<PAGE>   1


                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                                   FORM 10-Q

(Mark One)

X    Quarterly Report Pursuant to Section 13 or 15(d) of The Securities
--   Exchange Act of 1934.

        For the quarterly period ended September 30, 1998

--   Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934.


     Commission file number 0-11428


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


         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)


   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, $.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
                                         -----      -----

The number of shares of the registrant's common stock, $.01 par value per share
outstanding, as of  October 30, 1998 was 28,247,204.





<PAGE>   2

                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES

                                     INDEX



                                                                           PAGE
                                                                          NUMBER
PART I.   FINANCIAL INFORMATION                                           ------
-------------------------------

Condensed Consolidated Balance Sheets                                       3

Condensed Consolidated Statements of Operations                             4

Condensed Consolidated Statements of Cash Flows                             5

Notes to Condensed Consolidated Financial Statements                        6

Management's Discussion and Analysis of
  Financial Condition and Results of Operations                            10





PART II.  OTHER INFORMATION
---------------------------

Item 6 - Exhibits and Reports Form 8-K                                    19

Signatures                                                                20






                                       2
<PAGE>   3


                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>


ASSETS                                                    SEPTEMBER 30, 1998      DECEMBER 31, 1997
                                                          ------------------      -----------------
                                                              (UNAUDITED)
<S>                                                         <C>                     <C>
CURRENT ASSETS
  Cash and cash equivalents                                   $     7,424            $  20,925
  Accounts receivable, net                                         99,854               96,209
  Prepaid expenses and other                                       12,541                9,563
                                                              -----------            ---------
      Total Current Assets                                        119,819              126,697
                                                              -----------            ---------

Property and equipment, at cost                                   172,439              180,043
  Accumulated depreciation and amortization                       (94,215)            (111,628)
                                                              -----------            ---------
      Net property and equipment                                   78,224               68,415

Investments                                                         8,922               13,061

Other assets                                                      172,041              158,447
                                                              -----------            ---------

                                                              $   379,006            $ 366,620
                                                              ===========            =========

LIABILITIES AND STOCKHOLDERS' EQUITY
--------------------------------------------           

CURRENT LIABILITIES
  Current maturities of capitalized leases                    $        --            $   2,266
  Accounts payable                                                 41,729               49,306
  Accrued compensation and benefits                                16,185               20,357
  Accrued property, payroll and other taxes                         3,082                3,068
  Accrued expenses                                                 11,265                6,324
  Deferred revenue                                                 26,091               20,469
                                                              -----------            ---------
      Total Current Liabilities                                    98,352              101,790
                                                              -----------            ---------

Bank debt and capitalized leases                                   11,747                  640
Deferred income taxes, net                                         20,312               13,660
Other liabilities                                                  11,357                8,988

STOCKHOLDERS' EQUITY
  Preferred stock-authorized, 1,000,000 shares
      $.01 par value - none issued                                     --                   --
  Common stock - authorized 60,000,000 shares,
      $.01 par value; 28,247,204 and
      28,713,943 shares issued and
      outstanding, respectively                                       282                  287
  Capital in excess of par value                                  192,849              198,537
  Retained earnings                                                49,745               45,932
  Cumulative translation adjustment                                (5,638)              (3,214)
                                                              -----------            ---------
      Total Stockholders' Equity                                  237,238              241,542
                                                              -----------            ---------
                                                              $   379,006            $ 366,620
                                                              ===========            =========
</TABLE>

        The accompanying notes are an integral part of these statements.





                                       3
<PAGE>   4

                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   UNAUDITED
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>

                                                      THREE MONTHS ENDED         NINE MONTHS ENDED
                                                      ------------------         -----------------
                                                         SEPTEMBER 30              SEPTEMBER 30
                                                         ------------              ------------

                                                      1998         1997           1998        1997
                                                      ----         ----           ----        ----
<S>                                               <C>         <C>             <C>         <C>
Revenues                                            $ 125,346  $ 115,601       $ 373,928   $ 334,702

Costs and expenses:
 Operating expenses                                  (112,978)  (101,645)       (329,386)   (297,818)
 Selling, general and administrative expenses         (14,709)    (9,674)        (37,680)    (28,053)
                                                  -----------  ---------       ----------  ---------
                                                     (127,687)  (111,319)       (367,066)   (325,871)
                                                  -----------  ---------       ----------  ---------

Operating profit (loss)                                (2,341)     4,282           6,862       8,831

Interest expense and other, net                          (749)      (130)           (959)       (634)

Equity in earnings of affiliated companies                142          7             436         351
                                                  -----------  ---------       ----------  ---------

Earnings (loss) before income taxes and
 minority interests                                    (2,948)     4,159           6,339       8,548

Income tax (expense) benefit                            1,300     (2,000)         (2,500)     (4,047)
                                                  -----------  ---------       ----------  ---------

Earnings (loss) before minority interests              (1,648)     2,159           3,839       4,501

Minority interests (expense) benefit                      110       (177)            (26)       (335)
                                                  -----------  ---------       ----------  ---------
 
Net earnings (loss)                               $    (1,538) $   1,982       $   3,813   $   4,166
                                                  ===========  =========       ==========  =========

Net earnings (loss) per common share -
 basic                                            $      (.05) $     .07       $     .13   $     .15
                                                  ===========  =========       ==========  =========

Net earnings (loss) per common and
 common equivalent share - diluted                $      (.05) $     .07       $     .13   $     .14
                                                  ===========  =========       ==========  =========

Weighted average common shares - basic                 28,708     28,610          28,746      28,307
                                                  ===========  =========       ==========  =========

Weighted average common and
 common equivalent shares - diluted                    28,708     29,468          29,283      28,861
                                                  ===========  =========       ==========  =========
</TABLE>



        The accompanying notes are an integral part of these statements.






                                       4
<PAGE>   5


                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   UNAUDITED
                                 (IN THOUSANDS)



<TABLE>
<CAPTION>

                                                                                         NINE MONTHS ENDED SEPTEMBER 30
                                                                                         ------------------------------
                                                                                            1998               1997
                                                                                         -----------        -----------
<S>                                                                                  <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings                                                                          $     3,813           $   4,166
 Adjustments to reconcile net earnings to net cash provided by
 operating activities:
  Amortization of deferred data procurement costs                                          83,493              74,985
  Depreciation expense                                                                     16,990              15,144
  Amortization of capitalized software costs and intangibles                                5,334               4,481
  Deferred income tax provision                                                             2,500               4,047
  Equity in earnings of affiliated companies and minority interests, net                     (410)                (16)
  Other                                                                                    (1,216)             (2,236)
  Change in assets and liabilities:
   Decrease (increase) in accounts receivable                                              (3,460)             10,462
   Decrease (increase) in other current assets                                              2,927                 (38)
   Decrease in accounts payable and accrued liabilities                                    (4,995)             (1,441)
   Increase in deferred revenue                                                             5,622               2,957
   Other, net                                                                              (1,440)                630
                                                                                      -----------           ---------
        Total adjustments                                                                 105,345             108,975
                                                                                      -----------           ---------
         Net cash provided by operating activities                                        109,158             113,141
                                                                                                            
CASH FLOWS FROM INVESTING ACTIVITIES:                                                                       
 Deferred data procurement costs                                                          (90,085)            (83,240)
 Purchase of property and equipment                                                       (26,986)            (25,255)
 Capitalized software costs                                                                (6,210)             (2,648)
 Proceeds from disposition of assets and other                                                319               2,389
                                                                                      -----------           ---------
         Net cash used in investing activities                                           (122,962)           (108,754)
                                                                                      
CASH FLOWS FROM FINANCING ACTIVITIES:                                                 
 Net bank (repayments) borrowings                                                           9,500              (5,500)
 Net repayments of capitalized leases                                                        (718)             (1,619)
 Purchases of Common Stock                                                                (16,938)                 --
 Proceeds from exercise of stock options and other                                          8,260              13,645
                                                                                      -----------           ---------
         Net cash used by financing activities                                                104               6,526
                                                                                                            
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                       199              (1,115)
                                                                                      -----------           ---------
                                                                                                            
 Net increase (decrease) in cash and cash equivalents                                     (13,501)              9,798
                                                                                                            
 Cash and cash equivalents at beginning of period                                          20,925              12,195
                                                                                      -----------           ---------
                                                                                      
 Cash and cash equivalents at end of period                                           $     7,424           $  21,993
                                                                                      ===========           =========
</TABLE>





     The accompanying notes are an integral part of these statements.






                                       5
<PAGE>   6


                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Basis of presentation:  The accompanying condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements included in Information Resources, Inc.'s Annual Report on
Form 10-K for the year ended December 31, 1997.  The condensed consolidated
financial information furnished herein reflects all adjustments (consisting of
normal recurring accruals) which are, in the opinion of management, necessary
for a fair presentation of the condensed consolidated financial statements for
the periods shown.

         Principles of consolidation:  The condensed consolidated financial
statements include the accounts of Information Resources, Inc. and all wholly or
majority owned subsidiaries and affiliates (collectively "the Company").
Minority interests reflect the non-Company owned stockholder interests within
international operations, including effective February 1, 1998, IRI/GfK Retail
Services B.V. (the Netherlands).  The equity method of accounting is used for
investments in which the Company has a 20% to 50% ownership and exercises
significant influence over operating and financial policies.  All significant
intercompany accounts and transactions have been eliminated in consolidation.

         Reclassifications:  Certain amounts in the 1997 condensed consolidated
financial statements have been reclassified to conform to the 1998 presentation.

         Earnings (Loss) per Common and Common Equivalent Share and Stock-Based
Compensation:  Net earnings (loss) per share is based upon the weighted average
number of shares of common stock outstanding during each period. 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
period.

         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.  The
Company adopted Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" in the first quarter of 1998.  The Company is currently
investigating the impact of Statement of Financial Accounting Standards No. 131
"Disclosures about Segments of an Enterprise and Related Information" for
adoption in its December 31, 1998 consolidated financial statements.





                                       6
<PAGE>   7


                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONT'D.
                                  (UNAUDITED)

NOTE 2 - COMPREHENSIVE INCOME (LOSS)

         The comprehensive income (loss) summary shown below sets forth certain
items that affect stockholders' equity but are excluded from the presentation of
net earnings.  The components of comprehensive income (loss) for the three and
nine months ended September 30, 1998 and 1997 were as follows (in thousands):

<TABLE>
<CAPTION>

                                            THREE MONTHS ENDED SEPTEMBER 30  NINE MONTHS ENDED SEPTEMBER 30
                                                  1998        1997                 1998         1997
                                                --------    --------             ---------    --------
<S>                                          <C>           <C>                  <C>          <C>
 Net earnings (loss)                            $ (1,538)   $  1,982             $   3,813    $  4,166
 Foreign currency translation
  adjustment, net of tax                            (476)        288                (1,468)     (1,777)
                                                ---------   --------             ---------    --------

 Comprehensive income (loss)                    $ (2,014)   $  2,270             $   2,345    $  2,389
                                                =========   ========             =========    ========
</TABLE>

NOTE 3 - SUPPLEMENTAL CASH FLOW INFORMATION

     Cash paid for interest and income taxes during the period was as follows
(in thousands):
<TABLE>
<CAPTION>
                                                NINE MONTHS ENDED SEPTEMBER 30
                                                   1998                1997
                                                ---------            ---------
<S>                                             <C>                  <C>
     Interest                                   $  1,033             $  1,042

     Income taxes                                  1,317                  222
</TABLE>

NOTE 4 - THE NETHERLANDS OPERATIONS

         The Company and GfK AG of Germany ("GfK") operate a joint venture which
offers a scanner-based product tracking service to the Netherlands market
operating under the InfoScan name.  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 assumed overall management responsibilities.
The Company provides production services to the joint venture through the
Company's computer facilities in Wood Dale, Illinois.  The consolidation of the
Netherlands did not have a material impact on the consolidated financial results
or position of the Company.

         In 1998, the Company 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 InfoScan operation in the sale and delivery of
services to common customers.







                                       7
<PAGE>   8





                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONT'D.
                                  (UNAUDITED)



NOTE 5 - ACCOUNTS RECEIVABLE
----------------------------

        Accounts receivable were as follows (in thousands):
<TABLE>
<CAPTION>
                     

                                                   SEPTEMBER 30, 1998     DECEMBER  31, 1997
                                                   ------------------     ------------------
       <S>                                             <C>                    <C>
             Billed                                    $ 75,484               $ 70,761

             Unbilled                                    29,039                 29,288
                                                       --------               --------
                                                        104,523                100,049
             Reserve for accounts receivable             (4,669)                (3,840)
                                                       --------               --------

                                                       $ 99,854               $ 96,209
                                                       ========               ========


</TABLE>
NOTE 6 - OTHER ASSETS
---------------------

          Other assets were as follows (in thousands)

<TABLE>
<CAPTION>

                                           

                                                   SEPTEMBER 30, 1998    DECEMBER 31, 1997
                                                   ------------------     ------------------
    <S>                                                 <C>                    <C>
    Deferred data procurement costs -
       net of accumulated amortization of
       of $129,791 in 1998 and $108,491 in 1997        $136,716               $126,733

    Intangible assets, including goodwill
       primarily related to acquisitions -
       net of accumulated amortization of
       $12,393 in 1998 and $10,233 in 1997               19,127                 16,463

    Capitalized software costs - net of
       accumulated amortization of $3,856
       in 1998 and $3,578 in 1997                         9,564                  6,093

    Other                                                 6,634                  9,158
                                                       --------               --------
                                                       $172,041               $158,447
                                                       ========               ========
</TABLE>





                                       8

<PAGE>   9


                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONT'D.
                                  (UNAUDITED)




NOTE 7- BANK DEBT AND CAPITALIZED LEASES

 Bank debt and capitalized leases were as follows (in thousands):
<TABLE>
<CAPTION>
                                                    SEPTEMBER 30, 1998         DECEMBER 31, 1997
                                                    ------------------         -----------------


<S>                                                      <C>                         <C>
Bank borrowings                                          $ 9,500                     $    --
Capitalized leases                                         2,247                       2,906
                                                         -------                     -------
                                                          11,747                       2,906
Less current maturities                                       --                      (2,266)
                                                         -------                     -------

                                                         $11,747                     $   640
                                                         =======                     =======
</TABLE>



        The Company currently has a $75.0 million bank revolving credit
   facility maturing in 2001. The facility has floating interest rate options
   at or below prime, and commitment fees of .15% payable on the unused
   portion.

        The Company's obligations under its capitalized leases have been
   classified as long-term debt at September 30, 1998 as the Company has both
   the intent and the ability, through its bank revolving credit facility, to
   refinance these amounts on a long-term basis.

        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
   $61.7 million is currently available for such distributions under the most
   restrictive of these covenants.  The credit agreement also contains
   covenants which restrict the Company's ability to incur additional
   indebtedness.





                                       9
<PAGE>   10




                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


   RESULTS OF OPERATIONS

         The Company's consolidated net loss was ($1.5) million or ($.05) per
   diluted share for the third quarter of 1998 compared to consolidated net
   earnings of $2.0 million or $.07 per diluted share for the corresponding 1997
   quarter. Consolidated net earnings were $3.8 million or $.13 per diluted
   share for the nine months ended September 30, 1998 compared to $4.2 million
   or $.14 per diluted share for the corresponding period of 1997. Consolidated
   revenues for the quarter ended September 30, 1998 were $125.3 million, an
   increase of 8% over the corresponding quarter in 1997. Consolidated revenues
   were $373.9 million for the nine months ended September 30, 1998, an increase
   of 12% over the corresponding period of 1997.  This increase was the result
   of revenue growth of $21.3 million in the U.S. Services business and a $17.9
   million increase in international revenues which was aided somewhat by the
   consolidation of IRI's majority-owned Netherlands operation effective
   February 1998.

         Consolidated operating expenses increased 11% to $113.0 million for the
   quarter ended September 30, 1998 compared to $101.6 million for the third
   quarter of 1997.  The increase in 1998 was primarily due to:  (a) a $5.9
   million increase in compensation expense resulting primarily from higher
   salaries and higher headcount required for operations, client servicing and
   international growth; (b) a $1.9 million increase in amortization of deferred
   data procurement costs, principally resulting from the expansion of the
   information services business in Europe; and (c) a $1.1 million increase in
   operating expenses due to the consolidation of IRI/GfK Retail Services B.V.
   Consolidated operating expenses increased 11% to $329.4 million for the nine
   months ended September 30, 1998 compared to $297.8 million for the same
   period in 1997.  The increase in 1998 was primarily due to: (a) a $16.7
   million increase in compensation expense; (b) a $8.3 million increase in
   amortization of deferred data procurement costs; and (c) a $4.1 million
   increase in operating expenses due to the consolidation of IRI/GfK Retail
   Services B.V.

         Consolidated selling, general and administrative expenses increased 52%
   to $14.7 million for the three months ended September 30, 1998.  This
   increase was primarily attributable to recruiting, training and severance
   costs relating to the reorganization and transformation of the Company's U.S.
   sales, marketing and other operating functions, an increase in the provision
   for bad debts and increases in other general expenses, including
   compensation, worldwide.

         Consolidated selling, general and administrative expenses increased 34%
   to $37.7 million for the nine months ended September 30, 1998.  This increase
   was primarily attributable to legal expenses in the U.S. and the costs
   relating to the transformation of the Company's U.S. sales, marketing and
   other operating functions.  Increased legal expenses related directly to the
   Company's anti-trust lawsuit against The Dun and Bradstreet Corporation,
   ACNielsen Company and IMS International, Inc.  In that suit, filed in 1996,
   the Company is seeking $1 billion in trebled damages from the defendants for
   violations of U.S. anti-trust laws. The case is currently in the discovery
   phase, and the Company anticipates that it will continue to incur its present
   high level of legal expenses as the case progresses toward trial.



                                       10

<PAGE>   11




                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
           OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONT'D.



        For all periods presented, the Company's effective income tax rate is
   greater than the U.S. Federal statutory rate due to certain unbenefitted
   foreign losses, goodwill amortization and other nondeductible expenses.

        Based upon discussions with financial analysts, the Company considers
   the aggregation of operating profit (loss), equity earnings 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 three and nine months
   ended September 30, 1998 and 1997 follows (in thousands):



<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED                    NINE MONTHS ENDED
                                                   ------------------                    -----------------
                                                      SEPTEMBER 30                         SEPTEMBER 30
                                                      ------------                         ------------
                                                   1998         1997                      1998       1997
                                                ----------- ------------               ----------- ---------
<S>                                             <C>          <C>                       <C>          <C>    
Revenues:
 U.S. Services                                  $    98,120  $    93,405                  292,063   $270,760
 International Services                              27,226       22,196                   81,865     63,942
                                                -----------  -----------               ----------   --------

                                                $   125,346  $   115,601                  373,928   $334,702
                                                ===========  ===========               ==========   ========

Operating Results:
 U.S. Services operating profit                 $     3,407  $    10,139                   24,494   $ 27,435

 International Services
    Operating loss                                   (3,858)      (4,932)                 (12,819)   (16,591)
    Equity in earnings of affiliated companies          142            7                      436        351
    Minority interests                                  110         (177)                     (26)      (335)
                                                -----------  -----------               ----------   --------
      Subtotal - International                       (3,606)      (5,102)                 (12,409)   (16,575)

 Corporate and other expenses                        (1,890)        (925)                  (4,813)    (2,013)
                                                -----------  -----------               ----------   --------

 Operating Results                               $   (2,089) $     4,112                    7,272   $  8,847
                                                ===========  ===========               ==========   ========
</TABLE>



    In the third quarter of 1998, revenues from the Company's U.S. Services
    business were $98.1 million, an increase of 5% over the corresponding 1997
    quarter.  U.S. revenues in the first nine months of 1998 were $292.1 million
    or 8% higher than during the same period of 1997. These revenue increases
    were primarily due to the increased use of the Company's services and
    products particularly, its all-store (i.e. Census) scanner databases, by
    existing customers.  The slowdown in the U.S. revenue growth in the third
    quarter of 1998 was principally due to a flattening of growth of the
    Company's non-contractual services.







                                       11
<PAGE>   12





                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
           OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONT'D.



        Third quarter 1998 revenues from the Company's International businesses,
   primarily from Europe, were $27.2 million, an increase of 23% over the
   corresponding 1997 quarter.  For the nine months ended September 30, 1998,
   International revenues were $81.9 million, an increase of 28% over the
   corresponding period of 1997.  Results in 1998 reflected the consolidation of
   IRI's majority-owned operations in the Netherlands, IRI/GfK Retail Services,
   B.V., effective February 1, 1998.  Excluding the revenues from the
   Netherlands, European revenues increased 19% for the third quarter of 1998
   and 21% the first nine months of 1998 compared to the same periods of 1997,
   respectively.

        Consolidated Operating Results were a ($2.1) million loss in the third
   quarter of 1998 compared to a $4.1 million profit for the third quarter of
   1997.  For the nine months ended September 30, 1998, consolidated Operating
   Results were a $7.3 million profit compared to an $8.8 million profit for the
   corresponding period of 1997.

        Operating Results for the Company's U.S. businesses were $3.4 million
   in the third quarter of 1998, a decrease of 66% from the third quarter of
   1997.  The Company's U.S. Operating Results in the third quarter were
   negatively impacted by a slowdown in revenue growth.  Because of the
   relatively high fixed cost component of the Company's database operations,
   small variations in revenue can have a significant impact on earnings
   results.  In addition, results were negatively affected by higher costs.
   Operating Results for the U.S. businesses decreased 11% to $24.5 million for
   the nine months ended September 30, 1998.  This decrease was due to
   increased expenses for employee related expenses, including compensation,
   benefits, training, recruiting and development expenses.

        Operating Results for the Company's International businesses were a
   ($3.6) million loss in the third quarter of 1998, 29% below the ($5.1)
   million loss in the corresponding 1997 quarter. Operating Results for the
   Company's International businesses were a ($12.4) million loss for the nine
   months ended September 30, 1998, 25% below the ($16.6) million loss in the
   corresponding 1997 period.  The improved International results were
   principally due to continuing revenue growth of the Company's major European
   services, primarily U.K., France and Italy.

        Corporate and other expenses increased $1.0 million and $2.8 million
   for the three and nine months ended September 30, 1998, respectively.  The
   increase was primarily due to increased legal expenses in the U.S.
   attributable to the anti-trust litigation and increased compensation
   expenses.

   LIQUIDITY AND CAPITAL RESOURCES

        The Company's current cash resources include its $7.4 million
   consolidated cash balance and $65.5 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.






                                       12
<PAGE>   13





                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
           OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONT'D.


        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
   $61.7 million is currently available for such distributions under the most
   restrictive of these covenants.  The credit agreement also contains
   covenants which restrict the Company's ability to incur additional
   indebtedness.

        Cash Flow:  Consolidated net cash provided by operating activities was
   $109.2 million for the nine months ended September 30, 1998 compared to
   $113.1 million for the same period in 1997. Lower 1998 operating cash flow
   is primarily due to higher accounts receivable in 1998 compared to a large
   reduction in accounts receivable during the first nine months of 1997.
   Consolidated cash used in net investing activities was ($123.0) million in
   1998 compared to ($108.8) million for the same period in 1997. Investing
   activity in the first nine months of 1998 reflects higher expenditures for
   data procurement and software development.  Net cash provided (used) before
   financing activities was ($13.8) million for the nine months ended September
   30, 1998 and $4.4 million for the same period of 1997 primarily due to the
   higher accounts receivable and investing activities in 1998. Consolidated
   cash used by net financing activities was $.1 million for the nine months
   ended September 30, 1998 compared to $6.5 million for the same period in
   1997.  The Company borrowed $9.5 million under its revolving line of credit
   during 1998 and for the nine months ended September 30, 1998 purchased $16.9
   million of the Company's stock under its stock purchase plan.

        Common Stock Purchase 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.
   Through September 30, 1998, the Company had purchased a cumulative total of
   1,481,800 shares of its Common Stock at an average price of $13.51 per
   share.

        Other Deferred Costs and Capital Expenditures:  Consolidated deferred
   data procurement expenditures were $90.1 million for the nine months ended
   September 30, 1998 and $83.2 million for the same period in 1997.  These
   expenditures are amortized over a period of 28 months and include payments
   and services to retailers for point-of-sale data and other costs related to
   collecting, reviewing and verifying other data which are an essential part
   of the Company's data base.  Such expenditures were $57.9 million and $53.8
   million for the nine month periods ended September 30, 1998 and 1997,
   respectively, for the Company's U.S. services business and $32.2 million and
   $29.4 million, respectively, for the Company's International services
   business.






                                       13
<PAGE>   14





                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
           OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONT'D.


        Based upon currently projected Operating Results and cash flows, the
   Company's assessment is that the realizability of its International assets
   is not impaired. Should actual Operating Results and cash flows be
   materially lower than current projections, the Company may be required to
   write down a portion of these assets in future periods.

        Consolidated capital expenditures were $27.0 million and $25.3 million
   for the nine months ended September 30, 1998 and 1997, respectively.
   Capital expenditures for the Company's U.S. services business were $22.5
   million and $21.7 million, while depreciation expense was $13.4 million and
   $12.1 million for the nine months ended September 30, 1998 and 1997,
   respectively. The Company's International services business capital
   expenditures were $4.5 million and $3.6 million while depreciation expense
   was $3.6 million and $3.0 million, for the nine months ended September 30,
   1998 and 1997, respectively.

        Consolidated capitalized software development costs, primarily in the
   U.S., were $6.2 million and $2.6 million for the nine months ended September
   30, 1998 and 1997, 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. 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. 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 NOL's may be carried forward indefinitely,
   while the remaining $5.6 million expire in 2000 and 2002.

        Impact of Inflation:  Inflation 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 in such agreements.







                                       14
<PAGE>   15







                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
           OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONT'D.


   YEAR 2000 ISSUES

        Background:  Many computers, software and other equipment include
   programming code in which calendar year data is abbreviated to only two
   digits.  As a result of this design decision, some of these systems could
   fail to operate or produce correct results if "00" is interpreted to mean
   "1900".  For IRI, such failures would cause disruptions of operations
   including, among other things, a temporary inability to obtain data from
   retailers, process transactions, communicate information to tracking service
   clients, send invoices or engage in normal business activities.

        In 1996 and 1997, various internal review teams within the Company
   began addressing the Year 2000 issue in their respective areas.  In early
   1998, a steering committee was established to represent all operating,
   administrative and finance areas of the Company to direct the process of
   identifying, assessing and resolving significant Year 2000 issues in a
   timely manner. The process includes development of remediation plans, where
   necessary, as they relate to internally used software, commercial software
   applications licensed to clients, computer hardware and the use of computer
   applications in the Company's data warehouse operations.  In addition, the
   Company is engaged in assessing the Year 2000 issue with significant
   suppliers, including data vendors, and tracking service clients.  Executive
   management is represented on the steering committee and monitors the status
   of the Company's Year 2000 plans.  In addition, management reports the
   status of the Year 2000 project to the Board of Directors.

        The operations of office and facilities equipment, such as fax
   machines, photocopiers, telephone switches, security systems elevators and
   other common devices may also be affected by the occurrence of the Year
   2000.  The Company's current assessment of the potential effect of the Year
   2000 issues on its office and facilities equipment is considered to be
   minimal, in terms of risk and incremental cost.

        Risk:  The Company has identified potential Year 2000 risks in the
   following four categories: (1) reliance upon third party retailers in the
   U.S. and Europe for data for use in its tracking service; (2) processing of
   data by the various computer applications in its Wood Dale, Illinois
   facilities; (3) commercial software products and applications produced
   and/or marketed by the Company; and (4) Company data interfaces with client
   developed applications which may not be Year 2000 compliant.

        Third Party Retailers:  The Company has identified and has initially
   contacted, using surveys, all of its critical retailers in the U.S. and
   Europe to determine the extent to which the Company's interface systems are
   vulnerable to those third parties' failure to remedy their own Year 2000
   issues. It is expected that full certification of Year 2000 compliance for
   all key suppliers of tracking data to the Company will be completed during
   the fourth quarter of 1999.  To the extent that






                                       15
<PAGE>   16





                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
           OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONT'D.



   responses to Year 2000 readiness are unsatisfactory, the Company intends to
   follow up to insure that all critical retailers are Year 2000 compliant.  In
   addition, the Company is currently investigating alternative sources to
   provide the Company with reasonable assurance of source retailer data should
   a U.S. or European key retailer encounter unforeseen difficulties during
   early 2000.

        Wood Dale Computer Applications:  The Company has commenced a review of
   its information and operational systems used to process data in its InfoScan
   tracking services in order to identify those systems that are not Year 2000
   compliant.  The Company has determined that its InfoScan tracking service is
   currently Year 2000 compliant due to the Company's programming design which
   accounts for data by "weeks" as opposed to calendar dates.  However, the
   Company has identified certain peripheral programs which might be negatively
   impacted by Year 2000. Accordingly, it expects to build a Year 2000 test
   database and a test environment to verify compliance on all programs
   affecting services to clients.  The test environment will also provide an
   ongoing benefit to the Company for all future peripheral programs developed
   by the Company. The Company estimates that completion of the test database
   and test environment will occur by mid-1999.

        Commercial Software Products and Applications:  During 1997 the Company
   began an internal review of each of its software products which it intends
   to maintain through the Year 2000.  Based upon this assessment, the Company
   concluded that its standard policy of regular software maintenance, upgrades
   and lifecycle evaluation will provide adequate assurance that the Company's
   current portfolio of software products will be Year 2000 compliant prior to
   mid-year 1999.  In 1998 the Company began the process of identifying and
   contacting clients and former clients in both the U.S. and Europe for whom
   the Company previously developed custom applications. These investigations
   will determine the extent to which custom applications developed by the
   Company require Year 2000 remediation and whether the Company will provide
   software consulting services in order to assist these clients and  former
   clients in such remediation.  The Company expects that identification of all
   material custom application issues will be completed by December 31, 1998.
   To the extent that responses to Year 2000 readiness are inconclusive, the
   Company intends to continue follow up through June of 1999.

        Data Interfaces with Client Applications:  As part of an ongoing
   service, the Company has begun making inquiries of major clients to identify
   and resolve potential Year 2000 issues resulting from IRI interfaces with
   client applications, including any custom applications developed by clients.
   However, management believes that it may not be possible for it to
   determine with complete certainty that Year 2000 issues affecting client
   applications can be identified or corrected due to the complexity of these
   applications and the fact that these systems interact and operate with
   computer systems which are not under the Company's control.  Consequently,
   the Company is unable to estimate a timetable for completion of this
   assessment including remediation and any related costs, as the decision to
   allow the Company to conduct such investigations on a timely basis resides
   with each client.







                                       16
<PAGE>   17







                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
           OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONT'D.



        Costs:  The Company uses both internal and external resources in the
   assessment and remediation of Year 2000 issues and believes these resources
   will provide adequate support for such resolution. While the costs of
   external resources are quantifiable, the costs of internal resources who
   deal with data vendors and tracking service and software clients on a daily
   basis on a variety of subjects, including Year 2000 issues, are difficult
   for the Company to estimate.  Accordingly, costs included in the Company's
   disclosures are subject to uncertainty with respect to internal personnel.
   The Company currently estimates that the combined 1998 and 1999 internal and
   external Year 2000 project costs will range from $8 million to $12 million
   and will be funded through operating cash flows.  To date, the Company
   estimates that approximately $2 million has been spent and expensed, and of
   the remaining estimated costs, up to $5 million may be capitalized for new
   systems and equipment.

        Most Likely Consequences of Year 2000 Problems.  The Company expects to
   identify and resolve all Year 2000 issues that could materially adversely
   affect its business operations.  However, management believes that it may
   not be possible for it to determine with complete certainty that all Year
   2000 issues affecting the Company will be identified or corrected.  The
   number of devices that could be affected and the interactions among these
   devices are innumerable.  In addition, accurate predictions of the extent of
   Year 2000 problem-related failures or the severity, duration, or financial
   consequences of these failures, cannot be made. As a result, management
   expects that the Company could likely suffer the following consequences:

   1.   A significant number of operational inconveniences and
        inefficiencies for the Company, its retailers and its clients may
        divert management's time and attention and financial and human
        resources from its ordinary business activities; and

   2.   A lesser number of serious system failures may require significant
        efforts by the Company, its retailers or its clients to prevent or
        alleviate material business disruptions.







                                       17
<PAGE>   18






                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
           OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONT'D.


        Contingency Plans.  The Company is currently developing contingency
   plans to be implemented as part of its efforts to identify and correct Year
   2000 issues affecting its internal systems.  The Company expects to complete
   its contingency plans by early to mid-1999.  Depending on the systems
   affected, these plans could include accelerated replacement of affected
   equipment or software, short to medium-term use of backup equipment and
   software, or use of contract personnel to correct on an accelerated schedule
   any year 2000 issues that arise or to provide manual workarounds for
   information systems, and similar approaches. If the Company actually is
   required to implement any of these contingency plans, it could have a
   material effect on the Company's financial condition and results of
   operations.  However, based on the activities described above, the Company
   does not believe that the Year 2000 issues will have a material adverse
   effect on the Company's business or results of operations.

        Disclaimer:  The discussion of the Company's efforts, and management's
   expectations, relating to Year 2000 compliance are forward-looking
   statements.  The Company's ability to achieve Year 2000 compliance and the
   level of incremental costs associated therewith, could be adversely impacted
   by, among other things, the availability and cost of programming and testing
   resources, retailers' and vendors' ability to modify proprietary software,
   and unanticipated problems identified in the ongoing compliance review.

        Forward Looking Information:  Certain matters discussed above are
   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, the success of transforming its domestic
   operations, competitive conditions, changes in client spending for the
   non-contractual services the Company offers, the release of chain-specific
   data by European retailers, foreign currency exchange rates, Year 2000
   issues 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.







                                       18
<PAGE>   19






                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES
                                    PART II

                               OTHER INFORMATION



     Item 6. Exhibits and Reports on Form 8-K

      a.     Exhibits


<TABLE>
             <S>          <C>                                        <C>  <C>
             Exhibit No.  Description of Exhibit                          Page
             -----------  ----------------------                          ----

               27         Financial Data Schedule (filed herewith).        EF
</TABLE>


      b.     Reports on Form 8-K.

             The registrant has not filed any reports on Form 8-K during the
             quarter for which this report is filed.



                                       19

<PAGE>   20
                  INFORMATION RESOURCES, INC. AND SUBSIDIARIES



                                   SIGNATURES







Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.




                                          INFORMATION RESOURCES, INC.
                                          -------------------------------------
                                          (Registrant)






                                          /s/  Gary M. Hill
                                          -------------------------------------
                                          Gary M. Hill
                                          Executive Vice President
                                          and Chief Financial Officer
                                          (Authorized officer of Registrant and
                                          principal financial officer)




                                          /s/  John P. McNicholas, Jr.
                                          -------------------------------------
                                          John P. McNicholas, Jr.
                                          Senior Vice President and Controller
                                          (Principal accounting officer)





November 12, 1998





                                       20