Preliminary Results - Part 2

WPP Group PLC
21 February 2001



Part 2


WPP GROUP PLC
Notes to the unaudited preliminary consolidated financial statements

1.     Basis of accounting

The unaudited preliminary consolidated financial statements are prepared under
the historical cost convention.


2.       Accounting policies

The unaudited preliminary consolidated financial statements comply with
relevant accounting standards (UK GAAP) and have been properly prepared using
accounting policies set out on pages 56 and 57 of the Group's 1999 Annual
Report and Accounts, apart from the adoption of FRS15 (Tangible fixed assets),
FRS16 (Current tax) and FRS19 (Deferred tax).  There has been no material
impact on the financial statements as a result of the adoption of these new
standards except in the case of FRS19 (Deferred tax).

FR19 requires that deferred tax should be recognised as a liability or asset
if the transactions or events that give the Group an obligation to pay more
tax in the future or a right to pay less tax in future have occurred by the
balance sheet date.  The Standard is mandatory for all accounting periods
ending on or after 23 January 2002 but, consistent with ASB's encouragement
for companies to adopt early, the Group has decided to implement FRS19 in its
2000 financial statements.  The effects of the early adoption of FRS19 and the
resulting prior year adjustments are shown in notes 6 and 11.

The directors have also reassessed their opinion that all the goodwill and
intangible assets of the Group have an infinite life.  For certain
acquisitions, where the directors consider it more appropriate, goodwill is
now amortised over its useful life up to a 20 year period, from the date of
acquisition.  The impact of this revision to the estimated life of goodwill is
shown in note 10.


3.    Currency conversion

The 2000 unaudited preliminary consolidated profit and loss account is
prepared using, among other currencies, an average exchange rate of US$1.5162
to the pound (1999: US$1.6178).  The unaudited preliminary consolidated
balance sheet as at 31 December 2000 has been prepared using the exchange rate
on that day of US$1.4937 to the pound (1999: US$1.6182).

The unaudited preliminary consolidated profit and loss account and balance
sheet are presented in Euros in Appendix II for illustrative purposes.  The
unaudited preliminary consolidated profit and loss account has been prepared
using an average exchange rate of Euro1.6428 to the pound (1999: Euro1.5202).
The unaudited preliminary balance sheet at 31 December 2000 has been prepared
using the exchange rate on that day of Euro1.5912 to the pound (1999: Euro
1.6056).

The constant currency percentage changes shown on the face of the profit and
loss account have been calculated by applying 2000 exchange rates to the
results for 1999 and 2000 for both the Sterling and Euro financial statements.

WPP GROUP PLC
Notes to the unaudited preliminary consolidated financial statements
(continued)


4.     Acquisitions

The total contributions of acquisitions completed in 2000 was follows:


                                                   Young &        Other
                                                   Rubicam Acquisitions   Total
                                                        £m           £m      £m
Revenue                                              359.4         79.5   438.9
Gross profit                                         359.4         79.5   438.9
Operating costs                                    (311.8)       (65.6) (377.4)
Operating profit                                      47.6         13.9    61.5
Income from associates                                 2.6          2.3     4.9
Profit on ordinary activities before interest and     50.2         16.2    66.4
taxation
Net interest payable and similar charges             (2.5)        (0.1)   (2.6)
Profit on ordinary activities before taxation         47.7         16.1    63.8


5.     Segmental Information

Reported contributions by geographical area were as follows:
                                                              2000        1999
                                                                £m          £m
Revenue

United Kingdom                                               532.4       434.7
United States                                              1,273.6       915.2
Continental Europe                                           586.3       426.2
Canada, Asia Pacific, Latin America, Africa
& Middle East                                                588.4       396.5
                                                           2,980.7     2,172.6
PBIT(1)

United Kingdom                                                63.1        51.5
United States                                                191.4       139.0
Continental Europe                                            81.9        55.8
Canada, Asia Pacific, Latin America, Africa
& Middle East                                                 79.6        44.5
                                                             416.0       290.8

(1)PBIT:  Profit on ordinary activities before interest and taxation


WPP GROUP PLC

Notes to the unaudited preliminary consolidated financial statements
(continued)

Reported contributions by operating sector were as follows:
                                                              2000        1999
                                                                £m          £m
Revenue

Advertising and media investment management                1,399.0     1,013.1
Information and consultancy                                  512.1       419.7
Public relations and public affairs                          330.1       178.9
Branding and Identity, Healthcare and
  Specialist Communications                                  739.5       560.9
                                                           2,980.7     2,172.6
PBIT(1)

Advertising and media investment management                  231.4       155.9
Information and consultancy                                   51.6        42.1
Public relations and public affairs                           43.2        23.9
Branding and Identity, Healthcare and
  Specialist Communications                                   89.8        68.9
                                                             416.0       290.8

(1)PBIT:  Profit on ordinary activities before interest and taxation

6.     Taxation

The Group tax rate on profit on ordinary activities before taxation is 30%
(1999: 30%).  The tax charge comprises:


                                                                2000       1999
                                                                  £m         £m

Corporation Tax at 30% (1999 - 30.25%)                           6.4       12.4
Deferred  taxation                                            (10.6)      (0.7)
Overseas taxation                                              100.3       56.5
Tax on profits of associate companies                           13.6        8.1
ACT write-off                                                      -        0.3
                                                               109.7       76.6

7.    Ordinary dividends

The Board has recommended a final dividend of 2.55p (1999: 2.1p) per ordinary
share.  In addition to the interim dividend paid of 1.2p (1999: 1.0p net) per
ordinary share, this makes a total for the year of 3.75p (1999: 3.1p) per
ordinary share.   The final dividend is expected to be paid on 9 July 2001 to
share owners on the register at 8 June 2001.  No advance corporation tax is
paid or payable in respect of either the interim or final dividends owing to
the abolition of ACT with effect from April 1999.

WPP GROUP PLC

Notes to the unaudited preliminary consolidated financial statements
(continued)


8.    Earnings per share

Basic and fully diluted earnings per share have been calculated in accordance
with FRS14 'Earnings per Share'.

(a)   Basic earnings per share have been calculated using earnings of £244.7
million (1999: £172.8 million) and weighted average shares in issue during the
year of 834,280,801 shares (1998: 753,324,054 shares).

(b)   Fully diluted earnings per share have been calculated using earnings of
£244.7 million (1999: £172.8 million), as adjusted for income arising on the
convertible loan note of £0.9 million (1999: £nil). The weighted average
shares used was 865,978,000 shares (1999: 768,691,993 shares).  This takes
into account the exercise of employee share options where these are expected
to dilute earnings.

(c)    At 31 December 2000, there were 1,111,853,705 ordinary shares in issue.


9.    Corporate Brands

The Group has capitalised an additional £600 million for the Corporate brand
names of Y&R Inc., which was acquired during the year.

10.   Goodwill

Total goodwill of £3,092.1 million arising during the year includes £3,087.0
million in respect of acquisitions of subsidiary undertakings. This amount
includes £2,818.5     million arising from the acquisition of Y&R Inc, which
was completed on 4th October 2000.

In addition, investments include £5.1 million of goodwill in respect of
associated undertakings acquired during the year.

Cash paid in respect of these acquisitions was £206.5 million.  Future
anticipated payments to vendors total £302.3 million (1999 : £172.4 million),
based on the directors' best estimates of future obligations, which are
dependent on future performance of the interests acquired.  £94.1 million of
earnout payments are expected to be paid during 2001.

During the year, the Group charged £8.5million (1999: £nil) to operating
profit, arising from the impairment of goodwill during the year due to the
adjustment of the carrying value of goodwill to its recoverable amount.

Additionally, £6.6million (1999: £nil) was charged to operating profit for
goodwill amortisation, as goodwill arising on certain acquisitions is now
being amortised over periods up to 20 years as a result of the Group's
reassessment of the useful economic life of goodwill.



WPP GROUP PLC

Notes to the unaudited preliminary consolidated financial statements
(continued)


11.       Debtors

The following are included in debtors:                      2000           1999
                                                                      RESTATED*
                                                              £m             £m

Trade debtors                                            1,699.4          770.0
Prepayments and accrued income                             129.3           70.1
Deferred tax                                                57.4           28.0
Other debtors                                              294.9          200.3
                                                         2,181.0        1,068.4


The deferred tax asset is regarded as recoverable since, based on all
available evidence, including forecasts of profit, it is more likely than not
there will be suitable taxable profits from which the future reversal of the
underlying timing differences can be deducted.

The 31 December 1999 balance sheet has been restated to recognise a deferred
tax asset of £28.0 million as a result of the implementation by the Group of
FRS19 in its 2000 financial statements.


12.   Creditors: amounts falling due within one year

The following are included in creditors falling due within one year:


                                                             2000          1999
                                                               £m            £m

Bank loans and overdrafts                                   297.6         148.3
Trade creditors                                           2,574.9       1,315.0
Corporate income tax payable                                 42.4          34.6
Deferred income                                             267.6         125.8
Payments due to vendors (note 10)                            94.1          41.2
Other creditors and accruals                                975.8         483.1
                                                          4,252.4       2,148.0

Overdraft balances included within bank loans and overdrafts amount to £297.6
million (1999: £55.6 million).


WPP GROUP PLC

Notes to the unaudited preliminary consolidated financial statements
(continued)


13.   Creditors: amounts falling due after more than one year

The following are included in creditors falling due after more than one year:


                                                                  2000     1999
                                                                    £m       £m

Corporate bond, convertible loan note and bank loans             794.6    366.8
Corporate income taxes payable                                   212.5    122.9
Payments due to vendors (note 10)                                208.2    131.2
Other creditors and accruals                                      64.3     31.6
                                                               1,279.6    652.5


The corporate bond, convertible loan note, bank loans and overdrafts included
within short and long term creditors fall due for repayment as follows:


                                                            2000           1999
                                                              £m             £m

Within one year                                            297.6          148.3
Between 1 and 2 years                                          -              -
Between 2 and 5 years                                      402.8          183.1
Over 5 years                                               391.8          183.7
                                                         1,092.2          515.1


14.   Net (debt)/ funds

                                                                  2000   1999
                                                                     £m     £m

Cash at bank and in hand                                         1,067.6  607.0
Bank loans and overdrafts due
Within one year (note 12)                                        (297.6) (148.3)
Corporate bond, convertible loan note and loans due After one
year (note 13)                                                   (794.6) (366.8)
Net (debt)/ funds                                                (24.6)   91.9


15.   Statutory information and audit review

The results for the year to 31 December 2000 do not constitute statutory
accounts  and are unaudited.   The statutory accounts for the year ended 31
December 1999 received an unqualified auditors' report and have been filed
with the Registrar of Companies.

WPP GROUP PLC

Appendix II

Preliminary results for the year ended 31 December, 2000

Unaudited preliminary consolidated profit & loss account for the year ended 31
December, 2000
Presented in Euros for illustrative purposes only


                                                                       Constant
                                                                       Currency
                                         2000                          (Note 3)
                               Continuing Acquisitions            1999
                               Operations     (Young &     Total Total      +/-
                                               Rubicam
                                                 only)
                                    Eurom        Eurom     Eurom Eurom        %

Turnover (gross billings)        20,063.0     2,853.1  22,916.1 14,207.6  +61.3%

Revenue                           4,306.3        590.4   4,896.7 3,302.8  +48.3%

Gross profit                      3,904.5        590.4   4,494.9 2,820.4  +59.4%
Operating costs                 (3,361.7)      (512.2) (3,873.9) (2,419.8)-60.1%

Operating profit                    542.8         78.2     621.0 400.6   +55.0%
Income from associates               58.1          4.3      62.4  41.5   +50.4%
Profit on ordinary activities
before interest and taxation        600.9         82.5     683.4 442.1   +54.6%
                                    
Net interest payable and           (78.5)        (4.1)    (82.6) (53.8)  -53.5%
similar charges

Profit on ordinary activities
before taxation                     522.4         78.4     600.8 388.3   +54.7%
                                    
Tax on profit on ordinary                                (180.2) (116.5) -54.7%
activities

Profit on ordinary activities                              420.6 271.8   +54.7%
after taxation
Minority interests                                        (18.6) (9.1)  -104.4%

Profit attributable to
ordinary share owners                                      402.0 262.7   +53.0%
                                                           
Ordinary dividends                                        (62.1) (36.5)   +70.1%
Retained profit for the year                               339.9 226.2   +50.3%

Earnings per share (net basis)
Basic earnings per ordinary                                48.1c 34.8c   +38.2%
share
Fully diluted earnings per
ordinary share                                             46.7c 34.2c   +36.5%
                                                           
Ordinary dividend per share  - interim                     1.97c 1.52c   +29.6%
                             - final                       4.19c 3.19c   +31.3%
                    

WPP GROUP PLC
Unaudited preliminary consolidated balance sheet as at 31 December, 2000
Presented in Euros for illustrative purposes only


                                                               2000        1999
                                                                     RESTATED *
                                                              Eurom       Eurom
Fixed assets
Intangible assets:
  Corporate brands                                          1,511.6       561.9
   Goodwill                                                 5,565.0       658.8
Tangible assets                                               620.9       315.8
Investments                                                   877.5       573.0
                                                            8,575.0     2,109.5
Current assets
Stocks and work in progress                                   383.6       182.2
Debtors                                                     3,470.4     1,715.4
Debtors within working capital facility:
  Gross debts                                                 739.7       555.1
  Non-returnable proceeds                                   (368.5)     (343.8)
                                                              371.2       211.3
Cash at bank and in hand                                    1,698.8       974.6
                                                            5,924.0     3,083.5
Creditors:  amounts falling due within one year           (6,766.4)   (3,448.8)
Net current liabilities                                     (842.4)     (365.3)
Total assets less current liabilities                       7,732.6     1,744.2
Creditors:  amounts falling due after more than one year  (2,036.1)   (1,047.7)
Provisions for liabilities and charges                      (232.2)     (127.2)
Net assets                                                  5,464.3       569.3

Capital and reserves
Share capital                                                 176.9       124.4
Reserves                                                    5,248.9       431.3
Share owners' funds                                         5,425.8       555.7
Minority interests                                             38.5        13.6
Total capital employed                                      5,464.3       569.3



* The 1999 balance sheet has been restated as a result of the implementation
  of FRS19 in the Group's 2000   financial statements. The resulting prior year
  adjustment is shown in note 11.