Acxiom - Form 10-K

10-K 1 f10k.htm ACXIOM FY05 FORM 10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2005
OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number 0-13163

ACXIOM® CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE 71-0581897
(State or other jurisdiction of incorporation (I.R.S. Employer Identification No.)
or organization)

1INFORMATION WAY, P.O. BOX 8180, LITTLE ROCK, ARKANSAS 72203-8180
(Address of principal executiveoffices) (Zip Code)

(501) 342-1000
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 Par Value
(Title of Class)

Preferred Stock Purchase Rights
(Title of Class)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
Yes [ X ] No [ ]

The aggregate market value of the voting stock held by non-affiliates of the registrant, based upon the closing sale price of the
registrant's Common Stock, $.10 par value per share, as of September 30, 2004 as reported on the Nasdaq National Market, was
approximately $1,791,009,000. (For purposes of determination of the above stated amount only, all directors, executive officers and
10% or more shareholders of the registrant are presumed to be affiliates.)

The number of shares of Common Stock, $.10 par value per share, outstanding as of June 10, 2005, was 87,924,800.

[THIS SPACE LEFT BLANK INTENTIONALLY]
2

Table of Contents Page

Documents Incorporated by Reference ........................................................................... 4

Part I

Availability of SEC Filings and Corporate Governance Information .............................................. 4

Item 1. Business ............................................................................................. 4

Item 2. Properties ........................................................................................... 25

Item 3. Legal Proceedings .................................................................................... 27

Item 4. Submission of Matters to a Vote of Security Holders .................................................. 27

Part II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities .................................................................................... 32

Item 6. Selected Financial Data .............................................................................. 33

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations................. 33

Item 7A. Quantitative and Qualitative Disclosures About Market Risk ........................................... 33

Item 8. Financial Statements and Supplementary Data .......................................................... 33

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ................. 33

Item 9A. Controls and Procedures .............................................................................. 33

Item 9B. Other Information ................................................................................... 34

Part III

Item 10. Directors and Executive Officers of the Registrant ................................................... 34

Item 11. Executive Compensation ............................................................................... 34

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters............................................................................................... 34

Item 13. Certain Relationships and Related Transactions ....................................................... 34

Item 14. Principal Accountant Fees and Services ............................................................... 34

Part IV

Item 15. Exhibits and Financial Statement Schedules............................................................ 35

Signatures .................................................................................................... 38

Financial Supplement ..................................................................................... F-1 - F-68

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Acxiom's Proxy Statement for the 2005 Annual Meeting of Shareholders ("2005 Proxy Statement") are incorporated by
reference into Part III of this Form 10-K.

PART I

AVAILABILITY OF SEC FILINGS AND CORPORATE GOVERNANCE INFORMATION

Our website address is www.acxiom.com, where copies may be obtained, free of charge, of our annual report on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or
15(d) of the Exchange Act as soon as reasonably practicable after we electronically file these reports with, or furnish them to,
the SEC. Copies may also be obtained through the SEC's EDGAR site. Copies of these SEC filings were available on our website
during the past fiscal year covered by this Form 10-K. In addition, at the "Corporate Governance" section of our website, we have
posted copies
of our Corporate Governance Principles, the charters for the Audit, Compensation, Corporate Governance, and Nominating Committees
of the Board of Directors, and the codes of ethics applicable to directors, financial personnel and all employees.

Item 1. Business

SUMMARY

Acxiom Corporation (Nasdaq: ACXM) integrates data, services and technology to create and deliver customer and information management
solutions for many of the largest, most respected companies in the world. The core components of Acxiom's innovative solutions are
Customer Data Integration (CDI) technology, data, database services, information technology ("IT") outsourcing, consulting and
analytics, and privacy leadership. Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas, with locations throughout the
United States and Europe, and in Australia and China.

Our client base in the U.S. consists primarily of Fortune 1000 companies in the financial services, insurance, information services,
direct marketing, publishing, retail and telecommunications industries. We help our clients with:

o Marketing solutions built on our Acquisition and Customer Marketing database framework for:
- Customer acquisition
- Customer growth and retention
- Multi-channel integration

o Development of analytical tools and marketing support infrastructure to help them better understand their prospects and
customers

o Creation of a single customer view through our customer recognition solutions

o Database design, data content and data quality through our Customer Data Integration solutions, which include our AbiliTec®
and InfoBase® offerings, as well as our Acquisition and Customer Marketing database framework

o Large-scale data and systems management through strategic IT infrastructure outsourcing

o Re-engineering of clients' information technology capabilities and development of their "data factories"

Our solutions are designed to meet the specific needs of our clients and the industries in which they operate. We believe that we
offer our clients the most technologically advanced, accurate and timely solutions available. We enable businesses to develop and
deepen customer relationships by creating a single, comprehensive customer view that is accessible, in real time, throughout the
organization. We target organizations that view data as a strategic competitive advantage and an integral component of their
business decision-making process.

Information Services Industry

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

o Information as an asset in Customer Relationship Management

o Customer Data Integration recognized as "central to success" in CRM

o Customer recognition becoming a paramount concern

o Increasing amounts of raw data to manage

o Growth in technology partnering

o Evolution of one-to-one marketing

Competitive Strengths

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

o Ability to design, build and derive business intelligence from large-scale databases, leveraging our Customer Information
InfrastructureSM (CII) grid technology and our Acquisition and Customer Marketing database framework

o Our industry-leading Customer Data Integration products and services
o Real-time customer recognition software and infrastructure
o Accurate and comprehensive data content
o Comprehensive IT outsourcing services
o Ability to attract and retain talent

Growth Strategy

Using our competitive strengths, we are continuing to pursue the following strategic initiatives:

o Reinforce our leadership in building Customer Data Integration products and services, fully implement our Customer
Information Infrastructure grid technology, and leverage our information management consulting and analytics capabilities

o Encourage the sales and marketing of all of our products and services under the "One Acxiom" concept, thereby capturing
cross-selling opportunities

o Further penetrate existing and new client industries and continue development of applications for fraud detection, risk
management, privacy and security

o Continue to expand data content

o Continue to pursue international opportunities, and expand our products and services so that our multinational clients can
utilize Acxiom offerings globally

o Continue to seek alliances and acquisitions

o Expand our capabilities to provide more integrated campaigns, including digital marketing and mid-tier marketing services
capabilities

RISK FACTORS

The risks described below could materially and adversely affect our business, financial condition and results of future operations.
These risks 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.

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

The complexity and uncertainty regarding the development of new technologies affects our business greatly, as does the loss of
market share through competition, or the extent and timing of market acceptance of innovative products and technology. We are also
potentially affected by:

o longer sales cycles for our solutions due to the nature of that technology as an enterprise-wide solution;

o the introduction of competent, competitive products or technologies by other companies;

o changes in the consumer and/or business information industries and markets;

o the ability to protect our proprietary information and technology or to obtain necessary licenses on commercially
reasonable terms; and

o the impact of changing legislative, judicial, accounting, regulatory, cultural and consumer environments in the geographies
where our products and services are deployed.

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 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.

Changes in legislative, judicial, regulatory, cultural or consumer environments relating to consumer privacy or information
collection and use may affect our ability to collect and use data.

There could be a material adverse impact on our business due to the enactment of legislation or industry regulations, the issuance
of judicial interpretations, or simply a change in customs, arising from the increasing public concern over consumer privacy issues.
In the U.S., both the Congress and the legislatures of various states have recently focused their attention on matters concerning
the collection and use of consumer data. In most of the non-U.S. locations in which we do business, legislation restricting the
collection and use of personal data already exists. Restrictions could be placed upon the collection, management, aggregation and
use of information, which could result in a material increase in the cost of collecting some kinds of data. 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, potentially resulting in decreased revenues, net income, and earnings per share.

We could experience a breach of the security of our computer systems.

We operate extremely large, powerful and complex computer systems. Unauthorized third parties could attempt to gain entry to such
systems for the purpose of stealing data or disrupting the systems. We believe that we have taken adequate measures to protect them
from intrusion, but in the event that our efforts are unsuccessful we could suffer significant harm.

General economic conditions and world events could result in a reduced demand for our products and services.

As a result of the economic recession which began in 2001, we experienced a reduction in the demand for our products and services as
our clients looked for ways to reduce their expenses. Although the economy has improved significantly, how our clients procure our
products and services has changed in some instances. Many clients are negotiating their contracts through a contracts procurement
representative rather than through their business leaders. In the face of increasing demands by clients for price reductions and
discounts, we are challenged with pricing our products and services so as to be able to make reasonable profits. We likewise
continue to be challenged with controlling our expenses, given that a significant portion of our costs are fixed. If we are not
successful in meeting these challenges, we could suffer lower net income and earnings per share. In addition, world events such as
the conflict in Iraq and the continuing threats of terrorism may have a negative impact upon the economy in general and upon our
business as well, if our clients become hesitant to embark on discretionary spending programs.

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

Much of the data that we use is either purchased or licensed from third parties. We compile the remainder of the data that we use
from public record sources. 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, or if judicial interpretations are issued restricting use of 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 associates could adversely affect our business.

Competition for qualified technical, sales and other personnel is often intense, and we periodically are required to pay premium
wages to attract and retain good associates. There can be no assurance that we will be able to continue to hire and retain
sufficient qualified management, technical, sales and other associates necessary to conduct our operations successfully.

The nature and volume of our customer contracts may affect the predictability of our revenues.

While approximately 74% of our total revenue is currently derived from client contracts with initial terms of at least two years,
these contracts have been entered into at various times and therefore some of them are in the latter part of their terms and are
approaching their originally scheduled expiration dates. Further, if renewed by the customer, the terms of the renewal contract may
not have a term as long as, or may otherwise be on terms less favorable than, the original contract. Revenue from customers with
long-term contracts is not necessarily "fixed" or guaranteed, however, as portions of the revenue from these customers is
volume-driven or project-related. With respect to the portion of our business that is not under long-term contract, revenues are
less predictable and are almost completely volume-driven or project-related. Therefore, we must engage in continual sales efforts
to maintain revenue stability and future growth with these customers. In addition, if a significant customer fails to renew a
contract, our business could be negatively impacted if additional business were not obtained to replace the business which was lost.

Our operations outside the U.S. subject us to risks normally associated with international operations.

We conduct business outside of the United States. During the last fiscal year, we received approximately 18% of our revenues from
business outside the United States. In fiscal 2004 we completed the European acquisitions of Claritas Europe and Consodata S.A.,
and in fiscal 2005 we acquired ChinaLOOP in Shanghai, China. As part of our growth strategy we plan to continue to pursue
opportunities outside the U.S. Accordingly, our future operating results could be negatively affected by a variety of factors, some
of which are beyond our control. These factors include legislative, judicial, accounting, regulatory, political or economic
conditions in a specific country or region, trade protection measures, and other regulatory requirements. In order to successfully
expand non-U.S. revenues in future periods, we must continue to strengthen our foreign operations, hire additional personnel, and
continue to identify and execute beneficial strategic alliances. To the extent that we are unable to do these things in a timely
manner, our growth, if any, in non-U.S. revenues will be limited, and our operating results could be materially adversely affected.
In general, each of our foreign locations is expected to fund its own operations and cash flows, although periodically funds may be
loaned or invested from the U.S. to the foreign subsidiaries. Therefore, exchange rate movements of foreign currencies may have an
impact on our future costs or on future cash flows from foreign investments. We have not entered into any foreign currency forward
exchange contracts or other derivative instruments to hedge the effects of adverse fluctuations in foreign currency exchange rates.
Additional risks inherent in our non-U.S. business activities generally include, among others, potentially longer accounts
receivable payment cycles, the costs and difficulties of managing international operations, potentially adverse tax consequences,
and greater difficulty enforcing intellectual property rights. The various risks which are inherent in doing business in the United
States are also generally applicable to doing business outside of the United States, and may be exaggerated by the difficulty of
doing business in numerous sovereign jurisdictions due to differences in culture, laws and regulations.

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 telecommunications 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.

Failure to favorably negotiate or effectively integrate acquisitions or alliances could adversely affect our business.

Recently our growth strategy has included growth through acquisitions and strategic alliances. While we believe we will be able to
successfully integrate recently acquired businesses into our existing operations, there is no certainty that future acquisitions or
alliances 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 candidates, to negotiate favorable terms, or to successfully integrate
future acquisitions and alliances into our existing operations could result in decreased revenues, net income and earnings per share.

Decline in value of investments could negatively impact us.

Due to the general recession in the market that took place over the past few years, several of our investments in other ventures
have declined and could continue to decline in value. While several of the investments have been written down accordingly, others
could also be subject to future write-down in the event their values become impaired.

Postal rate increases and disruptions in postal services 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. The last
increase in the U.S. was in June 2002. While no further increases are expected until 2006, it is possible that increases could
occur in 2005. Postal rate increases could force direct mailers to mail fewer pieces and to target their prospects more carefully.
Additionally, the amount of direct mailings could be reduced in response to disruptions in and concerns over the security of the
U.S. mail system, its global counterparts, and other delivery systems. Such responses by direct mailers could negatively affect us
by decreasing the amount of processing services purchased from us, which could result in lower revenues, net income and earnings per
share.

Industry consolidations could result in increased competition for our products and services.

The possibility of the consolidation or merger of companies who might combine forces to create a single-source provider of multiple
services to the marketplace in which we compete could result in increased competition for us. We currently compete against numerous
providers of a single service or product in several separate market spaces. (See the discussion below under "Competition.") Since
we offer a larger variety of services than many of our current competitors, we have been able to successfully compete against them
in most instances. However, the dynamics of the marketplace could be significantly altered if some of the single-service providers
were to combine with each other to provide a wider variety of services.

Processing errors or delays in completing service level requirements could result in negative financial consequences.

Processing errors could result in the issuance of credits to clients, the re-performance of work, and/or the payment of damages.
Likewise, the failure to meet contractual service level requirements or to meet specified goals with contractual timeframes could
result in monetary penalties or lost revenue.

ACXIOM'S BUSINESS

Overview

We integrate data, services and technology to create and deliver customer and information management solutions for many of the
largest, most respected companies in the world. The core components of Acxiom's innovative solutions are Customer Data Integration
(CDI) technology, data, database services, information technology ("IT") outsourcing, consulting and analytics, and privacy
leadership. Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas, with locations throughout the United States and
Europe, and in Australia and China.

Our sophisticated information management capabilities enable our clients to use information to improve their business decision-
making processes and to effectively manage existing and prospective customer relationships, thereby positioning them to maximize
the value of their customer relationships and increase their profits. Our solutions are customized to meet the specific needs of
our clients and the industries in which they operate. We believe that we offer our clients the most technologically advanced,
accurate and timely solutions available.

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. The information services industry provides a broad range of products and

services designed to help companies manage customer relationships. Acxiom's combination of technology, services, and premier data
content allow us to provide the Customer Information Infrastructure (CII) that enables our clients to efficiently access and manage
information throughout the enterprise. We're doing this on an increasingly global scale as our clients ask us to provide the same
services we've delivered in the U.S. to their global efforts. The ability to create global solutions was the driving motivation
behind our recent acquisition of ChinaLOOP, which has provided us with a presence in China, as well as the acquisitions in fiscal
2004 of Claritas Europe and Consodata, which solidified our presence in the European market.

Acxiom's services help our clients answer important business questions such as:

o Who are our existing customers?
o Who are our prospective customers?
o Who are our most profitable customers?
o What are the common traits of our existing customers?
o What do our customers want and when do they want it?
o How do we service our customers?
o How should we price our products and services?
o What distribution channels should we use?
o What new products should we develop or what old products should we retire?

We believe the current trends and dynamics of the information services industry will provide us with growth opportunities as
discussed below.

Information as an asset in Customer Relationship Management

More and more companies are realizing that the various types of data they gather and maintain - customer, product, financial, sales
and marketing - can be a competitive resource for acquiring and retaining customers, provided that the information is well
maintained and optimized throughout the organization. Gone are the days when companies thought they could buy a piece of Customer
Relationship Management (CRM) software and instantly have better relationships with their customers. Today, companies understand
that CRM is a business strategy, not a piece of software, and that management of their information assets is one of the keys for
turning the promises of CRM success into reality. In fact, Gartner, Inc., a leading international industry analytical, research
and advisory firm, reported recently that without adequate resources to focus on data quality, an organization's CRM efforts will
not be successful.

Gartner reports that the key to enterprises being able to deal effectively with their customers is to know them - who their
customers are, what they want and why they want it. It is also critical, says Gartner, to know how to use that information. The
more enterprises know about their customers, the more they can do with that information to improve the likelihood of sales and
improve the levels of service. In a recent report entitled "CRM Demands Data Cleansing" (Ted Friedman, Scott Nelson, and John
Radcliffe, December 3, 2004), Gartner cites a case study in which a manufacturing industry company incorrectly labeled a subset of
its large customers, which caused them to be overlooked in a market segment analysis. The resulting lack of interaction with that
customer segment cost the manufacturer $5 million in revenue in one year.

Customer Data Integration recognized as "central to success" in CRM

Gartner reports that CRM projects usually require various organizations within a company to work together around a shared single
view of the customer, and that without the right customer information at the right time, it's difficult to realize the goals a
company has for its CRM efforts - regardless of company size, market leadership, or merger and acquisition history. Therefore,
creating and leveraging a single customer view for operational, marketing and analytical purposes is critical to successfully
target, acquire, develop and retain customers - the key goals for any customer-centric solution. That single customer view can
only be obtained through customer data integration (CDI). Gartner goes on to state that CDI will remain a business imperative for
most organizations, and that CEOs are demanding the single customer view that will make their customer-centric initiatives work.

CDI can best be described as the combination of the technology, processes and services needed to create and maintain an accurate,
timely and complete view of the customer across multiple channels, business lines and, potentially, enterprises, where there are
multiple sources of customer data in multiple application systems and databases. In different ways, both the real-time enterprise
and business process fusion depend on having this "single view of the customer." The ability to successfully target, acquire,
develop and retain customers depends on the availability, at the time and place of need, of high quality, comprehensive, up-to-date
customer information and insight.

CDI's critical role in CRM is reflected in one of Gartner's Strategic Planning Assumptions, which says that, through 2008, the
creation of an accurate, timely and rich single view of the customer across channels and lines of business will be a key enabler for
reducing costs, managing risk, and increasing revenue and profitability in customer-centric organizations.

Customer recognition becoming a paramount concern

How does a company know that the customer on the phone is the same one that was on its Web site one hour ago? Is it the same
person, or is it just someone using that customer's computer? Gartner concludes that enterprises need to have an ID system that
allows them to link all interactions with a customer quickly and accurately. Such a constant ID system will be necessary, says
Gartner, to take advantage of an environment where technology is modified to that customer's desires and, in the process, enabling
the enterprise's CRM system to have a chance to truly support them. If an enterprise cannot be sure of who the customer is, and how
to link that customer to the database and profiles it has created, Gartner predicts that the enterprise's investments in CRM will be
seriously compromised.

Another application for Customer Recognition solutions is in a company's efforts to combat fraud and identity theft. As customer
contact channels proliferate and data volumes continue to increase, the opportunity for fraudulent activity multiplies. Customer
recognition capabilities are an important tool to verify that customers are who they say they are. As reports of instances of
identity theft continue to increase, enterprise risk management has become a top concern for financial services firms.

Increasing amounts 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 growth and complexity of managing data.
Advances in computer and software technology have also unlocked vast amounts of customer data, which historically was inaccessible,
further increasing the amount of existing data to manage and analyze. As these data resources expand and become more complex, it
also becomes increasingly difficult to integrate all the fragmented, disparate and often outdated information. The challenge to
obtaining accurate and complete customer data lies in obtaining, enhancing and integrating data from across an organization to form
a single, comprehensive view of individual customers.

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:

o allowing a company to focus on its fundamental business operations

o avoiding the difficulty of hiring and retaining scarce technical personnel

o taking advantage of world-class expertise in particular specialty areas

o benefiting from the cost efficiencies of outsourcing

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

o benefiting more from the latest technologies

Evolution of one-to-one marketing

Advances in information technology, fragmentation of the media, combined with the ever-increasing amounts of raw data and the
changing household and population demographics 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. In many cases, digital marketing can also accomplish these objectives far more cost
effectively than existing marketing media.

Competitive Strengths

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

Ability to design, build and derive business intelligence from large-scale databases, leveraging our Customer Information
Infrastructure grid technology and our Acquisition and Customer Marketing database framework

Acxiom has extensive experience in designing, developing, managing and operating massively large-scale databases for some of the
world's largest, most successful companies, including Allstate, CitiGroup, GE Finance, Federated Department Stores, IBM and Sears.
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 currently manage 2.2 petabytes of storage, which includes over
760 terabytes of database solutions. A terabyte is approximately one trillion bytes, and is the scale often used when measuring
large computer storage. A petabyte is the equivalent of 1000 terabytes, or one quadrillion bytes.

We provide a complete solution that starts with consulting, integrates data content, applies data management technology and delivers
CRM applications to the desktop. Our open system 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.

To complement our historical database expertise, we have developed our Customer Information Infrastructure (CII), which includes a
large collection of commodity servers working together in an internal network. CII provides our clients with a secure,
high-performance, usage-based, on-demand computing solution where data is practically actionable upon receipt. CII's proven,
grid-based solution provides the functions of a traditional computer such as storage, computations, security, and data management,
with significantly faster performance and with much more efficiency. It enables high performance, unlimited scalability and maximum
adaptability in a secure environment:

Performance - The grid-based architecture uses commodity-based servers to replicate the performance of a supercomputer that
would cost many times more. When clients need to increase their processing capability, we simply allocate an additional "node" or
personal computer processor to the grid, rather than having to invest in another large, expensive computer. Jobs that could take up
to eight hours on a mainframe can be completed in 20 minutes in the grid.

Scalability - The grid-based architecture allows us to add additional storage as clients need it, thereby providing
on-demand capacity. This enables our clients to store historical data for use in trending, modeling and analytics, creating more
sophisticated and accurate models than ever before. The scalability works both ways; if less storage space is needed, we can scale
back the amount of grid dedicated to a particular client.

Adaptability - The CII solution is comprised of a standard set of components and tools. Using these "plug and play"
components, it is easier and faster to set up new, repeatable and powerful processes into CII. The standard framework can be easily
configured for a specific client or industry as needed.

Security - Our security objective within CII is that no Acxiom- or customer-owned intellectual property (i.e., data,
software, or algorithms) stored in or in transit to/from the CII can be copied or moved outside the CII in a usable format without
appropriate authentication and authorization.

Grid technology works by breaking down large jobs into smaller, separate tasks, then assigning them to computers linked together in
the grid. Large mainframe computers process jobs linearly, i.e., they must first complete one task before going on to the next.
Grids, on the other hand, can process separate tasks simultaneously, thereby providing much faster results. Additional servers
connected through the grid can be called into service as needed to assist during peak workload periods, thereby making the most of
their combined available power. Utilization of the grid enables our clients to avoid multi-million dollar up-front investments in
servers, resulting in significant cost savings. In addition, the grid enables us to offer our services to a broader range of
clients, including companies whose processing needs are on a much smaller scale than that of our historical clientele. With CII,
raw data can be turned into actionable, intelligent information much more quickly than with traditional mainframe processing. Fresh
data can rapidly be incorporated into models and analytics. Clients can scale up or down as they need it, thereby providing greater
flexibility than was ever possible in traditional environments.

We provide both traditional batch marketing solutions as well as real-time solutions, both via our Acquisition and Customer
Marketing database framework. We believe that through this framework -- which leverages large-scale databases, CII, InfoBase and
AbiliTec -- Acxiom is leading the industry in a fundamental shift from traditional linear campaigns to continuous campaign
management. We offer our clients weekly, daily and even real-time updates, thereby dramatically increasing the frequency with which
they can execute marketing campaigns. The competitive advantage that may be gained by our clients is improved marketing offers that
drive a greater response, in addition to increasing the timeliness of campaigns and the revenues generated. Through our real-time
marketing solutions, clients are able to get a consistent and immediately available customer view and decision engine that helps
them make effective, instantaneous marketing offers, based on comprehensive business rules, across all of their front-office
applications.

Before CII, technology was a dominant constraint on implementation and execution of customer-centric data management strategies,
forcing trade-offs in speed, or efficiency of a customer management solution. With CII, the technology barriers and resource
inefficiencies are virtually eliminated for our clients, thus allowing them to focus on obtaining true customer insight with
virtually no processing or performance constraints. Currently, nearly all of our clients are having at least some work processed in
the grid, and management is focused on rapidly moving as much customer processing to the grid as possible.

Our industry-leading Customer Data Integration products and services

We believe our Customer Data Integration capabilities, powered by AbiliTec, combined with the related real-time customer recognition
software and infrastructure, is the leading solution for companies seeking to better integrate their customer data and manage their
customer relationships. CRM involves analyzing, identifying, acquiring and retaining customers. Knowledge delivered directly and
immediately to a desktop or customer point of contact in real time is critical to the CRM process. Acxiom's Customer Data
Integration products and services are designed to fully meet these challenges for its clients.

As the basic infrastructure for integrated CRM solutions, AbiliTec allows the linking of disparate databases across a client's
business and makes possible personalized, real-time CRM at every customer touch-point. We believe that AbiliTec's unprecedented
scope, accuracy and speed contributes to Acxiom being established as the Customer Data Integration leader, using AbiliTec both as an
internal processing tool and as the enabler of the single customer view that drives true, one-to-one marketing.

AbiliTec 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. By applying this unique, patented technology, we are able to properly cleanse data and eliminate
redundancies, update the data to reflect real-time changes, and combine our external data with our clients' internal data.

The financial benefits for our clients generated by faster processing times are multi-faceted. Our clients gain advantages from
AbiliTec by:

o Greatly improving the speed in which campaigns are brought to market in order to seize on opportunities more quickly.

o Leveraging shorter turnaround times to increase the frequency of data warehouse updates. With AbiliTec, some Acxiom
clients have moved from monthly to weekly updates, others from weekly to nightly, and some utilize the technology in an
on-line transaction processing ("OLTP") mode to update their data continuously, as new information becomes available.

o Basing marketing and other business decisions on more accurate data. In the world of customer or prospect data warehouses,
fresher information equals more accurate information. Integration of correct names and addresses also ensures more
accurate data is reflected for the customer or prospect.

We also believe that AbiliTec enables our clients to better serve the consumer privacy preferences of their customers. Just as
AbiliTec allows businesses to create a single view of their customers in real time for marketing purposes, it makes it much easier
for businesses to allow their customers to access, correct and selectively opt-out their information, provide better safeguards
around their customers' information, and facilitate the addition of information such as preference in time and manner of contact.

Real-time customer recognition software and infrastructure

Acxiom continues to expand its real-time multi-channel Customer Data Integration and customer recognition capabilities with products
and services such as our Acquisition and Customer Marketing database solutions. This suite of software and infrastructure
capabilities allows our clients, in real time, to integrate their existing databases together in ways that have previously been
difficult or impossible. Our Customer Data Integration and customer recognition technologies allow our clients and us to integrate
data directly into CRM applications, including:

• Customer analysis • Campaign management
• Interactive web pages • Point-of-sale
• Call centers • Customer service automation
• Direct mail • Sales force automation

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

Accurate and comprehensive data content

We believe that we have the most comprehensive and accurate collection of United States consumer, property and telephone marketing
data available from a single supplier. We believe we process more mailing lists than any company in the United States. Our Info-
Base consumer database contains approximately 17 billion data elements, which we believe covers almost all households in the United
States. Our real estate database, which includes most major United States metropolitan areas, covers approximately 70 million
properties in a majority of the states. We believe our InfoBase TeleSource product represents the most comprehensive repository of
accurate telephone number information for listed business and consumer telephone numbers in the United States and Canada. Our
clients use this data to manage existing customer relationships and to target prospective customers.

Acxiom's offerings in Europe are closely aligned with those in the U.S. The acquisitions of Claritas Europe and Consodata S.A. have
significantly enhanced Acxiom's offerings in terms of data services and customer information throughout Europe. Acxiom provides

leading customer information in the seven European countries in which it now has physical operations, including the United Kingdom,
France, The Netherlands, Germany, Spain, Portugal, and Poland. The customer information and segmentation offerings are similar to
Acxiom's InfoBase in the U.S. and in the U.K. While there are some differences between InfoBase in the U.S. and the U.K. and
differences country-to-country for the InfoBase equivalents that have been acquired with the Claritas Europe and Consodata
acquisitions, the core value proposition to Acxiom clients remains the same regardless of location.

In Australia, Acxiom is a leading supplier of consumer, business, telephone and property information for marketing purposes. Under
a range of brand names, Acxiom's data products are used by major financial institutions, telecommunications companies and retailers
to help them strengthen their customer relationships and grow their market share. Our clients use data from our databases to target
prospective customers and strengthen relationships with their existing customers.

Through our recent acquisition of ChinaLOOP, we hope to become one of the premier data providers in China. ChinaLOOP is a business
intelligence, customer relationship management and data management company headquartered in China. It provides data, database
management and data services to a number of Asian and international clients from its headquarters in Shanghai and additional
operations in Beijing. ChinaLOOP's clients include a number of China-based and multi-national companies.

Comprehensive IT Outsourcing Services

We offer clients comprehensive, integrated information management solutions tailored to their specific needs. 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. Our information technology solutions cover the computing requirements of our clients, ranging from full mainframe
and midrange information processing centers to desktop applications. We currently operate several large mainframe and server data
centers, manage numerous networks and host Internet applications. We offer information management services, primarily to clients in
the United States, in the following areas:

• Mainframe platform operations • Redundant infrastructure availability services
• Client/server platform outsourcing • "Data Factory" reengineering to grid computing
• Network management • Web hosting management

Our information technology solutions help consumer-focused companies reduce costs, access leading-edge technology and resources,
increase flexibility and minimize risk. Our outsourcing solutions include IT Infrastructure Outsourcing, Customer Relationship
Management, Business Process Outsourcing, and Data Factory Transformation Outsourcing, powered by Acxiom's grid technology which
enables our clients to serve their own customers better, faster and cheaper.

Data-intensive companies are operating in an increasingly competitive marketplace that demands customer data be more accurate and
complete, better decisions be made more quickly, new products be developed and brought to market faster, and information technology
meet the needs of the business more readily. At the core of our Data Factory Transformation solution is our grid technology that is
designed to help our clients reach a new level of competitiveness. Acxiom's solution combines what we believe to be the most
advanced grid-enabled architecture available for data processing with our leading customer data management capabilities.

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 core values that include leadership, teamwork, innovation and
integrity. Our company goals include creating value for our associates, clients and stockholders. We strive to create value for our

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associates by building a progressive work environment where we inspire, empower, challenge and recognize them. In addition to our
culture, our extensive geographic presence, with locations in the United States, Europe, China and Australia, has enhanced our
ability to attract talented associates.

We have consistently been recognized for our leadership in a number of areas, including technical innovation and marketplace
excellence, and we continued to receive such honors in 2004 and 2005.

For our innovation in the use of grid-computing applications, we received the Data Warehousing Institute's 2004 Best Practices Award
for "Radical Data Warehousing/Business Intelligence." We were also named as a finalist in the "Most Innovative Company" category by
the 2004 American Business Awards for our continued development of grid computing systems for large commercial applications, as well
as for our long-term contributions to protection of consumer privacy. We were also a finalist in the 2004 American Business Awards.
Acxiom leaders were invited to speak at a number of prestigious events, including the Grid Today 04 conference in Philadelphia,
regarding our grid technology. Publications as diverse as Fortune, Database Trends & Applications, and Internet Retailer have
recognized our leadership role in the new grid-based technology. Acxiom was named to the 2004 CIO 100 ranking of top companies that
best demonstrate organizational agility, and we were recognized by CRM magazine as a Data Quality Market Leader.

Significant awards announced since January 2004:

o Acxiom was named a finalist in the 2005 Computerworld Honors program based on an independent case study for grid computing

o CIO 100 - CIO magazine ranked Acxiom among the CIO "Agile 100" for demonstrating measurable results in the use of IT to
enable and support organizational agility

o CRM Data Quality Market Leader Award - CRM magazine honored Acxiom for leading the data quality market from a CRM
standpoint

o Top 100 Best Places to Work in Information Technology - Acxiom made Computerworld magazine's list in 2004, following
appearances in 2001 and 2000

o InformationWeek 500 - Acxiom made this list in InformationWeek magazine , a revenue-based ranking of the most innovative
corporate users of information technology

o DM Review 100 - DM Review magazine ranked Acxiom in 2004 among the top companies in the business intelligence industry as
chosen by DM Review readers, following appearances in 2003, 2002, 2001 and 2000

o TDWI Best Practices in Data Warehousing "Radical Data Warehousing/Business Intelligence" Award - Data Warehousing Institute
(TDWI) honored Acxiom in 2004 for innovation in the use of grid-computing applications

o Check Point Customer Excellence Award - Check Point Software Technologies Ltd. Bestowed this award for cutting-edge
security practices

Growth Strategy

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

Reinforce our leadership in building Customer Data Integration products and services, fully implement our Customer Information
Infrastructure powered by grid technology, and leverage our information management, consulting and analytics capabilities

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Our primary initiatives are AbiliTec-driven Customer Data Integration solutions, combined with our traditional consulting and
analytical services. We provide strategic consulting to our clients regarding creation and measurement of CRM programs and the
related infrastructure, particularly in the financial, banking and retail communities, and in the privacy arena.

We have developed our Customer Information Infrastructure grid technology in order to provide our clients with the fastest, most
accurate and current customer information possible. This revolutionary solutions architecture has greatly increased our processing
efficiency, making warehousing and accessing vast data stores far easier and more affordable than ever before. This technology
enables us to provide our clients with what we believe to be the industry's most accurate and cost-effective means to integrate
their customer and prospect data across the entire organization. We then provide the capability to further enhance and add
decision-making intelligence to that data with external data, including our InfoBase data products. In Europe, all of these
Customer Data Integration processes can take place in a traditional batch mode or in real time over the Internet or via private
network.

Our technologies are available to a broad range of clients that desire to better manage their existing and prospective customer
relationships and to integrate disparate databases. We are continually developing AbiliTec-enabled solutions to improve data
quality, streamline production, reduce costs and increase the efficiency of our clients' marketing and database initiatives.

We are marketing AbiliTec, InfoBase, and our Acquisition and Customer Marketing database services through our internal sales
organization as well as through our strategic alliances, including leading CRM software solution providers such as IBM and SAS
Institute, and systems integrators such as Accenture and IBM. Each of these Acxiom products can be integrated directly into the
decision systems offered by our strategic alliance partners to enhance their unique value proposition to their customers. This
alliance partner strategy provides the potential for us to extend the scope of our services in our existing markets and expand our
client base. We have developed the Opticx® process which allows clients to rapidly determine their data quality and the
potential return on their investment in our Customer Data Integration solutions.

Encourage the sales and marketing of all of our products and services under the "One Acxiom" concept, thereby capturing cross-
selling opportunities

The "One Acxiom" concept reflects our commitment to more fully leverage and blend our core components - Customer Data Integration
technology, data, database services, IT outsourcing, consulting and analytics, and privacy leadership - to provide our clients the
most innovative and effective customer and information management solutions in the marketplace today. 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.

Further penetrate existing and new client industries, and continue development of applications for fraud detection, risk management,
privacy and security

Our clients expect information management solutions tailored to the needs of their particular industry. We have developed specific
knowledge for the industries we serve, including the financial services, insurance, information services, direct marketing, media,
retail, technology, telecommunications, automotive, and pharmaceuticals/healthcare industries. We expect to continue to expand our
presence in these industries as well as to penetrate other industries as their information management needs increase. Other
industries which we believe are undergoing changes that will increase the need for data and information management services include
the e-commerce, packaged goods and entertainment sectors. We also believe our products and services complement and are adaptable to
the identity verification systems of prospective clients in industries or businesses concerned about security management, including
travel, special events management and building security.

We believe that in the post-September 11 environment, certain governmental agencies have a need for the type of data integration
solutions enabled by AbiliTec in the areas of fraud detection and identity verification. Since September 11, 2001, we have been
actively pursuing government contract work in this regard, and continue to view this sector as a potential source of new business
in the future.

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Continue to expand data content

We believe that the depth, breadth and quality of our data differentiates us in the marketplace. We continually enhance our
databases by adding new data through multiple sources and increasing the accuracy of the data through the use of AbiliTec.
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 because we can repackage it into multiple formats or sell it through
various distribution channels, at a minimal incremental cost.

Continue to pursue international opportunities, and expand our products and services so that our multinational clients can utilize
Acxiom offerings globally

In fiscal 2004 we significantly expanded our European operations through the acquisitions of Claritas Europe and Consodata S.A., two
of Europe's premier data providers with offices in the United Kingdom, France, The Netherlands, Germany, Spain, Portugal and Poland.
Previously, since 1986, we had a smaller presence in Europe, primarily in. As a result of the 2004 acquisitions, Acxiom is now
well-positioned to help its international clients improve their marketing effectiveness and prospecting results in the European
markets. Among the existing clients of the acquired companies are some of the world's most successful companies in the financial
services, automotive, retail, consumer durables, mail order, publishing, telecommunications, utilities, and travel and leisure
industries. We expect to maintain these relationships, as well as acquire additional multinational clients doing business in
Europe. Similar to Acxiom's InfoBase products in the U.S., the combined products of our European operations provide the largest
source of consumer lifestyle databases and behavioral information available to marketers across Europe. We intend to focus on the
integration of these two new businesses into the "One Acxiom" business model, and to continue to look for additional opportunities
to expand our product and service offerings in the European marketplace.

With the recent acquisition of ChinaLOOP, a pioneering business intelligence, customer relationship management and data management
company based in Shanghai, China, we hope to be in a position to take advantage of the world's fastest growing economy. We believe
that China offers strong growth opportunities for both domestic and multi-national companies, and that those companies will
increasingly seek to gain market share through marketing intelligence and technology-based information solutions. ChinaLOOP, which
was among the first information management services companies to operate in China, provides data, database management and data
services to a number of Asian and international clients from its headquarters in Shanghai and additional operations in Beijing.
Representative clients include a number of China-based and multi-national companies, including Diageo, Financial Times, Nokia,
Total, Citroen and Johnson & Johnson.

Since 1999, we have been offering our products and services in Australia and New Zealand, including Customer Relationship Management
services, data warehousing, merge purge, analytics, InfoBase data, TeleAppend, Best Address, and verification.

Information concerning the revenues and assets of our foreign operations is included in Note 17 of the Notes to Financial Statements
which are attached to this Annual Report as part of the Financial Supplement.

Continue to seek alliances and acquisitions

Acxiom partners with many of the world's leading systems integrators and hardware and software companies, to create and distribute
the best customer and information management solutions for the market. Our partners include such companies as Accenture, D&B, DWL,
Equitec, Hewlett Packard, IBM Corporation, Moore Wallace Response Marketing Services, SAS Institute, TransUnion and USADATA.

To add value for our global clients, we have also developed alliances with delivery partners and third-party providers in the
various regions in which we do business. Being particularly mindful of privacy and consumer protection concerns within the
different geographies, partner organizations are evaluated on their understanding of privacy issues, compliance and guarantees of
the legality of provided data. These alliances support our ability to process and maintain data in local languages and to convert
local languages into English when necessary.

We will continue to seek 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. We will also consider acquisitions as opportunities may arise.
We continually review our mix of businesses to determine that we have the correct combination of people, products, services and
other resources to allow us to best serve our clients.

Expand our capabilities to provide more integrated campaigns, including digital marketing and mid-tier marketing services
capabilities

In the past fiscal year, we acquired SmartDM Holdings, Inc. and affiliated companies Smart DM, Inc. and SmartReminders.com, Inc.
SmartDM, a full-service direct marketing company headquartered in Nashville, Tennessee, with approximately 90 employees, offers
comprehensive direct marketing services and information management for mid-sized companies. We believe that the acquisition of
SmartDM will enhance our ability to provide the sophisticated information management capabilities to mid-sized companies that we
have previously been able to offer only to larger clients. SmartDM offers four main channels of direct marketing information
services, including direct mail, e-mail, Customer Relationship Management and data management. These channels provide clients with
a fully integrated information management platform that allows companies and organizations to transform data into useful business
knowledge designed to enable them to make effective marketing decisions. Management believes that the combination of Acxiom's
information management capabilities with SmartDM's ability to integrate e-mail, direct mail and call center marketing activities
will provide an entree into the market comprised of mid-sized companies. Representative clients of SmartDM include Wyndham Hotels
Worldwide, Gaylord Entertainment, Harrah's Entertainment, the American Red Cross, Comcast-Spectacor, the National Basketball
Association and Bass Pro Shops.

With the acquisitions of SmartDM, followed by the acquisition of Digital Impact after the end of the fiscal year, we have greatly
expanded our e-mail marketing and analytical capabilities, as well as added hosted web applications and messaging technology
infrastructures to our range of services, the combination of which will allow us to better deliver integrated campaign management,
analytics, and e-messaging services focused on strategic, data-driven marketing results. See additional discussion under "Recent
Developments" below, and in Note 3 of the Notes to Financial Statements which are attached to this Annual Report as part of the
Financial Supplement.

Business Segments

We report segment information consistent with the way we internally manage our operations to assess performance and to allocate
resources. The 2004 European acquisitions significantly increased our international operations. This increase accentuated
different economic environments, market maturity and operational needs of the international operations while reducing the
differentiation between the existing Services segment and the Data and Software Products segment. In the first quarter of fiscal
2005, we restructured our internal operations and, as a result, changed the presentation of our segment information. The new
organization is better able to assess the operational performance and resource allocation between U.S. and international operations.

The Company's business segments consist of U.S. Services and Data, International Services and Data and IT Management. The Services
and Data segments for both the US and International segments substantially consist of consulting, database and data warehousing,
list processing services, the Company's data content and software products. IT Management includes information technology
outsourcing and facilities management for data center management, network management, client/server management and other
complementary IT services. We evaluate the performance of the segments based on segment operating income, which excludes certain
gains, losses and nonrecurring items. Certain information technology outsourcing and facilities management revenue is accounted
for in both the IT Management segment and the U.S. Services and Data segment where the client is billed. These revenues are
eliminated in consolidation.

Information concerning the financial results of our business segments and the total assets of each business segment is included in
Note 20 of the Notes to Financial Statements and in Management's Discussion and Analysis of Results of Operations and Financial
Condition which are attached to this Annual Report as part of the Financial Supplement.

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U.S. Services and Data

Our U.S. Services and Data segment provides solutions that integrate and manage customer, consumer and business data using our
information management skills and technology, as well as our InfoBase data products. We believe that AbiliTec, which provides
Customer Data Integration capabilities, together with our Acquisition and Customer Marketing database solutions, positions us for a
greater share of the growing demand for integrated customer management solutions. Our Customer Information Infrastructure grid
technology, AbiliTec linking technology, Acquisition and Customer Marketing database solutions, InfoBase data, and intellectual
property for building and managing large-scale database environments gives our clients the ability to reach their customers more
rapidly, efficiently and accurately and to target their sales efforts accordingly. We build customer and information management
solutions for our clients in the following service areas:

o Marketing database and data warehouse design consulting
o Data integration
o Data warehouse/database management and delivery
o Marketing applications
o List processing

Our AbiliTec-enabled solutions allow us to more effectively integrate and manage data. We believe that AbiliTec is the leading
software solution for companies seeking to integrate and manage their customer data and customer relationships. It allows the
linking of separate, disparate databases across a client's business, provides unprecedented speed and accuracy and permits real-time
updating of consumer and business information. AbiliTec is a software product that is licensed to our clients and sold through the
following channels: enterprise, database, channel partner, service bureaus and direct marketing. Our AbiliTec-enabled solutions
deliver more accurate, accelerated data solutions that help businesses reduce costs, gain a better understanding of their customer
base, and build loyal, trust-based customer relationships.

Based upon our knowledge of the industry and our competitors' products, we believe our InfoBase and Personicx® products, as well
as our Fraud Management Platform products, represent the industry's most comprehensive and accurate relationship management, risk
management, and operational efficiency data product offerings. They are available either on a stand-alone basis or integrated into
our customized service offerings.

With the recent acquisitions of SmartDM and Digital Impact, we have added e-mail marketing capabilities as well as hosted web
applications and messaging technology infrastructures to our range of services, which will allow us to better deliver integrated
campaign management, analytics, and e-messaging services focused on strategic data-driven marketing results.

The data that we use is obtained from publicly available information, public record information, summarized customer information,
customer contact information, and self-reported information. We utilize multiple data sources from each category of data including,
but not limited to, published telephone directories, directory service information, voter registrations, county assessor and
recorder information, questionnaires, warranty cards, inferred preference information, catalog buyer behavior information, and
product registration. Accuracy is one of our primary concerns, and we have processes in place to maintain a high level of quality
in our products.

International Services and Data

Our International Services and Data segment provides customer data, data management, risk management and business process
outsourcing solutions to clients across the globe. With the acquisition of Claritas Europe, Consodata and ChinaLOOP, we believe
that we are well-positioned to meet businesses' needs in these geographies and beyond. We are currently helping clients solve
business problems in the following locations: Canada, Mexico, Puerto Rico, Brazil, Colombia, Chile, United Kingdom, France,
Germany, Poland, Portugal, The Netherlands, Spain, China, Australia and New Zealand. International offerings include:

o Customer Management Solutions - including marketing databases, customer recognition, interactive solutions and decision
support tools
o Customer Data Integration Solutions - including advanced AbiliTec (information-based) customer data integration and
traditional data hygiene/matching
o Data - including a wide range of lifestyle data, specialist data, e.g., suppression solutions, data collection solutions,
segmentation solutions, interactive/online data, online access to Acxiom data, GIS data/solutions
o Consulting & Analytics and Privacy Leadership consulting
o Business Contact Center - based in the UK, an integrated call center and fulfillment house serving all media channels

Our global vision is to provide market-leading customer data and data management solutions locally, while also helping our clients
solve the challenges of multi-country customer information management and data integration.. We intend to meet this challenge by
cleansing, integrating, hosting and enhancing client customer data from a single architecture. Using postal standards from the
postal authorities of more than 260 countries, we anticipate that these services will fully leverage our Customer Information
Infrastructure and superior AbiliTec-driven data integration capabilities. Also incorporated are our InfoBase content, our
Personicx segmentation solutions and the expansive data assets of new international markets.

IT Management

Data center outsourcing enables our clients to focus on their core business while Acxiom manages their technical infrastructure
needs. We provide the IT services for large systems, midrange and client/server platforms and networks. Some of these services are
part of Acxiom's total offering of Customer Information Infrastructure (CII) - the "One Acxiom" concept _ combining data,
technology, marketing services and IT management to enable companies to maximize the value of customer relationships.

Our data center outsourcing services give our customers a secure, high-performance network and computing environment, supported by
experienced IT professionals. The benefits include:

o Maximization of value from IT assets and information system staff

o Computing and network capacity driven by client demand

o Highly scalable computing and network environments

o "24 x 7" system availability

Our IT solutions cover the computing needs of our clients, ranging from full mainframe and midrange information processing centers
to desktop applications. Acxiom currently operates several large, high-availability data centers, manages high-speed networks, and
hosts Internet e-commerce applications. Acxiom's IT services have the added specialty of supporting the very large databases needed
by companies who sell to consumers. Acxiom has developed a storage-centric IT infrastructure to manage the massive amounts of data
these companies require. Our leadership in grid-based Customer Information Infrastructure provides customers with a flexible and
scalable approach to on-demand access, management and updating of customer data for advanced analytics and database marketing.
Acxiom provides the infrastructure and managed services that power our customer and information management solutions.

We offer technology services in the following areas:

• Mainframe platform outsourcing
• Midrange and client/server platform outsourcing
• Network management
• Web hosting management

• "Data Factory" reengineering into the grid environment
• Redundant infrastructure availability services

Clients

Our client base consists primarily of Fortune 1000 companies in the financial services, insurance, information services, direct
marketing, publishing, retail and telecommunications industries. Some of our major clients include Allstate, American Express, Bank
of America, Baxter International, Capital One, CitiGroup, City of Chicago, DeLuxe, Discover Card, eFunds, Federated Department
Stores, GE Finance, General Motors, Guideposts, HSBC, IBM, Information Resources, Inc., JP Morgan Chase, MBNA America, Philip
Morris, Primedia, Providian Financial, R.L. Polk, RR Donnelley, Sears, Sprint and TransUnion.

Our 10 largest clients represented approximately 41% of our revenues in fiscal 2005. No single client accounted for more than 10%
of our revenue during the last fiscal year. We seek to maintain long-term relationships with our clients. Many of our clients
typically operate under long-term contracts with initial terms of at least two years in length. We have historically experienced
high retention rates among our clients.

Sales and Marketing

Acxiom takes a solution-selling approach that combines the full scope of Acxiom's strengths to deliver solutions for clients that
enhance profitability, reduce risk, and lower costs. Core branded offerings from Acxiom include:

o Data (under the InfoBase brand),
o Customer Data Integration (under the AbiliTec brand),
o Database services, IT outsourcing, fraud management, analytics, privacy consulting (all under the umbrella Acxiom brand).

Acxiom maintains a strong focus on industry expertise to ensure we understand our clients' unique business opportunities and
challenges. This was achieved to a greater degree than ever in the past two fiscal years as Acxiom has introduced and standardized
a required and intensive training and "accreditation" process for sales associates.

Acxiom continues to promote a sales and marketing-driven culture that encourages each associate to understand how he or she can
better promote the sale of Acxiom solutions and the satisfaction of our clients. It complements the strong product/service delivery
culture that has helped Acxiom succeed in the past. The sales and marketing-driven attitude extends across the enterprise, and sales
activities with major clients involve a high level of collaboration and cooperation across all levels of leadership in sales,
marketing and operations.

Also, as noted above, Acxiom partners with many of the world's leading systems integrators and hardware and software companies to
create and distribute the best customer and information management solutions for the market. Our partners include such companies as
Accenture, D&B, DWL, Equitec, Hewlett Packard, IBM Corporation, Moore Wallace Response Marketing Services, SAS Institute, TransUnion
and USADATA. We will continue to seek 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.

Pricing for Products and Services

We have standard pricing guidelines for many services such as list processing, national change-of-address processing, data
cleansing/postal hygiene, merge/purge processing and other standard Customer Data Integration (CDI) processing. Data
warehousing/database management services tend to be more custom-designed and are negotiated individually with each client utilizing
standard pricing guidelines.

Pricing for data warehouses and database builds may include separate fees for discovery, design, initial build, implementation,
ongoing updates, queries and outputs. We also may price separately for consulting and statistical analysis services.

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

AbiliTec is priced as software, and the right to use it is licensed to our clients, typically under one- to three-year license
agreements. The pricing includes separate fees for the annual license and for individual transactions, if applicable. Both
components allow for volume price discounts. AbiliTec may also be utilized as part of an AbiliTec-enabled service and priced as a
bundled service solution.

IT Management services are priced based on the costs of migration, management services, operation of the data center, and network
and system infrastructure.

Competition

Although the information services industry in which we operate is highly competitive, we believe that we are the leader in our field
of expertise. Within the industry, there are data content providers, database marketing service providers, analytical data
application vendors, enterprise software providers, systems integrators, consulting firms, list brokerage/list management firms and
teleservices companies that compete with us. Many firms offer a limited number of services within a particular geographic area, and
several are national or international companies and offer a broad array of information services. However, we do not know of a
competitor that offers our complete line of products and services for Customer Information Infrastructure.

In the services arena, we compete primarily with in-house information technology departments of current and prospective 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. We have three primary competitors in the data warehousing and
database services and mailing list processing sectors. In the data sector, 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 client needs and, to a lesser extent, on the pricing of information products and
services. We have four principal competitors in this market. We also compete with hundreds of smaller firms that provide list
brokerage and list management services. An emerging market is the Internet-driven data market. This market consists of two primary
areas of emphasis: the use of the Internet to collect and deliver data, and the use of e-mail addresses for reaching consumers for
marketing. The addition of the Internet into the traditional compilation and distribution channels has made the market more diverse
with potentially lower barriers to entry. In the IT management market, competition is based on technical expertise and innovation,
financial stability, past experience with the provider, marketplace reputation, cultural fit, quality and reliability of services,
project management capabilities, processing environments, and price. We have four primary competitors and three lesser competitors,
as well the in-house IT departments of current and prospective clients.

In Europe, Acxiom faces similar competition as in the United States in terms of the scope and type of competition. While there is a
broader range of competitors across Europe, particularly for customer data, the major competitors in both the services and the data
markets are very similar to those that Acxiom has in the United States.

Privacy

We have always taken an active approach with respect to consumer privacy. The growth of e-commerce and companies' needs for
consumer information mean that we must work even harder to guarantee that our policies offer individuals the protection to which
they are entitled. Consequently, we actively promote a set of effective privacy guidelines for the direct marketing, e-commerce,
and information industries as a whole. Industry-wide compliance helps address privacy concerns across the globe. Furthermore, we
are certified under the European Union Safe Harbor and contractually comply with other international data protection requirements to
ensure the continued free flow of information across borders.

Our Fair Information Practices Policy outlines the variety of measures we take to protect consumers' privacy. A copy of this policy
is posted on our website at www.acxiom.com. We educate our clients and associates regarding consumer privacy issues, guidelines and
laws. Our policy also explains the steps that consumers may take to have their names removed from our marketing products and to
obtain a copy of the information we maintain about them in our reference products.

Companies are assessing their privacy policies and beginning to recognize that newly developed customer data integration technology
can help them honor an individual's preferences and address consumers' concerns. We believe that technologies such as AbiliTec will
enable businesses to move beyond mere privacy "protection" and toward aggressive consumer advocacy. Just as AbiliTec allows
businesses to create a single view of their customers in real time for marketing purposes, it makes it much easier for businesses to
honor their customers' preferences and selectively opt out of certain practices, and provide better safeguards around their
customers' information.

Privacy legislation is pending in Congress and in most of the 50 states, and we anticipate that additional legislation will continue
to be introduced in the future. While there has been a significant amount of proposed legislation, we believe that as legislators
come to better understand the importance of information as a fundamental building block of a robust economy, reasonable legislative
approaches to information use will prevail. We are supportive of legislation that codifies the current industry guidelines of
notice and opt-out regarding whether or not a consumer's personal information is shared with independent third parties for marketing
purposes. We recognize that different types of personal information should be afforded varying safeguards, so with regard to
certain types of sensitive personal information, we support choice on an opt-in basis for third-party marketing use. Acxiom also
supports legislation requiring all custodians of sensitive information to deploy reasonable information security safeguards to
protect that information.

Employees

Acxiom currently employs approximately 6,600 employees (associates) worldwide. None of Acxiom's U.S. associates are currently
represented by a labor union or are the subject of a collective bargaining agreement. To the best of management's knowledge,
approximately 18 associates are elected members of work councils representing the associates in France, Germany and the Netherlands.
Acxiom has never experienced a work stoppage and believes that its employee relations are good.

RECENT DEVELOPMENTS

Effective May 6, 2005, we acquired the outstanding stock of Digital Impact, Inc., a leading provider of integrated digital marketing
solutions for Global 2000 enterprises based in San Mateo, CA, with approximately 280 employees. It offers online direct marketing
solutions which assist companies in creating and delivering successful e-mail marketing programs designed to drive revenue,
influence behavior and strengthen customer relationships through a combination of hosted web applications, messaging technology
infrastructure and professional services. Management believes that the acquisition will provide Acxiom with a competitive platform
to win digital marketing outsourcing contracts with new clients and expand offerings to current clients. Based on the "IMPACT
Platform," Digital delivers integrated campaign management, analytics, and e-messaging services focused on strategic data-driven
marketing results. Digital provides campaigns across multimedia channels and was the first company to offer comprehensive e-mail
deliverability reporting (percentage of e-mails sent that reach the intended recipient) and anti-spam solutions. Representative
clients include The GAP, Dell, HP, Fidelity, Comcast and Marriot.

In April 2005, we discontinued most of our operations in Japan. We initially entered the Japanese market in 2000 by purchasing a
minority interest in a Japanese consumer data firm. Our activities in Japan consisted of providing data hygiene, marketing campaign
data and consulting services. The decision to serve the market through business partnerships was based on the fact that the
business did not expand as rapidly as we had anticipated and never achieved profitability.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION

This document, the documents that we incorporate by reference, and other written reports and oral statements made from time to time
by us and our representatives contain forward-looking statements. These statements, which are not statements of historical fact, may
contain estimates, assumptions, projections and/or expectations regarding our financial position, results of operations, market
position, product development, growth opportunities, economic conditions, and other similar forecasts and statements of expectation.
We generally indicate these statements by words or phrases such as "anticipate," "estimate," "plan," "expect," "believe," "intend,"
"foresee," and similar words or phrases. These forward-looking statements are not guarantees of future performance and are subject
to a number of factors and uncertainties that could cause our actual results and experiences to differ materially from the
anticipated results and expectations expressed in such forward-looking statements.

The forward-looking statements contained in this report include the items set forth on pages F-26- F-27 in Management's Discussion
and Analysis of Financial Condition and Results of Operations ("MD&A") attached hereto. In light of the risks, uncertainties and
assumptions set forth in the MD&A, we caution readers not to place undue reliance on any forward-looking statements. We undertake no
obligation to publicly update or revise any forward-looking statements based on the occurrence of future events, the receipt of new
information or otherwise.

Item 2. Properties

Acxiom is headquartered in Little Rock, Arkansas with additional locations around the United States. It also has operations in
Europe, Australia and China. In general, our facilities are in good condition. Construction on a 97,000 sq. ft. office building
and data center in Phoenix was completed during the past fiscal year. Construction on a new 30,000 sq. ft. data center in Little
Rock is expected to be completed during fiscal 2006. We believe that our current facilities, together with those currently planned
or underway, are adequate to meet our current needs. Other than the possible consolidation of some of our European facilities, we
do not anticipate that any substantial additional properties will be required during fiscal year 2006. The following table sets
forth the location, ownership and general use of the principal properties currently being used by each business segment.

Location Held Use Business Segment

United States:

Phoenix, Arizona Held in fee Data center; office space U.S. Services and Data

Conway, Arkansas Eleven facilities Data center; office space U.S. Services and Data;
held in fee IT Management

Fayetteville, Arkansas Lease Office space U.S. Services and Data

Little Rock, Arkansas Two leased Principal executive offices; U.S. Services and Data
buildings; one office space
building held in fee

San Diego, California Lease Data center; office space U.S. Services and Data

San Mateo, California Lease Office space U.S. Services and Data

Stamford, Lease Office space U.S. Services and Data
Connecticut

Chicago, Illinois Lease Data center; office space IT Management

Downers Grove, Illinois Lease Data center; office U.S. Services and Data;
space; IT Management

Southfield, Michigan Lease Data center; office space IT Management

Shoreview, Minnesota Lease Office space U.S. Services and Data;
IT Management

Carmel, New York Lease Data center; office space IT Management

Melville, New York Lease Office space; print facilities U.S. Services and Data

Independence, Ohio Lease Office space U.S. Services and Data

Memphis, Tennessee Lease Office space U.S. Services and Data

Nashville, Tennessee Lease Office space U.S. Services and Data

Europe:

London, England Lease Office space International Services
and Data

Normanton, England Lease Data center; office space International Services
and Data

Sunderland, England Lease Data center; fulfillment International Services
service center; office space; and Data; IT Management
warehouse space

Teddington, England Lease Office space International Services
and Data

Lille, France Lease Data center; office space International Services
and Data

Paris, France Lease Data center; office space International Services
and Data

Frankfurt, Germany Lease Office space International Services
and Data

Munich, Germany Lease Office space International Services
and Data

Amsterdam, Netherlands Lease Office space International Services
and Data

Warsaw, Poland Lease Office space International Services
and Data

Madrid, Spain Lease Office space International Services
and Data

26
Australia:

Sydney, Australia Lease Office space International Services
and Data

China:

Shanghai, China Lease Office space International Services
and Data

Item 3. Legal Proceedings

We are involved in various claims and litigation matters that arise in the ordinary course of business. None of these, however, are
believed to be material in their nature or scope. See Note 11 of the Notes to Financial Statements which are attached to this Annual
Report as part of the Financial Supplement.

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.

[THIS SPACE LEFT BLANK INTENTIONALLY]

EXECUTIVE OFFICERS

Acxiom's corporate officers, their current positions, ages and business experience are listed below. Officers are elected by the
Board of Directors annually for terms of one year or until their successors are elected. There are no family relationships between
any of the individuals listed below:

Office of the Company Leader

Name Position Held Age

Charles D. Morgan Chairman of the Board and Company Leader* 62

Rodger S. Kline Director and Chief Finance & Administration 62
Leader*

L. Lee Hodges Chief Operations Leader* 58

Corporate Office Leaders

Name Position Held Age

Jennifer T. Barrett Chief Privacy Officer 55

R. Bruce Carroll Strategic Development Leader 60

Cindy K. Childers Organizational Development Leader* 45

C. Alex Dietz Products and Infrastructure Technology 62
Organization Leader*

Dathan A. Gaskill Corporate Finance Leader & Treasurer 50

Richard K. Howe Marketing Organization Leader* 43

Catherine L. Hughes Corporate Governance Officer & Secretary 52

Jerry C. Jones Business Development/Legal Leader & Assistant 49
Secretary*

James T. Womble Global Development Leader* 62

Operations Leaders

Name Position Held Age

David J. Allen Client Services Organization Leader - Multi- 52
Industry 1

Scott D. Hambuchen Universal Services & Support Organization Leader 36

Michael J. Lloyd Delivery Management Organization Leader 38

* Subject to Section 16(b) of the Securities Exchange Act of 1934

Holly Marr Associate Community Organization Leader 40

William C. Park Client Services Organization Leader - Interactive 37
Services

Jefferson D. Stalnaker Client Services Organization Leader - Financial 39
Services

Martin D. Sunde Client Services Organization Leader - Multi- 48
Industry 2

Thomas B. Walker IT Services Organization Leader 56

Timothy Watts Account Executive 46

Kevin R. Zaffaroni Client Services Organization Leader - Europe 51

Mr. Morgan joined Acxiom as an officer in 1972. He has been chairman of the board of directors since 1975 and serves as Acxiom's
Company Leader. He is also a director and past chairman of the board of the Direct Marketing Association. In addition, he serves
as a member and is the past Chairman of the Board of Trustees of Hendrix College. He was employed by IBM for six years prior to
joining Acxiom. Mr. Morgan holds a mechanical engineering degree from the University of Arkansas.

Mr. Kline joined Acxiom in 1973 and has served as an officer and director of the Company since 1975. He is currently Acxiom's Chief
Finance and Administration Leader. Prior to joining Acxiom, Mr. Kline spent seven years with IBM and two years as an officer in the
U.S. Army. Mr. Kline holds a degree in electrical engineering from the University of Arkansas at Fayetteville, where he has served
since 1990 as chairman of the College of Engineering Advisory Council.

Mr. Hodges joined Acxiom in 1998 as its Outsourcing and IT Services Leader and currently serves as Chief Operations Leader for the
Company. Prior to joining Acxiom, he was employed for six years with Tascor, the outsourcing subsidiary of Norrell Corporation,
most recently serving as a senior vice president. 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 Pennsylvania
State University.

Ms. Barrett joined Acxiom in 1974 and serves as Chief Privacy Officer. She initially was named a corporate officer in 1981. In her
current role, Ms. Barrett is responsible for the oversight of Acxiom's global public policy and fair information practices. Since
1991, she has led Acxiom's initiatives relating to internal compliance with applicable privacy guidelines, consumer affairs and
government affairs. During her career with Acxiom, Ms. Barrett has worked in a variety of areas of the business, including systems
development, operations, marketing and business development. Ms. Barrett holds a degree in mathematics and computer science from
the University of Texas at Austin.

Mr. Carroll joined Acxiom in 2000 as an officer and currently serves as Strategic Development Leader. Prior to joining Acxiom, he
was senior vice president of R.L. Polk, where he managed Polk's data engineering and market analysis group of companies. Before its
acquisition by Polk in 1996, he was president of Blackburn Marketing Services in Toronto, an information technology company which
included Canadian-based Compusearch and US-based Carfax. Prior to his nine years with Blackburn and Polk, Mr. Carroll was
president/CEO of Claritas Inc. for 10 years, based in Washington, D.C., then was managing director of Computerized Marketing
Technologies in London. He holds undergraduate and graduate degrees in history and economics from the University of Toronto.

Ms. Childers joined Acxiom in 1985 and serves as Organizational Development Leader. She was first named an officer in 1996. In her
current role, Ms. Childers leads strategic planning and execution in the areas of business culture, organizational effectiveness,
associate development, recruiting, human resources and corporate communications. Previously, she served as leader of the financial
services business unit and oversaw all of the financial and accounting functions of the Company. Before joining Acxiom, she was a
certified public accountant in audit and tax for KPMG Peat Marwick. Ms. Childers holds a degree in business administration from the
University of Central Arkansas.

Mr. Dietz joined Acxiom as an officer in 1970 and has served in a variety of senior-level management positions since that time. He
currently is Acxiom's Products and Infrastructure Technology Organization Leader, setting the strategy and direction for the
development of the overall technology framework for the delivery of Acxiom's products and solutions. Prior to joining Acxiom, Mr.
Dietz was a systems engineer with IBM. Mr. Dietz holds a degree in electrical engineering from Tulane University.

Mr. Gaskill joined Acxiom in 1999 and currently serves as its Corporate Finance Leader and Treasurer. He became an officer in 2005.
Prior to joining Acxiom, Mr. Gaskill spent 13 years in the securities industry as a senior analyst and director of research focusing
on the information technology and telecommunications industries. Mr. Gaskill holds a degree in computer science and an MBA from the
University of Arkansas at Little Rock.

Mr. Howe joined Acxiom in 2004 as its Marketing Organization Leader. From 2001 to 2004 he was employed by Fair Isaac & Company
as business unit vice president, Global Marketing Services. For two years prior to that, Mr. Howe was the CEO and chairman of the
board of ieWild Inc., a technology company offering software solutions to leading financial institutions, which was acquired by HNC
Software, Inc. in 2001. For the previous nine years, Mr. Howe held positions in product marketing, project management, sales
management, software development and construction engineering. Mr. Howe holds a bachelor's degree in structural engineering from
Concordia University, Canada, and a master's degree in engineering from McGill University, Canada.

Ms. Hughes joined Acxiom in 1988 as General Counsel and Secretary and currently serves as Acxiom's Corporate Governance Officer and
Secretary. Prior to joining Acxiom, Ms. Hughes was employed as a corporate securities attorney with the Rose Law Firm in Little
Rock, Arkansas. Previously she served as a senior law clerk with the Federal District Court of the Eastern District of Arkansas and
as an assistant attorney general for the State of Arkansas. Ms. Hughes holds a degree in political science and philosophy from the
University of Arkansas at Little Rock and a juris doctorate degree from the UALR School of Law.

Mr. Jones joined Acxiom in 1999 and currently serves as Business Development/Legal Leader & Assistant Secretary. Prior to
joining Acxiom, he was employed for 19 years as an attorney with the Rose Law Firm in Little Rock, Arkansas, representing a broad
range of business interests. He is a member of the board of directors of Entrust, Inc. and the Arkansas Virtual Academy. Mr. Jones
holds a degree in public administration and a juris doctorate degree from the University of Arkansas.

Mr. Womble joined Acxiom in 1974 and serves as the Company's Global Development Leader. He served as a director of the Company from
1975 to 2005 and has been an officer since 1975. Prior to joining Acxiom, he was employed by IBM as a systems engineer and
marketing representative. Mr. Womble is a member of the Board of Trustees of the Arkansas Arts Center. He holds a degree in civil
engineering from the University of Arkansas.

Mr. Allen joined Acxiom in 1997 and serves as Client Services Organization Leader for Multi Industry 1. He was first named as an
officer in 1999. Prior to his current role, he served as a group leader in Acxiom's London office. Prior to joining Acxiom, Mr.
Allen was employed by IBM and EDS. He holds a bachelor's degree in biological sciences from the University of East Anglia (UK).

Mr. Hambuchen joined Acxiom in 1992 as a software engineer and serves as the Universal Services & Support Organization Leader.
He was first named an officer in 2001 and has served in a number of roles, including industry solutions group leader for Acxiom's
Multi-Industry Client Services Organization. He also led operations in the United Kingdom, France and Spain. Mr. Hambuchen holds
a degree in industrial engineering from the University of Arkansas, where he sits on the university's board of directors for the
Information Technology Resource Center. He also serves on the board of Arvest Bank.

Mr. Lloyd joined Acxiom in 1989 and currently serves as Delivery Management Organization Leader. He is also responsible for
Acxiom's Program Management Office and Opportunity Engagement Process. Mr. Lloyd has held a variety of leadership positions within
Acxiom, most recently serving as client services group leader focused on client management for several large financial services
accounts. He was first named an officer in 2001. He holds a BBA in finance from the University of Central Arkansas.

Ms. Marr joined Acxiom in 1986 and currently serves as Associate Community Organization Leader. She was first named an officer in
2000. Ms. Marr has served in a number of leadership roles at Acxiom in organizational development, operational effectiveness and
client relationship management. Her industry experience includes the insurance, investment/brokerage, automotive,
telecommunications and financial services industries. She holds a bachelor's degree from Hendrix College in Conway, Arkansas.

Mr. Park joined Acxiom as an officer in 2005 following the acquisition of Digital Impact, Inc. and serves as Acxiom's Client
Services Organization Leader for Interactive Services. Prior to joining Acxiom, he served as CEO and chairman of the board of
Digital Impact, an integrated digital marketing solutions company that he co-founded in 1997. During 1996, Mr. Park worked as a
director of customer profile marketing at NetAngels, an Internet company focused on web personalization technologies. Prior to that
he was the vice president of marketing for ZAI*NET Software, Inc., an enterprise software company for foreign currency trading.
Park holds a B.A. from the University of Pennsylvania and an M.B.A. from Stanford University.

Mr. Stalnaker currently serves as Acxiom's Client Services Organization Leader for Financial Services. He joined Acxiom in 1995
and was first named an officer in 2001. During his tenure he has served in a number of roles in the financial organization, most
recently as financial operations leader. Prior to joining Acxiom, Mr. Stalnaker was employed by the Arkansas Public Service
Commission as a senior financial analyst. Prior to that, Mr. Stalnaker worked for several years at a regional public accounting
firm located in Little Rock, Arkansas. He holds a degree in business administration with a major in accounting from the University
of Central Arkansas.

Mr. Sunde joined Acxiom in 2005 and serves as the Client Services Organization Leader for Multi-Industry 2. Previously Mr. Sunde
was vice president and general manager of Siebel Systems, Inc., where he led Siebel's alliances organization and was responsible for
external alliance partners that acted as joint marketing, sales, development, and services channels. Prior to his three years at
Siebel, Mr. Sunde worked in several capacities at Enron Energy Services, Inc., a division of Enron, serving as a director of sales
and marketing, product management and most recently as president over North America. Prior to that, he worked for IBM in various
management positions for over 18 years. He holds a degree in economics from Carleton College in Northfield, Minnesota.

Mr. Walker joined Acxiom in 1990 and currently serves as IT Services Organization Leader. He was first named an officer in 1993.
Prior to joining Acxiom, Mr. Walker was employed with IBM, where he served as a systems engineer, on the regional support staff and
as an S.E. manager in St. Louis, as a member of the headquarters staff support in Dallas, and as a branch marketing support manager
in Washington, D.C. He holds a degree in industrial engineering from the University of Arkansas.

Mr. Watts joined Acxiom in 1987 and serves as account executive for Acxiom's largest financial services clients. He was first named
an officer in 2001. In previous leadership roles at Acxiom, Mr. Watts was responsible for Acxiom's relationships with clients in
the financial, high-tech, insurance, investment/brokerage, media and telecommunications industries. Prior to joining Acxiom, Mr.
Watts was employed for five years with United Parcel Service in Dayton, Ohio. He attended the University of Cincinnati and Wright
State University in Dayton, Ohio.

Mr. Zaffaroni joined Acxiom in 1997 and currently serves as Client Services Organization Leader for Europe. He was first named an
officer in 1999. Prior to moving to London in his current capacity, Mr. Zaffaroni was a group leader responsible for clients in a
number of areas, including finance, health care and government. Before joining Acxiom, he was employed for 22 years with IBM, where
he held several management positions. He also served as director of systems integration and outsourcing services for ISSC, the
predecessor to IBM Global Services. He holds a Bachelor of Science degree from Pennsylvania State University and has completed
numerous business courses including IBM's Advanced Management School.

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The outstanding shares of Acxiom's Common Stock are listed and traded on the NASDAQ National Market and trade under the symbol ACXM.
The following table reflects the range of high and low closing prices of Acxiom's Common Stock as reported by Dow Jones & Company,
Inc. for each quarter in fiscal 2005 and 2004.

Fiscal 2005 High Low
--------------------------------------------------------
Fourth Quarter $25.78 $20.65
Third Quarter 26.94 22.72
Second Quarter 24.23 21.39
First Quarter 25.04 22.17

Fiscal 2004 High Low
--------------------------------------------------------
Fourth Quarter $21.96 $18.64
Third Quarter 18.75 15.39
Second Quarter 17.50 15.10
First Quarter 16.91 12.96

We currently have approximately 2,660 stockholders of record.

The Acxiom Board of Directors declared quarterly dividend payments of $.04 per share on our Common Stock for the quarters ending
December 31, 2003, March 31, 2004, June 30, 2004 and September 30, 2004. A $.05 per share dividend was declared for the quarters
ending December 31, 2004 and March 31, 2005. Prior to 2004, we had never paid cash dividends on our stock. While we expect to
continue to pay quarterly dividends for the foreseeable future, all subsequent dividends will be reviewed quarterly and declared by
the Board in its discretion. In addition, if certain financial ratios and other conditions are not satisfied, our revolving credit
facility imposes limitations on our ability to pay dividends, including a restriction that we may not pay dividends in excess of $30
million in any fiscal year (plus dividends in an additional amount up to $50 million in any fiscal year, depending on the amount of
other restricted payments made during the year).

The table below provides information regarding purchases by Acxiom of its Common Stock during the periods indicated.
-------------------- ----------------- ------------------ -------------------------- ---------------------------------
Maximum Number (or Approximate
Total Number of Shares Dollar Value) of Shares that
Total Number of Average Price Purchased as Part of May Yet Be Purchased Under the
Period Shares Paid per Share Publicly Announced Plans Plans or Programs
Purchased or Programs

-------------------- ----------------- ------------------ -------------------------- ---------------------------------
1/1/05 - 1/31/05 1,229,267 22.75 1,229,267 $50,586,702
-------------------- ----------------- ------------------ -------------------------- ---------------------------------
2/1/05 - 2/28/05 236,142 23.10 236,142 $45,125,508
-------------------- ----------------- ------------------ -------------------------- ---------------------------------
3/1/05 - 3/31/05 180,100 20.77 180,100 $41,379,349
-------------------- ----------------- ------------------ -------------------------- ---------------------------------
Total 1,645,509 22.58 1,645,509 $41,379,349
-------------------- ----------------- ------------------ -------------------------- ---------------------------------

The repurchases listed above were made pursuant to a repurchase program initially adopted by the Board of Directors on October 30,
2002. The maximum dollar amount which had been approved and is reflected in the table above as of March 31, 2005 was $200 million.
Subsequent to March 31, 2005, the Board approved increases in the maximum dollar amount which may be repurchased from $200 million
to $550 million. As of June 10, 2005, the maximum approximate dollar value of shares that may yet be purchased under the repurchase
program was approximately $241.6 million. The repurchase program has no designated expiration date.

Item 6. Selected Financial Data

For information pertaining to Selected Financial Data of Acxiom, refer to page F-2 of the Financial Supplement, which is attached
hereto.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The information required by this Item appears in the Financial Supplement at pp. F-3 - F-27, which is attached hereto.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The Company's earnings are affected by changes in short-term interest rates primarily as a result of its revolving credit agreement,
which bears interest at a floating rate. The Company does not use derivative or other financial instruments to mitigate the
interest rate risk. Risk can be estimated by measuring the impact of a near-term adverse movement of 10% in short-term market
interest rates. If short-term market interest rates average 10% more during the next four quarters than during the previous four
quarters, there would be no material adverse impact on the Company's results of operations. The Company has no material future
earnings or cash flow expenses from changes in interest rates related to its other long-term debt obligations, as substantially all
of the Company's remaining long-term debt instruments have fixed rates. At both March 31, 2005 and 2004, the fair value of the
Company's fixed rate long-term obligations approximated carrying value.

As noted in Note 3 to the consolidated financial statements, during the fiscal years ended March 31, 2004 and 2005 the Company
completed international acquisitions of the Claritas Europe group of companies, the Consodata companies including the German
operation formerly known as 'pan-adress', and ChinaLOOP. As a result of these international acquisitions, the Company now has a
larger presence in the United Kingdom and a new presence in France, The Netherlands, Germany, Spain, Portugal, Poland and China. In
general, each of the foreign locations is expected to fund its own operations and cash flows, although funds may be loaned or
invested from the U.S. to the foreign subsidiaries. Therefore, exchange rate movements of foreign currencies may have an impact on
the Company's future costs or on future cash flows from foreign investments. The Company has not entered into any foreign currency
forward exchanges contracts or other derivative instruments to hedge the effects of adverse fluctuations in foreign currency
exchange rates.

Item 8. Financial Statements and Supplementary Data

The Financial Statements required by this Item appear in the Financial Supplement at pp. F-31 - F-68, which is attached hereto.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required under the Sarbanes-Oxley Act of 2002, Acxiom carried out an evaluation as of March 31, 2005, under the supervision and
with the participation of its management, including the Registrant's Company Leader (Chief Executive Officer) and its Chief Finance
and Administration Leader (Chief Financial Officer), of the effectiveness of the design and operation of its "disclosure controls and
procedures." The term "disclosure controls and procedures" is defined under SEC rules as controls and other procedures of a company
that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange
Act is recorded, processed, summarized and reported within required time periods. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports
that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including the company's
principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure. Based upon that
evaluation, Acxiom's Company Leader and its Chief Finance & Administration Leader concluded that the Company's disclosure controls
and procedures were effective. See further discussion in the Financial Supplement at page F-28 , which is attached hereto.

33
Changes in Internal Controls

There were no significant changes in Acxiom's internal controls or other factors that could significantly affect the controls
subsequent to the date of their evaluation.

Item 9B. Other Information

Not applicable.

PART III

Item 10. Directors and Executive Officers of the Registrant

Pursuant to general instruction G(3) of the instructions to Form 10-K, information concerning Acxiom's executive officers is
included under the caption "Executive Officers" at the end of Part I of this Report. The remaining information required by this
Item appears under the captions "Proposals You May Vote On," "Information About the Board of Directors," and "Section 16(a)
Beneficial Ownership Reporting Compliance" in Acxiom's 2005 Proxy Statement, which information is incorporated herein by reference.

The Acxiom Board of Directors has adopted a code of ethics applicable to our principal executive, financial and accounting officers
and all other persons performing similar functions. A copy of this code of ethics is posted on Acxiom's website at www.acxiom.com
under the Corporate Governance section of