ACXIOM CORP, 424B4, 1999-07-23

ACXIOM CORP
424B4, 1999-07-23
COMPUTER PROCESSING & DATA PREPARATION

Previous: ACXIOM CORP, S-3/A, 1999-07-23

Next: DENTAL MEDICAL DIAGNOSTIC SYSTEMS INC, S-3, 1999-07-23

<PAGE>

PROSPECTUS Filed Pursuant to Rule 424(b)(4)
Registration Number 333-81211

5,421,000 Shares
[LOGO]
Acxiom(R) Corporation
Common Stock

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

Acxiom(R) Corporation is selling 1,500,000 shares of Acxiom common stock and
the selling stockholder, as described on page 27, is selling 3,921,000 shares
of Acxiom common stock. Acxiom will not receive any proceeds from the sale of
shares by the selling stockholder.

Our common stock is quoted on the Nasdaq Stock Market under the symbol
"ACXM." On July 22, 1999, the closing sale price of our common stock was $27
1/16 per share.

Investing in the Common Stock involves certain risks.
See "Risk Factors" beginning on page 4.

<TABLE>
<CAPTION>
Per Share Total
--------- ------------
<S> <C> <C>
Public Offering Price................................... $27.00 $146,367,000
Underwriting Discount................................... $ 1.15 $ 6,234,150
Proceeds to Acxiom...................................... $25.85 $ 38,775,000
Proceeds to the Selling Stockholder..................... $25.85 $101,357,850
</TABLE>

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.

Acxiom has granted an option to the underwriters to purchase a maximum of
800,000 shares of common stock from Acxiom within 30 days following the date of
this prospectus to cover over-allotments.

The underwriters are severally underwriting the shares of common stock being
offered. The underwriters expect to deliver the shares to purchasers in New
York, New York, on July 28, 1999.

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

Joint Lead Managers

ABN AMRO Rothschild Merrill Lynch & Co. Salomon Smith Barney
a division of ABN AMRO Incorporated
----------------

William Blair & Company PaineWebber Incorporated

Robert W. Baird & Co. Stephens Inc.
Incorporated

The date of this Prospectus is July 23, 1999.
<PAGE>

[Chart depicting Acxiom's key assets and market opportunities.]
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary........................................................ 1
Risk Factors.............................................................. 4
Recent Developments....................................................... 5
Use of Proceeds........................................................... 5
Price Range of Common Stock and Dividends................................. 6
Capitalization............................................................ 6
Selected Supplemental Consolidated Financial Data......................... 7
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 8
Business.................................................................. 13
Management................................................................ 25
Selling Stockholder....................................................... 27
Underwriting.............................................................. 28
Legal Matters............................................................. 29
Experts................................................................... 29
Where You Can Find More Information....................................... 30
Index to Supplemental Consolidated Financial Statements................... F-1
</TABLE>

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

As used in this prospectus, references to "we," "our," "us" and "Acxiom"
refer to Acxiom Corporation, its consolidated subsidiaries and its predecessors
and not to the underwriters or to the selling stockholder. The term "common
stock" means Acxiom's common stock, par value $0.10 per share.

This prospectus contains forward-looking statements, primarily in the
sections captioned "Prospectus Summary," "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business." Forward-looking statements represent our judgment relating to,
among other things, future results of operations, growth plans, sales, capital
requirements and general industry and business conditions applicable to us.
They are based on our current expectations. Our actual results could differ
materially from the information contained in the forward-looking statements due
to a number of factors, including the risks described below, changes in the
economy or the industry in general, and other unanticipated events that may
prevent us from competing successfully in existing or new markets, and hinder
our ability to manage our growth effectively.

Our principal executive office is located at 1 Information Way, Little Rock,
Arkansas 72202 and our telephone number is 501-342-1000. We maintain a World
Wide Web site at www.acxiom.com. Information contained on our Web site does not
constitute part of this prospectus.

Except as otherwise noted, all information in this prospectus has been
restated to give effect to the May 1999 acquisition of Computer Graphics of
Arizona, Inc. which has been accounted for as a pooling of interests and
assumes no exercise of the underwriters' over-allotment option.
<PAGE>

PROSPECTUS SUMMARY

This summary highlights information contained in other parts of this
prospectus. It is not complete and may not contain all of the information that
you should consider before deciding to invest in shares of our common stock.
The other information is important, so you should read the entire prospectus
carefully.

ACXIOM

We are a global leader in providing comprehensive information management
solutions using customer, consumer and business data. Our products and services
enable our clients to use information to improve business decision-making and
effectively manage existing and prospective customer relationships. We believe
that we offer our clients the most technologically advanced, accurate and
timely solutions available. Our solutions are customized to the specific needs
of our clients and the industries in which they operate.

We target organizations that view data as a strategic competitive advantage
and an integral component of business decision-making. Historically, our client
base has primarily been Fortune 1000 companies in the financial services,
insurance, information services, publishing, retail and telecommunications
industries. Current clients include AT&T, ADP, Advance Publications, Allstate,
Bank of America, Citibank, General Electric, GTE, IBM, Prudential, Sears, Trans
Union and Wal-Mart. More recently, our industry focus has expanded to include
the pharmaceuticals/healthcare, e-commerce, Internet, utilities, automotive,
technology, packaged goods and media/entertainment industries. Representative
clients in these new industries include 3Com, DaimlerChrysler, Procter &
Gamble, Searle, Bristol-Myers Squibb, Novell and Netscape.

Our primary development initiative over the past two years has been the
Acxiom Data NetworkSM and its related linking technology. The Acxiom Data
Network is a web-enabled technology that allows us to cost effectively provide
our clients with real-time desktop access to actionable information over the
Internet and via private networks. We expect that the ease of use and low cost
delivery of the Acxiom Data Network will allow us to extend our scope of
services in the existing markets we serve and expand our client base to include
the middle market and small office/home office companies seeking customer
relationship management solutions.

We have increased revenue from $499 million in fiscal year 1997 to $754
million in fiscal year 1999, representing a compound annual growth rate of
22.9%. Over the same time period our diluted earnings per share has increased
from $0.49 to $0.78 (excluding special charges), representing a compound annual
growth rate of 26.2%. Also during this time period, our operating profit margin
(excluding special charges) has improved from 13.7% in 1997 to 15.6% in 1999.
In fiscal year 1999, approximately 51% of total revenue was under long-term
contracts with initial terms of three years or longer.

Information Services Industry

We believe the following trends and dynamics in the information services
industry will provide us growth opportunities:

. Increasing recognition of data as a competitive resource

. Increasing amount of raw data to manage

. Growth of the Internet and e-commerce

. Evolution of one-to-one marketing

. Growth in technology partnering

1
<PAGE>

Competitive Strengths

We intend to reinforce our position as a leading provider of information
management solutions by capitalizing on our competitive strengths which
include:

. Ability to build and manage large-scale databases

. Accurate and comprehensive data content

. Industry-leading customer relationship management technology: the Acxiom
Data Network

. Comprehensive information management services

. Ability to attract and retain talent

Growth Strategy

Using our competitive strengths, we are pursuing the following strategic
initiatives:

. Leverage the Acxiom Data Network

. Further penetrate existing and new client industries

. Expand data content

. Capture cross-selling opportunities

. Pursue international opportunities

. Seek acquisitions and alliances that complement or expand our business

THE OFFERING

The following information is based on 82,995,032 shares outstanding at June
7, 1999. This number excludes 13,317,762 shares of common stock issuable upon
exercise of stock options outstanding on June 7, 1999 at a weighted average
exercise price of $13.54 per share and 2,451,296 shares of common stock
reserved for future issuance under our stock option plans and employee stock
purchase plan. This number also excludes 376,800 shares of common stock
issuable upon exercise of warrants outstanding on June 7, 1999 at a weighted
average exercise price of $21.38 per share.

<TABLE>
<C> <S>
Common stock offered by Acxiom.................. 1,500,000 shares

Common stock offered by the selling stockholder. 3,921,000 shares

Common stock to be outstanding after the
offering....................................... 84,495,032 shares

Use of proceeds................................. We will use the proceeds from
our sale of shares to reduce
the outstanding balance on
our revolving credit
facility. We will not receive
any proceeds from the sale of
shares by the selling
stockholder.

Risk Factors.................................... For a discussion of certain
risks you should consider
before investing in the
shares, see "Risk Factors" on
page 4.

Nasdaq Stock Market symbol...................... ACXM
</TABLE>

2
<PAGE>

SUMMARY SUPPLEMENTAL CONSOLIDATED FINANCIAL DATA

The following summary supplemental consolidated financial data gives
retroactive effect to our acquisitions of Computer Graphics on May 28, 1999,
and May & Speh on September 17, 1998, both of which were accounted for by the
pooling-of-interests accounting method.

<TABLE>
<CAPTION>
Fiscal Years Ended March 31,
------------------------------
1999(/1/) 1998(/2/) 1997
--------- --------- --------
(in thousands, except per
share data)
<S> <C> <C> <C>
Statement of Operations Data:
Revenue.......................................... $754,057 $592,329 $499,232
Operating costs and expenses..................... 755,441 511,420 431,026
Income (loss) from operations.................... (1,384) 80,909 68,206
Net earnings (loss).............................. (15,142) 47,155 38,944
Basic earnings (loss) per share.................. (0.19) 0.64 0.55
Diluted earnings (loss) per share................ (0.19) 0.58 0.49
Weighted average shares outstanding.............. 77,840 74,070 71,150
Weighted average shares outstanding, including
common share equivalents........................ 77,840 82,780 79,936

Operating and Other Data(/3/):
Income from operations........................... $117,363 $ 85,609 $ 68,206
Income from operations as a percentage of
revenues........................................ 15.6% 14.5% 13.7%
Basic earnings per share......................... $ 0.86 $ 0.68 $ 0.55
Diluted earnings per share....................... 0.78 0.61 0.49
Cash provided from operating activities.......... 88,796 70,188 44,156
Percentage of revenue under long-term contracts.. 51% 53% 51%
</TABLE>

<TABLE>
<CAPTION>
March 31, 1999
----------------------
As
Actual Adjusted(/4/)
-------- -------------
<S> <C> <C>
Balance Sheet Data:
Cash and marketable securities........................... $ 12,604 $ 12,604
Current assets........................................... 301,999 301,999
Working capital.......................................... 134,084 134,084
Total assets............................................. 889,800 889,800
Long-term debt, including current installments........... 348,578 310,303
Total stockholders' equity............................... 357,773 396,048
</TABLE>
- --------
(1) For the fiscal year ended March 31, 1999, operating expenses include
special charges of $118.7 million related to merger and integration charges
associated with the May & Speh merger and the write-down of other impaired
assets.
(2) For the fiscal year ended March 31, 1998, operating expenses include
special charges of $4.7 million related to May & Speh severance costs.
(3) Excludes special charges of $4.7 million for fiscal year ended March 31,
1998, and $118.7 million for fiscal year ended March 31, 1999.
(4) Gives effect to the common stock to be offered by Acxiom in this offering
and the application of the estimated net proceeds as described under "Use
of Proceeds."

3
<PAGE>

RISK FACTORS

You should carefully consider the risks described below before deciding to
invest in our common stock. These risks could materially and adversely affect
our business, financial condition and results of future operations. If that
were to happen, the trading price of our common stock could decline, and you
could lose all or part of your investment.

The risks described below are not the only ones we face. Our business
operations could also be impaired by additional risks and uncertainties that
are not presently known to us, or that we currently consider immaterial.

Legislation relating to consumer privacy may affect our ability to collect
and use data

There could be a material adverse impact on our direct marketing and data
sales business due to the enactment of legislation or industry regulations
arising from public concern over consumer privacy issues. Restrictions could be
placed upon the collection and use of information that is currently legally
available, in which case our cost of collecting some kinds of data might be
increased materially. It is also possible that we could be prohibited from
collecting or disseminating certain types of data, which could in turn
materially adversely affect our ability to meet our clients' requirements.

Data suppliers might withdraw data from us, leading to our inability to
provide products and services

We could suffer a material adverse effect if owners of the data we use were
to withdraw the data from us. Data providers could withdraw their data from us
if there is a competitive reason to do so or if legislation is passed
restricting the use of the data. If a substantial number of data providers were
to withdraw their data, our ability to provide products and services to our
clients could be materially adversely impacted which could result in decreased
revenues, net income and earnings per share.

Failure to attract and retain qualified technical personnel could adversely
affect our business

Competition for qualified technical and other personnel is intense, and we
periodically are required to pay premium wages to attract and retain personnel.
There can be no assurance that we will be able to continue to hire and retain
sufficient qualified management, technical, sales and other personnel necessary
to conduct our operations successfully, particularly if the planned growth of
our business occurs.

Short-term contracts affect predictability of our revenues

While approximately 51% of our total revenue is currently derived from long-
term client contracts (defined as contracts with initial terms of three years
or longer), the remainder is not. With respect to that portion of our business
which is not under long-term contract, revenues are less predictable, and we
must consequently engage in continual sales efforts to maintain revenue
stability and future growth.

We must continue to improve and gain market acceptance of our technology to
remain competitive and grow

Maintaining technological competitiveness in our data products, processing
functionality, software systems and services is key to our continued success.
Our ability to continually improve our current processes and to develop and
introduce new products and services, such as the Acxiom Data Network, is
essential in order to maintain our competitive position and meet the
increasingly sophisticated requirements of our clients. If we fail to do so, we
could lose clients to current or future competitors which could result in
decreased revenues, net income and earnings per share. In addition, failure to
gain market acceptance of our new products and services, including the Acxiom
Data Network, could adversely affect our growth.

Year 2000 problems could affect our ability to deliver products and services

Many computer systems and instruments were designed to only recognize the
last two digits of the calendar year. With the arrival of the Year 2000, these
systems may encounter operating problems due to their inability to correctly
distinguish years after 1999. We believe that with modifications to existing
software and conversions to new software the Year 2000 issue can be mitigated.
However, the systems of vendors on whom we rely may not be converted in a
timely fashion or a vendor or customer may fail to convert its systems to be
Year 2000-ready which could materially adversely impact our ability to deliver
products and services to our clients.

4
<PAGE>

Loss of data center capacity or interruption of telecommunication links
could adversely affect our business

Our ability to protect our data centers against damage from fire, power
loss, telecommunications failure or other disasters is critical to our future.
The on-line services we provide are dependent on links to telecommunication
providers. We believe we have taken reasonable precautions to protect our data
centers and telecommunication links from events that could interrupt our
operations. Any damage to our data centers or any failure of our
telecommunication links that causes interruptions in our operations could
materially adversely affect our ability to meet our clients' requirements,
which could result in decreased revenues, net income and earnings per share.

The failure to favorably negotiate or effectively integrate acquisitions
could adversely affect our business

Our growth strategy currently includes growth through acquisitions. While we
believe we have been successful in implementing this strategy during the past
three years, there is no certainty that future acquisitions will be consummated
on acceptable terms or that any acquired assets, data or businesses will be
successfully integrated into our operations. Our failure to identify
appropriate acquisition candidates, to negotiate favorable terms for future
acquisitions, or to integrate them in our operations could result in decreased
revenues, net income and earnings per share.

Postal rate increases could lead to reduced volume of business

The direct marketing industry has been negatively impacted from time to time
during past years by postal rate increases. Any future increases will, in our
opinion, force direct mailers to mail fewer pieces and to target their
prospects more carefully. This sort of response by direct mailers could affect
us by decreasing the amount of processing services purchased from us, which
could result in lower revenues, net income and earnings per share.

RECENT DEVELOPMENTS

On May 28, 1999, Acxiom acquired Computer Graphics of Arizona, Inc. and all
of its affiliated companies in a stock-for-stock merger. The acquired companies
provide computer-based information management services with a focus on direct
marketing as well as other related data-based products. The transaction was
accounted for as a pooling of interests. The supplemental consolidated
financial statements included in this prospectus are restated to give effect to
this transaction.

On July 20, 1999, we announced our results of operations for the first
quarter ended June 30, 1999. We increased our revenue 29% to $211.5 million for
the quarter ended June 30, 1999 from $164.5 million for the same quarter a year
ago. Over the same period, our net earnings were $15.7 million ($0.18 diluted
earnings per share) which represented an increase of 34% compared to net
earnings in the prior year of $11.7 million ($0.14 diluted earnings per share).
Our year-over-year growth was driven by growth in each of our business
segments. The Services segment reported revenues of $130.1 million, up 38% over
the prior year. The Information Technology Management segment reported revenues
of $45.3 million, up 30% over the prior year and our Data Products segment
reported revenues of $47.9 million, up 11% over the prior year. The Data
Products sold to Services customers included in the above totals were $11.8
million and $7.9 million, respectively, for the quarters ended June 30, 1999
and June 30, 1998.

USE OF PROCEEDS

We estimate that the net proceeds from the sale of the 1,500,000 shares of
common stock that we are selling in this offering will be approximately $38.3
million ($59.0 million if the underwriters exercise in full their over-
allotment option). Our estimate reflects the deduction of the underwriters'
discount and estimated offering expenses. We will not receive any proceeds from
the sale of shares by the selling stockholder.

We expect to use the net proceeds to reduce the outstanding balance on our
revolving credit facility of which approximately $139.9 million was outstanding
as of June 17, 1999. The facility currently bears interest at the rate of
approximately 6.0% per annum and expires on January 31, 2003. To the extent
that the outstanding balance of this facility is reduced, that amount will be
available for acquisitions, working capital and other general corporate
purposes.

5
<PAGE>

PRICE RANGE OF COMMON STOCK AND DIVIDENDS

The following table shows for the periods indicated the high and low closing
sales prices of our common stock as reported on the Nasdaq Stock Market.

<TABLE>
<CAPTION>
Fiscal Year Ended High Low
----------------- -------- ---------
<S> <C> <C>
March 31, 1997:
First Quarter........................................ $17 5/8 $12 3/8
Second Quarter....................................... 20 9/16 16 3/8
Third Quarter........................................ 24 5/8 18 3/4
Fourth Quarter....................................... 22 7/8 14 3/8
March 31, 1998:
First Quarter........................................ $20 1/2 $12 1/8
Second Quarter....................................... 21 1/8 17 5/16
Third Quarter........................................ 19 1/4 15 1/8
Fourth Quarter....................................... 25 5/8 17
March 31, 1999:
First Quarter........................................ $25 5/8 $20 1/8
Second Quarter....................................... 28 1/8 20
Third Quarter........................................ 31 16 5/8
Fourth Quarter....................................... 29 5/8 21 15/16
March 31, 2000:
First Quarter........................................ $29 3/8 $23
Second Quarter (through July 22, 1999)............... 29 3/8 26 5/32
</TABLE>

The common stock is listed on the Nasdaq Stock Market under the symbol
"ACXM." The closing sales price of our common stock on July 22, 1999 was $27
1/16 per share.

We have never paid cash dividends on our common stock. We presently intend
to retain earnings to provide funds for our business operations and expansion.
Thus, we do not anticipate paying cash dividends in the foreseeable future.

CAPITALIZATION

The following table sets forth our consolidated capitalization at March 31,
1999 on a supplemental basis giving effect to our acquisition of Computer
Graphics and as adjusted to reflect the sale of 1,500,000 shares of common
stock offered by us in this offering and the application of the estimated net
proceeds as described under "Use of Proceeds." This table should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and our Supplemental Consolidated Financial
Statements and related notes included elsewhere in this prospectus.

<TABLE>
<CAPTION>
March 31, 1999
------------------------
Supplemental As Adjusted
------------ -----------
(in thousands)
<S> <C> <C>
Long-term debt, including current installments.. $348,578 $310,303
Stockholders' equity:
Common stock, $0.10 par value per share,
200,000,000 shares authorized; 81,064,416
shares issued and 82,564,416 shares issued,
as adjusted.................................. 8,106 8,256
Additional paid-in capital.................... 186,011 224,136
Retained earnings............................. 167,013 167,013
Accumulated other comprehensive income (loss). (324) (324)
Treasury stock, at cost; 732,271 shares....... (3,033) (3,033)
-------- --------
Total stockholders' equity.................. 357,773 396,048
-------- --------
Total capitalization...................... $706,351 $706,351
======== ========
</TABLE>

6
<PAGE>

SELECTED SUPPLEMENTAL CONSOLIDATED FINANCIAL DATA

The following selected supplemental consolidated financial data gives
retroactive effect to our acquisitions of Computer Graphics on May 28, 1999,
and May & Speh on September 17, 1998, both of which were accounted for by the
pooling-of-interests accounting method. This data should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results
of Operations," our Supplemental Consolidated Financial Statements and related
notes and other financial information included elsewhere or incorporated by
reference in this prospectus. This data is derived from our audited
supplemental consolidated financial statements.

<TABLE>
<CAPTION>
Fiscal Years Ended March
31,
----------------------------
1999 1998 1997
-------- -------- --------
(in thousands, except per
share data)
<S> <C> <C> <C>
Statement of Operations Data:
Revenue.......................................... $754,057 $592,329 $499,232
Operating costs and expenses:
Salaries and benefits.......................... 283,659 219,339 178,684
Computer, communications and other equipment... 111,876 87,529 77,631
Data costs..................................... 111,395 93,382 80,758
Other operating costs and expenses............. 129,764 106,470 93,953
Special charges(/1/)........................... 118,747 4,700 --
-------- -------- --------
Total operating costs and expenses........... 755,441 511,420 431,026
-------- -------- --------
Income (loss) from operations.................... (1,384) 80,909 68,206
-------- -------- --------
Other income (expense)
Interest expense............................... (17,393) (10,091) (5,840)
Other, net..................................... 6,478 4,402 183
-------- -------- --------
Earnings (loss) before income taxes.............. (12,299) 75,220 62,549
Income taxes..................................... 2,843 28,065 23,605
-------- -------- --------
Net earnings (loss).............................. $(15,142) $ 47,155 $ 38,944
======== ======== ========
Basic earnings (loss) per share.................. $ (0.19) $ 0.64 $ 0.55
======== ======== ========
Weighted average shares outstanding.............. 77,840 74,070 71,150
======== ======== ========
Diluted earnings (loss) per share................ $ (0.19) $ 0.58 $ 0.49
======== ======== ========
Weighted average shares outstanding, including
common share equivalents........................ 77,840 82,780 79,936
======== ======== ========
Operating and Other Data(/2/):
Income from operations........................... $117,363 $ 85,609 $ 68,206
Income from operations as a percentage of
revenue......................................... 15.6% 14.5% 13.7%
Basic earnings per share......................... $ 0.86 $ 0.68 $ 0.55
Diluted earnings per share....................... 0.78 0.61 0.49
Cash provided from operating activities.......... 88,796 70,188 44,156
Percentage of revenue under long-term contracts.. 51% 53% 51%
<CAPTION>
March 31,
----------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Balance Sheet Data:
Cash and marketable securities................... $ 12,604 $129,446 $ 35,305
Current assets................................... 301,999 294,704 150,805
Working capital.................................. 134,084 210,503 96,761
Total assets..................................... 889,800 681,634 419,788
Long-term debt, including current installments... 348,578 264,706 119,309
Total stockholders' equity....................... 357,773 308,225 237,606
</TABLE>
- --------
(1) For the fiscal year ended March 31, 1998, includes special charges related
to May & Speh severance costs. For the fiscal year ended March 31, 1999,
includes special charges related to merger and integration charges
associated with the May & Speh merger and the write down of other impaired
assets.
(2) Excludes special charges of $4.7 million for the fiscal year ended March
31, 1998, and $118.7 million for the fiscal year ended March 31, 1999.

7
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

On May 26, 1998, we entered into a merger agreement with May & Speh, Inc.
May & Speh, headquartered in Downers Grove, Illinois, provides computer-based
information management services with a focus on direct marketing and
information technology outsourcing services. The merger, which was completed
September 17, 1998, has been accounted for as a pooling of interests.
Accordingly, our consolidated financial statements have been restated as if the
combining companies had been combined for all periods presented. See note 2 to
the Supplemental Consolidated Financial Statements for a more detailed
discussion of the merger transaction.

On May 28, 1999, Acxiom acquired Computer Graphics and all of its affiliated
companies in a stock-for-stock merger. The acquired companies provide computer-
based information management services with a focus on direct marketing as well
as other related data-based products. The transaction was accounted for as a
pooling of interests. The Supplemental Consolidated Financial Statements
included elsewhere in this Prospectus have been restated to reflect this
transaction. See note 2 to the Supplemental Consolidated Financial Statements
for a more detailed discussion of the merger transactions.

Results of Operations

For the fiscal year ended March 31, 1999, we recorded the highest annual
revenue, earnings, and earnings per share in our history, excluding the special
charges discussed more fully below. Consolidated revenue was a record $754.1
million in 1999, up 27% from 1998. For fiscal 1998, revenue growth was 19% over
the previous year.

In 1999 and 1998 we had one major customer who accounted for more than 10%
of revenue, and in 1997 we had two major customers who accounted for more than
10% of revenue. Allstate accounted for 10.9%, 12.6%, and 13.6% in 1999, 1998
and 1997, respectively, and Trans Union accounted for 11.3% in 1997. The Trans
Union data center management agreement and marketing services agreement both
expire in 2005. The Allstate agreement has been extended and now expires in
2004. Revenues under long term contracts (defined as contracts having an
initial term of three years or longer) were 51%, 53%, and 51% of consolidated
revenues for 1999, 1998 and 1997, respectively.

The following table shows our revenue by business segment for each of the
years in the three-year period ended March 31, 1999 and the percentage changes
between years (dollars in millions):

<TABLE>
<CAPTION>
1998 1997
to to
1999 1998 1997 1999 1998
------ ------ ------ ---- ----
<S> <C> <C> <C> <C> <C>
Services............................... $444.0 $331.7 $274.8 +34% +21%
Data Products.......................... 186.7 155.2 135.4 +20 +15
Information Technology Management...... 164.5 128.4 109.5 +28 +17
Intercompany eliminations(/1/)......... (41.1) (23.0) (20.5) +79 +12
------ ------ ------
$754.1 $592.3 $499.2 +27 +19
====== ====== ======
</TABLE>
- --------
(1) Represents Data Products sold to the Services segment customers.

The Services segment, the Company's largest segment, provides data
warehousing, database management, list processing and consulting services to
large corporations in a number of industries. Revenue growth for this segment
has been strong, with fiscal 1999 growing 34% over the previous year after a
21% increase in 1998. This performance has been fueled by a business trend to
develop data warehouses to implement customer relationship management
applications and one-to-one marketing initiatives for our clients.

8
<PAGE>

The Data Products segment provides data content, primarily in support of our
customers' direct marketing activities. Revenue growth for this segment in
fiscal 1999 grew 20% over the previous year after a 15% increase in 1998. One
of the channels for the Data Products segment is the customers of the Services
segment. For internal reporting purposes, these revenues are included in both
segments and then adjusted within the intercompany elimination. As evidenced by
the intercompany eliminations in the previous table, revenues from customers of
the Services segment grew strongly in 1999, increasing 79% over the prior year
after a 12% increase in 1998.

The Information Technology Management segment reflects outsourcing services,
primarily in the areas of data center, client/server and network management.
Revenue growth for this segment in fiscal 1999 grew 28% over the previous year
after a 17% increase in 1998. This segment is experiencing strong growth as a
result of a trend towards business process outsourcing due to increased
complexity and changes in technology. Growth in this segment was fueled by
increases of 48% and 35% for May & Speh's outsourcing business in 1999 and
1998, respectively.

The following table presents operating expenses for each of the years in the
three-year period ended March 31, 1999 and the percentage change between years
(dollars in millions):

<TABLE>
<CAPTION>
1998 to 1997 to
1999 1998 1997 1999 1998
------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C>
Salaries and benefits............... $283.7 $219.3 $178.7 +29% +23%
Computer, communications and other
equipment.......................... 111.9 87.5 77.6 +28 +13
Data costs.......................... 111.4 93.4 80.8 +19 +16
Other operating costs and expenses.. 129.7 106.5 93.9 +22 +13
Special charges..................... 118.7 4.7 -- NM NM
------ ------ ------
$755.4 $511.4 $431.0 +48 +19
====== ====== ======
</TABLE>

Salaries and benefits increased by 29% from 1998 to 1999 and by 23% from
1997 to 1998 principally due to increased headcount to support the growth of
the business and merit increases, combined with increases in incentive
compensation, new outsourcing business, and the impact of acquisitions during
the year.

Computer, communications and other equipment costs increased 28% from 1998
to 1999, after rising 13% from 1997 to 1998. The increases in 1999 and 1998
reflect depreciation on capital expenditures and amortization of software cost
expenditures made to accommodate business growth. In 1998, the percentage
increase was lessened due to the Trans Union pass-through expenses recorded in
1997.

Data costs grew 19% in 1999 and 16% in 1998. These costs are a direct result
of growth in the Data Products segment and increased data purchases under our
contract with Allstate.

Other operating costs and expenses increased by 22% in 1999. Facilities
costs increased $5.5 million, primarily due to a new building in Downers Grove,
Illinois. Outside services and temporary help costs increased $8.7 million,
primarily to support growth in new Information Technology Management
outsourcing contracts. The remainder of the increase was in office supplies,
travel and entertainment expenses, and advertising, offset by a decrease in
cost of sales for client/server equipment of $3.6 million. In total, the
percentage increase in other operating costs and expenses was less than the
percentage increase in revenue. Other operating costs and expenses increased
13% in 1998. The increase is primarily attributable to acquisitions,
client/server sales noted above, an increase in bad debt expense, and volume-
related increases, somewhat reduced by the impact of the sale of the Pro CD
retail and direct marketing unit.

In the second and third quarters of fiscal 1999, we recorded special charges
which totaled $118.7 million. These charges were merger and integration
expenses associated with the May & Speh merger and the write down of other
impaired assets. The charges consisted of approximately $10.7 million of
transaction costs, $8.1

9
<PAGE>

million in associate-related reserves, $48.5 million in contract termination
costs, $11.5 million for the write down of software, $29.3 million for the
write down of property and equipment, $7.8 million for the write down of
goodwill and other assets, and $2.8 million in other accruals. See note 2 to
the Supplemental Consolidated Financial Statements for further information
about the special charges. In 1998, May & Speh recorded a $4.7 million special
charge, primarily for severance costs.

Total spending on capitalized software and research and development expense
was $36.3 million in 1999, compared to $35.1 million in 1998 and $23.7 million
in 1997. Research and development expense was $17.8 million, $13.7 million, and
$13.0 million for 1999, 1998, and 1997, respectively.

Excluding the effect of the special charges on both years, income from
operations would have been $117.4 million in 1999, an increase of 37% over the
income from operations of $85.6 million in 1998. Income from operations in 1998
would have reflected an increase of 26% over 1997. The operating margin for
1999, 1998, and 1997 would have been 15.6%, 14.5%, and 13.7%, respectively.
Operating margins for the Services and
Information Technology Management segments are generally higher than that of
the Data Products segment. For fiscal 1999, operating margins were 20.4%, 8.2%,
and 21.2% for the Services, Data Products, and Information Technology
Management segments, respectively.

Interest expense increased by $7.3 million in 1999 and by $4.3 million in
1998. The increase is due primarily to increased debt levels, including $115
million of convertible debt issued by May & Speh in March, 1998, increases in
our revolving credit agreement, and increases in enterprise software license
liabilities.

Other, net is primarily composed of interest income on noncurrent
receivables and invested cash of $6.4 million in 1999, $2.9 million in 1998 and
$1.6 million in 1997. Other, net for 1998 also includes $0.9 million of gain on
the disposal of the Pro CD retail and direct marketing business compared with a
$2.6 million charge in 1997 due to a write-off from the sale of a facility
related to a previously disposed of unit.

Our effective tax rate, excluding the special charges, was 37.3%, 37.3%, and
37.7% for 1999, 1998, and 1997, respectively. In each year, the effective rate
exceeded the U.S. statutory rate because of state income taxes, partially
offset by research and experimentation tax credits. In 1999, the effect of the
special charges increased the effective tax rate as certain of the special
charges are not deductible for federal or state tax purposes.

The net loss was $15.1 million in 1999 including the special charges noted
above. Excluding the effect of the special charges, net earnings would have
been $66.8 million. Net earnings were $47.2 million in 1998, or $50.1 million
excluding the special charges. Net earnings were $38.9 million in 1997. Basic
earnings per share, excluding the special charges, would have been $0.86,
$0.68, and $0.55 in 1999, 1998, and 1997, respectively. Diluted earnings per
share would have been $0.78, $0.61, and $0.49, respectively.

Seasonal and Quarterly Comparisons

Our operations have not proven to be significantly seasonal, although our
traditional direct marketing operations experience slightly higher revenues in
our second and third quarters. This seasonal impact should decrease as we
continue to move toward long-term strategic partnerships with more predictable
revenues. The following table sets forth certain quarterly financial
information for the quarters indicated.

<TABLE>
<CAPTION>
Three Months Ended
------------------------------------------------------------------------------
6/30/97 9/30/97 12/31/97 3/31/98 6/30/98 9/30/98 12/31/98 3/31/99
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data(/1/):
Revenue................ $129,390 $141,739 $152,892 $168,308 $164,512 $180,030 $193,910 $215,605
Income from operations. 15,006 21,000 25,525 24,078 20,321 26,665 35,333 35,044
Net earnings........... 8,265 12,575 15,035 14,241 11,737 15,473 19,944 19,631
Percentage of
Revenue(/1/):
Income from operations. 11.6% 14.8% 16.7% 14.3% 12.4% 14.8% 18.2% 16.3%
Net earnings........... 6.4 8.9 9.8 8.5 7.1 8.6 10.3 9.1
</TABLE>
- --------
(1) Excludes special charges for the fiscal year ended March 31, 1998 related
to May & Speh severance costs and for the fiscal year ended March 31, 1999
related to merger and integration charges associated with the May & Speh
merger and the write down of other impaired assets.

10
<PAGE>

Capital Resources and Liquidity

Working capital at March 31, 1999 totaled $134.1 million compared to $210.5
million a year previously. At March 31, 1999, we had available credit lines of
$126.5 million, of which $55.4 million was outstanding. Our debt-to-capital
ratio (capital defined as long-term debt plus stockholders' equity) was 48% at
March 31, 1999, compared to 45% at March 31, 1998. Included in long-term debt
are two convertible debt facilities totaling $140 million, of which $25.0
million was converted to equity in April 1999. Assuming both of these
facilities will convert to equity, our debt-to-capital ratio would be reduced
to 27% as of March 31, 1999. Total stockholders' equity increased to $357.8
million at March 31, 1999, from $308.2 million at March 31, 1998.

In May 1999, we arranged a $25.0 million increase in our current revolving
credit facility. This temporary increase will expire on July 31, 1999. As of
June 17, 1999, $139.9 million was outstanding compared to $55.4 million at
March 31, 1999. The increase in the amount outstanding under our revolving
credit facility was the result of acquisition payments, capital expenditures
and working capital needs. We intend to use the net proceeds of this offering
to pay down a portion of the outstanding balance of this facility.

Cash provided by operating activities was $60.4 million for 1999 compared to
$65.5 million in 1998 and $44.2 million in 1997. Excluding the impact of
special charges, cash provided by operating activities was $88.8 million, $70.2
million and $44.2 million in 1999, 1998 and 1997, respectively. Earnings before
interest, taxes, depreciation, and amortization ("EBITDA"), again excluding the
impact of the special charges, increased by 34% in 1999 after also increasing
34% in 1998. The operating cash flow was reduced by $124.1 million in 1999,
$55.7 million in 1998, and $50.8 million in 1997 due to the net change in
operating assets and liabilities. The change primarily reflects higher current
and noncurrent receivables, partially offset by higher accounts payable and
accrued liabilities resulting from the growth of our business. EBITDA is not
intended to represent operating cash flow, is not presented as an alternative
to operating income as an indicator of operating performance, may not be
comparable to other similarly titled measures of other companies, and should
not be considered in isolation or as a substitute for measures of performance
prepared in accordance with generally accepted accounting principles. However,
EBITDA is a relevant measure of our operations and cash flows and is used
internally as a surrogate measure of cash provided by operating activities.

Investing activities used $190.3 million in 1999, $86.8 million in 1998, and
$108.3 million in 1997. Investing activities in 1999 included $127.9 million in
capital expenditures, compared to $68.1 million in 1998 and $65.3 million in
1997. The increase in capital expenditures was principally due to purchases of
data center equipment to support our outsourcing agreements, as well as the
purchase of additional data center equipment in our core data centers.
Approximately one-half of the capital expenditures in 1999 were related to
customer-specific projects or contractual customer requirements. We occupied a
new building in Downers Grove, Illinois in fiscal 1999 and two new buildings in
Little Rock, Arkansas in the first quarter of fiscal 2000.

Investing activities during 1999 also include $18.5 million in capitalized
software development costs, compared to $21.4 million in 1998 and $10.7 million
in 1997. The capitalized costs in 1998 included $8.1 million capitalized by May
& Speh on a project that was completed during 1998. Excluding the decrease
related to this project at May & Speh, capitalized software development costs
increased $5.2 million from 1998 to 1999, primarily due to capitalized software
costs related to the Acxiom Data Network. The remainder of the capitalized
software costs includes software tools and databases developed for customers in
all three segments of our business. Investing activities also reflect cash paid
for acquisitions of $46.0 million in 1999, $19.8 million in 1998, and $16.2
million in 1997. These outflows were partially offset in 1998 by $15.3 million
received from the sale of assets, including $13.0 million from the sale of the
retail and direct marketing assets of Pro CD. Notes 2 and 15 to our
Supplemental Consolidated Financial Statements discuss the acquisitions and
dispositions in more detail. Investing activities also reflect the investment
of $10.4 million in 1999 and $6.1 million in 1998 in joint ventures. These
investments include approximately $4.0 million invested in each of 1999 and
1998 in Bigfoot International, Inc., an emerging company that provides services
and tools for Internet e-mail users, and $3.2 million invested in fiscal 1999
in Ceres Integrated Solutions, LLC, a provider of software and analytical
services to large retailers. Investing activities also include purchases and
sales of

11
<PAGE>

marketable securities. These securities were purchased by May & Speh prior to
the merger. As of March 31, 1999, we no longer held any marketable securities.

Financing activities in 1999 provided $24.9 million of cash, including sales
of stock through our stock option and employee stock purchase plans and the
exercise of a warrant by Trans Union for the purchase of 4.0 million shares.
This warrant was issued to Trans Union in 1992 in conjunction with our data
center management agreement with Trans Union. Financing activities in 1998
provided $127.4 million of cash, including the issuance of the $115.0 million
convertible debt by May & Speh in March 1998. Financing activities in 1997
included the issuance of $30.0 million in senior notes and the issuance of
$43.0 million of common stock by May & Speh.

During fiscal 1999, construction was substantially completed on our new
headquarters building and a new customer service facility in Little Rock,
Arkansas. These two buildings were built pursuant to 50/50 joint ventures
between us and local real estate investors and were occupied in the first
quarter of fiscal 2000. We have also occupied a new building in Downers Grove,
Illinois. During fiscal 2000, we expect to begin construction on a new customer
service facility in Conway, Arkansas as well as another customer service
facility in Little Rock, Arkansas. The Conway facility is expected to be
completed in February 2000 and to cost approximately $12.0 million. The Little
Rock facility is expected to cost approximately $28.0 million and construction
is expected to last from August 1999 to July 2001. Financing plans for these
two buildings are not yet complete, although the City of Little Rock has
committed to issue revenue bonds for the Little Rock facility.

While we do not have any other material contractual commitments for capital
expenditures, additional investments in facilities and computer equipment
continue to be necessary to support the growth of our business. In addition,
new outsourcing or facilities management contracts frequently require
substantial up-front capital expenditures in order to acquire or replace
existing assets. In some cases, we also sell software, hardware, and data to
customers under extended payment terms or notes receivable collectible over one
to eight years. These arrangements also require up-front expenditures of cash,
which are repaid over the life of the agreement. We have also been, and will
likely continue to be, actively pursuing acquisitions. As a result, we expect
that it will be necessary to raise additional capital during the next fiscal
year. We believe that capital could be raised by negotiating an increase in our
current revolving credit agreement, by incurring other debt on either a secured
or unsecured basis, or by the issuance of additional equity securities in
either public or private offerings. We believe we have significant unused
capacity to raise capital which could be used to support future growth.

12
<PAGE>

BUSINESS

Overview

Information Services Industry

In today's technologically advanced and competitive business environment,
companies are using vast amounts of customer, prospect and marketplace
information to manage their businesses. As a result, an information services
industry has evolved that provides a broad range of products and services.
Within this industry, the services and products we provide include data
warehousing, database management, real-time information delivery, customer
relationship management, data content, and data center and network management.
Our products and services enable our clients to use information to improve
business decision-making and manage customer relationships. This information
can be used to answer our clients' important business questions such as:

. How do we service our customers?
. What are the profiles of our existing customers?

. What distribution channels
. Who are our prospective customers? should we use?

. Who are our most profitable customers?. What new products should we
develop?

. What do our customers want and when do they want it?
. How should we price our products
and services?

We believe the trends and dynamics that will provide us growth opportunities
include the following:

Increasing recognition of data as a competitive resource. Since the 1970's,
businesses have gathered and maintained increasing amounts of customer,
product, financial, sales and marketing data in an electronic format in order
to better manage their operations. Generally, businesses maintained this data
in a number of discrete and often incompatible systems, and therefore, the data
was not readily accessible. More recently, advances in information technology
have allowed this data to be accessed and processed more cost effectively into
useful strategic information and shared more efficiently within an
organization. This has caused many companies to invest in managing and
maintaining their own internal data and integrating their data with external
data sources to improve business decision-making.

The growing importance of using data for business decision-making is
illustrated by increased corporate expenditures allocated to building data
warehouses, which are central repositories for data. International Data
Corporation projects that the data warehouse market will grow from $13.8
billion in 1998 to $29.2 billion in 2002. Companies using data as a competitive
resource traditionally consisted of Fortune 1000 companies in the financial
services, insurance, publishing, information services and retail industries.
This group is expanding to include companies in the telecommunications,
pharmaceuticals/healthcare, e-commerce, Internet, utilities, packaged goods,
automotive, technology and media/entertainment industries. Advances in
technology and reductions in hardware and software costs have also helped
expand the universe of users to include middle market and small office/home
office companies across multiple industries.

Increasing amount of raw data to manage. The combination of demographic
shifts and lifestyle changes, the proliferation of new products and services,
and the evolution of multiple marketing channels have made the information
management process increasingly complex. Marketing channels now include cable
and satellite television, telemarketing, direct mail, direct response, in-store
point-of-sale, on-line services and the Internet. The multiplicity of these
marketing channels has created more data and compounded the complexity of
managing the data. Advances in computer and software technology have also
unlocked vast amounts of customer data which historically was inaccessible,
thereby further increasing the amount of existing data to

13
<PAGE>

manage and analyze. Today, it is common for a business to keep several thousand
to tens of thousands of characters of information about each customer. This
compares to a few hundred characters of information kept ten years ago. As
these data resources expand and become more complex, it also becomes
increasingly difficult to maintain the quality and integrity of the data.

Growth of the Internet and e-commerce. The emergence of the Internet is
dramatically changing how consumers and businesses are purchasing products and
services. International Data Corporation estimates that transactions over the
Internet will increase from approximately $32 billion worldwide in 1998 to $426
billion worldwide in 2002. As a result of this change, traditional marketing
techniques are being challenged. Businesses are being forced to reengineer how
they market to and interact with their customers. This paradigm shift is
creating an entirely new set of marketing complexities and opportunities, which
will require businesses to better understand and utilize customer and market
data. Businesses are seeking access to highly sophisticated technology
resources in order to manage this new data rich environment and to capitalize
on the tremendous growth opportunities associated with this new medium.

Evolution of one-to-one marketing. Advances in information technology
combined with the ever increasing amounts of raw data and the changing
household and population profiles in the United States have spurred the
transition from traditional mass media to targeted one-to-one marketing. One-
to-one marketing enables the delivery of a customized message to a defined
audience and the measurement of the response to that message. The Internet has
rapidly emerged as an ideal one-to-one marketing channel. It allows marketing
messages to be customized to specific consumers and allows marketers to make
immediate modifications to their messages based on consumer behavior and
response. The Internet can also accomplish these objectives far more cost
effectively than existing marketing mediums.

Growth in technology partnering. Companies are increasingly looking outside
of their own organizations for help in managing the complexities of their
information needs. The reasons for doing so include:

. allowing a company to focus on their fundamental business operations

. avoiding the difficulty of hiring and retaining scarce technical
personnel

. benefiting from the cost efficiencies of outsourcing

. avoiding the organizational and infrastructure costs of building in-
house capability

. benefiting more from the latest technologies

Competitive Strengths

We believe we possess the following competitive strengths which allow us to
benefit from these industry trends and offer solutions to the information needs
of our clients:

Ability to build and manage large-scale databases. We have extensive
experience in developing and managing large-scale databases for some of the
world's largest companies including: AT&T, Allstate, Citibank, General
Electric, IBM, Procter & Gamble and Wal-Mart. Our state-of-the-art data
centers, computing capacity and operating scale enable us to access and process
vast amounts of raw data and cost effectively transform the data into useful
information. We house over 50 terabytes of disk storage. A terabyte is
approximately one trillion bytes, and is the scale often used when measuring
computer storage.

Accurate and comprehensive data content. We believe that we have the most
comprehensive and accurate collection of United States consumer, business,
property and telephone data available from a single source. Our consumer
database contains approximately 17 billion data elements, which we believe
covers approximately 95% of all households in the United States. Our business
database covers approximately 15 million United States businesses. Our real
estate database, which includes most major United States metropolitan areas,
covers approximately 70 million properties in 41 states. We believe we have the
most comprehensive repository of accurate telephone number information for
business and consumer telephone

14
<PAGE>

numbers in the United States and Canada. We believe we process more mailing
lists than any other company in the United States. Our clients use this data to
manage existing customer relationships and to target prospective customers.

Industry-leading customer relationship management technology: the Acxiom
Data Network. We believe the Acxiom Data Network is emerging as the leading e-
business solution for companies seeking to better manage their customer
relationships. Customer relationship management involves studying, identifying,
acquiring and retaining customers. Knowledge delivered directly and immediately
to a desktop or customer point of contact is critical to the customer
relationship management process. Acxiom Data Network is a web-enabled solution
that provides our clients with real-time desktop access to our data via the
Internet and also allows them to integrate their existing databases together in
ways that have previously been difficult or impossible. Our new linking
technology, for which a patent is pending, is a data integration tool that
permits up-to-the-minute updating of consumer and business information with our
data, thereby creating a new level of data accuracy within the industry.

Comprehensive information management services. We offer our clients
comprehensive and integrated information management solutions tailored to their
specific needs. We believe our total solution approach is a competitive
strength because it allows our clients to use a sole service provider for all
of their information management needs.

[Graphic describing Acxiom's total solution approach]

We provide a complete solution that starts with consulting, integrates data
content, applies data management technology and delivers customer relationship
management applications to the desktop. Our open system client/server
environment allows our clients to use a variety of tools, and provides the
greatest flexibility in analyzing data relationships. This open system
environment also optimizes our clients' requirements for volume, speed,
scalability and functional performance.

Ability to attract and retain talent. We believe our progressive culture
allows us to attract and retain top associates, especially those in technology
fields where critical technical skills are scarce. Our culture is based on
concepts such as leadership, associate development and continuous improvement.
Our business culture focuses on customer satisfaction, associate satisfaction
and profitability. In addition to our culture, our extensive geographic
presence, with over 45 locations in the United States and Europe, including
Atlanta, Chicago, London, New York, Phoenix and San Diego, has enhanced our
ability to attract talented associates. We were recently ranked 19th on Fortune
magazine's listing of the 100 best companies to work for in America.

15
<PAGE>

Growth Strategy

Using our competitive strengths, we are pursuing a strategy that includes
the following initiatives:

Leverage the Acxiom Data Network. Our primary development initiative over
the past two years has been the Acxiom Data Network and its related linking
technology. The Acxiom Data Network and its related linking technology are
proprietary systems that enable us to provide our clients with what we believe
to be the industry's most accurate customer, consumer and business information
in a real-time manner over the Internet or via private network. The Acxiom Data
Network can serve any size business enterprise that desires to manage existing
and prospective customer relationships. Our technology to deliver this
capability over the Internet was the first offered in the marketplace. Our goal
is to establish this technology as the most widely accepted standard for
managing and delivering customer, consumer and business data. We expect to
market the Acxiom Data Network to Fortune 1000 clients through our existing
sales organization. The middle and small office/home office markets will be
targeted primarily through our channel partners, who include leading e-commerce
and industry specialized software solution providers. We expect to generate
revenues from the Acxiom Data Network in two primary ways:

. Our clients can use the Acxiom Data Network as a cost effective channel
for accessing our data products. The ease of use and low cost delivery
of the Acxiom Data Network will allow us to extend our scope of services
in our existing markets and expand our client base to include the large
pool of middle market and small office/home office companies seeking
customer relationship management solutions. The middle and the small
office/home office markets have not historically been cost effective
markets for us.

. Our clients can also access the Acxiom Data Network and license our
linking technology as a tool to improve the customer data residing on
their internal systems on an ongoing basis.

Further penetrate existing and new client industries. Our clients expect
information management solutions tailored to the needs of their industry. We
have developed specific knowledge for the industries we serve, including the
financial services, insurance, information services, publishing, retail,
pharmaceuticals/healthcare and telecommunications industries. We expect to
continue to expand our presence in these industries as well as to penetrate new
industries as their information management needs increase. The
telecommunications and utilities industries are examples of industries where
information about existing and prospective customers is becoming increasingly
important as they move into a deregulated environment. Other industries which
we believe are undergoing change that will increase the need for data and
information management services include the e-commerce, Internet, automotive,
technology, packaged goods and media/entertainment sectors.

Expand data content. We continue to invest substantial resources to maintain
the quality and increase the scope of our databases. We enhance our databases
by adding new data through multiple sources and increasing the accuracy of the
data through our use of our new linking technology. Expanding our data content
offerings enables us to grow existing client relationships, capture new clients
and enter new industries. Data content also represents an attractive business
model for us because we can repackage it into multiple formats or sell it
through various distribution channels, including the Acxiom Data Network, at a
marginal incremental cost.

Capture cross-selling opportunities. Our established client base is
primarily composed of Fortune 1000 companies. These clients use a single
product or service or a combination of multiple products and services. Our
consultative approach, comprehensive set of services and products and long-
standing client relationships combined with the increasing information needs of
our clients provide us with a significant opportunity to offer our existing
client base new and enhanced services and products.

Pursue international opportunities. We first entered the international
marketplace with an acquisition in the United Kingdom in 1986. During the past
year, we made additional acquisitions in Spain and France to further develop a
European presence. We believe that businesses in Europe are in the early stages
of using information to drive their strategic decision-making. We have also
recently entered into a strategic alliance through which we will offer our
services in Australia and New Zealand. We believe that our existing

16
<PAGE>

international presence, combined with the emerging market demand for our
information services, represents a large growth opportunity for us.

Seek acquisitions and alliances. We will continue to seek acquisition and
alliance opportunities with companies that can complement or expand our
business by offering unique data content, strategic services or market presence
in a new industry. Since April 1998, we have completed several acquisitions,
including our merger with May & Speh. These acquisitions have significantly
extended our range of products and services, increased our client base, and
expanded our industry coverage. We currently have a number of strategic
alliances and actively seek new alliances with channel partners, software
developers and data content providers that will strengthen our position in the
marketplace.

Lines of Business

We have three primary lines of business: Services, Data Products, and
Information Technology Management.

Services

Our Services segment provides solutions which integrate and manage customer,
consumer and business data using our information management skills and
technology. We use our core competencies of data integration, data management
and data delivery to build customized solutions for our clients. Our primary
services include the following:

Service Description
--------------------- ------------------------------------------------------
Marketing strategy and . Develops strategies to effectively use and
database consulting transform data into actionable information
. Selects data elements that are relevant for a
particular client's goals and industry
. Lays foundation for data warehouse/database
development and marketing campaigns

Data integration . Standardizes, converts, cleanses and validates data
to ensure accuracy and remove duplicative and
unnecessary data
. Creates accurate and comprehensive standardized
customer profile from disparate data sources
. Augments client's data with our proprietary data

Data warehouse/database. Designs, models and builds data warehouse/database
management and delivery
. Provides data warehouse/database maintenance and
updates
. Delivers information through a variety of channels
including the Internet via the Acxiom Data Network

Customer relationship . Provides market planning, analytical and
management applications statistical modeling, campaign management, channel
implementation, and tracking and reporting
applications
. Enables client to manage and monitor customer
relationships

List processing . Provides processing tools to increase accuracy,
deliverability and efficiency of marketing lists
. Cleanses and integrates mailing list data
. Addresses and pre-sorts mailing to maximize postal
discounts and minimize handling costs

17
<PAGE>

Data Products

Our data products include both business and consumer data. We believe our
products are the industry's most comprehensive and accurate data product
offerings that are sold on a stand-alone basis as well as integrated with our
customized service offerings. Our primary products include the following:

InfoBase(TM)--Consumer
- --------------------------------------------------------------------------------
Product Description
--------------------- ------------------------------------------------------
InfoBase Enhancement . Multi-sourced consumer database containing
approximately 95% of all U.S. households
. Provides relevant demographic, real estate,
telephone, socio-economic and lifestyle data for
individuals, households and geographic areas
. Collects data from multiple data services using
approximately 1.5 billion source records

Analytical products . Employs advanced segmentation and modeling
techniques to analyze customer attributes and
behavior

InfoBase List . Multi-sourced consumer list designed to help target
prospects
. Delivers accurate and comprehensive lists based on
multiple data categories

InfoBase . Provides over 130 million telephone numbers in the
Telesource(TM) U.S.
- --------------------------------------------------------------------------------
InfoBase--Business
- --------------------------------------------------------------------------------
InfoBase Enhancement . Multi-sourced business database containing data on
approximately 15 million businesses
. Provides data on location, contacts, line of
business, size, ownership, property, stability and
market potential

Analytical products . Provides three standard levels of product analysis:
data profile analysis, CHAID (Chi-squared Automatic
Interaction Detector) and regression analysis

InfoBase Business List . Comprehensive business lists tailored to meet
specific marketing requirements
. Uses InfoBase business database to deliver accurate
and comprehensive lists, based on multiple data
categories

InfoBase Telesource . Provides data on over 12 million business telephone
lines in the U.S.

- --------------------------------------------------------------------------------
DataQuick(R)
- --------------------------------------------------------------------------------
Product Description
--------------------- ------------------------------------------------------
Real estate . Provides detailed information on over 70 million
information U.S. properties
. Information includes: ownership, address, sale and
loan data, home and property characteristics,
household demographics and trend data by
neighborhood
- --------------------------------------------------------------------------------
List Brokerage
- --------------------------------------------------------------------------------
List brokerage and
management . Offers clients access to customer lists from
consumer products and services firms

18
<PAGE>

Our clients use our data products for a range of management decision-making
functions including: identification, verification and segmentation of customers
and prospects for direct marketing purposes; campaign management; Internet
marketing; point-of-sale marketing; sales force automation; risk management;
fraud prevention; and other information driven applications.

We utilize multiple data sources to compile our consumer database including:
telephone directories; motor vehicle registrations; drivers licenses; voter
registrations; product registration questionnaires; warranty cards; county real
estate property records; purchase transactions; mail order transactions and
postal service information. Our business database is obtained from multiple
sources and covers approximately 15 million businesses throughout the United
States. Business data is verified by telephone or by matching against other
sources of the data. Business data sources include: yellow and white pages;
annual reports and other SEC information; federal, state and municipal
government data; business magazines, newsletters, and newspapers; business
registries; the Internet; professional directories; outbound telemarketers; and
postal service information. Our real estate database is obtained from county
recorders' and assessors' files. Each data source is compiled by us or licensed
from one of our data partners. We update and maintain our databases frequently
in order to provide current information to our clients.

Information Technology Management

Our Information Technology Management segment provides solutions to our
clients' information processing needs. Our significant infrastructure and scale
enable us to provide these services on a cost effective basis. Our primary
services and support functions are available 24 hours a day, seven days a week,
and include the following:

Service Description
--------------------- ------------------------------------------------------
Data center . Manages data center and transaction processing on
management behalf of clients either on-site at client
locations or at our facilities
. Services include data center operation, hardware
installation and support, account management
systems, software installation support, customized
software programming and licensing of software

Network and . Services include technical support, help-desk
client/server access and support, back-up recovery, disaster
management recovery services, operating support and
telecommunications support

19
<PAGE>

Acxiom Data Network

The Acxiom Data Network is an on-line access and delivery system that
provides authorized clients secure network access to selected data content and
information. It enables our clients to have real-time access from their
desktops to our consumer and business data products as well as proprietary
client data content from databases that we build and manage for our clients.

[Chart depicting the Acxiom Data Network and how it links data content with
customer relationship management applications via the internet.]

The Acxiom Data Network allows us and our clients to integrate data directly
into customer relationship applications such as:

. detailed customer analysis

. Internet marketing and interactive web pages

. call centers

. direct mail initiatives

. campaign management software

. point-of-sale applications

. sales force automation software

Delivery of information over the Internet or via private network, as opposed
to traditional delivery through CD-ROM, floppy discs, tape cartridges and
tapes, significantly reduces the turnaround time from days to minutes or
seconds and reduces the operating costs associated with extended processing and
turnaround.

Acxiom's proprietary linking technology was created to provide a new level
of data accuracy. By applying our technology, we are able to properly cleanse
data and eliminate redundancies, constantly update to reflect real-time
changes, and combine our data with our clients' data.

This affordable access to data content will enable us to more efficiently
serve our traditional Fortune 1000 client base and will also enable us to
expand our potential client base to include what we believe to be over 20

20
<PAGE>

million U.S. middle market and small office/home office businesses. We are
working with channel partners who are leading e-commerce and industry
specialized software solution providers to expand the market presence of the
Acxiom Data Network. The use of channel partners opens new markets to us,
stimulates product development, and creates new revenue generating
capabilities.

Acxiom Data Network Partner Program

We have designed a four-tiered channel partner program to enhance our
marketing of the Acxiom Data Network and our data products. This program offers
our partners revenue sharing levels that vary with the amount of their sales.
The tiers include:

Strategic Partners: Partners who integrate the Acxiom Data Network into
their applications and lead with Acxiom data as an integral part of their
solution. Strategic partners receive maximum integration, technical and
marketing support from us.

Channel Partners: Partners who offer prepackaged software solutions and
intend to either fully integrate the Acxiom Data Network into their
applications, create an import/export filter for Acxiom data, or have a link to
the Acxiom Data Network web site.

Solutions Partners: Partners who build custom applications on a project-by-
project basis, integrating various products, tools and technologies including
the Acxiom Data Network to provide a customized solution to their customer.
Solutions partners usually include system integrators, application developers
and consultants. Integration and technical support are also available.

Data Marketing Partners: Partners who resell or re-market our data and list
products to their customers. This tier typically includes service bureaus,
consultants, brokers and agents. Data marketing partners are required to sign a
marketing agreement with us. Sales and marketing support varies based on the
sales opportunities and revenue levels achieved by the data marketing partner.

Clients

Our clients are primarily in the financial services, insurance, information
services, publishing, retail and telecommunications industries. Our ten largest
clients represented approximately 40% of our revenues in fiscal 1999. Our
largest client, Allstate, represented approximately 10.9% of our revenues over
the same period.

We seek to maintain long-term relationships with our clients. Many of our
clients typically operate under long-term contracts (defined as contracts with
initial terms of at least three years in length). In fiscal 1999, approximately
51% of our revenue was derived from long-term contracts.

Representative clients by the industries we serve include:

<TABLE>
<CAPTION>
Information
Financial Services Insurance Services
------------------ --------- -----------
<S> <C> <C>
Bank of America Allstate ADP
Citibank Physicians Mutual IBM
Discover Financial Services Prudential Polk
First USA Bank Trans Union
General Electric

<CAPTION>
Publishing Retail Telecommunications
---------- ------ ------------------
<S> <C> <C>
Advance Publications Neiman Marcus AT&T
Guideposts Sears GTE
Meredith Wal-Mart Vodafone
</TABLE>

21
<PAGE>

More recently, our industry focus has expanded to include the
pharmaceuticals/healthcare, e-commerce, Internet, utilities, automotive,
technology, packaged goods and media/entertainment industries. Representative
clients in these new industries include 3Com, DaimlerChrysler, Procter &
Gamble, Searle, Bristol-Myers Squibb, Novell and Netscape.

Sales and Marketing

We have two separate sales forces. One is dedicated to our Services and
Information Technology Management lines of business and the other is focused on
Data Products. We maintain separate sales forces to allow our sales
representatives to concentrate on particular services, technologies and client
demands.

Our Services and Information Technology Management sales force is
decentralized and organized by industry. Our largest clients have their own
dedicated sales personnel. Sales to these and other large accounts typically
involve business unit leaders, group leaders and other members of our senior
management. Most major contracts are negotiated with the highest levels of our
clients' organizations and therefore necessitate the involvement of our senior
executives.

Our Data Products segment sells products rather than services and thus
requires a larger sales force. This sales force is organized into four groups.
The data sales team sells primarily InfoBase products. The DataQuick sales team
sells property data content and on-line access to those products. The list
brokerage sales team sells list rental and list management products. The
channels sales team focuses on creating sales through business partners and
other alternate channels of distribution.

Pricing for Products and Services

We have standard list pricing guidelines for many services such as list
processing, national change of address processing, merge/purge processing and
other standard processing. Data warehousing/database management services tend
to be more custom-designed and are priced individually to each customer. We
have built extensive pricing guidelines and case studies for pricing based on
our experience in building large-scale data warehouses and databases.

Pricing for data warehouses and databases normally includes separate fees
for design, initial build, on-going updates, queries and outputs. We also price
separately for consulting and statistical analysis services.

We publish standard list prices for many of our data products. These
products are priced with volume discounts. Licenses for our entire consumer or
business database for one or more years are priced individually.

Information technology management services are priced based on the cost of
managing and operating the data center, network and client/server systems.

Strategic Alliances

In addition to our traditional sales force activity, we maintain and pursue
strategic alliances to further the development and distribution of our best
products and services. We partner with firms that can help us service our
clients. Current strategic alliances include Bigfoot (e-mail marketing), Trans
Union (information services), Exchange Applications (customer relationship
management applications software), Ceres (campaign management), and PBL
(media/entertainment) in Australia.

22
<PAGE>

Our strategic alliances are structured in several ways. Because each of our
partners is unique, it is necessary to create a structure specifically suited
to our needs and the needs of our business partners. Examples of various
alliance structures in which we participate include:

. joint ventures

. minority interests in small, early-stage companies

. channel partner relationships

. joint marketing alliances

. agreements to pay commissions for business directed to us

. agreements to pay finders fees for new clients directed to us

Competition

The information services industry in which we operate is highly competitive,
with no single dominant competitor. Within the industry, there are database
marketing service providers, analytical data application vendors, enterprise
software providers, systems integrators, consulting firms, list brokerage/list
management firms and teleservices companies. Many firms offer a limited number
of services within a particular geographic area, and several participants offer
a broad array of information services on a national or international basis.
However, we do not know of a competitor that offers our complete line of
products and services.

In the Services market, we compete primarily with in-house information
technology departments of current clients and those of potential clients as
well as firms that provide data warehousing and database services, mailing list
processing, and consulting services. Competition is based on the quality and
reliability of products and services, technological expertise, historical
experience, ability to develop customized solutions for clients, processing
capabilities and price. Competitors in the data warehousing and database
services and mailing list processing sectors include Harte-Hanks, Metromail and
Experian (subsidiaries of Great Universal Stores), Dynamark (a subsidiary of
Fair Isaac), Epsilon and KnowledgeBase Marketing (a subsidiary of Young &
Rubicam).

In the Data Products market, we compete with two types of firms: data
providers and list providers. Competition is based on the quality and
comprehensiveness of the information provided, the ability to deliver the
information in products and formats that the customer needs and, to a lesser
extent, on the pricing of information products and services. Our principal
competitors in this market are Abacus Direct, Donnelley Marketing (a pending
acquisition by infoUSA), Metromail (a subsidiary of Great Universal Stores), R.
L. Polk and infoUSA. We also compete with hundreds of smaller firms that
provide list brokerage and list management services.

In the Information Technology Management services market, competition is
based on the quality and reliability of services, technical expertise,
processing capabilities, processing environment and price. Our primary
competitors include Affiliated Computer Services, Lockheed Martin, PKS
Information Services and the in-house information technology departments of
current clients and those of potential clients. In addition, but on a less
frequent basis, we compete with IBM, Electronic Data Systems, Computer Sciences
Corporation, Perot Systems and MCI/Systemhouse, a subsidiary of MCI Worldcom.

Privacy

We have always taken an active approach with respect to consumer privacy
rights. The growth of e-commerce and companies wanting consumer information
means that we must work even harder to guarantee that our policies offer
individuals the protection to which they are entitled.

23
<PAGE>

Consequently, we are promoting adherance to a common set of strict privacy
guidelines for the direct marketing, e-commerce and data industries as a whole.
Industrywide compliance helps address U.S. privacy concerns and the rigorous
demands of the European Union to ensure the continued free flow of information.

Our own Fair Information Practices Policy outlines the variety of measures
we currently take to protect consumers' privacy rights. Our multi-level
security systems are designed to ensure that only authorized clients can access
our data. We go to great lengths to educate clients and associates regarding
consumer right-to-privacy issues, guidelines and laws. Our policy also explains
the simple steps that consumers may take to have their names removed from our
InfoBase line of marketing products and to learn what non-public information we
maintain about them.

Employees

As of March 31, 1999, we had over 5,000 associates worldwide. With the
exception of approximately 45 associates who are engaged in lettershop
fulfillment activities, none of our associates are represented by a labor union
or are the subject of a collective bargaining agreement. We have never
experienced any work stoppages, and we consider our relations with our
associates to be excellent.

24
<PAGE>

MANAGEMENT

The following table provides information about our directors and executive
officers as of June 17, 1999:

<TABLE>
<CAPTION>
Year
Name Age Elected Position Held
---- --- ------- -------------
<C> <C> <C> <S>
Charles D. Morgan............. 56 1972 Chairman of the Board and
President (Company Leader)
Rodger S. Kline............... 56 1975 Chief Operating Officer,
Treasurer and Director
James T. Womble............... 56 1975 Division Leader and Director
C. Alex Dietz................. 56 1979 Division Leader
Paul L. Zaffaroni............. 52 1990 Division Leader
L. Lee Hodges................. 52 1999 Division Leader
Jerry C.D. Ellis.............. 49 1991 Division Leader
Jerry C. Jones................ 43 1999 Business Development/Legal Leader
Robert S. Bloom............... 43 1992 Chief Financial Officer
Dr. Ann H. Die................ 54 1993 Director
William T. Dillard II......... 54 1988 Director
Harry C. Gambill.............. 53 1992 Director
Thomas F. (Mack) McLarty, III. 52 1999 Director
Robert A. Pritzker............ 72 1994 Director
</TABLE>

Mr. Morgan joined Acxiom in 1972. He has been Chairman of the Board of
Directors since 1975, and serves as Acxiom's president (Company Leader). He is
also a director of Fairfield Communities, Inc., and of the Direct Marketing
Association. Mr. Morgan is Chairman of the Board of Trustees of Hendrix
College. He was employed by IBM prior to joining Acxiom and holds a mechanical
engineering degree from the University of Arkansas.

Mr. Kline joined Acxiom in 1973. He has been a director since 1975, and
serves as Acxiom's chief operating officer and treasurer. Prior to joining
Acxiom, Mr. Kline was employed by IBM. Mr. Kline holds a degree in electrical
engineering from the University of Arkansas.

Mr. Womble joined Acxiom in 1974. He has been a director since 1975, and
serves as one of Acxiom's five Division Leaders. Mr. Womble is also a director
of Sedona Corporation. Prior to joining Acxiom, Mr. Womble was employed by
IBM. Mr. Womble holds a degree in civil engineering from the University of
Arkansas.

Mr. Dietz joined Acxiom in 1970 and served as a vice president until 1975.
Between 1975 and 1979 he was an officer of a commercial bank responsible for
data processing matters. Following his return to Acxiom in 1979, Mr. Dietz
served as a senior level officer of Acxiom and is presently one of Acxiom's
division leaders. Mr. Dietz holds a degree in electrical engineering from
Tulane University.

Mr. Zaffaroni joined Acxiom in 1990. He serves as one of Acxiom's division
leaders. Prior to joining Acxiom, he was employed by IBM for 21 years, most
recently serving as regional sales manager. Mr. Zaffaroni holds a degree in
marketing from Youngstown State University.

Mr. Hodges joined Acxiom in 1998. He serves as one of Acxiom's division
leaders. Prior to joining Acxiom, he was a senior vice president with Tascor,
the outsourcing subsidiary of Norrell Corporation. Prior to that time, Mr.
Hodges served in a number of engineering, sales, marketing and executive
positions with IBM for 24 years. Mr. Hodges holds a degree in industrial
engineering from The Pennsylvania State University.

Mr. Ellis joined Acxiom in 1991 as managing director of Acxiom's U.K.
operations. He serves as one of Acxiom's division leaders. Prior to 1991, Mr.
Ellis was employed for 22 years with IBM, serving most recently as assistant
to the CEO of IBM's U.K. operations. Prior to that, Mr. Ellis served as branch
manager of the IBM U.K. Public Sector division.

25
<PAGE>

Mr. Jones joined Acxiom in 1999. Prior to joining Acxiom, he was employed
for 19 years as an attorney in private practice with the Rose Law Firm,
representing a broad range of business interests. Mr. Jones holds a degree in
public administration from the University of Arkansas and a law degree from the
University of Arkansas School of Law.

Mr. Bloom joined Acxiom in 1992 as chief financial officer. Prior to joining
Acxiom, he was employed for six years with Wilson Sporting Goods Co. as chief
financial officer of its international division. Prior to his employment with
Wilson, Mr. Bloom was employed by Arthur Andersen & Co. for nine years, serving
most recently as a manager. Mr. Bloom, a certified public accountant, holds a
degree in accounting from the University of Illinois.

Dr. Die was elected as a director in 1993. She has served as President of
Hendrix College in Conway, Arkansas since 1992. She is a member of the Board of
Directors of the National Merit Scholarship Corporation, The Foundation for
Independent Higher Education, and the American Council on Education. She is
also Chair of the National Collegiate Athletic Association (NCAA) Division III
Presidents Council and a member of the NCAA Executive Committee. She is past
Chair of the Board of Directors of the National Association of Independent
Colleges and Universities. Prior to coming to Hendrix, she served as Dean of
the H. Sophie Newcomb Memorial College and Associate Provost at Tulane
University. Dr. Die graduated summa cum laude from Lamar University, earned a
master's degree from the University of Houston and a Ph.D. in counseling
psychology from Texas A&M University.

Mr. Dillard was elected as a director in 1988. He has served since 1968 as a
member of the Board of Directors and is Chief Executive Officer of Dillard's,
Inc., of Little Rock, Arkansas, a regional chain of traditional department
stores with retail outlets in the Southeast, Southwest and Midwest areas of the
United States. In addition to Dillard's, Inc., Mr. Dillard is also a director
of Barnes & Noble, Inc. and Chase Bank of Texas, Inc. He holds a master's
degree in business administration from Harvard University and a bachelor's
degree in the same field from the University of Arkansas.

Mr. Gambill was appointed to fill a vacancy on our Board of Directors in
1992 and was elected as a director in 1993. He is a director and has held the
positions of Chief Executive Officer and President of Trans Union, a company
engaged in the business of providing consumer credit reporting services, since
April 1992. Mr. Gambill joined Trans Union in 1985 as Vice President/General
Manager of the Chicago Division. In 1987 he was named Central Region Vice
President. In 1990, he was named President of Trans Union, and assumed the
added title of President of TransMark in 1992. Mr. Gambill is also a director
of Associated Credit Bureaus and the International Credit Association. He holds
degrees in business administration and economics from Arkansas State
University.

Mr. McLarty was appointed to fill a vacancy on our Board of Directors in
1999. He is Chairman of the McLarty Companies, a third generation family
business and one of the nation's leading automotive dealership groups. He is a
board member of the Financial Times Advisory Board of London, England, the
Americas Society of New York City, the Inter-American Dialogue of Washington,
D.C., the M.D. Anderson Cancer Center in Houston, and Entergy Corporation. In
1983 he became chairman and chief executive officer of Arkla, Inc., a Fortune
500 natural gas company. He was appointed by President Bush to the National
Petroleum Council and the National Council on Environmental Quality, and he was
a member of the St. Louis Federal Reserve Board from 1989 through 1992.
Beginning in 1992, he served President Clinton in several key positions: Chief
of Staff, Counselor to the President, and Special Envoy for the Americas, with
over five years of service in the President's Cabinet and on the National
Economic Council. He holds a degree in business administration from the
University of Arkansas.

Mr. Pritzker was appointed to fill a newly created position on our Board of
Directors in 1994 and was elected a director in 1996. Since before 1992, Mr.
Pritzker has been a director and the Chairman of Trans Union, a company engaged
in the business of providing consumer credit reporting services, a director and
the President of Union Tank Car Company, a company principally engaged in the
leasing of railway tank cars and

26
<PAGE>

other railcars, and Marmon Holdings, Inc., a holding company of diversified
manufacturing and services businesses. Mr. Pritzker is also a director of Hyatt
Corporation, a company which owns and operates domestic and international
hotels, and a director of Southern Peru Copper Corporation, a company which
mines, smelts, refines and markets copper. Mr. Pritzker holds an industrial
engineering degree from the Illinois Institute of Technology.

There are no family relationships among any of the Company's executive
officers and/or directors.

SELLING STOCKHOLDER

The selling stockholder, the Pritzker Foundation, an Illinois private
foundation, is offering 3,921,000 shares, which is all of its current holdings.
Following the offering, it will not own any shares of our common stock. Robert
A. Pritzker, one of our directors, is a member of the board of directors of the
Pritzker Foundation.

In 1992, Acxiom acquired certain hardware and computer equipment associated
with Trans Union's Chicago data center pursuant to a data center management
agreement in exchange for 1,920,000 shares of Acxiom's common stock. In 1994,
Acxiom and Trans Union's parent company, Marmon Industrial LLC, entered into a
stock purchase agreement under which Marmon Industrial purchased an additional
2,000,000 shares of Acxiom common stock. In 1997, Trans Union transferred its
1,920,000 shares (together with an additional 1,000 shares it had previously
acquired from Mr. Gambill, one of our directors) to the Pritzker Foundation. At
the same time, Marmon Industrial also transferred its 2,000,000 shares to the
Pritzker Foundation.

In connection with the 1992 data center management agreement, Trans Union
also received a warrant to purchase an additional 4,000,000 shares of Acxiom
common stock. In August 1998, Trans Union exercised the warrant. In the first
quarter of fiscal 2000, Trans Union sold 400,000 shares and as a result
currently owns approximately 3.6 million shares.

27
<PAGE>

UNDERWRITING

Acxiom and the selling stockholder have entered into an underwriting
agreement with the underwriters named below. ABN AMRO Incorporated, Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith Barney Inc., William
Blair & Company, L.L.C., PaineWebber Incorporated, Robert W. Baird & Co.
Incorporated and Stephens Inc. are acting as representatives (the
"Representatives") for the underwriters.

The underwriting agreement provides for each underwriter to purchase the
number of shares of common stock shown opposite its name below, subject to the
terms and conditions of the underwriting agreement. The underwriters'
obligations are several, which means that each underwriter is required to
purchase the specified number of shares, but is not responsible for the
commitment of any other underwriter to purchase shares.

<TABLE>
<CAPTION>
Number of
Underwriter Shares
----------- ---------
<S> <C>
ABN AMRO Incorporated........................................... 1,024,570
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................................... 1,024,570
Salomon Smith Barney Inc........................................ 1,024,570
William Blair & Company, L.L.C.................................. 463,496
PaineWebber Incorporated........................................ 463,496
Robert W. Baird & Co. Incorporated.............................. 439,102
Stephens Inc.................................................... 439,102
J.C. Bradford & Co.............................................. 90,349
First Analysis Securities Corporation........................... 90,349
ING Barings LLC................................................. 90,349
Morgan Keegan & Company, Inc.................................... 90,349
Needham & Company, Inc.......................................... 90,349
U.S. Bancorp Piper Jaffray Inc.................................. 90,349
---------
Total...................................................... 5,421,000
=========
</TABLE>

This is a firm commitment underwriting, which means that the underwriters
have agreed to purchase all of the shares offered by this prospectus if they
purchase any shares (other than those covered by the over-allotment option
described below). The underwriting agreement provides that if an underwriter
defaults in its commitment to purchase shares, the commitments of non-
defaulting underwriters may be increased or the underwriting agreement may be
terminated, depending on the circumstances.

The Representatives have advised us and the selling stockholder that the
underwriters propose to offer the shares directly to the public at the public
offering price that appears on the cover page of this prospectus. In addition,
the underwriters may offer some of the shares to selected securities dealers at
the public offering price less a concession of $0.69 per share. The
underwriters may also allow, and these dealers may reallow, a concession not in
excess of $0.10 per share to other dealers. After the shares are released for
sale to the public, the underwriters may change the offering price and other
selling terms at various times.

We have granted the underwriters an over-allotment option. This option,
which is exercisable for up to 30 days after the date of this prospectus,
permits the underwriters to purchase a maximum of 800,000 additional shares
from us to cover over-allotments. If the underwriters exercise all or part of
this option, they will purchase shares covered by the option at the initial
public offering price that appears on the cover page of this prospectus, less
the underwriting discount. The underwriters have severally agreed that, to the
extent the over-allotment option is exercised, they will each purchase a number
of additional shares proportionate to each underwriter's initial commitment
reflected in the foregoing table.

The following table shows the underwriting fees to be paid to the
underwriters by us and the selling stockholder in connection with this
offering. The fees to be paid by us and the selling stockholder are shown
assuming both no exercise and full exercise of the underwriters' over-allotment
option.

<TABLE>
<CAPTION>
Paid by Selling
Paid by Us Stockholder
--------------------- ---------------------
No No
Exercise Full Exercise Full
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Per share..................... $ 1.15 $ 1.15 $ 1.15 $ 1.15
Total......................... $1,725,000 $2,645,000 $4,509,150 $4,509,150
</TABLE>

28
<PAGE>

We will pay the offering expenses, estimated to be approximately $500,000.

Trans Union and the Pritzker Foundation have agreed to a 120-day "lockup"
and our officers and directors have agreed to a 90-day "lockup" with respect to
the shares of common stock and any other Acxiom securities that they
beneficially own or have the right to acquire upon exercise of options. We have
agreed to a 120-day "lockup" with respect to previously-unissued or treasury
shares. This means that, with certain exceptions, during the "lockup" periods,
Acxiom, Trans Union, the Pritzker Foundation and these officers and directors
may not offer, sell, pledge or otherwise dispose of our common stock without
the prior written consent of ABN AMRO Incorporated.

The rules of the Securities and Exchange Commission may limit the ability of
the underwriters to bid for or purchase shares before the distribution of the
shares is completed. However, the underwriters may engage in the following
activities under the rules:

. Stabilizing transactions--The underwriters may make bids or purchases
for the purpose of pegging, fixing or maintaining the price of shares,
so long as stabilizing bids do not exceed a specified maximum and may
discontinue these bids or purchases at any time.

. Over-allotments and syndicate covering transactions--The underwriters
may create a short position in the shares by selling more shares than
are shown on the cover page of this prospectus. If a short position is
created in connection with the offering, the representatives may engage
in syndicate covering transactions by purchasing shares in the open
market. The representatives may also elect to reduce any short position
by exercising all or part of the over-allotment option.

We and the selling stockholder have agreed to indemnify the underwriters
against certain liabilities, including liabilities under the Securities Act of
1933, and to contribute to payments the underwriters may be required to make to
satisfy any such liabilities.

Stephens Group, Inc., the parent company of Stephens Inc., one of the
underwriters, has agreed to sell property located in Little Rock, Arkansas to
us for 54,450 shares of common stock pursuant to an agreement dated April 13,
1999. The purchase price for the property was negotiated on an arms-length
basis. The National Association of Securities Dealers, Inc. has determined that
the difference between the tax assessment of the property and the fair market
value of the Common Stock to be received, estimated to be approximately
$1,285,957, is deemed to be underwriting compensation. In accordance with the
rules of the National Association of Securities Dealers, Inc., Stephens Inc.
will not sell, transfer or assign the 54,450 shares of Common Stock received in
connection with the sale of the property, for a period of one (1) year from the
date hereof.

William Blair & Company, L.L.C., one of the underwriters, has stated in
filings with the Securities and Exchange Commission that it owns approximately
5,860,000 shares of common stock, or approximately 7.1% of our issued and
outstanding common stock.

LEGAL MATTERS

The validity of the shares of common stock offered hereby will be passed
upon for us by Friday, Eldredge & Clark, LLP, Little Rock, Arkansas. Certain
other legal matters will be passed upon for the underwriters by McDermott, Will
& Emery, Chicago, Illinois.

EXPERTS

The supplemental consolidated financial statements and related supplemental
financial statement schedule of Acxiom as of March 31, 1999 and 1998, and for
each of the years in the three year period ended March 31,

29
<PAGE>

1999, included in the prospectus and the registration statement, except as to
the supplemental consolidated financial statements as they relate to May &
Speh, Inc. for the year ended September 30, 1996, have been audited by KPMG
LLP, independent accountants, and as they relate to May & Speh, Inc. for the
year ended September 30, 1996 (not presented separately herein), by
PricewaterhouseCoopers LLP, independent accountants, whose reports have been
included in the prospectus and registration statement upon the authority of
said firms as experts in auditing and accounting.

The consolidated financial statements and related financial statement
schedule of Acxiom as of March 31, 1999 and 1998, and for each of the years in
the three year period ended March 31, 1999, which are incorporated in the
Acxiom Annual Report on Form 10-K for the year ended March 31, 1999 which is
incorporated by reference in the prospectus and the registration statement,
except as to the consolidated financial statements as they relate to May &
Speh, Inc. for the year ended September 30, 1996, have been audited by KPMG
LLP, independent accountants, and as they relate to May & Speh, Inc. for the
year ended September 30, 1996 (not presented separately therein), by
PricewaterhouseCoopers LLP, independent accountants, whose reports have been
incorporated by reference in the prospectus and registration statement upon the
authority of said firms as experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

The SEC allows us to "incorporate by reference" into this prospectus
information filed with it, which means that we can disclose important
information to you by referring you directly to those documents. The
information incorporated by reference is considered to be a part of this
prospectus. In addition, information we file with the SEC in the future will
automatically update and supersede information contained in this prospectus.

We incorporate by reference the documents listed below and any future
filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until this offering is completed:

(i) Annual Report on Form 10-K for the fiscal year ended March 31, 1999;

(ii) Form 8-K filed on June 21, 1999 and Form 8-K/A filed on June 25,
1999;

(iii) Form 8-K filed on July 23, 1999;

(iv) The description of our capital stock contained in the registration
statement on Form 8-A of CCX Network, Inc., which is now known as
Acxiom Corporation, dated February 4, 1985, and any amendments or
updates to that form; and

(v) The description of our preferred stock purchase rights contained in
the registration statement on Form 8-A/A dated June 4, 1998.

We have filed a registration statement on Form S-3 with the SEC and we also
file annual, quarterly and periodic reports, proxy statements and other
information. You may read and copy the registration statement and any other
documents filed by us at the public reference room of the SEC at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the
operation of the public reference room by calling the SEC at 1-800-SEC-0330.
Our filings with the SEC also are available to the public at the SEC's web site
at http://www.sec.gov.

We will provide you with free copies of any of these documents, without
exhibits, unless an exhibit is incorporated into the document by reference, if
you write us or call us at: Acxiom Corporation, 1 Information Way, Little Rock,
Arkansas 72202, Attention: Catherine L. Hughes, telephone (501) 342-1320.

30
<PAGE>

ACXIOM CORPORATION
AND SUBSIDIARIES

INDEX TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Reports............................................. F-2

Supplemental Consolidated Balance Sheets--March 31, 1999 and 1998......... F-4

Supplemental Consolidated Statements of Operations--Years ended March 31,
1999, 1998 and 1997...................................................... F-5

Supplemental Consolidated Statements of Stockholders' Equity--Years ended
March 31, 1999, 1998 and 1997............................................ F-6

Supplemental Consolidated Statements of Cash Flows--Years ended March 31,
1999, 1998 and 1997...................................................... F-8

Notes to Supplemental Consolidated Financial Statements................... F-9

Supplemental Financial Statement Schedule--Valuation and Qualifying
Accounts--Years ended March 31, 1999, 1998 and 1997...................... F-26
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Acxiom Corporation:

We have audited the accompanying supplemental consolidated financial
statements of Acxiom Corporation and subsidiaries as listed in the accompanying
index. In connection with our audits of the supplemental consolidated financial
statements, we have also audited the supplemental financial statement schedule
as listed in the accompanying index. These supplemental consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these supplemental consolidated
financial statements based on our audits. We did not audit the consolidated
financial statements of May & Speh, Inc., a wholly-owned subsidiary, which
statements reflect total revenues constituting 15 percent of the related
consolidated total during the year ended March 31, 1997. Those statements were
audited by other auditors whose report has been furnished to us, and our
opinion, insofar as it relates to the amounts included for May & Speh, Inc., is
based solely on the report of the other auditors.

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.

The supplemental consolidated financial statements give retroactive effect
to the merger of Acxiom Corporation and Computer Graphics of Arizona, Inc. on
May 28, 1999, which has been accounted for as a pooling of interests as
described in Note 2 to the supplemental consolidated financial statements.
Generally accepted accounting principles proscribe giving effect to a
consummated business combination accounted for by the pooling-of-interests
method in financial statements that do not include the date of consummation.
These financial statements do not extend through the date of consummation.
However, they will become the historical consolidated financial statements of
Acxiom Corporation and subsidiaries after financial statements covering the
date of consummation of the business combination are issued.

In our opinion, based on our audits and the report of the other auditors,
the supplemental consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Acxiom Corporation
and subsidiaries as of March 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the years in the three-year period
ended March 31, 1999, in conformity with generally accepted accounting
principles applicable after financial statements are issued for a period which
includes the date of consummation of the business combination. Also in our
opinion, based on our audits and the report of other auditors, the related
supplemental financial statement schedule, when considered in relation to the
basic supplemental consolidated financial statements taken as a whole, presents
fairly in all material respects the information set forth therein.

KPMG LLP

Little Rock, Arkansas
June 11, 1999

F-2
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of May & Speh, Inc.

In our opinion, the consolidated statements of operations, of cash flows and
of changes in stockholders' equity of May & Speh, Inc. (not presented
separately herein) present fairly, in all material respects, its results of
operations and its cash flows for the year ended September 30, 1996, in
conformity with generally accepted accounting principles. 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 of these statements in accordance with
generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for the
opinion expressed above.

PricewaterhouseCoopers LLP

Chicago, Illinois
November 1, 1996

F-3
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS
March 31, 1999 and 1998
(Dollars in thousands)

<TABLE>
<CAPTION>
1999 1998
ASSETS -------- --------
<S> <C> <C>
Current assets:
Cash and cash equivalents... $ 12,604 $117,652
Marketable securities....... -- 11,794
Trade accounts receivable,
net (note 12)................ 184,799 122,413
Refundable income taxes
(note 9)................... 12,651 7,670
Deferred income taxes (note
9)......................... 30,643 2,868
Other current assets (note
5)......................... 61,302 32,307
-------- --------
Total current assets.... 301,999 294,704
Property and equipment, net of
accumulated depreciation and
amortization (notes 4
and 6)....................... 226,381 187,258
Software, net of accumulated
amortization of $17,941 in
1999 and $11,642 in 1998
(note 3) .................... 37,400 38,673
Excess of cost over fair value
of net assets acquired, net
of accumulated amortization
of $13,517 in 1999 and $8,585
in 1998 (note 2) ............ 122,483 73,851
Other assets (note 5)......... 201,537 87,148
-------- --------
$889,800 $681,634
======== ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS'
EQUITY
<S> <C> <C>
Current liabilities:
Current installments of
long-term debt (note 6).... $ 23,355 $ 10,466
Trade accounts payable...... 60,216 22,876
Accrued expenses:
Merger and integration
costs (note 2)........... 33,181 --
Payroll................... 18,224 18,466
Other..................... 25,744 20,846
Deferred revenue............ 7,195 11,547
-------- --------
Total current
liabilities............ 167,915 84,201
Long-term debt, excluding
current installments (note
6)........................... 325,223 254,240
Deferred income taxes (note
9)........................... 38,889 34,968
Stockholders' equity (notes 2,
6, 8 and 9):
Common stock................ 8,106 7,592
Additional paid-in capital.. 186,011 122,038
Retained earnings........... 167,013 182,155
Accumulated other
comprehensive income
(loss)..................... (324) 676
Unearned ESOP compensation.. -- (2,055)
Treasury stock, at cost..... (3,033) (2,181)
-------- --------
Total stockholders'
equity................. 357,773 308,225
Commitments and contingencies
(notes 2, 6, 7, 10, 11 and
14)..........................
-------- --------
$889,800 $681,634
======== ========
</TABLE>

See accompanying notes to supplemental consolidated financial statements.

F-4
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended March 31, 1999, 1998 and 1997
(Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Revenue (notes 2 and 12)........................ $754,057 $592,329 $499,232
Operating costs and expenses (notes 2, 3, 7, 10
and 11):
Salaries and benefits......................... 283,659 219,339 178,684
Computer, communications and other equipment.. 111,876 87,529 77,631
Data costs.................................... 111,395 93,382 80,758
Other operating costs and expenses............ 129,764 106,470 93,953
Special charges (note 2)...................... 118,747 4,700 --
-------- -------- --------
Total operating costs and expenses.......... 755,441 511,420 431,026
-------- -------- --------
Income (loss) from operations............... (1,384) 80,909 68,206
-------- -------- --------
Other income (expense):
Interest expense.............................. (17,393) (10,091) (5,840)
Other, net.................................... 6,478 4,402 183
-------- -------- --------
Total other income.......................... (10,915) (5,689) (5,657)
-------- -------- --------
Earnings (loss) before income taxes............. (12,299) 75,220 62,549
Income taxes (note 9)........................... 2,843 28,065 23,605
-------- -------- --------
Net earnings (loss)......................... $(15,142) $ 47,155 $ 38,944
======== ======== ========
Earnings (loss) per share:
Basic......................................... $ (.19) $ .64 $ .55
======== ======== ========
Diluted....................................... $ (.19) $ .58 $ .49
======== ======== ========
</TABLE>

See accompanying notes to supplemental consolidated financial statements.

F-5
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years ended March 31, 1999, 1998 and 1997
(Dollars in thousands)

<TABLE>
<CAPTION>
Common stock
----------------- Additional
Number of paid-in
shares Amount capital
---------- ------ ----------
<S> <C> <C> <C>
Balances at March 31, 1996........................ 66,859,872 $6,686 $ 53,088
Pro CD merger (note 2).......................... 3,313,324 331 2,647
Sale of common stock............................ 4,381,362 438 46,828
Tax benefit of stock options exercised (note 9). -- -- 2,232
Issuance of common stock warrants............... -- -- 1,300
Employee stock awards and shares issued to
employee benefit plans,
net of treasury shares repurchased............. -- -- 1,359
ESOP compensation earned........................ -- -- --
Comprehensive income:
Foreign currency translation.................. -- -- --
Net earnings.................................. -- -- --
---------- ------ --------
Total comprehensive income..................
Balances at March 31, 1997........................ 74,554,558 7,455 107,454
May & Speh merger (note 2)...................... 72,160 7 115
Sale of common stock............................ 1,235,971 124 9,158
Tax benefit of stock options exercised (note 9). -- -- 2,763
Employee stock awards and shares issued to
employee benefit plans,
net of treasury shares repurchased............. 57,529 6 2,548
ESOP compensation earned........................ -- -- --
Comprehensive income:
Foreign currency translation.................. -- -- --
Net earnings.................................. -- -- --
---------- ------ --------
Total comprehensive income..................
Balances at March 31, 1998........................ 75,920,218 7,592 122,038
Sale of common stock............................ 4,000,000 400 11,850
Tax benefit of stock options and warrants
exercised (note 9)............................. -- -- 36,393
Issuance of warrants (note 2)................... -- -- 2,676
Employee stock awards and shares issued to
employee benefit plans,
net of treasury shares repurchased............. 1,144,198 114 13,054
ESOP compensation earned........................ -- -- --
Comprehensive loss:
Foreign currency translation.................. -- -- --
Net loss...................................... -- -- --
---------- ------ --------
Total comprehensive loss....................
Balances at March 31, 1999........................ 81,064,416 $8,106 $186,011
========== ====== ========
</TABLE>

See accompanying notes to supplemental consolidated financial statements.

F-6
<PAGE>

<TABLE>
<CAPTION>
Accumulated Treasury stock Total
other Unearned ------------------- stockholders'
Comprehensive Retained comprehensive ESOP Number of equity
income (loss) earnings income (loss) compensation shares Amount (note 7)
- ------------- -------- ------------- ------------ ---------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
$ 96,514 $ (863) $(8,906) (1,242,242) $(2,323) $144,196
(4,752) -- -- -- -- (1,774)
-- -- -- -- -- 47,266
-- -- -- -- -- 2,232
-- -- -- -- -- 1,300

-- -- -- 145,912 (192) 1,167
-- -- 3,134 -- -- 3,134
1,141 -- 1,141 -- -- -- 1,141
38,944 38,944 -- -- -- -- 38,944
-------- -------- ------ ------- ---------- ------- --------
$ 40,085
========
130,706 278 (5,772) (1,096,330) (2,515) 237,606
4,294 -- 1,188 -- -- 5,604
-- -- -- -- -- 9,282
-- -- -- -- -- 2,763

-- -- -- 259,410 334 2,888
-- -- 2,529 -- -- 2,529

398 -- 398 -- -- -- 398
47,155 47,155 -- -- -- -- 47,155
-------- -------- ------ ------- ---------- ------- --------
$ 47,553
========
182,155 676 (2,055) (836,920) (2,181) 308,225
-- -- -- -- -- 12,250
-- -- -- -- -- 36,393
-- -- -- -- -- 2,676

-- -- -- 104,649 (852) 12,316
-- -- 2,055 -- -- 2,055

(1,000) -- (1,000) -- -- -- (1,000)
(15,142) (15,142) -- -- -- -- (15,142)
-------- -------- ------ ------- ---------- ------- --------
$(16,142)
========
$167,013 $ (324) -- (732,271) $(3,033) $357,773
======== ====== ======= ========== ======= ========
</TABLE>

F-7
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended March 31, 1999, 1998 and 1997
(Dollars in thousands)

<TABLE>
<CAPTION>
1999 1998 1997
--------- -------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss)........................... $ (15,142) $ 47,155 $ 38,944
Adjustments to reconcile net earnings (loss)
to net cash provided by operating activities:
Depreciation and amortization................. 64,097 49,808 35,640
Loss (gain) on disposal or impairment of
assets....................................... 26 (960) 2,412
Provision for returns and doubtful accounts... 2,223 3,094 4,462
Deferred income taxes......................... (23,854) 12,143 8,163
Tax benefit of stock options and warrants
exercised.................................... 36,393 2,763 2,232
ESOP compensation............................. 2,055 2,529 3,134
Special charges............................... 118,747 4,700 --
Changes in operating assets and liabilities:
Accounts receivable.......................... (61,286) (29,670) (24,683)
Other assets................................. (62,446) (41,998) (16,930)
Accounts payable and other liabilities....... 27,983 20,624 (9,218)
Merger and integration costs................. (28,385) (4,700) --
--------- -------- ---------
Net cash provided by operating activities... 60,411 65,488 44,156
--------- -------- ---------
Cash flows from investing activities:
Proceeds from the disposition of assets....... 733 15,340 2,385
Proceeds from sale of marketable securities... 11,794 19,021 12,919
Purchases of marketable securities............ -- (5,778) (31,366)
Cash received in merger....................... -- -- 21
Development of software....................... (18,544) (21,411) (10,715)
Capital expenditures.......................... (127,880) (68,093) (65,286)
Investments in joint ventures................. (10,400) (6,072) --
Net cash paid in acquisitions (note 2)........ (45,983) (19,841) (16,223)
--------- -------- ---------
Net cash used in investing activities....... (190,280) (86,834) (108,265)
--------- -------- ---------
Cash flows from financing activities:
Proceeds from debt............................ 18,939 125,820 39,509
Payments of debt.............................. (18,607) (10,542) (20,994)
Sale of common stock.......................... 24,566 12,171 48,433
--------- -------- ---------
Net cash provided by financing activities... 24,898 127,449 66,948
--------- -------- ---------
Effect of exchange rate changes on cash........ (77) 2 --
--------- -------- ---------
Net increase (decrease) in cash and cash
equivalents................................... (105,048) 106,105 2,839
Cash and cash equivalents at beginning of year. 117,652 11,547 12,132
--------- -------- ---------
Cash and cash equivalents at end of year....... $ 12,604 $117,652 $ 14,971
========= ======== =========
Supplemental cash flow information:
Cash paid (received) during the year for:
Interest...................................... $ 15,608 $ 9,350 $ 5,147
Income taxes.................................. (4,715) 13,360 15,936
Noncash financing and investing activities:
Issuance of warrants.......................... 2,676 -- 1,300
Enterprise software licenses acquired under
software obligation.......................... 74,638 10,949 --
Acquisition of property and equipment under
capital lease................................ -- 14,939 11,373
Convertible debt issued in acquisition (note
2)........................................... -- -- 25,000
========= ======== =========
</TABLE>

See accompanying notes to supplemental consolidated financial statements.

F-8
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS

March 31, 1999, 1998 and 1997

(1) Summary of Significant Accounting Policies

(a) Description of Business

Acxiom Corporation ("Acxiom" or the "Company") provides information
management solutions using customer, consumer and business data, primarily for
marketing applications. Business segments of the Company provide list services,
data warehousing, consulting, data content, fulfillment services, and
outsourcing and facilities management services primarily in the United States
(U.S.) and United Kingdom (U.K.).

(b) Basis of Presentation and Principles of Consolidation

The supplemental consolidated financial statements include the accounts of
the Company and its subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation. Investments in 20% to 50%
owned entities are accounted for using the equity method and investments in
less than 20% owned entities are accounted for at cost.

Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these supplemental consolidated
financial statements in conformity with generally accepted accounting
principles. Actual results could differ from those estimates.

(d) Marketable Securities

Marketable securities are stated at cost which approximates fair market
value; gains and losses are recognized in the period realized. The Company has
classified its securities as available for sale.

(e) Accounts Receivable

Financial instruments which potentially subject the Company to
concentrations of credit risk consist primarily of trade accounts receivable.
The Company's receivables are from a large number of customers. Accordingly,
the Company's credit risk is affected by general economic conditions. Although
the Company has several large individual customers, concentrations of credit
risk are limited because of the diversity of the Company's customers.

Trade accounts receivable are presented net of allowances for doubtful
accounts and credits of $5.6 million and $3.8 million in 1999 and 1998,
respectively.

(f) Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization are
calculated on the straight-line method over the estimated useful lives of the
assets as follows: buildings and improvements, 5-31.5 years; office furniture
and equipment, 3-12 years; and data processing equipment, 2-10 years.

Property held under capitalized lease arrangements is included in property
and equipment, and the associated liabilities are included with long-term debt.
Property and equipment taken out of service and held for sale is recorded at
net realizable value and depreciation is ceased.

F-9
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(g) Software and Research and Development Costs

Capitalized and purchased software costs are amortized on a straight-line
basis over the remaining estimated economic life of the product, or the
amortization that would be recorded by using the ratio of gross revenues for a
product to total current and anticipated future gross revenues for that
product, whichever is greater. Research and development costs incurred prior to
establishing technological feasibility of software products are charged to
operations as incurred.

(h) Excess of Cost Over Fair Value of Net Assets Acquired

The excess of acquisition costs over the fair values of net assets acquired
in business combinations treated as purchase transactions ("goodwill") is being
amortized on a straight-line basis over 15 to 40 years from acquisition dates.
The Company periodically evaluates the existence of goodwill impairment on the
basis of whether the goodwill is fully recoverable from the projected,
undiscounted net cash flows of the related business unit. The amount of
goodwill impairment, if any, is measured based on projected discounted future
operating cash flows using a discount rate reflecting the Company's average
cost of funds. The assessment of the recoverability of goodwill will be
impacted if estimated future operating cash flows are not achieved.

(i) Revenue Recognition

Revenue from services, including consulting, list processing and data
warehousing, and from information technology outsourcing services, including
facilities management contracts, are recognized as services are performed. In
the case of long-term outsourcing contracts, capital expenditures incurred in
connection with the contract are capitalized and amortized over the term of the
contract whereby profit is recognized under the contracts at a consistent rate
of margin as services are performed under the contract. In certain outsourcing
contracts, additional revenue is recognized based upon attaining certain annual
margin improvements or cost savings over performance benchmarks as specified in
the contracts. Such additional revenue is recognized when it is determinable
that such benchmarks have been met.

Revenue from sales and licensing of software and data are recognized when
the software and data are delivered, the fee for such data is fixed or
determinable, and collectibility of such fee is probable. Software and data
file maintenance is recognized over the term of the agreements. In the case of
multiple-element software and data arrangements, revenue is allocated to the
respective elements based upon their relative fair values. Billed but unearned
portions of revenue are deferred.

(j) Income Taxes

The Company and its domestic subsidiaries file a consolidated Federal income
tax return. The Company's foreign subsidiaries file separate income tax returns
in the countries in which their operations are based.

Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

(k) Foreign Currency Translation

The balance sheets of the Company's foreign subsidiaries are translated at
year-end rates of exchange, and the statements of earnings are translated at
the weighted average exchange rate for the period. Gains or losses

F-10
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

resulting from translating foreign currency financial statements are included
in accumulated other comprehensive income (loss) in the statement of
stockholders' equity.

(l) Earnings Per Share

A reconciliation of the numerator and denominator of basic and diluted
earnings (loss) per share is shown below (in thousands, except per share
amounts):

<TABLE>
<CAPTION>
1999 1998 1997
-------- ------- -------
<S> <C> <C> <C>
Basic earnings per share:
Numerator-net earnings (loss)................ $(15,142) $47,155 $38,944
======== ======= =======
Denominator-weighted average shares
outstanding................................. 77,840 74,070 71,150
======== ======= =======
Earnings (loss) per share.................... $ (.19) $ .64 $ .55
======== ======= =======
Diluted earnings per share:
Numerator:
Net earnings (loss)........................ $(15,142) $47,155 $38,944
Interest expense on convertible debt (net
of tax effect)............................ -- 465 445
-------- ------- -------
$(15,142) $47,620 $39,389
======== ======= =======
Denominator:
Weighted average shares outstanding.......... 77,840 74,070 71,150
Effect of common stock options............... -- 3,593 3,782
Effect of common stock warrant............... -- 3,015 3,004
Convertible debt............................. -- 2,102 2,000
-------- ------- -------
77,840 82,780 79,936
======== ======= =======
Earnings (loss) per share...................... $ (.19) $ .58 $ .49
======== ======= =======
</TABLE>

All potentially dilutive securities were excluded from the above
calculations for the year ended March 31, 1999 because they were antidilutive.
The equivalent share effects of common stock options and warrants which were
excluded were 5,632. Potentially dilutive shares related to the convertible
debt which were excluded were 7,783. Also, interest expense on the convertible
debt (net of income tax effect) excluded in computing diluted loss per share
was $4,257.

Options to purchase shares of common stock that were outstanding during
1999, 1998 and 1997 but were not included in the computation of diluted
earnings (loss) per share because the option exercise price was greater than
the average market price of the common shares are shown below (in thousands,
except per share amounts):

<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------- -------------
<S> <C> <C> <C>
Number of shares under option. 1,491 2,176 1,432
Range of exercise prices...... $24.24-$54.00 $15.94-$35.92 $18.61-$35.00
</TABLE>

(m) Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of

Long-lived assets and certain identifiable intangibles are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to future net cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amount of the assets exceeds the fair value of
the assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell.

F-11
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(n)Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with original
maturities of three months or less to be cash equivalents.

(o)Reclassifications

To conform to the 1999 presentation, certain accounts for 1998 and 1997 have
been reclassified. The reclassifications had no effect on net earnings for 1998
and 1997.

(2) Acquisitions

On May 28, 1999, the Company completed the acquisition of Computer Graphics
of Arizona, Inc. ("Computer Graphics") and all of its affiliated companies in a
stock-for-stock merger. The Company issued 1,871,343 shares of its common stock
in exchange for all outstanding common stock of Computer Graphics. Computer
Graphics, a privately held enterprise headquartered in Phoenix, Arizona, is a
computer service business principally serving financial services direct
marketers. The acquisition was accounted for as a pooling of interests, and,
accordingly, the consolidated financial statements for periods prior to the
combination have been restated to include the accounts and results of
operations of Computer Graphics.

Effective January 1, 1999, the Company acquired three database marketing
units from Deluxe Corporation ("Deluxe"). The purchase price was $23.6 million,
of which $18.0 million was paid in cash at closing and the remainder was paid
in April 1999. Deluxe's results of operations are included in the Company's
consolidated results of operations beginning January 1, 1999. This acquisition
was accounted for as a purchase. The excess of cost over net assets acquired of
$21.9 million is being amortized using the straight-line method over 15 years.
The pro forma effect of the acquisition is not material to the Company's
consolidated results of operations for the periods reported.

On September 17, 1998, the Company issued 20,858,923 shares of its common
stock in exchange for all outstanding capital stock of May & Speh, Inc. ("May &
Speh"). Additionally, the Company assumed all of the outstanding options
granted under May & Speh's stock option plans with the result that 4,289,202
shares of the Company's common stock became subject to issuance upon exercise
of such options. This business combination has been accounted for as a pooling
of interests and, accordingly, the consolidated financial statements for
periods prior to the combination have been restated to include the accounts and
results of operations of May & Speh.

The results of operations previously reported by Acxiom, May & Speh and
Computer Graphics and the combined amounts presented in the accompanying
supplemental consolidated financial statements are summarized below.

<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Revenue:
Acxiom...................................... $729,984 $465,065 $402,016
May & Speh.................................. -- 103,955 77,223
Computer Graphics........................... 24,073 23,309 19,993
-------- -------- --------
Combined.................................... $754,057 $592,329 $499,232
======== ======== ========
Net earnings (loss):
Acxiom...................................... $(16,430) $ 35,597 $ 27,512
May & Speh.................................. -- 10,458 10,223
Computer Graphics........................... 1,288 1,100 1,209
-------- -------- --------
Combined.................................... $(15,142) $ 47,155 $ 38,944
======== ======== ========
</TABLE>

F-12
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Included in the statement of operations for the year ended March 31, 1999
are revenue of $66.6 million and net earnings of $9.3 million for May & Speh
for the period from April 1, 1998 to September 17, 1998.

Prior to the combination, May & Speh's fiscal year ended September 30. In
recording the pooling-of-interests combination, May & Speh's consolidated
financial statements as of and for the year ended March 31, 1998 were combined
with Acxiom's consolidated financial statements for the same period and May &
Speh's consolidated financial statements as of and for the year ended September
30, 1996 were combined with Acxiom's consolidated financial statements as of
and for the year ended March 31, 1997. May & Speh's unaudited consolidated
results of operations for the six months ended March 31, 1997 included revenue
of $42.9 million and net earnings of $4.3 million. An adjustment has been made
to retained earnings as of March 31, 1997 to record the net earnings of May &
Speh for the six months ended March 31, 1997.

During the year ended March 31, 1999, the Company recorded special charges
totaling $118.7 million related to merger and integration charges associated
with the May & Speh merger and the write down of other impaired assets. The
charges consisted of approximately $10.7 million of transaction costs to be
paid to investment bankers, accountants, and attorneys; $8.1 million in
associate-related reserves, principally employment contract termination costs
and severance costs; $48.5 million in contract termination costs; $11.5 million
for the write down of software; $29.3 million for the write down of property
and equipment; $7.8 million for the write down of goodwill and other assets;
and $2.8 million in other write downs and accruals.

The transaction costs are fees which were incurred as a direct result of the
merger transaction. The associate-related reserves include 1) payments to be
made under a previously existing employment agreement with one terminated May &
Speh executive in the amount of $3.5 million, 2) payments to be made under
previously existing employment agreements with seven May & Speh executives who
are remaining with Acxiom, but are entitled to payments totaling $3.6 million
due to the termination of their employment agreements, and 3) involuntary
termination benefits aggregating $1.0 million to seven May & Speh and Company
employees whose positions have been or will be eliminated. One of the seven
positions, for which $0.7 million was accrued, was not related to the May &
Speh merger, but related to a Company associate whose position was eliminated
as a result of the closure of the Company's New Jersey business location. As of
March 31, 1999, one of the seven associates has been terminated.

The contract termination costs are costs which have been incurred to
terminate duplicative software contracts. The amounts recorded represent cash
payments which the Company has made or will make to the software vendors to
terminate existing May & Speh agreements.

For all other write downs and costs, the Company performed an analysis as
required under Statement of Financial Accounting Standards ("SFAS") No. 121 to
determine whether and to what extent any assets were impaired as a result of
the merger. The analysis included estimating expected future cash flows from
each of the assets which were expected to be held and used by the Company.
These expected cash flows were compared to the carrying amount of each asset to
determine whether an impairment existed. If an impairment was indicated, the
asset was written down to its fair value. Quoted market prices were used to
estimate fair value when market prices were available. In cases where quoted
prices were not available, the Company estimated fair value using internal
valuation sources. In the case of assets to be disposed of, the Company
compared the carrying value of the asset to its estimated fair value, and if an
impairment was indicated, wrote the asset down to its estimated fair value.

Approximately $110.1 million of the charge was for duplicative assets or
costs directly attributable to the May & Speh merger. The remaining $8.6
million related to other impaired assets which were impaired during

F-13
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

the year, primarily $5.7 million related to goodwill and shut-down costs
associated with the closing of certain business locations in New Jersey,
Malaysia, and the Netherlands. Special charges in 1998 relate to employee
severance payments made to former May & Speh executives.

The following table shows the balances which were initially accrued as of
September 30, 1998, and the changes in those balances during the remainder of
the year ended March 31, 1999 (dollars in thousands):

<TABLE>
<CAPTION>
September 30, March 31,
1998 Additions Payments 1999
------------- --------- -------- ---------
<S> <C> <C> <C> <C>
Transaction costs.............. $ 9,163 -- $ 9,163 --
Associate-related reserves..... 6,783 $1,375 3,804 $ 4,354
Contract termination costs..... 40,500 -- 13,500 27,000
Other accruals................. 3,745 -- 1,918 1,827
------- ------ ------- -------
$60,191 $1,375 $28,385 $33,181
======= ====== ======= =======
</TABLE>

The associate-related reserves and contract termination costs will be
substantially paid out during fiscal 2000. The other accruals will be paid out
over periods ranging up to five years.

Effective May 1, 1998, May & Speh acquired substantially all of the assets
of SIGMA Marketing Group, Inc. ("Sigma"), a full-service database marketing
company headquartered in Rochester, New York. Under the terms of the agreement,
May & Speh paid $15 million at closing for substantially all of Sigma's assets,
and will pay the former owners up to an additional $6 million, the substantial
portion of which is contingent on certain operating objectives being met.
Sigma's former owners were also issued warrants to acquire 276,800 shares of
the Company's common stock at a price of $17.50 per share in connection with
the transaction. Sigma's results of operations are included in the Company's
consolidated results of operations beginning May 1, 1998. This acquisition was
accounted for as a purchase. The excess of cost over net assets acquired of
$23.2 million is being amortized using the straight-line method over 20 years.
The pro forma effect of the acquisition is not material to the Company's
consolidated results of operations for the periods reported.

Effective April 1, 1998, the Company purchased the outstanding stock of
Normadress, a French company located in Paris. Normadress provides database and
direct marketing services to its customers. The purchase price was 20 million
French Francs (approximately $3.4 million) in cash and other additional cash
consideration of which approximately $900,000 is guaranteed and the remainder
is based on the future performance of Normadress. Normadress' results of
operations are included in the Company's consolidated results of operations
beginning April 1, 1998. This acquisition was accounted for as a purchase. The
excess of cost over net assets acquired of $5.7 million is being amortized
using the straight-line method over 20 years. The pro forma effect of the
acquisition is not material to the Company's consolidated results of operations
for the periods reported.

Effective October 1, 1997, the Company acquired 100% ownership of
MultiNational Concepts, Ltd. ("MultiNational") and Catalog Marketing Services,
Inc. (d/b/a Shop the World by Mail), entities under common control
(collectively "STW"). Total consideration was $4.6 million (net of cash
acquired) and other cash consideration based on the future performance of STW.
MultiNational, headquartered in Hoboken, New Jersey, is an international
mailing list and database maintenance provider for consumer catalogers
interested in developing foreign markets. Shop the World by Mail, headquartered
in Sarasota, Florida, provides cooperative customer acquisition programs, and
also produces an international catalog of catalogs whereby end-customers in
over 60 countries can order catalogs from around the world.

Also effective October 1, 1997, the Company acquired Buckley Dement, L.P.
and its affiliated company, KM Lists, Incorporated (collectively "Buckley
Dement"). Buckley Dement, headquartered in Skokie, Illinois,

F-14
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

provides list brokerage, list management, promotional mailing and fulfillment,
and merchandise order processing to pharmaceutical, health care, and other
commercial customers. Total consideration was $14.2 million (net of cash
acquired) and other cash consideration based on the future performance of
Buckley Dement.

Both the Buckley Dement and STW acquisitions are accounted for as purchases
and their operating results are included with the Company's results beginning
October 1, 1997. The purchase price for the two acquisitions exceeded the fair
value of net assets acquired by $12.6 million and $5.2 million for Buckley
Dement and STW, respectively. The resulting excess of cost over net assets
acquired is being amortized over 20 years. The pro forma effect of the
acquisitions are not material to the Company's consolidated results of
operations for the periods reported.

On April 9, 1996, the Company issued 3,313,324 shares of its common stock
for all of the outstanding common stock and common stock options of Pro CD,
Inc., ("Pro CD"). Headquartered in Danvers, Massachusetts, Pro CD is a
publisher of reference software on CD-ROM. The business combination was
accounted for as a pooling-of-interests. The stockholders' equity and
operations of Pro CD were not material in relation to those of the Company. As
such, the Company recorded the combination by restating stockholders' equity as
of April 1, 1996, without restating prior years' financial statements to
reflect the pooling-of-interests. At April 1, 1996 Pro CD's liabilities
exceeded its assets by $1.8 million.

Also in April, 1996, the Company acquired the assets of Direct Media/DMI,
Inc. ("DMI") for $25 million and the assumption of certain liabilities of DMI.
The $25 million purchase price was payable in three years, and could, at DMI's
option, be paid in two million shares of Acxiom common stock in lieu of cash
plus accrued interest. Subsequent to March 31, 1999, the holder of the
convertible note elected to receive the two million shares of the Company's
common stock in lieu of cash. Headquartered in Greenwich, Connecticut, DMI
provides list brokerage, management and consulting services to business-to-
business and consumer list owners and mailers. At April 1, 1996 the liabilities
assumed by the Company exceeded the fair value of the net assets acquired from
DMI by approximately $1.0 million. The resulting excess of purchase price over
fair value of net assets acquired of $26.0 million is being amortized over 20
years. The acquisition has been accounted for as a purchase, and accordingly,
the results of operations of DMI are included in the consolidated results of
operations from the date of its acquisition.

Also subsequent to March 31, 1999, the Company acquired the assets of
Horizon Systems, Inc. ("Horizon") for $16.0 million in cash and common stock of
the Company and the assumption of certain liabilities of Horizon, and other
cash and stock considerations based on the future performance of Horizon.

(3) Software and Research and Development Costs

The Company recorded amortization expense related to internally developed
computer software of $8.3 million, $5.9 million and $5.4 million in 1999, 1998
and 1997, respectively. Additionally, research and development costs of $17.8
million, $13.7 million and $13.0 million were charged to operations during
1999, 1998 and 1997, respectively.

F-15
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(4) Property and Equipment

Property and equipment is summarized as follows (dollars in thousands):

<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Land................................................... $ 8,224 $ 8,427
Buildings and improvements............................. 92,417 75,969
Office furniture and equipment......................... 36,765 24,777
Data processing equipment.............................. 204,435 194,392
-------- --------
341,841 303,565
Less accumulated depreciation and amortization......... 115,460 116,307
-------- --------
$226,381 $187,258
======== ========
</TABLE>

(5) Other Assets

Included in other assets are unamortized outsourcing capital expenditure
costs in the amount of $28.4 million and $25.0 million as of March 31, 1999 and
1998, respectively. Noncurrent receivables from software license, data, and
equipment sales are also included in other assets in the amount of $24.9
million and $20.3 million as of March 31, 1999 and 1998, respectively. The
current portion of such receivables is included in other current assets in the
amount of $24.6 million and $9.5 million as of March 31, 1999 and 1998,
respectively. Certain of the noncurrent receivables have no stated interest
rate. In such cases, such receivables have been discounted using an appropriate
imputed interest rate based upon the customer, type of agreement, collateral
and payment terms. This discount is being recognized into income using the
interest method. Also included in other assets are capitalized software license
agreements of $103.5 million and $19.8 million as of March 31, 1999 and 1998,
respectively.

F-16
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(6) Long-Term Debt

Long-term debt consists of the following (dollars in thousands):

<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
5.25% Convertible subordinated notes due 2003......... $115,000 $115,000
Unsecured revolving credit agreement.................. 55,384 36,445
6.92% Senior notes due March 30, 2007, payable in
annual installments of $4,286 commencing March 30,
2001; interest is payable semi-annually.............. 30,000 30,000
3.12% Convertible note, interest and principal due
April 30, 1999; convertible at maturity into two
million shares of common stock (note 2).............. 25,000 25,000
Capital leases on land, buildings and equipment
payable in monthly payments of $357 of principal and
interest; remaining terms of from five to twenty
years; interest rates at approximately 8%............ 20,587 22,818
Software license liabilities payable over terms of
from five to seven years; effective interest rates at
approximately 6%..................................... 76,748 10,949
8.5% unsecured term loan; quarterly principal payments
of $200 plus interest with the balance due in 2003... 9,000 9,800
9.75% Senior notes, due May 1, 2000, payable in annual
installments of $2,143 each May 1; interest is
payable semi-annually................................ 4,286 6,429
ESOP loan (note 11)................................... -- 1,782
Other capital leases, debt and long-term liabilities.. 12,573 6,483
-------- --------
Total long-term debt................................ 348,578 264,706
Less current installments............................. 23,355 10,466
-------- --------
Long-term debt, excluding current installments...... $325,223 $254,240
======== ========
</TABLE>

In March 1998, May & Speh completed an offering of $115 million 5.25%
convertible subordinated notes due 2003. The notes are convertible at the
option of the holder into shares of the Company's common stock at a conversion
price of $19.89 per share. The notes also are redeemable, in whole or in part,
at the option of the Company at any time on or after April 3, 2001. The total
net proceeds to the Company were approximately $110.8 million after deducting
underwriting discounts and commissions and estimated offering expenses.

The unsecured revolving credit agreement, which expires January 31, 2003
provides for revolving loans and letters of credit in amounts of up to $125
million. The terms of the credit agreement provide for interest at the prime
rate (or, at other alternative market rates at the Company's option). At March
31, 1999, the effective rate was 6.275%. The agreement requires a commitment
fee equal to 3/16 of 1% on the average unused portion of the loan. The Company
also has another unsecured line of credit amounting to $1.5 million of which
none was outstanding at March 31, 1999 or 1998. The other unsecured line
expires August 31, 1999 and bears interest at approximately the same rate as
the revolving credit agreement.

In connection with the construction of the Company's new headquarters
building and a new customer service facility in Little Rock, Arkansas, the
Company has entered into 50/50 joint ventures with local real estate
developers. In each case, the Company is guaranteeing portions of the
construction loans for the buildings. The aggregate amount of the guarantees at
March 31, 1999 was $8.2 million. The total cost of the two building projects is
expected to be approximately $19.5 million.

F-17
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Under the terms of certain of the above borrowings, the Company is required
to maintain certain tangible net worth levels and working capital, debt-to-
equity and debt service coverage ratios. At March 31, 1999, due to the merger
with May & Speh and the special charges booked during the year, the Company was
in violation of certain restrictive covenants under the unsecured revolving
credit agreement and the 9.75% senior notes. The violations of each of these
agreements has been waived by the respective lenders. The violations occurred
as a result of the net loss reported by the Company for the quarter ended
September 30, 1998. Since these calculations are performed using the latest
four quarters' income statements and cash flows, the violation has been waived
through the June 30, 1999 quarter. After this date the violations will have
been cured since the bulk of the special charges will no longer be included in
the 12-month period of the applicable calculations. The aggregate maturities of
long-term debt for the five years ending March 31, 2004 are as follows: 2000,
$23.4 million; 2001, $27.8 million; 2002, $23.6 million; 2003, $112.2 million;
and 2004, $132.3 million.

(7) Leases

The Company leases data processing equipment, office furniture and
equipment, land and office space under noncancellable operating leases. Future
minimum lease payments under noncancellable operating leases for the five years
ending March 31, 2004 are as follows: 2000, $22.9 million; 2001, $18.0 million;
2002, $12.0 million; 2003, $8.9 million; and 2004, $7.2 million.

Total rental expense on operating leases was $24.7 million, $15.2 million
and $18.4 million for the years ended March 31, 1999, 1998 and 1997,
respectively.

(8) Stockholders' Equity

The Company has authorized 200 million shares of $.10 par value common stock
and 1 million shares of $1.00 par value preferred stock. The Board of Directors
of the Company may designate the relative rights and preferences of the
preferred stock when and if issued. Such rights and preferences could include
liquidation preferences, redemption rights, voting rights and dividends and the
shares could be issued in multiple series with different rights and
preferences. The Company currently has no plans for the issuance of any shares
of preferred stock.

On March 29, 1996, May & Speh completed an initial public offering of
3,350,000 shares of its common stock (2,680,000 shares as adjusted for merger
with Acxiom) and on April 24, 1996 completed the offering of an additional
1,005,000 shares of common stock (804,000 shares as adjusted) that were subject
to an over-allotment granted to the underwriters of the offering. Total net
proceeds from the offering were approximately $43.5 million.

On March 30, 1998, May & Speh also completed an offering of 325,000 shares
of its common stock (260,000 shares as adjusted). Total net proceeds were
approximately $3.5 million.

In connection with its data center management agreement entered into in
August, 1992 with Trans Union LLC, the Company issued a warrant, which expired
on August 31, 2000 and entitled Trans Union to acquire up to 4 million
additional shares of newly-issued common stock. The exercise price for the
warrant stock was $3.06 per share through August 31, 1998 and increased $.25
per share in each of the two years subsequent to August 31, 1998. The warrant
was exercised for 4 million shares on August 31, 1998. The Company intends to
record $68.0 million as additional sales discounts on its tax return for the
difference in the fair value of the stock on the date the warrant was exercised
and the fair value of the warrant on the date the warrant was issued (note 9).

F-18
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The Company has for its U.S. employees a Key Employee Stock Option Plan
("Plan") for which 15.2 million shares of the Company's common stock have been
reserved. The Company has for its U.K. employees a U.K. Share Option Scheme
("Scheme") for which 1.6 million shares of the Company's common stock have been
reserved. These plans provide that the option price, as determined by the Board
of Directors, will be at least the fair market value at the time of the grant.
The term of nonqualified options is also determined by the Board of Directors.
Incentive options granted under the plans must be exercised within 10 years
after the date of the option. At March 31, 1999, 3,427,678 shares and 822,763
shares are available for future grants under the Plan and the Scheme,
respectively.

May & Speh had options outstanding under two separate plans at March 31,
1998. Generally, such options vest and become exercisable in five equal annual
increments beginning one year after the issue date and expire 10 years after
the issue date except in the event of change in control of May & Speh all
options become fully vested and exercisable. Pursuant to the merger, the
Company assumed all of the currently outstanding options granted under the May
& Speh plans with the result that shares of the Company's common stock become
subject to issuance upon exercise of such options.

Activity in stock options was as follows:

<TABLE>
<CAPTION>
Weighted
average Number of
Number of price shares
shares per share exercisable
---------- --------- -----------
<S> <C> <C> <C>
Outstanding at March 31, 1996........... 9,509,746 $ 7.18 3,467,728
Granted............................... 1,300,811 17.29
Pro CD acquisition (note 2)........... 294,132 1.76
Exercised............................. (835,369) 2.41
Terminated............................ (93,255) 7.29
----------
Outstanding at March 31, 1997........... 10,176,065 8.31 3,974,265
May & Speh acquisition (note 2)....... 217,440 16.89
Granted............................... 2,143,176 14.88
Exercised............................. (977,511) 3.86
Terminated............................ (157,190) 11.89
----------
Outstanding at March 31, 1998 11,401,980 9.63 5,316,861
Granted............................... 1,066,891 27.82
Exercised............................. (937,411) 6.95
Terminated............................ (115,462) 12.96
----------
Outstanding at March 31, 1999........... 11,415,998 12.19 7,913,294
==========
</TABLE>

F-19
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The per share weighted-average fair value of stock options granted during
fiscal 1999, 1998 and 1997 was $13.43, $9.91 and $8.61, respectively, on the
date of grant using the Black-Scholes option pricing model with the following
weighted-average assumptions: Dividend yield of 0% for 1999, 1998 and 1997;
risk-free interest rate of 5.44% in 1999, 6.79% in 1998, 6.71% in 1997;
expected option life of 10 years for 1999, 1998 and 1997; and expected
volatility of 40.48% in 1999, 38.69% in 1998 and 34.85% in 1997.

Following is a summary of stock options outstanding as of March 31, 1999:

<TABLE>
<CAPTION>
Options outstanding Options exercisable
------------------------------------- -----------------------
Weighted Weighted Weighted
average average average
Range of remaining exercise exercise
exercise Options contractual per Options per
prices outstanding life share exercisable share
-------------- ----------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
$ 1.38 - 2.54 1,239,220 6.33 years $ 2.19 1,148,996 $ 2.23
2.56 - 3.13 1,367,719 4.81 years 2.83 1,190,833 2.79
3.37 - 6.25 2,261,009 5.06 years 5.42 1,616,736 5.29
7.43 - 11.75 1,372,414 6.76 years 10.37 1,146,462 10.44
11.82 - 15.63 1,265,951 7.32 years 13.88 949,646 13.98
15.69 - 18.13 1,350,611 10.67 years 16.55 1,168,925 16.47
18.38 - 24.81 1,849,793 8.21 years 22.54 550,589 22.33
24.84 - 51.97 677,947 13.11 years 33.61 141,107 27.64
52.05 - 54.00 31,334 14.61 years 52.08 -- --
---------- ----------- ------ --------- ------
11,415,998 7.30 years $12.19 7,913,294 $ 9.49
========== =========== ====== ========= ======
</TABLE>

The Company applies the provisions of Accounting Principles Board Opinion
No. 25 and related interpretations in accounting for the stock based
compensation plans. Accordingly, no compensation cost has been recognized by
the Company in the accompanying consolidated statements of operations for any
of the fixed stock options granted. Had compensation cost for options granted
been determined on the basis of the fair value of the awards at the date of
grant, consistent with the methodology prescribed by SFAS No. 123, the
Company's net earnings (loss) would have been reduced/increased to the
following pro forma amounts for the years ended March 31 (dollars in thousands,
except per share amounts):

<TABLE>
<CAPTION>
1999 1998 1997
-------- ------- -------
<S> <C> <C> <C> <C>
Net earnings (loss)....................... As reported $(15,142) $47,155 $38,944
Pro forma (32,302) 40,725 37,881
Basic earnings (loss) per share........... As reported (.19) .64 .55
Pro forma (.41) .55 .53
Diluted earnings (loss) per share......... As reported (.19) .58 .49
Pro forma (.41) .50 .48
</TABLE>

Pro forma net earnings (loss) reflect only options granted after fiscal
1995. Therefore, the full impact of calculating compensation cost for stock
options under SFAS No. 123 is not reflected in the pro forma net earnings
amounts presented above because compensation cost is reflected over the
options' vesting period of 8-9 years and compensation cost for options granted
prior to April 1, 1995 is not considered.

The Company maintains an employee stock purchase plan which provides for the
purchase of shares of common stock at 85% of the market price. There were
129,741, 125,151 and 110,332 shares purchased under the plan during the years
ended March 31, 1999, 1998 and 1997, respectively.

F-20
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(9) Income Taxes

Total income tax expense (benefit) was allocated as follows (dollars in
thousands):

<TABLE>
<CAPTION>
1999 1998 1997
-------- ------- -------
<S> <C> <C> <C>
Income from operations...................... $ 2,843 $28,065 $23,605
Stockholders' equity, for expenses for tax
purposes in excess of amounts recognized
for financial reporting purposes:
Compensation.............................. (9,178) (2,763) (2,232)
Sale discounts (note 8)................... (27,215) -- --
-------- ------- -------
$(33,550) $25,302 $21,373
======== ======= =======
</TABLE>

Income tax expense (benefit) attributable to earnings (loss) from operations
consists of (dollars in thousands):

<TABLE>
<CAPTION>
1999 1998 1997
-------- ------- -------
<S> <C> <C> <C>
Current expense:
Federal....................................... $ 18,285 $12,889 $13,714
Foreign....................................... 1,165 1,206 83
State......................................... 7,247 1,827 1,645
-------- ------- -------
26,697 15,922 15,442
-------- ------- -------
Deferred expense (benefit):
Federal....................................... (14,780) 9,792 5,979
Foreign....................................... (248) 23 687
State......................................... (8,826) 2,328 1,497
-------- ------- -------
(23,854) 12,143 8,163
-------- ------- -------
Total tax expense........................... $ 2,843 $28,065 $23,605
======== ======= =======
</TABLE>

The actual income tax expense (benefit) attributable to earnings (loss) from
operations differs from the expected tax expense (benefit) (computed by
applying the U.S. Federal corporate tax rate of 35% to earnings (loss) before
income taxes) as follows (dollars in thousands):

<TABLE>
<CAPTION>
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Computed expected tax expense (benefit)....... $(4,305) $26,327 $21,892
Increase (reduction) in income taxes resulting
from:
Nondeductible merger and integration
expenses................................... 7,836 -- --
State income taxes, net of Federal income
tax benefit................................ (1,026) 2,701 2,042
Research and experimentation credits........ (265) (715) (683)
Other....................................... 603 (248) 354
------- ------- -------
$ 2,843 $28,065 $23,605
======= ======= =======
</TABLE>

F-21
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and liabilities at March 31, 1999 and 1998
are presented below (dollars in thousands).

<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Deferred tax assets:
Accrued expenses not currently deductible for tax
purposes.......................................... $ 20,633 $ 2,150
Investments, principally due to differences in
basis for tax and financial reporting purposes.... 328 676
Net operating loss carryforwards................... 7,986 --
Other.............................................. 1,696 846
-------- --------
Total deferred tax assets........................ 30,643 3,672
-------- --------
Deferred tax liabilities:
Property and equipment, principally due to
differences in depreciation....................... (12,887) (11,099)
Intangible assets, principally due to differences
in amortization................................... (3,624) (2,212)
Capitalized software and other costs expensed as
incurred for tax purposes......................... (20,501) (20,618)
Installment sale gains for tax purposes............ (1,877) (1,843)
-------- --------
Total deferred tax liabilities................... (38,889) (35,772)
-------- --------
Net deferred tax liability....................... $ (8,246) $(32,100)
======== ========
</TABLE>

At March 31, 1999, the Company had available tax benefits associated with
state tax operating loss carryforwards of $45.7 million which expire annually
in varying amounts to 2014. The deferred tax effect of such carryforwards are
included above.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Based upon the Company's
history of substantial profitability and taxable income and its utilization of
tax planning strategies, management believes it is more likely than not that
the Company will realize the benefits of these deductible differences, net of
any valuation allowances.

(10) Related Party Transactions

The Company leases certain equipment from a business partially owned by an
officer. Rent expense under these leases was approximately $797,000 during the
years ended March 31, 1999, 1998 and 1997, respectively. Under the terms of the
lease in effect at March 31, 1999 the Company will make monthly lease payments
of $66,000 through December, 2001. The Company has agreed to pay the
difference, if any, between the sales price of the equipment and 70 percent of
the lessor's related loan balance (approximately $5.0 million at March 31,
1999) should the Company elect to exercise its early termination rights or not
extend the lease beyond its initial five year term and the lessor sells the
equipment as a result thereof.

(11) Retirement Plans

The Company has a retirement savings plan which covers substantially all
domestic employees. The Company also offers a supplemental non-qualified
deferred compensation plan for certain management

F-22
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

employees. The Company matches 50% of the employee's salary deferred
contributions under both plans up to 6% annually and may contribute additional
amounts to the plans from the Company's earnings at the discretion of the Board
of Directors.

Effective October 1, 1988, May & Speh established the May & Speh, Inc.
Employee Stock Ownership Plan ("ESOP") for the benefit of substantially all of
its employees. May & Speh borrowed $22,500,000 from a bank ("ESOP Loan") and
loaned the proceeds to the ESOP for the purpose of providing the ESOP
sufficient funds to purchase 9,887,340 shares of May & Speh's common stock at
$2.28 per share. The terms of the ESOP agreement required May & Speh to make
minimum contributions sufficient to meet the ESOP's debt service obligations.
During the year ended March 31, 1999, the ESOP loan was paid in full and the
ESOP was merged into the Company's retirement savings plan.

Company contributions for the above plans amounted to approximately $4.8
million, $4.3 million and $3.9 million in 1999, 1998 and 1997, respectively.

(12) Major Customers

In 1999 and 1998, the Company had one major customer who accounted for more
than 10% of revenue, and in 1997, the Company had two major customers who
accounted for more than 10% of revenue. Allstate Insurance Company ("Allstate")
accounted for revenue of $82.2 million (10.9%), $74.7 million (12.6%) and $67.7
million (13.6%) in 1999, 1998 and 1997, respectively, and Trans Union accounted
for revenue of $56.6 million (11.3%) in 1997. At March 31, 1999, accounts
receivable from Allstate was $12.0 million.

(13) Foreign Operations

Foreign operations are conducted primarily in the United Kingdom. The
following table shows financial information by geographic area for the years
1999, 1998 and 1997 (dollars in thousands).

<TABLE>
<CAPTION>
United
States Foreign Consolidated
-------- ------- ------------
<S> <C> <C> <C>
1999:
Revenue................................... $712,907 $41,150 $754,057
Long-lived assets......................... 454,631 10,687 465,318
======== ======= ========
1998:
Revenue................................... 557,683 34,646 592,329
Long-lived assets......................... 305,219 7,860 313,079
======== ======= ========
1997:
Revenue................................... 470,812 28,420 499,232
Long-lived assets......................... 207,717 6,106 213,823
======== ======= ========
</TABLE>

(14) Contingencies

The Company is involved in various claims and legal actions in the ordinary
course of business. In the opinion of management, the ultimate disposition of
these matters will not have a material adverse effect on the Company's
consolidated financial position or its expected future consolidated results of
operations.

(15) Dispositions

Effective August 22, 1997, the Company sold certain assets of its Pro CD
subsidiary to a wholly-owned subsidiary of American Business Information, Inc.
("ABI"). ABI is now known as infoUSA, Inc. ABI

F-23
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

acquired the retail and direct marketing operations of Pro CD, along with
compiled telephone book data for aggregate cash proceeds of $18.0 million,
which included consideration for a compiled telephone book data license. The
Company also entered into a data license agreement with ABI under which the
Company will pay ABI $8.0 million over a two-year period, and a technology and
data license agreement under which ABI will pay the Company $8.0 million over a
two-year period. In conjunction with the sale to ABI, the Company also recorded
certain valuation and contingency reserves. Included in other income for the
year ended March 31, 1998 is the gain on disposal related to this transaction
of $855,000.

(16) Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value.

Cash and cash equivalents, marketable securities, trade receivables,
short-term borrowings, and trade payables--The carrying amount approximates
fair value because of the short maturity of these instruments.

Long-term debt--The interest rate on the revolving credit agreement is
adjusted for changes in market rates and therefore the carrying value of
the credit agreement approximates fair value. The estimated fair value of
other long-term debt was determined based upon the present value of the
expected cash flows considering expected maturities and using interest
rates currently available to the Company for long-term borrowings with
similar terms. At March 31, 1999 the estimated fair value of long-term debt
approximates its carrying value.

(17) Segment Information

SFAS No. 131 "Disclosures about Segments of an Enterprise and Related
Information" ("SFAS 131") requires reporting segment information consistent
with the way management internally disaggregates an entity's operations to
assess performance and to allocate resources. As required, the Company adopted
the provisions of SFAS 131 in its fiscal 1999 consolidated financial statements
and has presented its prior-year segment information to conform to SFAS 131's
requirements.

The Company's business segments consist of Services, Data Products, and
Information Technology Management. The Services segment substantially consists
of consulting, database and data warehousing and list processing services. The
Data Products segment includes all of the Company's data content products.
Information Technology Management includes information technology outsourcing
and facilities management for data center management, network management,
client server management and other complementary information technology
services. The Company evaluates performance of the segments based on segment
operating income, which excludes special charges. The Company accounts for
sales of certain data products as revenue in both the Data Products segment and
revenue of the Services segment which billed the customer. The duplicate
revenues are eliminated in consolidation.

F-24
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS--(Concluded)

The following tables present information by business segment (dollars in
thousands):

<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Services.................................... $444,020 $331,713 $274,751
Data Products............................... 186,706 155,206 135,449
Information Technology Management........... 164,453 128,366 109,497
Intercompany eliminations................... (41,122) (22,956) (20,465)
-------- -------- --------
Total revenue............................. $754,057 $592,329 $499,232
======== ======== ========
Services.................................... $ 90,776 $ 55,302 $ 46,453
Data Products............................... 15,370 15,664 8,878
Information Technology Management........... 34,820 25,808 27,443
Intercompany eliminations................... (20,771) (11,942) (11,639)
Corporate and other......................... (121,579) (3,923) (2,929)
-------- -------- --------
Income (loss) from operations........... $ (1,384) $ 80,909 $ 68,206
======== ======== ========
Services.................................... $ 24,360 $ 17,901 $ 7,900
Data Products............................... 19,214 12,660 8,861
Information Technology Management........... 20,039 16,547 14,046
Corporate and other......................... 484 2,700 4,833
-------- -------- --------
Depreciation and amortization........... $ 64,097 $ 49,808 $ 35,640
======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
March 31,
-----------------
1999 1998
-------- --------
<S> <C> <C>
Services................................................ $427,210 $228,115
Data Products........................................... 167,111 130,704
Information Technology Management....................... 238,164 172,834
Corporate and other..................................... 57,315 149,981
-------- --------
Total assets........................................ $889,800 $681,634
======== ========
</TABLE>

(18) Selected Quarterly Financial Data (Unaudited)

The table below sets forth selected financial information for each quarter
of the last two years (dollars in thousands, except per share amounts):

<TABLE>
<CAPTION>
1st 2nd 3rd 4th
quarter quarter quarter quarter
-------- -------- -------- --------
<S> <C> <C> <C> <C>
1999:
Revenue.................................. $164,512 $180,030 $193,910 $215,605
Income (loss) from operations............ 20,321 (82,707) 25,958 35,044
Net earnings (loss)...................... 11,737 (60,548) 14,038 19,631
Basic earnings (loss) per share.......... .16 (.79) .18 .25
Diluted earnings (loss) per share........ .14 (.79) .16 .22
1998:
Revenue.................................. $129,390 $141,739 $152,892 $168,308
Income from operations................... 15,006 21,000 20,825 24,078
Net earnings............................. 8,265 12,575 12,074 14,241
Basic earnings per share................. .11 .17 .16 .19
Diluted earnings per share............... .10 .15 .15 .17
</TABLE>

F-25
<PAGE>

ACXIOM CORPORATION AND SUBSIDIARIES

SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS
Years ended March 31, 1999, 1998 and 1997
(In thousands)

<TABLE>
<CAPTION>
Additions Bad
Balance at charged to Other debts Balance
beginning costs and additions written Bad debts at end
of period expenses (note) off recovered of period
---------- ---------- --------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
1999:
Allowance for doubtful
accounts, returns and
credits.............. $3,847 2,373 710 2,026 715 $5,619
====== ===== ===== ===== === ======
1998:
Allowance for doubtful
accounts, returns and
credits.............. $4,898 3,105 224 4,777 397 $3,847
====== ===== ===== ===== === ======
1997:
Allowance for doubtful
accounts, returns and
credits.............. $2,402 4,496 4,800 7,044 238 $4,898
====== ===== ===== ===== === ======
</TABLE>

Note--Other additions represent the valuation accounts acquired in connection
with business combinations.

F-26
<PAGE>

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

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

PROSPECTUS

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

ABN AMRO Rothschild
a division of ABN AMRO Incorporated

Merrill Lynch & Co.

Salomon Smith Barney

William Blair & Company

PaineWebber Incorporated

Robert W. Baird & Co.
Incorporated

Stephens Inc.

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