November 4, 1999

Don Seeley: 312/425-6505

Kathryn Woods: 212/727-5582

 FOR IMMEDIATE RELEASE

 TRUE NORTH REPORTS STRONG THIRD QUARTER EARNINGS FROM OPERATIONS

 Q3 Diluted EPS rose 29% to $0.36; organic growth and new business increased.

• Revenues grew 18% in the third quarter, due to stronger organic growth and acquisitions.
• Organic growth rose to 8.8% in Q3, up from 5.0% in Q2, and (1.3)% in Q3 last year.
• Staff cost ratio improved to 61.7% from 62.2% in last year’s Q3.
• Net new business wins were $233 million in equivalent annualized billings in Q3, up 64% from a year ago.
• Restructuring and other charges totaled $76 million in Q3, mainly for severance and real estate costs.
• The realignment of True North’s advertising agency operations remains on course.

Third Quarter and 9-Month 1999 Highlights (Amounts in thousands, except per share data and percentages)

(1) 1998 results have been restated to reflect a Feb. 1999 pooling of interests transaction.

(2) Q3 1999 results exclude $76.4 million of pre-tax restructuring and other charges ($50.2 million after-tax or $1.05 per share), and Q3 1998 results exclude $4.3 million of pre-tax restructuring and other charges ($2.3 million after-tax or $0.05 per share.)

(3) Q3 1999 results exclude a $1.1 million pre-tax gain ($0.6 million after-tax or $0.01 per share), Q1 1999 excludes a $4.1 million pre-tax gain ($2.3 million after-tax or $0.05 per share), and Q3 1998 excludes a $4.4 million pre-tax gain ($2.3 million after-tax or $0.05 per share) on the sale of securities.

November 4, 1999

Don Seeley: 312/425-6505

Kathryn Woods: 212/727-5582

FOR IMMEDIATE RELEASE

TRUE NORTH REPORTS STRONG THIRD QUARTER EARNINGS FROM OPERATIONS

CHICAGO–True North Communications Inc. (NYSE: TNO) today reported a 29% increase in diluted earnings per share before unusual items, driven by strong improvements in revenues and organic growth. Excluding the impact of two pre-tax unusual charges ($76.4 million in 1999, primarily for the FCB/Bozell realignment; and $4.3 million in 1998 for the Modem Media.Poppe Tyson pre-IPO reorganization) and gains on the sales of DoubleClick securities ($1.1 million in 1999 and $4.4 million in 1998), net income for the third quarter ended September 30, 1999 was $17.9 million or $0.36 diluted per share, compared with $13.2 million or $0.28 diluted per share in the year-ago quarter. Results for 1998 were restated to reflect the February 1999 pooling of interests transaction with The Financial Relations Board. Including all unusual items, True North had a net loss for the third quarter of 1999 of $3l.7 million or $0.66 diluted per share, compared to net income of $13.2 million or $0.28 per share in the same quarter of 1998.

Revenues increased 18% in the third quarter to $356.7 million on broad-based growth throughout True North. Organic growth rose 8.8%, up from 5.0% in the second quarter and (1.3)% in the year-ago quarter. Modem Media.Poppe Tyson (Nasdaq: MMPT), which is approximately 50% owned by True North, continued to have a positive impact on revenues and organic growth. Excluding MMPT, True North’s organic growth was 6.0%. Net new business rose to $233 million in equivalent annualized billings, up 64% from $142 million in last year’s third quarter.

Excluding the restructuring charges, operating income rose 17% to $35.3 million in the third quarter. As a percentage of revenue, staff costs decreased to 61.7% from 62.2% in last year’s third quarter, while other general expenses increased to 28.4% from 27.9%, primarily attributable to Y2K compliance costs. Earnings also benefited from initiatives that reduced the effective tax rate from 47.2% to 43.5%.

"We continue to move in the right direction toward achieving our goals," said David Bell, True North’s Chairman and Chief Executive Officer. "Third quarter organic growth increased, new business increased, and collaboration among our business groups is becoming a more integral part of True North’s culture."

Bell added, "The realignment of our advertising agency operations continues to advance on track. In addition to our significantly stronger global positioning, we continue to expect the realignment to result in expense savings of close to $25 million on an annualized basis, with approximately half of the savings occurring in 2000 and the full amount realized in 2001 and thereafter. The achievement of these expense savings is expected to have a meaningful impact on True North’s staff cost ratio and operating margin."

The third quarter results were reduced by a restructuring charge, related to the realignment, mainly for severance and real estate costs. The severance costs are primarily related to administrative and general management positions, particularly internationally where FCB and Bozell have duplicative functions in their operations.

Fourth Quarter Outlook

"We're pleased with True North's growth in the third quarter, which demonstrates the kind of improvement we think we're capable of once we fully hit our stride," Bell said. "It's important to recognize that the level of strength shown in the third quarter was somewhat above-trend, however, and early indications are that revenue and income growth for the fourth quarter should come a bit closer to our experience in the second quarter of this year. Factors affecting fourth quarter comparisons will include the $2.3 million in equity income from Publicis in last year's fourth quarter, a slight shift in the seasonality of client spending, and the revenue in last year's fourth quarter from accounts lost early in 1999. We continue to expect 1999 fourth quarter revenues and net income to exceed last year's fourth quarter, and we are encouraged by the positive trends in both our numbers and business positioning."

Cash Flow

Third quarter EBITDA (earnings before interest expense, taxes, depreciation and amortization) increased 9% to $51.8 million versus the year-ago quarter. Depreciation and amortization totaled $13.6 million in the third quarter, up from $11.5 million a year ago.

Nine-Month Results

Net income for the nine-month period ended September 30, 1999, excluding unusual items, was $43.9 million or $0.90 diluted per share, compared with $34.5 million or $0.73 diluted per share in the first nine months of last year. Including unusual items, the net loss for the nine-month period was $3.4 million or $0.07 diluted per share. Excluding the restructuring charges, nine-month operating income increased 15% to $86.2 million on a 12% increase in revenues to $1.0 billion.

Key Growth Initiatives

True North continued to make progress in its key growth initiatives: new business, collaboration and acquisitions.

• New Business — Third Quarter

Third quarter net new business was approximately $233 million in equivalent annualized billings, up from $170 million in the second quarter and from $142 million in last year’s third quarter. Bell commented, "Our focus on organic growth and new business is beginning to have an impact throughout True North, both domestically and in international markets. Our new business gains include a strong and growing presence in the e-business arena, with such third quarter wins as Datek Online to Bozell Group; About.com to BSMG Worldwide; Hungry Minds.com, hilton.com and Starbelly.com to units of FCB Worldwide."

Third quarter new business wins included:

Collaboration
Collaboration among various True North companies continues to build. Bell noted, "Collaboration is becoming an increasing part of our organic growth. Since we began our focus earlier this year, collaborative efforts have resulted in more than seventy new assignments throughout True North."

 New collaborative efforts during the third quarter included:

• FCB Worldwide to R/GA Interactive – AT&T
• FCB Worldwide to Wells Marketing (MDWW) – 3Com/Palm Pilot
• FCB HealthCare to Stedman Graham & Partners (New America Strategies Group) – Glaxo Wellcome
• Bozell Chicago to BSMG – Ace Hardware
• Bozell Global Healthcare to Siboney (New America Strategies Group) – Merck
• Bozell Kamstra to Bozell Yellow Pages – GE
• Tierney to Bozell Direct – Exelon Energy
• Tierney to Financial Relations Board – American Business Financial Services
• McCracken Brooks (MDWW) to Bozell Silicon Valley – Motorola Pagers
• Within Marketing Drive Worldwide (MDWW): MGR with BBG – Alliant and Gannett

  Acquisitions
  During the third quarter, True North continued to acquire companies that expand the strengths and global depth of FCB Worldwide and key brands within its Diversified Companies. David Bell noted, "Our priorities for acquisitions remain the expansion of FCB Europe as well as our public relations, sales promotion and multicultural marketing brands. And we’ve made decisive moves toward achieving those priorities in the third quarter."

Acquisitions for the 3Q include:

FCB Worldwide

• FCB Direct Worldwide strengthened its European presence with the acquisition of Paris-based 20/80 Group, a direct marketing company with strong database capabilities. Its key clients include such leading French brands as Bouygues, Sofinco and Total.

• FCB Worldwide, currently the 4^th largest advertising agency in Latin America, acquired majority ownership of EFPZ Publicidad, a top-ten agency in Uruguay. The new agency, renamed EFPZ/FCB, serves a number of major FCB global clients, including S.C. Johnson and Nabisco, as well as Fleischmann, Harley-Davidson and Samsonite.

• FCB Worldwide acquired McElroy Communications, a Southern California agency that specializes in youth marketing and has expertise in Gen Y extreme sports. Renamed McElroy FCB, the agency creates advertising for such brands as Vans Shoes, Pacific Sunwear, and Titus and Interplay Software.

Diversified Companies Brands

• Public Relations: BSMG Worldwide completed its acquisition of Benjamin Group, one of the largest public relations agencies in Silicon Valley. Benjamin Group is also one of the leading agencies specializing in technology PR, with clients including Toshiba’s Computer Systems Division, Mentor Graphics, Conexant Systems, and Wireless Knowledge, the joint venture between Microsoft and Qualcomm.

• Multicultural Marketing: True North became the U.S. leader in multicultural marketing with its new stake in Don Coleman Advertising. The third-largest African-American advertising agency, Don Coleman Advertising (DCA) now operates as part of True North’s New America Strategies Group, the only partnership to reach all three of the nation’s major ethnic populations – African-Americans, Hispanics and Asian-Americans. DCA serves major marketers, including DaimlerChrysler, Kmart, General Mills, Domino’s and Miller Brewing.

• Marketing Drive Worldwide: True North acquired Maier Marketing and merged it with McCracken Brooks, a leading packaged goods sales promotion agency within Marketing Drive Worldwide. The combined agency, McCracken Brooks Maier, now has expanded capabilities in food service marketing as well as database and direct marketing. Maier brings such clients as Pillsbury, Dairy Management Inc., and General Mills.

Go to Highlights for more information.

CAUTIONARY STATEMENT

Certain statements contained in this press release may constitute "forward-looking statements" within the meaning of Section 21E(i)(1) of the Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause True North’s actual results to be materially different from any future results expressed or implied by these statements. Such factors include the following: general economic and business conditions, changes in demand for True North’s services, changes in competition, the ability of True North to integrate acquisitions or complete future acquisitions, interest rate fluctuations, dependence upon and availability of qualified personnel and changes in government regulation. In light of these and other uncertainties, the forward-looking statements included in this document should not be regarded as a representation by True North that True North’s plans and objectives will be achieved.

True North Communications (NYSE: TNO) is a top global advertising and communications holding company. It has three major advertising agencies: FCB Worldwide, a top-ten global agency and the largest agency brand in the U.S.; and two strongly positioned national agencies, Bozell Group and Temerlin McClain. True North’s Diversified Companies group is comprised of leading communications services brands, including: BSMG Worldwide, public relations; Marketing Drive Worldwide, global marketing services; R/GA Interactive; Tierney & Partners, advertising and public relations; TN Media; and New America Strategies Group, the largest multicultural marketer; among others. True North, headquartered in Chicago, has annual revenues exceeding $1.2 billion and annual billings of more than $12 billion.

Download Consolidated Income Statement Quarter Ended September 30 spreadsheet

Download Consolidated Income Statement Nine Months Ended September 30, 1999 spreadsheet

# # #