<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-7898
GREY ADVERTISING INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-0802840
- ------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
777 Third Avenue, New York, New York 10017
- ------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, 212-546-2000
including area code: ------------
NOT APPLICABLE
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
As of April 30, 2000, the total number of shares outstanding of Registrant's
Common Stock, par value $1 per share ("Common Stock"), was 1,010,752 and of
Registrant's Limited Duration Class B Common Stock, par value $1 per share
("Class B Common Stock"), was 231,415.
<PAGE> 2
GREY ADVERTISING INC.
AND CONSOLIDATED SUBSIDIARY COMPANIES
INDEX
PAGE NO.
--------
Financial Statements:
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Income 5
Condensed Consolidated Statements of Cash Flows 6
Notes to Condensed Consolidated Financial Statements 8
Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Other Information 13
Signatures 14
Index to Exhibits 15
2
<PAGE> 3
GREY ADVERTISING INC. AND CONSOLIDATED SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
(in thousands, except share and per share data) (UNAUDITED) (A)
------------------------- -------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 169,099 $ 306,556
Marketable securities 6,926 5,581
Accounts receivable 970,067 940,612
Expenditures billable to clients 59,117 51,991
Other current assets 101,250 93,207
------------------------- -------------------------
Total current assets 1,306,459 1,397,947
Investments in and advances to nonconsolidated
affiliated companies 17,895 17,961
Fixed assets-at cost, less accumulated depreciation of
$163,550 in 2000 and $158,370 in 1999 133,226 126,939
Marketable securities 21,222 22,429
Intangibles-net of accumulated amortization of $45,849
in 2000 and $42,818 in 1999 157,536 157,115
Other assets-including loans to executive officers of
$5,247 in 2000 and 1999 104,621 86,863
------------------------- -------------------------
Total assets $ 1,740,959 $ 1,809,254
========================= =========================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
(A) The condensed consolidated balance sheet has been derived from the audited
financial statements at that date.
3
<PAGE> 4
GREY ADVERTISING INC. AND CONSOLIDATED SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(CONTINUED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
(in thousands, except share and per share data) (UNAUDITED) (A)
------------------------------ ----------------------------
<S> <C> <C>
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,112,752 $ 1,161,508
Notes payable to banks 56,894 68,500
Accrued expenses and other 202,131 208,254
Income taxes payable 20,563 16,572
------------------------------ ----------------------------
Total current liabilities 1,392,340 1,454,834
Other liabilities, including deferred compensation of
$45,967 in 2000 and $44,160 in 1999 70,082 75,260
Long-term debt 78,025 78,025
Minority interest 18,776 19,620
Redeemable Preferred Stock-at redemption value; par
value $1 per share; authorized 500,000 shares; issued
and outstanding 30,000 shares in 2000 and 1999 10,171 10,150
Common stockholders' equity:
Common Stock-par value $1 per share; authorized
10,000,000 shares; issued 1,230,338 shares in 2000
and 1,228,534 shares in 1999 1,230 1,229
Limited Duration Class B Common Stock-par value $1
per share; authorized 2,000,000 shares;
issued 260,044 shares in 2000 and 261,224 shares in 1999 260 261
Paid-in additional capital 40,315 39,763
Retained earnings 194,870 191,042
Accumulated other comprehensive loss
Cumulative translation adjustment (18,754) (15,462)
Unrealized gain (loss) on marketable securities 447 (141)
------------------------------ ----------------------------
Total accumulated other comprehensive loss (18,307) (15,603)
------------------------------ ----------------------------
Loans to officer used to purchase Common Stock and
Limited Duration Class B Common Stock (4,726) (4,726)
------------------------------ -----------------------------
213,642 211,966
Less-cost of 221,465 and 218,514 shares of Common
Stock and 26,937 and 26,937 shares of Limited
Duration Class B Common Stock held in treasury in
2000 and 1999, respectively 42,077 40,601
---------------------------------- ------------------------
Total common stockholders' equity 171,565 171,365
---------------------------------- ------------------------
Total liabilities and common stockholders' equity $1,740,959 $1,809,254
================================== ========================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
(A) The condensed consolidated balance sheet has been derived from the audited
financial statements at that date.
4
<PAGE> 5
GREY ADVERTISING INC. AND CONSOLIDATED SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31,
(in thousands, except share and per share data) 2000 1999
----------------------------------- ----------------------------------
<S> <C> <C>
Commissions and fees $ 288,708 $ 227,907
Expenses:
Salaries and employee related expenses 187,404 151,635
Office and general expenses 89,496 73,215
----------------------------------- ----------------------------------
276,900 224,850
----------------------------------- ----------------------------------
11,808 3,057
Other income-net 1,151 960
----------------------------------- ----------------------------------
Income of consolidated companies before taxes on income 12,959 4,017
Provision for taxes on income 6,911 3,000
----------------------------------- ----------------------------------
Income of consolidated companies 6,048 1,017
Minority interest applicable to consolidated companies (1,358) (1,187)
Equity in earnings of nonconsolidated affiliated companies 464 277
----------------------------------- ----------------------------------
Net income $ 5,154 $ 107
=================================== ==================================
Weighted average number
of common shares outstanding:
Basic 1,233,588 1,237,681
Diluted 1,342,259 1,237,681
Earnings per common share:
Basic $4.11 $0.20
Diluted $3.81 $0.20
Dividends per common share $1.00 $1.00
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE> 6
GREY ADVERTISING INC. AND CONSOLIDATED SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31,
(in thousands, except share and per share data) 2000 1999
--------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 5,154 $ 107
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation and amortization of fixed assets 8,826 7,301
Amortization of intangibles 3,031 2,398
Deferred compensation 2,599 (1,882)
Equity in earnings of nonconsolidated affiliated
companies, net of dividends received of $12 in 2000
and $35 in 1999 (452) (242)
Loss (gains) from the sale of marketable securities 22 (66)
Minority interest applicable to consolidated companies 1,358 1,187
Restricted stock expense 195 131
Deferred income taxes (600) 293
Changes in operating assets and liabilities (102,437) (75,473)
---------------------------------------------------------------
Net cash used in operating activities (82,304) (66,246)
INVESTING ACTIVITIES
Purchases of fixed assets (17,781) (11,975)
Trust fund deposits (1,134) (1,240)
Decrease in investments in and advances to
nonconsolidated affiliated companies 518 630
Purchases of marketable securities (501) (101)
Proceeds from the sale of marketable securities 920 29,708
Purchases of investment securities (14,966) -
Increase in intangibles, primarily goodwill (9,800) (5,417)
---------------------------------------------------------------
Net cash (used in) provided by investing activities (42,744) 11,605
</TABLE>
6
<PAGE> 7
GREY ADVERTISING INC. AND CONSOLIDATED SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(CONTINUED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31,
(in thousands, except share and per share data) 2000 1999
-------------------------------- ----------------------------------
<S> <C> <C>
FINANCING ACTIVITIES
Net repayments of short-term borrowings (8,835) (566)
Common shares acquired for treasury (1,606) (98)
Cash dividends paid on common shares (1,244) (1,242)
Cash dividends paid on redeemable Preferred Stock (60) (60)
Issuance of restricted stock 3 4
Proceeds from exercise of stock options 164 722
-------------------------------- ----------------------------------
Net cash used in financing activities (11,578) (1,240)
Effect of exchange rate changes on cash (831) (1,447)
-------------------------------- ----------------------------------
Decrease in cash and cash equivalents (137,457) (57,328)
Cash and cash equivalents at beginning of period 306,556 153,816
-------------------------------- ----------------------------------
Cash and cash equivalents at end of period $ 169,099 $ 96,488
================================ ==================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
7
<PAGE> 8
GREY ADVERTISING INC. AND CONSOLIDATED SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
1. As permitted by the Securities and Exchange Commission, the accompanying
unaudited Consolidated Financial Statements and Notes thereto have been
condensed and, therefore, do not contain all disclosures required by
generally accepted accounting principles. Reference should be made to the
Company's Annual Report on Form 10-K for the year ended December 31, 1999
filed with the Securities and Exchange Commission.
2. The financial statements as of March 31, 2000 and for the three months
ended March 31, 2000 and 1999 are unaudited. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
3. The results of operations for the three months ended March 31, 2000 are
not necessarily indicative of the results to be expected for the full
year.
4. The provision for taxes on income results in an effective tax rate that
is greater than the Federal statutory rate principally due to state and
local income taxes and an effective foreign tax rate in excess of the
Federal statutory rate and, in 1999, the non-recognition of tax benefits
of certain international net operating losses.
5. As of March 31, 2000 and December 31, 1999, the Company had outstanding
20,000 shares of Series I Preferred Stock, and 5,000 shares each of its
Series II and Series III Preferred Stock. The holder of these shares is
the Chairman and Chief Executive Officer of the Company. Each share of
Preferred Stock is to be redeemed by the Company at a price equal to the
book value per share attributable to one share of Common Stock and one
share of Class B Common Stock (subject to certain adjustments) upon
redemption, less a fixed discount established upon the issuance of the
Preferred Stock. The holder of each class of Preferred Stock is entitled
to receive cumulative preferential dividends at the annual rate of $.25
per share, and to participate in dividends on one share of the Common
Stock and one share of the Class B Common Stock to the extent such
dividends exceed the per share preferential dividend. The redemption date
for the Series I, Series II and Series III Preferred Stock is fixed at
April 7, 2004.
8
<PAGE> 9
GREY ADVERTISING INC. AND CONSOLIDATED SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(in thousands, except share and per share data)
6. The computation of basic earnings per common share is based on the
weighted average number of common shares outstanding and, for diluted
earnings per common share, is adjusted for the dilutive effect, if any,
of the assumed exercise of dilutive stock options, shares issuable
pursuant to the Company's Senior Management Incentive Plan and the
assumed conversion of the Company's 8 1/2% Convertible Subordinated
Debentures. For the purpose of computing basic earnings per common share,
the Company's net income is adjusted by dividends paid on the Company's
Preferred Stock and by the change in redemption value of the Company's
Preferred Stock during the period. For the purpose of computing diluted
earnings per common share, net income is also adjusted by the interest
savings, net of tax, on the assumed conversion of the Company's 8 1/2%
Convertible Subordinated Debentures. Additionally, in computing diluted
earnings per common share, the average quarterly market price is used to
determine the number of shares which would be assumed to be repurchased.
The market price for a share of Class B Common Stock, which is not
publicly traded, is deemed to be equal to the market price of a share of
Common Stock, into which a share of Class B Common Stock may be converted
at the option of the holder, as of the date such valuation is made. The
following table shows the amounts effecting income used in computing
earnings per common share ("EPS") and the weighted average number of
shares of dilutive potential common stock:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31,
----------------------------------------------------
2000 1999
----------------------------------------------------
<S> <C> <C>
BASIC EARNINGS PER COMMON SHARE
WEIGHTED AVERAGE SHARES 1,233,588 1,237,681
----------------------------------------------------
Net income $ 5,154 $ 107
Effect of dividend requirements and the change in
redemption value of redeemable Preferred Stock (82) 140
----------------------------------------------------
NET EARNINGS USED IN COMPUTATION $ 5,072 $ 247
----------------------------------------------------
PER SHARE AMOUNT $4.11 $0.20
====================================================
DILUTED EARNINGS PER COMMON SHARE
Weighted average shares used in the Basic EPS calculation 1,233,588 1,237,681
Net effect of dilutive stock options and stock
incentive plans (2) 57,543 (1) -
Assumed conversion of 8 1/2% Convertible
Subordinated Debentures 51,128 (1) -
----------------------------------------------------
ADJUSTED WEIGHTED AVERAGE SHARES 1,342,259 1,237,681
----------------------------------------------------
Net earnings used in the Basic EPS calculation $ 5,072 $ 247
8 1/2% Convertible Subordinated Debentures
interest, net of income tax effect 35 (1) -
----------------------------------------------------
NET EARNINGS USED IN COMPUTATION $ 5,107 $ 247
----------------------------------------------------
PER SHARE AMOUNT $3.81 $0.20
====================================================
</TABLE>
(1) For the first quarter of 1999, the assumed exercise of stock
options, issuances under stock incentive plans and the assumed
conversion of the 8 1/2% Convertible Subordinated Debentures each
had an anti-dilutive effect. As such, these items have been
excluded from the diluted EPS calculation for the period.
(2) Includes 15,723 shares expected to be issued pursuant to the Senior
Management Incentive Plan for the three months ended March 31,
2000. Due to their anti-dilutive effect, shares expected to be
issued pursuant to the Senior Management Incentive Plan for the
comparable period in 1999 were excluded.
9
<PAGE> 10
GREY ADVERTISING INC. AND CONSOLIDATED SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(in thousands, except share and per share data)
7. The Company is not engaged in more than one industry segment. The Company
evaluates performance by geographic region based on profit or loss before
income taxes. Commissions and fees are attributed to the geographic region
that generates the billings.
Commissions and fees, operating profit, and income of consolidated
companies before taxes on income for the three months ended March 31, 2000
and 1999, and related identifiable assets at March 31, 2000 and December
31, 1999 are summarized below according to geographic region:
<TABLE>
<CAPTION>
UNITED STATES EUROPE
--------------------------- -----------------------------
2000 1999 2000 1999
------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Commissions and fees $128,311 $ 99,117 $125,970 $106,427
------------- ------------- -------------- --------------
Operating profit (loss) 5,678 5,521 7,841 2,058
------------- ------------- -------------- --------------
Income (loss) of consolidated
companies before taxes on income 7,882 7,098 6,884 1,720
------------- ------------- -------------- --------------
Identifiable assets 731,143 796,657 739,976 752,662
------------- ------------- -------------- --------------
Investments in and advances to
nonconsolidated affiliated companies
Total assets
</TABLE>
<TABLE>
<CAPTION>
OTHER CONSOLIDATED
--------------------------- -----------------------------
2000 1999 2000 1999
--------------------------- -----------------------------
<S> <C> <C> <C> <C>
Commissions and fees $ 34,427 $ 22,363 $ 288,708 $ 227,907
------------- ------------- -------------- --------------
Operating profit (loss) (1,711) (4,522) 11,808 3,057
------------- ------------- -------------- --------------
Income (loss) of consolidated
companies before taxes on income (1,807) (4,801) 12,959 4,017
------------- ------------- -------------- --------------
Identifiable assets 251,945 241,974 1,723,064 1,791,293
------------- -------------
Investments in and advances to
nonconsolidated affiliated companies 17,895 17,961
-------------- --------------
Total assets $ 1,740,959 $ 1,809,254
-------------- --------------
</TABLE>
8. During the first quarter of 2000 and 1999, total comprehensive income
(loss) amounted to $2,450 and $(1,055), respectively. The difference
between net income and total comprehensive income (loss) is the result of
the change in the translated value of the net assets of the Company's
international operations due to the change in value of the United States
dollar versus other currencies
10
<PAGE> 11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
(in thousands, except share and per share data)
RESULTS OF OPERATIONS
Income from commissions and fees ("gross income") increased 26.7% during the
first quarter of 2000 when compared to the same period in 1999. Absent exchange
rate fluctuations, gross income increased 31.5% in the three months ended March
31, 2000 when compared to the same period in 1999. In the first quarters of 2000
and 1999, respectively, 44.4% and 43.5% of consolidated gross income was
attributable to domestic operations and 55.6% and 56.5% to international
operations. In the first quarter of 2000, gross income from domestic operations
increased 29.5% versus the respective prior period, while gross income from
international operations increased 24.5%, (33.0% absent exchange rate
fluctuations) for the first quarter of 2000 when compared to the same period in
1999. The increase in gross income primarily resulted from the impact of new
business and the continued growth of the Company's media and marketing
communications operations, and from acquired companies.
Salaries and employee related expenses increased 23.6% in the first quarter of
2000 when compared to the respective prior period. Office and general expenses
increased 22.2% for the three months ended March 31, 2000 versus the comparable
prior period. These increases are slightly less but generally in line with the
growth in gross income.
Inflation did not have a material effect on revenue or expenses during 2000 or
1999.
Minority interest applicable to consolidated companies increased by $171 in the
first quarter of 2000 as compared to the respective prior period. The increase
is primarily due to changes in the level of profits of majority-owned companies.
Equity in earnings of nonconsolidated affiliated companies increased by $187 in
the first quarter of 2000 as compared to the respective prior period. The
fluctuations are primarily due to changes in the level of profits of
nonconsolidated affiliated companies.
The effective tax rate is 53.3% in the first quarter of 2000 versus 74.7% in the
same period in 1999. The rate was significantly higher in the first quarter of
1999 because the Company decided it was not prudent to recognize the future tax
benefits attributable to net operating losses at certain international
subsidiaries.
Net income was $5,154 in the first quarter of 2000 as compared to $107 in the
respective prior period. Basic and diluted earnings per common share for the
first quarter of 2000 were $4.11 and $3.81 as compared to $0.20 for both basic
and diluted, respectively, in the comparable quarter in 1999. The increase in
net income is attributable principally to increased gross income at the
Company's media and marketing communications operations, and the reduction of
operating losses at certain international subsidiaries.
11
<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS (CONTINUED)
(in thousands, except share and per share data)
LIQUIDITY AND CAPITAL RESOURCES
Working capital decreased by $28,994 to a deficit of $85,881 at March 31, 2000,
versus a deficit of $56,887 at December 31, 1999. Cash and cash equivalents
decreased by $137,457 from $306,556 to $169,099 at March 31, 2000. The decrease
in cash and cash equivalents is largely attributable to the timing of
collections of accounts receivable and billing of expenses to clients versus
payments to trade vendors. Domestically, the Company has committed lines of
credit totaling $60,000. These lines of credit were partially utilized during
the three months ended March 31, 2000 and 1999 to secure obligations of selected
foreign subsidiaries. There was $21,200 and $20,500 outstanding under these
credit lines as of March 31, 2000 and December 31, 1999, respectively.
Other lines of credit are available to the Company in foreign countries in
connection with short-term borrowings and bank overdrafts used in the normal
course of business. There was $35,694 and $48,000 outstanding at March 31, 2000
and December 31, 1999, respectively.
FORWARD LOOKING STATEMENTS
In connection with the provisions of the Private Securities Litigation Reform
Act of 1995 (the "Reform Act"), the Company may include Forward Looking
Statements (as defined in the Reform Act) in oral or written public statements
issued by or on behalf of the Company. These Forward Looking Statements may
include, among other things, plans, objectives, projections, anticipated future
economic performance or assumptions and the like that are subject to risks and
uncertainties. As such, actual results or outcomes may differ materially from
those discussed in the Forward Looking Statements. Important factors which may
cause actual results to differ, include but are not limited to, the following:
the unanticipated loss of a material client or key personnel, delays or
reductions in client budgets, shifts in industry rates of compensation,
government compliance costs or litigation, unanticipated natural disasters,
changes in the general economic conditions that affect interest rates and/or
consumer spending both in the U.S. and the international markets in which the
Company operates, unanticipated expenses, client preferences which can be
affected by competition, the inability to implement upgrades for certain
computer programs which are not Year 2000 compliant and the ability to project
risk factors which may vary.
12
<PAGE> 13
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: Reference is made to the Index annexed hereto and made a
part hereof.
(b) Reports on Form 8-K: The Company did not file any reports on Form
8-K during the quarter ended March 31, 2000.
13
<PAGE> 14
GREY ADVERTISING INC. AND CONSOLIDATED SUBSIDIARY COMPANIES
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.
GREY ADVERTISING INC.
(REGISTRANT)
DATE: May 15, 2000 By:/s/ Steven G. Felsher
-----------------------------
Steven G. Felsher
Executive Vice President -
Finance - Worldwide
Secretary and Treasurer
(Duly Authorized Officer)
DATE: May 15, 2000 By:/s/ Lester M. Feintuck
-----------------------------
Lester M. Feintuck
Senior Vice President -
Chief Financial Officer - US Operations
Controller
(Chief Accounting Officer)
14
<PAGE> 15
INDEX TO EXHIBITS
Page Number in
Number Assigned to Sequential Numbering
Exhibit (i.e. 601 of Table of Item 601 Exhibits System Where Exhibit
Regulation S-K) Description of Exhibits May be Found
- -------------------- -------------------------- ---------------------
27 Financial Data Schedule 16
15
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
[LEGEND]
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2000 AND THE
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS
ENDED MARCH 31, 2000 OF GREY ADVERTISING INC. AND CONSOLIDATED SUBSIDIARY
COMPANIES AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
[/LEGEND]
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 169,099
<SECURITIES> 6,926
<RECEIVABLES> 970,067
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,306,459
<PP&E> 296,776
<DEPRECIATION> 163,550
<TOTAL-ASSETS> 1,740,959
<CURRENT-LIABILITIES> 1,392,340
<BONDS> 78,025
10,171
0
<COMMON> 1,490
<OTHER-SE> 170,075
<TOTAL-LIABILITY-AND-EQUITY> 1,740,959
<SALES> 288,708
<TOTAL-REVENUES> 288,708
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 276,900
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,500
<INCOME-PRETAX> 12,959
<INCOME-TAX> 6,911
<INCOME-CONTINUING> 5,154
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,154
<EPS-BASIC> 4.11
<EPS-DILUTED> 3.81
</TABLE>
