<PAGE>   1

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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K

<TABLE>
<C>               <S>
   (MARK ONE)
      [X]         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
                                               OR
      [ ]         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
                  FOR THE TRANSITION PERIOD FROM ____________ TO ____________
</TABLE>

                          COMMISSION FILE NO. 0-11428

                          INFORMATION RESOURCES, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                            <C>
                   DELAWARE                                      36-2947987
       (State or Other Jurisdiction of                        (I.R.S. Employer
        Incorporation or Organization)                      Identification No.)
 150 NORTH CLINTON STREET, CHICAGO, ILLINOIS                       60661
   (Address of Principal Executive Offices)                      (Zip Code)
</TABLE>

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (312) 726-1221

          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                              TITLE OF EACH CLASS
                              -------------------
                     COMMON STOCK, $.01 PAR VALUE PER SHARE
                        PREFERRED STOCK PURCHASE RIGHTS

     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 [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

     The aggregate market value of the voting stock held by nonaffiliates of the
registrant as of February 27, 1998 (based on the closing price as quoted by
NASDAQ as of such date) was $401,172,254.

     The number of shares of the registrant's common stock, $.01 par value per
outstanding share, as of February 27, 1998 was 28,655,161.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the registrant's definitive proxy statement for the annual
meeting of stockholders to be held May 21, 1998 to be filed pursuant to
Regulation 14A are incorporated by reference into Part III of this Form 10-K.
================================================================================
<PAGE>   2

                                     PART I
ITEM 1. BUSINESS

INTRODUCTION

     Information Resources, Inc. ("IRI") and its subsidiaries (collectively "the
Company") is a leading provider of UPC scanner-based business solutions services
to the consumer packaged goods ("CPG") industry. The Company obtains data
primarily from electronic point-of-sale scanners in retail stores and integrates
this scan data with other proprietary data collected by the Company. The Company
maintains this data in massive data warehouses and provides CPG manufacturers,
retailers, wholesalers and brokers with a variety of services critical to their
sales, marketing and logistics operations. The Company's software products
assist clients in analyzing, distributing and using the Company's data, enabling
them to make more cost-effective decisions in marketing, selling and
distributing their products.

     The Company derives approximately 80% of its revenues in the U.S. These
services center in large part around the Company's flagship InfoScan(R) service,
which tracks consumer purchasing of products sold in supermarkets, drug stores,
mass merchandisers and convenience stores across the United States. The Company
also offers a number of other services to CPG manufacturers, including
household-level information collected via consumer panels. One such service is
BehaviorScan(R) which is used for the testing and evaluation of alternative
marketing strategies and tactics for both new and established products. Closely
related to its information services, the Company also markets its suite of
software applications to the CPG industry. In addition, the Company maintains a
family of software application products based on Oracle technology. In July
1995, the Company sold its EXPRESS technology to Oracle Corporation ("Oracle"),
while retaining rights to market and distribute Oracle EXPRESS(R) software.

     The Company also provides scanner-based business information services in
Western Europe and other international markets. Revenues from the Company's U.S.
and International Services, as well as from the software products business sold
to Oracle in mid-1995, were as follows for the periods shown (in thousands):

<TABLE>
<CAPTION>
                                                         1997       1996       1995
                                                       --------   --------   --------
<S>                                                    <C>        <C>        <C>
U.S. Services........................................  $366,678   $344,612   $317,553
International Services...............................    89,649     60,991     42,165
                                                       --------   --------   --------
          Subtotal...................................   456,327    405,603    359,718
Software products business sold to Oracle............        --         --     40,198
                                                       --------   --------   --------
          Total......................................  $456,327   $405,603   $399,916
                                                       ========   ========   ========
</TABLE>

U.S. AND INTERNATIONAL SERVICES

     The Company's U.S. and International Services include InfoScan product
tracking services, related software product sales, consumer panel information,
analytical and consulting services, BehaviorScan product testing services and a
variety of applications of the Company's census (i.e., all stores within
participating retail chains) scanner data bases.

     The Company's principal information service marketed in the United States
and internationally is InfoScan. InfoScan is a service used by the CPG industry
to monitor and evaluate the market performance of products sold in retail
stores. The InfoScan service provides subscribers with a variety of information
including how much product they and their competitors are selling, where the
products are being purchased, at what price the products are being sold and
under what promotional conditions sales are occurring. This information helps
subscribers make fundamental strategic and tactical decisions for their
businesses in the areas of sales, marketing, pricing, promotion and logistics.

     InfoScan utilizes universal product code ("UPC") information printed via
bar codes on CPG product packaging. Scanners at retail checkouts read the UPC
code and record product sales electronically. On an on-going basis, the Company
procures such electronic sales data (weekly and daily) along with related
promotional data from a sample of national and local market retail stores. The
Company also collects consumer purchase information directly from individual
households across the United States using consumer

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identification cards in a store and/or proprietary in-home scanning devices. The
Company processes the information at its computer facilities and stores it in
the Company's proprietary data bases. InfoScan subscribers access the
information in the Company's data bases through a variety of means, including
the use of analytical software provided by the Company.

     Subscriptions to InfoScan by CPG manufacturers are a principal source of
revenue for the Company. Manufacturers subscribe to InfoScan by contracting with
the Company to obtain access to the InfoScan data bases for specified product
categories. InfoScan contracts generally have multi-year terms, usually of three
years or more.

     InfoScan Census. InfoScan Census applications are derived from a product
tracking service based on scanner data collected from all stores within
participating retail chains, as opposed to collection from a sample of stores.
InfoScan Census offers the CPG industry more complete and accurate data than
sample services, since it has no sampling or projection errors, and its
applications can go beyond traditional market tracking uses.

     InfoScan Census revenues come primarily from manufacturers purchasing key
account data, which is sales data for a product category based on all the stores
of a specific retailer. This service enables manufacturers' sales
representatives to negotiate with retail buyers based on a mutually consistent
and accurate measure of consumer purchasing. In addition, an evaluation of
differences in brand and product category purchasing across individual stores
within a chain can often pin-point opportunities to effectively build
sales -- to the benefit of both manufacturers and retailers. Beyond "key
account" information, census applications include improved management of trade
promotions, validation of "pay-for-performance" promotions, more effective sales
force and broker compensation programs and improved inventory and distribution
management.

     There are presently approximately 14,000 supermarket stores and
approximately 8,000 drug stores in the Company's InfoScan Census U.S. data base.

     InfoScan Data Collection. For the Company's InfoScan sample service, the
Company continuously collects weekly product sales and price information from
representative retail outlets throughout the United States. Included in the
Company's national and local market samples in the U.S. are approximately 4,500
stores in the aggregate, including supermarkets, drug stores, mass merchandisers
and convenience stores. Contracting retailers typically deliver their scanner
data electronically to the Company's computer facilities in Wood Dale, Illinois.
While most retail stores in the United States have installed scanner equipment
to record product sales information, certain convenience stores have not. When
scanner data are not available, the Company's field personnel visit stores and
obtain sales information via a manual audit of the stores' product purchases and
inventory. Collection practices for weekly product sales information in the
Company's operation in foreign countries vary somewhat on a country-by-country
basis as does scanner data availability.

     The InfoScan U.S. and international data bases typically contain both
product movement and price information and "causal" data. Causal data consist of
information which may explain changes in product sales, such as price
promotions, retailers' newspaper ads and in-store displays, as well as other
promotion and merchandising data related to the sale of CPG products. The
Company employs a field force of part-time workers to collect causal data. These
employees conduct weekly on-site visits to retail stores participating in the
InfoScan service to collect causal information such as in-store promotions and
displays. Field force personnel perform other services as well, including those
related to the Company's test marketing services.

     The Company's InfoScan service also collects consumer purchase information
from approximately 90,000 individual households in the United States. Shoppers
from approximately 60,000 of these households present an identification card
when shopping at participating supermarkets, thereby allowing scanners to record
specific details of their product purchases. The Company also provides about
30,000 households with hand-held scanners to record their product purchases made
in retail outlets which either do not have scanners or do not otherwise
participate in the Company's household data collection system. The Company is
expanding this collection process to 55,000 households in 1998. Household panel
information is available in European markets usually from alliance partners of
the Company.

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     The Company often pays cash for scanner data covering a sample or census of
retailers' stores. However, the Company also exchanges software, product
movement information and other services to obtain access to data for all stores
within certain supermarket and drug chains. (See "QScan" below.) Typical data
procurement contracts run from year to year and generally are cancelable by
either party on 90 days notice.

     InfoScan Data Processing. With respect to its U.S. operation for which the
Company processes scanner data, the Company receives and processes data for its
InfoScan service at its production center and computer facilities located in
Wood Dale, Illinois. The Company's production center operates with numerous
mainframe and RISC-based computers as well as proprietary production software
and related technology developed exclusively by the Company to process and store
very large amounts of data. Through direct telecommunication connections with
InfoScan clients in the U.S., the Company also provides electronic on-line
access to InfoScan data services. The Company leases its mainframe computers
from third party financial institutions.

     InfoScan Delivery. Subscriptions to the InfoScan service entitle the
Company's clients to access the Company's data bases and receive information for
specific product categories. Because large amounts of data are involved, clients
usually either take electronic delivery of the data or obtain electronic access
to the Company's data bases through the Company's on-line service. Clients
taking electronic delivery generally license software from the Company. The
Company's on-line service permits clients to build and store their own data
bases which remain resident on the Company's computers. Clients then access the
data bases through remote electronic connection. Clients typically also purchase
software services from the Company. (See "Software and Related Products" below
for more information on Company revenues derived from software licensing.)

     Other Client Services. The Company places a major emphasis on the provision
of experienced and knowledgeable client service personnel to assist InfoScan
subscribers in the use and interpretation of InfoScan data as well as the use of
the Company's analytical software. The Company also provides numerous analytical
and consulting services to both CPG manufacturers and retailers. These revenues
mostly follow from subscriptions to the Company's InfoScan service and
principally relate to analytical use of InfoScan data. These services are
generally billed on a time and materials basis.

     Analytical and consulting services are directed at helping clients identify
new marketing opportunities, more effectively manage their marketing mix,
identify appropriate opportunities for product line optimization and increase
productivity of marketing expenditures through more effective couponing,
advertising and in-store merchandising programs. The Company's Neo, Inc.
subsidiary provides management consulting services focused on sales force
effectiveness, retailer marketing, information utilization and training and
support for selling organizations.

     QScan. The Company provides its QScan(TM) system to U.S. retailers in
exchange for their participation in the provision of their all-store data for
InfoScan Census. QScan is an information system designed to provide retailers
with easy access to their scanner data. The system addresses retailers' problems
of organizing and analyzing their own data bases of information for products
sold in their stores. With a RISC workstation at a retailer's buying office or
the Company's data center along with software provided by the Company, the QScan
system allows for the processing and analysis of scanner data from all of the
retailer's stores on a weekly basis.

     Software and Related Products. In close association with its worldwide
InfoScan services, the Company markets analytical software to the CPG industry
principally for use in accessing, managing and analyzing the Company's data
bases. The Company also markets space management software for use in managing
retail shelf space, software for the improved management of a manufacturer's
promotion expenditures and software applications to facilitate enhanced uses of
InfoScan data. The Company markets a line of software application products based
on Oracle EXPRESS(R) primarily to the CPG industry. Oracle EXPRESS is a software
technology designed for working with large and complex data bases. In July 1995,
the Company sold its EXPRESS technology and certain software products to Oracle,
while retaining ownership of certain EXPRESS-based sales and marketing software
application products for use in the CPG industry. Through licensing agreements
with Oracle, the Company continues to market and distribute the full line of
Oracle EXPRESS software products.

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<PAGE>   5

     Many of the Company's U.S. and International InfoScan and QScan clients
need the Oracle EXPRESS-based software application, Oracle Sales Analyzer(TM),
in order to access, manage and analyze the Company's data bases. Oracle Sales
Analyzer is a decision support software application built in Oracle EXPRESS and
now owned by Oracle. The product provides users with a range of analytical and
reporting tools. The Company typically licenses its own applications as well as
Oracle Sales Analyzer in conjunction with a client's InfoScan data subscription.

     A principal source of software revenues is the provision of on-line access
services to InfoScan subscribers who access InfoScan data bases residing in the
Company's data warehouses. Other software revenues derive from the sale of
Oracle software product licenses to InfoScan subscribers who load InfoScan data
on their own computer systems and do not use the Company's on-line services.
Licenses typically require a one-time paid-up license fee upon acceptance of the
software and annual maintenance payments for update and support services
thereafter. Oracle is entitled to receive royalties on relevant licenses granted
by the Company and its distributors within the CPG industry until July 2001.
Oracle is not entitled to receive royalties on other licenses granted by the
Company and its data affiliates to CPG end-users. The Company anticipates that
it and Oracle will negotiate new royalty rates payable to Oracle after July
2001.

     Prior to the 1995 sale to Oracle, the Company operated a decision support
software business engaged in general application development using the EXPRESS
product line. Following the sale to Oracle, the Company obtained rights to
market, distribute and provide first line customer support for the full range of
Oracle EXPRESS products. Software development work by the Company is now
directed exclusively toward the development of applications for specific use in
the CPG industry using the best available technology.

     The Company markets its proprietary APOLLO(TM) Space Management System
software to CPG retailers, wholesalers, manufacturers and brokers in the United
States and internationally. APOLLO software is designed to assist in the
management of retail shelf space, providing a range of tools for space
management including production of picture schematics of shelf layouts, software
for evaluating space utilization and a national data base of product dimensions
and product images. Variety Planner(TM) is a product assortment application
offered by the Company which can be used independently or in conjunction with
the APOLLO product.

     The Company's census data can be used for supply chain management solutions
by both retailers and manufacturers. Until entering into an alliance with
Manugistics, Inc. ("Manugistics") in 1997, the Company developed and marketed
its own software and supply chain products and services aimed at helping
manufacturers and retailers improve the efficiency of product replenishment
across their distribution channels. Manugistics is a leading provider of
software and services for synchronized supply chain management. Pursuant to the
alliance, Manugistics markets supply chain planning solutions that incorporate
the Company's census and causal data directly into consumer demand and supply
forecasts. Manugistics also markets certain of the Company's products including
APOLLO, the Company's suite of Trade Promotion Planning applications, as well as
Oracle Sales Analyzer multi-dimensional query tool, all for use in conjunction
with Manugistics' supply chain management solutions. Upon the establishment of
the alliance, Manugistics took over support for the Company's customers using
its demand planning software and consulting services.

     The Company develops and markets a number of other software products for
use in the CPG industry. These include a variety of tools which help clients
receive, analyze and interpret InfoScan data.

     The Company also provides a number of testing services primarily for CPG
manufacturers. These include controlled retail testing, matched market analyses
and related special analyses using the Company's InfoScan data bases. Controlled
testing involves testing the placement of new products or changes in
advertising, shelf location, price or promotional conditions in different retail
outlets or different markets and involves custom manipulation and analysis of
the Company's InfoScan data bases. The Company's BehaviorScan service is a test
marketing system available in the United States which enables CPG manufacturers
to measure the impact of different marketing variables on consumer purchase
behavior on new and existing products. Typical marketing variables tested in
BehaviorScan are television advertisements, newspaper ads, manufacturers'
coupons, free samples, in-store displays, shelf price and packaging changes.
BehaviorScan tests compare the

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purchases of a group of consumers exposed to test variable(s) with the purchases
of a control group of consumers not exposed to the test variable(s). A unique
feature of the BehaviorScan system is its ability to deliver alternative
television advertising to different groups of panel households using the
Company's patented targetable television technology. BehaviorScan is currently
available in six markets and is the only such electronic test marketing system
in the United States. Major costs associated with the BehaviorScan system
include payments to retailers, compensation to participating panel households,
field personnel costs, cable television studio operation, computer resources and
client service personnel costs.

INTERNATIONAL BUSINESS DEVELOPMENT

     Through subsidiaries and joint ventures with other leading marketing
information firms, the Company in 1992 began offering information services in a
number of countries outside of the United States. Specific services offered
depend upon local country competitive conditions and the general retailer
environment. The Company's major European subsidiaries and joint venture
companies rely on the Company's data production facilities in the United States
as well as the Company's know-how and trade secrets to provide InfoScan product
tracking services.

     The Company's only significant competitor offering product tracking
services internationally is the ACNielsen Company ("ACNielsen"). (See
"Competition" below.) The Company competes with ACNielsen in virtually every
foreign market where the Company has established information services. ACNielsen
maintains a dominant market position throughout most of Europe where the
Company's expenditures to establish product tracking services over the last five
years have been most significant.

     United Kingdom. The Company's subsidiary in the United Kingdom offers a
product tracking service under the InfoScan name to the British market.
Organized in 1992 as a joint venture, the Company's initial partners were Taylor
Nelson AGB plc of the United Kingdom and GfK AG of Germany ("GfK"). The Company
now owns substantially all of the joint venture. In 1993, the venture expanded
its sample of scanning stores, initiated the collection of causal data and began
offering a fully operational scanning service covering major chains under the
InfoScan name. It also expanded the service to cover stores selling health and
beauty aids. Pursuant to contractual arrangements, the Company provides data
production services to the subsidiary from the Company's computer facilities in
Wood Dale, Illinois.

     France. The Company's subsidiary in France offers scanning-based tracking
services under the InfoScan name. In 1993, the Company organized a joint
venture, IRI-SECODIP S.C.S. with GfK and SECODIP S.A. to acquire the operations
of SECODIP's retail audit business and the business of a former
development-stage scanner-based operation of GfK.

     Since 1994, the Company has funded substantially all of the joint venture's
capital requirements and the Company now owns substantially all of the joint
venture interests. Pursuant to contractual arrangements, the Company provides
data production services to the subsidiary from the Company's computer
facilities in Wood Dale, Illinois.

     Italy. In 1994, the Company began development of an information service in
Italy through the formation of a wholly-owned subsidiary, IRI InfoScan Italy. In
early 1995, the subsidiary produced its initial reports to clients. Its basic
service consists of retail sales and promotion tracking using a sample of retail
grocery outlets. Supermarket sales are tracked by means of scanning data, while
sales in smaller, traditional shops are measured by manual audit techniques. The
Company provides production services to IRI InfoScan Italy from the Company's
computer facilities in Wood Dale, Illinois.

     Germany. The Company operates a retail tracking service joint venture in
Germany through a 51% owned subsidiary whose minority shares are held by GfK.
From 1993 through 1996, the Company owned a 15% interest in GfK Panel Services
GmbH ("GfK Panel"), then a subsidiary of GfK. During that time, GfK Panel
offered both retail and consumer panel tracking services based on consumer
household panel data, retail audit data, scanner data and provided related
consulting studies.

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     In February 1997, the retail tracking service and related software
businesses were put into a new joint venture company, IRI/GfK Retail Services
GmbH ("IRI/GfK Retail") in which the Company took a 51% ownership interest and
GfK the remainder.

     In 1997, the Company also sold its 15% ownership interest in GfK Panel to
GfK. GfK Panel continues to provide consumer panel and ad hoc research services
to the German market, and GfK Panel and IRI/GfK Retail cooperate in selling and
delivering services to common clients.

     Scanner data is not available from all major retailers in Germany, and as
such scanner data in Germany, when available, is primarily used for diagnostic
and promotion analysis rather than for provision of a product tracking service
as in other major European countries. GfK provides production services to
IRI/GfK Retail through GfK's facilities in Nuremberg, Germany.

     Benelux. The Company and GfK operate a joint venture which offers a
scanner-based product tracking service to the Netherlands market. This
scanner-based product tracking service became fully-operational in 1994. Until
early 1998, this joint venture was owned 80.1% by GfK and 19.9% by the Company.
In February 1998, the Company increased its ownership to 51% and took over
management responsibilities. It operates under the InfoScan name, and the
Company provides production services to the joint venture through the Company's
computer facilities in Wood Dale, Illinois.

     In 1998, the Company also sold a 9.9% interest in GfK Panel Services
Benelux B.V. and GfK Belgium S.A. reducing its ownership to 10%. Those companies
operate household panel services in the Netherlands and Belgium and continue to
cooperate with the Netherlands joint venture scanner operation in the sale and
delivery of services to common customers.

     Turkey. The Company operates a retail audit business in Turkey which it
acquired in 1993. This business conducts its service in a national sample of
supermarkets, large and small grocery stores, pharmacies, cosmetic shops and
other stores, provides related special consulting services and distributes IRI
software products in Turkey.

     Greece. The Company operates a retail audit business in Greece which it
acquired in 1994. The operation includes collecting, reporting, analyzing and
interpreting national and regional sales data from retail audits.

     Sweden. The Company owns a 8% interest in a joint venture formed in 1995
with GfK for the provision of scanner-based product tracking services in Sweden.
The business is managed by GfK.

     Eastern Europe, Middle East and North Africa. The Company has an alliance
with Middle East Market Research Bureau ("MEMRB"), a market research company
based in Cyprus. MEMRB provides market research throughout more than 20
countries in the Middle East, Eastern Europe, the Mediterranean, the
Commonwealth of Independent States and North Africa. Under the terms of the 1995
alliance, MEMRB has agreed to cooperate in the adoption of multi-country
technical standards developed by the Company and co-market certain information
and software products with the Company. The Company holds an option to acquire
up to a 49% ownership interest in MEMRB.

     Japan. The Company has a wholly-owned software distribution subsidiary and
a joint venture in Japan with Tokyo-based Mitsui & Co., Ltd. to provide software
and information services, respectively, in Japan. The Company holds a 60%
ownership in the joint venture which was formed in 1995. The operation is
currently in the development stage.

     Latin America. The Company has operations in the certain Latin American
markets through joint ventures and subsidiaries in Venezuela, Puerto Rico and
Guatemala. The Company owns 49% of the Venezuelan joint venture, Datos
Information Resources, which provides audit-based product tracking as well as ad
hoc and software services to the Venezuelan market. The Company's subsidiary in
Puerto Rico, offers both audit-based product tracking and ad hoc marketing
research services. The Company owns 19.9% of a Guatemalan based company that
provides research services in Central America. The Company has strategic
alliance agreements with companies in Peru and Argentina.

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TRADEMARKS, PATENTS, LICENSES AND SOFTWARE PROTECTION

     The Company is the owner of various trademarks, including InfoScan(R),
InfoScan Census(TM), InfoScan Daily Census(TM), InfoForce(TM), QScan(TM), IRI
Software(TM), IRI Logistics(TM), BehaviorScan(R), APOLLO(TM), The Partners(TM),
Targeter(TM), TradeWins(TM), Shoppers'Hotline(R), EZPrompt(R), CouponScan(TM)
and PromotionScan(TM). The Company also holds certain patents relating to the
targetable television technology utilized in its BehaviorScan service. The
patents expire at various dates between 1999 and 2005. Loss or infringement of
these patents would likely not have a material adverse effect upon the Company's
revenues.

     As a result of the sale of the EXPRESS technology and line of software
products to Oracle in July 1995, the Company no longer owns a large portion of
the software that is used in the delivery of InfoScan data. The Company secured
a license back from Oracle assuring the continued use of the EXPRESS software in
the Company's business, including rights to sublicense the software to clients
of the Company. The initial term of the license is six years. After July 2001,
the royalty rates owed to Oracle will be subject to renegotiation between the
Company and Oracle. The Company also has rights to use various trademarks owned
by Oracle, including Oracle EXPRESS(R).

     The Company regards its data bases as proprietary and, in addition to
copyright protection, relies upon trade secret laws, limitations on access to
its computer source codes, confidentiality agreements with clients and internal
nondisclosure safeguards to protect its rights to proprietary interests. The
Company's own computer software is also proprietary and bears appropriate
copyright notices.

     Because of the rapid pace of technological change in the computer industry,
trademark, patent or copyright protection is of less significance than the
knowledge and experience of the Company's personnel and their ability to develop
and market new systems or software products.

WORKING CAPITAL PRACTICES

     The Company invoices its information service clients in accordance with
agreed contract terms. Typical billing cycles are quarterly or monthly for
long-term contracts and payment is typically due within 30 days of receipt of
invoice. Software licenses generally require payment in full upon acceptance of
software.

     The Company pays retailers cash in accordance with negotiated terms for
providing scanner data for use in the InfoScan sample service. Payments to other
vendors are normally made in accordance with vendor terms.

CUSTOMERS

     The Company had approximately 2,300, 1,700 and 1,300 clients using its
information services in 1997, 1996 and 1995, respectively. Most of the Company's
clients are CPG manufacturers in the United States or in foreign countries where
the Company offers its services. No client of the Company accounted for revenues
in excess of 10% of the Company's total revenues. The Company's top ten clients
accounted for approximately 33% of the Company's 1997 revenues.

BACKLOG ORDERS

     At December 31, 1997, 1996 and 1995, the Company had committed contract
revenues for information services of approximately $335 million, $265 million
and $235 million, respectively. Revenues on contracts generally have terms of
not less than one year. Such contracts are generally categorized into one of two
classes: 1) cancelable at the end of each year by the giving of six months
written notice by either party, or 2) multi-year contracts either non-cancelable
or cancelable only with significant penalties, generally by the giving of six
months written notice after the initial multi-year term. Committed contract
revenues include only the noncancelable portion of a contract. The portion of
these committed contract revenues expected to be earned subsequent to 1998 is
approximately 43%.

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COMPETITION

     Numerous firms supply marketing and advertising research products and
services to CPG manufacturers and retailers. However, the Company and ACNielsen
are the only two firms which provide national scanner-based product tracking
services in the United States to such manufacturers and retailers. While the
Company generates more revenues than ACNielsen in the United States market,
ACNielsen is far larger than the Company in terms of worldwide revenues, giving
it access to greater financial resources than the Company. In the product
tracking services markets across Europe, ACNielsen currently maintains a
dominant market position in most European countries and is the Company's only
competitor.

     Principal competitive factors include: quality, reliability, timeliness and
comprehensiveness of analytical services and data provided; flexibility and
innovation in tailoring services to client needs; experience; the capability of
technical and client service personnel; data processing and decision support
software; reputation; price; and geographical coverage.

RESEARCH AND DEVELOPMENT

     The Company is continuously developing new business products and services.
In this regard, the Company is actively engaged in research and development of
new software services and new data base analyses and applications. Expenditures
for research and development for the years ended December 31, 1997, 1996 and
1995 approximated $21.3 million, $24.9 million and $37.4 million, respectively.
Included in these expenditures were $3.7 million, $5.8 million and $9.9 million
of software development costs that were capitalized. Expenditures not
capitalized were expensed as incurred. The figures for 1995 are higher than
recent years due to the sale of certain assets, liabilities and software
products previously operated by the Company's software division.

PERSONNEL

     At December 31, 1997, the Company had approximately 4,200 full-time and
2,600 part-time employees worldwide. The Company depends to a significant extent
on its skilled technical personnel. Its future success will depend to a large
degree upon its ability to continue to hire, train and retain its professional
staff.

ITEM 2. PROPERTIES

     The Company markets and provides its information services and software
support services to U.S. clients from full-service sales offices in San
Francisco and Los Angeles, California; Norwalk, Connecticut; Atlanta, Georgia;
Cincinnati, Ohio; Minneapolis, Minnesota; Fairfield, New Jersey; Winston-Salem,
North Carolina; Plymouth Meeting, Pennsylvania as well as from its headquarters
in Chicago, Illinois and software development headquarters in Waltham,
Massachusetts. The Company markets to international clients through
subsidiaries, joint ventures and/or offices in Australia, Belgium, Canada,
France, Germany, Guatemala, Greece, Italy, Japan, Mexico, the Netherlands, New
Zealand, Puerto Rico, Sweden, Turkey, United Kingdom, Venezuela and through its
various distributors.

                                        9
<PAGE>   10

     Principal leased facilities of the Company are as follows:

<TABLE>
<CAPTION>
                                                                                   APPROXIMATE
                                                                                   FLOOR AREA
               LOCATION                            PRINCIPAL OPERATION              (SQ. FT.)
               --------                            -------------------             -----------
<S>                                      <C>                                       <C>
Chicago, IL............................  Corporate headquarters and offices for
                                           professional staff                        427,000
Waltham, MA............................  Professional staff and computer
                                         facilities                                   67,000
Wood Dale, IL..........................  Computer facilities                          45,000
Regional sales and client service
  offices..............................  Sales, client service and analysis          236,000
International offices..................  Sales, client service, computer
                                         facilities and professional staff           200,000
Data collection facilities.............  Data collection and client test market
                                         control, cable TV studio facilities,
                                           warehouse                                 160,000
</TABLE>

ITEM 3. LEGAL PROCEEDINGS

     On July 29, 1996, IRI filed an action against The Dun & Bradstreet Corp.,
ACNielsen and IMS International, Inc. (collectively, "the Defendants") in the
United States District Court for the Southern District of New York entitled
Information Resources, Inc. v. The Dun & Bradstreet Corp., et. al. No. 96 CIV.
5716 (the "Action"). IRI alleged that, among other things, the Defendants
violated Sections 1 and 2 of the Sherman Act, 15 U.S.C. Sections 1 and 2, by
engaging in a series of anti-competitive practices aimed at excluding the
Company from various export markets for retail tracking services and regaining
monopoly power in the United States market for such services. These practices
included: i) entering into exclusionary contracts with retailers in several
countries in order to restrict the Company's access to sales data necessary to
provide retail tracking services; ii) illegally tying services in markets over
which Defendants' had monopoly power with services in markets in which ACNielsen
competed with the Company; iii) predatory pricing; iv) acquiring foreign market
competitors with the intent of impeding the Company's efforts at export market
expansion; v) tortuously interfering with Company contracts and relationships
with clients, joint venture partners and other market research companies; and
vi) disparaging the Company to financial analysts and clients. By the Action,
the Company seeks to enjoin the Defendants' anti-competitive practices and to
recover damages in excess of $350 million, prior to trebling.

     The Action followed legal proceedings by the Canadian Competition Tribunal
in 1995 and the European Commission in 1996 against ACNielsen for
anti-competitive practices. In 1995, the Canadian Competition Tribunal concluded
that ACNielsen had engaged in "anti-competitive acts" with the express intent
"to exclude potential competitors generally and IRI specifically" from the
Canadian retail tracking and services market. In December 1996, ACNielsen signed
an Undertaking to the European Commission agreeing to halt numerous contractual
practices which the Company contended was part of ACNielsen's intentional and
unlawful strategy aimed at preventing the Company from establishing a
competitive position in Europe and eliminating the Company as a competitor.

     In the ordinary course of business, IRI and its subsidiaries become
involved as plaintiffs or defendants in various other legal proceedings. The
claims and counterclaims in such litigation, including those for punitive
damages, individually in certain cases and in the aggregate, involve amounts
which may be material. However, it is the opinion of the Company's management,
based upon the advice of counsel, that the ultimate disposition of pending
litigation against the Company will not be material.

     The Company was involved in a shareholder class action suit filed by
certain shareholders in 1989. In 1994 a federal district court jury ruled in
favor of the Company and in 1995 the Appeals Court rendered its decision in
favor of the Company. The plaintiffs did not file any further appeals.

     In 1994 certain shareholders filed a class action lawsuit against the
Company, and in 1994 the Company entered into an agreement to settle this
lawsuit. Pursuant to the terms of the court approved settlement agreement, in
1995 the Company satisfied its obligations by issuing 211,223 shares of Common
Stock valued at $2.6 million and paying $2.6 million in cash to the settlement
class.

                                       10
<PAGE>   11

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

     None.

ITEM 4(A). EXECUTIVE OFFICERS OF THE REGISTRANT

<TABLE>
<CAPTION>
                  NAME                      AGE    POSITION WITH COMPANY AND BUSINESS EXPERIENCE
                  ----                      ---    ---------------------------------------------
<S>                                         <C>    <C>
Thomas W. Wilson Jr......................   66     Chairman of the Board of Directors of the
                                                   Company since April 1995. Director of the
                                                   Company since 1991. Senior Partner of
                                                   McKinsey & Company, management consultants,
                                                   from 1973 until 1990 (retired). Director of
                                                   Aerial Communications Inc. since October
                                                   1996.
Gian M. Fulgoni..........................   50     Chief Executive Officer since January 1986;
                                                   Chairman of the Board of Directors of the
                                                   Company from February 1991 to April 1995;
                                                   Director since 1981; Director of PLATINUM
                                                   technology, inc.
Randall S. Smith.........................   46     President of International Services Group
                                                   since January 1995 and President of
                                                   Information Technology Group since February
                                                   1996; President -- International Operations
                                                   Division from December 1993 until January
                                                   1995; President of European Data Operations
                                                   Division from February 1993 until December
                                                   1993.
James R. Chambers........................   40     President of U.S. Commercial Businesses Group
                                                   since October 1997; President -- Refrigerated
                                                   Foods Division of Nabisco Foods from January
                                                   1996 to October 1997; Senior Vice
                                                   President -- Sales and Customer Service of
                                                   Nabisco Foods from November 1992 to December
                                                   1996.
Gary M. Hill.............................   50     Executive Vice President and Chief Financial
                                                   Officer of the Company since May 1995.
                                                   Financial consultant from August 1994 to
                                                   December 1994. Senior Vice President --
                                                   Finance of Itel Corporation from prior to
                                                   March 1993 to July 1994.
Edward S. Berger.........................   57     Executive Vice President since June 1993;
                                                   Secretary and General Counsel of the
                                                   Company since 1988; Division Senior Vice
                                                   President of the Company from February 1991
                                                   until June 1993.
John P. McNicholas, Jr...................   44     Senior Vice President and Controller of the
                                                   Company since June 1995; Vice President --
                                                   Controller of Itel Corporation from prior to
                                                   March 1993 to March 1995.
</TABLE>

     All of the foregoing executive officers hold office until the next annual
meeting of the Board of Directors and until their successors are elected and
qualified.

                                       11
<PAGE>   12

                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER'S MATTERS

     The Company's Common Stock has been traded on the NASDAQ Stock Market under
the symbol "IRIC" since 1983. The stock currently trades on the National Market
System. Share data has been adjusted for all stock splits and stock dividends to
date.

     The high and low closing sales prices for the Company's Common Stock were
as follows:

<TABLE>
<CAPTION>
                               QUARTERS                             HIGH        LOW
                               --------                             ----        ---
<S>     <C>                                                        <C>        <C>
1996    1st quarter............................................    $15.625    $12.750
        2nd quarter............................................     15.125     12.000
        3rd quarter............................................     13.500     11.125
        4th quarter............................................     14.250     11.125
1997    1st quarter............................................    $16.000    $13.500
        2nd quarter............................................     15.125     11.875
        3rd quarter............................................     18.563     14.000
        4th quarter............................................     19.625     13.375
</TABLE>

     The last sale price on February 27, 1998 was $14.00 per share. As of
February 27, 1998 there were 1,823 record holders of the Company's Common Stock.

     The Company has never paid cash dividends. It is the present policy of the
Company's Board of Directors to retain earnings for use in the Company's
business. Accordingly, the Board of Directors does not anticipate that cash
dividends will be paid in the foreseeable future. There are restrictions in
IRI's bank revolving credit facility and certain lease agreements which limit
the payment of dividends and the purchases or redemption of Common Stock. (See
Note 10 of the Notes to the Consolidated Financial Statements.)

                                       12
<PAGE>   13

ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                             YEARS ENDED DECEMBER 31
                                                 -----------------------------------------------
                                                  1997      1996      1995      1994      1993
                                                 -------   -------   -------   -------   -------
                                                      (IN MILLIONS, EXCEPT PER SHARE DATA)
<S>                                              <C>       <C>       <C>       <C>       <C>
HISTORICAL RESULTS OF OPERATIONS(1)(2)(3)
Revenues.......................................  $ 456.3   $ 405.6   $ 399.9   $ 376.6   $ 334.5
                                                 =======   =======   =======   =======   =======
Nonrecurring expenses(4).......................       --      (4.8)    (22.8)       --      (3.0)
                                                 =======   =======   =======   =======   =======
Operating profit (loss)........................     14.8      (5.1)    (54.9)      5.3      37.9
                                                 =======   =======   =======   =======   =======
Net gain (loss) on sale of assets(5)...........       --      (4.6)     41.1        --        --
                                                 =======   =======   =======   =======   =======
Net earnings (loss) before cumulative effect of
  change in accounting principle(6)............  $   7.7   $  (7.6)  $ (11.7)  $  (8.9)  $  22.2
Cumulative effect on prior years of change in
  accounting principle(3)(7)...................       --        --        --      (6.6)      1.9
                                                 -------   -------   -------   -------   -------
Net earnings (loss)............................  $   7.7   $  (7.6)  $ (11.7)  $ (15.5)  $  24.1
                                                 =======   =======   =======   =======   =======
Net earnings (loss) per common share(3)(8):
  Before cumulative effect of accounting
     changes...................................  $   .27   $  (.27)  $  (.43)  $  (.34)  $   .88
  Cumulative effect of accounting changes
     (7).......................................       --        --        --      (.26)      .08
                                                 -------   -------   -------   -------   -------
Net earnings (loss)............................  $   .27   $  (.27)  $  (.43)  $  (.60)  $   .96
                                                 =======   =======   =======   =======   =======
Weighted average common shares.................     28.5      27.8      27.0      26.1      25.0
                                                 =======   =======   =======   =======   =======
Net earnings (loss) per common and common
  equivalent share -- assuming dilution(3)(8):
  Before cumulative effect of accounting
     changes...................................  $   .26   $  (.27)  $  (.43)  $  (.34)  $   .83
  Cumulative effect of accounting changes(7)...       --        --        --      (.26)      .07
                                                 -------   -------   -------   -------   -------
Net earnings (loss) -- assuming dilution.......  $   .26   $  (.27)  $  (.43)  $  (.60)  $   .90
                                                 =======   =======   =======   =======   =======
Weighted average common and common equivalent
  shares -- assuming dilution..................     29.1      27.8      27.0      26.1      26.7
                                                 =======   =======   =======   =======   =======
BALANCE SHEET DATA(1)(2)
Total assets...................................  $ 366.6   $ 334.5   $ 338.5   $ 346.8   $ 317.3
                                                 =======   =======   =======   =======   =======
Working capital................................     24.9      34.6      44.4      66.9      83.4
                                                 =======   =======   =======   =======   =======
Long-term debt.................................       .6       7.9       3.8      31.5       3.1
                                                 =======   =======   =======   =======   =======
Stockholders' equity...........................    241.5     226.3     229.8     227.2     228.7
                                                 =======   =======   =======   =======   =======
Book value per common and common equivalent
  share........................................  $  8.41   $  8.12   $  8.33   $  8.58   $  9.00
                                                 =======   =======   =======   =======   =======
Dividends paid per common share................       --        --        --        --        --
                                                 =======   =======   =======   =======   =======
ADDITIONAL FINANCIAL INFORMATION(1)(2)
Deferred data procurement costs................  $ 111.8   $  98.0   $  96.8   $  79.2   $  68.0
                                                 =======   =======   =======   =======   =======
Capital expenditures...........................     34.4      18.8      24.5      24.0      25.9
                                                 =======   =======   =======   =======   =======
Capitalized software costs.....................      3.7       5.8       9.9      11.7      10.2
                                                 =======   =======   =======   =======   =======
</TABLE>

(1)  In February 1997, the Company and GfK formed a new company, IRI/GfK Retail,
     of which the Company has a 51% ownership interest. IRI/GfK Retail purchased
     the German retail tracking business of GfK Panel. The consolidation of
     IRI/GfK Retail, which was effective February 1, 1997, did not have a
     material impact on the consolidated financial results or position of the
     Company.

                                       13
<PAGE>   14

(2) In 1995, the Company purchased 39% of its French joint venture, IRI-SECODIP,
    from its joint venture partner increasing IRI's ownership from 50% to 89%.
    As a result of capital contributions made since 1994, the Company now owns
    substantially all of the joint venture interests. IRI-SECODIP has been
    consolidated effective January 1, 1995.

(3) Effective January 1, 1994, the Company changed its method of recognizing
    revenue on its information service products whereby revenue is recognized
    over the term of the contract on a straight-line basis. Previously, the
    Company recognized a portion of the initial contract revenue in the period
    between client commitment and either the start of forward data or the test
    commencement, with the remaining revenue recognized ratably over the initial
    contract term. Pro forma revenues and earnings per common and common
    equivalent share before cumulative effect of accounting change for 1993 were
    $334.6 million and $.90.

(4)  The $4.8 million nonrecurring charge in 1996 principally related to the
     disposal of certain cable TV advertising cut-in equipment originally
     developed for use in the Company's market testing operation. Nonrecurring
     expenses in 1995 included a $12.4 million write-down of assets, principally
     related to European deferred data procurement costs to net realizable value
     and a $10.4 million charge principally related to a U.S. facility closing.
     Nonrecurring expenses in 1993 primarily related to a loss on the
     disposition of certain non-strategic assets.

(5)  In December 1996, the Company recorded a $4.6 million charge primarily for
     the final settlement of the escrow account related to the sale of a portion
     of the Company's software business to Oracle in 1995. In July 1995, the
     Company sold to Oracle certain assets, liabilities and related software
     application products of its software products business resulting in a $41.1
     million gain. (See Note 4 of the Notes to Consolidated Financial
     Statements.)

(6)  The 1994 results reflected a pre-tax provision of $8.3 million related to
     shareholder litigation.

(7)  Effective January 1, 1993, the Company adopted Statement of Financial
     Accounting Standards No. 109 -- Accounting for Income Taxes (FAS 109).

(8)  The Company adopted the Statement of Financial Accounting Standards No.
     128, "Earnings per Share" effective January 1, 1997. The adoption of this
     new accounting standard did not have a material effect on the per share
     disclosures for the years ended December 31, 1997, 1996, 1995 and 1994.
     Historical primary and fully diluted earnings per share for the year ended
     December 31, 1993 were $.90 and $.89, respectively, computed on outstanding
     weighted average common shares of 26.8 million and 27.2 million,
     respectively.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESULTS OF OPERATIONS

     Overview: Over the periods presented, the Company has generated increased
revenues in its U.S. business in spite of a period of intensely competitive
pricing that began in 1993, through the offering of new products and services.
While this intense price competition began moderating somewhat in 1996, pricing
changes have a somewhat delayed effect on reported revenues in the Company's
consolidated financial statements. This lagging effect is due to the long-term
nature of many contracts and the fact that only a portion of such contracts come
up for renewal and therefore are subject to competitive bidding in any
particular year.

     In 1992, the Company began introducing its InfoScan tracking service into
Europe. Due to the inherent fixed cost nature of the business and the alleged
anticompetitive business practices and tactics of its major competitor,
ACNielsen, losses from the International services business have been
significant. In December 1996, ACNielsen signed an Undertaking with the European
Commission agreeing to halt numerous contractual practices which the Company
believes had hampered the Company's participation in European markets. As a
result of the Undertaking, the Company believes that AC Nielsen clients can
begin to benefit from the Company's services without risk of financial penalties
being imposed by ACNielsen, and that a significant artificial barrier to the
Company's efforts to provide services to the European markets has been

                                       14
<PAGE>   15

removed. While the Company's International losses are now declining, cash
investment in Europe will be significant until revenues increase further.

     Special Items: In July 1995, the Company sold to Oracle, certain assets,
liabilities and software products relating to its on-line analytical processing
business, the software products business previously operated by the Company's
software division. Since this business was not a separate business segment,
prior period's consolidated financial statements have not been restated. The
sale resulted in a pre-tax gain of $41.1 million in 1995. In December 1996, the
Company recorded a $4.6 million charge primarily for final settlement of the
escrow account related to the sale.

     In addition, in 1996 the Company recorded a $4.8 million nonrecurring
charge principally due to the disposal of certain cable TV advertising cut-in
equipment originally developed for use in the Company's market testing
operation. In 1995, the Company recorded a nonrecurring charge of $22.8 million
principally related to the write-down of European deferred data procurement
costs and the closing of a U.S. facility. Selling, general and administrative
expenses in 1995 reflect approximately $6.7 million of special charges,
principally related to a provision for doubtful accounts.

     Operations: Overall revenues in 1997 increased 12.5% over 1996. The Company
had consolidated net earnings of $7.7 million in 1997, a consolidated net loss
of ($7.6) million in 1996 and a consolidated net loss of ($11.7) million in
1995. A number of factors influenced operating performance, including: (a) the
continued competitive environment in the Company's rapidly growing International
services business; (b) the effects of declining price competition in the U.S.;
(c) costs related to building the Company's InfoScan Census data base and its
re-engineering initiatives; (d) nonrecurring charges in 1996 and 1995 together
with the impact of the sale of a portion of the Company's software business to
Oracle including the net gain (loss) on sale in 1995 and 1996, respectively, as
described in the preceding paragraphs.

     The Company considers the aggregation of operating profit (loss), equity
earnings (losses) and minority interests, ("Operating Results"), on a geographic
basis to be a meaningful measure of the Company's operating performance. A
comparative analysis of consolidated revenues and Operating Results for the
years ended December 31, 1997, 1996 and 1995 follows (in thousands):

<TABLE>
<CAPTION>
                                                         1997       1996       1995
                                                       --------   --------   --------
<S>                                                    <C>        <C>        <C>
Revenues:
  U.S. Services......................................  $366,678   $344,612   $317,553
  International Services.............................    89,649     60,991     42,165
                                                       --------   --------   --------
          Subtotal...................................   456,327    405,603    359,718
  Software products business sold to Oracle..........        --         --     40,198
                                                       --------   --------   --------
                                                       $456,327   $405,603   $399,916
                                                       ========   ========   ========
Operating Results:
  U.S. Services
     Operating profit................................  $ 38,613   $ 31,106   $ 15,286
     Equity in loss of affiliated companies..........        --         --       (200)
                                                       --------   --------   --------
          Subtotal -- U.S. Services..................    38,613     31,106     15,086
  International Services
     Operating loss..................................   (19,920)   (29,425)   (35,756)
     Equity in earnings of affiliated companies......       444         30        579
     Minority interests (expense) benefit............      (304)       986        304
                                                       --------   --------   --------
          Subtotal -- International Services.........   (19,780)   (28,409)   (34,873)
  Corporate and other expenses.......................    (3,926)    (1,965)    (3,652)
  Software products business sold to Oracle-operating
     loss............................................        --         --     (8,044)
  Nonrecurring expenses..............................        --     (4,808)   (22,759)
                                                       --------   --------   --------
Operating Results....................................  $ 14,907   $ (4,076)  $(54,242)
                                                       ========   ========   ========
</TABLE>

                                       15
<PAGE>   16

     Revenues from the Company's U.S. services business in 1997 were 6.4% higher
than in 1996 while revenues in the U.S. in 1996 increased 8.5% over 1995. These
revenue gains were primarily the result of higher sales of the Company's Census
application products and analytical services. Almost all the revenue increases
came from existing customers, and the Company's market share has remained
relatively unchanged over the period. U.S. operating profit increased 24% in
1997 as margins expanded on the benefit of lower expense growth resulting from
the Company's continuing cost containment and reengineering initiatives. U.S.
operating profits in 1996 more than doubled compared to 1995. This $16.0 million
increase was due to revenue gains, the benefit of lower expense growth resulting
from the Company's cost containment initiatives and production process
reengineering and the effect of $6.7 million of special charges in 1995.

     International service revenues in 1997 increased 47.0% over 1996 in dollar
terms despite the dampening effect of a strong U.S. dollar against European
currencies. Revenues in 1997 also reflect the benefit of the consolidation of
IRI's majority-owned German operation, IRI/GfK Retail, effective February 1,
1997. Excluding the German results and foreign exchange effect, European
revenues increased 27.0% compared to 1996 as the Company made continued inroads
with multi-national customers. International service revenues in 1996 increased
44.6% over 1995 primarily as a result of significant revenue gains in France,
the U.K. and Italy due to an increase in the number of InfoScan clients and
expanded usage among existing clients. The International Operating Results were
a ($19.8) million loss in 1997 compared to a ($28.4) million loss in 1996. The
reduced International losses are principally due to continued sharp revenue
increases in each of the Company's major European countries. The loss from
International operations of ($28.4) million in 1996 compared to a ($34.9)
million loss in 1995. The 1995 results reflected a difficult competitive pricing
environment in Europe, the ramp-up of Italian operations and high retailer costs
in the U.K.

     Consolidated results in 1995 included an ($8.0) million operating loss on
seven-months of operations of the software products business that was sold to
Oracle in July 1995.

     Year Ended December 31, 1997: Consolidated net earnings were $7.7 million
in 1997 compared to a net loss of ($7.6) million in 1996. Results in 1996
included a $4.8 million nonrecurring pretax charge principally related to the
disposal of certain cable TV advertising cut-in equipment and a $4.6 million
pretax charge primarily related to final settlement on the sale of a portion of
the Company's software business to Oracle in 1995.

     Consolidated revenues increased 12.5% to $456.3 million in 1997. Revenues
in 1997 reflected strong market share growth in Europe. International revenues
also reflected the benefit of consolidating IRI's majority-owned German
operation, IRI/GfK Retail, effective February 1, 1997. Excluding the German
results and foreign exchange effect, consolidated revenues increased 9.5%
compared to 1996.

     Consolidated cost of information services sold increased by $32.9 million,
or 8.9% to $401.9 million in 1997. Major components of the 1997 increase
included: (a) a $15.9 million increase in operating expenses due to the 1997
consolidation of the German operation; (b) a $10.3 million increase in the
amortization of deferred data procurement costs, principally resulting from the
expansion of the information services business in Europe; and (c) a $9.1 million
increase in compensation expense resulting primarily from the growing European
operations and salary increases in the U.S.

     Consolidated selling, general and administrative expenses increased by $2.7
million or 7.4% to $39.7 million in 1997. These increases were primarily
attributable to higher compensation expenses worldwide and legal expenses in the
U.S. Increased legal expenses related directly to the Company's antitrust
lawsuit against The Dun & Bradstreet Corporation, ACNielsen Company and IMS
International, Inc. In that suit, the Company is seeking $1 billion in trebled
damages from the defendants for violations of U.S. antitrust laws. The case is
currently in the discovery phase, and the Company anticipates incurring
continued high legal expenses as the case progresses toward trial.

     Interest and other expenses were $.5 million for 1997 compared to $1.2
million in 1996. The decrease in 1997 is due to decreased bank borrowings in
1997 resulting from positive cash flow from operations. The Company's 1997
income tax expense was higher than the income tax expense computed using the
U.S. Federal statutory rate due to certain unbenefitted foreign losses, goodwill
amortization and other nondeductible expenses.

                                       16
<PAGE>   17

     Year Ended December 31, 1996: Consolidated net loss was ($7.6) million in
1996 compared to a net loss of ($11.7) million in 1995. Results in 1996 included
a $4.8 million nonrecurring pretax charge principally related to the disposal of
certain cable TV advertising cut-in equipment and a $4.6 million pretax charge
primarily related to final settlement on the sale of a portion of the Company's
software business to Oracle in 1995. Results in 1995 included several special
items including: (a) a $41.1 million pre-tax gain on sale of a portion of the
Company's software business to Oracle; (b) a $22.8 million nonrecurring charge
primarily related to the accelerated recognition of European deferred data
procurement costs and the reorganization of the Company's Towne-Oller unit; and
(c) $6.7 million of special charges included in selling, general and
administrative expenses, principally relating to a provision for uncollectible
accounts receivable.

     Consolidated revenues increased 12.8% to $405.6 million in 1996, after
adjusting revenues for 1995 to remove that portion of the Company's software
business that was sold to Oracle in July 1995. Including such revenues in the
1995 base results in a 1.4% consolidated revenue increase from 1995 to 1996.

     Consolidated costs of information services sold increased $27.4 million or
8.0% to $369.0 million in 1996. Major components of the 1996 increase included:
(a) an $11.4 million or 7.4% increase in U.S. services compensation expense
resulting primarily from higher headcount required for software development and
client servicing; (b) a $9.0 million increase in International services
compensation expense resulting from the continued expansion of operations; and
(c) a $5.9 million increase in amortization of deferred data procurement costs.

     Consolidated results for 1995 included the operations of the software
products business unit sold to Oracle in July 1995. This part of the software
business reported costs of software products sold for the seven months of 1995
of approximately $41.1 million.

     Consolidated selling, general and administrative expenses decreased $12.4
million or 25.2% to $36.9 million in 1996. Excluding that portion of selling,
general and administrative expenses attributable to the software products
business sold to Oracle, consolidated selling, general and administrative
expenses decreased $5.4 million or 12.6% in 1996 compared to 1995. This decrease
was attributable to the special charges of $6.7 million incurred in 1995
principally related to a provision for uncollectible accounts receivable.

     Interest and other expenses for 1996 and 1995 were $1.2 million and $2.8
million, respectively. This decrease was principally due to application of
proceeds from the July 1995 Oracle sale to reduce bank debt.

     The Company's 1996 and 1995 income tax benefit, resulting from pretax
losses, was lower than the income tax benefit computed using the U.S. Federal
statutory rate due to certain unbenefitted foreign losses, goodwill amortization
and other nondeductible expenses.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's current cash resources include its $20.9 million consolidated
cash balance and $73.9 million available under the Company's bank revolving
credit facility. The Company anticipates that it will have sufficient funds from
these sources and internally generated funds from its U.S. operations to satisfy
its cash needs for the foreseeable future. The Company's bank credit agreement
contains covenants which restrict the Company's ability to incur additional
indebtedness.

     In July 1995, the Company sold its software products business to Oracle for
approximately $100 million in cash, including $8.0 million of cash in escrow,
subject to post-closing adjustment. The $8.0 million constituted a general
escrow which was settled in December 1996. In July 1995, the entire amount
outstanding under the Company's existing credit facility was repaid by using a
portion of the proceeds from the sale. The remainder of the proceeds was used to
pay expenses associated with the sale and for general corporate purposes.

     Cash Flow for the Year Ended December 31, 1997: Consolidated net cash
provided by operating activities was $154.3 million for the year ended December
31, 1997 compared to $102.1 million for the year ended December 31, 1996. Cash
provided by operating activities increased primarily due to improved operating
performance both in Europe and in the U.S. and significantly lower working
capital investment in

                                       17
<PAGE>   18

the U.S. in 1997. Consolidated cash used in net investing activities was
($147.6) million in 1997 compared to ($121.2) million in 1996. Investing
activity for 1997 reflected higher purchases of equipment and deferred data
procurement costs offset by lower investment in capitalized software compared to
1996. Net cash provided (used) before financing activities was $6.8 million in
1997 and ($19.1) million for 1996. Consolidated cash provided by financing
activities was $3.4 million in 1997 compared to $7.1 million in 1996 when the
bank line was used to fund international operating needs. Proceeds from
exercises of stock options were approximately $17.2 million in 1997 and $1.7
million in 1996. In the fourth quarter of 1997, the Company purchased shares of
Common Stock at an aggregate purchase price of $5.9 million.

     Cash Flow for the Year Ended December 31, 1996: Consolidated net cash
provided by operating activities was $102.1 million for the year ended December
31, 1996 compared to $76.1 million in 1995. Cash provided by operating
activities increased primarily due to improved operating performance in 1996.
Consolidated cash used in net investing activities was ($121.2) million in 1996
compared to ($43.9) million in 1995 as the 1995 period benefited from the $92.0
million of cash proceeds received from the sale of the software products
business to Oracle. Net cash provided (used) before financing activities was
($19.1) million for 1996 and $32.2 million in 1995 as 1995 cash flow was
benefited by $92.0 million of proceeds from the Oracle transaction. Consolidated
cash provided by (used in) net financing activities was $7.1 million in 1996
compared to ($19.1) million in 1995. The 1995 net financing activities primarily
reflect the repayment of bank borrowings using proceeds from the Oracle sale.

     Financings: In October 1997, the Company replaced its $50.0 million bank
revolving credit facility maturing in 1998 with a new $75.0 million facility
maturing in 2001. The new facility has floating interest rate options at or
below prime and commitment fees of .25% payable on the unused portion.

     The financial covenants in the bank credit agreement, as well as in the
lease agreement for the Company's Chicago headquarters, require the Company to
maintain a minimum tangible net worth and to meet certain cash flow coverage and
leverage ratios. The agreements also limit the Company's ability to declare
dividends or make distributions to holders of capital stock, or redeem or
otherwise acquire shares of the Company. Approximately $69.5 million is
currently available for such distributions under the most restrictive of these
covenants. The credit agreement contains covenants which restrict the Company's
ability to incur additional indebtedness.

     Common Stock Repurchase Plan: In November 1997 the Company's Board of
Directors approved a plan to purchase up to two million shares of the Company's
Common Stock from time to time in the open market. Purchases under the plan are
subject to a number of considerations including the market price of the
Company's Common Stock and general market conditions. The Company anticipates
funding purchases out of cash on hand or available through the Company's bank
revolving credit facility. As of December 31, 1997, the Company had purchased
419,200 shares under the plan at an average cost of $14.19 per share.

     Other Deferred Costs and Capital Expenditures: Consolidated deferred data
procurement expenditures were $111.8 million, $98.0 million and $96.8 million
for the years ended December 31, 1997, 1996 and 1995, respectively. These
expenditures are amortized over a period of 28 months and include payments to
retailers for point-of-sale data and costs related to collecting, reviewing and
verifying other data (i.e., causal factors) which are an essential part of the
Company's data base. The increase in deferred data procurement expenditures was
related to the expansion of the Company's International services business and
higher collection costs related to the expansion of multi-outlet panel in the
U.S. in 1997. Deferred data procurement expenditures for the Company's U.S.
services business were $71.7 million, $65.6 million and $64.7 million for the
years ended December 31, 1997, 1996 and 1995, respectively. The Company's
International services business deferred data procurement expenditures were
$40.1 million, $32.4 million and $32.1 million for the years ended December 31,
1997, 1996 and 1995, respectively.

     Management expects to continue the development of its International
businesses, and accordingly, the Company's International operations will
continue to require substantial investment in data procurement costs. Based upon
currently projected Operating Results and cash flows, the Company's assessment
is that the realizability of its International assets is not impaired. To the
extent that actual Operating Results and cash flows are lower than these current
projections, the Company may be required to write down a portion of these assets
in future periods.
                                       18
<PAGE>   19

     Consolidated capital expenditures were $34.4 million, $18.8 million and
$24.5 million for the years ended December 31, 1997, 1996 and 1995,
respectively. Capital expenditures for the Company's U.S. services business were
$29.3 million, $15.2 million and $18.6 million for the years ended December 31,
1997, 1996 and 1995, respectively, while related depreciation expense was $16.3
million, $16.0 million and $16.1 million, respectively. The Company's
International services business capital expenditures were $5.1 million, $3.6
million and $5.9 million for the years ended December 31, 1997, 1996 and 1995,
respectively, while depreciation expense was $4.1 million, $4.2 million and $4.1
million, respectively.

     Consolidated capitalized software development costs were $3.7 million, $5.8
million and $9.9 million for the years ended December 31, 1997, 1996 and 1995,
respectively.

     NOL Carryforwards: As of December 31, 1997, the Company had cumulative U.S.
Federal net operating loss ("NOL") carryforwards of approximately $70.8 million
that expire primarily in 2009 and 2011. Certain of these carryforwards have not
been examined by the Internal Revenue Service and, therefore, are subject to
adjustment. In addition, at December 31, 1997, various foreign subsidiaries of
IRI had aggregate cumulative NOL carryforwards for foreign income tax purposes
of approximately $8.9 million which are subject to various income tax provisions
of each respective country. Approximately $3.3 million of these foreign NOLs may
be carried forward indefinitely, while the remaining $5.6 million expire in 2000
through 2002. At December 31, 1997 the Company had general business tax credit
carryforwards of approximately $9.5 million which expire primarily between 1999
and 2012, and are available to reduce future Federal income tax liabilities.

     Impact of Inflation: Inflation has slowed in recent years and is currently
not an important determinant of the Company's results of operations. To the
extent permitted by competitive conditions, the Company passes increased costs
on to customers by adjusting sales prices and in the case of multi-year
contracts through consumer price index provisions of such agreements.

     Year 2000: The Company has been assessing whether the hardware and software
used in its businesses will function properly in connection with the transition
of dates from 1999 to 2000. Based on its evaluation to date, management believes
that most of the hardware and software used in the Company's businesses are
either now Year 2000 compliant or will become so prior to midyear 1999 through
regular product upgrades and replacements. Therefore, management currently
anticipates that, in connection with bringing its own hardware and software into
compliance, the Company will not incur material expenditures which would cause
the Company's reported consolidated financial information not to be indicative
of future consolidated operating results or financial condition.

     The Company potentially faces Year 2000 compliance issues with certain of
its data vendors and tracking service clients. The Company is currently
developing a plan to ensure that all such hardware and software interfacing with
the Company complies with Year 2000 requirements. The Company believes that its
plans to address Year 2000 concerns are adequate and does not currently
anticipate significant problems with data suppliers and clients on which the
Company's systems rely. If the Company's data suppliers do not become Year 2000
compliant on a timely basis, delays in the Company's data delivery to clients
may occur. If clients do not become Year 2000 compliant, their ability to
utilize the Company's data and services may be negatively affected. A
significant disruption of service, if it were to occur, could negatively impact
the Company's financial performance.

     Forward Looking Information: Certain matters discussed herein may contain
forward-looking statements that are subject to risks and uncertainties that
could cause actual results to differ materially from those anticipated,
including customer renewals of service contracts, the timing of significant new
customer engagements, competitive conditions in Europe, foreign currency
exchange rates and other factors beyond the Company's control. These risks and
uncertainties are described in reports and other documents filed by the Company
with the Securities and Exchange Commission.

                                       19
<PAGE>   20

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Listed below are the financial statements and supplementary data included
in this part of the Annual Report on Form 10-K:

<TABLE>
<CAPTION>
                                                                     PAGE
                                                                     NO.
                                                                     ----
<S>  <C>                                                             <C>
(a)  Financial Statements
     Report of Independent Auditors (Ernst & Young LLP)..........      21
     Report of Independent Certified Public Accountants (Grant
     Thornton LLP)...............................................      22
     Consolidated Balance Sheets at December 31, 1997 and 1996...      23
     Consolidated Statements of Operations for the years ended
     December 31, 1997, 1996 and 1995............................      24
     Consolidated Statements of Stockholders' Equity for the
     years ended December 31, 1997, 1996 and 1995................      25
     Consolidated Statements of Cash Flows for the years ended
     December 31, 1997, 1996 and 1995............................      26
     Notes to Consolidated Financial Statements..................      27
(b)  Supplementary Data
     Summary of Quarterly Data...................................      38
</TABLE>

     Financial statement schedule is included on page 42 preceding the signature
pages of this report (see Item 14).

                                       20
<PAGE>   21

                         REPORT OF INDEPENDENT AUDITORS

Board of Directors and Stockholders
Information Resources, Inc. and Subsidiaries

     We have audited the accompanying consolidated balance sheets of Information
Resources, Inc. and Subsidiaries as of December 31, 1997 and 1996 and the
related consolidated statements of operations, stockholders' equity and cash
flows for the years then ended. Our audits also included the financial statement
schedule listed in the Index at Item 14(a). These financial statements and
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and schedule based on our
audits.

     We conducted our audits 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 audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Information
Resources, Inc. and Subsidiaries at December 31, 1997 and 1996, and the
consolidated results of their operations and their consolidated cash flows for
the years then ended, in conformity with generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

                                            ERNST & YOUNG LLP

Chicago, Illinois
February 12, 1998

                                       21
<PAGE>   22

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
Information Resources, Inc. and Subsidiaries

     We have audited the accompanying consolidated balance sheet of Information
Resources, Inc. and Subsidiaries as of December 31, 1995, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the year then ended. 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 financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Information
Resources, Inc. and Subsidiaries at December 31, 1995, and the consolidated
results of their operations and their consolidated cash flows for the year then
ended, in conformity with generally accepted accounting principles.

                                            GRANT THORNTON LLP

Chicago, Illinois
February 15, 1996

                                       22
<PAGE>   23

                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                                  DECEMBER 31,

                                     ASSETS

<TABLE>
<CAPTION>
                                                                1997       1996
                                                              --------   --------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
CURRENT ASSETS
  Cash and cash equivalents.................................  $ 20,925   $ 12,195
  Accounts receivable, net..................................    96,209     99,413
  Prepaid expenses and other................................     9,563      6,575
                                                              --------   --------
          Total Current Assets..............................   126,697    118,183
                                                              --------   --------
  Property and equipment, at cost...........................   180,043    147,398
  Accumulated depreciation and amortization.................  (111,628)   (92,806)
                                                              --------   --------
          Net property and equipment........................    68,415     54,592
  Investments...............................................    13,061     18,737
  Other assets..............................................   158,447    142,981
                                                              --------   --------
                                                              $366,620   $334,493
                                                              ========   ========
                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Current maturities of capitalized leases..................  $  2,266   $  2,805
  Accounts payable..........................................    49,306     36,059
  Accrued compensation and benefits.........................    20,357     17,660
  Accrued property, payroll and other taxes.................     3,068      4,506
  Accrued expenses..........................................     6,324      7,015
  Deferred revenue..........................................    20,469     15,558
                                                              --------   --------
          Total Current Liabilities.........................   101,790     83,603
                                                              --------   --------
  Long-term debt............................................       640      7,892
  Deferred income taxes, net................................    13,660      9,113
  Other liabilities.........................................     8,988      7,557
STOCKHOLDERS' EQUITY
  Preferred stock -- authorized 1,000,000 shares, $.01 par
     value; none issued.....................................        --         --
  Common stock -- authorized 60,000,000 shares, $.01 par
     value; 28,713,943 and 27,886,406 shares issued and
     outstanding, respectively..............................       287        279
  Capital in excess of par value............................   198,537    187,213
  Retained earnings.........................................    45,932     38,270
  Cumulative translation adjustment.........................    (3,214)       566
                                                              --------   --------
          Total Stockholders' Equity........................   241,542    226,328
                                                              --------   --------
                                                              $366,620   $334,493
                                                              ========   ========
</TABLE>

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

                                       23
<PAGE>   24

                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                            YEARS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
                                                                 1997          1996          1995
                                                              -----------   -----------   -----------
                                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                           <C>           <C>           <C>
Revenues:
  Information services......................................   $456,327      $405,603      $359,718
  Software products business sold to Oracle.................         --            --        40,198
                                                               --------      --------      --------
                                                                456,327       405,603       399,916
Costs and expenses:
  Information services sold.................................   (401,876)     (368,951)     (341,566)
  Software products business sold to Oracle.................         --            --       (41,142)
  Selling, general and administrative expenses..............    (39,684)      (36,936)      (49,374)
  Nonrecurring expenses.....................................         --        (4,808)      (22,759)
                                                               --------      --------      --------
                                                               (441,560)     (410,695)     (454,841)
                                                               --------      --------      --------
Operating profit (loss).....................................     14,767        (5,092)      (54,925)
Net gain (loss) on sale of assets...........................         --        (4,600)       41,126
Interest expense and other, net.............................       (545)       (1,182)       (2,752)
Equity in earnings of affiliated companies..................        444            30           379
                                                               --------      --------      --------
Earnings (loss) before income taxes and minority
  interests.................................................     14,666       (10,844)      (16,172)
Income tax (expense) benefit................................     (6,700)        2,300         4,190
                                                               --------      --------      --------
Earnings (loss) before minority interests...................      7,966        (8,544)      (11,982)
Minority interests (expense) benefit........................       (304)          986           304
                                                               --------      --------      --------
  Net earnings (loss).......................................   $  7,662      $ (7,558)     $(11,678)
                                                               ========      ========      ========
Net earnings (loss) per common share........................   $    .27      $   (.27)     $   (.43)
                                                               ========      ========      ========
Net earnings (loss) per common and common equivalent share--
  assuming dilution.........................................   $    .26      $   (.27)     $   (.43)
                                                               ========      ========      ========
Weighted average common shares..............................     28,476        27,755        26,991
                                                               ========      ========      ========
Weighted average common and common equivalent shares --
  assuming dilution.........................................     29,069        27,755        26,991
                                                               ========      ========      ========
</TABLE>

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

                                       24
<PAGE>   25

                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                            YEARS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
                                                     CAPITAL IN              CUMULATIVE
                                            COMMON   EXCESS OF    RETAINED   TRANSLATION
                                            STOCK    PAR VALUE    EARNINGS   ADJUSTMENT     TOTAL
                                            ------   ----------   --------   -----------   --------
                                                                (IN THOUSANDS)
<S>                                         <C>      <C>          <C>        <C>           <C>
Balance at December 31, 1994..............   $265     $169,703    $57,506      $  (273)    $227,201
                                             ----     --------    -------      -------     --------
Net loss..................................     --           --    (11,678)          --      (11,678)
Shares issued:
  Employee stock option plans and other...      9       10,420         --           --       10,429
  Acquisitions and joint ventures.........      2        3,492         --           --        3,494
Translation adjustment....................     --           --         --          308          308
                                             ----     --------    -------      -------     --------
Balance at December 31, 1995..............    276      183,615     45,828           35      229,754
                                             ----     --------    -------      -------     --------
Net loss..................................     --           --     (7,558)          --       (7,558)
Shares issued from employee stock option
  plans and other.........................      3        3,598         --           --        3,601
Translation adjustment....................     --           --         --          531          531
                                             ----     --------    -------      -------     --------
Balance at December 31, 1996..............    279      187,213     38,270          566      226,328
                                             ----     --------    -------      -------     --------
Net earnings..............................     --           --      7,662           --        7,662
Shares issued from employee stock option
  plans and other.........................     12       17,269         --           --       17,281
Shares purchased..........................     (4)      (5,945)        --           --       (5,949)
Translation adjustment....................     --           --         --       (3,780)      (3,780)
                                             ----     --------    -------      -------     --------
Balance at December 31, 1997..............   $287     $198,537    $45,932      $(3,214)    $241,542
                                             ====     ========    =======      =======     ========
</TABLE>

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

                                       25
<PAGE>   26

                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                            YEARS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
                                                               1997        1996        1995
                                                             ---------   ---------   --------
                                                                      (IN THOUSANDS)
<S>                                                          <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss)........................................  $   7,662   $  (7,558)  $(11,678)
Adjustments to reconcile net earnings (loss) to net cash
  provided by operating activities:
  Amortization of deferred data procurement costs..........    101,625      87,944     82,095
  Depreciation.............................................     20,421      20,204     20,196
  Amortization of capitalized software costs and
     intangibles...........................................      6,689       7,140     10,920
  Deferred income tax expense (benefit)....................      6,329      (2,938)    (5,284)
  Equity in earnings of affiliated companies and minority
     interests.............................................       (140)     (1,016)      (683)
  Nonrecurring expenses....................................         --       4,808     22,759
  Net (gain) loss on disposition of assets.................         --       4,600    (41,126)
  Provision for losses on accounts receivable..............      1,046         719      6,295
  Other....................................................     (3,529)     (3,002)    (2,543)
  Change in assets and liabilities:
     Decrease (increase) in accounts receivable............      5,468      (6,163)    (7,593)
     Increase in other current assets......................     (2,379)     (1,334)    (3,760)
     Increase (decrease) in accounts payable and accrued
       liabilities.........................................     11,105      (3,314)     2,382
     Increase (decrease) in deferred revenue...............       (672)        (84)     3,578
     Other, net............................................        679       2,077        583
                                                             ---------   ---------   --------
          Total adjustments................................    146,642     109,641     87,819
                                                             ---------   ---------   --------
          Net cash provided by operating activities........    154,304     102,083     76,141
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposition of assets........................      1,500       2,900     92,000
Deferred data procurement costs............................   (111,814)    (98,005)   (96,808)
Purchase of property and equipment.........................    (34,444)    (18,772)   (24,497)
Capitalized software costs.................................     (3,682)     (5,784)    (9,887)
Investments and net assets acquired in business
  acquisitions and other...................................        889      (1,550)    (4,750)
                                                             ---------   ---------   --------
          Net cash used by investing activities............   (147,551)   (121,211)   (43,942)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net bank borrowings (repayments)...........................     (5,500)      5,500    (29,000)
Net borrowings (repayments) of capitalized leases..........     (2,291)       (880)     1,606
Purchases of Common Stock..................................     (5,949)         --         --
Proceeds from exercise of stock options and other..........     17,154       2,445      8,246
                                                             ---------   ---------   --------
          Net cash provided (used) by financing
            activities.....................................      3,414       7,065    (19,148)
EFFECT OF EXCHANGE RATE CHANGES ON CASH....................     (1,437)       (626)        41
                                                             ---------   ---------   --------
          Net increase (decrease) in cash and cash
            equivalents....................................      8,730     (12,689)    13,092
Cash and cash equivalents at beginning of year.............     12,195      24,884     11,792
                                                             ---------   ---------   --------
Cash and cash equivalents at end of year...................  $  20,925   $  12,195   $ 24,884
                                                             =========   =========   ========
</TABLE>

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

                                       26
<PAGE>   27

                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 1997, 1996 AND 1995

NOTE 1 -- SUMMARY OF ACCOUNTING POLICIES

  Business

     Information Resources, Inc. ("IRI") and its subsidiaries (collectively the
"Company") is a leading provider of UPC scanner-based business solutions to the
consumer package goods ("CPG") industry. The Company obtains data primarily from
electronic point-of-sale scanners in retail stores and integrates this scan data
with other proprietary data collected by the Company. The Company maintains this
data in massive data warehouses and provides CPG manufacturers, retailers,
wholesalers and brokers with a variety of services critical to their sales,
marketing and logistics operations. The Company's software products assist
clients in analyzing, distributing and using the Company's data, enabling them
to make more cost effective decisions in marketing, selling and distributing
their products.

  Principles of Consolidation

     The consolidated financial statements include the accounts of IRI and all
wholly or majority owned subsidiaries and affiliates. Minority interests reflect
the non-Company owned stockholder interests in IRI-SECODIP, S.C.S., (France)
("IRI-SECODIP"), IRI InfoScan Limited (U.K.), Information Resources Japan, Ltd.,
and effective February 1, 1997, IRI/GfK Retail Services GmbH (Germany) ("IRI/GfK
Retail"). The equity method of accounting is used for investments in which the
Company has a 20% to 50% ownership interest and exercises significant influence
over operating and financial policies. All significant intercompany accounts and
transactions have been eliminated in consolidation.

  Accounting 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 reported
period. Actual results may differ from estimates.

  Reclassifications

     Certain reclassifications have been made in the prior years' consolidated
financial statements to conform to the 1997 presentation.

  Revenue Recognition

     Revenues on contracts for retail tracking services, which generally have
terms of not less than one year, are recognized over the terms of the contracts.
Such contracts are generally categorized into one of two classes: 1) cancelable
at the end of each year by the giving of six months written notice by either
party; or 2) multi-year contracts either non-cancelable or cancelable only with
significant penalties, generally by the giving of six months written notice
after the initial multi-year term. Revenues for special analytical services,
market research and consulting projects are recognized as services are
performed. Certain of these projects are fixed-price in nature and use the
percentage-of-completion method for the recognition of revenue.

     Revenues from the sale of software application products, or products sold
under licensing agreements, are recognized upon delivery when there is a
reasonable basis for estimating collectibility and the Company has no
significant remaining obligations. If there are significant other obligations,
revenues are recognized on the basis of the ratio of incurred cost to total
estimated cost over the life of the contract. Related software maintenance fees
are recognized as earned over the terms of their respective contracts.

                                       27
<PAGE>   28
                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Research and Development

     Expenditures for research and development for the years ended December 31,
1997, 1996 and 1995 approximated $21.3 million, $24.9 million and $37.4 million,
respectively. Included in these expenditures were $3.7 million, $5.8 million and
$9.9 million of software development costs that were capitalized for the years
ended December 31, 1997, 1996 and 1995, respectively. Expenditures not
capitalized are charged to expense as incurred.

  Benefits Plan

     The Company sponsors an employee savings plan that qualifies as a deferred
salary arrangement under Section 401(k) of the Internal Revenue Code. The plan
allows eligible employees to contribute a portion of their pre-tax income in
accordance with specified guidelines. The Company matches a percentage of
employee contributions up to certain limits. The expense recognized for the
401(k) plan totaled approximately $2.2 million, $2.0 million and $1.5 million in
1997, 1996 and 1995, respectively.

  Cash and Cash Equivalents

     For purposes of reporting cash flows, cash and cash equivalents include
cash on hand, commercial paper and funds held in money market accounts with a
maturity of three months or less.

  Fair Value of Financial Instruments and Credit Risk

     The carrying value of the Company's financial instruments, cash and cash
equivalents, investments and debt obligations represent a reasonable estimate of
their fair value. As of December 31, 1997 and 1996, the Company had no
significant concentrations of credit risk related to cash equivalents and
accounts receivable.

  Property and Equipment

     Property and equipment is recorded at cost and is depreciated over the
estimated service lives. For financial statement purposes, depreciation is
provided by the straight-line method. The Company also capitalizes the cost of
internal-use computer software as incurred and amortizes such costs over the
related projects estimated useful lives of three to seven years. Leasehold
improvements are amortized over the shorter of their estimated service lives or
the terms of their respective lease agreements. Estimated useful lives are as
follows:

<TABLE>
<S>                         <C>
Computer equipment and
  software................  3 to  7 years
Market testing and other
  operating equipment.....  3 to  7 years
Leasehold improvements....  5 to 20 years
Equipment and furniture...  3 to  8 years
</TABLE>

  Other Assets

     Other assets include deferred data procurement costs, intangible assets and
capitalized software costs. Data procurement costs are amortized over a period
of 28 months and include actual payments and services to retailers for
point-of-sale data and causal costs related to collecting, reviewing and
verifying other data (i.e., causal factors) which are an essential part of the
data base. Intangible assets include goodwill, solicitation rights and
non-compete agreements, all of which arose from acquisitions, investment or
strategic alliances. Goodwill is amortized on a straight-line basis over periods
from ten to twenty years. Solicitation rights are amortized on a straight-line
basis over the expected useful lives of six to ten years. Non-compete agreements
are being amortized over periods from five to seven years. Capitalized costs of
computer software held for sale are amortized on a straight-line basis beginning
upon the software's general release date over a period not to exceed three
years.

                                       28
<PAGE>   29
                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     On an ongoing basis, management reviews the valuation and amortization of
these assets to determine possible impairment by comparing the carrying value to
the undiscounted future cash flows of the related assets. Based upon currently
projected cash flows, the Company's assessment is that the realizability of
these assets is not impaired.

  Income Taxes

     Deferred income taxes are recognized at statutory rates to reflect the
future effects of tax carryforwards and temporary differences arising between
the tax bases of assets and liabilities and their financial reporting amounts at
each year end. Deferred income taxes arise in business combinations accounted
for as purchases as a result of differences between the fair value of assets
acquired and their tax bases.

  Earnings (Loss) per Common and Common Equivalent Share and Stock-Based
Compensation

     The Company adopted the Statement of Financial Accounting Standards No.
128, "Earnings per Share" effective January 1, 1997. Net earnings (loss) per
share is based upon the weighted average number of shares of common stock
outstanding during each year. Net earnings (loss) per common and common
equivalent share -- assuming dilution is based upon the weighted average number
of shares of common stock and common stock equivalents, entirely comprised of
stock options, outstanding during each year. In 1997, stock options with an
exercise price greater than $16.50 per share aggregating 750,262 were excluded
from the weighted average shares outstanding calculation because they were
antidilutive. The adoption of this new accounting standard had no effect on the
per share amounts for the years ended December 31, 1997, 1996 or 1995.

     The Company accounts for stock option grants in accordance with provisions
of APB Opinion No. 25, "Accounting for Stock Issued to Employees."

  Adoption of Recent Statement of Financial Accounting Standards

     In July 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" and Statement of Financial Accounting Standards No. 131, "Disclosures
about Segments of an Enterprise and Related Information" (collectively "the
Standards"). The Standards are effective for fiscal years beginning after
December 15, 1997 and the Company is currently investigating the impact of these
Standards.

NOTE 2 -- SUPPLEMENTAL CASH FLOW INFORMATION

     Cash paid (refunded) for interest and income taxes during the years ended
December 31, was as follows (in thousands):

<TABLE>
<CAPTION>
                                                            1997      1996      1995
                                                            ----      ----      ----
<S>                                                        <C>       <C>       <C>
Interest.................................................  $1,346    $2,103    $4,876
Income taxes.............................................     262      (735)     (855)
</TABLE>

     Excluded from the consolidated statements of cash flows was the effect of
several non-cash investing and financing activities. In 1997, 1996 and 1995,
receivables of $.5 million, $.7 million and $1.6 million, respectively, were
reclassified to investment in joint ventures. In December 1995, the Company
issued shares of its Common Stock having a market value of $3.5 million in
connection with a strategic alliance agreement and other acquisitions. Also in
1995, the Company issued shares of Common Stock having a market value of $2.6
million in connection with the settlement of a 1994 shareholder lawsuit.

NOTE 3 -- ACQUISITIONS AND JOINT VENTURES

     In February 1997, the Company and GfK AG of Germany ("GfK") organized a new
joint venture company, IRI/GfK Retail. The Company has a 51% ownership interest
in IRI/GfK Retail, and GfK owns the remainder. IRI/GfK Retail purchased the
German retail tracking business of GfK Panel Services GmbH

                                       29
<PAGE>   30
                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

("GfK Panel"). The consolidation of IRI/GfK Retail, which was effective February
1, 1997, did not have a material impact on the financial results or position of
the Company.

     In a separate transaction, the Company sold its previously held 15%
ownership interest in GfK Panel to GfK at no book gain or loss. GfK Panel will
continue to provide consumer panel and ad hoc research services and will
cooperate with IRI/GfK Retail in selling and delivering services to appropriate
customers.

NOTE 4 -- NET GAIN (LOSS) ON DISPOSITION OF ASSETS

     In July 1995, the Company sold to Oracle Corporation ("Oracle") certain
assets, liabilities and related software application products relating to the
on-line analytical processing business previously operated by the Company's
software division. The sale transaction resulted in a pre-tax gain in 1995 of
approximately $41.1 million. In consideration for such assets and liabilities,
Oracle paid, subject to post-closing adjustment, approximately $100 million in
cash, including $8.0 million to an interest-bearing escrow account. A portion of
the sale proceeds were used to repay the Company's bank credit facility. The
remainder of the proceeds was used to pay expenses of the sale and held for
general corporate purposes. In December 1996, the Company recorded a $4.6
million charge related primarily to the final settlement of the escrow account.

NOTE 5 -- NONRECURRING EXPENSES

     Nonrecurring expenses in 1996 included a $4.8 million charge principally
related to the disposal of certain cable TV advertising cut-in equipment
originally developed for use in the Company's market-testing operation.
Nonrecurring expenses in 1995 included a $12.4 million write-down of assets,
principally related to European deferred data procurement costs to net
realizable value and a $10.4 million charge principally related to a U.S.
facility closing. The 1995 write-down of deferred data procurement costs was
based upon the Company's assessment of the realizability of these assets in part
due to lower than originally expected revenues and operating results in the
Company's startup operations in the U.K. and Italy.

NOTE 6 -- INCOME TAXES

     IRI and its U.S. subsidiaries and partnerships file their U.S. Federal
income tax return on a consolidated basis. As of December 31, 1997, the Company
had cumulative U.S. Federal net operating loss ("NOL") carryforwards of
approximately $70.8 million that expire primarily in 2009 and 2011. Certain of
these carryforwards have not been examined by the Internal Revenue Service and,
therefore, are subject to adjustment. In addition, at December 31, 1997, various
foreign subsidiaries of IRI had aggregate cumulative NOL carryforwards for
foreign income tax purposes of approximately $8.9 million which are subject to
the various income tax provisions of each respective country. Approximately $3.3
million of these foreign NOLs may be carried forward indefinitely, while the
remaining $5.6 million expire in 2000 through 2002. At December 31, 1997 the
Company had general business tax credit carryforwards of approximately $9.5
million which expire primarily between 1999 and 2012, and are available to
reduce future U.S. Federal income tax liabilities.

     Domestic earnings before income taxes and minority interests were $31.4
million, $11.7 million and $27.1 million for 1997, 1996 and 1995, respectively.
The foreign loss before income taxes and minority interests was ($16.7) million,
($22.5) million and ($43.3) million for 1997, 1996 and 1995, respectively. A
majority of the European foreign pre-tax losses are deducted as partnership
losses in IRI's consolidated U.S. Federal income tax return in accordance with
the U.S. Internal Revenue Code.

                                       30
<PAGE>   31
                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Income tax (expense) benefit relating to earnings (loss) before minority
interests for the years ended December 31, 1997, 1996 and 1995 consisted of the
following components (in thousands):

<TABLE>
<CAPTION>
                                                           1997       1996      1995
                                                          -------    ------    ------
<S>                                                       <C>        <C>       <C>
Current income tax (expense) benefit
  Federal...............................................  $    --    $   --    $   --
  Foreign...............................................     (371)     (638)   (1,094)
  State and local.......................................       --        --        --
                                                          -------    ------    ------
                                                             (371)     (638)   (1,094)
                                                          -------    ------    ------
Deferred income tax (expense) benefit
  Federal...............................................   (6,366)    3,805     3,282
  Foreign...............................................      549      (937)    1,181
  State and local.......................................     (512)       70       821
                                                          -------    ------    ------
                                                           (6,329)    2,938     5,284
                                                          -------    ------    ------
Income tax (expense) benefit............................  $(6,700)   $2,300    $4,190
                                                          =======    ======    ======
</TABLE>

     The Company has reduced its deferred tax liability by its Federal, state
and certain foreign NOL carryforwards in its consolidated financial statements.
The Company's recognition of future tax benefits is due to the expected
utilization of those benefits based upon future receipt of substantial taxable
income, specifically resulting from over $111.8 million of existing net
temporary differences at December 31, 1997, primarily deferred data procurement
costs, capitalized software costs, and other items, most of which will reverse
over the next three years.

     Significant components of the Company's deferred tax liabilities and assets
were as follows (in thousands):

<TABLE>
<CAPTION>
                                                                   DECEMBER 31
                                                                ------------------
                                                                 1997       1996
                                                                -------    -------
<S>                                                             <C>        <C>
Deferred tax liabilities:
  Deferred data procurement costs...........................    $45,366    $40,098
  Capitalized software costs................................      4,669      4,732
  Acquisition related costs.................................      4,493      2,502
  Other.....................................................      8,635      2,766
                                                                -------    -------
          Total deferred tax liabilities....................     63,163     50,098

Deferred tax assets:
  Domestic NOL carryforwards................................     26,904     25,535
  Domestic tax credit carryforwards.........................      9,467      6,210
  Foreign NOL carryforwards.................................      3,648      2,440
  Revenue recognition change................................      1,404      2,097
  Reserve for nonrecurring items............................         --        664
  Reserve for compensation related items....................      5,021      3,003
  Other.....................................................     11,785      7,580
                                                                -------    -------
          Total deferred tax assets.........................     58,229     47,529
Valuation allowance on deferred tax assets..................     (8,726)    (6,544)
                                                                -------    -------
Net deferred tax assets.....................................     49,503     40,985
                                                                -------    -------
Net deferred tax liability..................................    $13,660    $ 9,113
                                                                =======    =======
</TABLE>

                                       31
<PAGE>   32
                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The valuation allowance increased by $2.2 million in 1997 and $2.4 million
in 1996, as it is more likely than not that the net operating loss and domestic
tax credit carryforwards recorded by certain Company subsidiaries in these years
will not be utilized to offset taxable income.

     Income tax (expense) benefit differs from the statutory U.S. Federal income
tax rate of 35% applied to earnings (loss) before income taxes and minority
interests for the years ended December 31, 1997, 1996 and 1995 as follows (in
thousands):

<TABLE>
<CAPTION>
                                                      1997        1996         1995
                                                     -------    ---------    --------
<S>                                                  <C>        <C>          <C>
Statutory tax (expense) benefit....................  $(5,133)   $   3,795    $  5,660
Effects of --
  State income taxes, net of Federal income tax
     benefit.......................................     (333)          45         534
  Nondeductible meals and entertainment............     (407)        (365)       (502)
  Nondeductible acquisition/organization costs.....     (127)        (210)       (719)
  Other non-taxable income (nondeductible
     expenses).....................................      (11)          18        (374)
  Foreign losses and taxes.........................     (983)      (1,150)       (976)
  Change in valuation allowance....................      216          419          --
  Other............................................       78         (252)        567
                                                     -------    ---------    --------
                                                     $(6,700)   $   2,300    $  4,190
                                                     =======    =========    ========
</TABLE>

NOTE 7 -- ACCOUNTS RECEIVABLE

     Accounts receivable at December 31, were as follows (in thousands):

<TABLE>
<CAPTION>
                                                                  1997         1996
                                                                ---------    --------
<S>                                                  <C>        <C>          <C>
Billed.............................................             $  70,761    $ 66,135
Unbilled...........................................                29,288      37,615
                                                                ---------    --------
                                                                  100,049     103,750
Reserve for accounts receivable....................                (3,840)     (4,337)
                                                                ---------    --------
                                                                $  96,209    $ 99,413
                                                                =========    ========
</TABLE>

     Payments received in advance of revenue recognition are reflected in the
consolidated financial statements as deferred revenue. Unbilled accounts
receivable represent revenues and fees on contracts and other services earned to
date for which customers were not invoiced as of the balance sheet date.

NOTE 8 -- PROPERTY AND EQUIPMENT

     Property and equipment at December 31, were as follows (in thousands):

<TABLE>
<CAPTION>
                                                                  1997         1996
                                                                ---------    --------
<S>                                                  <C>        <C>          <C>
Computer equipment and software....................             $ 102,283    $ 82,708
Market testing and other operating equipment.......                24,581      14,291
Leasehold improvements.............................                16,513      15,345
Equipment and furniture............................                36,666      35,054
                                                                ---------    --------
                                                                  180,043     147,398
Accumulated depreciation and amortization..........              (111,628)    (92,806)
                                                                ---------    --------
                                                                $  68,415    $ 54,592
                                                                =========    ========
</TABLE>

                                       32
<PAGE>   33
                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 9 -- INVESTMENTS AND OTHER ASSETS

     Investments at December 31 were as follows (in thousands):

<TABLE>
<CAPTION>
                                                                1997        1996
                                                              --------    --------
<S>                                                           <C>         <C>
Datos Information Resources, at cost plus equity in
  undistributed earnings....................................  $  5,143    $  5,500
GfK Panel Services GmbH, at cost............................        --       5,772
GfK Panel Services Benelux B.V., at cost....................     5,919       5,436
Other.......................................................     1,999       2,029
                                                              --------    --------
                                                              $ 13,061    $ 18,737
                                                              ========    ========
</TABLE>

     Other assets at December 31 were as follows (in thousands):

<TABLE>
<CAPTION>
                                                                1997        1996
                                                              --------    --------
<S>                                                           <C>         <C>
Deferred data procurement costs -- net of accumulated
  amortization of $108,491 in 1997 and $102,372 in 1996.....  $126,733    $113,926
Intangible assets, including goodwill primarily related to
  acquisitions -- net of accumulated amortization of $10,233
  in 1997 and $12,171 in 1996...............................    16,463      13,940
Capitalized software costs -- net of accumulated
  amortization of $3,578 in 1997 and $5,554 in 1996.........     6,093      11,516
Other.......................................................     9,158       3,599
                                                              --------    --------
                                                              $158,447    $142,981
                                                              ========    ========
</TABLE>

NOTE 10 -- LONG-TERM DEBT

     Long-term debt at December 31, was as follows (in thousands):

<TABLE>
<CAPTION>
                                                                1997        1996
                                                              --------    --------
<S>                                                           <C>         <C>
Bank borrowings.............................................  $     --    $  5,500
Capitalized leases..........................................     2,906       5,197
                                                              --------    --------
                                                                 2,906      10,697
Less current maturities.....................................    (2,266)     (2,805)
                                                              --------    --------
                                                              $    640    $  7,892
                                                              ========    ========
</TABLE>

     In October 1997, the Company replaced its $50.0 million bank revolving
credit facility maturing in 1998 with a new $75.0 million facility maturing in
2001. The new facility has floating interest rate options at or below prime and
commitment fees of .25% are payable on the unused portion.

     The financial covenants in the bank credit agreement, as well as in the
lease agreement for the Company's Chicago headquarters, require the Company to
maintain a minimum tangible net worth and to meet certain cash flow coverage and
leverage ratios. The agreements also limit the Company's ability to declare
dividends or make distributions to holders of capital stock, or redeem or
otherwise acquire shares of the Company. Approximately $69.5 million is
currently available for such distributions under the most restrictive of these
covenants. The credit agreement contains covenants which restrict the Company's
ability to incur additional indebtedness.

     Capitalized leases primarily consist of leases for computer and
communications equipment expiring through 2000. Maturities of capitalized leases
during each of the years 1998 through 2000 are $2.3 million, $.5 million and $.1
million, respectively.

                                       33
<PAGE>   34
                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 11 -- CAPITAL STOCK

  Preferred Stock Purchase Rights

     In 1989, IRI adopted a shareholder rights plan which attached preferred
stock rights ("Rights") to each share of its Common Stock. During 1997, IRI
amended the shareholder rights plan to, among other things, extend the terms of
the Rights through 2007. Each Right entitles the holder to purchase one
one-hundredth share of Preferred Stock at an exercise price of $60. The Rights
become exercisable upon the acquisition of a certain percentage of IRI Common
Stock or a tender offer or exchange offer for IRI Common Stock by a person or
group. IRI may redeem the Rights at $.01 per Right at any time prior to a public
announcement that a person or group has acquired a certain percentage of IRI's
Common Stock. The Rights will expire on October 27, 2007. IRI has authority to
issue one million shares of $.01 par value Preferred Stock.

  Common Stock

     At December 31, 1997, 1996 and 1995, 28,713,943, 27,886,406 and 27,587,176
shares of Common Stock, respectively were issued and outstanding. At December
31, 1997, .6 million and 4.3 million options were available for grant under the
Executive Stock Option Plan and the Employee Stock Option Plan, respectively. In
connection with all IRI employee and director stock plans, 12.3 million shares
were reserved for issuance at December 31, 1997.

     In November 1997, the Company's Board of Directors approved a plan to
purchase up to two million shares of the Company's Common Stock from time to
time in the open market. Purchases under the plan are subject to a number of
considerations including the market price of the Company's Common Stock and
general market conditions. The Company anticipates funding purchases out of cash
on hand or available through the Company's bank revolving credit facility. As of
December 31, 1997, the Company had purchased 419,200 shares under the plan at an
average cost of $14.19 per share.

     In May 1996, the Company's shareholders approved a stock plan for
non-employee directors (the Director's Plan), authorizing the issuance of up to
100,000 shares of Common Stock. Under the Directors' Plan an eligible director
is paid annually in shares of Common Stock in lieu of 75% of the cash retainer
otherwise payable for services on the Board. The number of shares issued is
based upon the fair market value of the Company's Common Stock. The Company
issued 9,873 and 10,692 shares in 1997 and 1996 at a price of $14.36 and $14.25
per share, respectively, under the Director's Plan.

     In 1995, the Company issued 244,000 shares of Common Stock in connection
with a strategic alliance agreement and acquisition of businesses and joint
ventures and 211,223 shares of Common Stock in settlement of a 1994 shareholder
lawsuit.

     There are restrictions in IRI's bank revolving credit facility and lease
agreements which limit the payment of dividends and the purchases or redemption
of Common Stock. (See Note 10.)

  Stock Options

     The Company has several stock option plans. The Employee Stock Option Plan
covers most employees other than executive officers and directors. Substantially
all options under these plans have been granted at fair market value or higher.
Most option grants are exercisable in equal annual increments of 25% beginning
on the first anniversary of the grant date and expire ten years after the date
of grant. IRI also has an Executive Stock Option Plan covering executive
officers and directors which at inception authorized up to 2.5 million stock
options. Most options under this plan were granted at fair market value and are
exercisable in equal annual increments of 25% beginning on the first anniversary
of the grant date and expire ten years after the date of grant. For options
granted at less than fair market value, the Company recognizes compensation
expense over the vesting period for the difference between the total fair market
value and the total exercise price on the date of grant.

                                       34
<PAGE>   35
                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following table presents, on an pro forma basis, net earnings (loss)
and net earnings (loss) per share for the years ended December 31, 1997, 1996
and 1995 as if an alternate method of accounting as prescribed by Statement of
Financial Accounting Standard No. 123 "Accounting for Stock-Based Compensation"
for stock options had been adopted (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                           1997     1996       1995
                                                          ------   -------   --------
<S>                                                       <C>      <C>       <C>
Net earnings (loss) -- as reported......................  $7,662   $(7,558)  $(11,678)
                                                          ======   =======   ========
Net earnings (loss) -- pro forma........................  $6,096   $(8,673)  $(13,956)
                                                          ======   =======   ========
Net earnings (loss) per common share -- as reported.....  $  .27   $  (.27)  $   (.43)
                                                          ======   =======   ========
Net earnings (loss) per common share -- pro forma.......  $  .21   $  (.31)  $   (.52)
                                                          ======   =======   ========
Net earnings (loss) per common and common equivalent
  share -- assuming dilution -- as reported.............  $  .26   $  (.27)  $   (.43)
                                                          ======   =======   ========
Net earnings (loss) per common and common equivalent
  share -- assuming dilution -- pro forma...............  $  .21   $  (.31)  $   (.52)
                                                          ======   =======   ========
</TABLE>

     The above table is based upon the valuation of option grants using the
Black-Scholes pricing model for traded options with assumed risk-free interest
rates of 6.6%, 6.7% and 5.9% for 1997, 1996 and 1995, respectively; stock price
volatility factor of 46.6%, 41.4% and 41.4% for 1997, 1996 and 1995,
respectively; and an expected life of the options of five years. Using the
foregoing assumptions, the calculated weighted-average fair value of options
granted in 1997, 1996 and 1995 was $7.21, $5.85 and $5.66, respectively. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the input
assumptions can materially affect the fair value estimate, in management's
opinion, the model does not necessarily provide a reliable single measure of the
fair value of its employee stock options.

     Transactions involving stock options for the Executive and Employee Stock
Option Plans are summarized as follows:

<TABLE>
<CAPTION>
                                                                            WEIGHTED
                                                                            AVERAGE
                                                                NUMBER      EXERCISE
                                                              OF OPTIONS     PRICE
                                                              ----------    --------
<S>                                                           <C>           <C>
Outstanding January 1, 1995.................................   9,571,047     $14.83
Granted.....................................................   2,042,565      12.89
Canceled/Expired............................................  (2,122,603)     15.93
Exercised...................................................    (638,748)     10.20
                                                              ----------     ------
Outstanding December 31, 1995...............................   8,852,261      14.44
Granted.....................................................     430,000      12.90
Canceled/Expired............................................    (645,543)     18.43
Exercised...................................................    (288,538)      8.32
                                                              ----------     ------
Outstanding December 31, 1996...............................   8,348,180      14.26
Granted.....................................................     801,390      14.59
Canceled/Expired............................................    (651,083)     17.06
Exercised...................................................  (1,236,864)     12.38
                                                              ----------     ------
Outstanding December 31, 1997...............................   7,261,623     $14.36
                                                              ==========     ======
Exercisable December 31, 1997...............................   5,386,452     $14.47
                                                              ==========     ======
</TABLE>

                                       35
<PAGE>   36
                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Stock options outstanding at December 31, 1997 are as follows:

<TABLE>
<CAPTION>
                                              WEIGHTED     OUTSTANDING                 EXERCISABLE
                                               AVERAGE      WEIGHTED                    WEIGHTED
                                              REMAINING      AVERAGE                     AVERAGE
          RANGE OF               NUMBER      CONTRACTUAL    EXERCISE       NUMBER       EXERCISE
       EXERCISE PRICES         OUTSTANDING      LIFE          PRICE      EXERCISABLE      PRICE
       ---------------         -----------   -----------   -----------   -----------   -----------
<S>                            <C>           <C>           <C>           <C>           <C>
$ 7.63 - $12.75..............   1,504,492       4.85         $10.49       1,112,449      $ 9.93
$12.88 - $14.00..............   1,895,553       7.57          13.66       1,070,865       13.58
$14.13 - $16.50..............   3,111,316       5.66          14.45       2,543,948       14.38
$17.13 - $34.00..............     750,262       5.58          23.51         659,190       23.92
                                ---------       ----         ------       ---------      ------
$ 7.63 - $34.00..............   7,261,623       5.98         $14.36       5,386,452      $14.47
                                =========       ====         ======       =========      ======
</TABLE>

NOTE 12 -- COMMITMENTS, CONTINGENCIES AND LITIGATION

  Lease Agreements and Other Commitments

     The Company leases certain property and equipment under operating leases
expiring at various dates through 2010. At December 31, 1997 obligations to make
future minimum payments under all operating leases were $155.1 million in the
aggregate and $33.5 million, $26.7 million, $21.3 million, $13.1 million and
$11.1 million for the five years ended December 31, 2002, respectively. Rent
expense for all operating leases was $36.1 million, $32.0 million and $32.6
million for the years ended December 31, 1997, 1996 and 1995, respectively.

  Legal Proceedings

     In July 1996, IRI filed an action against The Dun & Bradstreet Corp.,
ACNielsen Company ("ACNielsen") and IMS International, Inc. (collectively, "the
Defendants") in the United States District Court for the Southern District of
New York entitled Information Resources, Inc. v. The Dun & Bradstreet Corp., et.
al. No. 96 CIV. 5716 (the "Action"). IRI alleged that, among other things, the
Defendants violated Sections 1 and 2 of the Sherman Act, 15 U.S.C. Section
Section 1 and 2, by engaging in a series of anti-competitive practices aimed at
excluding the Company from various export markets for retail tracking services
and regaining monopoly power in the United States market for such services.
These practices included: (i) entering into exclusionary contracts with
retailers in several countries in order to restrict the Company's access to
sales data necessary to provide retail tracking services; (ii) illegally tying
services in markets over which Defendants' had monopoly power with services in
markets in which ACNielsen competed with the Company; (iii) predatory pricing;
(iv) acquiring foreign market competitors with the intent of impeding the
Company's efforts at export market expansion; (v) tortuously interfering with
Company contracts and relationships with clients, joint venture partners and
other market research companies; and (vi) disparaging the Company to financial
analysts and clients. By the Action, the Company seeks to enjoin the Defendants'
anti-competitive practices and to recover damages in excess of $350 million,
prior to trebling.

     The Action followed legal proceedings by the Canadian Competition Tribunal
in 1995 and the European Commission in 1996 against ACNielsen for
anti-competitive practices. In 1995, the Canadian Competition Tribunal concluded
that ACNielsen had engaged in "anti-competitive acts" with the express intent
"to exclude potential competitors generally and IRI specifically" from the
Canadian retail tracking and services market. In December 1996, ACNielsen signed
an Undertaking to the European Commission agreeing to halt numerous contractual
practices which the Company contended was part of an intentional and unlawful
strategy aimed at preventing the Company from establishing a competitive
position in Europe and eliminating the Company as a competitor.

     In the ordinary course of business, IRI and its subsidiaries become
involved as plaintiffs or defendants in various other legal proceedings. The
claims and counterclaims in such litigation, including those for punitive

                                       36
<PAGE>   37
                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

damages, individually in certain cases and in the aggregate, involve amounts
which may be material. However, it is the opinion of the Company's management,
based upon advice of counsel, that the ultimate disposition of pending
litigation against the Company will not be material.

NOTE 13 -- GEOGRAPHIC AREA INFORMATION

     The Company develops and maintains data bases, decision support software,
and mathematical models, primarily for the analysis of detailed information on
purchasing of consumer goods, all within one industry segment -- business
information services. The following table presents information about the Company
by geographic areas, including operations of the General Software Business,
which was sold to Oracle in 1995, (in thousands):

<TABLE>
<CAPTION>
                                                               1997        1996        1995
                                                             --------    --------    --------
<S>                                                          <C>         <C>         <C>
Operating revenues(a):
  To unaffiliated customers:
     United States.........................................  $366,678    $344,612    $329,340
     Europe................................................    84,549      54,520      62,693
     Other International...................................     5,100       6,471       7,882
  Transfers between geographic areas(b):
     United States.........................................        --          --       4,343
     Europe................................................        --          --       1,099
     Eliminations..........................................        --          --      (5,441)
                                                             --------    --------    --------
          Total operating revenues.........................  $456,327    $405,603    $399,916
                                                             ========    ========    ========
Operating profit (loss)(c):
     United States.........................................  $ 38,613    $ 26,699    $ (4,922)
     Europe................................................   (17,175)    (23,864)    (42,983)
     Other International...................................    (2,745)     (5,962)     (3,368)
     Corporate expenses....................................    (3,926)     (1,965)     (3,652)
                                                             --------    --------    --------
          Operating profit (loss)..........................  $ 14,767    $ (5,092)   $(54,925)
                                                             ========    ========    ========
Identifiable assets at December 31(d):
     United States.........................................  $250,816    $230,371    $239,069
     Europe................................................    99,073      87,380      84,109
     Other International...................................    16,731      16,742      15,358
                                                             --------    --------    --------
          Total identifiable assets........................  $366,620    $334,493    $338,536
                                                             ========    ========    ========
</TABLE>

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

(a)  Total international revenues, including export sales, were $90.9 million,
     $62.5 million and $72.9 million for 1997, 1996 and 1995, respectively.

(b)  Transfers in 1995 related to the software products business sold to Oracle
     in 1995. (See Note 4.)

(c)  Operating profit (loss) includes nonrecurring expenses of $4.8 million and
     $22.8 million in 1996 and 1995, respectively. (See Note 5.) Operating
     profit (loss) excludes net gain (loss) on disposition of assets of ($4.6)
     million and $41.1 million in 1996 and 1995, respectively. (See Note 4.)

(d)  Identifiable assets, in the U.S., include investments aggregating $13.1
     million, $18.7 million and $18.8 million at December 31, 1997, 1996 and
     1995, respectively. (See Note 9.)

                                       37
<PAGE>   38

                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

SUMMARY OF QUARTERLY DATA (UNAUDITED)

     Summaries of consolidated results on a quarterly basis are as follows (in
thousands, except per share data):

<TABLE>
<CAPTION>
                                                               1997
                                             -----------------------------------------
                                              FIRST      SECOND     THIRD      FOURTH
                                             QUARTER    QUARTER    QUARTER    QUARTER
                                             --------   --------   --------   --------
<S>                                          <C>        <C>        <C>        <C>
Revenues...................................  $105,128   $113,973   $115,601   $121,625
                                             ========   ========   ========   ========
Operating profit (loss)....................       (38)     4,587      4,282      5,936
                                             ========   ========   ========   ========
Net earnings...............................  $     55   $  2,129   $  1,982   $  3,496
                                             ========   ========   ========   ========
Net earnings per common share..............  $     --   $    .08   $    .07   $    .12
                                             ========   ========   ========   ========
Net earnings per common and common
  equivalent share -- assuming dilution....  $     --   $    .07   $    .07   $    .12
                                             ========   ========   ========   ========
     Weighted average common shares........    28,052     28,260     28,610     28,974
                                             ========   ========   ========   ========
     Weighted average common and common
       equivalent shares -- assuming
       dilution............................    28,563     28,553     29,468     29,691
                                             ========   ========   ========   ========
</TABLE>

<TABLE>
<CAPTION>
                                                                1996
                                              ----------------------------------------
                                               FIRST     SECOND     THIRD      FOURTH
                                              QUARTER   QUARTER    QUARTER    QUARTER
                                              -------   --------   --------   --------
<S>                                           <C>       <C>        <C>        <C>
Revenues....................................  $92,998   $102,955   $101,980   $107,670
                                              =======   ========   ========   ========
Nonrecurring expenses(a)....................       --         --         --     (4,808)
                                              =======   ========   ========   ========
Operating profit (loss).....................   (4,474)       771         28     (1,417)
                                              =======   ========   ========   ========
Net loss on sale of assets(b)...............       --         --         --     (4,600)
                                              =======   ========   ========   ========
Net earnings (loss).........................  $(2,247)  $    242   $     10   $ (5,563)
                                              =======   ========   ========   ========
Net earnings (loss) per common share........  $  (.08)  $    .01   $     --   $   (.20)
                                              =======   ========   ========   ========
Net earnings (loss) per common and common
  equivalent share -- assuming dilution.....  $  (.08)  $    .01   $     --   $   (.20)
                                              =======   ========   ========   ========
     Weighted average common shares.........   27,653     27,753     27,775     27,837
                                              =======   ========   ========   ========
     Weighted average common and common
       equivalent shares -- assuming
       dilution.............................   27,653     28,463     27,978     27,837
                                              =======   ========   ========   ========
</TABLE>

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

(a)  The nonrecurring charge in 1996 principally relates to the disposal of
     certain equipment.

(b)  The net loss on sale of assets in 1996 is primarily for the final
     settlement of the escrow account related to the sale of a portion of the
     company's software business to Oracle.

                                       38
<PAGE>   39

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

     None

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The sections entitled "Election of Directors" and "Section 16(a) Beneficial
Ownership Reporting Compliance" are incorporated by reference from the
definitive proxy statement to be filed with the Securities and Exchange
Commission in connection with the Company's 1998 annual meeting of stockholders
scheduled for May 21, 1998. Information about the Company's executive officers
is set forth in Item 4(a) in Part I of this Report.

ITEM 11. EXECUTIVE COMPENSATION

     The section entitled "Executive Compensation" excluding the Board
Compensation Committee Report and the stock price performance graph is
incorporated by reference from the definitive proxy statement to be filed with
the Securities and Exchange Commission in connection with the Company's 1998
annual meeting of stockholders scheduled for May 21, 1998.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The section entitled "Ownership of Securities" is incorporated by reference
from the definitive proxy statement to be filed with the Securities and Exchange
Commission in connection with the Company's 1998 annual meeting of stockholders
scheduled for May 21, 1998.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The section entitled "Certain Transactions" is incorporated by reference
from the definitive proxy statement to be filed with the Securities and Exchange
Commission in connection with the Company's 1998 annual meeting of stockholders
scheduled for May 21, 1998.

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a) Documents filed as a part of this Report:

          1. Financial Statements

     The consolidated financial statements of the Company are included in Part
II, Item 8 of this Report.

          2. Financial Statement Schedules

<TABLE>
<CAPTION>
                                                              PAGE
                                                              NO.
                                                              ----
<S>                                                           <C>
Report of Independent Certified Public Accountants on
  Schedule..................................................    41
Schedule II -- Valuation and Qualifying Accounts; Allowance
  for Doubtful Receivables..................................    42
</TABLE>

     All other schedules are omitted because they are not applicable, or not
required, or because the required information is included in the financial
statements or notes thereto.

     (b) Reports on Form 8-K:

         On October 27, 1997, the Company filed a Report on Form 8-K, Item 5,
         reporting the amendment to the Company's Rights Agreement with Harris
         Trust and Savings Bank, as rights agent.

                                       39
<PAGE>   40

          3. Exhibits

             (I) See Exhibit Index (immediately following the signature pages).

             (II) Executive Compensation Plans and Arrangements. The following
        Executive Compensation Plans and Arrangements are listed as exhibits to
        this Form 10-K:

<TABLE>
<S>                      <C>
                         Employment Agreement dated November 27, 1978 between the
                           Company and Gerald Eskin.
                         Employment Agreement dated March 15, 1985 between the
                           Company and Jeffrey Stamen.
                         Employment Agreement dated March 15, 1985 between the
                           Company and Leonard Lodish.
                         Noncompetition Agreements dated March 15, 1985 between the
                           Company and John D.C. Little, Glen Urban, and Leonard
                           Lodish, respectively.
                         Letter agreement dated January 17, 1989 between the Company
                           and Glen Urban.
                         Form of letter agreement between the Company and John D.C.
                           Little.
                         Consulting and Noncompetition Agreement dated January 16,
                           1987 between the Company and Edwin Epstein.
                         Agreement effective January 1, 1989 between the Company and
                           Edwin Epstein, amending the Consulting and Non-competition
                           Agreement dated January 16, 1987, which Consulting and
                           Noncompetition Agreement is referred to above.
                         Letter agreement dated August 7, 1989 between the Company
                           and Leonard Lodish.
                         Employment Agreement dated November 16, 1989 between the
                           Company and James G. Andress.
                         Amended and Restated Employment Agreement dated March 16,
                           1994 between the Company and Thomas M. Walker.
                         1992 Executive Stock Option Plan, as amended.
                         1992 Employee Incentive Stock Option Plan.
                         Employment Agreement dated November 4, 1993 between the
                           Company and George R. Garrick.
                         1994 Employee Nonqualified Stock Option Plan.
                         Form of Information Resources, Inc. Directorship/Officership
                           Agreement between the Company and its directors, its
                           executive officers and certain other officers.
                         Employment Termination Agreement dated as of March 4, 1996,
                           between the Company and George R. Garrick.
                         Employment Agreement dated as of August 22, 1996, between
                           the Company and Randall S. Smith and First Amendment to
                           Employment Agreement dated November 11, 1996.
</TABLE>

                                       40
<PAGE>   41

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Information Resources, Inc. and Subsidiaries

     In connection with our audit of the consolidated financial statements of
Information Resources, Inc. and Subsidiaries referred to in our report dated
February 15, 1996 which is included in Part II of this form, we have also
audited Schedule II for the year ended December 31, 1995. In our opinion, this
schedule presents fairly, in all material respects, the information required to
be set forth therein.

                                            GRANT THORNTON LLP

Chicago, Illinois
February 15, 1996

                                       41
<PAGE>   42

                                  SCHEDULE II

                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

                       VALUATION AND QUALIFYING ACCOUNTS
                        RESERVE FOR ACCOUNTS RECEIVABLE
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                              ADDITIONS
                                                               CHARGED
                                                BALANCE AT    TO COSTS       DEDUCTIONS       BALANCE AT
                                                BEGINNING        AND       (NET WRITEOFFS/      END OF
                 DESCRIPTION                    OF PERIOD     EXPENSES       RECOVERIES)        PERIOD
                 -----------                    ----------    ---------    ---------------    ----------
<S>                                             <C>           <C>          <C>                <C>
Year ended December 31, 1995..................    $2,926       $6,295          $(5,361)         $3,860
Year ended December 31, 1996..................    $3,860       $  719          $  (242)         $4,337
Year ended December 31, 1997..................    $4,337       $1,046          $(1,543)         $3,840
</TABLE>

                                       42
<PAGE>   43

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

Dated: March 30, 1998

                                            INFORMATION RESOURCES, INC.

                                            By:    /s/ GIAN M. FULGONI
                                             -----------------------------------
                                                       Gian M. Fulgoni
                                                   Chief Executive Officer

     Pursuant to the Requirement of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on March 30, 1998.

<TABLE>
<CAPTION>
                       SIGNATURE                                             TITLE
                       ---------                                             -----
<C>                                                       <S>

               /s/ THOMAS W. WILSON, JR.                  Chairman of the Board of Directors and
--------------------------------------------------------    Director
                 Thomas W. Wilson, Jr.

                  /s/ GIAN M. FULGONI                     Chief Executive Officer and Director
--------------------------------------------------------    [Principal executive officer]
                    Gian M. Fulgoni

                    /s/ GARY M. HILL                      Executive Vice President and Chief Financial
--------------------------------------------------------    Officer [Principal financial officer]
                      Gary M. Hill

              /s/ JOHN P. MCNICHOLAS, JR.                 Senior Vice President and Controller
--------------------------------------------------------    [Principal accounting officer]
                John P. McNicholas, Jr.

                 * /s/ JAMES G. ANDRESS                   Director
--------------------------------------------------------
                    James G. Andress

                  /s/ GERALD J. ESKIN                     Director
--------------------------------------------------------
                    Gerald J. Eskin

                 */s/ EDWIN E. EPSTEIN                    Director
--------------------------------------------------------
                    Edwin E. Epstein

                 */s/ JOHN D.C. LITTLE                    Director
--------------------------------------------------------
                    John D.C. Little
</TABLE>

                                       43
<PAGE>   44

<TABLE>
<CAPTION>
                       SIGNATURE                                             TITLE
                       ---------                                             -----
<C>                                                       <S>

                 */s/ LEONARD M. LODISH                   Director
--------------------------------------------------------
                   Leonard M. Lodish

                 */s/ EDWARD E. LUCENTE                   Director
--------------------------------------------------------
                   Edward E. Lucente

                  */s/ EDITH W. MARTIN                    Director
--------------------------------------------------------
                    Edith W. Martin

                 */s/ JEFFREY P. STAMEN                   Director
--------------------------------------------------------
                   Jeffrey P. Stamen

                   */s/ GLEN L. URBAN                     Director
--------------------------------------------------------
                     Glen L. Urban

                *By: /s/ GIAN M. FULGONI
  ---------------------------------------------------
            Pursuant to a Power of Attorney
</TABLE>

                                       44
<PAGE>   45

                                 EXHIBIT INDEX

     The following documents are the exhibits to this Report. For convenient
reference, each exhibit is listed according to the number assigned to it in the
Exhibit Table of Item 601 of Regulation S-K.

<TABLE>
<CAPTION>
                                                                           SEQUENTIAL
  EXHIBIT                                                                   DOCUMENT
   NUMBER                      DESCRIPTION OF DOCUMENT                       FILING
  -------                      -----------------------                     ----------
<S>          <C>                                                          <C>
   3(a)      -- Copy of the certificate of incorporation of the Company
                dated May 27, 1982, as amended. (Incorporated by
                reference. Previously filed as Exhibit 3(a) to the
                Company's Annual Report on Form 10-K for the fiscal year
                ended December 31, 1988.)                                     IBRF
    (b)      -- Copy of the bylaws of the Company, as amended.
                (Incorporated by reference. Previously filed as Exhibit
                3(b) to the Company's Annual Report on Form 10-K for the
                fiscal year ended December 31, 1988.)                         IBRF
    (c)      -- Copy of amendments to the Certificate of Incorporation
                approved by the stockholders on May 16, 1989.
                (Incorporated by reference. Previously as Exhibit 3(c) to
                the Company's Annual Report 10-K for the fiscal year
                ended December 31, 1989.)                                     IBRF
    (d)      -- Copy of amendments to the bylaws of the Company as
                approved by the Board of Directors bringing the bylaws
                into conformity with the amendments to the Certificate of
                Incorporation approved by the stockholders May 16, 1989.
                (Incorporated by reference. Previously filed as Exhibit
                3(d) to the Company's Annual Report on Form 10-K for the
                fiscal year ended December 31, 1989.)                         IBRF
    (e)      -- Certificate of Designations of Series A Participating
                Preferred Stock, as adopted by the Board of Directors of
                the Company on March 2, 1989 and duly filed with the
                Secretary of State of the State of Delaware March 15,
                1989. (Incorporated by reference. Previously filed as
                Exhibit 3(e) to the Company's Annual Report on Form 10-K
                for the fiscal year ended December 31, 1989.)                 IBRF
  10         -- Material Contracts
    (a)      -- 1982 Incentive Stock Option Plan adopted November 3,
                1982, as amended. (Incorporated by reference. Previously
                filed as Exhibit 10(a) to the Company's Registration
                Statement on Form S-8 filed with the SEC on December 31,
                1988.)                                                        IBRF
    (b)      -- Information Resources, Inc., Nonqualified Stock Option
                Plan effective January 1, 1984, as amended. (Incorporated
                by reference. Previously filed as Exhibit 10(b) to the
                Company's Quarterly Report on Form 10-Q for the quarter
                ended June 30, 1988.)                                         IBRF
    (c)      -- Employment Agreement dated November 27, 1978 between the
                Company and Gerald Eskin. (Incorporated by reference.
                Previously filed as Exhibit 10(e) to Registration
                Statement No. 2-81544.)                                       IBRF
    (d)      -- Consulting and Noncompetition Agreement dated January 16,
                1987 between the Company and Edwin Epstein. (Incorporated
                by reference. Previously filed as Exhibit 10(e) to the
                Company's Annual Report on Form 10-K for the fiscal year
                ended December 31, 1987.)                                     IBRF
    (e)      -- Employment agreement dated March 15, 1985 between the
                Company and Jeffrey Stamen. (Incorporated by reference.
                Previously filed as Exhibit 10(d) to the Company's Annual
                Report on Form 10-K for the fiscal year ended December
                31, 1985, as amended on Form 8 dated April 29, 1986 and
                August 25, 1986.)                                             IBRF
    (f)      -- Employment agreements dated March 15, 1985 between the
                Company and Leonard Lodish. (Incorporated by reference.
                Previously filed as Exhibit 10.14 to Registration
                Statement No. 2-96940.)                                       IBRF
</TABLE>
<PAGE>   46

<TABLE>
<CAPTION>
                                                                           SEQUENTIAL
  EXHIBIT                                                                   DOCUMENT
   NUMBER                      DESCRIPTION OF DOCUMENT                       FILING
  -------                      -----------------------                     ----------
<S>          <C>                                                          <C>
    (g)      -- Noncompetition Agreement dated March 15, 1985 between the
                Company and John Little, Glen Urban, and Leonard Lodish,
                respectively. (Incorporated by reference. Previously
                filed as Exhibit 10.15 to Registration Statement No.
                2-96490.)                                                     IBRF
    (h)      -- Letter agreement dated January 17, 1989 between the
                Company and Glen Urban (Incorporated by reference.
                Previously filed as Exhibit 10(1) to the Company's Annual
                Report on Form 10-K for the fiscal year ended December
                31, 1989.)                                                    IBRF
    (i)      -- Form of letter agreement between the Company and John
                D.C. Little (Incorporated by reference. Previously filed
                as Exhibit 10(m) to the Company's Annual Report on Form
                10-K for the fiscal year ended December 31, 1989.)            IBRF
    (j)      -- Form of Rights Plan Agreement between the Company and
                Harris Trust and Savings Bank. (Incorporated by
                reference. Previously filed on Form 8-A Registration
                Statement filed with the SEC on March 15, 1989.)              IBRF
    (k)      -- Agreement effective January 1, 1989 between the Company
                and Edwin Epstein, amending the Consulting and
                Noncompetition Agreement dated January 16, 1987, which
                Consulting and Noncompetition Agreement is referred to in
                Exhibit 10(d) hereof. (Incorporated by reference.
                Previously filed as Exhibit 19(a) to the Company's Annual
                Report on Form 10-K for the fiscal year ended December
                31, 1989.)                                                    IBRF
    (l)      -- Letter agreement dated August 7, 1989 between the Company
                and Leonard Lodish (Incorporated by reference. Previously
                filed as Exhibit 3(q) to the Company's Annual Report on
                Form 10-K for the fiscal year ended December 31, 1989.)       IBRF
    (m)      -- Employment Agreement dated November 16, 1989 between the
                Company and James G. Andress (Incorporated by reference.
                Previously filed as Exhibit 3(r) to the Company's Annual
                Report on Form 10-K for the fiscal year ended December
                31, 1989.)                                                    IBRF
    (n)      -- Form of 401(k) Retirement Savings Plan and Trust adopted
                by the Company effective August 1, 1989. (Incorporated by
                reference. Previously filed as Exhibit 3(v) to the
                Company's Annual Report on Form 10-K for the fiscal year
                ended December 31, 1989.)                                     IBRF
    (o)      -- Amended and Restated Employment Agreement dated March 16,
                1994 between the Company and Thomas M. Walker.
                (Incorporated by reference. Previously filed as Exhibit
                10(s) to the Company's Annual Report on Form 10-K for the
                fiscal year ended December 31, 1993.)                         IBRF
    (p)      -- Lease Agreement dated September 27, 1990 between
                Randolph/Clinton Limited Partnership and the Company
                (Incorporated by reference. Previously filed as Exhibit
                2.1 to the Company's Current Report on Form 8-K dated
                September 27, 1990.)                                          IBRF
    (q)      -- 1992 Employee Incentive Stock Option Plan (Incorporated
                by reference. Previously filed as Exhibit 10(x) to the
                Company's Annual Report on Form 10-K for the fiscal year
                ended December 31, 1992.)                                     IBRF
    (r)      -- 1994 Employee Nonqualified Stock Option Plan.
                (Incorporated by reference. Previously filed as Exhibit
                10(y) to the Company's Annual Report on Form 10-K for the
                fiscal year ended December 31, 1993.)                         IBRF
    (s)      -- Employment Agreement dated November 4, 1993 between the
                Company and George Garrick. (Incorporated by reference.
                Previously filed as Exhibit 10(z) to the Company's Annual
                Report on Form 10-K for the fiscal year ended December
                31, 1993.)                                                    IBRF
</TABLE>
<PAGE>   47

<TABLE>
<CAPTION>
                                                                           SEQUENTIAL
  EXHIBIT                                                                   DOCUMENT
   NUMBER                      DESCRIPTION OF DOCUMENT                       FILING
  -------                      -----------------------                     ----------
<S>          <C>                                                          <C>
    (t)      -- Credit Agreement dated May 13, 1994, between the Company
                and Harris Trust and Savings Bank. Superseded by Credit
                Agreement dated November 3, 1994 filed at Exhibit 10(w).
                (Incorporated by reference. Previously filed as Exhibit
                10 to the Company's Quarterly Report on Form 10-Q for the
                quarter ended March 31, 1994.)                                IBRF
    (u)      -- Credit Agreement dated November 3, 1994, between the
                Company and Harris Trust and Savings Bank. (Incorporated
                by reference. Previously filed as Exhibit 10 to the
                Company's Quarterly Report on Form 10-Q for the quarter
                ended September 30, 1994.)                                    IBRF
    (v)      -- Second Amendment to Lease Agreement dated September 27,
                1990 between the Company and Randolph/Clinton Limited
                Partnership. (Incorporated by reference. Previously filed
                as Exhibit 10 to the Company's Quarterly Report on Form
                10-Q for the quarter ended March 31, 1995.)                   IBRF
    (w)      -- 1992 Executive Stock Option Plan, as amended effective
                May 24, 1995. (Incorporated by reference. Previously
                filed as Exhibit 3 to the Company's Quarterly Report on
                Form 10-Q for the quarter ended June 30, 1995.)               IBRF
    (x)      -- Amended and Restated Asset Purchase Agreement dated as of
                June 12, 1995 by and between the Company and Oracle
                Corporation. (Incorporated by reference. Previously filed
                as Exhibit 2.1 to the Company's Current Report on Form
                8-K dated July 27, 1995 and filed August 11, 1995.)           IBRF
    (y)      -- 1992 Executive Stock Option Plan, as amended effective
                May 24, 1995. (Incorporated by reference. Previously
                filed as Exhibit 3 to the Company's Quarterly Reparation
                Form 10-Q for the quarter ended June 30, 1995.)               IBRF
    (z)      -- Licenses-Back Agreement dated as of July 27, 1995 between
                the Company and Oracle Corporation. (Incorporated by
                reference. Previously filed as Exhibit B to the Amended
                and Restated Asset Purchase Agreement dated as of July
                27, 1995 filed as Exhibit 2.1 to the Current Report on
                Form 8-K dated July 27, 1995 and filed August 11, 1995.)      IBRF
    (aa)     -- Amendment to Credit Agreement dated November 3, 1994
                between the Company, the Bank Parties thereto and Harris
                Trust and Savings Bank, as agent. Superseded by Credit
                Agreement November 10, 1995 filed at Exhibit [10(ee)].
                (Incorporated by reference. Previously filed as Exhibit
                10.2 to the Company's Quarterly Report on Form 10-Q for
                the quarter ended June 30, 1995.)                             IBRF
    (bb)     -- Credit Agreement dated November 10, 1995 between the
                Company, the Bank Parties thereto and Harris Trust and
                Savings Bank, as agent. (Incorporated by reference.
                Previously filed as Exhibit 10 to the Company's Quarterly
                Report on Form 10-Q for the quarter ended September 30,
                1995.)                                                        IBRF
    (cc)     -- Employment Termination Agreement, dated as of March 4,
                1996 between the Company and George R. Garrick
                (Incorporated by reference. Previously filed as Exhibit
                10(dd) to the Company's Annual Report on Form 10-K for
                the fiscal year ended December 31, 1995.)                     IBRF
    (dd)     -- Form of Information Resources, Inc.
                Directorship/Officership Agreement between the Company
                and each of its directors, executive officers and certain
                other officers. (Incorporated by reference. Previously
                filed as Exhibit 10(x) to the Company's Annual Report on
                Form 10-K for the fiscal year ended December 31, 1994.)       IBRF
</TABLE>
<PAGE>   48

<TABLE>
<CAPTION>
                                                                           SEQUENTIAL
  EXHIBIT                                                                   DOCUMENT
   NUMBER                      DESCRIPTION OF DOCUMENT                       FILING
  -------                      -----------------------                     ----------
<S>          <C>                                                          <C>
    (ee)     -- Amendment to Credit Agreement dated November 10, 1995
                between the Company, the Bank Parties thereto and Harris
                Trust and Savings Bank, as agent. (Incorporated by
                reference. Previously filed as Exhibit 10(ff) to the
                Company's Annual Report on Form 10-K for the fiscal year
                ended December 31, 1996.)                                     IBRF
    (ff)     -- Employment Agreement dated as of August 22, 1996, between
                the Company and Randall S. Smith and First Amendment to
                Employment Agreement dated November 11, 1996.
                (Incorporated by reference. Previously filed as Exhibit
                10(gg) to the Company's Annual Report on Form 10-K for
                the fiscal year ended December 31, 1996.)                     IBRF
    (gg)     -- Information Resources, Inc. Amended and Restated 401(k)
                Retirement Savings Plan and Trust adopted by the Company
                effective May 24, 1995. (Incorporated by reference.
                Previously filed as Exhibit 10(hh) to the Company's
                Annual Report on Form 10-K for the fiscal year ended
                December 31, 1996.                                            IBRF
    (hh)     -- First Amendment to the Information Resources, Inc.
                Amended and Restated 401(k) Retirement Savings Plan
                effective July 1, 1996. (Incorporated by reference.
                Previously filed as Exhibit 10(ii) to the Company's
                Annual Report on Form 10-K for the fiscal year ended
                December 31, 1996.)                                           IBRF
    (ii)     -- Second Amendment to the Information Resources, Inc.
                Amended and Restated 401(k) Retirement Savings Plan
                effective March 1, 1997. (Incorporated by reference.
                Previously filed as Exhibit 10(jj) to the Company's
                Annual Report on Form 10-K for the fiscal year ended
                December 31, 1996.)                                           IBRF
    (jj)     -- Trust Agreement between Information Resources, Inc. and
                Fidelity Management Trust Company dated as of July 1,
                1996. (Incorporated by reference. Previously filed as
                Exhibit 10(kk) to the Company's Annual Report on Form
                10-K for the fiscal year ended December 31, 1996.)            IBRF
    (kk)     -- First Amendment to Trust Agreement between Fidelity
                Management Trust Company and Information Resources, Inc.
                effective March 1, 1997. (Incorporated by reference.
                Previously filed as Exhibit 10(11) to the Company's
                Annual Report on Form 10K for the fiscal year ended
                December 31, 1996.)                                           IBRF
    (ll)     -- Credit Agreement dated October 31, 1997 among the
                Company, the Bank Parties thereto and Harris Trust and
                Savings Bank, as Agent. (Incorporated by reference.
                Previously filed as Exhibit 10 to the Company's Quarterly
                Report on Form 10-Q for the quarter ended September 30,
                1997.)                                                        IBRF
    (mm)     -- Rights Agreement between Information Resources, Inc. and
                Harris Trust and Savings Bank, amended and restated as of
                October 27, 1997. (Incorporated by reference. Previously
                filed as Exhibit 4.2 to the Company's Current Report on
                Form 8-A/A dated October 27, 1997 and filed October 28,
                1997.)                                                        IBRF
  18         -- Letter regarding change in accounting principle.
                (Incorporated by reference. Previously filed as Exhibit
                18 to the Company's Quarterly Report on Form 10-Q for the
                quarter ended March 31, 1994.)                                IBRF
  21         -- Subsidiaries of the Registrant (filed herewith).               EF
  23         -- Consent of Independent Auditors (filed herewith).              EF
  23.1       -- Consent of Independent Certified Public Accountants
                (filed herewith).                                              EF
  24         -- Powers of Attorney (filed herewith).                           EF
  27         -- Financial Data Schedule (filed herewith).                      EF
  27.2       -- Financial Data Schedule (filed herewith).                      EF
  27.3       -- Financial Data Schedule (filed herewith).                      EF
</TABLE>