notes to Supplemental Consolidated Financial Statements

            Selected Financial Data For Five Years

            Results by Quarter (Unaudited)

Supplemental Consolidated Financial Statement Schedule

            Schedule VIII: Valuation and Qualifying Accounts

Supplemental Consolidated Financial Statements

            Supplemental Consolidated Balance Sheet
               September 30, 2000 (unaudited) and December 31, 1999

            Supplemental  Consolidated  Statement  of Income for the Nine Months
               Ended September 30, 2000 and 1999 (unaudited)

            Supplemental Consolidated Statement of Comprehensive Income for
               the Nine Months Ended September 30, 2000 and 1999 (unaudited)
Supplemental Consolidated Statement of Cash Flows for the
               Nine Months Ended September 30, 2000 and 1999 (unaudited)

            Notes to Supplemental Consolidated Financial Statements (unaudited)

            Management's Discussion and Analysis of
             Financial Condition and Results of Operations (unaudited)

Exhibit 11  COMPUTATION OF EARNINGS PER SHARE

            For the Years Ended December 31, 1995, 1996, 1997, 1998 and 1999

            For the Three Months Ended September 30, 2000 and 1999

            For the Nine Months Ended September 30, 2000 and 1999

Exhibit 23  CONSENT OF INDEPENDENT ACCOUNTANTS

            PricewaterhouseCoopers LLP

            Arthur Andersen LLP

            Soteriou Banerji

            Ernst & Young

            Ernst & Young LLP

            J. H. Cohn LLP

Exhibit 27  RESTATED FINANCIAL DATA SCHEDULE

            For the Nine Months Ended September 30, 2000 and 1999

            For the Years Ended December 31, 1999, 1998 and 1997
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.

                         THE INTERPUBLIC GROUP OF COMPANIES, INC.
                                        (Registrant)

Date:  January 5, 2001      BY /S/  FREDERICK MOLZ
                            ----------------------
                            Frederick Molz
                            Vice President and Controller
FINANCIAL HIGHLIGHTS
                  (Amounts in Thousands Except Per Share Data)
--------------------------------------------------------------------------------
December 31
                                                                         Percent
                                                                       Increase/

                                        1999            1998         (decrease)
--------------------------------------------------------------------------------
Operating Data

 Revenue                            $ 4,977,823     $  4,218,657          18.0%
 Net Income                         $   331,287     $    339,907          (2.5%)
 Net Income Excluding
   Restructuring(1)                 $   382,724    $     339,907          12.6%
Per Share Data(2)
 Diluted EPS                        $      1.07     $       1.12          (4.5%)
 Diluted EPS Excluding
   Restructuring (1)                $      1.24     $       1.12          10.7%
 Cash Dividends                     $       .33     $        .29          13.8%
 Share Price at December 31         $  57 11/16     $     39 7/8          44.7%
 Weighted-average shares
  Diluted                               308,840          305,134           1.2%
  Diluted Excluding
   Restructuring(1)                     315,532          305,134           3.4%
Financial Position

 Cash and Cash Equivalents          $ 1,029,076     $    801,207          28.4%
 Total Assets                       $ 9,247,044     $  7,526,563          22.9%
 Book Value Per Share(2)            $      5.75     $       4.71          22.1%
 Return on Average
  Stockholders' Equity:
    As Reported                           20.7%            26.2%
    Excluding Restructuring(1)            23.6%            26.2%

Revenue

1999                               $4,977,823
1998                               $4,218,657
1997                               $3,610,706
Diluted Earnings Per Share(2)
1999 As Reported                       $ 1.07
1999 Excluding Restructuring(1)        $ 1.24
1998                                   $ 1.12
1997                                   $  .76
Cash Dividends Per Share(2)
1999                                   $  .33
1998                                   $  .29
1997                                   $  .25
Return On Average Stockholders' Equity
1999 As Reported                        20.7%
1999 Excluding Restructuring(1)         23.6%
1998                                    26.2%
1997                                    21.4%

All  periods  have  been  restated  to  reflect  the  aggregate  effect  of  the
acquisitions accounted for as poolings of interests. (See Notes 15 and 16).

-----------------
[FN]
(1)  Excludes the impact of restructuring and other merger-related costs.
(2)  All  share data  for  1998 and 1997  has  been adjusted to reflect the two-
     for-one stock split effective July 15, 1999.
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

In November  2000,  The  Interpublic  Group of Companies,  Inc. (the  "Company")
acquired Deutsch,  Inc. and its affiliate companies ("Deutsch") in a transaction
accounted for as a pooling of interests.  Deutsch is a full service  advertising
agency servicing a broad range of clients. The Company's  consolidated financial
statements  and other  financial  information  have been restated to reflect the
effect  of the  Deutsch  pooling.  In  April  2000,  the  Company  acquired  NFO
Worldwide,  Inc.  ("NFO")  in  a  transaction  accounted  for  as a  pooling  of
interests.  The results of NFO and several  other  recent  acquisitions,  all of
which have been  accounted  for as poolings of interests  have been  included in
previously restated financial  statements.  The following  discussion relates to
the combined  results of the Company  after  giving  effect to all of the pooled
companies.

The Company  reported net income of $331.3 million or $1.07 diluted earnings per
share  for  the  year  ended   December  31,  1999.   Excluding  the  impact  of
restructuring  and  other  merger  related  costs,  which  are  described  in  a
subsequent section of this discussion, net income would have been $382.7 million
or $1.24 diluted earnings per share, compared to $339.9 million or $1.12 diluted
earnings per share for the year ended  December  31, 1998 and $224.2  million or
$.76 diluted earnings per share for the year ended December 31, 1997.

The  following  table sets forth net income and  earnings  per share  before and
after the restructuring and other merger related costs:

(Dollars in thousands)
                                          1999            1998            1997
                                          ----            ----            ----

Net income as reported                $  331,287      $  339,907      $  224,184

Earnings per share

    Basic                             $     1.11      $     1.15      $      .79
    Diluted                           $     1.07      $     1.12      $      .76

Net income before restructuring
  and other merger related costs      $  382,724      $  339,907      $  224,184

Earnings per share

    Basic                             $     1.28      $     1.15      $      .79
    Diluted                           $     1.24      $     1.12      $      .76

Revenue
-------
Worldwide  revenue for 1999 was $5.0  billion,  an  increase of $759  million or
18.0% over 1998. Domestic revenue, which represented 51% of worldwide revenue in
1999, increased $401 million or 18.6% over 1998.  International  revenue,  which
represented  49% of worldwide  revenue in 1999,  increased $358 million or 17.4%
over 1998.  International  revenue would have increased 22% excluding the effect
of the strengthening of the U.S. dollar against major  currencies.  The increase
in  worldwide  revenue is a result of both  growth from new  business  gains and
growth from  acquisitions.  Exclusive of  acquisitions,  worldwide  revenue on a
constant dollar basis increased 9% over 1998.
Revenue from other specialized  marketing services,  which include media buying,
market research,  relationship (direct) marketing,  public relations, sports and
event   marketing,   healthcare   marketing  and   e-business   consulting   and
communications,  comprised approximately 44% of total worldwide revenue in 1999,
compared to 38% in 1998.

Worldwide  revenue for 1998 was $4.2  billion,  an  increase of $608  million or
16.8% over 1997.  Domestic revenue,  which represented 51% of worldwide revenue,
increased $306 million or 16.5% over 1997.  International revenue increased $302
million or 17.2% over  1997.  International  revenue  would have  increased  23%
excluding  the effect of the  strengthening  of the U.S.  dollar  against  major
currencies.

Operating Expenses
------------------
Worldwide operating expenses for 1999, excluding  restructuring and other merger
related  costs,  were $4.3  billion,  an increase of 18.4% over 1998.  Operating
expenses  outside the United States increased  16.7%,  while domestic  operating
expenses  increased 20.0%.  These increases were commensurate with the increases
in revenue. Worldwide operating expenses for 1998 were $3.6 billion, an increase
of 13.0% over 1997, comprised of an 17.8% increase in international expenses and
an 8.5% increase in domestic expenses.

Significant  portions of the Company's expenses relate to employee  compensation
and various employee  incentive and benefit programs,  which are based primarily
upon operating results.  Salaries and related expenses were $2.7 billion in 1999
or 55.2% of revenue as compared to $2.3 billion in 1998 or 55.4% of revenue and

$2.0 billion in 1997 or 56.0% of revenue.  The year over year dollar increase is
a result of growth from acquisitions and new business gains.

In  1997,  as part of its  continuing  cost  containment  efforts,  the  Company
announced that it was curtailing  its domestic  pension plan effective  April 1,
1998, and recorded pre-tax charges of approximately  $16.7 million.  The Company
continues to sponsor a domestic defined contribution plan.

Office and general expenses were $1.5 billion in 1999, $1.2 billion in 1998, and
$1.1 billion in 1997.  The year over year  increase is a result of the continued
growth of the Company.

In the fourth quarter of 1999, NFO recorded  special charges of $22 million as a
result of the difficult  competitive  environment due to client consolidation in
the  financial  services  industry.  Approximately  $16  million of the  special
charges  related  to the  write-off  of  intangible  assets  which  were  deemed
permanently impaired.

Income from Operations
----------------------
Income from operations for 1999 was $578 million.  Excluding  restructuring  and
other merger related costs, income from operations for 1999 was $663 million, an

increase of $90 million or 16% over 1998.  Exclusive  of  acquisitions,  foreign
exchange  fluctuations  and  amortization  of  intangible  assets,  income  from
operations increased 16% for 1999 compared to 1998.

Income from  operations  for 1998 was $573  million  compared to $383 million in
1997,  an increase of 50%. The increase is a result of growth from  acquisitions
and new business gains.

Special Compensation Charges
----------------------------
During 1997, Hill,  Holliday,  Connors,  Cosmopulos,  Inc. ("Hill Holliday"),  a
company acquired in a pooling of interests  transaction in the second quarter of
1998, recorded special compensation charges of approximately $32 million.
Restructuring and Other Merger Related Costs
--------------------------------------------
In October  1999,  the Company  announced  the merger of two of its  advertising
networks.  The networks  affected,  Lowe & Partners Worldwide and Ammirati Puris
Lintas were combined to form a new agency  network called Lowe Lintas & Partners
Worldwide.  The merger involves the  consolidation  of operations in Lowe Lintas
agencies  in  approximately  24 cities in 22  countries  around the world.  Once
complete, the newly merged agency network will have offices in over 80 countries
around the world.

During  the  fourth  quarter  of  1999,   the  Company  began   execution  of  a
comprehensive  restructuring  plan in  connection  with  the  merger.  The  plan
includes  headcount  reductions,  consolidation  of real  estate and the sale or
disposition of certain investments,  and is expected to be completed by June 30,
2000. The Company is pleased with the progress of the merger to date and expects
the total costs to be in line with its original estimate.

The total pre-tax cost of the restructuring  plan is expected to be between $170
and $190 million,  ($100 to $115 million,  net of tax). In the fourth quarter of
1999, the Company recognized pre-tax costs of $84.2 million ($51.4 million,  net
of tax or $.17 per diluted share),  with the remainder expected to be recognized
in the first two quarters of 2000.

A summary of the components of the total  restructuring and other merger related
costs,  together  with an  analysis  of the cash and  non-cash  elements,  is as
follows:

(Dollars in millions)

                                               1999            Cash    Non-Cash
                                              ---------------------------------
TOTAL BY TYPE
-------------
   Severance and termination costs            $44.9           $27.0       $17.9
   Fixed asset write-offs                      11.1              --        11.1
   Lease termination costs                      3.8             3.8          --
   Investment write-offs and other             24.4             1.1        23.3
                                              ---------------------------------
Total                                         $84.2           $31.9       $52.3
                                              =================================

The severance and termination costs recorded in 1999 relate to approximately 230
employees who have been terminated or notified that they will be terminated. The
employee   groups   affected   include   executive   and  regional   management,
administrative,  account  management,  creative and media production  personnel,
principally  in the U.S.  and  U.K.  The  charge  related  to these  individuals
includes  the cost of  voluntary  programs  in certain  locations  and  includes
substantially all senior executives that will be terminated.  As of December 31,
1999, the amount accrued related to severance and termination was  approximately
$42.6 million.  During the fourth quarter of 1999, cash payments of $2.3 million
were made.

The fixed  assets  write-off  relates  largely to the  abandonment  of leasehold
improvements  as part of the merger.  The amount  recognized  in 1999 relates to
fixed asset write-offs in 6 offices principally in the United States.

Lease termination costs relate to the offices vacated as part of the merger. The
lease  terminations  are expected to be completed by mid-to-late  2000, with the
cash  portion to be paid out over a period of up to five  years.  As of December
31,  1999,  the  amount  accrued  related  to these  termination  costs was $3.8
million.
The  investment  write-offs  relate to the loss on sale or  closing  of  certain
business  units.  In 1999,  $23  million  has been  recorded  as a result of the
decision  to sell or  abandon  4  European  businesses.  In the  aggregate,  the
businesses  being  sold or  abandoned  represent  an  immaterial  portion of the
revenue  and  operations  of Lowe Lintas & Partners.  The  write-off  amount was
computed based upon the difference between the estimated sales proceeds (if any)
and the  carrying  value of the related  assets.  These  sales or  closures  are
expected to be completed by mid 2000.

The Company expects to benefit from the resulting  reduction in employee related
costs, compensation,  benefits and space occupancy. These benefits will begin to
be realized in the second half of 2000.  It is  anticipated  that a  significant
portion  of the  savings  will be  offset by  investments  in  creative  talent,
technology and other  capabilities to support the  acceleration of growth in the
future.  The Company  anticipates  that beginning 2001 its after-tax  results of
operations will benefit by between $20 to $25 million.

Interest Expense
----------------
Interest expense was $81 million in 1999, $64 million in 1998 and $60 million in
1997.  The  increase  in 1999 was  attributable  to the  issuance  of the  1.87%
Convertible  Subordinated  Notes due 2006,  issued in June 1999,  in addition to
other  borrowings  to fund a  portion  of the  acquisition  of  Infratest  Burke
Aktiengesellschaft  Holdings,  one of the top custom marketing research firms in
Europe, in November 1998.

Other Income, Net
-----------------
Other income, net primarily  consists of interest income,  investment income and
net gains from equity  investments.  Other income,  net included  gains from the
Company's   investments  in  various  interactive  based  companies,   including
Nicholson NY, Inc.,  Lycos and USWEB in 1999,  gains related to  investments  in
USWEB, CKS Group,  Inc. and Lycos in 1998, and gains on the sale of investments,
including All American Communications,  Inc. and CKS Group, Inc. in 1997. In the
aggregate,  annual net equity  gains  remained  relatively  constant  during the
three-year period.

Other Items
-----------
Income applicable to minority interests increased by $5.5 million in 1999 and by
$3.7 million in 1998.  The 1999 and 1998  increases  were  primarily  due to the
strong  performance  of  companies  that were not wholly  owned,  as well as the
acquisition of additional such entities during 1999 and 1998.

The  Company's  effective  income tax rate was 40.6% in 1999,  40.5% in 1998 and
44.9% in 1997. The higher rate in 1997 was largely  attributable  to the special
compensation charges recorded by Hill Holliday.

As described in Note 4, prior to acquisition,  Deutsch had elected to be treated
as an "S" Corporation and accordingly,  its income tax expense was lower than it
would have been had Deutsch been treated as a "C" Corporation.  Deutsch became a
"C" Corporation  upon  acquisition.  Assuming Deutsch had been a "C" Corporation
since 1997,  the pro forma  effective  tax rate of the  Company  would have been
41.7%, 40.9% and 45.2% respectively for 1999, 1998 and 1997.
Cash Based Earnings
-------------------
Management believes that cash based earnings are a relevant measure of financial
performance as it better  illustrates  the Company's  performance and ability to
support growth. The Company defines cash based earnings as net income,  adjusted
to exclude amortization of intangible assets, net of tax where applicable.  Cash
based  earnings are not  calculated  in the same manner by all companies and are
intended to supplement, not replace, the other measures calculated in accordance
with generally accepted accounting principles. Cash based earnings for the three
years ending December 31, 1999, 1998, and 1997 were as follows:

(Amounts in thousands except per share data)

                                         1999           1998            1997
                                       ---------------------------------------
Net income as reported                 $331,287       $339,907        $224,184
Restructuring and other
  merger related costs, net of tax       51,437             --              --
                                       ---------------------------------------
Net income, as adjusted                 382,724        339,907         224,184
Add back amortization
  of intangible assets                   99,326         61,396          45,682
Less related tax effect                 (13,031)        (6,146)         (5,228)
                                       ---------------------------------------
Cash based earnings (as
  defined above)                       $469,019       $395,157        $264,638
                                       =======================================

Per share amounts (diluted)               $1.51          $1.30            $.90

LIQUIDITY AND CAPITAL RESOURCES

The Company's financial position remained strong during 1999, with cash and cash
equivalents at December 31, 1999, of $1.0 billion, an increase of $227.9 million
over the 1998 year-end balance. Working capital at December 31, 1999, was $171.0
million,  which was $74.1 million  higher than the level at the end of 1998. The
increase  in  working   capital  was   largely   attributable   to  proceeds  of
approximately  $300 million from the 1.87%  Convertible  Subordinated  Notes due
2006 issued in June, 1999.

Historically,  cash flow from  operations has been the primary source of working
capital and  management  believes  that it will continue to be so in the future.
Net cash provided by operating  activities  was $610  million,  $552 million and
$292  million  for  the  years  ended   December  31,  1999,   1998,  and  1997,
respectively. The Company's working capital is used primarily to provide for the
operating needs of its  subsidiaries,  which includes payments for space or time
purchased from various media on behalf of clients.  The Company's practice is to
bill and collect from its clients in sufficient  time to pay the amounts due for
media on a timely basis. Other uses of working capital include the repurchase of
the Company's common stock, payment of cash dividends,  capital expenditures and
acquisitions.

The Company  acquires shares of its stock on an ongoing basis.  During 1999, the
Company purchased approximately 6.5 million shares of its common stock, compared
to 4.9 million shares in 1998. The Company repurchases its stock for the purpose
of fulfilling its obligations under various compensation plans.
The Company,  excluding pooled entities,  paid $90.4 million ($.33 per share) in
dividends to stockholders in 1999, as compared to $76.9 million ($.29 per share)
paid during 1998.

The  Company's  capital  expenditures  in 1999 were $186.7  million  compared to
$159.6 million in 1998 and $123.3 million in 1997. The primary purposes of these
expenditures were to upgrade computer and  telecommunications  systems to better
serve clients and to modernize offices.

During 1999, the Company paid  approximately  $559 million in cash and stock for
new acquisitions,  including a number of marketing  communications  companies to
complement its existing  agency systems and to optimally  position itself in the
ever-broadening  communications  marketplace.  This amount includes the value of
stock issued for pooled companies.

The Company and its subsidiaries maintain credit facilities in the United States
and in countries  where they conduct  business to manage their future  liquidity
requirements.  The Company's  available  short-term  credit facilities were $510
million,  of which $80 million  were  utilized at December  31,  1999,  and $576
million, of which $118 million were utilized at December 31, 1998.

Return  on  average  stockholders'  equity  was 20.7% in 1999 and 26.2% in 1998.
Excluding  restructuring  and other  merger  related  costs,  return on  average
stockholders'  equity  was  23.6% in 1999.  The  decline  in 1999 was  primarily
attributable  to a $159  million  increase in net  unrealized  holding  gains on
equity investments, which are included in stockholders' equity.

As discussed in Note 12, revenue from international  operations was 49% of total
revenue in 1999, 1998 and 1997. The Company continuously  evaluates and attempts
to mitigate its exposure to foreign exchange,  economic and political risks. The
notional value and fair value of all outstanding  forwards and options contracts
at the  end of  the  year  were  not  significant.  In  addition,  the  economic
developments in Brazil,  which did not have a significant negative impact on the
Company,  were  partially  offset by the  favorable  impact due to the  economic
recovery in Japan.

The Company is not aware of any significant  occurrences  that could  negatively
impact its liquidity. However, should such a trend develop, the Company believes
that there are sufficient funds available under its existing lines of credit and
from internal cash-generating capabilities to meet future needs.

OTHER MATTERS
Internet-Services Companies
---------------------------
During 1999, the Company expanded its investment in internet-service and related
companies. In December 1999, the Company announced the establishment of Zentropy
Partners,  a new global  internet-services  company that integrates the building
and marketing of digital  businesses.  At its formation,  Zentropy  Partners had
annualized revenue exceeding $50 million and was positioned to serve clients out
of 11 offices in Europe and North America.

In April 1999, the Company invested $20 million for a minority  interest in Icon
Medialab International AB ("Icon"), a Swedish based internet consultancy.  Later
in  the  year,  the  Company  increased  its  investment  in  Icon  through  the
contribution of other investments and through additional cash purchases.
On October 19, 1999, NFO announced the formation of  InsightExpress,  LLC, a new
Internet company formed to provide  real-time  consumer input to the desktops of
decision-makers  in companies of all sizes worldwide.  InsightExpress is a fully
automated  web-enabled  survey  system that will allow its customers to test new
ideas, screen new concepts, gauge customer satisfaction,  survey employees, test
advertising,  and gather  insight into the needs,  attitudes,  and  behaviors of
consumers.  InsightExpress  is  designed  to  provide  these  capabilities  at a
fraction  of the time and the cost of existing  market  research  methods  while
leveraging the worldwide  client  experience and panel expertise of NFO. To fund
its development and growth,  InsightExpress has raised a total of $25 million in
new venture capital from General Atlantic Partners and Engage Technologies.

In addition to the above,  the Company  maintains  internet-service  and related
divisions at several of its major  operating  divisions  and has made  strategic
investments in fourteen  companies whose objectives revolve around consulting on
the use of technology to benefit customers.

Year 2000 Issue
---------------
Pursuant to the Year 2000 issue,  the Company had developed  programs to address
the possible  exposures  related to the impact of computer  systems  incorrectly
recognizing the year 2000 or "00" as 1900. As a result of  implementation of its
programs,  the Company did not experience any significant  Year 2000 disruptions
during the  transition  from 1999 to 2000,  and since entering 2000, the Company
has not experienced any significant  Year 2000  disruptions to its business.  In
addition, the Company is not aware of any significant  disruptions impacting its
customers  or  suppliers.  The Company  will  continue  to monitor its  computer
systems over the next several months.  However,  the Company does not anticipate
any  significant  impact  related  to Year 2000  problems  that may  affect  its
internal  computer  systems.  The  Company  will also  continue  to monitor  the
activities  of its business  partners and critical  suppliers  and has developed
contingency plans should business partners or critical suppliers  experience any
Year 2000 disruptions in the coming months.

Costs incurred to achieve Year 2000  readiness,  which included  modification to
existing systems,  replacement of non-compliant systems and consulting resources
totaled $73 million.  A total of $47 million was capitalized  (related primarily
to hardware and software that  provided  both Year 2000  readiness and increased
the functionality of certain systems), and $26 million was expensed.

Cautionary Statement
--------------------
This Report on Form 8-K (the "Report"),  including  Management's  Discussion and
Analysis   of   Financial   Condition   and  Results  of   Operations   contains
forward-looking statements.  Statements that are not historical facts, including
statements about  Interpublic's  beliefs and expectations,  are  forward-looking
statements. These statements are based on current plans, expectations, estimates
and  projections,  and  therefore  you should not place undue  reliance on them.
Forward-looking  statements  speak  only  as of the  date  they  are  made,  and
Interpublic  undertakes no obligation to update publicly any of them in light of
new information, future events or otherwise.

Forward-looking statements involve inherent risks and uncertainties. Interpublic
cautions you that a number of important  factors  could cause actual  results to
differ materially from those contained in any  forward-looking  statement.  Such
factors  include,  but are not limited to, those  associated  with the effect of
national and regional economic conditions, the ability of Interpublic to attract
new  clients  and retain  existing  clients,  the  financial  success  and other
developments  of the clients of  Interpublic,  developments  from changes in the
regulatory and legal  environment  for advertising  companies  around the world,
Interpublic's   ability  to  effectively   integrate  recent   acquisitions  and
Interpublic's ability to attract and retain key management personnel.
New Accounting Guidance
-----------------------
In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting  Standards No. 133, "Accounting for Derivative  Instruments
and Hedging  Activities"  (SFAS 133),  which had an initial adoption date by the
Company of January 1, 2000. In June 1999,  the FASB  postponed the adoption date
of SFAS 133 until  January 1, 2001.  The Company  does not believe the effect of
adopting  SFAS 133 will be material  to its  financial  condition  or results of
operations.

Conversion to the Euro
----------------------
On January 1, 1999,  certain member countries of the European Union  established
fixed  conversion  rates  between  their  existing  currencies  and the European
Union's common currency (the "Euro").  The Company  conducts  business in member
countries.  The  transition  period  for the  introduction  of the Euro  will be
between January 1, 1999, and June 30, 2002. The Company is addressing the issues
involved with the  introduction of the Euro. The major  important  issues facing
the Company include:  converting  information  technology  systems;  reassessing
currency  risk;  negotiating  and amending  contracts;  and  processing  tax and
accounting records.

Based upon progress to date, the Company  believes that use of the Euro will not
have a  significant  impact on the  manner  in which it  conducts  its  business
affairs  and  processes  its  business  and  accounting  records.   Accordingly,
conversion to the Euro has not, and is not expected to have a material effect on
the Company's financial condition or results of operations.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
The Interpublic Group of Companies, Inc.

In our opinion, based upon our audits and the reports of the other auditors, the
accompanying   supplemental   consolidated   balance   sheets  and  the  related
supplemental   consolidated   statements  of  income,  of  cash  flows,  and  of
stockholders'  equity and  comprehensive  income present fairly, in all material
respects, the financial position of The Interpublic Group of Companies, Inc. and
its subsidiaries  (the "Company") at December 31, 1999 and 1998, and the results
of their  operations  and their  cash  flows for each of the three  years in the
period ended December 31, 1999, in conformity with accounting principles

generally accepted in the United States of America.  These financial  statements
are the  responsibility of the Company's  management;  our  responsibility is to
express an opinion on these financial statements based on our audits. We did not
audit the financial  statements of International Public Relations plc ("IPR"), a
wholly-owned   subsidiary,   which  statements  reflect  revenues   constituting
approximately  6%  of  the  related  1997  supplemental  consolidated  financial
statements.  We did not  audit  the  financial  statements  of  Hill,  Holliday,
Connors,  Cosmopulos,  Inc. ("Hill  Holiday"),  a wholly-owned  subsidiary which
statements reflect total net loss constituting  approximately 15% of the related
1997  supplemental  consolidated  financial  statements.  We did not  audit  the
financial statements of NFO Worldwide,  Inc. ("NFO"), a wholly-owned subsidiary,
which  statements  reflect  total assets  constituting  approximately  5% of the
related 1999 supplemental  consolidated financial statements.  Additionally,  we
did not audit the  financial  statements  of Deutsch,  Inc. and  Subsidiary  and
Affiliates  ("Deutsch"),  a wholly-owned  subsidiary,  which statements  reflect
total net income constituting  approximately 5% of the related 1999 supplemental
consolidated  financial  statements.  Those  statements  were  audited  by other
auditors  whose  reports  thereon  have been  furnished  to us, and our  opinion
expressed  herein,  insofar as it relates to the amounts  included for IPR, Hill
Holiday,  NFO and Deutsch, is based solely on the reports of the other auditors.
We  conducted  our  audits  of these  statements  in  accordance  with  auditing
standards generally accepted in the United States of America, which require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates made by management,  and evaluating the overall financial
statement  presentation.  We believe  that our  audits and the  reports of other
auditors provide a reasonable basis for the opinion expressed above.

As described in Note 16, to the supplemental  consolidated financial statements,
on November 30, 2000, the Company merged with Deutsch in a transaction accounted
for as a pooling  of  interests.  The  accompanying  supplementary  consolidated
financial statements give retroactive effect of the merger of the Company with

Deutsch.  Accounting  principles  generally  accepted  in the  United  States of
America proscribe giving effect to a consummated business combination  accounted
for by the  pooling of  interests  method in  financial  statements  that do not
include  the date of  consummation.  These  financial  statements  do not extend
through  the date of  consummation;  however,  they will  become the  historical
consolidated  financial  statements  of the Company and its  subsidiaries  after
financial   statements  covering  the  date  of  consummation  of  the  business
combination are issued.

PricewaterhouseCoopers LLP
New York, New York

February 22,  2000,  except for Note 15 which is as of July 13, 2000 and Note 16
which is as of December 22,2000
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of NFO Worldwide, Inc.:

We have  audited  the  consolidated  balance  sheets of NFO  Worldwide,  Inc. (a
Delaware corporation) and subsidiaries as of December 31, 1999 and 1998, and the
related consolidated statements of income,  stockholders' equity, and cash flows
for each of the years in the three year period ended  December  31, 1999.  These
financial statements (not presented separately herein) are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial  statements  based on our audits.  We did not audit the 1997 financial
statements  of  The  MBL  Group  plc,  included  in the  consolidated  financial
statements of NFO Worldwide, Inc., which statements reflect total revenues of 26
percent of the related 1997  consolidated  total,  after  adjustment  to reflect
translation into U.S. dollars and accounting  principles  generally  accepted in
the United States. The financial statements of The MBL Group plc, prior to those
adjustments,  were  audited by other  auditors  whose  report  thereon  has been
furnished to us, and our opinion expressed herein,  insofar as it relates to the
amounts  included  for The MBL Group plc,  is based  solely on the report of the
other auditors.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We  believe  that our  audits  and the  report of other  auditors
provide a reasonable basis for our opinion.

In our opinion,  based on our audits and the report of the other  auditors,  the
consolidated  financial  statements  referred to above  present  fairly,  in all
material  respects,   the  financial   position  of  NFO  Worldwide,   Inc.  and
subsidiaries  as of  December  31,  1999  and  1998,  and the  results  of their
operations  and their cash flows for each of the years in the three year  period
ended  December 31, 1999, in conformity  with  accounting  principles  generally
accepted in the United States.

Our audits were made for the  purpose of forming an opinion on the  consolidated
financial  statements taken as a whole. The schedule referred to in Item 14 (not
presented  separately herein) is presented for the purpose of complying with the
Securities and Exchange  Commission's  rules and is not part of the consolidated
financial  statements.   This  schedule  has  been  subjected  to  the  auditing
procedures applied in our audits of the consolidated  financial  statements and,
in our  opinion,  based on our audit and the  report of other  auditors,  fairly
states in all material  respects  the  financial  data  required to be set forth
therein in relation to the consolidated financial statements taken as a whole.

Arthur Andersen LLP
New York, New York,

February 25, 2000
REPORT OF THE AUDITORS TO THE SHAREHOLDERS OF THE MBL GROUP plc

We have audited the financial statements of The MBL Group plc for the year ended
December 31, 1997, which have been prepared under the historical cost convention
and in accordance with generally accepted  accounting  principles  applicable in
the United Kingdom.

Respective Responsibilities of Directors and Auditors

The  Company's  directors  are  responsible  for the  preparation  of  financial
statements.  It is our responsibility to form an independent  opinion,  based on
our audit, on those statements and to report our opinion to you.

Basis of Opinion

We conducted  our audit in  accordance  with  Auditing  Standards  issued by the
Auditing  Practices Board which are  substantially the same as those followed in
the United States. An audit includes  examination,  on a test basis, of evidence
relevant to the amounts and  disclosures  in the financial  statements.  It also
includes an assessment of the  significant  estimates and judgements made by the
directors in the  preparation  of the financial  statements,  and of whether the
accounting policies are appropriate to the Company's circumstances, consistently
applied and adequately disclosed.

We  planned  and  performed  our audit so as to obtain all the  information  and
explanations  which  we  considered  necessary  in  order  to  provide  us  with
sufficient evidence to give reasonable  assurance that the financial  statements
are  free  from  material  misstatement,   whether  caused  by  fraud  or  other
irregularity  or error.  In forming our opinion,  we also  evaluated the overall
adequacy of the presentation of information in the financial statements.

Opinion

In our  opinion,  the  financial  statements  give a true and  fair  view of the
group's  profit and cash flows for the year ended  December 31,  1997,  and have
been  properly  prepared  in  accordance  with  generally  accepted   accounting
principles in the United Kingdom.

Soteriou Banerji

Registered Auditors and Chartered Accountants
253 Gray's Inn Road

London, WC1X 8QT

Date February 23, 1998
REPORT OF  INDEPENDENT  AUDITORS TO THE  SHAREHOLDERS  AND BOARD OF DIRECTORS OF
INTERNATIONAL PUBLIC RELATIONS PLC

We have audited the consolidated statements of income,  shareholders' equity and
cash  flows of  International  Public  Relations  plc and  subsidiaries  for the
fourteen-month  period ended 31 December 1997, all expressed in pounds sterling.
These financial  statements,  which are not separately presented herein, are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance  with United  Kingdom  auditing  standards,
which do not differ in any  significant  respect  from United  States  generally
accepted  auditing  standards.  Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audit provides a reasonable  basis
for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,   the  consolidated   results  of  operations  and  the
consolidated  cash flows of International  Public Relations plc and subsidiaries
for the  fourteen-month  period ended 31 December 1997 in conformity with United
States generally accepted accounting principles.

Ernst & Young
London
3 February 1999
REPORT OF INDEPENDENT AUDITORS

Board of Directors

Hill, Holliday, Connors, Cosmopulos, Inc.

We have audited the consolidated statements of operations,  stockholders' equity
(deficit)  and cash  flows of Hill,  Holliday,  Connors,  Cosmopulos,  Inc.  and
Subsidiaries  (the Company) for the twelve months ended  December 31, 1997,  not
separately  presented herein.  These financial statements are the responsibility
of the  Company's  management.  Our  responsibility  is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the consolidated  results of operations and
cash flows of Hill, Holliday, Connors, Cosmopulos, Inc. and Subsidiaries for the
twelve-month  period  ended  December  31,  1997 in  conformity  with  generally
accepted accounting principles.

Ernst & Young LLP
Boston, Massachusetts

March 13, 1998
Report of Independent Public Accountants
                    ----------------------------------------

To the Stockholder

Deutsch, Inc. and Subsidiary and Affiliates

         We have  audited  the  combined  balance  sheet of  Deutsch,  Inc.  and
Subsidiary  and  Affiliates  as of December 31, 1999,  and the related  combined
statements of income,  stockholder's  equity (deficiency) and cash flows for the
year then ended, which financial  statements are respectively  presented herein.
These combined financial  statements are not the responsibility of the Company's
management.  Our  responsibility  is to express  an  opinion  on these  combined
financial statements based on our audit.

         We conducted our audit in accordance with generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the combined financial statements.  An audit also
includes assessing the accounting principles used and significant estimates made
by management,  as well as evaluating the overall combined  financial  statement
presentation.  We believe  that our audit  provides a  reasonable  basis for our
opinion.

         In our opinion,  the combined  financial  statements  referred to above
present fairly,  in all material  respects,  the financial  position of Deutsch,
Inc. and Subsidiary and Affiliates as of December 31, 1999, and their results of
operations and cash flows for the year then ended,  in conformity with generally
accepted accounting principles.

         The combined  financial  statements  have been  restated to reflect the
correct  treatment  of  payments  made to the  Company's  sole  stockholder.  In
financial  statements  previously  issued for the years ended December 31, 1999,
1998 and 1997,  certain  payments had been  classified as bonuses which,  it has
been  determined,  should have been reflected as  distributions to the Company's
sole stockholder. Accordingly, the Company has restated the financial statements
to reflect the correct accounting for the payments and the related tax effects.

J.H. Cohn LLP
Roseland, New Jersey
November 28, 2000
FINANCIAL STATEMENTS
          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                     SUPPLEMENTAL CONSOLIDATED BALANCE SHEET
                                   DECEMBER 31
                  (Dollars in Thousands Except Per Share Data)

ASSETS                                                1999            1998
                                                   --------------------------
CURRENT ASSETS:
Cash and cash equivalents (includes
  certificates of deposit: 1999-$150,343;
  1998-$152,064)                                   $1,029,076      $  801,207
Marketable securities                                  36,765          31,733
Receivables (net of allowance for doubtful
  accounts:  1999-$60,565; 1998-$54,060)            4,442,229       3,661,076
Expenditures billable to clients                      337,769         300,067
Prepaid expenses and other current assets             147,085         156,314
                                                   --------------------------
   Total current assets                             5,992,924       4,950,397
                                                   --------------------------
OTHER ASSETS:
Investment in unconsolidated affiliates                62,225          62,244
Deferred taxes on income                                   --          92,756
Other investments and miscellaneous assets            719,024         362,154
                                                   --------------------------
   Total other assets                                 781,249         517,154
                                                   --------------------------
FIXED ASSETS, AT COST:
Land and buildings                                    164,678         117,105
Furniture and equipment                               783,698         742,191
                                                   --------------------------
                                                      948,376         859,296
Less: accumulated depreciation                       (506,975)       (440,190)
                                                   --------------------------
                                                      441,401         419,106
Unamortized leasehold improvements                    151,870         119,461
                                                   --------------------------
   Total fixed assets                                 593,271         538,567
                                                   --------------------------
Intangible assets (net of accumulated
 amortization: 1999-$607,417; 1998-$525,792)        1,879,600       1,520,445
                                                   --------------------------
TOTAL ASSETS                                       $9,247,044      $7,526,563
                                                   ==========================
FINANCIAL STATEMENTS
          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                     SUPPLEMENTAL CONSOLIDATED BALANCE SHEET
                                   DECEMBER 31
                  (Dollars in Thousands Except Per Share Data)
LIABILITIES AND STOCKHOLDERS' EQUITY                      1999             1998
                                                          ----             ----
CURRENT LIABILITIES:
Payable to banks                                    $  262,483       $  215,078
Accounts payable                                     4,629,415        3,699,783
Accrued expenses                                       769,566          720,274
Accrued income taxes                                   160,484          218,381
                                                    ---------------------------
Total current liabilities                            5,821,948        4,853,516
                                                    ---------------------------
NONCURRENT LIABILITIES:
Long-term debt                                         530,117          498,517
Convertible subordinated debentures
  and notes                                            518,490          207,927
Deferred compensation and reserve
  for termination allowances                           348,172          325,007
Deferred taxes on income                                45,888               --
Accrued postretirement benefits                         50,226           49,919
Other noncurrent liabilities                            86,127          102,000
Minority interests in consolidated
  subsidiaries                                          81,612           59,246
                                                    ---------------------------
Total noncurrent liabilities                         1,660,632        1,242,616
                                                    ---------------------------
STOCKHOLDERS' EQUITY:
Preferred Stock, no par value
  shares authorized:  20,000,000
  shares issued:  none

Common Stock, $.10 par value
  shares authorized:  550,000,000
  shares issued:
    1999 - 315,921,839;
    1998 - 309,954,039                                  31,592           30,995
Additional paid-in capital                             783,897          574,246
Retained earnings                                    1,392,224        1,166,785
Accumulated other comprehensive
  loss, net of tax                                     (76,695)        (160,970)
                                                     --------------------------
                                                     2,131,018        1,611,056
Less:
Treasury stock, at cost:
1999 - 8,909,904 shares;
1998 - 6,411,028 shares                                289,519          109,277
Unamortized expense of restricted stock grants          77,035           71,348
                                                     --------------------------
Total stockholders' equity                           1,764,464        1,430,431
                                                     --------------------------
Commitments and contingencies

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $9,247,044       $7,526,563
                                                    ===========================

All  periods  have  been  restated  to  reflect  the  aggregate  effect  of  the
acquisitions accounted for as poolings of interests. (See Notes 15 and 16).

All share data for 1998 has been adjusted to reflect the two-for-one stock split
effective July 15, 1999.

The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENTS
          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                  SUPPLEMENTAL CONSOLIDATED STATEMENT OF INCOME
                             YEAR ENDED DECEMBER 31
                  (Amounts in Thousands Except Per Share Data)

                                             1999           1998           1997
                                      -----------------------------------------
Revenue                               $ 4,977,823    $ 4,218,657    $ 3,610,706

Salaries and related expenses           2,745,956      2,339,894      2,020,243
Office and general expenses             1,469,862      1,244,771      1,129,639
Amortization of intangible assets          99,326         61,396         45,682
Special compensation charges                   --             --         32,229
Restructuring and other merger
   related costs                           84,183             --             --
                                      -----------------------------------------
Total operating expenses                4,399,327      3,646,061      3,227,793
                                      -----------------------------------------
Income from operations                    578,496        572,596        382,913

Interest expense                          (81,341)       (64,296)       (59,820)
Other income, net                         103,562         98,555        117,150
                                      -----------------------------------------
Income before provision
  for income taxes                        600,717        606,855        440,243

Provision for income taxes                243,971        245,636        197,665
                                      -----------------------------------------
Income of consolidated companies          356,746        361,219        242,578
Income applicable to
  minority interests                      (33,991)       (28,503)       (24,759)
Equity in net income of
  unconsolidated affiliates                 8,532          7,191          6,365
                                      -----------------------------------------
Net Income                            $   331,287    $   339,907    $   224,184
                                      =========================================

Per Share Data:
  Basic EPS                           $      1.11    $      1.15    $       .79
  Diluted EPS                         $      1.07    $      1.12    $       .76

Weighted average shares:
  Basic                                   297,992        294,756        283,796
  Diluted                                 308,840        305,134        301,602

All  periods  have  been  restated  to  reflect  the  aggregate  effect  of  the
acquisitions accounted for as poolings of interests. (See Notes 15 and 16).

All share data for 1998 and 1997 has been  adjusted to reflect  the  two-for-one
stock split effective July 15, 1999.

The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENTS
          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                SUPPLEMENTAL CONSOLIDATED STATEMENT OF CASH FLOWS
                             YEAR ENDED DECEMBER 31
                             (Dollars in Thousands)
1999         1998         1997
                                                    -------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                          $  331,287    $ 339,907    $ 224,184
Adjustments to reconcile net income to
   cash provided by operating activities:
Depreciation and amortization of fixed assets          128,302      110,086       88,847
Amortization of intangible assets                       99,326       61,396       45,682
Amortization of restricted stock awards                 25,926       20,272       16,222
Stock bonus plans/ESOP                                      --           --        1,389
Provision for (benefit of) deferred income taxes         9,316      (11,972)       7,432
Noncash pension plan charges                                --           --       16,700
Equity in net income of unconsolidated affiliates       (8,533)      (7,191)      (6,366)
Income applicable to minority interests                 33,991       28,503       24,759
Translation losses/(gains)                                 690        1,034         (319)
Special compensation charges                                --           --       31,553
Net gain on investments                                (43,390)     (40,465)     (44,626)
Restructuring costs, non-cash                           52,264           --           --
Other                                                   (5,197)      12,667      (10,467)
Change in assets and liabilities,
   net of acquisitions:
Receivables                                           (820,510)    (269,536)    (357,380)
Expenditures billable to clients                       (24,413)     (31,199)     (51,247)
Prepaid expenses and other assets                     (121,945)     (39,790)     (30,892)
Accounts payable and accrued expenses                  996,630      336,799      317,165
Accrued income taxes                                   (64,423)      26,870          435
Deferred compensation and reserve for
   termination allowances                               20,496       14,537       18,571
                                                    ------------------------------------
Net cash provided by operating activities              609,817      551,918      291,642
                                                    ------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net                                     (248,406)    (255,995)    (110,317)
Capital expenditures                                  (186,669)    (159,596)    (123,275)
Proceeds from sales of assets                           72,542       28,346      114,494
Net (purchases of) proceeds from
   marketable securities                                (9,114)       3,934          324
Other investments and miscellaneous assets                (150)          --           --
Investment in unconsolidated affiliates                (10,531)     (16,725)      (9,191)
                                                    -------------------------------------
Net cash used in investing activities                 (382,328)    (400,036)    (127,965)
                                                    -------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in short-term borrowings                       47,592       15,304       31,188
Proceeds from long-term debt                           405,927      220,494      280,847
Payments of long-term debt                             (70,126)     (98,294)     (36,404)
Proceeds from ESOP                                          --        7,420           --
Treasury stock acquired                               (300,524)    (164,928)    (144,094)
Issuance of common stock                                66,130       35,239       38,664
Cash dividends - Interpublic                           (90,424)     (76,894)     (61,242)
Cash dividends - pooled companies                      (14,643)     (16,461)     (19,519)
                                                    ------------------------------------
Net cash provided by (used in) financing activities     43,932      (78,120)      89,440
                                                    ------------------------------------
Effect of exchange rates on
  cash and cash equivalents                            (43,552)      10,998      (43,279)
                                                    ------------------------------------
Increase in cash and cash equivalents                  227,869       84,760      209,838
Cash and cash equivalents at beginning of year         801,207      716,447      506,609
                                                     -----------------------------------
Cash and cash equivalents at end of year            $1,029,076    $ 801,207    $ 716,447
                                                    ====================================

All  periods  have  been  restated  to  reflect  the  aggregate  effect  of  the
acquisitions accounted for as poolings of interests. (See Notes 15 and 16).

The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENTS
                                         THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                              SUPPLEMENTAL CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                                               FOR THE THREE-YEAR PERIOD ENDED DECEMBER 31, 1999
                                                             (Dollars in Thousands)
Accumulated                 Unamortized
                              Common    Additional                      Other                     Expense   Unearned
                               Stock       Paid-In   Retained   Comprehensive  Treasury     of Restricted       ESOP
                    (par value $.10)       Capital   Earnings   Income (loss)     Stock      Stock Grants       Plan       Total
------------------------------------------------------------------------------------------------------------------------------------
BALANCES, DECEMBER 31, 1998    $30,995  $574,246     $1,166,785   $(160,970)     $(109,277)    $(71,348)      $     --   $1,430,431
 Comprehensive income:
 Net income                                          $  331,287                                                          $  331,287
 Adjustment for minimum pension
   liability                                                         18,596                                                  18,596
Change in market value of
   securities available-for-sale                                    158,607                                                 158,607
 Foreign currency translation
   adjustment                                                       (92,928)                                                (92,928)
-----------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income                                                                                                 $415,562
Cash dividends - IPG                                    (90,424)                                                            (90,424)
Cash dividends - pooled companies                       (14,643)                                                            (14,643)
Equity adjustments - pooled companies                      (594)                                                               (594)
Awards of stock under
  Company plans:
 Achievement stock and
   incentive awards                          198                                       333                                      531
 Restricted stock,
   net of forfeitures               66    36,902                                    (7,927)      (5,687)                     23,354
Employee stock purchases            40    19,068                                                                             19,108
Exercise of stock options,
  including tax benefit            276    81,539                                                                             81,815
Purchase of Company's own stock                                                   (300,524)                                (300,524)
Issuance of shares
  for acquisitions                        63,447                                   127,876                                  191,323
Par value of shares issued
  for two-for-one stock split      187                     (187)                                                                 --
Other issuances                     28     8,497                                                                              8,525
------------------------------------------------------------------------------------------------------------------------------------
BALANCES, DECEMBER 31, 1999    $31,592  $783,897     $1,392,224   $ (76,695)     $(289,519)    $(77,035)      $     --   $1,764,464
------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS
                                         THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                        SUPPLEMENTAL CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                                               FOR THE THREE-YEAR PERIOD ENDED DECEMBER 31, 1999
                                                             (Dollars in Thousands)
Accumulated                 Unamortized
                              Common    Additional                      Other                     Expense   Unearned
                               Stock       Paid-In   Retained   Comprehensive  Treasury     of Restricted       ESOP
                    (par value $.10)       Capital   Earnings   Income (loss)     Stock      Stock Grants       Plan       Total
------------------------------------------------------------------------------------------------------------------------------------
BALANCES, DECEMBER 31, 1997    $30,564  $431,872     $920,448   $(159,064)      $      --    $(56,634)      $(7,420)     $1,159,766
Comprehensive income:
 Net income                                          $339,907                                                            $  339,907
 Adjustment for minimum pension
   liability                                                      (24,013)                                                  (24,013)
 Change in market value of
   securities available-for-sale                                   (2,576)                                                   (2,576)
 Foreign currency translation
   adjustment                                                      24,683                                                    24,683
-----------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income                                                                                               $  338,001
Cash dividends - IPG                                  (76,894)                                                              (76,894)
Cash dividends - pooled companies                     (16,461)                                                              (16,461)
Awards of stock under
 Company plans:
 Achievement stock and
   incentive awards                          274                                      110                                       384
 Restricted stock,
   net of forfeitures               63    36,619                                   (2,406)    (14,714)                       19,562
Employee stock purchases            26    13,325                                                                             13,351
Exercise of stock options,
  including tax benefit            123    42,518                                                                             42,641
Purchase of Company's own stock                                                  (164,928)                                 (164,928)
Issuance of shares
  for acquisitions                        36,714                                   57,947                                    94,661
Conversion of convertible
   debentures                        3     1,002                                                                              1,005
Payments from ESOP                                                                                            7,420           7,420
Par value of shares issued
  for two-for-one stock split      215                   (215)                                                                   --
Other issuances                      1    11,922                                                                             11,923
-----------------------------------------------------------------------------------------------------------------------------------
BALANCES, DECEMBER 31, 1998    $30,995 $ 574,246   $1,166,785   $(160,970)      $(109,277)   $(71,348)      $    --      $1,430,431
-----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS
                                         THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                        SUPPLEMENTAL CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                                               FOR THE THREE-YEAR PERIOD ENDED DECEMBER 31, 1999
                                                             (Dollars in Thousands)
Accumulated                 Unamortized
                              Common    Additional                      Other                     Expense   Unearned
                               Stock       Paid-In   Retained   Comprehensive  Treasury     of Restricted       ESOP
                    (par value $.10)       Capital   Earnings   Income (loss)     Stock      Stock Grants       Plan       Total
------------------------------------------------------------------------------------------------------------------------------------
BALANCES, DECEMBER 31, 1996    $15,501  $272,790     $791,383   $ (93,572)      $      --    $(47,350)      $(7,800)     $  930,952
Comprehensive income:
 Net income                                          $224,184                                                            $  224,184
 Adjustment for minimum pension
   liability                                                           72                                                        72
 Change in market value of
   securities available-for-sale                                   12,465                                                    12,465
 Foreign currency translation
   adjustment                                                     (78,029)                                                  (78,029)
-----------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income                                                                                                 $158,692
Cash dividends - IPG                                  (61,242)                                                              (61,242)
Cash dividends - pooled companies                     (19,519)                                                              (19,519)
Awards of stock under
 Company plans:
 Achievement stock and
    incentive awards                          787                                      175                                       962
 Restricted stock,
   net of forfeitures               53    27,821                                   (3,664)     (9,284)                       14,926
Employee stock purchases            23     9,684                                                                              9,707
Exercise of stock options,
  including tax benefit            126    40,855                                                                             40,981
Purchase of Company's own stock                                                  (144,094)                                 (144,094)
Issuance of shares
  for acquisitions                       (72,129)                                 147,583                                    75,454
Conversion of convertible
   debentures                       443   118,357                                                                            118,800
Par value of shares issued
  for three-for-two stock split     59                                                                                           59
Payments from ESOP                                                                                              380             380
Special compensation charges              27,324                                                                             27,324
Deferred stock bonus charges              (4,876)                                                                            (4,876)
Par value of shares issued for
  two-for-one stock split       14,358                (14,358)                                                                   --
Other issuances                      1    11,259                                                                             11,260
-----------------------------------------------------------------------------------------------------------------------------------
BALANCES, DECEMBER 31, 1997    $30,564  $431,872     $920,448   $(159,064)      $      --    $(56,634)      $(7,420)     $1,159,766
-----------------------------------------------------------------------------------------------------------------------------------

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

All  periods  have  been  restated  to  reflect  the  aggregate  effect of  the acquisitions accounted for as poolings of interests.
(See Notes 15 and 16).

All share data for 1999, 1998 and 1997 has been adjusted to reflect the two-for-one stock split effective July 15, 1999.
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
The Company is a worldwide  provider of advertising agency and related services.
The   Company   conducts   business   through   the   following    subsidiaries:
McCann-Erickson  WorldGroup,  The Lowe Group,  DraftWorldwide,  Initiative Media
Worldwide,  International  Public Relations,  Octagon,  Zentropy  Partners,  NFO
Worldwide,   Allied  Communications  Group,  Deutsch,  Inc.  and  other  related
companies.  The Company also has  arrangements  through  association  with local
agencies in various parts of the world.  Other  specialized  marketing  services
conducted by the Company  include media buying,  market  research,  relationship
(direct)  marketing,  public relations,  sports and event marketing,  healthcare
marketing and e-business consulting and communications.

Principles of Consolidation
The consolidated  financial  statements  include the accounts of the Company and
its  subsidiaries,  most of which are wholly owned. The Company also has certain
investments in unconsolidated affiliates that are carried on the equity basis.

The Company's  consolidated  financial statements,  including the related notes,
have been restated as of the earliest period presented to include the results of
operations,  financial  position  and cash flows of the 2000 pooled  entities in
addition to all prior pooled entities.

The accompanying income statements have been prepared in a format different than
that used in the  originally  filed Form 10-K for the three years ended December
31, 1999. The changes made principally  relate to the introduction of a new line
item - "Income from operations".  Amounts previously  included in "Other income,
net" as part of "Gross  Income" are now included  elsewhere in the  Consolidated
Statement of Income.

Short-term and Long-term Investments
The Company's investments in marketable and equity securities are categorized as
available-for-sale  securities,  as defined by Statement of Financial Accounting
Standards No. 115 (SFAS 115),  "Accounting  for Certain  Investments in Debt and
Equity  Securities".  Unrealized holding gains and losses are reflected as a net
amount within stockholders'  equity until realized.  The cost of securities sold
is based on the average cost of securities  when  computing  realized  gains and
losses.

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.

Translation of Foreign Currencies
Balance  sheet  accounts  are  translated   principally  at  rates  of  exchange
prevailing  at the  end  of  the  year  except  for  fixed  assets  and  related
depreciation  in  countries  with  highly   inflationary   economies  which  are
translated  at rates in  effect on dates of  acquisition.  Revenue  and  expense
accounts are translated at average rates of exchange in effect during each year.
Translation  adjustments  are included  within  stockholders'  equity except for
countries with highly inflationary economies, in which case they are included in
current operations.
Revenues and Agency Costs
Revenues are generally  recognized when media  placements  appear and production
costs are incurred.  Salaries and other agency costs are  generally  expensed as
incurred.

Depreciation and Amortization
Depreciation  is  computed  principally  using  the  straight-line  method  over
estimated  useful lives of the related  assets,  ranging  generally from 3 to 20
years for furniture and equipment and from 10 to 45 years for various  component
parts of buildings.

Leasehold  improvements  and  rights  are  amortized  over the terms of  related
leases. Company policy provides for the capitalization of all major expenditures
for renewal and  improvements  and for current charges to income for repairs and
maintenance.

Long-lived Assets
The excess of purchase price over the fair value of net tangible assets acquired
is  amortized  on a  straight-line  basis over  periods not  exceeding 40 years.
Customer lists are amortized on a  straight-line  basis over the expected useful
life of the customer lists (generally 5 to 40 years).

The Company  evaluates the  recoverability  of the carrying  value of long-lived
assets  whenever events or changes in  circumstances  indicate that the net book
value of an operation  may not be  recoverable.  If the sum of projected  future
undiscounted  cash flows of an  operation is less than its  carrying  value,  an
impairment loss is recognized.  The impairment loss is measured by the excess of
the  carrying  value over fair value based on estimated  discounted  future cash
flows or other valuation measures.

During 1999, the Company recorded a pre-tax charge of $16 million related to the
write-off of goodwill and customer lists within NFO's North American financial

services  division.  Cash  flow  analyses  were  performed,   resulting  in  the
determination by management that the intangible assets within this division were
deemed to be permanently impaired.

Income Taxes
Deferred  income taxes reflect the impact of temporary  differences  between the
amount of assets and liabilities recognized for financial reporting purposes and
such amounts recognized for income tax purposes.

Earnings per Common and Common Equivalent Share

The  Company  applies  the  principles  of  Statement  of  Financial  Accounting
Standards No. 128 (SFAS 128),  "Earnings Per Share". Basic earnings per share is
based on the  weighted-average  number of common shares  outstanding during each
year.  Diluted  earnings  per  share  also  includes  common  equivalent  shares
applicable  to grants under the stock  incentive  and stock option plans and the
assumed conversion of convertible subordinated debentures and notes, if they are
determined to be dilutive.

Treasury Stock
Treasury  stock is acquired at market  value and is recorded at cost.  Issuances
are accounted for on a first-in, first-out basis.

Concentrations of Credit Risk
The  Company's  clients are in various  businesses,  located  primarily in North
America, Latin America, Europe and the Asia Pacific Region. The Company performs
ongoing  credit  evaluations  of its  clients.  Reserves  for credit  losses are
maintained at levels considered adequate by management.  The Company invests its
excess cash in deposits with major banks and in money market  securities.  These
securities typically mature within 90 days and bear minimal risk.
Segment Reporting
The Company  provides  advertising  and many other closely  related  specialized
marketing services.  All of these services fall within one reportable segment as
defined in  Statement  of  Financial  Accounting  Standards  No. 131 (SFAS 131),
"Disclosures about Segments of an Enterprise and Related Information."

Accounting for Derivative  Instruments and Hedging  Activities In June 1998, the
FASB issued Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative  Instruments and Hedging Activities" (SFAS 133), which had an initial
adoption  date by the  Company  of  January  1,  2000.  In June  1999,  the FASB
postponed  the adoption  date of SFAS 133 until  January 1, 2001.  SFAS 133 will
require  the  Company to record all  derivatives  on the  balance  sheet at fair
value.  Changes in derivative  fair values will either be recognized in earnings
as offsets to the changes in fair value of related  hedged  assets,  liabilities
and  firm  commitments  or  for  forecasted  transactions,  deferred  and  later
recognized in earnings at the same time as the related hedged transactions.  The
impact  of SFAS 133 on the  Company's  financial  statements  will  depend  on a
variety of factors,  including the future level of forecasted and actual foreign
currency transactions,  the extent of the Company's hedging activities, the type
of hedging instruments used and the effectiveness of such instruments.  However,
the Company does not believe the effect of adopting SFAS 133 will be material to
its financial condition or results of operations.

Reclassifications
Certain  amounts  for prior years have been  reclassified  to conform to current
year presentation.

NOTE 2:  STOCKHOLDERS' EQUITY
On July 15, 1999, the stockholders  approved a two-for-one stock split, effected
in the form of a payment of a 100  percent  stock  dividend to  stockholders  of
record on June 29,  1999.  The  number of shares of common  stock  reserved  for
issuance  pursuant to various plans under which stock is issued was increased by
100 percent. The two-for-one stock split has been reflected retroactively in the
consolidated  financial  statements and all per share data,  shares,  and market
prices of the  Company's  common stock  included in the  consolidated  financial
statements  and notes  thereto  have been  adjusted  to give effect to the stock
split.
Comprehensive Income
Accumulated other  comprehensive  income (loss) amounts are reflected net of tax
in the consolidated financial statements as follows:

(Dollars in thousands)
                                                                           Total
                                                                     Accumulated
                                Foreign     Unrealized   Minimum        Other
                               Currency      Holding     Pension   Comprehensive
                               Translation    Gains/    Liability      Income/
                               Adjustment    (Losses)   Adjustment     (Loss)
                               -------------------------------------------------
Balances, December 31, 1996     $ (80,270)    $     --    $(13,302)   $ (93,572)
Current-period change             (78,029)      12,465          72      (65,492)
                                -----------------------------------------------

Balances, December 31, 1997     $(158,299)    $ 12,465    $(13,230)   $(159,064)
Current-period change              24,683       (2,576)    (24,013)      (1,906)
                                -----------------------------------------------

Balances, December 31, 1998     $(133,616)    $  9,889    $(37,243)   $(160,970)
Current-period change             (92,928)     158,607      18,596       84,275
                                -----------------------------------------------

Balances, December 31, 1999     $(226,544)    $168,496    $(18,647)   $ (76,695)
                                ===============================================

The foreign currency translation  adjustments are not tax-effected.  See Note 13
for additional discussion of unrealized holding gains on investments.
NOTE 3:  EARNINGS PER SHARE

In accordance with SFAS 128, the following is a reconciliation of the components
of the basic  and  diluted  EPS  computations  for  income  available  to common
stockholders for the year ended December 31:

(Dollars in Thousands Except Per Share Data)
1999                                1998                             1997
                               -----------------------------------------------------------------------------------------------------
                                                        Per                                  Per                              Per
                                                        Share                                Share                            Share
                               Income      Shares       Amount      Income     Shares        Amount   Income     Shares       Amount
                               -----------------------------------------------------------------------------------------------------
BASIC EPS
Income available
 to common stockholders        $331,287    297,992      $1.11       $339,907      294,756    $1.15    $224,184       283,796  $.79

Effect of Dilutive Securities:
 Options                                     7,311                                  6,924                              6,508
 Restricted stock                   631      3,537                       541        3,454                  447         3,277
 3 3/4% Convertible
    subordinated debentures          --             --                    --           --                5,929         8,021

DILUTED EPS                    $331,918    308,840      $1.07       $340,448      305,134    $1.12    $230,560       301,602  $.76
                               -----------------------------------------------------------------------------------------------------
The  computation  of diluted EPS for 1999,  1998,  and 1997 excludes the assumed
conversion of the 1.80% Convertible  Subordinated Notes and the 1999 computation
also  excludes the 1.87%  Convertible  Subordinated  Notes (See Note 10) because
they were  antidilutive.  In the fourth  quarter of 1997,  the Company  redeemed
substantially all its 3 3/4% Convertible Subordinated Debentures due 2002.

All data for 1999,  1998,  and 1997 has been  restated to reflect the  aggregate
effect of the acquisitions accounted for as poolings of interests. (See Notes 15
and 16).

All share data for 1998 and 1997 has been  adjusted to reflect  the  two-for-one
stock split effective July 15, 1999.

NOTE 4: ACQUISITIONS
The Company acquired a number of advertising and communications companies during
the three-year  period ended December 31, 1999.  The aggregate  purchase  price,
including  cash  and  stock  payments  for new  acquisitions  (including  pooled
entities),  was $559  million,  $820 million and $378 million in 1999,  1998 and
1997, respectively.  The aggregate purchase price for new acquisitions accounted
for as purchases and equity investments was $293 million, $405 million, and $144
million in 1999, 1998, and 1997, respectively.
1999
In 1999,  the Company paid $189 million in cash and issued  8,393,893  shares of
its common stock to acquire 56 companies. Of the acquisitions, 52 were accounted
for under the purchase  method of accounting  and 4 were accounted for under the
pooling  of  interests  method.  The  Company  also  recorded  a  liability  for
acquisition   related  deferred  payments  of  $28  million,   for  cases  where
contingencies related to acquisitions have been resolved.

For those entities accounted for as purchase transactions, the purchase price of
the acquisitions  has been allocated to assets acquired and liabilities  assumed
based on  estimated  fair  values.  The results of  operations  of the  acquired
companies  were included in the  consolidated  results of the Company from their
respective  acquisition dates which occurred  throughout the year. The companies
acquired  in  transactions  accounted  for as  purchases  included  The  Cassidy
Companies,  Inc.,  Spedic  France  S.A.,  Mullen  Advertising,   Inc.,  and  PDP
Promotions UK Ltd. None of the  acquisitions  was  significant  on an individual
basis.

In connection  with the 1999 purchase  transactions,  goodwill of  approximately
$254 million was  recorded.  The  purchase  price  allocations  made in 1999 are
preliminary and subject to adjustment.  Goodwill  related to the acquisitions is
being amortized on a straight-line basis over their estimated useful lives.

On  December  1, 1999,  the Company  acquired  Brands  Hatch  Leisure  Plc.  for
5,158,122  shares of stock.  The acquisition has been accounted for as a pooling
of interests.  Additionally,  during 1999 the Company  issued  641,596 shares to
acquire  3  other  companies  which  have  been  accounted  for as  poolings  of
interests.

The following  unaudited pro forma data  summarize the results of operations for
the periods indicated as if the 1999 purchase acquisitions had been completed as
of January 1, 1998. The pro forma data give effect to actual  operating  results
prior to the acquisition,  adjusted to include the estimated pro forma effect of
interest expense,  amortization of intangibles and income taxes. These pro forma
amounts do not purport to be  indicative of the results that would have actually
been  obtained if the  acquisitions  occurred as of the beginning of the periods
presented or that may be obtained in the future.

For the year ended December 31, 1999

(Amounts in thousands except per share data)

                                    Pre-        Pro forma IPG
                                 acquisition      with 1999
                     IPG           results      acquisitions
                (as reported)    (unaudited)     (unaudited)
                -------------    -----------     -----------
Revenues          $4,977,823      $104,529       $5,082,352
Net income           331,287         7,101          338,388

Earnings per share:

     Basic              1.11                           1.14
     Diluted            1.07                           1.10

Net income  amounts  shown in the table above  include  restructuring  and other
merger related costs of $51.4 million, net of tax.
For the year ended December 31, 1998

(Amounts in thousands except per share data)

                                  Results      Pro forma IPG
                                  of 1999         with 1999
                     IPG        acquisitions    acquisitions
                (as reported)    (unaudited)     (unaudited)
                -------------    -----------     -----------
Revenues         $4,218,657       $446,833       $4,665,490
Net income          339,907         15,819          355,726

Earnings per share:

     Basic             1.15                            1.21
     Diluted           1.12                            1.17

Unaudited  pro forma  consolidated  results  after  giving  effect  to  business
acquired in  purchase  transactions  during 1998 would not have been  materially
different from the reported amounts for 1998.

1998
In 1998,  14,956,534  shares of the  Company's  common  stock  were  issued  for
acquisitions  accounted for as poolings of interests.  The companies  pooled and
the respective  shares of the Company's common stock issued were:  International
Public Relations Plc. - 5,280,346 shares,  Hill Holliday - 4,124,868 shares, The
Jack Morton Company - 4,271,992 shares,  Carmichael Lynch, Inc. - 973,808 shares
and KBA Marketing - 305,520 shares.

In 1998,  the Company paid $282 million in cash and issued  2,718,504  shares of
its common stock to acquire 77 companies,  all of which have been  accounted for
as purchases. These acquisitions included Gillespie, Ryan McGinn, CSI, Flammini,
Gingko,  Defederico,  Herrero Y Ochoa, Infratest Burke AG, CF Group,  MarketMind
Technologies,  and  Ross-Cooper-Lund.  The Company also recorded a liability for
acquisition related deferred payments of $24 million.

1997
In  1997,  the  Company  issued  10,789,079  shares  of  its  common  stock  for
acquisitions  accounted  for as poolings  of  interests.  Some of the  companies
pooled and the  respective  shares of the  Company's  common  stock issued were:
Complete Medical Group - 1,417,578 shares, The MBL Group plc - 1,126,114 shares,
Prognostics - 1,425,123 shares, Integrated Communications Corporation- 1,170,108
shares,  Advantage  International  -  1,158,412  shares and  Ludgate - 1,078,918
shares.  Additional  companies  accounted  for as poolings of interests  include
Adler Boschetto Peebles, Barnett Fletcher, Davies Baron, Diefenbach Elkins, D.L.
Blair, Rubin Barney & Birger, Inc. and Technology Solutions Inc.

In 1997,  the  Company  also paid  $101.1  million in cash and issued  2,792,950
shares of its common  stock for  acquisitions  accounted  for as  purchases  and
equity  investments.   These  acquisitions  included  Marketing  Corporation  of
America,  Medialog, The Sponsorship Group,  Kaleidoscope and Addis Wechsler (51%
interest).  The Company  increased its interest in Campbell  Mithun Esty by 25%.
The Company also recorded a liability for acquisition  related deferred payments
of $38 million.

Deferred Payments
Certain of the Company's acquisition agreements provide for deferred payments by
the  Company,  contingent  upon  future  revenues  or profits  of the  companies
acquired.  Deferred  payments  of both cash and shares of the  Company's  common
stock for prior years'  acquisitions  were $210  million,  $84 million,  and $51
million in 1999, 1998 and 1997, respectively.  Such payments are capitalized and
recorded as goodwill.
Investments
During 1999,  the Company sold a portion of its  investments  in Lycos and USWEB
for combined  proceeds of approximately $56 million.  Additionally,  the Company
sold its minority  investment  in Nicholson  NY, Inc. to Icon for $19 million in
shares of Icon's common stock.

During 1998, the Company sold a portion of its investments in USWEB,  CKS Group,
Inc.  and Lycos with  combined  proceeds of  approximately  $20  million.  These
investments are being accounted for as available-for-sale  securities,  pursuant
to the requirements of SFAS 115.

During 1997,  the Company sold its  investment  in All American  Communications,
Inc. for approximately $77 million.

Restatement
As  discussed  in Note 16, the Company  acquired  Deutsch in November  2000 in a
transaction which was accounted for as a pooling of interests.  The accompanying
consolidated  financial  statements,  including  the  related  notes,  have been
restated  as of  the  earliest  period  presented  to  include  the  results  of
operations, financial position and cash flows of Deutsch.

In April 2000,  the Company  acquired NFO in a  transaction  accounted  for as a
pooling of interests.  The results of NFO and several other recent  acquisitions
accounted for as poolings of interests have been included in previously restated
financial statements.

Revenue and net income for Deutsch  included  in the  supplemental  consolidated
statement  of income for the years ending  December 31, 1999,  1998 and 1997 are
summarized below.

                                                          Net Income/
                                           Revenue          (Loss)
                                          ----------      -----------
For the year ended December 31, 1999:

     As Previously Restated               $4,892,912        $315,243
     Deutsch                                  84,911          16,044
     As Restated                          $4,977,823        $331,287

For the year ended December 31, 1998:

     As Previously Restated               $4,167,788        $333,593
     Deutsch                                  50,869           6,314
     As Restated                          $4,218,657        $339,907

For the year ended December 31, 1997:

     As Previously Restated               $3,582,601        $220,211
     Deutsch                                  28,105           3,973
     As Restated                          $3,610,706        $224,184

Prior to its acquisition by the Company, Deutsch elected to be treated as an "S"
Corporation  under  applicable  sections of the Internal Revenue Code as well as
for state income tax  purposes.  Accordingly,  income tax expense was lower than
would have been the case had Deutsch been treated as a "C" Corporation.  Deutsch
became a "C"  Corporation upon its  acquisition  by the Company.  On a pro forma
basis,  assuming "C" Corporation  status, net income for Deutsch and the Company
would have been as follows:
(Dollars in thousands)

                                              1999       1998       1997
                                           -------------------------------
   Deutsch, as reported                     $ 16,044   $  6,314   $  3,973

   Deutsch, pro forma                          9,518      3,833      2,431
                                           -------------------------------
   Pro forma tax adjustment                   (6,526)    (2,481)    (1,542)
                                           -------------------------------
   IPG, as restated                          331,287    339,907    224,184
                                           -------------------------------
   IPG, pro forma                           $324,761   $337,426   $222,642
                                           ===============================

NOTE 5:  PROVISION FOR INCOME TAXES
The Company  accounts for income taxes under  Statement of Financial  Accounting
Standards No. 109 (SFAS 109), "Accounting for Income Taxes". SFAS 109 applies an
asset and  liability  approach  that  requires the  recognition  of deferred tax
assets and liabilities  with respect to the expected future tax  consequences of
events that have been recognized in the  consolidated  financial  statements and
tax returns.

The components of income before provision for income taxes are as follows:

(Dollars in thousands)                     1999            1998           1997
                                         ------            ----           ----
Domestic                                 $365,118        $322,651       $201,359
Foreign                                   235,599         284,204        238,884
                                         ---------------------------------------
Total                                    $600,717        $606,855       $440,243
                                         =======================================

The provision for income taxes consisted of:

Federal Income Taxes (Including
   Foreign Withholding Taxes):
  Current                                $ 92,018        $110,226       $ 75,736
  Deferred                                 19,891           4,335          3,683
                                         ---------------------------------------
                                          111,909         114,561         79,419
                                         ---------------------------------------
State and Local Income Taxes:
  Current                                  23,168          23,713         24,384
  Deferred                                  4,252             802            286
                                         ---------------------------------------
                                           27,420          24,515         24,670
                                         ---------------------------------------

Foreign Income Taxes:
  Current                                 119,469         123,669         90,113
  Deferred                                (14,827)        (17,109)         3,463
                                         ---------------------------------------
                                          104,642         106,560         93,576
                                         ---------------------------------------
Total                                    $243,971        $245,636       $197,665
                                         =======================================
At December 31, 1999 and 1998 the deferred tax assets/(liabilities) consisted of
the following items:

(Dollars in thousands)                                      1999           1998
                                                            ----           ----
Postretirement/postemployment benefits                  $ 52,317       $ 49,207
Deferred compensation                                      4,940         34,285
Pension costs                                             10,036         13,715
Depreciation                                              (8,537)       (10,953)
Rent                                                      (8,674)        (6,424)
Interest                                                   4,100          4,598
Accrued reserves                                           9,399          9,155
Investments in equity securities                        (140,320)       (10,677)
Tax loss/tax credit carryforwards                         47,783         47,293
Restructuring and other merger related costs               9,497             --
Other                                                       (196)        (6,032)
                                                        -----------------------
Total deferred tax assets / (liabilities)                (19,655)       124,167
Deferred tax valuation allowance                          26,233         31,411
                                                        -----------------------
Net deferred tax assets / (liabilities)                 $(45,888)      $ 92,756
                                                        =======================

The valuation  allowance of $26.2 million and $31.4 million at December 31, 1999
and  1998,  respectively,  represents  a  provision  for  uncertainty  as to the
realization of certain  deferred tax assets,  including U.S. tax credits and net
operating loss carryforwards in certain jurisdictions. The change during 1999 in
the  deferred  tax  valuation  allowance  primarily  relates  to  changes in the
deferred  compensation  tax  item,  net  operating  loss  carryforwards  and tax
credits.   At  December  31,  1999,  there  were  $9.7  million  of  tax  credit
carryforwards  with  expiration  periods  through  2004 and net  operating  loss
carryforwards  with a tax  effect  of  $38.1  million  with  various  expiration
periods.

A  reconciliation  of the effective income tax rate as shown in the consolidated
statement of income to the federal statutory rate is as follows:

                                                    1999      1998      1997
                                                    ----      ----      ----
Statutory federal income tax rate                   35.0%     35.0%     35.0%
State and local income taxes,
  net of federal income tax benefit                  2.8       3.7       4.1
Impact of foreign operations, including
  withholding taxes                                  0.8       0.4       0.3
Goodwill and intangible assets                       3.6       2.8       2.7
Effect of pooled companies                           0.3      (0.8)      2.7
Other                                               (1.9)     (0.6)      0.1
                                                    ------------------------
Effective tax rate                                  40.6%     40.5%     44.9%
                                                    ========================

The  Company's  effective  income tax rate was 40.6% in 1999,  40.5% in 1998 and
44.9% in 1997. The higher rate in 1997 was largely  attributable  to the special
compensation charges recorded by Hill Holliday.
As described  in Note 4, prior to its  acquisition  by the Company,  Deutsch had
elected to be  treated as an "S"  Corporation  and  accordingly,  its income tax
expense  was lower than it would have been had  Deutsch  been  treated as an "S"
Corporation.  Deutsch  became  a "C"  Corporation  upon its  acquisition  by the
Company.  Assuming Deutsch had been a "C" Corporation  since 1997, the pro forma
effective  tax rate for the  Company  would  have  been  41.7%,  40.9% and 45.2%
respectively for 1999, 1998 and 1997.

The total amount of  undistributed  earnings of foreign  subsidiaries for income
tax purposes  was  approximately  $585  million at December 31, 1999.  It is the
Company's   intention  to  reinvest   undistributed   earnings  of  its  foreign
subsidiaries and thereby indefinitely postpone their remittance. Accordingly, no
provision  has been made for foreign  withholding  taxes or United States income
taxes which may become payable if undistributed earnings of foreign subsidiaries
were paid as dividends to the Company.  The additional  taxes on that portion of
undistributed  earnings  which is available for  dividends  are not  practicably
determinable.

NOTE 6: SUPPLEMENTAL CASH FLOW INFORMATION
Cash and Cash Equivalents

For purposes of the consolidated  statement of cash flows, the Company considers
all highly liquid investments with a maturity of three months or less to be cash
equivalents.

Income Tax and Interest Payments
Cash paid for income taxes was approximately $186 million, $200 million and $133
million  in  1999,  1998  and  1997,   respectively.   Interest   payments  were
approximately $57 million,  $40 million and $32 million in 1999, 1998, and 1997,
respectively.

Noncash Financing Activity
During  1997,  the Company  redeemed  all  outstanding  issues  under the 3 3/4%
Convertible   Subordinated  Debentures  due  2002.   Substantially  all  of  the
outstanding  debentures were converted into  approximately 8.6 million shares of
the Company's common stock.

Acquisitions
As more  fully  described  in Note  4,  the  Company  issued  8,393,893  shares,
17,942,578  shares,  and  10,518,628  shares of the  Company's  common  stock in
connection with acquisitions during 1999, 1998 and 1997,  respectively.  Details
of  businesses  acquired in  transactions  accounted  for as  purchases  were as
follows:

(Dollars in thousands)

                                             1999          1998         1997
                                             ----          ----         ----
Fair value of assets acquired             $627,005      $726,601     $303,969
Liabilities assumed                        148,637       319,676       90,303
                                          -----------------------------------
Net assets acquired                        478,368       406,925      213,666
Less: noncash consideration                186,210        91,077       96,814
Less: cash acquired                         43,752        59,853        6,535
                                          -----------------------------------
Net cash paid for acquisitions            $248,406      $255,995     $110,317
                                          ===================================
The amounts  shown above  exclude  future  deferred  payments due in  subsequent
years, but include cash deferred  payments of $120 million,  $55 million and $30
million made during 1999, 1998 and 1997, respectively.

NOTE 7: INCENTIVE PLANS
The 1997  Performance  Incentive  Plan  ("1997 PIP Plan")  was  approved  by the
Company's  stockholders  in May 1997 and  includes  both  stock  and cash  based
incentive  awards.  The maximum  number of shares of the Company's  common stock
which may be  granted  in any year  under the 1997 PIP Plan is equal to 1.85% of
the total  number of shares of the  Company's  common stock  outstanding  on the
first day of the year adjusted for additional  shares as defined in the 1997 PIP
Plan document (excluding management incentive compensation  performance awards).
The 1997 PIP Plan also  limits the number of shares  available  with  respect to
awards  made to any one  participant  as well as  limiting  the number of shares
available  under certain  awards.  Awards made prior to the 1997 PIP Plan remain
subject to the respective terms and conditions of the predecessor plans.  Except
as otherwise noted,  awards under the 1997 PIP Plan have terms similar to awards
made under the respective predecessor plans.

Stock Options
Outstanding  options  are  generally  granted  at the fair  market  value of the
Company's common stock on the date of grant and are exercisable as determined by
the  Compensation  Committee  of  the  Board  of  Directors  (the  "Committee").
Generally,  options become exercisable between two and five years after the date
of grant and expire ten years from the grant date.

Following is a summary of stock option transactions during the three-year period
ended December 31:

                               1999                1998                1997
                        --------------------------------------------------------
                                  Weighted            Weighted          Weighted
                                   Average             Average           Average
                                  Exercise            Exercise          Exercise
(Shares in thousands)   Shares       Price   Shares      Price    Shares   Price
                        --------------------------------------------------------
Shares under option,
  beginning of year     29,505     $ 19      25,466     $ 13     25,230    $ 11
Options granted          4,743       39       8,399       32      4,830      19
Options exercised       (4,497)      11      (3,108)       8     (3,549)      8
Options cancelled       (2,124)      25      (1,252)      15     (1,045)     12
                        ------               ------              ------
Shares under option,
   end of year          27,627     $ 23      29,505     $ 19     25,466    $ 13
                        ======               ======              ======
Options exercisable
   at year-end           7,955     $ 13       6,954     $ 11      9,158    $  9
The following table summarizes  information about stock options  outstanding and
exercisable at December 31, 1999:

(Shares in thousands)

                                 Weighted-
                                   Average   Weighted-                Weighted-
                      Number     Remaining     Average        Number    Average
Range of         Outstanding   Contractual    Exercise   Exercisable   Exercise
Exercise Prices  at 12/31/99          Life       Price   at 12/31/99      Price
-------------------------------------------------------------------------------
$ 4.33 to $9.99       2,990           2            $ 7         2,865        $ 8

 10.00 to 14.99       3,422           5             11         3,093         11

 15.00 to 24.99       9,996           7             17         1,666         20

 25.00 to 56.28      11,220           9             36           612         30

Employee Stock Purchase Plan
Under the Employee  Stock  Purchase Plan (ESPP),  employees may purchase  common
stock of the Company  through  payroll  deductions  not  exceeding  10% of their
compensation.  The  price  an  employee  pays for a share of stock is 85% of the
market  price  on the  last  business  day  of the  month.  The  Company  issued
approximately .5 million shares in 1999, 1998, and 1997, respectively, under the
ESPP. An additional  15.5 million  shares were reserved for issuance at December
31, 1999.

SFAS 123 Disclosures
The  Company  applies  the  disclosure  principles  of  Statement  of  Financial
Accounting   Standards  No.  123  (SFAS  123),   "Accounting   for   Stock-Based
Compensation".  As permitted by the provisions of SFAS 123, the Company  applies
APB  Opinion  25,  "Accounting  for Stock  Issued  to  Employees",  and  related
interpretations in accounting for its stock-based  employee  compensation plans.
If compensation  cost for the Company's stock option plans and its ESPP had been
determined  based on the fair  value at the grant  dates as defined by SFAS 123,
the  Company's  pro forma net income and  earnings  per share would have been as
follows:

(Dollars in Thousands Except Per Share Data)

                                       1999             1998              1997
                                       ----             ----              ----
Net Income            As reported    $331,287          $339,907         $224,184
                      Pro forma      $303,645          $322,084         $211,223

Earnings Per Share

        Basic         As reported    $   1.11          $   1.15         $    .79
                      Pro forma      $   1.02          $   1.09         $    .74
        Diluted       As reported    $   1.07          $   1.12         $    .76
                      Pro forma      $   0.99          $   1.06         $    .72

For  purposes  of this pro forma  information,  the fair value of shares  issued
under  the ESPP  was  based  on the 15%  discount  received  by  employees.  The
weighted-average  fair  value  (discount)  on the  date of  purchase  for  stock
purchased under this plan was $5.28,  $3.82,  and $2.68 in 1999, 1998, and 1997,
respectively.
The weighted  average fair value of options granted during 1999,  1998, and 1997
was $12.94, $8.85, and $5.91, respectively. The fair value of each option grant

has been estimated on the date of grant using the  Black-Scholes  option-pricing
model with the following assumptions:

                                              1999           1998          1997
                                              ----           ----          ----
Expected option lives                       6 years        6 years       6 years
Risk free interest rate                      5.72%          4.87%         6.51%
Expected volatility                         19.73%         19.17%        19.17%
Dividend yield                                .81%           .95%          1.3%

As required by SFAS 123,  this pro forma  information  is based on stock  awards
beginning in 1995 and accordingly is not likely to be  representative of the pro
forma  effects in future  years  because  options  vest over  several  years and
additional awards generally are made each year.

Restricted Stock
Restricted  stock  issuances  are  subject to certain  restrictions  and vesting
requirements  as determined by the  Committee.  The vesting  period is generally
five to seven  years.  No monetary  consideration  is paid by a recipient  for a
restricted  stock  award  and the  grant  date  fair  value of these  shares  is
amortized over the restriction  periods. At December 31, 1999, there was a total
of 7.0 million shares of restricted  stock  outstanding.  During 1999,  1998 and
1997, the Company awarded .9 million shares,  1.3 million shares and 1.4 million
shares of  restricted  stock  with a  weighted-average  grant date fair value of
$40.03, $28.99 and $19.48, respectively.  The cost recorded for restricted stock
awards  in 1999,  1998 and 1997 was  $25.9  million,  $20.3  million,  and $16.2
million, respectively.

Performance Units
Performance  units have been awarded to certain key employees of the Company and
its  subsidiaries.  The ultimate value of these  performance units is contingent
upon the annual  growth in profits (as  defined) of the Company,  its  operating
components or both, over the performance  periods. The awards are generally paid
in cash.  The  projected  value of these  units is  accrued by the  Company  and
charged  to  expense  over  the  performance   period.   The  Company   expensed
approximately $27 million,  $20 million and $20 million in 1999, 1998, and 1997,
respectively.

Hill Holliday
Due to the merger of Hill Holliday and the Company,  Hill Holliday  recognized a
one-time compensation charge of approximately $32 million in 1997. Hill Holliday
had an Equity  Participation  Plan and  certain  other  agreements  for  various
members of management,  which provided for  participants to receive a portion of
the proceeds in the event of the sale or merger of Hill Holliday.  Also included
in the charge were costs  primarily  relating  to  consulting  and  supplemental
retirement agreements.

NOTE 8: RETIREMENT PLANS
Defined Benefit Pension Plans
Through March 31, 1998 the Company and certain of its domestic  subsidiaries had
a defined  benefit plan  ("Domestic IPG Plan") which covered  substantially  all
regular domestic employees. Effective April 1, 1998 this Plan was curtailed, and
participants  with five or less  years of  service  became  fully  vested in the
Domestic Plan.  Participants  with five or more years of service as of March 31,
1998 retain their vested balances and participate in a new compensation plan.
Under  the new plan,  each  participant's  account  is  credited  with an annual
allocation,  equal to the  projected  discounted  pension  benefit  accrual plus
interest,  while they continue to work for the Company.  Participants  in active
service are eligible to receive up to ten years of allocations  coinciding  with
the number of years of service  with the  Company  after  March 31,  1998.  As a
result of the change in the  Domestic  Plan,  the  Company  recorded  charges of
approximately $16.7 million in the fourth quarter of 1997.

Net periodic  pension  costs for the  Domestic IPG Plan for 1999,  1998 and 1997
were $1.3 million,  $.9 million and $15.0  million,  respectively.  The 1997 net
periodic pension cost included a $10 million  curtailment  charge and $4 million
of service costs.

Additionally,  NFO  maintains  a defined  benefit  plan  ("NFO  Plan")  covering
approximately one half of NFO's U.S.  employees.  The periodic pension costs for
this plan for  1999,  1998,  and 1997  were $.8  million,  $.6  million  and $.6
million, respectively.

The Company's  stockholders' equity balance includes a minimum pension liability
of $18.6 million, $37.2 million and $13.2 million at December 31, 1999, 1998 and
1997, respectively.

The Company also has several  foreign  pension plans in which benefits are based
primarily on years of service and  employee  compensation.  It is the  Company's
policy  to fund  these  plans in  accordance  with  local  laws and  income  tax
regulations.

Net periodic  pension costs for foreign  pension  plans for 1999,  1998 and 1997
included the following components:

(Dollars in thousands)

                                                   1999        1998        1997
                                                   ----        ----        ----
Service cost                                   $  9,619    $  6,847    $  5,460
Interest cost                                    11,759      10,908      10,633
Expected return on plan assets                   (9,380)     (9,437)    (10,537)
Amortization of unrecognized
transition obligation                               390         373         324
Amortization of
prior service cost                                  833         482         552
Recognized actuarial loss / (gain)                  508         (70)     (1,440)
Other                                                (9)         --          --
                                               --------------------------------
Net periodic pension cost                      $ 13,720    $  9,103    $  4,992
                                               ================================
The following table sets forth the change in the benefit obligation,  the change
in plan assets,  the funded status and amounts  recognized for the pension plans
in the Company's consolidated balance sheet at December 31, 1999, and 1998:

(Dollars in thousands)
                                         Domestic                  Foreign
                                       Pension Plans             Pension Plans
                               ------------------------------------------------
                                    1999         1998         1999         1998
                               ------------------------------------------------
Change in benefit obligation
Beginning obligation           $ 166,538    $ 141,376    $ 220,964    $ 179,016
Service cost                         768          627        9,619        6,847
Interest cost                      9,869       10,367       11,759       10,908
Benefits paid                    (12,671)     (12,899)     (12,777)      (9,447)
Participant contributions              -            -        2,410        1,606
Actuarial (gains) / losses       (12,626)      27,067       (7,264)      29,882
Currency effect                       --           --        1,440        5,245
Other                                 --           --          352       (3,093)
                               ------------------------------------------------
Ending obligation                151,878      166,538      226,503      220,964
                               ------------------------------------------------
Change in plan assets
Beginning fair value             129,755      122,157      161,975      145,942
Actual return on plan assets      15,354       12,292       30,651       17,363
Employer contributions             3,072        8,205        7,887        2,473
Participant contributions             --           --        2,410        1,606
Benefits paid                    (12,671)     (12,899)     (12,777)      (9,447)
Currency effect                       --           --          156        1,300
Other                                 --           --        2,437        2,738
                               ------------------------------------------------
Ending fair value                135,510      129,755      192,739      161,975
                               ------------------------------------------------
Funded status of the plans       (16,368)     (36,783)     (33,764)     (58,989)
Unrecognized net actuarial
  loss/(gain)                     18,927       38,439      (18,163)      11,536
Unrecognized prior service cost      (13)         (20)       3,704        2,921
Unrecognized transition cost          --           --        1,838        3,796
                               ------------------------------------------------
Net asset/(liability)
  recognized                   $   2,546    $   1,636   $  (46,385)   $ (40,736)
                               ================================================

At December 31, 1999 and 1998,  the assets of the Domestic  Plan and the foreign
pension plans were primarily invested in fixed income and equity securities.

For the Domestic Plans, discount rates of 7.75% in 1999, 6.75% to 7% in 1998 and
7.25% to 7.5% in 1997 and salary  increase  assumptions of 4.5% in 1999 (the NFO
Plan)  4.5% to 6% in 1998 and 4.75% to 6% in 1997 were used in  determining  the
actuarial present value of the projected benefit obligation. The expected return
of Domestic Plan assets was 9% to 9.5% in 1999 and 9% to 10% in each of 1998 and
1997. For the foreign pension plans, discount rates ranging from 3.75% to 14% in
1999, 4% to 14% in 1998, and 3.5% to 14% in 1997 and salary increase assumptions
ranging  from 3% to 10% in 1999 and 2% to 10% in both 1998 and 1997 were used in
determining the actuarial present value of the projected benefit obligation. The
expected rates of return on the assets of the foreign  pension plans ranged from
2% to 14% in 1999, 2% to 14% in 1998 and 3.5% to 14% in 1997.
The projected benefit obligation,  accumulated benefit obligation and fair value
of plan assets for the Domestic  Plan were $152  million,  $152 million and $136
million,  respectively, as of December 31, 1999, and $167 million, $167 million,
and $130 million,  respectively,  as of December 31, 1998. The projected benefit
obligation,  accumulated benefit  obligation,  and fair value of plan assets for
the foreign pension plans with accumulated benefit obligations in excess of plan
assets were $90 million, $72 million and $9 million respectively, as of December
31,  1999,  and $81  million,  $74  million and $3 million  respectively,  as of
December 31, 1998.

Other Benefit Arrangements
The Company also has special  unqualified  deferred  benefit  arrangements  with
certain key  employees.  Vesting is based upon the age of the  employee  and the
terms of the employee's  contract.  Life insurance contracts have been purchased
in amounts which may be used to fund these arrangements.

In addition to the defined  benefit  plans  described  above,  the Company  also
sponsors  other  defined   contribution   plans  ("Savings  Plan")  that  covers
substantially   all  domestic   employees  of  the  Company  and   participating
subsidiaries.  The Savings Plan permits  participants to make contributions on a
pre-tax and/or after-tax  basis. The Savings Plan allows  participants to choose
among  several  investment  alternatives.  The  Company  matches  a  portion  of
participants'  contributions  based  upon the  number of years of  service.  The
Company  contributed  $12 million,  $9.3 million and $7.2 million to the Savings
Plan in 1999, 1998 and 1997, respectively.

Postretirement Benefit Plans
The Company and its  subsidiaries  provide  certain  postretirement  health care
benefits  for  employees  who were in the employ of the Company as of January 1,
1988,  and life  insurance  benefits for employees who were in the employ of the
Company as of December 1, 1961. The plans cover certain  domestic  employees and
certain key  employees  in foreign  countries.  Effective  January 1, 1993,  the
Company's plan covering  postretirement  medical benefits was amended to place a
cap on annual benefits payable to retirees.

The coverage is self-insured, but is administered by an insurance company.

The Company  accrues the expected  cost of  postretirement  benefits  other than
pensions over the period in which the active  employees become eligible for such
postretirement benefits.

The net periodic  expense for these  postretirement  benefits for 1999, 1998 and
1997 was $2.2 million, $3 million and $2.8 million, respectively.
The following table sets forth the change in benefit obligation,  change in plan
assets,  funded status and amounts  recognized for the Company's  postretirement
benefit plans in the consolidated balance sheet at December 31, 1999 and 1998:

(Dollars in thousands)
                                                             1999         1998
                                                           ---------------------
Change in benefit obligation
Beginning obligation                                       $ 41,793    $ 42,863
Service cost                                                    477         785
Interest cost                                                 2,795       3,154
Participant contributions                                        90          77
Benefits paid                                                (2,020)     (1,722)
Plan amendments                                                  --         (68)
Actuarial gain                                               (4,300)     (3,296)
                                                           --------------------
Ending obligation                                            38,835      41,793
                                                           --------------------
Change in plan assets
Beginning fair value                                             --          --
Actual return on plan assets                                     --          --
Employer contributions                                        1,930       1,645
Participant contributions                                        90          77
Benefits paid                                                (2,020)     (1,722)
                                                           --------------------
Ending fair value                                                --          --
                                                           --------------------
Funded status of the plans                                  (38,835)    (41,793)
Unrecognized net actuarial gain                              (9,440)     (5,234)
Unrecognized prior service cost                              (1,951)     (2,892)
                                                           --------------------
Net amount recognized                                      $(50,226)   $(49,919)
                                                           ====================

Discount  rates of 7.5% to 7.75%  in 1999,  6.75% in 1998 and  7.25% in 1997 and
salary increase assumption of 4% to 6% in 1999 and 1998, and 4.75% to 6% in 1997
were used in determining the accumulated postretirement benefit obligation. A 7%
to 7.4% and an 8% increase  in the cost of covered  health  care  benefits  were
assumed  for 1999 and 1998,  respectively.  This  rate is  assumed  to  decrease
incrementally  to  approximately  5.5% in the year 2002 and remain at that level
thereafter.  The  health  care  cost  trend  rate  assumption  does  not  have a
significant effect on the amounts reported.

Postemployment Benefits
In accordance with SFAS 112 "Employers' Accounting for Postemployment Benefits",
the Company  accrues costs  relating to certain  benefits  including  severance,
worker's compensation and health care coverage over an employee's service life.

The Company's  liability for postemployment  benefits totaled  approximately $64
million  and $50 million at December  31,  1999 and 1998,  respectively,  and is
included in deferred  compensation and reserve for termination  allowances.  The
net periodic  expense  recognized in 1999, 1998 and 1997 was  approximately  $34
million, $32 million and $31 million, respectively.
NOTE 9: SHORT-TERM BORROWINGS
The  Company and its  domestic  subsidiaries  have lines of credit with  various
banks.  These credit lines  permit  borrowings  at  fluctuating  interest  rates
determined  by the banks.  Short-term  borrowings  by  subsidiaries  outside the
United States principally consist of drawings against bank overdraft  facilities
and lines of credit.  These  borrowings  bear interest at the  prevailing  local
rates.  Where  required,  the  Company has  guaranteed  the  repayment  of these
borrowings.  Unused  lines of  credit by the  Company  and its  subsidiaries  at
December  31,  1999  and  1998   aggregated   $430  million  and  $458  million,
respectively.  The  weighted-average  interest rate on  outstanding  balances at
December 31, 1999 was approximately  5.8%.  Current maturities of long-term debt
are included in the payable to banks balance.

NOTE 10:  LONG-TERM DEBT
Long-term debt at December 31 consisted of the following:

(Dollars in thousands)
                                                               1999       1998
                                                           ---------------------
Convertible Subordinated Notes - 1.87%                     $  304,076   $     --
Convertible Subordinated Notes - 1.80%                        214,414    207,927
Term loans - 4.20% to 7.91% (6.45% to 7.91% in 1998)          289,621    280,320
Senior Notes Payable to Banks under a Revolving Credit
  Agreement Due March 2003 - 4.3% to 6.9%                      35,603     53,045
Senior Notes Payable - 6.83% to 7.52%                         102,000     95,000
Subordinated Notes - 9.84%                                     25,000     17,000
Germany mortgage note payable - 7.64%                          26,779     31,680
Other mortgage notes payable and
  long-term loans - 2.80% to 9.84%                             75,026     44,370
                                                           ---------------------
                                                            1,072,519    729,342
Less: current portion                                          23,912     22,898
                                                           ---------------------
Long-term debt                                             $1,048,607   $706,444
                                                           =====================

On June 1, 1999,  the Company  issued $361  million  face amount of  Convertible
Subordinated  Notes due 2006. The 2006 notes were issued at an original price of
83% of the face amount,  generating proceeds of approximately $300 million.  The
notes are convertible into 6.4 million shares of the Company's common stock at a
conversion  rate of 17.616 shares per $1,000 face amount.  The fair value of the
2006 notes as of December  31,  1999,  was  approximately  $416  million and was
determined by obtaining quotes from brokers.

On  September  16,  1997,  the  Company  issued  $250  million  face  amount  of
Convertible  Subordinated  Notes due 2004 ("2004  Notes")  with a coupon rate of
1.80%.  The 2004  Notes  were  issued  at an  original  price of 80% of the face
amount,  generating  proceeds  of  approximately  $200  million.  The  notes are
convertible  into  6.7  million  shares  of  the  Company's  common  stock  at a
conversion  rate of 26.772 shares per $1,000 face amount.  The fair value of the
2004 Notes as of  December  31,  1999 was  approximately  $392  million  and was
determined by obtaining quotes from brokers.

On March 9, 1998,  the  Company  entered  into a $75  million  revolving  credit
agreement.  The $75 million  revolving credit facility has an ultimate  maturity
date of March 2003 and enables the Company to borrow in multiple  currencies  at
interest rates tied to LIBOR or the prime rate, at its option.
In conjunction with the Infratest Burke  acquisition and the financing  thereof,
the Company  amended  its $75  million  revolving  credit  facility  and its $40
million  Senior  Notes,  each  originally  dated March 9, 1998.  The  amendments
provide,  among other things, that the Company obligations will be guaranteed by
certain  subsidiaries of the Company. In addition,  the amendments increased the
rates at which interest  annually  accrues under the  obligations  from 6.43% to
6.83%.

The Senior  Notes  Payable  consist of four  private  placements  of $40 million
Senior Notes both dated March 9, 1998 due March 1, 2008, $17 million Series A

Senior Notes and $38 million  Series B Senior Notes dated  November 20, 1998 due
November 15, 2005 and November 15, 2008,  respectively,  and $7 million Series B
Senior Notes dated March 26 due November 15, 2008.

The Subordinated  Notes consist of the private  placement of $8 million on March
26,  1999,  and $17 million on November 20, 1998.  The  Subordinated  Notes bear
interest at the fixed annual rate of 9.84%,  mature  November 15, 2008,  and are
repayable in equal annual installments of $8.3 million beginning in 2006.

Under various loan agreements, the Company must maintain specified levels of net
worth and meet  certain  cash flow  requirements  and is limited in the level of
indebtedness.  The Company has complied with the limitations  under the terms of
these loan agreements.

Long-term  debt maturing over the next five years and  thereafter is as follows:
2000-$24 million;  2001-$44.8 million;  2002-$113.8 million; 2003-$83.4 million;
2004-$277.9 million, and $528.6 million thereafter.

See Note 13 for discussion of fair market value of the Company's long-term debt.

NOTE 11:  RESTRUCTURING AND OTHER MERGER RELATED COSTS
In October  1999,  the Company  announced  the merger of two of its  advertising
networks.  The networks  affected,  Lowe & Partners Worldwide and Ammirati Puris
Lintas were combined to form a new agency  network called Lowe Lintas & Partners
Worldwide.  The merger involves the  consolidation  of operations in Lowe Lintas
agencies  in  approximately  24 cities in 22  countries  around the world.  Once
complete, the newly merged agency network will have offices in over 80 countries
around the world.

During  the  fourth  quarter  of  1999,   the  Company  began   execution  of  a
comprehensive  restructuring  plan in  connection  with  the  merger.  The  plan
includes  headcount  reductions,  consolidation  of real  estate and the sale or
disposition of certain investments,  and is expected to be completed by June 30,
2000. The Company is pleased with the progress of the merger to date and expects
the total costs to be in line with its original estimate.

The total pre-tax cost of the restructuring  plan is expected to be between $170
and $190 million,  ($100 to $115 million,  net of tax). In the fourth quarter of
1999, the Company recognized pre-tax costs of $84.2 million ($51.4 million,  net
of tax or $.17 per diluted share),  with the remainder expected to be recognized
in the first two quarters of 2000.
A summary of the components of the total  restructuring and other merger related
costs,  together  with an  analysis  of the cash and  non-cash  elements,  is as
follows:

(Dollars in millions)

                                               1999            Cash     Non-Cash
                                              ----------------------------------
TOTAL BY TYPE
-------------
   Severance and termination costs            $44.9           $27.0        $17.9
   Fixed asset write-offs                      11.1              --         11.1
   Lease termination costs                      3.8             3.8           --
   Investment write-offs and other             24.4             1.1         23.3
                                              ----------------------------------
Total                                         $84.2           $31.9        $52.3
                                              ==================================

The severance and termination costs recorded in 1999 relate to approximately 230
employees who have been terminated or notified that they will be terminated. The
employee   groups   affected   include   executive   and  regional   management,
administrative,  account  management,  creative and media production  personnel,
principally  in the U.S.  and  U.K.  The  charge  related  to these  individuals
includes  the cost of  voluntary  programs  in certain  locations  and  includes
substantially all senior executives that will be terminated.  As of December 31,
1999, the amount accrued related to severance and termination was  approximately
$42.6 million.  During the fourth quarter of 1999, cash payments of $2.3 million
were made.

The fixed  assets  write-off  relates  largely to the  abandonment  of leasehold
improvements  as part of the merger.  The amount  recognized  in 1999 relates to
fixed asset write-offs in 6 offices principally in the United States.

Lease termination costs relate to the offices vacated as part of the merger. The
lease  terminations  are expected to be completed by mid-to-late  2000, with the
cash  portion to be paid out over a period of up to five  years.  As of December
31,  1999,  the  amount  accrued  related  to these  termination  costs was $3.8
million.

The  investment  write-offs  relate to the loss on sale or  closing  of  certain
business  units.  In 1999,  $23  million  has been  recorded  as a result of the
decision  to sell or  abandon  4  European  businesses.  In the  aggregate,  the
businesses  being  sold or  abandoned  represent  an  immaterial  portion of the
revenue  and  operations  of Lowe Lintas & Partners.  The  write-off  amount was
computed based upon the difference between the estimated sales proceeds (if any)
and the  carrying  value of the related  assets.  These  sales or  closures  are
expected to be completed by mid 2000.
NOTE 12:  GEOGRAPHIC AREAS
Long-lived assets and revenue are presented below by major geographic area:

(Dollars in thousands)
                                               1999         1998         1997
                                            -----------------------------------
Long-Lived Assets:
United States                               $1,784,072  $1,198,067   $  918,674
                                            -----------------------------------
International

United Kingdom                                 477,774     393,348      215,963
All other Europe                               685,521     641,895      505,797
Asia Pacific                                   151,083     141,113       94,432
Latin America                                   79,401      58,134       51,790
Other                                           76,269      50,853       42,041
                                            -----------------------------------
Total International                          1,470,048   1,285,343      910,023
                                            -----------------------------------
Total Consolidated                          $3,254,120  $2,483,410   $1,828,697
                                            ===================================

Revenue:
United States                               $2,560,161  $2,158,777   $1,852,959
                                            -----------------------------------
International

United Kingdom                                 527,250     450,103      353,086
All other Europe                             1,140,532     902,602      748,720
Asia Pacific                                   346,205     325,758      348,707
Latin America                                  213,260     232,940      204,894
Other                                          190,415     148,477      102,340
                                            -----------------------------------
Total International                          2,417,662   2,059,880    1,757,747
                                            -----------------------------------
Total Consolidated                          $4,977,823  $4,218,657   $3,610,706
                                            ===================================

Revenue is  attributed  to  geographic  areas  based on where the  services  are
performed.  Property and equipment is allocated  based upon  physical  location.
Intangible  assets,  other assets,  and  investments  are allocated based on the
location of the related operation.

The largest client of the Company  contributed  approximately  7% in 1999, 7% in
1998 and 9% in 1997 to revenue.  The Company's second largest client contributed
approximately 4% in 1999, 4% in 1998 and 4% in 1997 to revenue.

Dividends  received from foreign  subsidiaries were approximately $47 million in
1999, $51 million in 1998 and $41 million in 1997.

Consolidated net income includes losses from exchange and translation of foreign
currencies  of $5.6  million,  $3.2 million and $5.6  million in 1999,  1998 and
1997, respectively.
NOTE 13:  FINANCIAL INSTRUMENTS
Financial assets, which include cash and cash equivalents, marketable securities
and receivables,  have carrying values which  approximate fair value.  Long-term
equity securities, included in other investments and miscellaneous assets in the
Consolidated  Balance Sheet, are deemed to be  available-for-sale  as defined by
SFAS 115 and accordingly are reported at fair value,  with net unrealized  gains
and losses reported within stockholders' equity.

The following table  summarizes net unrealized  gains and losses before taxes at
December 31:

(Dollars in millions)

                                              1999       1998       1997
                                             ---------------------------
   Cost                                      $172.3     $121.3     $61.1
   Unrealized gains / (losses)
     - gains                                  302.3       20.2      22.0
     - losses                                 (12.2)      (1.5)       --
                                             ---------------------------
   Net unrealized gains                       290.1       18.7      22.0
                                             ---------------------------
   Fair market value                         $462.4     $140.0     $83.1
                                             ===========================

Net of tax, net unrealized holding gains were $168 million,  $10 million and $12
million at December 31, 1999, 1998 and 1997, respectively.

The above pre-tax gain amounts are net of reclassifications of $13.1 million and
$6.5 million in 1999 and 1998, which represent  amounts  previously  recorded in
other comprehensive income.

During 1999, the Company expanded its investment in internet-service and related
companies.  In April  1999,  the  Company  invested  $20  million for a minority
interest  in Icon,  a Swedish  based  internet  consultancy.  Subsequently,  the
Company  increased its investment  through the contribution of other investments
and through  additional  cash  purchases.  At December 31, 1999, the fair market
value of the Company's investment in Icon was $322 million.

Financial  liabilities  with carrying  values  approximating  fair value include
accounts payable and accrued expenses, as well as payable to banks and long-term
debt. As of December 31, 1999, the 1.87% Convertible Subordinated Notes due 2006
had a cost basis of $304  million  with a market  value of $416  million.  As of
December 31, 1999, the 1.80% Convertible  Subordinated Notes due 2004 had a cost
basis of $214 million with a market  value of $392  million.  As of December 31,
1998,  the cost  basis of the 1.80%  Convertible  Subordinated  Notes  were $208
million with a market value of $283 million.  The fair values were determined by
obtaining  quotes from brokers (refer to Note 10 for  additional  information on
long-term debt). As of December 31, 1999, the 6.83% to 7.52% Notes Payable had a
total cost  basis of $102  million  with a market  value of $88  million.  As of
December  31,  1998,  the 4.3% to 7.52%  Notes  Payable  had a total  cost basis
approximately  the same as the market  value.  The fair value was  determined by
using the expected  future cash flows  discounted  at market  interest  rates as
adjusted for conversion privileges.
The Company occasionally uses forwards and options to hedge a portion of its net
investment in foreign  subsidiaries  and certain  intercompany  transactions  in
order to  mitigate  the impact of changes in foreign  exchange  rates on working
capital.  The  notional  value and fair value of all  outstanding  forwards  and
options  contracts at the end of the year as well as the net cost of all settled
contracts during the year were not significant.

The  Company's  management  continuously  evaluates and attempts to mitigate its
exposure  to foreign  exchange,  economic  and  political  risks.  The  economic
developments  in  Brazil  did not  have a  significant  negative  impact  on the
Company,  and were  partially  offset by a favorable  impact due to the economic
recovery in Japan.

NOTE 14:  COMMITMENTS AND CONTINGENCIES
At December 31, 1999 the Company's  subsidiaries operating primarily outside the
United States were  contingently  liable for discounted notes receivable of $7.4
million.

The Company and its subsidiaries lease certain  facilities and equipment.  Gross
rental expense amounted to approximately $293 million for 1999, $257 million for
1998 and $225  million for 1997,  which was reduced by sublease  income of $17.2
million in 1999, $16.4 million in 1998 and $30.7 million in 1997.

Minimum rental commitments for the rental of office premises and equipment under
noncancellable  leases,  some of which  provide  for rental  adjustments  due to
increased  property taxes and operating  costs for 2000 and  thereafter,  are as
follows:

(Dollars in thousands)

                                 Gross Rental         Sublease
                                  Commitment           Income
                                  ----------           ------
Period
2000                               $198,255            $17,745
2001                                174,910             15,180
2002                                146,225             10,224
2003                                116,207              6,335
2004                                 98,444              1,390
2005 and thereafter                 391,697              2,014

Certain of the Company's acquisition agreements provide for deferred payments by
the  Company,  contingent  upon  future  revenues  or profits  of the  companies
acquired.  Such contingent amounts would not be material taking into account the
future revenues or profits of the companies acquired.

The  Company  and  certain  of  its   subsidiaries  are  party  to  various  tax
examinations, some of which have resulted in assessments. The Company intends to
vigorously defend any and all assessments and believes that additional taxes (if
any) that may ultimately  result from the settlement of such assessments or open
examinations  would  not have a  material  adverse  effect  on the  consolidated
financial statements.

The  Company is  involved  in legal and  administrative  proceedings  of various
types.  While any  litigation  contains an element of  uncertainty,  the Company
believes that the outcome of such proceedings or claims will not have a material
adverse effect on the Company.
NOTE 15:  NFO ACQUISITION
In April 2000,  the Company  acquired NFO in a  transaction  accounted  for as a
pooling of interests.  The results of NFO and several other recent  acquisitions
have been included in previously restated financial statements.

NOTE 16:  RECENT EVENTS
In November 2000, the Company acquired Deutsch in a transaction accounted for as
a pooling of interests.  Approximately  6 million  shares were issued to acquire
Deutsch. The Company's  consolidated  financial statements have been restated as
of the earliest period presented to include the results of operations, financial
position and cash flows of Deutsch.
SELECTED FINANCIAL DATA FOR FIVE YEARS
                                              (Amounts in Thousands Except Per Share Data)

                                       1999            1998         1997         1996         1995
                                       ----            ----         ----         ----         ----
OPERATING DATA
Revenue                               $ 4,977,823   $ 4,218,657  $ 3,610,706  $ 3,053,926  $ 2,650,192
Operating expenses                      4,315,144     3,646,061    3,195,564    2,695,038    2,353,970
Restructuring and other merger
  related costs                            84,183            --           --           --           --
Write-down of goodwill and other
related assets                                 --            --           --           --       38,687
Special compensation charge                    --            --       32,229           --           --
Interest expense                           81,341        64,296       59,820       53,321       49,105
Provision for income taxes                243,971       245,636      197,665      166,244      133,941
Net Income                            $   331,287   $   339,907  $   224,184  $   228,914  $   145,975

PER SHARE DATA
Basic

Net Income                            $      1.11   $      1.15  $       .79  $       .81  $       .52
Weighted-average shares                   297,992       294,756      283,796      284,219      278,303

Diluted

Net Income                            $      1.07   $      1.12  $       .76  $       .78  $       .51
Weighted-average shares                   308,840       305,134      301,602      300,802      286,307

FINANCIAL POSITION
Working capital                       $   170,976   $    96,881  $   244,361  $   149,919  $   118,147
Total assets                          $ 9,247,044   $ 7,526,563  $ 6,254,577  $ 5,253,456  $ 4,721,440
Total long-term debt                  $ 1,048,607   $   706,444  $   554,550  $   423,459  $   363,966
Book value per share                  $      5.75   $      4.71  $      3.79  $      3.34  $      2.79

OTHER DATA
Cash dividends - Interpublic          $    90,424   $    76,894    $  61,242    $  51,786  $    46,124
Cash dividends
  per share - Interpublic             $       .33   $       .29    $     .25    $     .22  $       .20
Number of employees                        42,400        38,100       33,000       27,000       25,200
                                      ----------------------------------------------------------------

All data has been restated to reflect the aggregate  effect of the  acquisitions accounted for as poolings
of interests. (See Notes 15 and 16).

All share data for prior periods have been  adjusted to reflect the  two-for-one stock split effective
July 15, 1999.
RESULTS BY QUARTER (UNAUDITED)
                                                  (Amounts in Thousands Except Per Share Data)
1st Quarter               2nd Quarter            3rd Quarter                  4th Quarter
                          1999           1998         1999         1998           1999           1998          1999          1998
                       -------------------------------------------------------------------------------------------------------------
Revenue                $1,037,860    $  883,615    $1,249,641    $1,094,214    $1,172,875    $  983,263    $1,517,447    $1,257,565
Operating expenses        944,013       810,382       995,159       876,417     1,038,041       878,462     1,337,931     1,080,800
Restructuring and other
  merger related charges       --            --            --            --            --            --        84,183            --
Income from operations     93,847        73,233       254,482       217,797        134,834      104,801        95,333       176,765
Interest expense          (17,475)      (13,524)      (20,591)      (15,809)      (21,714)      (17,175)      (21,561)      (17,788)
Other income, net          12,884        11,048        29,213        24,391        15,151        15,173        46,314        47,943
Income before provision
  for income taxes         89,256        70,757       263,104       226,379       128,271       102,799       120,086       206,920
Provision for

  income taxes             35,765        26,663       104,208        91,345        52,295        42,407        51,703        85,221
Net equity interests       (2,386)       (2,405)       (6,203)       (5,231)       (4,364)       (4,072)      (12,506)       (9,604)
                       -------------------------------------------------------------------------------------------------------------
Net income             $   51,105    $   41,689    $  152,693    $  129,803    $   71,612    $   56,320    $   55,877    $  112,095
                       ============================================================================================================

Per share data:
  Basic EPS            $      .17     $     .14    $      .51    $      .44    $      .24    $      .19    $      .19    $      .38
  Diluted EPS          $      .17     $     .14    $      .49    $      .42    $      .23    $      .19    $      .18    $      .37
Cash dividends per

 share - Interpublic   $     .075     $    .065    $     .085    $     .075    $     .085    $     .075    $     .085    $     .075

Weighted-Average Shares:
  Basic                   296,457       293,959       298,126       295,248       298,688       294,766       298,698       295,051
  Diluted                 307,701       304,461       317,381       313,057       309,298       304,497       309,790       311,926

Stock price:
  High                        $40      $31 5/16      $43 5/16       $32 1/4      $44 1/16      $32 7/16      $58 1/16       $39 7/8
  Low                     $34 7/8     $23 27/32     $34 19/32    $ 27 21/32       $36 1/2      $26 3/32       $35 3/4       $23 1/2
                       ------------------------------------------------------------------------------------------------------------

All data has been restated to reflect the aggregate  effect of the  acquisitions accounted for as poolings of interests.
(See Notes 15 and 16).

All share data for 1998 has been adjusted to reflect the two-for-one stock split effective July 15, 1999.
SCHEDULE VIII

          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                        VALUATION AND QUALIFYING ACCOUNTS

              For the Years Ended December 31, 1999, 1998 and 1997

================================================================================

                             (Dollars in thousands)

COLUMN A     COLUMN B      COLUMN C   COLUMN D       COLUMN E           COLUMN F
--------------------------------------------------------------------------------

                             Additions/(Deductions)
                             ----------------------

                                         Charged
              Balance at  Charged to    to Other                         Balance
               Beginning     Costs &   Accounts-   Deductions-            at End
Description    of Period    Expenses    Describe      Describe         of Period
--------------------------------------------------------------------------------

Allowance for Doubtful  Accounts - deducted from Receivables in the Consolidated
Balance Sheet:

1999         $54,060       $24,013    $5,148(1)      $(23,765)(3)       $60,565
                                       2,934(5)        (1,215)(2)
                                                         (610)(4)

1998         $44,581       $20,421    $6,699(1)      $(17,038)(3)       $54,060
                                       2,111(5)        (3,310)(4)

                                         596(2)

1997         $37,496       $16,904    $2,256(1)      $ (2,680)(2)       $44,581
                                         848(5)        (7,869)(3)

                                                       (2,374)(4)

-------------------
[FN]

  (1)  Allowance for doubtful accounts of acquired and newly consolidated
       companies.
  (2)  Foreign currency translation adjustment.
  (3)  Principally amounts written off.
  (4)  Reversal of previously recorded allowances on accounts receivable.
  (5)  Miscellaneous.
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                     SUPPLEMENTAL CONSOLIDATED BALANCE SHEET
                             (Dollars in Thousands)
                                     ASSETS

                                                  September 30,   December 31,
                                                      2000           1999
                                                   (unaudited)
                                                   ------------   ------------
CURRENT ASSETS:
 Cash and cash equivalents (includes
   certificates of deposit: 2000-$72,593;
   1999-$150,343)                                   $  587,916      $1,029,076
 Marketable securities                                  42,893          36,765
 Receivables (net of allowance for doubtful
   accounts:  2000-$68,536; 1999-$60,565)            4,443,452       4,442,229
 Expenditures billable to clients                      457,838         337,769
 Prepaid expenses and other current assets             195,738         147,085
                                                    --------------------------
    Total current assets                             5,727,837       5,992,924
                                                    --------------------------
 OTHER ASSETS:
 Investment in unconsolidated affiliates                87,101          62,225
 Deferred taxes on income                               76,185              --
 Other investments and miscellaneous assets            607,739         719,024
                                                    --------------------------
    Total other assets                                 771,025         781,249
                                                    --------------------------
 FIXED ASSETS, at cost:
 Land and buildings                                    151,787         164,678
 Furniture and equipment                               855,691         783,698
                                                    --------------------------
                                                     1,007,478         948,376
 Less: accumulated depreciation                       (556,058)       (506,975)
                                                    --------------------------
                                                       451,420         441,401
 Unamortized leasehold improvements                    172,907         151,870
                                                    --------------------------
    Total fixed assets                                 624,327         593,271
                                                    --------------------------
 INTANGIBLE ASSETS (net of accumulated
  amortization: 2000-$684,892; 1999-$607,417)        2,536,326       1,879,600
                                                    --------------------------

 TOTAL ASSETS                                       $9,659,515      $9,247,044
                                                    ==========================
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                  SUPPLEMENTAL CONSOLIDATED BALANCE SHEET
                  (Dollars in Thousands Except Per Share Data)
                      LIABILITIES AND STOCKHOLDERS' EQUITY
September 30,    December 31,
                                                        2000            1999
                                                     (unaudited)
                                                     ------------   ------------
CURRENT LIABILITIES:
 Payable to banks                                   $  445,800       $  262,483
 Accounts payable                                    4,212,458        4,629,415
 Accrued expenses                                      727,990          769,566
 Accrued income taxes                                  156,457          160,484
                                                     --------------------------
 Total current liabilities                           5,542,705        5,821,948
                                                     --------------------------
 NONCURRENT LIABILITIES:
 Long-term debt                                      1,128,326          530,117
 Convertible subordinated debentures
   and notes                                           529,375          518,490
 Deferred compensation and reserve
   for termination allowances                          373,109          348,172
 Deferred taxes on income                                   --           45,888
 Accrued postretirement benefits                        50,701           50,226
 Other noncurrent liabilities                           80,066           86,127
 Minority interests in consolidated
   subsidiaries                                         77,397           81,612
                                                     --------------------------
 Total noncurrent liabilities                        2,238,974        1,660,632
                                                     --------------------------
 STOCKHOLDERS' EQUITY:
 Preferred Stock, no par value
   shares authorized:  20,000,000
   shares issued:  none

 Common Stock, $.10 par value
   shares authorized:  550,000,000
   shares issued:
     2000 - 318,990,931;
     1999 - 315,921,839                                 31,899           31,592
 Additional paid-in capital                            907,547          783,897
 Retained earnings                                   1,555,818        1,392,224
 Accumulated other comprehensive
   loss, net of tax                                   (331,853)         (76,695)
                                                     --------------------------
                                                     2,163,411        2,131,018
 Less:
 Treasury stock, at cost:
 2000 - 5,593,450 shares;
 1999 - 8,909,904 shares                               177,670          289,519
 Unamortized expense of restricted
   stock grants                                        107,905           77,035
                                                     --------------------------
 Total stockholders' equity                          1,877,836        1,764,464
                                                     --------------------------
 Commitments and contingencies

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $9,659,515       $9,247,044
                                                    ===========================

All  prior  periods  have been  restated  to  reflect  the  aggregate  effect of
acquisitions accounted for as poolings of interests. (See Note (a))

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                  SUPPLEMENTAL CONSOLIDATED STATEMENT OF INCOME
                         THREE MONTHS ENDED SEPTEMBER 30
                  (Amounts in Thousands Except Per Share Data)
                                   (unaudited)

                                                 2000             1999
                                                 ----             ----
Revenue                                      $ 1,353,081      $ 1,172,875
                                             -----------      -----------
Salaries and related expenses                    767,575          670,517
Office and general expenses                      380,905          346,240
Amortization of intangible assets                 30,101           21,284
Restructuring and other
  merger related costs                            27,305                -
                                             -----------      -----------
     Total operating expenses                  1,205,886        1,038,041
                                             -----------      -----------

Income from operations                           147,195          134,834

Interest expense                                 (32,339)         (21,714)
Other income, net                                 16,676           15,151
                                             -----------      -----------
Income before provision for income taxes         131,532          128,271

Provision for income taxes                        53,298           52,295
                                             -----------      -----------
Income of consolidated companies                  78,234           75,976

Income applicable to minority interests          (10,012)          (6,288)
Equity in net income of unconsolidated
  affiliates                                       1,856            1,924
                                             -----------      -----------
Net income                                   $    70,078      $    71,612
                                             ===========      ===========
Weighted average shares:
  Basic                                          305,929          298,688
  Diluted                                        314,958          309,298

Earnings Per Share:
  Basic                                      $       .23      $       .24
  Diluted                                    $       .22      $       .23

Dividends per share                          $       .095     $       .085

All  prior  periods  have been  restated  to  reflect  the  aggregate  effect of
acquisitions accounted for as poolings of interests. (See Note (a))

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                   SUPPLEMENTAL CONSOLIDATED INCOME STATEMENT
                         NINE MONTHS ENDED SEPTEMBER 30
                  (Dollars in Thousands Except Per Share Data)
                                   (unaudited)

                                                 2000             1999
                                                 ----             ----
Revenue                                      $ 4,024,984      $ 3,460,376
                                             -----------      -----------

Salaries and related expenses                  2,207,549        1,898,437
Office and general expenses                    1,148,757        1,021,174
Amortization of intangible assets                 77,475           57,602
Restructuring and other

  merger related costs                           116,131                -
                                             -----------      -----------
     Total operating expenses                  3,549,912        2,977,213
                                             -----------      -----------
Income from operations                           475,072          483,163

Interest expense                                 (74,835)         (59,780)
Other income, net                                 62,961           57,248
                                             -----------      -----------
Income before provision for income taxes         463,198          480,631

Provision for income taxes                       190,245          192,268
                                             -----------      -----------
Income of consolidated companies                 272,953          288,363

Income applicable to minority interests          (25,721)         (19,044)
Equity in net income of unconsolidated
  affiliates                                       8,242            6,091
                                             -----------      -----------
Net income                                   $   255,474      $   275,410
                                             ===========      ===========
Weighted average shares:
  Basic                                          302,038          297,757
  Diluted                                        311,863          315,215

Earnings Per Share:
  Basic                                      $       .85      $       .92
  Diluted                                    $       .82      $       .89

Dividends per share                          $       .275     $       .245

All  prior  periods  have been  restated  to  reflect  the  aggregate  effect of
acquisitions accounted for as poolings of interests. (See Note (a))

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
        SUPPLEMENTAL CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
                         THREE MONTHS ENDED SEPTEMBER 30
                             (Dollars in Thousands)

                                   (unaudited)

                                                  2000           1999
                                                  ----           ----
Net Income                                      $ 70,078      $ 71,612
                                                --------      --------
Other Comprehensive Income (Loss), net of tax:

Foreign Currency Translation Adjustments         (36,296)       15,908

Net Unrealized Gain on Securities                  2,305        25,293
                                                --------      --------
Other Comprehensive Income (Loss)                (33,991)       41,201
                                                --------      --------
Comprehensive Income                            $ 36,087      $112,813
                                                ========      ========

All  prior  periods  have been  restated  to  reflect  the  aggregate  effect of
acquisitions accounted for as poolings of interests. (See Note (a))

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
        SUPPLEMENTAL CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
                            NINE MONTHS ENDED SEPTEMBER 30
                             (Dollars in Thousands)
                                   (unaudited)

                                                  2000           1999
                                                  ----           ----
Net Income                                      $255,474      $275,410
                                                --------      --------
Other Comprehensive Income (Loss), net of tax:

Foreign Currency Translation Adjustments        (112,039)      (70,154)

Net Unrealized Gain (Loss) on Securities        (143,119)       24,614
                                                --------      --------
Other Comprehensive Loss                        (255,158)      (45,540)
                                                --------      --------
Comprehensive Income (Loss)                    $     316     $ 229,870
                                               =========      ========

All  prior  periods  have been  restated  to  reflect  the  aggregate  effect of
acquisitions accounted for as poolings of interests. (See Note (a))

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                         NINE MONTHS ENDED SEPTEMBER 30
                             (Dollars in Thousands)
                                   (unaudited)
2000          1999
                                                           ----          ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                            $  255,474      $ 275,410
Adjustments to reconcile net income to cash (used in)
    provided by operating activities:
  Depreciation and amortization of fixed assets          111,733         88,092
  Amortization of intangible assets                       77,475         57,601
  Amortization of restricted stock awards                 27,197         19,067
  Equity in net income of unconsolidated
   affiliates                                             (8,241)        (6,091)
  Income applicable to minority interests                 25,721         19,044
  Translation losses                                       1,326          1,183
  Net gain from sale of investments                      (12,275)       (21,734)
  Restructuring charges, non cash                         32,100             --
  Miscellaneous other (grouped into "Accounts
   Payable and Other Liabilities")                      (19,812)       (17,384)
Changes in assets and liabilities, net of acquisitions:
  Receivables                                            (84,688)      (393,235)
  Expenditures billable to clients                      (111,236)       (94,711)
  Prepaid expenses and other assets                      (50,854)       (21,300)
  Accounts payable and other liabilities                (419,751)       165,310
  Accrued income taxes                                     3,856          7,570
  Deferred income taxes                                  (20,813)        (7,881)
  Deferred compensation and reserve for
    termination allowances                                34,391         11,202
                                                      ----------      ---------
Net cash (used in) provided by operating  activities    (158,397)        82,143
                                                      ----------      ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisitions                                          (439,229)      (182,206)
    Proceeds from sale of investments/assets              14,142         39,738
  Capital expenditures                                  (153,906)      (110,068)
  Net purchases of marketable securities                 (10,630)       (17,174)
  Dividends received from investments                         44             --
  Other investments and miscellaneous assets            (163,141)        10,358
  Investments in unconsolidated affiliates               (29,444)        (8,251)
                                                      ----------      ---------
Net cash used in investing activities                   (782,164)      (267,603)
                                                      ----------      ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase in short-term borrowings                      159,570         41,488
  Proceeds from long-term debt                           859,850        405,412
  Payments of long-term debt                            (228,301)       (56,873)
  Treasury stock acquired                               (182,040)      (209,024)
  Issuance of common stock                                36,192         54,295
  Cash dividends - pooled                                (11,424)        (7,550)
  Cash dividends - Interpublic                           (80,436)       (67,534)
                                                      ----------      ---------
Net cash provided by financing activities                553,411        160,214
                                                      ----------      ---------
Effect of exchange rates on cash and cash
  equivalents                                            (54,010)       (31,183)
                                                      ----------      ---------
Decrease in cash and cash equivalents                   (441,160)       (56,429)

Cash and cash equivalents at
  beginning of year                                    1,029,076        801,207
                                                      ----------      ---------
Cash and cash equivalents at end of period            $  587,916      $ 744,778
                                                      ==========      =========

All  prior  periods  have been  restated  to  reflect  the  aggregate  effect of
acquisitions accounted for as poolings of interests. (See Note (a))

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

  1. Consolidated Financial Statements

     (a)  In the opinion of  management,  the  consolidated  balance sheet as of
          September 30, 2000, the consolidated  income  statements for the three
          months  and  nine  months  ended  September  30,  2000 and  1999,  the
          consolidated  statement of  comprehensive  income for the three months
          and  nine  months  ended   September  30,  2000  and  1999,   and  the
          consolidated  statement  of cash  flows  for  the  nine  months  ended
          September 30, 2000 and 1999,  contain all  adjustments  (which include
          only normal  recurring  adjustments)  necessary to present  fairly the
          financial position,  results of operations and cash flows at September
          30,  2000  and for all  periods  presented.  Certain  information  and
          footnote   disclosures   normally  included  in  financial  statements
          prepared in accordance with generally accepted  accounting  principles
          have been omitted.  It is suggested that these consolidated  financial
          statements  be read in  conjunction  with the  consolidated  financial
          statements  and notes  thereto  included in The  Interpublic  Group of
          Companies,  Inc.'s (the "Company")  December 31, 1999 annual report to
          stockholders  and the  consolidated  financial  statements  and  notes
          thereto  included in the  Company's  Current  Report on Form 8-K dated
          September 15, 2000.

          The Company's consolidated financial statements, including the related
          notes,  have been restated for the prior periods  presented to include
          the  results  of  operations,  financial  position  and cash  flows of
          Deutsch,  Inc. and affiliate  companies  ("Deutsch").  (See Note (b)).
          Additionally,  the  results  of  several  other  recent  acquisitions,
          including  NFO  Worldwide,  Inc.  ("NFO"),  all  of  which  have  been
          accounted  for  as  poolings  of  interests,  have  been  included  in
          previously restated financial statements.  Other than Deutsch and NFO,
          none of the acquisitions was individually, or in aggregate, material.

          The  accompanying  income  statements  have been  prepared in a format
          different  than that used in the  originally  filed  Form 10-Q for the
          quarterly period ended September 30, 1999. The accompanying  financial
          statements  include  the  line -  "Income  from  operations".  Amounts
          previously  included in "Other income,  net" as part of "Gross Income"
          are now included elsewhere in the Consolidated Statement of Income.

     (b)  In November 2000, the Company issued approximately 6 million shares of
          its common stock in connection  with the  acquisition  of Deutsch.  In
          April 2000,  the Company issued  approximately  12.6 million shares of
          its common stock in connection  with the  acquisition  of NFO. Both of
          these acquisitions have been accounted for as poolings of interests.

     (c)  During the third quarter,  the Company recorded pre-tax  restructuring
          and other merger  related costs of $27.3 million ($17.2 million net of
          tax).  For the nine  months  ended  September  30,  2000,  the Company
          recorded  pre-tax  restructuring  and other  merger  related  costs of
          $116.1  million  ($72.9  million  net of tax).  Of the  total  pre-tax
          restructuring and other merger related costs, cash charges represented
          $14.8  million and $84  million  for the three  months and nine months
          ended  September  30, 2000,  respectively.  The key  components of the
          charge were the costs associated with the restructuring of Lowe Lintas
          & Partners  Worldwide.  The  remaining  costs  relate  principally  to
          transaction and other merger related costs arising from the previously
          announced merger with NFO.
Lowe Lintas & Partners
          -----------------------
          In  October  1999,  the  Company  announced  the  merger of two of its
          advertising networks. The networks affected, Lowe & Partners Worldwide
          and Ammirati Puris Lintas,  were combined to form a new agency network
          called  Lowe  Lintas & Partners  Worldwide.  The merger  involved  the
          consolidation  of operations in Lowe Lintas agencies in  approximately
          24 cities in 22 countries  around the world.  The newly merged  agency
          network  has  offices in over 80  countries  around  the world.  As of
          September 30, 2000, all restructuring activities have been completed.

          A summary of the components of the reserve for restructuring and other
          merger related costs for Lowe Lintas is as follows:

               (Dollars in millions)
Year to Date September 30, 2000
                                                          ---------------------------------
                                              Balance       Expense        Cash     Asset          Balance
                                            at 12/31/99   recognized       Paid  Write-offs       at 9/30/00
                                            -----------   -------------    ----  ----------       ----------
TOTAL BY TYPE
               Severance and

                 termination  costs            $43.6          $32.0        $24.6       --           $51.0
               Fixed asset write-offs           11.1           14.2           --     25.3              --
               Lease  termination costs          3.8           21.1          7.6       --            17.3
               Investment write-offs
                 and other                      23.4           20.5          6.4     37.5              --
                                               ----------------------------------------------------------
               Total                           $81.9          $87.8        $38.6    $62.8           $68.3
                                               ==========================================================
The  severance  and  termination  costs  recorded  in 2000  relate  to
          approximately  360 employees who have been terminated or notified that
          they  will  be  terminated.   The  employee  groups  affected  include
          management,  administrative,  account  management,  creative and media
          production  personnel,  principally  in the U.S. and several  European
          countries.

          The fixed  asset  write-offs  relate  largely  to the  abandonment  of
          leasehold improvements as part of the merger. The amount recognized in
          2000 relates to fixed asset  write-offs  in 4 offices,  the largest of
          which is in the U.K.

          Lease  termination  costs relate to the offices vacated as part of the
          merger.  The lease terminations are substantially  complete,  with the
          cash portion to be paid out over a period of up to five years.

          The  investment  write-offs  relate to the loss on sale or  closing of
          certain   business  units.  In  2000,   $12.7  million  of  investment
          write-offs has been  recorded,  the majority of which results from the
          decision to sell or abandon 3  businesses  located in Asia and Europe.
          In the aggregate,  the businesses being sold or abandoned represent an
          immaterial  portion of the  revenue  and  operations  of Lowe Lintas &
          Partners.  The write-off amount was computed based upon the difference
          between the estimated  sales  proceeds (if any) and the carrying value
          of the related assets.
NFO and Other Merger Related Costs
          ----------------------------------
          In addition to the  restructuring and other merger related costs noted
          above, additional charges, substantially all of which were cash costs,
          were  recorded   through   September  30,  2000.  These  costs  relate
          principally to the non-recurring  transaction and other merger related
          costs  arising from the recently  completed  acquisition  of NFO. (See
          Note (b)).

     (d)  In addition to the acquisition  mentioned in (b), the Company has made
          several other acquisitions in 2000, including  Nationwide  Advertising
          Services,  Waylon  Promotions,  Inc.  and  substantial  assets  of the
          Communications   Division  of   Caribiner   International,   Inc.  The
          acquisitions have been accounted for as purchases.

     (e)  On June 27, 2000, the Company entered into a syndicated multi-currency
          credit  agreement under which a total of $750 million may be borrowed;
          $375 million may be borrowed under a 364-day facility and $375 million
          under a five-year  facility.  The facilities bear interest at variable
          rates based on either LIBOR or a bank's base rates,  at the  Company's
          option. As of September 30, 2000,  approximately $534 million had been
          borrowed under the facilities.  The weighted-average  interest rate on
          the  borrowings at September 30, 2000 was 6.4%.  The proceeds from the
          syndicated credit agreement were used to refinance  borrowings and for
          general  corporate  purposes  including  acquisitions  and other  inv-
          estments.   Some  of  the  pre-existing   borrowing   facilities  were
          subsequently terminated.

          On August 25,  2000,  the  Company  entered  into a  revolving  credit
          facility under which up to $250 million may be borrowed.  The facility
          expires on November 30,  2000,  and bears  interest at variable  rates
          based on either LIBOR,  a bank's base rates or money market rates,  at
          the  Company's  option.  The Company  used the  proceeds to  refinance
          borrowings and for general corporate purposes,  including acquisitions
          and other investments.

          On October 20, 2000,  the Company  completed  the issuance and sale of
          $500 million  principal amount of senior unsecured notes due 2005. The
          notes bear an interest rate of 7.875% per annum.  The Company used the
          net proceeds of approximately  $496 million from the sale of the notes
          to  repay  outstanding   indebtedness  under  its  credit  facilities.
          Accordingly,  certain short-term  borrowings have been reclassified as
          long-term.

     (f)  In  June  1998,  the  Financial   Accounting  Standards  Board  issued
          Statement No. 133, "Accounting for Derivative  Instruments and Hedging
          Activities" ("SFAS No. 133"),  which sets out the required  accounting
          treatment for  derivatives and hedging  activities.  In June 1999, the
          Financial   Accounting  Standards  Board  issued  Statement  No.  137,
          "Accounting  for  Derivative  Instruments  and  Hedging  Activities  -
          Deferral of the  Effective  Date of FASB  Statement  No.  133",  which
          delays  implementation  of SFAS No. 133 until fiscal  years  beginning
          after June 15, 2000. In June 2000, the Financial  Accounting Standards
          Board issued  Statement No. 138,  "Accounting  for Certain  Derivative
          Instruments and Certain Hedging Activities", which provides additional
          guidance related to accounting for derivative  instruments and hedging
          activities  as addressed by SFAS No. 133. The Company does not believe
          that the  effect of  adopting  SFAS No.  133 and SFAS No.  138 will be
          material to its financial condition or results of operations.
Item 2

          THE INTERPUBLIC GROUP OF COMPANIES, INC. AND ITS SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

As  discussed  in Note  (b),  the  Company  acquired  Deutsch  in a  transaction
accounted for as a pooling of interests.  Deutsch is a full service  advertising
agency servicing a broad range of clients. The Company's  consolidated financial
statements and other financial  information for prior periods have been restated
to reflect the effect of the Deutsch pooling.

In April 2000, the Company acquired NFO Worldwide, Inc. ("NFO") in a transaction
accounted for as a pooling of interest.  Results of NFO and several other recent
acquisitions, all of which have been accounted for as poolings of interests have
been  included  in  previously  restated  financial  statements.  The  following
discussion relates to the combined results of the Company after giving effect to
all of the pooled companies.

Three Months Ended September 30, 2000 Compared to Three Months Ended September
------------------------------------------------------------------------------
30, 1999
--------
The Company  reported net income of $70.1  million or $.22 diluted  earnings per
share for the three months ended  September  30, 2000.  Excluding  the impact of
restructuring  and other merger related costs,  which are discussed  below,  net
income was $87.2 million or $.28 diluted  earnings per share,  compared to $71.6
million or $.23 diluted  earnings per share for the three months ended September
30, 1999.

The  following  table sets forth net income and  earnings  per share  before and
after restructuring and other merger related costs:

(Dollars in thousands, except
  per share data)

                                          2000            1999
                                          ----            ----
Net income as reported                  $ 70,078        $ 71,612
Earnings per share:
 Basic                                       .23             .24
 Diluted                                     .22             .23

Net income before restructuring
 and other merger related costs         $ 87,243        $ 71,612
Earnings per share:
 Basic                                       .29             .24
 Diluted                                     .28             .23

Worldwide  revenue for the three months ended  September 30, 2000 increased $180
million,  or 15%, to $1.4 billion compared to the same period in 1999.  Domestic
revenue  increased $153 million or 25% from 1999 levels.  International  revenue
increased  $27 million or 5% during the third  quarter of 2000 compared to 1999.
International  revenue  would have  increased  18%,  excluding the effect of the
strengthening of the U.S. dollar.  The increase in worldwide revenue is a result
of both new  business  growth  and growth  from  acquisitions.  Organic  revenue
growth,  exclusive of acquisitions and currency  effects,  was 15% for the third
quarter of 2000 compared to the prior year quarter.
Revenue from specialized marketing  communications services, which include media
buying, market research,  sales promotion,  direct marketing,  public relations,
sports and event marketing,  healthcare marketing and e-business  consulting and
communications,  comprised  approximately 48% of the total worldwide revenue for
the three months ended  September  30, 2000,  compared to 45% for the prior year
quarter.

Income from operations was $147 million for the third quarter of 2000. Excluding
restructuring  and other merger related costs,  income from  operations was $175
million for the third  quarter of 2000,  compared to $135  million for the third
quarter  of 1999,  an  increase  of 30%.  Exclusive  of  acquisitions,  currency
effects, and amortization of intangible assets, income from operations increased
24% for the third quarter of 2000 compared to the third quarter of 1999.

Worldwide operating expenses for the third quarter 2000, excluding restructuring
and other merger  related costs were $1.2  billion,  an increase of 14% over the
prior year  quarter.  Salaries and related  expenses were $768 million or 57% of
revenue  for the third  quarter of 2000 as  compared  to $671  million or 57% of
revenue for the third  quarter of 1999.  Office and general  expenses  were $381
million for the third  quarter of 2000  compared  to $346  million for the third
quarter of 1999.

Interest  expense was $32 million for the three months ended September 30, 2000,
compared to $22 million for the prior year quarter.  The increase is primarily a
result of higher debt levels and higher interest rates in 2000.

Other income, net, which consists of interest income,  investment income and net
gains from equity  investments,  increased slightly to $17 million for the third
quarter of 2000 as compared to $15 million for the third quarter of 1999.

The effective tax rate for the three months ended  September 30, 2000 was 40.5%,
compared to 40.8% in 1999.  The  difference  between the effective and statutory
rates is primarily due to state and local taxes,  foreign  withholding  taxes on
dividends and nondeductible goodwill expense.

Nine Months Ended September 30, 2000 Compared to Nine Months Ended September 30,
-------------------------------------------------------------------------------
1999
----
Net income  was $255  million or $.82  diluted  earnings  per share for the nine
months ended September 30, 2000. Excluding the impact of restructuring and other
merger related costs,  which are discussed  below, net income was $328.4 million
or $1.05 diluted earnings per share,  compared to $275.4 million or $.89 diluted
earnings per share for the nine months ended September 30, 1999.

The  following  table sets forth net income and  earnings  per share  before and
after restructuring and other merger related costs:

(Dollars in thousands, except
  per share data)
                                        2000            1999
                                        -----           ----
Net income as reported                 $255,474        $275,410
Earnings per share:
 Basic                                      .85             .92
 Diluted                                    .82             .89

Net income before restructuring
 and other merger related costs        $328,409        $275,410
Earnings per share:
 Basic                                     1.09             .92
 Diluted                                   1.05             .89
Worldwide  revenue for the nine months ended September 30, 2000,  increased $565
million,  or 16%, to $4.0 billion compared to the same period in 1999.  Domestic
revenue  increased  $438  million or 24%  during  the first nine  months of 2000
compared to 1999.  International revenue increased $126 million or 8% during the
first nine months of 2000  compared to 1999.  International  revenue  would have
increased 16%, excluding the effect of the strengthening of the U.S. dollar. The
increase in worldwide revenue is a result of both new business growth and growth
from  acquisitions.  Organic  revenue  growth,  exclusive  of  acquisitions  and
currency  effects,  was 14% for the first nine  months of 2000  compared  to the
prior year period.

Revenue from specialized marketing  communications services, which include media
buying,  market research,  promotion sales, direct marketing,  public relations,
sports and event marketing,  healthcare marketing and e-business  consulting and
communications,  comprised  approximately 46% of the total worldwide revenue for
the nine months ended  September  30,  2000,  compared to 44% for the first nine
months of 1999.

Income from  operations was $475 million for the nine months ended September 30,
2000.  Excluding  restructuring  and other  merger  related  costs,  income from
operations was $591 million for the first nine months of 2000,  compared to $483
million for the first nine months of 1999,  an  increase  of 22%.  Exclusive  of
acquisitions,  currency  effects and amortization of intangible  assets,  income
from operations  increased 19% for the first nine months of 2000 compared to the
first nine months of 1999.

Worldwide  operating  expenses  for the nine months  ended  September  30, 2000,
excluding  restructuring  and other merger  related costs were $3.4 billion,  an
increase of 15% over the prior year period.  Salaries and related  expenses were
$2.2  billion or 55% of revenue for the first nine months of 2000 as compared to
$1.9  billion or 55% of revenue  for the first nine  months of 1999.  Office and
general expenses were $1.1 billion for the first nine months of 2000 compared to
$1.0 billion for the first nine months of 1999.

Interest expense was $74.8 million for the nine months ended September 30, 2000,
compared to $59.8 million for the prior year. The increase is primarily a result
of higher debt levels and higher interest rates in 2000.

Other income, net, which consists of interest income,  investment income and net
gains from equity  investments,  was $63.0  million  for the nine  months  ended
September  30,  2000,  as  compared to $57.2  million for the nine months  ended
September 30, 1999, an increase of 10%.

The effective  tax rate for the nine months ended  September 30, 2000 was 41.1%,
compared to 40.0% in 1999.  The  difference  between the effective and statutory
rates is primarily due to state and local taxes,  foreign  withholding  taxes on
dividends and nondeductible goodwill expense.

Restructuring and Other Merger Related Costs
--------------------------------------------
During the third quarter,  the Company recorded pre-tax  restructuring and other
merger  related costs of $27.3 million  ($17.2 million net of tax). For the nine
months ended September 30, 2000, the Company recorded pre-tax  restructuring and
other merger  related costs of $116.1 million ($72.9 million net of tax). Of the
total  pre-tax  restructuring  and other  merger  related  costs,  cash  charges
represented  $14.8  million and $84 million for the three months and nine months
ended  September 30, 2000,  respectively.  The key components of the charge were
the costs associated with the restructuring of Lowe Lintas & Partners Worldwide.
The remaining  costs relate  principally to transaction and merger related costs
arising from the previously announced merger with NFO.
Lowe Lintas & Partners
----------------------
In October  1999,  the Company  announced  the merger of two of its  advertising
networks.  The networks  affected,  Lowe & Partners Worldwide and Ammirati Puris
Lintas, were combined to form a new agency network called Lowe Lintas & Partners
Worldwide.  The merger involved the  consolidation  of operations in Lowe Lintas
agencies in  approximately 24 cities in 22 countries around the world. The newly
merged agency network has offices in over 80 countries  around the world.  As of
September 30,2000, all restructuring activities have been completed.

The  restructuring  and other merger related costs for Lowe Lintas  included $31
million in  severance  and  termination  costs,  $14.2  million  in fixed  asset
write-offs,  $21.1  million  in lease  termination  costs and $21.5  million  in
investment write-offs and other costs.

The severance and termination  costs recorded 2000 relate to  approximately  360
employees who have been terminated or notified that they will be terminated. The
employee groups affected include management, administrative, account management,
creative and media  production  personnel,  principally  in the U.S. and several
European countries.

The fixed  asset  write-offs  relate  largely to the  abandonment  of  leasehold
improvements  as part of the merger.  The amount  recognized  in 2000 relates to
fixed asset  write-offs in 4 offices,  the largest of which is in the U.K. Lease
termination costs relate to the offices vacated as part of the merger.

The  investment  write-offs  relate to the loss on sale or  closing  of  certain
business  units.  In 2000,  $12.7  million  of  investment  write-offs  has been
recorded,  the majority of which  results from the decision to sell or abandon 3
businesses located in Asia and Europe.

NFO and Other Merger Related Costs
In addition to the  restructuring  and other merger  related  costs noted above,
additional  charges,  substantially  all of which were cash costs, were recorded
through September 30, 2000. These costs relate  principally to the non-recurring
transaction  and other merger related costs arising from the recently  completed
acquisition of NFO. (See Note (b)).

LIQUIDITY AND CAPITAL RESOURCES

The ratio of current assets to current  liabilities was  approximately 1 to 1 at
September 30, 2000.  Working capital  increased by $14 million from December 31,
1999 to September  30, 2000.  Total debt at September 30, 2000 was $2.1 billion,
an increase of $792  million from  December  31,  1999.  The increase in debt is
primarily  attributable to the net effect of payments made for  acquisitions and
other  investments.  Cash flow from operations and  availability  under existing
credit facilities will be the Company's primary source of working capital.

On June 27, 2000, the Company  entered into a syndicated  multi-currency  credit
agreement under which a total of $750 million may be borrowed;  $375 million may
be  borrowed  under a  364-day  facility  and  $375  million  under a  five-year
facility.  The facilities  bear interest at variable rates based on either LIBOR
or a bank's base rates,  at the  Company's  option.  As of  September  30, 2000,
approximately  $534  million  had  been  borrowed  under  the  facilities.   The
weighted-average interest rate on the borrowings at September 30, 2000 was 6.4%.
The  proceeds  from the  syndicated  credit  agreement  were  used to  refinance
borrowings and for general corporate purposes  including  acquisitions and other
investments.  Some of the pre-existing  borrowing  facilities were  subsequently
terminated.
On August 25, 2000, the Company  entered into a revolving  credit facility under
which up to $250 million may be borrowed.  The facility  expires on November 30,
2000,  and bears interest at variable rates based on either LIBOR, a bank's base
rates or money  market  rates,  at the  Company's  option.  The Company used the
proceeds to refinance  borrowings and for general corporate purposes,  including
acquisitions and other investments.

On October 20, 2000, the Company completed the issuance and sale of $500 million
principal  amount of senior unsecured notes due 2005. The notes bear an interest
rate of 7.875% per annum.  The Company  used the net  proceeds of  approximately
$496 million from the sale of the notes to repay outstanding  indebtedness under
its credit  facilities.  Accordingly,  certain  short-term  borrowings have been
reclassified as long-term.

Net cash used in operating activities was $158 million for the nine months ended
September 30, 2000. Net cash provided by operations was $82 million for the nine
months ended  September 30, 1999.  The  principal  use of the Company's  working
capital is to provide for the operating needs of its advertising agencies, which
include payments for space or time purchased from various media on behalf of its
clients.  The  Company's  practice  is to bill and  collect  from its clients in
sufficient  time to pay the  amounts  due media.  Other uses of working  capital
include the payment of cash dividends, acquisitions and capital expenditures. In
addition, during the first nine months of 2000, the Company acquired 3.5 million
shares of its own stock for the purpose of fulfilling the Company's  obligations
under its various compensation plans.

OTHER MATTERS

Acquisitions
------------
In connection with the NFO acquisition  completed on April 20, 2000, the Company
assumed approximately $180 million in debt.  Additionally,  the Company has made
several other acquisitions,  including Nationwide  Advertising Services,  Waylon
Promotions,  Inc.  and  substantial  assets of the  Communications  Division  of
Caribiner  International,  Inc.  The  acquisitions  have been  accounted  for as
purchases.

Cautionary Statement
--------------------
This Report on Form 8-K (the "Report"),  including  Management's  Discussion and
Analysis   of   Financial   Condition   and  Results  of   Operations   contains
forward-looking statements.  Statements that are not historical facts, including
statements about  Interpublic's  beliefs and expectations,  are  forward-looking
statements. These statements are based on current plans, expectations, estimates
and  projections,  and  therefore  you should not place undue  reliance on them.
Forward-looking  statements  speak  only  as of the  date  they  are  made,  and
Interpublic  undertakes no obligation to update publicly any of them in light of
new information, future events or otherwise.

Forward-looking statements involve inherent risks and uncertainties. Interpublic
cautions you that a number of important  factors  could cause actual  results to
differ materially from those contained in any  forward-looking  statement.  Such
factors  include,  but are not limited to, those  associated  with the effect of
national and regional economic conditions, the ability of Interpublic to attract
new  clients  and retain  existing  clients,  the  financial  success  and other
developments  of the clients of  Interpublic,  developments  from changes in the
regulatory and legal  environment  for advertising  companies  around the world,
Interpublic's   ability  to  effectively   integrate  recent   acquisitions  and
Interpublic's ability to attract and retain key management personnel.
New Accounting Guidance
-----------------------
In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting  Standards No. 133, "Accounting for Derivative  Instruments
and Hedging  Activities"  (SFAS No. 133),  which had an initial adoption date of
January 1, 2000. In June 1999,  the FASB postponed the adoption date of SFAS No.
133 until  January 1, 2001.  In June 2000,  the FASB  issued  SFAS No. 138 which
provides  additional  guidance on SFAS No. 133. The Company does not believe the
effect  of  adopting  SFAS  No.  133 and SFAS No.  138 will be  material  to its
financial condition or results of operations.

Conversion to the Euro
----------------------
On January 1, 1999,  certain member countries of the European Union  established
fixed  conversion  rates  between  their  existing  currencies  and the European
Union's common currency (the "Euro").  The Company  conducts  business in member
countries.  The transition  period for the  introduction  of the Euro is between
January  1, 1999,  and June 30,  2002.  The  Company  is  addressing  the issues
involved with the  introduction of the Euro. The major  important  issues facing
the Company include:  converting  information  technology  systems;  reassessing
currency  risk;  negotiating  and amending  contracts;  and  processing  tax and
accounting records.

Based upon progress to date, the Company  believes that use of the Euro will not
have a  significant  impact on the  manner  in which it  conducts  its  business
affairs  and  processes  its  business  and  accounting  records.   Accordingly,
conversion to the Euro has not, and is not expected to have a material effect on
the Company's financial condition or results of operations.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

The Company's  financial market risk arises from  fluctuations in interest rates
and foreign  currencies.  Most of the Company's  debt  obligations  are at fixed
interest  rates. A 10% change in market interest rates would not have a material
effect on the Company's pre-tax earnings, cash flows or fair value. At September
30, 2000, the Company had an insignificant amount of foreign currency derivative
financial  instruments  in  place.  The  Company  does not  hold  any  financial
instrument for trading purposes.