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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
 
                             WASHINGTON, D.C. 20549
 
                            ------------------------
 
                                   FORM 10-Q
 
(MARK ONE)
 
  /X/    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934
 
                 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
 
                                       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 0-15325
 
                            ------------------------
 
                              INFORMIX CORPORATION
 
             (Exact name of registrant as specified in its charter)
 
                  DELAWARE                             94-3011736
      (State or other jurisdiction of        (I.R.S. Employer Identification
       incorporation or organization)                     No.)
 
                   4100 BOHANNON DRIVE, MENLO PARK, CA 94025
                    (Address of principal executive office)
 
                                  650-926-6300
              (Registrant's telephone number, including area code)
 
                            ------------------------
 
    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 / /
 
    At March 31, 1998, 167,464,942 shares of the Registrant's Common Stock were
outstanding.
 
    Total number of pages: 44.
 
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- --------------------------------------------------------------------------------

                           FORWARD LOOKING STATEMENTS
 
    THIS QUARTERLY REPORT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING
OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF
CERTAIN FACTORS DESCRIBED HEREIN AND IN OTHER DOCUMENTS. READERS SHOULD PAY
PARTICULAR ATTENTION TO THE SECTION OF THIS REPORT ENTITLED "BUSINESS RISKS" AND
SHOULD ALSO CAREFULLY REVIEW THE RISK FACTORS DESCRIBED IN THE OTHER DOCUMENTS
THE COMPANY FILES FROM TIME TO TIME WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
     RESTATEMENT OF FINANCIAL STATEMENTS AND CHANGES TO CERTAIN INFORMATION
 
    Subsequent to the filing with the Commission of its Quarterly Report of Form
10-Q for the quarter ended March 30, 1997, the Company became aware of errors
and irregularities that ultimately affected the timing and dollar amount of
reported earned revenues from license transactions for all annual periods in the
three years ended December 31, 1996, in particular transactions involving
unauthorized or undisclosed arrangements or agreements with resellers. As a
result of its investigation into these errors and irregularities, in August
1997, the Company announced that it would restate its financial results for
fiscal 1996 and 1995. The financial review undertaken by the Company to
determine the extent of the restatement ultimately resulted in the restatement
of the Company's financial results for fiscal 1996, 1995 and 1994 and for the
first quarter of fiscal 1997. The Company publicly disclosed the results of the
restatement in November 1997. See Note B to the Unaudited Consolidated Financial
Statements.
 
    Financial statements and related disclosures contained in this filing
reflect, where appropriate, changes to conform to the restatement.
 
                                     INDEX
 


                                                                                                                PAGE
                                                                                                                -----
                                                                                                          
Part I. Financial Information..............................................................................           3
  Item 1. Condensed Consolidated Financial Statements (Unaudited)..........................................           3
        Condensed Consolidated Statements of Operations for the three-month periods ended March 31, 1998
        and March 30, 1997.................................................................................           3
        Condensed Consolidated Balance Sheets as of March 31, 1998 and December 31, 1997...................           4
        Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 1998
        and March 30, 1997.................................................................................           5
        Notes to Condensed Consolidated Financial Statements...............................................           6
  Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............          12
  Item 3.Quantitative and Qualitative Disclosures About Market Risk........................................          38
 
Part II. Other Information.................................................................................          39
  Item 1. Legal Proceedings................................................................................          39
  Item 2. Changes in Securities and Use of Proceeds........................................................          41
  Item 3. Defaults Upon Senior Securities..................................................................          41
  Item 4. Submission of Matters to a Vote of Security Holders..............................................          41
  Item 5. Other Information................................................................................          41
  Item 6. Exhibits and Reports on Form 8-K.................................................................          42
Signature page.............................................................................................          43

 
                                       2

                         PART I. FINANCIAL INFORMATION
 
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
                              INFORMIX CORPORATION
 
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
 
                                  (UNAUDITED)
 


                                                                          THREE MONTHS ENDED
                                                                         --------------------
                                                                         MARCH 31,  MARCH 30,
                                                                           1998       1997
                                                                         ---------  ---------
                                                                                    (RESTATED)
                                                                              
Net revenues:
  Licenses.............................................................  $  89,462  $  86,393
  Services.............................................................     77,720     63,509
                                                                         ---------  ---------
                                                                           167,182    149,902
Costs and expenses:
  Cost of software distribution........................................      9,833     29,134
  Cost of services.....................................................     37,425     41,152
  Sales and marketing..................................................     63,889    131,023
  Research and development.............................................     36,619     35,289
  General and administrative...........................................     13,531     28,027
  Write-off of goodwill and other long-term assets.....................         --     30,473
  Write-off of acquired research & development.........................         --      7,000
  Restructuring........................................................     (3,252)        --
                                                                         ---------  ---------
                                                                           158,045    302,098
                                                                         ---------  ---------
Operating income (loss)................................................      9,137   (152,196)
  Interest income......................................................      2,038      1,267
  Interest expense.....................................................     (1,882)    (2,468)
  Other income/(expense), net..........................................       (315)    12,036
                                                                         ---------  ---------
Income (loss) before income taxes......................................      8,978   (141,361)
Income taxes...........................................................      1,900      2,800
                                                                         ---------  ---------
Net income (loss)......................................................  $   7,078  $(144,161)
  Preferred stock dividend.............................................       (603)        --
  Value assigned to warrants...........................................     (1,594)        --
                                                                         ---------  ---------
Net income (loss) applicable to common stockholders....................  $   4,881  $(144,161)
                                                                         ---------  ---------
                                                                         ---------  ---------
Net income (loss) per common share:
  Basic................................................................  $    0.03  $   (0.95)
                                                                         ---------  ---------
                                                                         ---------  ---------
  Diluted..............................................................  $    0.03  $   (0.95)
                                                                         ---------  ---------
                                                                         ---------  ---------
Shares used in per share calculation:
  Basic................................................................    160,172    151,049
                                                                         ---------  ---------
                                                                         ---------  ---------
  Diluted..............................................................    168,653    151,049
                                                                         ---------  ---------
                                                                         ---------  ---------

 
           See Notes to Condensed Consolidated Financial Statements.
 
                                       3

                              INFORMIX CORPORATION
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
 
                           (UNAUDITED, IN THOUSANDS)
 


                                                                                         MARCH 31,   DECEMBER 31,
                                                                                            1998         1997
                                                                                         ----------  ------------
                                                                                               
                                                     ASSETS
Current assets:
Cash and cash equivalents..............................................................  $  149,208   $  139,396
  Short-term investments...............................................................      16,282       16,069
  Accounts receivable, net.............................................................     135,969      142,048
  Deferred taxes.......................................................................      13,219       12,249
  Other current assets.................................................................      27,045       26,243
                                                                                         ----------  ------------
  Total current assets.................................................................     341,723      336,005
Property and equipment, net............................................................      86,913       96,012
Software costs, net....................................................................      38,826       40,854
Deferred taxes.........................................................................      45,906       56,345
Intangible assets, net.................................................................       7,068        8,277
Other assets...........................................................................      29,834       25,751
                                                                                         ----------  ------------
  Total assets.........................................................................  $  550,270   $  563,244
                                                                                         ----------  ------------
                                                                                         ----------  ------------
 
                                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable.....................................................................  $   30,845   $   36,155
  Accrued expenses.....................................................................      56,125       64,538
  Accrued employee compensation........................................................      44,309       49,154
  Income taxes payable.................................................................       4,442        3,031
  Deferred maintenance revenue.........................................................     110,171      100,828
  Advances from customers and financial institutions...................................     156,505      180,048
  Accrued restructuring costs..........................................................      17,344       26,597
  Other liabilities....................................................................       8,468       15,802
                                                                                         ----------  ------------
    Total current liabilities..........................................................     428,209      476,153
Other liabilities......................................................................       6,187        6,311
Deferred taxes.........................................................................      20,903       21,716
 
Stockholders' equity:
  Convertible Series A Preferred Stock.................................................          --            2
  Convertible Series B Preferred Stock.................................................           1            1
  Common stock; par value..............................................................       1,674        1,526
  Additional paid-in capital...........................................................     368,497      347,582
  Accumulated deficit..................................................................    (271,066)    (278,144)
  Unrealized gain/(loss) on available-for-sale securities..............................       3,207         (767)
  Foreign currency translation adjustment..............................................      (7,342)     (11,136)
                                                                                         ----------  ------------
    Total stockholders' equity.........................................................      94,971       59,064
                                                                                         ----------  ------------
      Total liabilities and stockholders' equity.......................................  $  550,270   $  563,244
                                                                                         ----------  ------------
                                                                                         ----------  ------------

 
           See Notes to Condensed Consolidated Financial Statements.
 
                                       4

                              INFORMIX CORPORATION
 
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                           (UNAUDITED, IN THOUSANDS)
 


                                                                                             THREE MONTHS ENDED
                                                                                          -------------------------
                                                                                           MARCH 31,    MARCH 30,
                                                                                             1998          1997
                                                                                          -----------  ------------
                                                                                                        (RESTATED)
                                                                                                 
Operating Activities
Net income (loss).......................................................................   $   7,078    $ (144,161)
Adjustments to reconcile net income (loss) to net cash and cash equivalents used in
  operating activities:
  License fees received in advance......................................................     (15,148)      (15,277)
  Depreciation and amortization.........................................................      12,078        24,897
  Amortization of capitalized software..................................................       4,974         5,484
  Write-off of capitalized software.....................................................         771        14,749
  Write-off of long term assets.........................................................         742         6,799
  Write-off of intangibles..............................................................          --        20,032
  Write-off of acquired research & development..........................................          --         7,000
  Foreign currency transaction loss.....................................................       3,794         5,066
  Gains on sales of strategic investments...............................................          47            --
  (Gain) loss on disposal of property and equipment.....................................        (306)          (50)
  Provisions for losses on accounts receivable..........................................          --        11,006
  Restructuring charges.................................................................      (9,253)        3,642
  Stock-based employee compensation.....................................................         461            --
  Changes in operating assets and liabilities:
    Accounts receivable.................................................................         501        14,284
    Other current assets................................................................      (1,670)       (9,853)
    Other long term assets..............................................................      10,439            --
    Accounts payable and accrued expenses...............................................     (30,901)       (4,957)
    Deferred maintenance revenue........................................................       8,694         6,825
    Other long term liabilities.........................................................        (813)           --
                                                                                          -----------  ------------
Net cash and cash equivalents provided by (used in) operating activities................      (8,512)      (54,514)
Investing Activities
Investments of excess cash:
  Purchases of available-for-sale securities............................................      (9,500)      (10,374)
  Maturities of available-for-sale securities...........................................       4,997         9,585
  Sales of available-for-sale securities................................................       4,300            --
Purchases of strategic investments......................................................          --        (1,750)
Purchases of property and equipment.....................................................      (1,676)      (81,931)
Proceeds from disposal of property and equipment........................................         327           279
Additions to software costs.............................................................      (3,717)       (8,104)
Business combinations, net of cash acquired.............................................          --        (8,786)
Other...................................................................................         727           (21)
                                                                                          -----------  ------------
Net cash and cash equivalents used in investing activities..............................      (4,542)     (101,102)
Financing Activities
Advances from customers and financial institutions......................................          --        19,694
Proceeds from issuance of common stock, net.............................................       6,500         1,617
Proceeds from issuance of preferred stock, net..........................................      14,100            --
Principal payments on capital leases....................................................      (1,341)         (885)
                                                                                          -----------  ------------
Net cash and cash equivalents provided by financing activities..........................      19,259        20,426
                                                                                          -----------  ------------
Effect of exchange rate changes on cash and cash equivalents............................       3,607        (6,238)
                                                                                          -----------  ------------
Increase (decrease) in cash and cash equivalents........................................       9,812      (141,428)
Cash and cash equivalents at beginning of period........................................     139,396       226,508
                                                                                          -----------  ------------
Cash and cash equivalents at end of period..............................................   $ 149,208    $   85,080
                                                                                          -----------  ------------
                                                                                          -----------  ------------

 
           See Notes to Condensed Consolidated Financial Statements.
 
                                       5

                              INFORMIX CORPORATION
 
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
                                 MARCH 31, 1998
 
                                  (UNAUDITED)
 
NOTE A--PRESENTATION OF INTERIM FINANCIAL STATEMENTS
 
    All significant adjustments, in the opinion of management, which are normal,
recurring in nature and necessary for a fair presentation of the financial
position and results of the operations of the Company, have been consistently
recorded. The operating results for the interim periods presented are not
necessarily indicative of expected performance for the entire year.
 
    The Company has elected to change from the 4-4-5 week quarterly convention
previously followed to a calendar quarter convention. The change resulted in an
additional two days of operations for the first quarter of 1998 as compared to
the previous year. The impact on the Company's financial statements was to
increase revenue by $17.5 million, or 11 percent. The impact on operating
expenses was immaterial.
 
NOTE B--RESTATEMENT OF FINANCIAL STATEMENTS
 
    Subsequent to the filing of its Quarterly Report on Form 10-Q for the
quarter ended March 30, 1997 with the Securities and Exchange Commission, the
Company became aware of errors and irregularities that ultimately affected the
timing and dollar amount of reported earned revenues from license transactions
for all periods in the three years ended December 31, 1996 and the quarter ended
March 30, 1997. The irregularities took numerous forms and were primarily the
result of lack of compliance with or circumvention of the Company's procedures
and controls.
 
    These errors and irregularities included unauthorized and undisclosed
arrangements or agreements between Company personnel and resellers, recognition
of revenue on certain transactions in reporting periods prior to contract
acceptance, the recording of certain transactions that lacked economic substance
and the recording of maintenance revenue as license revenue. The unauthorized
and undisclosed agreements with resellers introduced acceptance contingencies,
permitted resellers to return unsold licenses for refunds, extended payment
terms or committed the Company to assist resellers in selling the licenses to
end-users. Accordingly, license revenue from these transactions that was
recorded at the time product was delivered to resellers should have instead been
recorded at the time all conditions on the sale lapsed. Because of the
pervasiveness of the unauthorized arrangements with resellers in the 1994, 1995
and 1996 accounting periods, the Company concluded that all revenue from license
agreements with resellers in these accounting periods, except for those licenses
sold and billed on a per copy basis, should be recognized only when the licenses
were resold or utilized by resellers and all related obligations had been
satisfied. Amounts received from resellers as prepayments of software license
fees in advance of revenue recognition have been recorded as advances on
unearned license revenue. This revised application of accounting policy has been
followed for all transactions with resellers, other than those licenses sold and
billed on a per-copy basis.
 
    In response to the errors and irregularities discussed above, a number of
conditions which collectively represented a material weakness in the Company's
internal accounting controls were identified. These conditions included a
deterioration in the Company's internal accounting controls at corporate and
regional management levels, and a related failure to stress the importance of
these controls, an inappropriate level of influence, principally by the
Company's sales organization, over the revenue recognition process and an
apparent lack of clarity and consistent understanding within the Company
concerning the application of the Company's revenue recognition policies to
large, complex reseller license transactions. The Company has implemented a plan
to strengthen the Company's internal accounting controls. This plan includes
updating the Company's policies regarding accounting and reporting for large,
complex
 
                                       6

                              INFORMIX CORPORATION
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                 MARCH 31, 1998
 
                                  (UNAUDITED)
 
NOTE B--RESTATEMENT OF FINANCIAL STATEMENTS (CONTINUED)
reseller license transactions, developing and conducting educational programs to
implement such policies, changing the Company's corporate and regional
accounting and reporting structure, and re-establishing an internal audit
function reporting to the Company's Board of Directors.
 
NOTE C--REVENUE RECOGNITION POLICY
 
    In October 1997, the American Institute of Certified Public Accountants
issued Statement of Position 97-2 (SOP 97-2), "Software Revenue Recognition"
which superseded SOP 91-1 and provides guidance on generally accepted accounting
principles for recognizing revenue on software transactions. SOP 97-2 was
amended in February 1998 by Statement of Position 98-4 (SOP 98-4) "Deferral of
the Effective Date of a Provision of SOP 97-2" which deferred for one year the
specification of what was considered vendor specific objective evidence of fair
value for the various elements in a multiple element arrangement. The Company
has adopted the provisions of these SOP's as of January 1, 1998 and as a result,
changed certain business practices. The adoption has, in certain circumstances,
resulted in the deferral of software license revenues that would have been
recognized upon delivery of the related software under preceding accounting
standards. Neither the changes in certain business practices nor the deferral of
certain revenues have resulted in a material impact on the Company's operating
results, financial position or cash flows for the period ended March 31, 1998.
 
    As a result of these changes, the Company now recognizes revenue from sales
of software licenses to end-users upon delivery of the software product to the
customer when there are no significant post-delivery obligations and collection
of the license fee is considered probable. Revenue from license agreements with
resellers, except for those licenses sold and billed on a per-copy basis, is
recognized as earned when the licenses are resold or utilized by the reseller
and all related obligations have been satisfied. The Company provides for sales
allowances on an estimated basis.
 
    In the first quarter of 1998, the Company entered into a material
transaction with an Industrial Manufacturer ("IM"). The Company defines an IM as
a developer who owns and licenses or sells to others a product using the IM's
application embedding one of the Company's products in a manner which renders
the Informix product invisible to the end user. The Company is not obligated to
provide sales support to the IM or support to the end user. The Company believes
that the attributes of the IMs are more like those of end-users than resellers
and has elected to account for these types of transactions entered into
subsequent to December 31, 1997 in a manner similar to end user transactions.
 
NOTE D--COMPREHENSIVE INCOME
 
    As of January 1, 1998, the Company adopted Financial Accounting Standards
Board Statement 130 (FAS 130), "Reporting Comprehensive Income." FAS 130
establishes new rules for the reporting and display of comprehensive income and
its components; however, the adoption of this Statement had no impact on the
Company's net income/(loss) or stockholders' equity. FAS 130 requires unrealized
gains or losses on the Company's available-for-sale securities and foreign
currency translation adjustments, which prior to adoption were reported
separately in stockholders' equity to be included in other comprehensive
 
                                       7

                              INFORMIX CORPORATION
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                 MARCH 31, 1998
 
                                  (UNAUDITED)
 
NOTE D--COMPREHENSIVE INCOME (CONTINUED)
income. Prior period financial statements have been reclassified to conform to
the requirements of FAS 130.
 


                                                                          THREE MONTHS ENDED
                                                                         --------------------
                                                                         MARCH 31,  MARCH 30,
                                                                           1998       1997
                                                                         ---------  ---------
                                                                            (IN THOUSANDS)
                                                                              
Net income (loss)......................................................  $   7,078  $(144,161)
Other comprehensive income (loss), net of income tax
  Unrealized gains (losses) on available-for-sale securities...........      3,974     (3,853)
  Foreign currency translation adjustment..............................      3,794       (297)
                                                                         ---------  ---------
Comprehensive income (loss)............................................  $  14,846  $(148,311)
                                                                         ---------  ---------
                                                                         ---------  ---------

 
NOTE E--NET INCOME (LOSS) PER SHARE
 
    The following table sets forth the computation of basic and diluted net
income (loss) per common share:
 


                                                                      THREE MONTHS ENDED
                                                                   ------------------------
                                                                    MARCH 31,    MARCH 30,
                                                                      1998         1997
                                                                   -----------  -----------
                                                                                (RESTATED)
                                                                     (IN THOUSANDS EXCEPT
                                                                       PER SHARE DATA)
                                                                          
Numerator:
Net income (loss)................................................   $   7,078    $(144,161)
Preferred stock dividend.........................................        (603)          --
Value assigned to warrants.......................................      (1,594)          --
                                                                   -----------  -----------
Numerator for basic and diluted net income (loss) per common
  share..........................................................   $   4,881    $(144,161)
                                                                   -----------  -----------
                                                                   -----------  -----------
Denominator:
Weighted average shares                                               160,172      151,049
Effect of dilutive securities:
Employee stock options...........................................       2,673           --
Series A-1 Convertible Preferred Stock...........................       5,808           --
                                                                   -----------  -----------
Denominator for diluted net income (loss) per common share.......     168,653      151,049
                                                                   -----------  -----------
                                                                   -----------  -----------
Basic net income (loss) per common share.........................   $     .03    $   (0.95)
Diluted net income (loss) per common share.......................   $     .03    $   (0.95)
                                                                   -----------  -----------
                                                                   -----------  -----------

 
    Weighted average employee stock options to acquire 6,478,268 shares were
outstanding as of March 30, 1997 but were not included in the computation of
diluted earnings per share because the effect was antidilutive. In addition, at
March 31, 1998, 13,215,467 shares of common stock that would have been issued
upon the assumed conversion of the Series B Convertible Preferred Stock at the
beginning of the
 
                                       8

                              INFORMIX CORPORATION
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                 MARCH 31, 1998
 
                                  (UNAUDITED)
 
NOTE E--NET INCOME (LOSS) PER SHARE (CONTINUED)
period were also excluded from the computation of diluted earnings per share
because the effect was antidilutive.
 
NOTE F--STOCKHOLDERS' EQUITY
 
    In December 1997, the Company's Board of Directors authorized a second stock
option repricing which was effective January 9, 1998 (the "Second Repricing
Effective Date") based upon the closing sales price of the Company's Common
Stock as of the Second Repricing Effective Date. Under the terms of the second
repricing, each employee, excluding officers and directors of the Company, could
exchange any option granted and outstanding as of May 1, 1997 for a new option
with an exercise price equal to the closing sales price on the Second Repricing
Date and with terms consistent with those of the original option, except that
options exchanged in the second repricing could not be exercised for a period of
one year from the Second Repricing Effective Date. Employees elected to reprice
3,128,524 options at a price of $5.094, the closing sales price of the Company's
Common Stock on the Repricing Effective Date.
 
    On February 13, 1998 the holders of the Series A-1 Preferred stock exercised
warrants to purchase 60,000 additional shares of Series A-1 Preferred at $250
per share resulting in net proceeds to the Company of $14.1 million. In
addition, pursuant to the Series A-1 Subscription Agreement, the Series A-1
Preferred Stockholder converted 220,000 shares of Series A-1 Preferred into
12,769,908 shares of the Company's Common Stock.
 
    Reconciliation of outstanding shares:
 


                                                                   
Shares outstanding at December 31, 1997.............................     152,587,051
Shares issued upon exercises of stock options.......................       1,825,484
Shares sold and issued to employees under ESPP......................         282,499
Shares issued upon conversion of Series A-1 Preferred...............      12,769,908
                                                                      --------------
Shares outstanding at March 31, 1998................................     167,464,942
                                                                      --------------
                                                                      --------------

 
NOTE G--RESTRUCTURING CHARGES
 
    In June and again in September 1997, the Company approved plans to
restructure its operations in order to bring expenses in line with forcasted
revenues. In connection with the restructuring, the Company substantially
reduced its worldwide headcount and operations to improve efficiency. The
following analysis
 
                                       9

                              INFORMIX CORPORATION
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                 MARCH 31, 1998
 
                                  (UNAUDITED)
 
NOTE G--RESTRUCTURING CHARGES (CONTINUED)
sets forth the significant components of the restructuring charge included in
current liabilities at March 31, 1998:
 


                                                             RESTRUCTURING   NON-CASH       CASH       ACCRUAL BALANCE
                                                                EXPENSE        COSTS      PAYMENTS    AT MARCH 31, 1998
                                                             -------------  -----------  -----------  -----------------
                                                                                   (IN MILLIONS)
                                                                                          
Severance & Benefits.......................................    $    19.9     $      --    $    19.4       $     0.5
Write-off of Assets........................................         48.2          48.2           --              --
Facility Charges...........................................         33.0           7.8          8.9            16.3
Other......................................................          3.8           2.6          0.7             0.5
                                                                  ------         -----        -----           -----
                                                               $   104.9     $    58.6    $    29.0       $    17.3
                                                                  ------         -----        -----           -----
                                                                  ------         -----        -----           -----

 
    Severance and benefits represent the reduction of approximately 670
employees, primarily sales and marketing personnel, on a worldwide basis. As of
March 31, 1998, the Company had completed this component of its restructure
plan. Temporary employees and contractors were also reduced. Write-off of assets
included write-off or write-down in carrying value of equipment as a result of
the Company's decision to reduce the number of Information Superstores
throughout the world, as well as the write-off of equipment associated with
headcount reductions. The equipment subject to write-offs and write-downs
consisted primarily of computer servers, workstations, and personal computers
that are no longer utilized in the Company's operations. These assets were
written down to their fair value less cost to sell. As of March 31, 1998, these
assets have a carrying value of approximately $2.2 million. Facility charges
include early termination costs associated with the closing of certain domestic
and international sales offices.
 
    Total restructuring expense decreased by $1.2 million and by $3.3 million
during the fourth quarter of 1997 and the first quarter of 1998, respectively.
These decreases were primarily due to adjusting the original estimate of the
loss to be incurred on the sale of land to the actual loss (fourth quarter 1997)
and to adjust the estimated severance and facility charges to actual costs
incurred (first quarter 1998).
 
    The Company expects to complete most of the actions associated with its
restructuring by the end of the second quarter of fiscal 1998.
 
NOTE H--LITIGATION
 
    Commencing in April 1997, a series of class action lawsuits purportedly by
or on behalf of stockholders and a separate but related stockholder action were
filed in United States District Court for the Northern District of California.
These actions name as defendants the Company, certain of its present and former
officers and directors and in some cases, its independent auditors. The
complaints allege various violations of the federal securities laws and seek
unspecified but potentially significant damages. Similar actions were also filed
in California state court and in Newfoundland, Canada.
 
    Stockholder derivative actions, purportedly on behalf of the Company and
naming virtually the same individual defendants and the Company's independent
auditors, were also filed, commencing in August 1997, in California state court.
While these actions allege various violations of state law, any monetary
judgments in the derivative actions would accrue to the benefit of the Company.
 
                                       10

                              INFORMIX CORPORATION
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                 MARCH 31, 1998
 
                                  (UNAUDITED)
 
NOTE H--LITIGATION (CONTINUED)
    Pursuant to Delaware law and certain indemnification agreements between the
Company and each of its current and former officers and directors, the Company
is obligated to indemnify its current and former officers and directors for
certain liabilities arising from their employment with or service to the
Company. This includes the costs of defending against the claims asserted in the
above-referenced actions and any amounts paid in settlement or other disposition
of such actions on behalf of these individuals. The Company's obligations do not
permit or require it to provide such indemnification to any such individual who
is adjudicated to be liable for fraudulent or criminal conduct. Although the
Company has purchased directors' and officers' liability insurance to reimburse
it for the costs of indemnification for its directors and officers, the coverage
presumes that 100 percent of the costs incurred in defending claims asserted
jointly against the Company and its current and former directors and officers
are allocable to the individuals' defense. With respect to the claims described
above, the Company does not have insurance to cover the costs of its own defense
or to cover any liability for any claims asserted against it. The Company has
not set aside any financial reserves relating to any of the above-referenced
actions.
 
    The pending federal and state securities actions are in the early stages of
discovery. Consequently, at this time it is not reasonably possible to estimate
the damages, or the range of damages, that the Company might incur in connection
with such actions.
 
    In addition, in July 1997, the Securities and Exchange Commission issued a
formal order of investigation of the Company and certain unidentified
individuals associated with the Company with respect to non-specified accounting
matters, public disclosures and trading activity in the Company's securities.
The Company is cooperating with the investigation and is providing all
information subpoenaed by the Commission.
 
    In the ordinary course of business, various other lawsuits and claims are
filed from time to time against the Company. It is the Company's opinion that
the resolution of these disputes or such other litigation will not have a
material effect on the Company's financial position, results of operations or
cash flows.
 
                                       11

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS
 
    THIS MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION
27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM
THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS
DESCRIBED HEREIN AND IN OTHER DOCUMENTS. READERS SHOULD CAREFULLY REVIEW THE
RISK FACTORS DESCRIBED IN THE DOCUMENTS THE COMPANY FILES FROM TIME TO TIME WITH
THE SECURITIES AND EXCHANGE COMMISSION, SPECIFICALLY THE QUARTERLY REPORTS ON
FORM 10-Q TO BE FILED BY THE COMPANY IN 1998 AND ANY CURRENT REPORTS ON FORM 8-K
FILED BY THE COMPANY.
 
    As a result of the restatement of the Company's financial statements for the
first quarter of 1997 and the years 1996, 1995 and 1994 as updated in subsequent
filings made by the Company, certain information contained in this item related
to the quarter ended March 30, 1997 has changed from that which appeared in the
Company's originally filed Form 10-Q for that period.
 
    The Company has elected to change from the 4-4-5 week quarterly convention
previously followed to a calendar quarter convention. The change resulted in an
additional two days of operations for the first quarter of 1998 as compared to
the previous year.
 
    References to or comparisons between the same "period" in this Form 10-Q
refer to the Company's first fiscal quarter of the relevant fiscal year.
 
OVERVIEW
 
    The Company is a leading multinational supplier of information management
software. It derives license revenues principally from licensing its relational
database management systems ("RDBMS") software and derives service revenues from
providing technical product support and product updates and consulting and
training services to customers. The Company's products are sold directly to
end-users and IMs and indirectly through application resellers, original
equipment manufacturers ("OEM") and distributors.
 
    In the first quarter of fiscal 1997, the Company experienced a substantial
shortfall in license revenues compared to forecasts, resulting in a substantial
loss for that quarter. The shortfall in revenue was due to slow growth in demand
for RDBMS products as well as the Company's inability to close a number of sales
transactions that management anticipated would close by quarter's end,
particularly in Europe.
 
    As a result of the shortfall in license revenues for the first quarter of
fiscal 1997, the Company, in the second quarter and again in the third quarter
of fiscal 1997, initiated an internal restructuring of its operations intended
to reduce operating expenses and improve the Company's financial condition.
These restructurings included selective reductions in headcount and leased
facilities and the downsizing, elimination or conversion into solution labs of
the Company's planned Information Superstores. Costs associated with the
restructurings totaled approximately $104.9 million and had a material adverse
effect on the Company's results of operations for fiscal 1997. In addition, in
1997, the Company issued newly designated series of Preferred Stock in two
financing transactions which resulted in aggregate net proceeds of $87.6 million
to the Company (excluding a $1.0 million fee paid to a financial advisor of the
Company in connection with the sale of the Series B Preferred) In February 1998,
the Company issued an additional 60,000 shares of its Series A-1 Convertible
Preferred Stock (the "Series A-1 Preferred") pursuant to the partial exercise of
a warrant to purchase shares of Series A-1 Preferred (the "Series A-1 Warrant")
which warrant was issued in connection with the sale of the Company's Series A
Convertibe Preferred Stock in August 1997. The partial exercise of the Series
A-1Warrant resulted in net proceeds of $14.1 million to the Company. At March
31, 1998 the Series A-1 Warrant remained exercisable for up to 80,000 shares of
Series A-1 Preferred at a puchase price of $250 per share. In December 1997, the
Company entered into a senior secured credit facility agreement with available
proceeds of up to $75.0 million, of which the Company was
 
                                       12

eligible to borrow $40.6 million at March 31, 1998, based on certain eligibility
criteria. See "--Liquidity and Capital Resources."
 
    In August 1997, the Company announced that it had become aware of errors and
irregularities that affected the timing and the dollar amount of reported earned
revenues from license transactions for all annual periods in the three years
ended December 31, 1996. These errors and irregularities included unauthorized
and undisclosed arrangements or agreements between Company personnel and
resellers, recognition of revenue on certain transactions in reporting periods
prior to contract acceptance, the recording of certain transactions that lacked
economic substance and the recording of maintenance revenue as license revenue.
The unauthorized and undisclosed agreements with resellers introduced acceptance
contingencies, permitted resellers to return unsold licenses for refunds,
extended payment terms or committed the Company to assist resellers in selling
the licenses to end-users. Accordingly, license revenues from these transactions
that were recorded at the time product was delivered to resellers should have
instead been recorded at the time all conditions to the sale lapsed. Because of
the pervasiveness of the unauthorized arrangements with resellers in the 1994,
1995 and 1996 accounting periods, the Company concluded that all revenue from
license agreements with resellers, except for those licenses sold and billed on
a per copy basis, should be recognized only when the licenses were resold or
utilized by resellers and all related obligations had been satisfied. In
addition, amounts received from resellers or financial institutions as
prepayments of software license fees in advance of revenue recognition should be
recorded as advances on unearned license revenue. The financial review
undertaken by the Company resulted in the restatement of the Company's financial
results for fiscal 1996, 1995 and 1994 and for the first quarter of fiscal 1997.
The Company publicly disclosed the results of the restatement in November 1997.
 
    The nature of the Company's business in 1992 and 1993 was such that there
was not a material amount of revenues recorded under prepaid software license
transactions conducted with resellers during these years. Additionally, as a
result of the Company's extended procedures, there were no material errors or
irregularities identified affecting revenues recognized prior to the third
quarter of 1994. The Company concluded based on those circumstances that it was
not necessary to restate the financial statements for 1992 and 1993.
 
    In connection with the errors and irregularities discussed above, a number
of conditions which collectively represented a material weakness in the
Company's internal accounting controls were identified. These conditions
included a deterioration in the Company's accounting controls at corporate and
regional management levels, and a related failure to stress the importance of
these controls, an inappropriate level of influence, principally by the
Company's sales organization, over the revenue recognition process and an
apparent lack of clarity and consistent understanding within the Company
concerning the application of the Company's revenue recognition policies to
large, complex reseller license transactions. To address the material weakness
represented by these conditions, the Company is implementing a plan to
strengthen the Company's internal accounting controls. This plan includes
updating the Company's revenue recognition policies regarding accounting and
reporting for large, complex reseller license transactions, developing and
conducting educational programs to help implement such policies, changing the
Company's corporate and regional accounting and reporting structure and
re-establishing the internal audit function reporting to the Company's Board of
Directors.
 
    The restatement resulted in substantial reductions in total revenues and net
income for fiscal 1996, 1995 and 1994. For the quarter ended March 31, 1997, the
restatement resulted in an increase in revenues of $16.2 million from $133.7
million as originally reported to $149.9 million. The restatement had a material
adverse effect on the Company's financial condition, most notably evidenced by
substantial reductions in retained earnings and working capital. At March 30,
1997, after giving effect to the restatement, the Company's working capital
decreased $252.0 million from $101.9 million as originally reported to a deficit
of $150.1 million. The substantial reduction in working capital at March 30,
1997 reflects substantial operating losses and the addition of "advances from
customers and financial institutions" as a current liability on the Company's
balance sheet. Such advances totaled $239.3 million at
 
                                       13

March 30, 1997. At March 31, 1998, the Company's working capital deficit
decreased to $86.5 million. The reduction in the deficit reflects the Company's
restructuring and cost containment efforts both of which resulted in a reduction
in cash used by operations of $46 million in the quarter ended March 31, 1998
compared to a similar period in the prior year. In addition, the liability for
"advances from customers and financial institutions" decreased to $156.5 million
at March 31, 1998.
 
    The Company's public announcement of the pending restatement, delays in
reporting operating results for the second and third quarters of fiscal 1997
while the restatement was being compiled, threatened de-listing of the Company's
Common Stock from the Nasdaq National Market as a result of the Company's
failure to satisfy its public reporting obligations, corporate actions to
restructure operations and reduce operating expenses, and customer uncertainty
regarding the Company's financial condition adversely affected the Company's
ability to sell its products in fiscal 1997 in addition, since the beginning of
1997, the Company and its competitors have experienced substantially slower
growth in the market for RDBMS products. The financial restatement has now been
completed, its results have been publicly disclosed and the Company is current
with respect to its public reporting obligations. In addition, the Company
believes that it has effectively controlled its operating expenses and
significantly improved its financial condition. Nevertheless, adverse market
conditions, including significant competitive pressures in the Company's markets
and ongoing customer uncertainty about the Company's financial condition and
business prospects, may continue to have an adverse effect on the Company's
ability to sell its products and results of operations.
 
                                       14

RESULTS OF OPERATIONS
 
    The following table sets forth operating results as a percentage of net
revenues for the three-month periods ended March 31, 1998 and March 30, 1997 (as
restated), respectively.
 


                                        PERCENT OF NET
                                           REVENUES
                                     ---------------------
                                      THREE MONTHS ENDED
                                     ---------------------
                                     MARCH 31,   MARCH 30,
                                       1998        1997
                                     ---------   ---------
                                           
Net revenue:
  Licenses.........................       54%         58%
  Services.........................       46%         42%
                                         ---         ---
    Total Net Revenue..............      100%        100%
Cost and expenses:
  Cost of software distribution....        6%         19%
  Cost of services.................       22%         28%
  Sales and marketing..............       38%         87%
  Research and development.........       22%         24%
  General and administrative.......        9%         19%
  Write-off of goodwill and long
    term assets....................       --          20%
  Write-off of acquired research
    and development................       --           5%
  Restructuring charges............       (2)%        --
                                         ---         ---
    Total operating expenses.......       95%        202%
                                         ---         ---
Operating income (loss)............        5%       (102)%
                                         ---         ---
Interest income....................        1%          1%
Interest expense...................       (1)%        (1)%
Other income/(expense), net........       --           8%
                                         ---         ---
Income (loss) before tax...........        5%        (94)%
Income taxes.......................       (1)%         2%
                                         ---         ---
Net income (loss)..................        4%        (96)%
                                         ---         ---
                                         ---         ---

 
    Informix's operating results for the quarter ended March 31, 1998 increased
significantly from the same period of the prior year due to a 12% increase in
revenue and a 48% decrease in operating expenses.
 
REVENUES
 
    The Company derives revenues from licensing its software and providing
post-license technical product support and updates to customers and from
consulting and training services. License revenues may involve the shipment of
product by the Company or the granting of a license to a customer to manufacture
products. Service revenues consist of customer telephone or direct support,
product update rights, consulting, and training fees.
 
    LICENSE REVENUES
 
    The Company's products are sold directly to end-user customers and IMs or
through resellers, including OEMs, distributors and value added resellers
(VAR's). In 1996, the Company increased its focus on its reseller channels in
order to focus on partnerships with several hardware vendors to utilize their
sales forces, obtain access to their installed base of customers, and benefit
from their consulting and systems integration organizations. This increased
focus on reseller channels resulted in a significant
 
                                       15

build-up of licenses that had not been resold or utilized by such resellers.
Unsold licenses in the amount of $156.1 million and $239.3 million have not been
recognized as earned revenue as of March 31, 1998 and March 30, 1997,
respectively.
 
    License revenues were $89.5 million and $86.4 million for the periods ended
March 31, 1998 and March 30, 1997, respectively. This represented an approximate
four percent increase. With the exception of one transaction with an IM, there
were no transactions greater than $2.5 million in the quarter ended March 31,
1998.
 
    The Company's license transactions can be relatively large in size and
difficult to forecast both in timing and dollar value. As a result, these
transactions have caused fluctutations in net revenues and net income (loss)
because of the relatively high gross margin on such revenues. As is common in
the industry, a disproportional amount of the Company's license revenue is
derived from transactions that close in the last weeks or days of a quarter. The
timing of closing large license agreements also increases the risk of
quarter-to-quarter fluctuations. The Company expects that these types of
transactions and the resulting fluctuations will continue.
 
    SERVICE REVENUES
 
    The increase in service revenue in absolute dollars over the same period in
1997 was attributable primarily to the continued growth of the Company's
installed customer base, and the attendant renewal of maintenance contracts and
increased consulting revenue. As the Company's products grow in complexity, more
support services are expected to be required. The Company intends to satisfy
this requirement through internal support, third-party services and OEM support.
The gross margin on service revenue increased from 36% in the first quarter of
1997 to 52% in the first quarter of 1998.
 
    Service revenue continues to grow faster than license revenue and as a
result, service revenue represents a larger percentage of total revenues than in
the prior year comparable period. The Company continues to emphasize support
services as a source of revenue and the growth achieved in absolute dollars
versus the prior year quarter reflects the continued growth in the Company's
installed base.
 
    GEOGRAPHIC DISTRIBUTION
 
    During the first quarter ended March 31, 1998, Informix's net revenues from
sales to foreign customers was 49% of total revenue as compared to 55% of the
total revenue during the same period in 1997. Foreign sales decreased
insignificantly from $82.2 million in the quarter ended March 30, 1997 to $81.9
million in the quarter ended March 31, 1998. Sales in Europe and Asia/Pacific
decreased 2% and 5%, respectively, while sales in Latin America increased 20%
over the same period in 1997.
 
    The decrease in European sales from the prior year quarter was partially due
to the disruption of the sales organization caused by management changes which
took place in 1997. The decrease in Asia/Pacific sales was primarily the result
of the impact of fluctuations in foreign currency exchange rates. Revenues for
the Asia/Pacific region increased by approximately 10% for the quarter ended
March 31, 1998 as compared to the same period in the prior year on a constant
currency basis.
 
    Substantially all of the Company's Latin American revenue is U.S. dollar
denominated. In Europe, Asia/Pacific, and Japan, most revenues and expenses are
denominated in local currencies. The U.S. dollar strengthened in the first
quarter of 1998 against the major European and Asia/Pacific currencies, which
resulted in lower revenue and expenses recorded when translated into U.S.
dollars, as compared with the same period in 1997.
 
    The Company's operating and pricing strategies take into account changes in
exchange rates over time; however, the Company's results of operations may be
significantly affected in the short term by fluctuations in foreign currency
exchange rates. Changes in foreign currency exchange rates, the strength
 
                                       16

of local economies, and the general volatility of software markets may result in
a higher or lower proportion of foreign revenues as a percentage of total
revenues in the future.
 
COST OF SOFTWARE DISTRIBUTION
 


                                                       FIRST QUARTER    FIRST QUARTER    PERCENTAGE
                                                           1998             1997           CHANGE
                                                      ---------------  ---------------  -------------
                                                                   (DOLLARS IN MILLIONS)
                                                                               
Manufactured cost of software distribution..........     $     4.1        $     8.9             (54)%
  Percentage of license revenue.....................             5%              10%
Amortization of capitalized software................     $     4.9        $     5.5             (11)%
  Percentage of license revenue.....................             5%               6%
Write down to net realizable value..................     $     0.8        $    14.7             (95)%
  Percentage of license revenue.....................             1%              18%
Total cost of software distribution.................     $     9.8        $    29.1             (66)%
  Percentage of license revenue.....................            11%              34%

 
    Software distribution costs consist primarily of: 1) manufacturing and
related costs such as media, documentation, product assembly and purchasing
costs, freight, customs, and third party royalties; and 2) amortization of
previously capitalized software development costs and any write-offs of
previously capitalized software.
 
    The manufactured cost of software distribution as a percentage of license
revenue decreased significantly in the first quarter of 1998 compared to the
same period in 1997. This decrease was primarily caused by a decrease of $2.1
million in third party software royalties as well as a reduction in labor costs
of approximately $.9 million and a reduction of shipping and material costs of
$.5 million each. These cost reductions resulted from the continued conversion
to electronic media. In the future, the cost of software distribution as a
percentage of revenue may vary depending upon sales levels, the cost of third
party software that is bundled with the Company's products and whether the
product is reproduced by the Company or by customers.
 
    Amortization of capitalized software costs begin in the quarter following
the commercial release of the product. The amortization of capitalized software
decreased to 5% of license revenues in the first quarter of 1998 compared to 6%
in the first quarter of 1997. The absolute value of amortization of capitalized
software will vary slightly quarter to quarter as new products are released and
other products become fully amortized.
 
    In addition, due to the Company's acquisition of Centerview Software, Inc in
February 1997 and the announcement of its revised tool strategy, and in
accordance with Financial Accounting Standards Board Statement No. 86,
"Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise
Marketed," a net realizable value test performed on certain of the Company's
tool products resulted in a write-down of $14.7 million of previously
capitalized software costs in the first quarter of 1997.
 
COST OF SERVICES
 
    Cost of services consists primarily of maintenance, consulting and training
expenses. Costs of services for the first quarter of 1998 decreased by 9% as
compared to the same period in 1997. This decrease was primarily attributable to
an 18% reduction in headcount over the same period in 1997 as well as improved
efficiency and better control of outsourced expenses. In the future, the Company
expects that cost of services as a percentage of net service revenue will
continue to approximate the rate incurred in the first quarter of 1998.
 
                                       17

SALES AND MARKETING EXPENSES
 
    The decrease in sales and marketing expenses in the first quarter of 1998,
in absolute dollars, as compared to the first quarter of 1997 was primarily the
result of a significant reduction of sales and marketing personnel worldwide.
Over the twelve-month period ending March 31, 1998, the headcount for sales and
marketing personnel decreased from 2,009 to 1,177 or 41%, which accounts for the
majority of the decrease both in percentage decline and absolute dollars spent.
In addition, depreciation expense charged to Sales and Marketing decreased
approximately $3.7 million versus the prior year quarter in connection with the
Company's reassessment of its Superstores concept. The Company's decision to
abandon the Superstores concept coupled with other cost cutting measures
resulted in significant charges for restructuring in the second and third fiscal
quarters of 1997. The decrease of costs as a percentage of revenue reflects the
Company's success in applying cost containment measures to bring expenses in
line with forecasted revenues.
 
RESEARCH AND DEVELOPMENT EXPENSES
 
    The following table summarizes research and development costs for the
periods ended March 31, 1998 and March 30, 1997:
 


                                                       FIRST QUARTER    FIRST QUARTER    PERCENTAGE
                                                           1998             1997           CHANGE
                                                      ---------------  ---------------  -------------
                                                                   (DOLLARS IN MILLIONS)
                                                                               
Incurred product development expenditures...........     $    40.3        $    41.6              (3)%
Expenditures capitalized............................           3.7              6.3             (41)%
                                                             -----            -----
Research and development expense....................     $    36.6        $    35.3               4%
                                                             -----            -----
                                                             -----            -----
Expenses capitalized as a percentage of incurred
  expenses..........................................             9%              15%

 
    Product development expenditures declined in absolute dollars by 3% in the
first quarter of 1998 compared to the same period in 1997. The proportion of
capitalized product development expenditures as a percentage of total incurred
expenses decreased in the first quarter of 1998. The decrease is attributable to
the fact that during the first quarter of 1997, a large portion of expenditures
incurred were on products that had reached technological feasibility, but had
not yet been commercially released. The Company expects the proportion of work
on capitalized projects for the remainder of 1998 to remain relatively stable
compared to the first quarter of 1998.
 
    Significant programs currently under development include improvements and
enhancements of current products, with particular emphasis on parallel computer
architecture, user-defined database extensions, web technology integration,
database application tools and systems administration. The Company believes that
research and development expenditures are essential to maintaining its
competitive position in its primary markets and expects the expenditure levels
to remain a significant percentage of revenues.
 
    The Company's product development efforts are expected to continue to
require substantial investments by the Company, and there can be no assurance
that the Company will have sufficient resources to make the necessary
investments. In addition, there can be no assurance that the Company's product
development efforts will be successful or that any new products will achieve
significant market acceptance.
 
GENERAL AND ADMINISTRATIVE EXPENSES
 
    General and administrative expenses decreased in absolute dollars in the
first quarter of 1998 compared to the same period in 1997 due primarily to the
implementation of the Company's restructuring plan which resulted in lower
facility and other general and administrative expenses and a reduction in bad
 
                                       18

debt expense of $11.0 million. This reduction reflects the Company's efforts to
better manage both the amount and quality of its accounts receivable balances.
In addition, headcount in general and administration decreased 14% from 489 at
March 30, 1997 to 420 at March 31, 1998.
 
WRITE-OFF OF GOODWILL AND LONG-TERM ASSETS
 
    In accordance with Financial Accounting Standards Board Statement No. 121,
"Accounting for the Impairment of Long Lived Assets and for Long-Lived Assets to
be Disposed of," the Company records impairment losses on long-lived assets used
in operations when events and circumstances indicate that the assets might be
impaired and the estimated future undiscounted cash flows to be generated by
those assets are less than the assets' carrying amounts. During the first
quarter of 1997, the Company's Japanese subsidiary experienced a significant
sales shortfall and operating losses. Accordingly, the Company evaluated the
ongoing value of the subsidiary's long-lived assets (primarily computer and
other equipment) and related goodwill. Based on this evaluation, the Company
determined that the subsidiary's assets had been impaired and wrote them down by
$30.5 million to their estimated fair values. Fair value was determined by using
estimated future discounted cash flows and/or resale market quotes as
appropriate. The Company did not record any write-off of long-term assets in the
quarter ended March 31, 1998.
 
WRITE-OFF OF ACQUIRED RESEARCH AND DEVELOPMENT
 
    In February 1997, the Company acquired all of the outstanding capital stock
of Centerview Software, Inc., a privately owned corporation that provides
software tools for application development. The aggregate purchase price was
approximately $8.7 million, which included cash plus direct costs of
acquisition. For financial statement purposes, the acquisition has been
accounted for as a purchase and, based on an independent appraisal of all the
assets acquired and liabilities assumed, the purchase price was allocated to the
specifically identifiable tangible and intangible assets acquired, including
approximately $7 million of purchased research and development which has been
charged to operations in the period the acquisition was consummated--the first
quarter of 1997. The Company did not write-off any acquired research and
development in the quarter ended March 31, 1998.
 
OTHER INCOME/(EXPENSE), NET
 
    Other income/(expense) for the period ended March 30, 1997 resulted from a
net foreign currency gain of $12.2 million. See "--Foreign Exchange Losses."
 
PROVISION FOR INCOME TAXES
 
    The income tax expense resulted from taxable earnings and withholding taxes
in certain foreign jurisdictions where the Company is unable to utilize its net
operating loss carryforwards.
 
FOREIGN EXCHANGE LOSSES
 
    The Company enters into forward foreign exchange contracts to hedge the
value of accounts receivable or accounts payable denominated in foreign
currencies against fluctuations in exchange rates until such receivables are
collected or payables are disbursed. This program involves the use of forward
foreign exchange contracts in the primary European and Asian currencies. The
Company has limited unhedged transaction exposures in certain secondary
currencies in Latin America, Eastern Europe, and Asia Pacific because there are
limited forward currency exchange markets in these currencies.
 
    In addition, in the quarter ended March 31, 1998, the Company initiated a
program whereby it enters into forward foreign currency exchange contracts to
hedge no more than 80% of anticipated net income of foreign subsidiaries for up
to a maximum of one year in the future. The Company's outstanding forward
exchange contracts used to hedge anticipated net income are marked to market.
This hedging activity did not have a material impact on the Company's results of
operations.
 
                                       19

    The restatement of the consolidated financial statements for the quarter
ended March 30, 1997 resulted in a change in the Company's foreign currency
denominated intercompany accounts receivable and accounts payable balances. As a
result, certain foreign currency forward contracts were no longer effective as
hedges. Transaction gains and losses realized due to fluctuations in foreign
currency exchange rates that were only partially offset by gains and losses on
forward foreign currency exchange contracts and the gains and losses on the
forward exchange contracts resulted in a net foreign currency gain of $12.2
million in the quarter ended March 30, 1997.
 
LIQUIDITY AND CAPITAL RESOURCES
 


                                                                            THREE MONTHS ENDED
                                                                         ------------------------
                                                                          MARCH 31,    MARCH 30,
                                                                            1998         1997
                                                                         -----------  -----------
                                                                           (DOLLARS IN MILLION)
                                                                                
Cash, cash equivalents, and short-term investments.....................   $   165.5    $   120.4
Working capital deficit................................................       (86.5)      (150.1)
Cash and cash equivalents used by operations...........................        (8.5)       (54.5)
Cash and cash equivalents used for investment activities, excluding
  investments in excess cash...........................................        (4.5)      (101.1)
Cash and cash equivalents provided by financing activities.............        19.3         20.4

 
    OPERATING CASH FLOWS
 
    Cash used by operations decreased significantly to $8.5 million for the
quarter ended March 31, 1998 from $54.5 million in the same period in 1997 due
primarily to the Company's efforts to reduce operating expenses.
 
    Net accounts receivable decreased by $6.1 million in the first quarter ended
March 30, 1998 as compared to the fourth quarter of 1997. Days sales outstanding
increased from approximately 71 days in December 1997 to 73 days in March 1998.
The days sales outstanding ratio is dependent on many factors, including the mix
of contract-based revenue with significant OEMs and large corporate and
government end-users versus revenue recognized on shipments to application
vendors and distributors.
 
    INVESTING CASH FLOWS
 
    Excluding investments of excess cash, net cash and cash equivalents used in
investing activities decreased in the first quarter of 1998 compared to the same
period in 1997 due in large part to the Company's emphasis on increasing its
working capital position. In the first quarter of 1998, the Company acquired
$1.7 million of capital equipment as compared to $20.4 million during the same
period in 1997. The decrease of capital equipment purchases in the first quarter
of 1998 resulted from the Company's reduction in employee headcount, the related
cost containment program and the Company's decision to downsize, eliminate or
convert its Superstores into solution labs managed by the Company's consulting
practice. In the future, the Company anticipates the actual level of capital
spending will be dependent on a variety of factors, including the Company's
business requirements and general economic conditions.
 
    In January 1997, the Company entered into a two year land lease which
required a pledge of $61.5 million in cash be placed into a non-interest bearing
collateral account controlled by an affiliate of the lessor. In April 1997, the
Company exercised its option to purchase the land for $61.5 million with the
intent to arrange for the sale of the parcels to unrelated third parties. The
$61.5 million is reflected in the "purchases of land and property and equipment"
line of the cash flow statement. The land sales closed in the fourth quarter of
fiscal 1997.
 
    The Company's investments in software costs were previously discussed under
"Results of Operations."
 
                                       20

    FINANCING
 
    Net cash and cash equivalents provided by financing activities in the first
quarter of 1998 consist primarily of proceeds from the sale of the Company's
common stock to employees, and the purchase of 60,000 additional shares of
Series A-1 Preferred Stock at $250 per share for net proceeds to the Company of
$14.1 million.
 
    The Company's programs with third-party financing institutions in the first
quarter of 1997 provided financing for extended credit terms instead of such
financing being provided by the Company. This was the primary source of net cash
and cash equivalents provided by financing activities in the first quarter of
1997. Cash received from customers and third-party financial institutions in
advance of revenue being recognized is reflected in the Statement of Cash Flows
under "Advances from Customers and Financial Institutions" as a financing
activity. The Company no longer enters into third-party financing arrangements
involving the sale of its receivables. See "Business Risks--Need for Additional
Financing: Customer Financing and Working Capital Deficit."
 
BUSINESS RISKS
 
    THIS REPORT, INCLUDING THIS MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTAINS FORWARD-LOOKING
STATEMENTS AND OTHER PROSPECTIVE INFORMATION RELATING TO FUTURE EVENTS. THESE
FORWARD-LOOKING STATEMENTS AND OTHER INFORMATION ARE SUBJECT TO CERTAIN RISKS
AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
HISTORICAL RESULTS OR ANTICIPATED RESULTS, INCLUDING THE FOLLOWING:
 
UNCERTAIN IMPACT OF RESTATEMENT OF FINANCIAL STATEMENTS
 
    Subsequent to the filing with the Commission of its Quarterly Report of Form
10-Q for the quarter ended March 30, 1997, the Company became aware of errors
and irregularities that ultimately affected the timing and dollar amount of
reported earned revenues from license transactions for all annual periods in the
three years ended December 31, 1996, in particular transactions involving
unauthorized or undisclosed arrangements or agreements with resellers. As a
result of its investigation into these errors and irregularities, in August
1997, the Company announced that it would restate its financial results for
fiscal 1996 and 1995. The financial review undertaken by the Company to
determine the extent of the restatement ultimately resulted in the restatement
of the Company's financial results for fiscal 1996, 1995 and 1994 and for the
first quarter of fiscal 1997. The Company publicly disclosed the results of the
restatement in November 1997.
 
    The errors and irregularities identified in connection with the Company's
investigation and the restatement included unauthorized and undisclosed
arrangements or agreements between Company personnel and resellers, recognition
of revenue on certain transactions in reporting periods prior to contract
acceptance, the recording of certain transactions that lacked economic substance
and the recording of maintenance revenue as license revenue. The unauthorized
and undisclosed agreements with resellers introduced acceptance contingencies,
permitted resellers to return unsold licenses for refunds, extended payment
terms or committed the Company to assist resellers in selling the licenses to
end-users. Accordingly, license revenues from these transactions that were
recorded at the time product was delivered to resellers should have instead been
recorded at the time all conditions to the sale lapsed. Because of the
pervasiveness of the unauthorized arrangements with resellers in the 1994, 1995
and 1996 accounting periods, the Company concluded that all revenue from license
agreements with resellers, except for those licenses sold and billed on a per
copy basis, should be recognized only when the licenses were resold or utilized
by resellers and all related obligations had been satisfied. In addition,
amounts received from resellers or financial institutions as prepayments of
software license fees in advance of revenue recognition should be recorded as
advances on unearned license revenue. The financial review undertaken by the
Company resulted in the restatement of the Company's financial results for
fiscal 1996, 1995 and 1994 and for the first quarter of fiscal 1997. The Company
publicly disclosed the results of the restatement in November 1997.
 
                                       21

                           PART II. OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
ACTIONS ARISING UNDER FEDERAL AND STATE SECURITIES LAWS
 
    Beginning on or about April 16, 1997, a total of 24 complaints alleging
violations of the federal securities laws were filed against the Company, Ernst
& Young LLP, the Company's independent auditors and certain Named Individual
Defendants (listed below) in the United States District Court for the Northern
District of California. Of the 24 complaints, 22 have been filed as purported
class actions by individuals who allege that they are individual investors who
purchased the Company's Common Stock during the purported class period; the
alleged class periods in the different complaints vary according to the date on
which the complaints were filed. The complaints name some or all of the
following current and former officers and directors of the Company as
defendants: Phillip E. White, Howard H. Graham, David H. Stanley, Ronald M.
Alvarez, Karen Blasing, D. Kenneth Coulter, Ira H. Dorf, Stephen E. Hill, Myron
(Mike) Saranga, Steven R. Sommer, MichaelR. Stonebraker and Edwin C. Winder (the
"Named Individual Defendants"). On August 20, 1997, the District Court entered
an order consolidating all of the separately-filed class actions pending at that
time, designating the action as IN RE INFORMIX CORPORATION SECURITIES
LITIGATION, and designating as "related cases" all cases brought under the
federal securities laws then pending and any that may be filed after that date.
A consolidated amended class action complaint was filed on April 6, 1998. As
required by the provisions of the Exchange Act, as amended by the Private
Securities Litigation Reform Act of 1995, the Court has designated the lead
plaintiffs in the federal action and has appointed lead plaintiffs' counsel.
 
    Two related non-class actions, TEACHERS' RETIREMENT SYSTEM OF LOUISIANA ET
AL. V. INFORMIX CORPORATION ET AL. and STATE BOARD OF ADMINISTRATION OF FLORIDA
V. INFORMIX CORPORATION ET AL., have been consolidated with IN RE INFORMIX
CORPORATION SECURITIES LITIGATION for all pre-trial purposes. The LOUISANA and
FLORIDA plaintiffs request a total of $10.173 million in damages. An amended
consolidated complaint was filed by the LOUISIANA and FLORIDA plaintiffs on
April 3, 1998.
 
    The existing federal court complaints allege that the Company, the Named
Individual Defendants and Ernst & Young issued false or misleading statements in
the Company's filings with the Commission, press releases, statements to
securities analysts and other public statements regarding its financial results
and business prospects. The alleged class period in the amended consolidated
complaints extends from February 7, 1995 through November 18, 1997. In
particular, plaintiffs allege that defendants overstated the Company's revenue
and earnings during the time period by improperly recognizing revenue from sales
of software licenses. All of these actions allege that the defendants' false and
misleading statements violate section 10(b) of the Exchange Act and Rule 10b-5
promulgated thereunder. The complaints further allege that the Named Individual
Defendants sold the Company's Common Stock while in the possession of adverse
material non-public information. The existing complaints, in general, do not
specify the amount of damages that plaintiffs seek.
 
    On or about March 19, 1998, a complaint alleging securities and common law
fraud and misrepresentation causes of action was filed in the United States
District Court for the Northern District of California. This complaint,
captioned WILLIAMS V. INFORMIX CORPORATION, ET AL., alleges both individual and
class claims on behalf of former securities holders of Illustra Information
Technologies, Inc. ("Illustra") who exchanged their Illustra securities for
securities of the Company in February 1996 in connection with the Company's
February 1996 acquisition of Illustra pursuant to an Agreement and Plan of
Reorganization (the "Illustra Agreement"). This matter has been consolidated
with IN RE INFORMIX CORPORATION SECURITIES LITIGATION. The WILLIAMS complaint,
like the previously-filed federal complaints, alleges that the Company and
certain of its former officers and/or directors, and its independent auditors,
issued false or misleading statements regarding the Company's reported financial
results and business prospects. Defendants are scheduled to file a response to
the consolidated, amended complaint on June 16, 1998.
 
                                       39

    Three purported securities class actions containing allegations similar to
the federal actions were filed in the Superior Court of the State of California,
County of San Mateo between May 19, 1997 and August 25, 1997. Those actions,
captioned RILEY V INFORMIX CORPORATION ET AL., DAYANI V. INFORMIX CORPORATION ET
AL., AND GOLDSTEIN V. WHITE ET AL., contained factual allegations nearly
identical to the allegations set forth in the federal court complaints. The
Superior Court has consolidated these actions into the DAYANI case, and has
appointed lead plaintiffs' counsel. By stipulation, plaintiffs filed a
consolidated, amended complaint on December 23, 1997. The state court
consolidated, amended complaint names as defendants the Company, Ernst & Young
and the Named Individual Defendants. The claims in the consolidated amended
state complaint arise under California securities, fraud and unfair business
practices statutes.
 
    The state court consolidated, amended complaint alleges that the defendants
issued false financial statements which were not prepared in conformity with
Generally Accepted Accounting Principles for fiscal years 1996, 1995 and 1994,
materially overstating the Company's revenue. Plaintiffs allege that defendants
recorded as revenue approximately $300 million from software license sales which
should not have been recorded because INTER ALIA, revenue was recognized on
sales to resellers before end-users were identified; revenue was recognized in
circumstances where customers had rights of return or cancellation; and the
Company recognized revenue from barter transactions in which the Company
allegedly exchanged software licenses for products that had no value to the
Company. Plaintiffs further allege that while the Company's stock price was
artificially inflated due to the overstatement of revenue, the defendants used
the Company's stock to make corporate acquisitions, and the Named Individual
Defendants sold stock while in possession of material adverse non-public
information. The alleged class period in the state court consolidated, amended
complaint is February 7, 1995 through November 18, 1997.
 
    Defendants filed demurrers to the state court consolidated, amended
complaint on February 13, 1998. Defendants base their demurrers to the
consolidated, amended complaint in this action on the grounds that certain of
the individual defendants made no actionable statements during the alleged class
period, the Company did not engage in any market activity during the alleged
class period, the plaintiffs did not actually rely upon any of the alleged false
and misleading statements, the California statutory unfair business practices
claims are inapplicable to securities transactions, and the consolidated,
amended complaint fails to plead the alleged fraud with sufficient
particularity. The hearing on defendants' demurrers is set for May 29, 1998. The
Company will not file an answer in this action unless the Court overrules the
pending and any subsequent demurrers. Further, the Company is not in a position
to state its factual defenses to the consolidated, amended complaint until the
Court rules upon the pending and any subsequent demurrers.
 
    DERIVATIVE ACTIONS
 
    The Company also was named as a nominal defendant in eight derivative
actions, purportedly brought on its behalf, filed in the Superior Court of the
State of California, County of San Mateo. The cases have been consolidated under
the caption IN RE INFORMIX CORPORATION DERIVATIVE LITIGATION, and the Court has
appointed lead plaintiff's counsel in the consolidated actions. The
consolidated, amended complaint alleges that, based upon the facts alleged in
the federal and state securities class actions, defendants breached their
fiduciary duties to the Company, engaged in abuses of their control of the
Company, were unjustly enriched by their sales of the Company's Common Stock,
engaged in insider trading in violation of California law and published false
financial information in violation of California law. The consolidated, amended
complaint names as defendants Ernst & Young, the Named Individual Defendants and
Albert F. Knorp, Jr., James L. Koch, Thomas A. McDonnell and Cyril J. Yansouni,
non-management directors of the Company. The plaintiff seeks unspecified damages
on the Company's behalf from each of the defendants. On December 18, 1997,
plaintiffs served their first amended, consolidated derivative complaint.
 
    The Company, on whose purported behalf the derivative action is asserted,
and the individual defendants and Ernst & Young, against whom the claims are
alleged, filed demurrers to the consolidated derivative complaint on February 6,
1998. The Company's demurrer in this action is based upon the fact
 
                                       40

that the plaintiff did not make demand on the Company's board prior to filing
the derivative action as is required by governing Delaware law. In addition, the
Company's current and former officers and directors have brought demurrers to
the consolidated, amended complaint on the grounds that plaintiffs fail to plead
any of their claims with sufficient particularity and that certain of
plaintiffs' California statutory causes of action do not apply, by their terms,
to officers and directors of a Delaware corporation. On April 1, 1998, the Court
sustained Informix's demurrer based upon the plaintiffs' failure to make demand.
The Court has given plaintiffs leave to amend their complaint. In addition, the
Court has kept on its calendar the defendants' demurrers based upon the lack of
merit in plaintiffs' substantive claims. That hearing is set for May 29, 1998.
The Company will not file an answer in this action unless the Court overrules
the pending or any subsequent demurrers. Further, the Company is not in a
position to state its factual defenses to the consolidated, amended complaint
until the Court rules upon the pending demurrers. Because of the nature of
derivative litigation, any recovery in the action would inure to the benefit of
the Company.
 
    ILLUSTRA ESCROW
 
    In January 1997, pursuant to the Illustra Agreement, Informix made a claim
to certain shares held in an escrow fund. In response, the Illustra shareholders
have claimed that the Company wrongfully caused these shares to be retained in
escrow, thereby harming the Illustra shareholders. The Illustra securities
holders have filed a demand for arbitration with the private arbitration service
agreed upon by the parties to the Illustra Agreement; however, at present, no
litigation or arbitration proceedings have been commenced with respect to the
Illustra escrow. In March 1998, a complaint was filed against the Company on
behalf of former Illustra shareholders alleging securities and common law fraud
and misrepresentation causes of actions. See "--Actions Arising Under Federal
and State Securities Laws."
 
    GENERAL
 
    The pending federal and state securities actions are in the early stages of
discovery. Consequently, at this time it is not reasonably possible to estimate
the damages, or the range of damages, that the Company might incur in connection
with such actions. However, the uncertainty associated with substantial
unresolved litigation can be expected to have an adverse impact on the Company's
business. In particular, such litigation could impair the Company's
relationships with existing customers and its ability to obtain new customers.
Defending such litigation will likely result in a diversion of management's time
and attention away from business operations, which could have a material adverse
effect on the Company's results of operations. Such litigation may also have the
effect of discouraging potential acquirors from bidding for the Company or
reduce the consideration such acquirors would otherwise be willing to pay in
connection with an acquisition.
 
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
 
    Not applicable.
 
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
 
    Not applicable.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
    Not applicable.
 
ITEM 5. OTHER INFORMATION
 
    On May 13, 1998, the Company announced that it had dismissed Ernst & Young
LLP as its independent auditors and that it was in the process of engaging KPMG
Peat Marwick LLP as its independent auditors.
 
                                       41

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
 


 EXHIBIT NO.   EXHIBIT
- -------------  -----------------------------------------------------------------------------------------------------
            
       27.1    Financial Data Schedule.

 
    (b) Reports on Form 8-K.
 
    The Company filed a Report on Form 8-K on February 27, 1998 related to the
sale of 60,000 shares of Series A-1 Preferred Stock.
 
                                       42

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

                               
                                INFORMIX CORPORATION
 
                                By:            /s/ JEAN-YVES DEXMIER
                                     -----------------------------------------
                                                 Jean-Yves Dexmier
                                         EXECUTIVE VICE PRESIDENT AND CHIEF
                                       FINANCIAL OFFICER (PRINCIPAL FINANCIAL
Dated: May 15, 1998                           AND ACCOUNTING OFFICER)

 
                                       43

                                 EXHIBIT INDEX
 


 EXHIBIT NO.   EXHIBIT TITLE
- -------------  -----------------------------------------------------------------------------------------------------
            
       27.1    Financial Data Schedule.

 
                                       44