<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                       --------------------------------

                                   FORM 10-K

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

                  For the fiscal year ended December 31, 1997
                                      or
         [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                  For the transition period from ____ to ____

                        Commission file number 0-22604

                            WHITE RIVER CORPORATION
            (Exact name of registrant as specified in its charter)

         DELAWARE                                              93-1011071
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                             Identification No.)

              2 Gannett Drive, Suite 200, White Plains, New York
      10604 (Address of principal executive offices, including zip code)

      Registrant's telephone number, including area code: (914) 251-0237

          Securities registered pursuant to Section 12(b) of the Act:

Title of each class                    Name of each exchange on which registered
-------------------                    -----------------------------------------
        NONE                                            NONE


          Securities registered pursuant to Section 12(g) of the Act:
                         Common Stock, $0.01 par value
                               (Title of class)

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

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

The aggregate market value of voting shares (based on the closing price of those
shares listed on the Nasdaq National Market and the consideration received for
those shares not listed on a national or regional exchange) held by non-
affiliates (as defined in Rule 405) of the registrant as of April 13, 1998, was
$240,908,059.

As of April 13, 1998, 4,874,756 shares of Common Stock with a par value of $0.01
per share were outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

                                    (None)
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                   WHITE RIVER CORPORATION AND SUBSIDIARIES

                               TABLE OF CONTENTS

ANNUAL REPORT ON FORM 10-K

<TABLE> 
<CAPTION> 
                                    PART I
<S>        <C>                                                                                          <C> 
  Item 1.  Business................................................................................      1
  Item 2.  Properties..............................................................................     11
  Item 3.  Legal Proceedings.......................................................................     11
  Item 4.  Submission of Matters to a Vote of Security Holders.....................................     11

                                    PART II

  Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters...................     12
  Item 6.  Selected Financial Data.................................................................     13
  Item 7.  Management's Discussion and Analysis of Financial Condition
                  and Results of Operations........................................................     15
  Item 8.  Financial Statements and Supplementary Data.............................................     27
  Item 9.  Changes in and Disagreements with Accountants on
                  Accounting and Financial Disclosure..............................................     27

                                   PART III

  Item 10.  Directors and Executive Officers of the Registrant.....................................     27
  Item 11.  Executive Compensation.................................................................     30
  Item 12.  Security Ownership of Certain Beneficial Owners and Management.........................     33
  Item 13.  Certain Relationships and Related Transactions.........................................     35

                                    PART IV

  Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.......................     36

  Signatures.......................................................................................     39

Consolidated Financial Statements

Directors, Officers and Corporate Information
</TABLE> 
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

                                    PART I

ITEM 1.   BUSINESS.

THE COMPANY

White River Corporation (together with its wholly-owned subsidiaries, unless the
context requires otherwise, "White River" or, together with all of its
subsidiaries, the "Company"), formerly named FF Re Inc., was incorporated in
Delaware in September 1989 and commenced operations in its present form on
September 24, 1993, concurrent with the purchase and other transfer of selected
assets and the assumption of certain liabilities (collectively, the
"Capitalization") from its former parent company, Fund American Enterprises
Holdings, Inc. and certain of its subsidiaries (together, "Fund American").
Additionally, on September 24, 1993, the Fund American board of directors
approved in principle a plan to distribute (the "Distribution") approximately
75% of the outstanding shares of White River common stock, par value $0.01 per
share (the "Common Stock"), to all holders of Fund American common stock. The
Distribution commenced on December 22, 1993.

Prior to the Capitalization, White River served as the holding company for Fund
American's investment management subsidiaries (the "Investment Management
Group") and certain of Fund American's insurance subsidiaries. The insurance
subsidiaries have had essentially no activity since their formation and White
River ceased the operations of the Investment Management Group during August
1994.

During June 1994, White River completed its acquisition of a majority of the
total outstanding shares of common stock, par value $0.10 per share (the "CCC
Common Stock"), of CCC Information Services Group Inc., formerly InfoVest
Corporation, (together with its subsidiaries, unless the context requires
otherwise, "CCC"). During August 1996, CCC completed an initial public offering
of approximately 29% of the resulting total outstanding CCC Common Stock for net
proceeds of $72.1 million (the "CCC IPO"). As of December 31, 1997, White River
held: (i) approximately 35% of the total outstanding shares of CCC Common Stock,
(ii) 630 shares of CCC Series C Cumulative Redeemable Preferred Stock, stated
value $1,000 per share (the "CCC Series C Preferred"), (iii) 3,601 shares of CCC
Series D Cumulative Redeemable Preferred Stock, stated value $1,000 per share
(together with the Series C Preferred, the "CCC Preferred Stock"), and 500
shares of CCC Series E Cumulative Redeemable Preferred Stock, stated value
$1,000 per share (the "CCC Series E Preferred"). According to the terms of the
CCC Series E Preferred, White River continues to have a majority of the voting
power associated with CCC's total outstanding voting stock. CCC is a supplier of
automobile claims information and processing, claims management software and
communications services.

On December 11, 1997, White River announced the signing of a merger agreement
under which an affiliate of Harvard Private Capital Group, Inc. (" Harvard 
Private Capital") would acquire White River for approximately $400 million in
cash. Under the Amended and Restated Agreement and Plan of Merger (the "Merger
Agreement"), among other things, WRC MergerCorp. ("MergerCo") would be merged
with and into White River (the "Merger"), and each share of Common Stock, (other
than treasury shares held

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                   WHITE RIVER CORPORATION AND SUBSIDIARIES


by White River or Dissenting Shares), outstanding at the effective time of the
merger ("Effective Time") would be converted into the right to receive
approximately $82.02 in cash, without interest and subject to adjustment under
certain circumstances as described further in the Merger Agreement. The
transaction would be fully financed and would not be subject to a financing
condition. The merger price would be subject to adjustment under certain
circumstances, and, therefore, the price per share actually received upon
consummation of the merger could be greater or less than $82.02. Holders of
White River's Series A Preferred Stock would receive the stated value of $1,000
per share plus any accrued and unpaid dividends.

In connection with the transaction, White River amended its shareholders' rights
plan (as discussed in Note 13 to the accompanying financial statements) to
provide, among other things, that the exercisability of rights will not be
triggered by the merger agreement and that the rights will expire immediately
prior to the consummation of the merger. Accordingly, the rights will not be
redeemed and no payment will be made to stockholders in respect of their rights.

On March 10, 1998, Fund American made a proposal to White River to negotiate the
acquisition of all of the outstanding shares of common stock of White River not
owned by Fund American for a total consideration of up to $85.00 per share in
cash, subject to satisfactory completion of due diligence and to successful
negotiation, Fund American Board approval and signing of a definitive agreement.

On March 23, 1998, Harvard Private Capital proposed an amendment to the Merger
Agreement. The proposed amendment would modify the Merger Agreement by: 1)
increasing the merger consideration to approximately $434 million ($89.00 per
share), subject to certain adjustments; and 2) requiring White River to pay a
"break up" fee of $13.5 million in the event that the merger is not successfully
concluded by June 30, 1998 for reasons other than a breach of the Merger
Agreement by Harvard Private Capital.

On March 30, 1998, Fund American increased its proposal to purchase all shares 
of White River not owned by Fund American to $90 cash per share, contingent, 
among other things, on White River Board acceptance by Monday, April 6, 1998, 
and execution of a mutually satisfactory definitive agreement, and certain other
contingencies.

On April 2, 1998, Harvard Private Capital proposed another amendment to 
the Merger Agreement. The proposed amendment would modify the Merger Agreement 
by, among other things: 1) increasing the merger consideration to approximately
$442 million ($90.67 per share), subject to certain adjustments; and 2)
requiring White River to pay a "break up" fee of $13.5 million in the event that
the merger is not successfully concluded by June 30, 1998 for reasons other than
a breach of the Merger Agreement by Harvard Private Capital.

On April 3, 1998, Fund American reaffirmed its proposal to purchase all shares 
of White River not owned by Fund American for $90 cash per share, and removed
certain contingencies.

On April 6, 1998, after further discussions with Harvard Private Capital and
Fund American, the White River Board evaluated the two proposals based on its
fiduciary duty to maximize shareholder value and decided to accept the Harvard
Private Capital proposal. Under the terms of the amended agreement, Harvard
Private Capital, among other things, will pay White River shareholders $90.67
per share in cash, subject to adjustment which could result in a higher or lower
price at closing. In addition, White River agreed to pay Harvard Private Capital
a termination fee of $15 million, plus up to $1.5 million in reimbursable
expenses, in the event that the merger agreement is terminated under certain
circumstances.

Consummation of the merger is subject to customary conditions, including the
approval of White River's stockholders and the absence of any material adverse
change. The merger agreement may be terminated by any of the parties in the
event that the Board of Directors of White River withdraws its recommendation of
the transaction to stockholders or recommends an alternative transaction. The
parties expect the merger to occur during the second quarter of 1998.

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                   WHITE RIVER CORPORATION AND SUBSIDIARIES

REGULATION

Based upon the composition of its assets at the time of the Capitalization,
White River met the definition of an investment company (an "Investment
Company") under the Investment Company Act of 1940 (the "Investment Company
Act") and, accordingly, was subject to registration and regulation under such
legislation. However, on December 6, 1993, White River received from the
Securities and Exchange Commission (the "Commission") a temporary exemption (the
"Exemptive Order") from registering as an Investment Company and was exempted
from some, but not all, of the provisions of the Investment Company Act for a
period of up to two years from the date of the Exemptive Order. White River
requested this temporary exemption to provide management with time to dispose of
a sufficient amount of investments, to acquire a majority interest in one or
more operating businesses, or to take such other actions necessary to cause
White River not to meet the definition of an Investment Company. During October
1995, White River filed a report with the Commission which concluded that,
effective September 30, 1995, White River no longer met the definition of an
Investment Company. Accordingly, White River no longer needs to rely upon the
relief provided by the Exemptive Order.

White River ceased to be an Investment Company because the value of its holdings
of investment securities was less than 40 percent of its total assets (excluding
Government securities and cash) on an unconsolidated basis. This change was
principally the result of a significant increase in the investment in White
River's majority-owned operating subsidiary, CCC, which was acquired by White
River in 1994. In addition, since it began operating independently in 1993,
White River has conducted its business so that it is not an investment company.
White River has continued to seek and acquire new operating businesses and has
been actively involved in the management and operations of its subsidiaries. It
has disposed of its holdings of investment securities to the greatest extent
possible, given pre-existing restrictions and other limits on its ability to
sell or otherwise dispose of certain of those holdings. So as to be ready to
make appropriate acquisitions of operating business, White River has maintained
its reserves in "cash and cash items," as those terms are used in the Investment
Company Act, that is, in deposits with banks that are payable on demand or on
less than seven days' notice. White River has purchased no new investment
securities.

INVESTMENT OPERATIONS

In accordance with its plan to cease to meet the definition of an Investment
Company, White River disposed of investments for proceeds and other
consideration totaling $308.3 million during the period from the Capitalization
through December 31, 1997. Such dispositions include $90.0 million of
investments which were transferred during 1995 to Fund American in settlement of
outstanding balances under a credit agreement between White River and Fund
American (the "Credit Agreement").

As of December 31, 1997, White River's investments totalled $164.4 million, as
compared to a total of $99.1 at December 31, 1996. The increase in 1997 related
primarily to an increase of $55.6 million in the carrying values of White
River's investment in Cross Timbers Oil Company ("Cross Timbers") common stock
and the increase in value associated with the Company's interest in the Richard
C. Blum & Associates - NWA Partners, L.P. ("NWA Partners") (see Note 2 to
accompanying financial statements), and to CCC's additional net purchase of
$21.1 million of U.S. Treasury Bills. The disposition of McFarland Energy
Corporation ("McFarland") common stock and the distribution by NWA

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                   WHITE RIVER CORPORATION AND SUBSIDIARIES

Partners, as described below, reduced investments by $11.3 million.

During 1997, White River disposed of certain investments and received proceeds
of approximately $39.0 million. Such dispositions include proceeds of
$26.3 million in connection with its investment in NWA Partners. The
distribution represented White River's share of proceeds arising primarily from
the distribution by NWA Partners, which holds equity securities in Northwest
Airlines Corporation ("NWA Corp."). The distribution represented White River's
share of proceeds arising primarily from the redemption of NWA Partners
investment in preferred stock of NWA Corp, but also in part due to the sale of
0.7 million shares of NWA Corp. Common Stock subject to a call option.
Additionally, White River received proceeds of $12.0 million from the sale of
its entire investment in common stock of McFarland due primarily to the purchase
of McFarland by Monterey Investment Acquisition Corporation.

As of December 31, 1996, White River's investments totalled $99.1 million, as
compared to a total of $76.3 million as of December 31, 1995. The increase
during 1996 relates primarily to CCC's purchase of U.S. Treasury Bills and the
increase in value of White River's investment in Cross Timbers common stock. The
1996 year end investment balances consisted primarily of White River's interests
in Cross Timbers ($60.8 million) and in NWA Partners ($21.8 million), as well as
U.S. Treasury Bills ($9.1 million) held by CCC.

During 1996, White River disposed of certain investments and received proceeds
of $21.1 million. Such dispositions included proceeds of $14.5 million from the
sale of White River's investment in common and preferred stock of Newflo
Corporation ("Newflo") in connection with the purchase of Newflo by Precision
Castparts Corporation. Additionally, White River received proceeds of $6.5
million from the sale of a portion of its investment in the common stock of
Cross Timbers. 

White River's dispositions of investments totaled $118.9 million during the year
ended December 31, 1995. The 1995 investment dispositions included
the transfer of $90.0 million of investments to Fund American in settlement of
outstanding balances under a credit agreement White River entered into in 1993
with Fund American (The "Credit Agreement"), which resulted in pretax net
investment gains of $11.0 million (see Note 7 to accompanying financial 
Statements).

Investment income, including interest earned on cash and cash equivalent
balances, totalled $11.4 million, $9.0 million and $8.3 million for the years
ended December 31, 1997, 1996 and 1995, respectively. Net investment gains
totalled $27.5 million, $16.2 million and $36.3 million, for the years ended
December 31, 1997, 1996 and 1995, respectively.

White River, through its wholly-owned subsidiary White River Partners, Inc.
("Partners"), seeks to acquire and operate distressed companies in various
industries. During April 1996, Partners, through its wholly-owned subsidiary
Hanover Accessories, Inc. ("Hanover"), acquired the business and assets of a
company engaged

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                   WHITE RIVER CORPORATION AND SUBSIDIARIES

in the design, distribution, sale and retail servicing of popular-priced fashion
accessories, primarily for the children's market. Hanover currently markets over
3,500 different styles of products, many of which are exclusive designs
available only to Hanover. All of Hanover's products are supplied through
contract manufacturers. Hanover's revenues were $9.0 million in 1997 and $5.4
million from its commencement of operations during April 1996 through December
31, 1996.

Effective November 7, 1997, Partners purchased from European American Bank
certain assets of Just Kiddie Rides, Inc. Through its indirect wholly-owned
subsidiary, Just Kiddie Rides Enterprises, Inc., ("JKRE"), a Delaware
corporation, White River will market and manufacture licensed kiddie rides.
Revenues of JKRE from its commencement of operations in November 1997 through
December 31, 1997 were $0.5 million.

INSURANCE-RELATED SERVICES

The Company's revenues from insurance-related services totalled $159.1 million,
$131.0 million and $115.5 million for the years ended December 31, 1997, 1996
and 1995 respectively.

During the years ended December 31, 1997, 1996 and 1995, 66%, 69%, and 70%,
respectively, of total insurance-related services revenue were attributable to
the insurance industry.

PRODUCTS

The principal services and products offered by CCC automate the process of
evaluating and settling both total loss and repairable automobile claims. When a
vehicle cannot be repaired, CCC's vehicle valuation services and products,
primarily Total Loss, provide insurance companies with the ability to effect
total loss settlements on the basis of market-specific vehicle values. When a
vehicle is repairable, CCC's collision estimating services and products,
principally EZEst and Pathways, provide insurance appraisers and collision
repair facilities with up-to-date pricing, interactive decision support and
computer-assisted logic to produce accurate collision repair estimates. CCC's
claims outsourcing services and products include ACCESS, a vehicle restoration
and management service. The Company also offers a complete auto claims
outsourcing solution that handles the entire process from initial loss report
through settlement. Communication services offered by CCC connect insurers,
appraisers and collision repair facilities, providing the information required
for decision making. CCC also provides a wide variety of related services and
products intended to facilitate the overall management of the automobile claims
process. CCC's Pathways workflow management software is designed to integrate
each of CCC's product offerings on a common platform with a common graphical
user interface, facilitating the learning of new applications while providing
CCC's customers with a broader tool set for claims completion. CCC's services
and products represent an integrated solution, combining information, claims
management software and secure communication systems to improve the efficiency
of the automobile claims process.

CCC's services and products are integrated for use with one another across
multiple platforms and are designed for ease of use by the large number of
people involved in the automobile claims process on a daily basis. Approximately
66% of CCC's consolidated revenue for 1997 was from the sale of services and
products

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                   WHITE RIVER CORPORATION AND SUBSIDIARIES

to insurance companies with the remainder sold to collision repair facilities
and other customers. Revenues from Total Loss valuation services and EZEst and
Pathways Collision Estimating software licensing accounted for 32% and 47%,
respectively, of CCC's consolidated 1997 revenue.

Vehicle Valuation Services and Products. CCC's Total Loss service provides
insurance companies the ability to effect total loss settlements on the basis of
market-specific values based upon physically inspected used car inventories.
CCC's management believes that CCC's vehicle database, which contains detailed
information about millions of vehicles either physically inventoried from one of
more than 4,500 dealer lots or taken from recent advertisements, is the most
comprehensive in North America. CCC uses its proprietary database and valuation
software to provide insurance companies with independent, current, local, market
values and vehicle identification data. CCC's Total Loss product complies with
the regulatory requirements of all 50 states. Each total loss valuation includes
a vehicle identification search under VINguard, CCC's vehicle identification
number fraud protection program which matches current claims against CCC's
database of previously totalled or stolen vehicles.

Collision Estimating Services and Products. EZEst was the first stand-alone, PC-
based collision estimating system utilizing intelligent logic to automate the
process of eliminating repair activity overlaps and automating all included
operations and ancillary repair work in preparing an estimate. Intelligent logic
represents automation of procedure pages from crash estimating guides that
detail the steps involved in repairing various parts of a damaged vehicle
depending on the extent of the damage. EZEst provides automobile insurers with
fast and reliable estimates at a low cost. EZEst runs on any IBM-compatible
laptop or desktop computer and contains all nine volumes of the Motor Crash
Estimating Guide and other data necessary to build an estimate. CCC licenses the
Motor Crash Estimating Guide data from a subsidiary of The Hearst Corporation. A
unique feature of EZEst is its recycled part valuation upgrade which will
display and automatically insert into the estimate a predicted price of those
recycled or salvage automotive parts statistically known to be available in the
local market in which the estimate is written. The EZEst software, Motor Crash
Estimating Guide database and other associated databases are updated via a
monthly CD-ROM. EZEst is sold under multi-year contracts on a monthly
subscription basis to both insurers and collision repair facilities. In April
1996, CCC began delivery of its next-generation estimating product, Pathways
Collision Estimating, which provides all of the functionality of the EZEst
product while adding the functionality of total loss and settlement processing,
claim payment, salvage disposal and custom electronic forms. In November 1996,
CCC introduced a collision repair facility version of Pathways Collision
Estimating.

EZWorks Productivity Tools. EZWorks is a set of modular applications that assist
collision repair businesses with a variety of management functions such as job
costing, operations analysis, and accounting interfaces. EZWorks provides an
important interface between EZEst and a leading commercial accounting product.

Claims Outsourcing Services and Products. ACCESS is an outsourced vehicle
appraisal and restoration management service. Insurance companies use ACCESS to
appraise and settle claims without hiring either additional staff or independent
appraisers. ACCESS uses a network of CCC certified, fully equipped repair
facilities and CCC's claims management tools to provide fast, low cost claims
settlement with high customer

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                   WHITE RIVER CORPORATION AND SUBSIDIARIES

satisfaction. In addition, CCC provides reinspection and restoration management
staff for quality assurance. ACCESS is sold on a per claim basis under multi-
year agreements. The Company offers a complete claims outsourcing service that
manages all aspects of the claim process. Using a proprietary, state-of-the-art,
paperless claims management system, the outsourcing service takes the initial
loss notification and manages the file through settlement.

EZNet Communications Network. EZNet connects insurers with their appraisers and
repair network partners. EZNet's process management capabilities provide the
information required to make appropriate and timely decisions, regardless of
location or settlement process. EZNet is used principally for the complete
electronic communication of work files and estimates to staff appraisers or
insurance company direct repair program ("DRP") partners and for the receipt of
auditable estimate data. (A DRP allows an insured whose automobile is involved
in a collision to have the repair performed within a network of approved repair
facilities.) EZNet is the only communications network tailored to provide
automated communication services to participants in the automobile physical
damage claim process, including: mailboxing, messaging, routing, imaging,
assignment tracking, record library and third-party gateways. A unique feature
of EZNet is the electronic appraisal review feature that provides real-time
exception reporting to target re-inspections and improves management control of
DRP networks and appraisers. EZNet also facilitates the management of car rental
and salvage disposition. EZNet is sold both on a per transaction basis and on a
monthly subscription basis.

Digital Imaging. The computerized digital photo imaging system allows automobile
insurers and collision repairers to visually document vehicle damage and
electronically communicate the image. This reduces claims cycle time while
eliminating film cost and saving travel and overnight delivery expense. In
September 1997, CCC began delivery of its next generation system, Pathways
Digital Imaging.

GuidePost Decision Support. GuidePost is an executive information and data
navigation software package. GuidePost allows managers to electronically
evaluate results, format reports, drill down for subject or personnel review and
compare performance to industry and regional indices. GuidePost updates are
distributed monthly on diskettes and development for network delivery is
underway. While introduced as an element of CCC's suite of electronic DRP and
collision estimating tools, GuidePost will be made available for all CCC's
products, extending the integration of a multi-channel claims process.

ACCLAIM Litigation Management. ACCLAIM is an outsourcing service offered to
insurance companies for the processing and management of defined soft-tissue
bodily injury claims. ACCLAIM uses CCC's licensed case management software and
information management tools in connection with a national network of lawyers
(the "Lawyers Network") to defend and dispose of lawsuits filed against insured-
parties. ACCLAIM services are sold to insurance companies on a fixed fee, per
claim basis.

Pathways Appraiser Workstation Software. Pathways is a windows-based appraiser
workstation software platform designed to better serve the overall workflow
needs of insurance field staffs. Pathways offers a common, graphical user
interface across all applications which organizes claims in tabbed, electronic
workfiles and reduces the time required to learn or develop new software
functions or applications. Pathways includes a workflow manager which assists
users in managing all aspects of their day-to-day activities, including receipt

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                   WHITE RIVER CORPORATION AND SUBSIDIARIES

of new assignments, communication of completed activity, electronic file notes
and reports as well as the automatic logging of key events in the claims
process. CCC intends to integrate all of its existing field applications into
this platform and develop all future field applications on Pathways. Pathways is
fully integrated with CCC's communications network, allowing claim adjusters to
operate in the field, and thereby reduce office and other expenses. The first
Pathways application was Pathways Collision Estimating which provides all of the
functionality of the EZEst product while adding the functionality of total loss
and settlement processing, claim payment, salvage disposal and custom electronic
forms. Pathways is sold under multi-year contracts on a monthly subscription
basis.

CUSTOMERS

CCC's business is based on relationships with the two primary users of CCC's
services: automobile insurance companies and collision repair facilities. CCC's
customers include the largest U.S. automobile insurance companies and most of
the small to medium size automobile insurance companies in the country.

CCC's products are used by approximately 12,000 collision repair facilities. CCC
has collision repair customers in all 50 states, including most major
metropolitan markets. In addition to assisting collision repair facilities in
managing their businesses, many of these customers use CCC's services and
products as a means to participate in insurance DRP programs, thereby making the
use of CCC's services and products important to the customer's business growth.

Over 60% of CCC's revenue for 1997 was for services and products sold pursuant
to contracts, which generally have multi-year terms. A substantial portion of
CCC's remaining revenue represented sales to customers that have been doing
business with CCC for many years. CCC's services and products are sold either on
a monthly subscription or a per transaction basis.

PRODUCT DEVELOPMENT AND PROGRAMMING

CCC's ability to maintain and grow its position in the claims industry is
dependent upon the expansion of its products and services. Investments in
development are therefore critical to obtaining new customers and renewals from
existing customers. CCC's product development and programming efforts
principally consist of software development, development of enhanced
communication protocols and custom user interfaces and applications, and
database design and enhancement. The custom interfaces and applications are
developed through CCC's Business Solution Group. CCC employs approximately 300
people in its product development organization. This group is comprised of
database analysts, software engineers, business systems analysts, product
managers and quality assurance employees responsible for client systems, server
systems, data warehousing and distribution systems. Product engineering
activities focus on improving speed to market of new products, services, and
enhancements, adding new business functions without affecting existing services
and products, and reducing development costs. CCC uses its class library of
objects, knowledge of its clients' workflows and its automated testing tools to
deliver quality workflow-oriented solutions to the marketplace quickly. CCC
develops products in close collaboration with its clients based on specific
needs. CCC's total

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                   WHITE RIVER CORPORATION AND SUBSIDIARIES

product development and programming expense was $20.2 million, $17.0 million and
$14.9 million for the years ended December 31, 1997 and 1996, and 1995,
respectively.

INTELLECTUAL PROPERTY

CCC relies primarily on a combination of contracts, intellectual property laws,
confidentiality agreements and software security measures to protect its
proprietary technology. CCC distributes its products under written license
agreements, which grant end-users a license to use CCC's services and products
and which contain various provisions intended to protect CCC's ownership and
confidentiality of the underlying technology. CCC also requires all of its
employees and other parties with access to its confidential information to
execute agreements prohibiting the unauthorized use or disclosure of CCC's
technology.

CCC has trademarked virtually all of its services and products. These marks are
used by CCC in the advertising and marketing of CCC's services and products.
EZEst and CCC are well-known marks within the automobile insurance and collision
repair industries. CCC has patents for its collision estimation product
pertaining to the comparison and analysis of the "repair or replace" and the
"new or used" parts decisions. While the Total Loss calculation process is not
patented, the methodology and processes are trade secrets of CCC and are
essential to CCC's Total Loss business. Despite these precautions, management
believes that existing laws provide only limited protection for CCC's technology
and that it may be possible for a third party to misappropriate CCC's technology
or to independently develop similar technology.

Certain data used in CCC's services and products is licensed from third parties
for which they receive royalties. Management does not believe that CCC's
services and products are significantly dependent upon licensed data, other than
the Motor Crash Estimating Guide data, because management believes it can find
alternative sources for such data. CCC's management does not believe that it has
access to an alternative database that would provide comparable information to
the Motor Crash Estimating Guide, licensed from the Hearst Corporation through a
scheduled expiration of April 30, 2002. Absent notification of cancellation by
either CCC or the Hearst Corporation two years before the license's scheduled
expiration, the license agreement is automatically extended for one year on a
rolling annual basis. Any interruption of CCC's access to the Motor Crash
Estimating Guide data could have a material adverse effect on CCC's business,
financial condition and results of operations.

CCC is not engaged in any material disputes with other parties with respect to
the ownership or use of CCC's proprietary technology. CCC has been previously
involved, however, in intellectual property litigation concerning certain data
ownership rights, the resolution of which resulted in substantial payments by
CCC. There can be no assurance that other parties will not assert technology
infringement claims against CCC in the future. The litigation of such a claim
may involve significant expense and management time. In addition, if any such
claim were successful, CCC could be required to pay monetary damages and may
also be required to either refrain from distributing the infringing product or
obtain a license from the party asserting the claim (which license may not be
available on commercially reasonable terms).

                                       9
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

COMPETITION

The market for CCC's products is highly competitive. CCC competes primarily on
product differentiation, customer service and price. CCC's principal competitors
are small divisions of two well capitalized, multinational firms, Automatic Data
Processing ("ADP") and Thomson Publishing Corporation ("Thomson"). ADP offers
both a PC-based collision estimating system and a total loss product to the
insurance industry. ADP offers a different collision estimating system and a
digital imaging system to the collision repair industry. Thomson publishes crash
guides for both the insurance and automobile collision repair industries and
markets collision estimating, shop management and imaging products. In addition,
there are several very small collision estimating programs sold into the market
which do not use intelligent logic. CCC has experienced steady competitive price
pressure, particularly in the collision estimating market, over the past few
years and expects that trend to continue. The strength of this trend may cause
CCC to alter its mix of services, features and prices.

CCC intends to address the competitive price pressures by providing high
quality, feature enhanced products and services to its clients. CCC intends to
continue to develop user-friendly claims products and services incorporating its
comprehensive proprietary inventory of data. CCC expects that the Pathways
workflow manager will provide the necessary position with its insurance
customers to effectively compete against competitive price pressures.

At times, insurance companies have entered into agreements with service
providers (including ADP, Thomson and CCC) wherein the agreement provides, in
part, that the insurance company will either use the product or service of that
vendor on an exclusive basis or designate the vendor as a preferred provider of
that product or service. If it is an exclusive agreement, the insurance company
mandates that collision repair facilities, independent appraisers and regional
offices use the particular product or service. If the vendor is a preferred
provider, the collision repair facilities, appraisers and regional offices, are
encouraged to use the preferred product, but may still choose another vendor's
product or service. Additionally, some insurance companies mandate that all
products be tested and approved at the companies' national level before regional
levels can purchase such products. The benefits of being an endorsed product or
on the approved list of an insurance company include immediate customer
availability and a head start over competitors who may not be so approved. With
respect to those insurance companies that have endorsed ADP or Thomson, but not
CCC, CCC will be at a competitive disadvantage.

In connection with CCC's strategy to provide outsourced claims processing
services, CCC will compete with other third-party service providers, some of
whom may have more capital and greater resources than CCC.

CCC currently processes the majority of insurer-to-collision repair facility
repair assignment and estimate retrieval for DRPs through its EZNet
communications network. Management believes there is a wide range of prospective
competitors in this service area, many of which have greater resources than CCC.

                                       10
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


EMPLOYEES

At December 31, 1997, the Company had approximately 1,200 full-time employees,
of which approximately 1,100 individuals were employed by CCC and approximately
75 individuals were employed by Hanover and approximately 14 by JKRE. The
Company's employees are not covered by a collective bargaining agreement and the
Company considers its employee relations to be satisfactory.

ITEM 2.   PROPERTIES.

White River leases approximately 500 square feet of office space as its
principal executive office in White Plains, New York, on a month-to-month basis.

CCC leases approximately 150,000 square feet of a multi-tenant facility as its
principal office in Chicago, Illinois, under several leases, the last of which
expire in 2008. CCC also leases approximately 84,000 square feet in Glendora,
California, under a lease expiring in 2000. The Glendora facility consists of a
satellite development and distribution center.

Hanover leases approximately 22,700 square feet of space as its principal office
and warehouse in Plymouth, Minnesota, under a lease expiring in 2001. Hanover
also leases approximately 4,000 square feet of space in two additional locations
under separate leases, the last of which expires in 2001.

JKRE leases approximately 12,000 square feet of space as its office and
warehouse in Edgewood, New York under a single lease expiring in 2003.

Management believes that its existing facilities and additional or alternative
available space are adequate to meet the Company's requirements for the
foreseeable future. Future requirements may be impacted by the growth of the
Company.

ITEM 3.    LEGAL PROCEEDINGS.

The Company is a party to various other legal proceedings in the ordinary course
of its business. The Company's management believes that the ultimate resolution
of these matters will not have a material effect on the Company's consolidated
financial position.

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

None.

                                       11
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

                                    PART II

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

White River's Common Stock trades on the Nasdaq National Market tier of The
Nasdaq Stock Market under the symbol WHRC. The low and high sales prices for
shares of Common Stock for each quarter of 1997 and 1996 are set forth below:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
                                      1997                                                1996
                   -------------------------------------------        ---------------------------------------------
                         First     Second      Third     Fourth           First     Second      Third     Fourth
                        Quarter    Quarter    Quarter    Quarter         Quarter    Quarter    Quarter    Quarter
-------------------------------------------------------------------------------------------------------------------
<S>                    <C>       <C>        <C>        <C>               <C>        <C>        <C>        <C>    
Low                    $ 54 1/2  $  61 1/2  $  59 1/2  $  65 1/8         $ 36 1/2   $ 37 1/4   $ 44 1/2   $ 52
High                   $ 69      $  73      $  84      $  81             $ 38 3/4   $ 46 7/8   $ 65       $ 65
===================================================================================================================
</TABLE> 

Since the Capitalization, no dividends have been declared on shares of Common
Stock and the White River Board currently does not intend to declare ordinary
periodic dividends to holders of Common Stock. However, the White River Board
intends to reevaluate from time to time the declaration of ordinary dividends
with due consideration given to the financial characteristics of White River's
remaining investments, its continuing operations and the amount and regularity
of its cash flows as of that time. There can be no assurance as to when or
whether the White River Board will declare any ordinary dividends. In addition,
under certain circumstances, White River may make an extraordinary distribution
of investments, cash, or a combination thereof to stockholders if, in the
judgment of the White River Board, the available resources of White River exceed
the internal and acquisition needs of White River.

As of April 13, 1998, there were 4,874,756 shares of Common Stock issued and
outstanding. As of such date, there were approximately 525 stockholders of
record, plus an indeterminate number of stockholders who hold shares of Common
Stock in the names of nominees.

                                       12
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


ITEM 6.   SELECTED FINANCIAL DATA.

CONSOLIDATED STATEMENT OF OPERATIONS DATA

Selected consolidated statement of operations data for the years ended December
31, 1997, 1996, 1995 and 1994, and for the period from September 24, 1993,
through December 31, 1993, follows:

<TABLE> 
<CAPTION> 
-----------------------------------------------------------------------------------------------------------------   
In thousands,
  except per share amounts                               1997         1996        1995(a)       1994(b)   1993(c)
-----------------------------------------------------------------------------------------------------------------   
<S>                                                 <C>         <C>          <C>         <C>            
Revenues                                            $ 179,910   $  145,398   $ 123,795    $   62,539   $    1,843      
Operating expenses                                    174,355      138,559     127,210        87,263(d)     1,688      
                                                    ---------   ----------   ---------    ----------   ----------      
Operating income (loss)                                 5,555        6,839      (3,415)      (24,724)         155      
Net investment gains (losses)                          27,492       16,150      36,255        49,678       (8,501)     
Interest expense                                          171        2,562       8,936         6,464          823      
Minority interest                                      10,065          971          --            --           --      
                                                    ---------   ----------   ---------    ----------   ----------      
Pretax income (loss)                                   22,811       19,456      23,904        18,490       (9,169)     
Income tax expense (benefit)                           15,610       14,306       7,909        (8,580)          --      
                                                    ---------   ----------   ---------    ----------   ----------      
Income (loss) before extraordinary item                 7,201        5,150      15,995        27,070       (9,169)     
Extraordinary loss on early retirement of debt,                 
 net of tax                                                --          678          --            --           -- 
                                                    ---------   ----------   ---------    ----------   ----------      
 

Net income (loss)                                       7,201        4,472      15,995        27,070       (9,169)     
Dividends and accretion on redeemable                                                                                  
 preferred stock                                          473          727         585           530           88      
                                                    ---------   ----------   ---------    ----------   ----------      
Net income (loss) applicable to common stock        $   6,728   $    3,745   $  15,410    $   26,540   $   (9,257)     
                                                    =========   ==========   =========    ==========   ==========      
Earnings (loss) per common share:                                                                                      
Basic:                                                                                                                 
   Income (loss) before extraordinary item          $    1.38   $     0.91   $    2.94    $     4.47   $    (1.45)     
   Net income (loss)                                $    1.38   $     0.77   $    2.94    $     4.47   $    (1.45)     
Diluted:                                                                                                               
   Income (loss) before extraordinary item          $    1.31   $     0.85   $    2.84    $     4.38   $    (1.45)     
   Net income (loss) applicable to common stock     $    1.31   $     0.73   $    2.84    $     4.38   $    (1.45)     
                                                                                                                       
Cash dividends declared per common share            $      --   $       --   $      --    $       --   $       --      
================================================================================================================== 
</TABLE> 

(a)  As discussed in Note 2 to the consolidated financial statements, White
     River adopted the provisions of Statement of Financial Accounting Standards
     ("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity
     Securities", effective September 30, 1995.
(b)  See Note 3 to the consolidated financial statements for a discussion of the
     acquisition of CCC by White River.
(c)  White River commenced operations in its present form on September 24, 1993,
     concurrent with the Capitalization. See Note 1 to the consolidated
     financial statements for a discussion of the Capitalization.
(d)  Includes write-off of purchased in-process research and development of 
     $27,582.

                                       13
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENT OF FINANCIAL CONDITION DATA

SELECTED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION DATA AS OF DECEMBER 31,
1997, 1996, 1995, 1994 AND 1993 FOLLOWS:

<TABLE> 
<CAPTION> 
---------------------------------------------------------------------------------------------------------------------
In thousands,
  except per share amounts                                     1997         1996       1995(a)      1994(b)      1993 
---------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>         <C>         <C>         <C>         <C> 
ASSETS
Cash and cash equivalents                                  $ 190,515   $ 188,365   $ 139,245   $  94,985   $   62,349   
Investment securities, at market value                       122,688      72,699      48,154      16,400       50,204   
Accounts receivable and other current assets                  26,708      15,206      14,482      14,044        7,044   
                                                           ---------   ---------   ---------   ---------   ----------    
  Total current assets                                       339,911     276,270     201,881     125,429      119,597   
Investment securities, at market value (d)                    41,434          --          --          --           --
Other investments                                                276      26,420      28,103     129,383      131,835   
Goodwill, net                                                 18,754      23,730      34,806      41,000           --   
Purchased software and equipment, net                         18,431      20,478      25,791      36,239          135   
Deferred income taxes and other assets                         8,327       7,614       6,174       9,462          176   
                                                           ---------   ---------   ---------   ---------   ----------    
  Total assets                                             $ 427,133   $ 354,512   $ 296,755   $ 341,513   $  251,743   
                                                           =========   =========   =========   =========   ==========    
Liabilities                                                                                                             
Accounts payable, accrued expenses                                                                                      
and deferred revenues                                      $  29,958   $  27,043   $  26,260   $  18,918   $    5,758   
Current portion of contract funding                               --         123       3,328      10,133           --   
Current portion of notes payable and other debt                  111         120       7,660       5,340           --   
Redeemable preferred stock                                     7,000          --          --          --           --   
                                                           ---------   ---------   ---------   ---------   ----------    
  Total current liabilities                                   37,069      27,286      37,248      34,391        5,758   
Notes payable and other debt                                      --         111      27,220      85,753       50,000   
Deferred income taxes and other liabilities                   55,441      44,458      30,751      17,981        1,122   
                                                           ---------   ---------   ---------   ---------   ----------    
  Total liabilities                                           92,510      71,855      95,219     138,125       56,880   
                                                           ---------   ---------   ---------   ---------   ----------    
Redeemable preferred stock                                       189       7,175       8,275       8,162        7,000   
                                                           ---------   ---------   ---------   ---------   ----------    
Minority interest                                             33,687      18,950          --          --           --   
                                                           ---------   ---------   ---------   ---------   ----------    
Stockholders' equity (d)                                     300,747     256,532     193,261     195,226      187,863   
                                                           ---------   ---------   ---------   ---------   ----------    
  Total liabilities, minority interest and                                                                              
     stockholders' equity                                  $ 427,133   $ 354,512   $ 296,755   $ 341,513   $  251,743   
                                                           =========   =========   =========   =========   ==========    
Book value per common and                                                                                               
   common equivalent share (c)                             $   61.88   $   51.98   $   39.01   $   33.75   $    29.29    
===================================================================================================================
</TABLE> 

(a)  As discussed in Note 2 to the consolidated financial statements, White
     River adopted the provisions of SFAS No. 115, effective September 30, 1995.
(b)  See Note 3 to the consolidated financial statements for a discussion of the
     acquisition of CCC by White River.
(c)  The calculation of book value per common and common equivalent share
     reflects the potentially dilutive effects of White River's outstanding
     incentive and directors' compensation awards. See Note 2 to the
     consolidated financial statements.
(d)  See Note 2 to the consolidated financial statements for a discussion of the
     investment in Richard C. Blum & Associates - NWA Partners, L.P.

                                       14
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

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

FINANCIAL CONDITION - AS OF DECEMBER 31, 1997 AND 1996

Book value per common equivalent share, as defined below, increased $9.90, or
19.0%, to $61.88 at December 31, 1997, from $51.98 at December 31, 1996. Such
change reflects an increase of $7.33 per share relative to the after tax
increase in net unrealized investment gains (including $3.51 per share related
to the increase in value of White River's interest in NWA Partners, as discussed
in Note 2 to the accompanying financial statements), which were recorded
directly to stockholders equity, and realized gains on the distribution received
from NWA Partners of $2.55 per share after tax.

The calculation of book value per common and common equivalent share reflects
the potentially dilutive effects of White River's outstanding incentive and
directors' compensation awards. In the calculation of book value per common and
common equivalent share: (i) the numerator is the sum of stockholders' equity
and the tax benefit which would result from the settlement of outstanding
performance units, directors' compensation awards and balances within White
River's retirement plans with shares of Common Stock, based upon the current
market price of the Common Stock and assuming a statutory tax rate of 35%, and
(ii) the denominator is the sum of the shares of Common Stock outstanding and
shares deemed issued in settlement of outstanding performance units, directors'
compensation awards and balances within such retirement plans. See Note 9 of the
accompanying financial statements for a discussion of White River's retirement
plans and Notes 10 and 11 of the accompanying financial statements for a
discussion of the incentive and directors' compensation plans which gives rise
to White River's potentially dilutive securities.

As of December 31, 1997, the Company had consolidated cash and cash equivalents
of $190.5 million, (which included $2.9 million related to the operations of
CCC, Hanover, and JKRE), as compared to $188.4 million as of December 31, 1996.
Substantially all of the cash and cash equivalent balances of $187.3 million
held by White River as of December 31, 1997, other than those of CCC, Hanover
and JKRE, were deposited with several major banking institutions in interest-
bearing accounts with maturities of six days or less. As of December 31, 1997,
such deposits earned a weighted average interest rate of 5.5% per annum. 

Working capital (current assets less current liabilities) increased by $53.9
million to $302.8 million at December 31, 1997 from December 31, 1996 primarily
due to a net increase in the Company's investments of $50.0 million.
Additionally, accounts receivable and other current assets increased by $11.5
million during the same period. The inclusion of the current portion of
redeemable preferred stock at December 31, 1997 reduced working capital by $7.0
million.

The reclassification of White River's investment in NWA Partners from "other 
investments" to "investment securities-non current" resulted in a $41.4 million
increase in total "investment securities", as discussed in Note 2 to the
accompanying financial statements.

                                      15
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

Capital expenditures were $9.8 million during the year ended December 31, 1997
compared to $5.6 million during the year ended December 31, 1996 primarily due
to expansion of CCC's office space as well as expenditures related to CCC's new
products.

RESULTS OF OPERATIONS -- YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

Consolidated net income applicable to common stock totalled $6.7 million for the
year ended December 31, 1997, or $1.31 per diluted common share, as compared to
$3.7 million, or $0.73 per diluted common share, for the year ended December 31,
1996, and $15.4 million, or $2.84 per diluted common share, for the year ended
December 31, 1995. The 1997 results reflect pretax net investment gains of $27.5
million, as compared to $16.2 million reported for 1996 and $36.3 million for
1995.

INVESTMENT OPERATIONS

INVESTMENT RESULTS

Based upon the composition of its assets at the time of the Capitalization,
White River met the definition of an Investment Company under the Investment
Company Act. As such, White River's accounting policies regarding the carrying
value of investments as well as the treatment of changes in unrealized gains and
losses relating to such investments conformed to generally accepted accounting
principles ("GAAP") for Investment Companies until such time as White River
ceased to meet the definition of an Investment Company. White River ceased to
meet the definition of an Investment Company effective September 30, 1995, and,
accordingly, as discussed further in Note 2 to the accompanying financial
statements, adopted the provisions of SFAS No. 115, as of such date. Under SFAS
No. 115, changes in net unrealized investment gains and losses relating to White
River's marketable equity securities and debt which are classified as available
for sale are reported net of tax as a separate component of stockholders' equity
and, except for declines in value which are deemed to be other than temporary in
nature, changes in net unrealized investment gains and losses relating to White
River's other investments are not recognized until realized. Pretax net
unrealized gains of $55.5 million and $17.0 million were recorded directly to
stockholders' equity during 1997 and 1996, respectively.

For the year ended December 31, 1997, pretax investment income totalled $11.4
million, including $10.2 million of interest income generated from higher cash
and cash equivalents balances held during 1997. Pretax investment income
totalled $9.0 million for the year ended December 31, 1996, and $8.3 million for
the year ended December 31, 1995.

White River's proceeds from dispositions of investments totalled $39.0 million,
$21.2 million and $118.9 million during the years ended December 31, 1997, 1996
and 1995, respectively. See Item 1 Business - Investment Operations for a
discussion of 1997 and 1996 investment dispositions. The 1995 investment
dispositions include the transfer of certain securities with a carrying value of
$93 million and a fair value of $104 million to Fund American. In conjunction
with the transfer of such securities, White River also received an additional
$14 million in cash from Fund American. The assets transferred by White River
were in satisfaction of the outstanding borrowings under the Credit Agreement.
Accordingly, management accounted for the transaction as a retirement of debt
with no corresponding gain or loss, and the remaining $11 million was recognized
as realized investment gains.

                                      16
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

INVESTMENT HOLDINGS

The Company's investment holdings as of December 31, 1997 consist primarily of
its interests in Cross Timbers; U.S. Treasury Bills held by CCC, and NWA
Partners which represented 54.6%, 18.5% and 25.2%, respectively, of White
River's total investments. White River's management believes that this
concentration may make the value of White River's investments more volatile than
the value of a more diversified portfolio.

Cross Timbers was organized in 1990 and is engaged in the acquisition and
-------------
development of producing oil and gas properties and the marketing and
transportation of oil and natural gas. Cross Timbers' oil and gas properties are
concentrated in major producing basins in Oklahoma, East Texas and the Permian
Basin of West Texas and New Mexico. Based upon information available to the
Company, White River's holdings represented 13.6% of the total outstanding Cross
Timbers common stock as of December 31, 1997. The Cross Timbers common stock
held by White River generally is not registered for sale in the open market;
however, White River does have limited demand registration rights with regard to
such shares. In addition, White River can sell its holdings of Cross Timbers
common stock in accordance with the volume restrictions under Rule 144 of the
U.S. Securities Act of 1933, as amended. During 1997, such sales totalled 20,000
shares resulting in gross proceeds of $0.6 million.

The common stock of Cross Timbers is traded on the New York Stock Exchange under
the symbol "XTO", and during the 52-week period ended December 31, 1997, its
daily closing market price ranged between a high of $2811/16 and a low of
$1411/16 per share. The closing market price of such shares as of December 31,
1997, was $2415/16 per share. Such prices were as listed on the New York Stock
Exchange during 1997, and do not reflect the stock split noted below. In
recognition of White River's demand registration rights with respect to its
shares of Cross Timbers common stock, White River began carrying its interest in
Cross Timbers at market value effective September 30, 1995, upon the adoption of
SFAS No. 115. Accordingly, White River's interest in Cross Timbers was carried
at $89.8 million and $60.8 million under the caption investment securities in
the accompanying consolidated statement of financial condition as of December
31, 1997 and 1996, respectively.

On January 30, 1998, Cross Timbers announced a three-for-two stock split, to be
effective on February 24, 1998 for stockholders of record on February 12, 1998.
As a result of the stock split, White River's holdings of Cross Timbers common
stock increased from 3,600,009 shares to 5,400,013 shares.

White River recognized dividend income of $0.8 million for each of the years
ended December 31, 1997, 1996 and 1995, from its interest in Cross Timbers.
There can be no assurance that Cross Timbers will continue to pay dividends on
its common stock at this level, or if dividends will be paid at all.

The energy and natural resources industries, particularly the oil and natural
gas industries, are highly competitive, require significant capital
expenditures, and are subject to extensive regulation at both the national and
local levels. Unpredictable fluctuations in the prices of oil, natural gas and
other natural resources, as well as changes in the level of development and
production expenditures by the operators of companies in this sector, generally
affect the market price of the securities of such companies. For these reasons,
among others, management believes that the value of its interest in Cross
Timbers may be subject to additional market price

                                       17
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

volatility not applicable to the securities markets in general.

NWA Partners is a limited partnership formed during 1989 under the laws of the
------------
State of California for the purpose of investing in Northwest Airlines
Corporation ("Northwest Airlines") equity securities. During December 1993, NWA
Partners entered into a stockholders' agreement (the "NWA Stockholders'
Agreement") with the participants in the Northwest Airlines leveraged buyout
(the "Northwest LBO"), which, among other things, restricted transfer of most of
the shares of Northwest Airlines common stock held by the parties to the
Northwest LBO until June 1997. Accordingly, the Company considered such
investments as restricted in accordance with SFAS No. 115, and carried such
investments at adjusted carring value (see Note 2 to the accompanying financial
statements) until such time as the restrictions expired (June 1997). Thereafter,
the Company accounted for its investment in NWA Partners as an available for
sale security. NWA Partners has an original term of ten years, which is
extendable at the discretion of the general partner for up to two additional
years.

White River acquired its interest in NWA Partners in connection with the
Capitalization. White River's interest in NWA Partners represented approximately
21% of partnership assets as of December 31, 1997 and 1996. During the year
ended December 31, 1997, White River received a $26.3 million partial
distribution on its investment resulting in a pretax investment gain of $19.4
million. The distribution represented White River's share of proceeds arising
primarily from the redemption of NWA Partners' investment in preferred stock of
NWA Corp., but also in part due to the sale of 0.7 million shares of NWA Corp.
common stock subject to a call option. No distributions were received during
1996. During the year ended December 31, 1995, White River received
distributions totaling $3.5 million from NWA Partners, resulting in pretax net
investment gains of $2.8 million. These distributions represented White River's
share of the proceeds from the sale of a portion of NWA Partners' assets. As of
December 31, 1997, NWA Partners' remaining assets consisted primarily of 4.7
million shares of Northwest Airlines Class A common stock, par value $0.01 per
share (the "Northwest Common Stock").

As discussed in Note 1 of the accompanying financial statements, prior to
September 30, 1995, investments classified by White River as "other investments"
included its partnership interest in NWA Partners, which had no established
market value at the time. White River carried its interest in NWA Partners at
internally appraised values, giving due consideration to the current market
value of the unrestricted Northwest Common Stock and the estimated value of the
Northwest Preferred Stock. To arrive at fair value, White River applied a
significant discount to such values due to liquidity restrictions caused in part
by restrictions on transfer imposed by the NWA Stockholders' Agreement, as well
as the partnership terms of NWA Partners. Upon White River ceasing to meet the
definition of an Investment Company, White River adopted SFAS No. 115, and the
Company recorded its limited partnership interest investment in NWA Partners at
its then carrying value (due to the restrictions on the investments held by the
NWA Partnership). Since the lapse of the restrictions on such investment in June
1997, the Company recorded its investment in NWA Partners as an available for
sale security. Accordingly, the carrying value of NWA Partners at December 31,
1997 was $41.4 million, as compared to a carrying value of $21.8 million at
December 31, 1996, which reflected the adjusted cost basis at that time.

Since the passage of the Airline Deregulation Act of 1978, the airline industry
has been characterized by strong

                                      18
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

competition and industry consolidation. A number of airlines have filed for
bankruptcy and/or ceased operations. Airlines offer discount fares, a wide range
of schedules, frequent flyer mileage programs, and ground and in-flight services
as competitive tools to attract passengers and increase market share. Because of
the relative ease with which U.S. carriers can enter new markets, each carrier's
domestic service is subject to potential increases in competition from other air
carriers, the extent and effect of which cannot be predicted. The airline
industry is subject to substantial price competition as U.S. carriers are free
to determine domestic pricing policies without government regulation. Domestic
price competition has accelerated the efforts of airline management to reduce
costs and improve productivity. Although the U.S. government retains authority
over international fares, such fares are also subject to the jurisdiction of the
foreign countries being served. For these reasons, among others, White River's
management believes that the value of its interest in NWA Partners may be
subject to additional price volatility not applicable to the securities markets
in general.

INSURANCE-RELATED SERVICES

Revenues for the year ended December 31, 1997 of $159.1 million were $28.1
million, or 21.5%, higher than the prior year. The increase in revenues was due
primarily to higher revenues from workflow/collision estimating software
licensing and valuation services. Workflow/collision estimating software revenue
increased due to an increase in the number of units sold in both the autobody
and insurance markets. Valuation services revenue increased due to higher
transaction volume.


Revenues for the year ended December 31, 1996 of $131.0 million were $15.5
million, or 13.4%, higher than the prior year. The increase in revenues was due
primarily to higher revenues from collision estimating software licensing, from
ACCESS claims services and from Total Loss vehicle valuation services. Collision
estimating software licensing revenues increased primarily because of an
increase in the number of software licenses, particularly at collision repair
facilities. ACCESS claims services revenues increased primarily as a result of
higher transaction volume. Total Loss revenues increased as a result of both
higher volume and a slightly higher rate per transaction.

On a stand-alone basis, CCC reported net income before accretion and dividends
on preferred stock of $15.8 million, $14.8 million and $1.3 million for the
years ended December 31, 1997, 1996 and 1995, respectively. The 1995 results
include the $4.5 million pretax provision for loss relating to the MacLean
Hunter litigation claim. White River's adjustment for the amortization of
goodwill and purchased software related to the CCC acquisition (see Note 2 to
the accompanying financial statements), as well as the minority shareholders'
interest in the earnings of CCC during these periods, reduced net income by
$17.4 million, $14.8 million and $9.0 million for the years ended December 31,
1997, 1996 and 1995, respectively.

During August 1996, CCC completed the initial public offering of 6.9 million
newly issued shares of Common Stock, resulting in net proceeds to CCC of $72.1
million. As a result of the IPO, CCC's $49.6 million deficiency in stockholders
equity was eliminated resulting in stockholders' equity of $22.5 million
immediately after the IPO. Prior to CCC's IPO, the minority interest in CCC was
not reflected in the consolidated statements of financial condition because the
minority interest did not guarantee the obligations of CCC nor was it otherwise
committed to provide further financial support. However, as a result of
eliminating CCC's deficiency in stockholders' equity, a minority interest
liability was included in the Company's statement of financial condition. Such
minority interest liability was $33.7 million and $19.0 million for the years
ended December 31, 1997 and 1996, respectively.

                                       19
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


OTHER REVENUES - CONSOLIDATED

1997 versus 1996

Other revenue of $9.6 million for the year ended December 31, 1997 consisted of
Hanover sales of $9.0 million, and JKRE sales of $0.5 million. The corresponding
sales amount of $5.4 million in 1996 is not comparable since Hanover operations
did not commence until April 1996, while JKRE was not established until November
1997.

Hanover, which began operations in April 1996, generated $9.0 million in revenue
from the sale of fashion accessories for the year ended December 31, 1997, with
a net loss of $0.5 million. As of December 31, 1997, White River's investment in
and advances to Hanover totalled $3.8 million.

Hanover generated revenues of $5.4 million for the year ended December 31,1996.
Hanover's operations had breakeven operating results for the period April 1996
to December 31, 1996, and the dollar amount of the investment in and advances to
this entity totalled $1.6 million at December 31, 1996.

OPERATING EXPENSES

1997 versus 1996

For the year ended December 31, 1997, compensation and benefits expense totalled
$82.0 million, as compared to $63.7 million for 1996. The 1997 year results
include a $7.3 million increase in White River's provision for stock based
incentive awards, a $1.7 million increase related to Hanover which began
operations in April 1996, and a $8.8 million increase in CCC's compensation and
benefits to recruit and retain key employees.

For the year ended December 31, 1997, other operating expenses totalled $92.3
million, as compared to $74.8 million for the 1996 period, representing an
increase of 23.4%. Such increase was due to an increase in CCC's operating
expenses of $13.7 million in 1997 which was primarily attributable to an
increase in product development and customer support capacity necessary to
support increased revenues, as well as to efforts to build and upgrade internal
systems. Furthermore, during 1996, CCC had constraints imposed on operating
expenditures due to principal payment obligations and restrictive covenants
attributable to its previous commercial bank credit facility. Additionally,
Hanover's other operating expenses increased by $2.5 million in 1997 primarily
because 1997 included a full year of expenses.

1996 versus 1995

Compensation and benefits expense increased by 23.1% to $63.7 million for the
year ended December 31, 1996, as compared to $51.8 million for the year ended
December 31, 1995. The 1996 increase reflects a $5.2 million increase in White
River's provision for stock-based incentive awards, which was due to increases
in the market value of Common Stock during such period as well as to accelerated
vesting of certain awards due in part to the effects of the CCC IPO upon White
River's book value per common and common equivalent share. In addition, CCC's
compensation and benefits increased by $5.5 million for the year ended December
31, 1996 when compared to the prior year, as a result of increased staffing
required to support revenue growth and product development activities.

Other operating expenses decreased by 0.8% to $74.8 million for the year ended
December 31, 1996, as

                                       22
<PAGE>
 

                   WHITE RIVER CORPORATION AND SUBSIDIARIES

compared to $75.4 million for the same period in 1995. The decrease in other
operating expenses during the year ended December 31, 1996 is attributable to
effective cost containment initiatives and the postponement by CCC of certain
operating expenditures that it would have made during the first half of 1996 in
the absence of covenants under its previous bank credit facility.

INCOME TAXES

The Company's effective tax rate is higher than the statutory rate of 35% due to
the fact that the Company provides for deferred taxes on its equity interest in
the net income of CCC, as well as due to the effect of the amortization of
goodwill. 

                                      23

<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


VALUATION ALLOWANCE

As of December 31, 1995, CCC carried a valuation allowance of $5.0 million
against future income tax benefits which were not recognized for book purposes
due to the existence of historical operating losses and the resulting
uncertainties regarding the availability of future taxable income. CCC reduced
valuation allowances by $4.7 million thus reducing its stand-alone income tax
expense in 1996 as a result of its successful recapitalization, through the CCC
IPO, and its demonstrated pattern of profitability. White River treated its
share of the reversal of these CCC tax benefits as a reduction of its goodwill
relating to the CCC acquisition. CCC's remaining valuation allowance of $0.3
million as of December 31, 1997 and December 31, 1996, pertains to capital loss
carry forwards, the realization of which is not assured.

LIQUIDITY AND CAPITAL RESOURCES

White River

As of December 31, 1997, the Company had consolidated cash and cash equivalents
of $190.5 million, of which $187.3 million relates to balances held by White
River, with the remaining $2.9 million related to the operations of CCC, Hanover
and JKRE. White River's primary sources of additional cash include sales of
investments, interest earned on cash equivalents and dividends earned on
investments. During the years ended December 31, 1997, 1996 and 1995, White
River generated cash proceeds from the sale of investments aggregating $39.0
million, $21.1 million and $28.9 million, respectively.

For the foreseeable future, White River does not expect to receive cash
dividends on its holdings of CCC Common Stock, and, based upon the terms of the
CCC Preferred Stock, further dividends will not begin to accrue until June 1998.
White River has not made any formal or informal commitment to make additional
investments in or advances to CCC.

The White River Board has not declared, and currently does not intend to
declare, ordinary periodic dividends on the Common Stock. However, the White
River Board intends to reevaluate from time to time the declaration of dividends
with due consideration given to the financial characteristics of White River's
remaining investments, its continuing operations and the amount and regularity
of its cash flows as of that time. There can be no assurance as to when or
whether the White River Board will declare any such dividends.

During the year ended December 31, 1997, the Company did not repurchase any
shares of Common Stock. Cumulative share repurchases since the formation of
White River through December 31, 1997, totalled approximately 1,495,000 shares
of Common Stock at an aggregate cost of $48.9 million. As of December 31, 1997,
White River may repurchase an additional 523,000 shares of Common Stock under
its existing share repurchase authorization.

                                      24
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

As part of the Capitalization, White River issued to Fund American 7,000 shares
of White River Series A NonParticipating Cumulative Preferred Stock, par value
$1.00 per share (the "Redeemable Preferred Stock"), which are entitled to
aggregate annual dividends of $0.5 million and must be redeemed during September
1998, at a redemption price of $1,000 per share. Fund American sold the
Redeemable Preferred Stock to two unaffiliated institutional investors at the
time of the Distribution.

Management believes that available cash and funds generated from sales of
investments will be sufficient for White River to satisfy its working capital
requirements for the foreseeable future.

CCC

CCC's primary source of cash includes receipts of customer billings, which are
generally invoiced monthly in advance for EZEst units and Pathways subscriptions
and monthly in arrears for Total Loss and EZNet transactions. During the years
ended December 31, 1997 and 1996, CCC generated net cash from operating
activities of $20.1 million and $20.3 million, respectively. CCC used $8.1
million and $5.6 million, respectively excluding noncash capital expenditures,
to purchase equipment and software and invested the remaining cash in marketable
securities.

On August 21, 1996, CCC completed its initial public offering of common stock,
generating proceeds of $72.1 million, net of underwriters' discounts and related
equity issue costs. Proceeds from the offering of $36.1 million were used to
redeem approximately 87% of the CCC Preferred Stock at stated value plus accrued
dividends. In addition, proceeds from the offering of $28.0 million were used to
make principal repayments on long-term debt. The balance of CCC's principal
repayments during the year ended December 31, 1996, was generated from
operations.

On August 22, 1996, CCC secured a $20.0 million revolving credit facility
through a commercial bank. As a result, the balance of deferred financing fees
associated with CCC's previous credit facility was written off in 1996 as an
extraordinary loss, net of income taxes. There have been no borrowings under the
current bank credit facility. Indebtedness under the current bank credit
facility would bear interest at either of two rates as selected by CCC: the
London Inter-Bank Offering Rate plus 1.5% per annum, or the prime rate.
Following the offering, CCC's principal liquidity requirements include its
operating activities, including product development, and its investments in
internal and customer capital equipment.

Under the current credit facility, CCC is, with certain exceptions, prohibited
from making certain sales or transfers of assets, incurring nonpermitted
indebtedness or encumbrances, and redeeming or repurchasing

                                       25
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

its capital stock, among other restrictions. In addition, the current credit
facility also requires CCC to maintain certain levels of operating cash flow and
interest expense coverage, and limits CCC's ability to make capital expenditures
and investments and declare dividends.

Management believes that cash flows from operations and the current credit
facility will be sufficient to meet CCC's liquidity needs over the next 12
months. There can be no assurance, however, that CCC will be able to satisfy its
liquidity needs in the future without engaging in financing activities beyond
those described above.

YEAR 2000 ISSUE

The year 2000 issue relates to computer system programs which may not properly
recognize the change in date years from 1999 to 2000. As a result of this time
sensitivity of existing software, any business entity is at risk for possible
system failure or miscalculations causing disruptions of operations, including,
among other things, a temporary inability to process transactions, send
invoices, or engage in similar normal business activities. In addition, entities
that provide software solutions to their customers must monitor the year 2000
concerns in the applications their software supports.

Based on risk assessment, CCC is currently modifying or replacing significant
portions of its software so that its computer systems will function properly
with respect to the year 2000 date recognition. White River is currently in the
process of replacing significant portions of its software and expects to have
such upgrades completed by December 31, 1998. CCC presently believes that with
modifications to existing software and conversions to new software, the year
2000 issue will not pose a significant operational problem. However, if such
modifications and conversions are not made, or not completed timely, the year
2000 issue could have a material adverse effect on CCC's business, financial
condition and results of operations.

CCC is utilizing both internal and external resources to reprogram, or replace,
and test software for the year 2000 modifications. CCC anticipates completing
the year 2000 project in early 1999. The total cost of the year 2000 project for
the Company is not material.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

The Private Securities Litigation Reform Act of 1995 ("the Act") provides a safe
harbor for forward-looking information made on behalf of the Company. All
statements, other than statements of historical facts, which address activities
or actions that the Company expects or anticipates will or may occur in the
future, including such things as expansion and growth of the Company's
operations and other such matters are forward-looking statements. To take
advantage of the safe harbor provided by the Act, the Company is identifying
certain factors that could cause actual results to differ materially from those
expressed in any forward-looking statements made by the Company.

Any one, or a combination, of these factors could materially affect the results
of the Company's operations. These factors include competitive pressures,
changes in customer preferences, acceptance of new product introductions and
other marketing and sales initiatives, legal and regulatory initiatives and
conditions in the

                                       26
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

capital markets. Forward -looking statements made by the Company are based on
knowledge of its business and the environment in which it operates, but because
of the factors listed above, as well as other factors- beyond the control of the
Company, actual results may differ from those in the forward-looking statements.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The information required by this item is contained under "WHITE RIVER
CORPORATION AND SUBSIDIARIES -- CONSOLIDATED FINANCIAL STATEMENTS" attached
hereto as ANNEX I.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE.

None.
                                   PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

WHITE RIVER BOARD

The following information with respect to the principal occupation, business
experience and other affiliations of the directors of White River has been
furnished to White River by the respective directors.

CLASS I:  TERM ENDING 2000

ANDREW DELANEY, age 77, has been a director of White River since September 1993.
Mr. Delaney served as Vice Chairman of American General Corporation, a
diversified insurance and financial services organization, from 1982 until his
retirement in 1985. He joined that company in 1954. He also served as a director
of Fund American and certain of its subsidiaries until December 1993.

BONNIE B. STEWART, age 37, was elected to the Board of Directors in December
1997. Ms. Stewart served as Corporate Secretary of White River from September
1996 until December 22, 1997. From 1994 to September 1996 she was Assistant
Corporate Secretary and from 1993 to December 22, 1997, she was Executive
Assistant to Mr. Marto. Prior to 1993, Ms. Stewart held various positions with
Fund American.

CLASS II:   TERM ENDING 1998

GORDON S. MACKLIN, age 69, has been Chairman of the White River Board since
September 1993. Mr. Macklin was also appointed to the positions of President and
Chief Executive Officer effective as of January 6, 1998. Mr. Macklin served as
Chairman of Hambrecht & Quist, LLC, a venture capital and investment banking
company, from 1987 until 1992. Prior to that, he served as President of the
National Association of Securities Dealers, Inc. from 1970 to 1987. Mr. Macklin
serves as a trustee, director or managing general partner, as the case may be,
of 52 of the investment companies in the Franklin/Templeton Group of Funds. He
is a director

                                       27
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

of CCC, MCI Communications Corporation, MedImmune, Inc., Real 3D Inc. and
Spacehab, Inc. He has also served, since 1987, as a director of Fund American.

CLASS III:  TERM ENDING 1999

ROBERT T. MARTO, age 52, has been a director of White River since September
1993. Mr. Marto was also President and Chief Executive Officer of White River
from 1993 until December 22, 1997. He became affiliated with Fund American in
1985 and served as Executive Vice President and Chief Financial Officer of Fund
American and as President of its subsidiary, Fund American Enterprises, Inc.
("FAE"), from 1990 to December 1993. He is a director of CCC and VICORP
Restaurants, Inc. He also served as a director of Fund American until December
1993.

PATRICK M. BYRNE, age 35, has been a director of White River since May 1996. Mr.
Byrne has been Chairman since 1994, and President and Chief Executive Officer
since March 1996, of Centricut, LLC, a manufacturer of industrial torch
consumable parts. In addition, since 1991, he has been the managing general
partner of a number of limited partnerships investing in real estate, gaming,
insurance and international trade. He currently serves as Chairman, President
and CEO of Fechheimer Brothers, a subsidiary of Berkshire Hathaway, Inc.
He has also served, since October 1997, as a director of Fund American. Patrick
M. Byrne is the son of John J. Byrne, the Chairman, and former President and
Chief Executive Officer of Fund American. John J. Byrne and Fund American are
the beneficial owners of 17.1% and 20.8%, respectively, of the total outstanding
shares of Common Stock as of April 13, 1998.

EXECUTIVE OFFICERS

For biographical information relating to Mr. Macklin, see - "White River Board".
Information concerning the other executive officers of White River follows:

MICHAEL E.B. SPICER, age 44, was hired by White River as Chief Financial Officer
and Treasurer, effective in April 1997. In December 1997, Mr. Spicer assumed the
additional responsibilities of Corporate Secretary. Prior to being hired by
White River, Mr. Spicer was Vice President, Finance and Administration of The
Chinet Company, an international manufacturer and marketer of packaging products
for the consumer and foodservice markets, since 1994.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act ("Section 16(a)") requires White River's
officers and directors, and persons who own more than ten percent of the total
outstanding shares of Common Stock, to file initial reports of ownership and
reports of changes in ownership of shares of Common Stock with the Commission.
Officers, directors and greater than ten percent stockholders are required by
the Commission regulations to furnish White River with copies of all Section
16(a) forms they file.

To White River's knowledge, based solely on its review of the copies of such
reports received by White River,

                                       28
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

and written representations from certain reporting persons that no other reports
were required for those persons, during 1997 all Section 16(a) filing
requirements applicable to White River's officers, directors and greater than
ten percent stockholders were complied with.

ITEM 11.  EXECUTIVE COMPENSATION.

COMPENSATION OF DIRECTORS

Concurrent with the approval by the board of directors of Fund American (the
"Fund American Board") of a plan to distribute (the "Distribution")
approximately 75% of the outstanding shares of Common Stock to holders of Fund
American common stock, Messrs. Macklin and Delaney received, in lieu of annual
retainer and meeting attendance fees, a grant of 48,649 and 16,216 performance
units ("Director Performance Units"), respectively. The initial value of such
Director Performance Units were determined by the Fund American Board based upon
the anticipated relative contribution of such individuals to the management of
White River.

Director Performance Units were payable solely in cash and were scheduled to
vest contingent upon the attainment of an annualized average return on
stockholders' equity ("ROE") by White River of 15% per annum over the period
from September 24, 1993, to December 31, 1996 (the "Director Performance
Target"), which would represent a total increase over the three year period of
approximately 52%. The return is measured as the change in White River's book
value per common and common equivalent share (as adjusted for dividends, stock
splits and other adjustments necessary to reflect true economic value). During
September 1996 (upon the third anniversary of the capitalization of White River)
and based upon the attainment of the Director Performance Target, the White
River Board declared the outstanding Director Performance Units earned and
payable on June 30, 1997, contingent upon the continued voluntary service of
Messrs. Macklin and Delaney through such date. On June 30, 1997, these 64,865
shares became fully vested and were transferred to the Director's Deferred
Compensation Plan.

The Directors' Deferred Compensation Plan was terminated effective as of
December 30, 1997, pursuant to the Merger Agreement. As required by the Merger
Agreement, White River approached each of the participants in the Directors'
Deferred Compensation Plan regarding the possible payment in cash by White River
on or prior to December 30, 1997 of the entire balance of such participant's
"Deferred Compensation Account" (as defined in the Directors' Deferred
Compensation Plan). The following persons, each a director of White River,
received the following amounts on December 24, 1997: Mr. Macklin $3,879,758 and
Mr. Delaney $1,293,226.

In addition to the Director Performance Units described above, during 1997, Mr.
Macklin received a reimbursement of $40,000 for office expenses incurred in
connection with his service as a director of White River and a fee of $16,350
for his service as a director of CCC.

                                       29
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

COMPENSATION OF EXECUTIVE OFFICERS

Unless otherwise indicated, the table on the following page sets forth certain
information regarding the cash and non-cash compensation earned by the listed
executive officers (the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
                                                 Annual Compensation    Long Term Compensation       All Other
                                               --------------------------------------------------
Name and principal position      Year          Salary          Bonus          LTIP Payout(a)        Compensation
-------------------------------------------------------------------------------------------------------------------
<S>                              <C>          <C>           <C>               <C>                  <C> 
ROBERT T. MARTO                  1997         $ 407,452     $  250,000         $       --          $ 6,810,230 (b)
  Former President and           1996         $ 375,000     $  250,000         $9,485,280          $   185,476 (b)
  Chief Executive Officer (d)    1995         $ 375,000     $  110,000         $       --          $   208,430 (b)

MICHAEL E.B. SPICER              1997         $ 114,446     $   94,000         $       --          $        --
  Chief Financial Officer, Treasurer
  and Corporate Secretary (e)

BONNIE B. STEWART                1997         $  99,342     $   50,000         $       --          $   345,841 (c)
  Former Corporate Secretary     1996         $  90,852     $   50,000         $  583,860          $        --
                                 1995         $  85,312     $   22,000         $       --          $        --

BRIAN P. ZWARYCH                 1997         $  45,390     $       --         $       --          $        --
  Former Chief Financial Officer 1996         $ 145,845     $   70,000         $1,380,000          $        --
  Treasurer (f)                  1995         $ 138,846     $   34,000         $       --          $        --
===================================================================================================================
</TABLE> 

(a)  LTIP payouts include amounts for awards originally granted by Fund
     American. White River assumed the liability for these awards prior to the
     Distribution. The 1996 LTIP payouts included $7,085,280 and $283,860 for
     Mr. Marto and Ms. Stewart, respectively, which related to award liabilities
     assumed from Fund American.

(b)  All other compensation includes: (i) a housing allowance of $66,262 and
     $66,528 paid in 1996 and 1995, respectively, (such housing allowance has
     been discontinued); (ii) directors' fees of $40,000 received in 1995, from
     a company in which White River held an equity investment; (iii) deemed
     contributions under the Deferred Benefit Plan of $138,933, $119,214, and
     $101,902 for 1997, 1996, and 1995, respectively; and (iv) gross-up
     incentive payments of $6,671,297 associated with the termination of White
     River's Retirement Plans in December 1997.

(c)  Gross-up incentive payment associated with the termination of White River's
     Retirement Plans in December 1997.

(d)  Mr. Marto's employment terminated with White River effective December 1997.

(e)  Mr. Spicer's employment commenced with White River effective April 1997.

(f)  Mr. Zwarych's employment terminated with White River effective April 1997.

                                       30
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

LONG-TERM INCENTIVE PLAN - AWARDS IN LAST FISCAL YEAR

<TABLE> 
<CAPTION> 
-----------------------------------------------------------------------------------------------------------------------
                                                                                     Number of         Performance or
                                                                                   shares, units        other period
                                                                                  or other rights      until maturation
Name                                                                                     (#)              or payout
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>                  <C>  
Michael E.B. Spicer                                                                    5,000              9/96-9/99
========================================================================================================================
</TABLE> 

This award is payable in cash or in shares of Common Stock at the discretion of
the Compensation Committee, based on the attainment of an annualized ROE by
White River of 15% per annum over the performance period, which would represent
a total increase over the three year period of approximately 52%. The return is
measured as the change in White River's book value per common and common
equivalent share (as adjusted for dividends, stock splits, and other adjustments
necessary to reflect true economic value).

OTHER COMPENSATION ARRANGEMENTS.  White River has no formal severance policy and
has not entered into any employment contracts with its Named Executive Officers.
However, pursuant to the Incentive Plan, under certain circumstances, such as a
"Change in Control" or an "Unfriendly Change in Control", performance units
("Performance Units") will become partially or fully payable. The terms "Change
of Control" and "Unfriendly Change of Control" are defined as follows:

Change of Control. For purposes of the Long-Term Incentive Plan, a "Change in
Control of the Company" shall occur if: (a) any person or group (within the
meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other than (i) the
Company and/or its management; (ii) Fund American Enterprises Holdings, Inc.
and/or its management and/or its subsidiaries; or (iii) John J. Byrne becomes
the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act)
of thirty-five percent (35%) or more of the Company's then outstanding voting
capital stock; (b) the Incumbent Directors cease for any reason to constitute a
majority of the Board of the Company; (c) the business of the Company for
which the participant's services are principally performed is disposed of by the
Company pursuant to a sale or other disposition of all or substantially all of
the business or business-related assets of the Company (including stock of a
subsidiary of the Company); or (d) the Compensation Committee determines that
the business or value of the Company is significantly changed or altered by
reason of a significant event or transaction; including, but not limited to, a
sale, transfer, merger, consolidation, reorganization or recapitalization.

In the event of a Change of Control, the participant shall be entitled to the
number or amount of award or awards, as the case may be, based on the sole
discretion of the Compensation Committee; but taking into consideration such
relevant factors including, but not limited to, whether the original performance
objectives are being met at the time of the Change in Control, whether the
market value of the Company's common stock has increased as a result of such
Change of Control, whether the Company has outperformed its competitors
notwithstanding significant adverse economic or market conditions, etc.

Only with respect to a Change of Control, in no event will any Option become
exercisable or amounts or Shares be paid, awarded in connection with Performance
Units, to the extent that the Company would not be

                                       31
<PAGE>
 

                   WHITE RIVER CORPORATION AND SUBSIDIARIES

entitled to a deduction for federal income tax purposes in connection with the
immediate exercise of such Option or payment of such award by reason of the
application of the provisions of Section 280G of the Code; relating to Golden
Parachute Payments.

Unfriendly Change of Control. A Change in Control of the Company shall be deemed
an "Unfriendly Change in Control of the Company" if (a) any person or group
(within the meaning of Section 13(d) and 14(d)(2) of the Exchange Act), other
than (i) the Company and/or its management; (ii) Fund American Enterprises
Holdings, Inc. and/or its management and/or its subsidiaries; or (iii) John J.
Byrne, becomes the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act) of thirty-five percent (35%) or more of the Company's then
outstanding voting capital stock through a transaction that is opposed by the
Company's President and Chief Executive Officer, and (b) a majority of the
Company's Incumbent Directors by resolution adopted within 30 days following the
date the Company becomes aware that the person or group referred to in this
section has become the beneficial owner of thirty-five percent (35%) or more of
the Company's Shares, determines that a Change in Control has occurred.

In the event an Unfriendly Change In Control occurs, the participant: (a) may
exercise his remaining Options or Tandem SARs (whether vested or unvested)
outstanding as of the Acceleration Date provided, however, that (i) in the case
of an officer subject to Section 16(b) of the Exchange Act, no Option shall
become exercisable until the expiration of the period ending six months after
the date of grant of the Option hereunder, and (ii) no Option shall become
exercisable to the extent that the Company would not be entitled to a deduction
for federal income tax purposes in connection with the immediate exercisability
of such Option by reason of the application of the provisions of Section 280G of
the Code, (b) will receive the Maximum Value of his Performance Units
outstanding, regardless of whether the performance objectives are being met, as
of the date of such Unfriendly Change of Control and (c) will receive a total
Annual Bonus as determined by the Compensation Committee.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 1997, the Compensation Committee was comprised entirely of non-employee
directors, specifically Mssrs. Byrne, Delaney and Macklin. During 1997, Mr.
Macklin was a member of the Fund American Board and served as the Chairman of
its Human Resources Committee and Compensation Committee.

In connection with the change of control with respect to the Company that will
occur if the Merger is consummated, it is anticipated that the Company's
Compensation Committee will fully vest certain awards to the Company's directors
under the White River Corporation 1993 Incentive Compensation Plan (the
"Incentive Plan"). It is anticipated that Messrs. Byrne, Delaney and Macklin
will receive awards in the amounts of $634,960, $634,960, and $1,904,070,
respectively.

                                       32
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

In connection with entering into the Merger Agreement, the Company entered into
indemnification agreements with each of its officers and directors (including
Messrs. Byrne, Delaney and Macklin) indemnifying such persons against certain
claims and liabilities resulting from having served as an officer or director of
the Company. In addition, under the terms of the Merger Agreement, an affiliate
of Harvard Private Capital Group, Inc. has agreed, if the Merger is consummated,
to keep the Company in existence with net assets of at least $50 million for a
period of two years, or to have such indemnity agreements assumed by an entity
meeting such requirements.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth, as of April 13, 1998, information concerning the
beneficial ownership of shares of White River Common Stock by each director and
executive officer of White River individually and by all current directors and
executive officers as a group. As of April 13, 1998, White River had 4,874,756
outstanding shares of White River Common Stock.

MANAGEMENT OF WHITE RIVER

<TABLE> 
<CAPTION> 
--------------------------------------------------------------------------------------------------------------------------
                                                                 Number of Shares of White River Common Stock
                                                 -------------------------------------------------------------------------
                                                                        Rights to
                                                           Shares        Acquire                              Ownership
Name of Beneficial Owner (1)                              Owned(2)      Shares(3)        Total              Percentage(4)
--------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>           <C>              <C>                <C> 
Patrick M. Byrne (4)                                           --            --               --                 --
Andrew Delaney                                                500            --              500                 (5)
Gordon S. Macklin                                           5,000            --            5,000                 (5)
Robert T. Marto                                            16,505       294,432          310,937                  6.4%
Bonnie B. Stewart                                           1,178            --            1,178                 (5)
Michael E. B. Spicer                                           --            --               --                 --
Brian P. Zwarych                                               --            --               --                 --
All current directors and executive officers as a group    23,183       294,432          317,615                  6.5%
==========================================================================================================================
</TABLE> 

(1) All current directors and executive officers may be contacted at White
    River's principal executive office at 2 Gannett Drive, Suite 200, White
    Plains, NY 10604.

(2) Determined based on the beneficial ownership provisions specified in Rule
    13d-3(d)(1) of the Exchange Act. Unless otherwise noted, the indicated
    beneficial ownership represents sole voting and investment powers.

(3) Represents shares of White River Common Stock deliverable upon exercise of
    options to purchase shares of White River Common Stock owned by Fund
    American. Such options expire in 1998 and were issued, concurrent with the
    purchase and other transfer of selected assets and the assumption of certain
    liabilities from Fund American, to replace then outstanding employee options
    to purchase Fund American common stock.

(4) Patrick M. Byrne, has voting power with respect to 15,000 shares of White
    River Common Stock held in trust for his benefit, but he disclaims any
    beneficial ownership of such shares of White River Common Stock. In
    addition, he is the son of John J. Byrne, who is the beneficial owner of
    835,112 shares of White River Common Stock, representing 17.1% of the total
    outstanding shares of White River Common Stock. Patrick M. Byrne disclaims
    any beneficial ownership of shares of White River Common Stock held by John
    J. Byrne.

(5) Represents less than 1.0% of the total outstanding shares of White River
    Common Stock.

                                       33
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

CHANGE OF CONTROL

See "Item 1 Business - the Company" for a discussion of the Merger Agreement. 

CERTAIN BENEFICIAL OWNERS

To the knowledge of White River, as of April 13, 1998, no person or entity
beneficially owns more than 5% of the outstanding White River Common Stock,
except as follows:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------------
                                                                                                              OWNERSHIP
NAME AND ADDRESS OF BENEFICIAL OWNER                                            SHARES OWNED(1)             PERCENTAGE(1)
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                         <C> 
Fund American Enterprises Holdings, Inc. (2)                                      1,014,250                    20.8%
  80 South Main Street
  Hanover, NH  03755
John J. Byrne (3)                                                                   835,112                    17.1%
  c/o Fund American Enterprises Holdings, Inc.
  80 South Main Street
  Hanover, NH  03755
Robert T. Marto (5)                                                                 310,937                     6.4%
  Two Gannett Drive, Suite 200
  White Plains, NY  10604

=================================================================================================================
</TABLE> 

(1)  Determined based on the beneficial ownership provisions specified in Rule
     13d-3(d)(1) of the Exchange Act.

(2)  According to filings made by Fund American with the SEC, Fund American
     reported that it and John J. Byrne believe that they do not constitute a
     group with respect to shares of White River Common Stock owned by Fund
     American. In addition, Fund American disclaims any beneficial ownership of
     shares of White River Common Stock owned by John J. Byrne. See note (3).

(3)  John J. Byrne is the Chairman, and former President and Chief Executive
     Officer of Fund American. According to a filing made by John J. Byrne with
     the Commission, he believes that he and Fund American do not constitute a
     group with respect to shares of White River Common Stock owned by him, and
     he disclaims any beneficial ownership of shares of White River Common Stock
     owned by Fund American. John J. Byrne has sole voting and investment power
     with respect to shares of White River Common Stock for which he claims
     beneficial ownership. See note (2).

(4)  According to a filing made by Mr. Marto with the Commission, the shares of
     White River Common Stock to which Mr. Marto claims beneficial ownership
     include options to purchase 294,432 shares of White River Common Stock
     owned by Fund American. Such options expire in 1998 and were issued,
     concurrent with the purchase and other transfer of selected assets and the
     assumption of certain liabilities from Fund American, to replace then
     outstanding employee options to purchase Fund American common stock.

                                       34
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

During 1997, Mr. Macklin was a member of the Fund American Board and served as
the Chairman of its Human Resources Committee.

Pursuant to a registration rights agreement (the "Registration Rights
Agreement") dated May 23, 1995, between White River and certain shareholders
identified therein (the "Selling Stockholders"), White River has filed a shelf
registration statement (the "Registration Statement") for 490,000 shares of
Common Stock of which 475,000 are beneficially owned by John J. Byrne and 15,000
shares are held in trust for the benefit of Patrick M. Byrne. In accordance with
the terms of the Registration Rights Agreement, the out-of-pocket costs incurred
by White River in connection with the Registration Statement have been borne by
the Selling Stockholders. In addition, White River and the Selling Stockholders
have agreed under certain circumstances to indemnify each other with respect to
certain claims relating to the Registration Statement.

Patrick M. Byrne, is the son of John J. Byrne, Chairman, and former President
and Chief Executive Officer of Fund American. John J. Byrne is the beneficial
owner of 17.1% of the total outstanding shares of Common Stock as of the Record
Date.

PENDING MERGER

There are certain transactions that have been, or will be, entered into between
the Company and its officers and directors in connection with the Merger
Agreement. 

INCENTIVE PLAN. All of the current directors and officers of White River are
expected to receive payments under the Incentive Plan. In the event of a "change
in control" (as defined in the Incentive Plan), the participant is entitled to
the number or amount of award or awards, as the case may be, based on the sole
discretion of the Compensation Committee of the White River Board (the
"Compensation Committee"). It is expected that the Compensation Committee will
fully vest the awards of each of the directors and officers of White River under
the Incentive Plan as a result of the change in control and that the
participants will be paid their awards in lump sum cash payments as of the
Effective Time. Based on an assumed price of $90.67 per share of White River
Common Stock, Mr. Marto, Mr. Macklin, Mr. Delaney, Mr. Byrne, Ms. Stewart and
Mr. Spicer are expected to receive awards in amounts of $6,346,900, $1,904,070,
$634,960, $634,960, $634,960 and $453,350, respectively. Each $1 increase in
share price will result in an increase in the amount for each of the above
individuals by $70,000, $21,000, $7,000, $7,000, $7,000 and $5,000 respectively.

                                       35
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


INDEMNIFICATION 

In connection with entering into the Merger Agreement the Company has entered
into Indemnity Agreements with each of its officers and directors. See Item 11 -
"Executive Compensation - Compensation Committee Interlocks and Insider 
Participation"

                                    PART IV

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

          (A)  FINANCIAL STATEMENT SCHEDULES

               All financial statement schedules are omitted as they are not
               applicable or the information required is included in the
               consolidated financial statements or notes thereto.

          (B)  REPORTS ON FORM 8-K

               On December 22, 1997, White River Corporation issued a press
               release announcing the resignation of Robert T. Marto from his
               position as President and CEO. (Form 8-K filed December 24,
               1997).

               Effective November 7, 1997, White River Partners, Inc. purchased
               from European American Bank the assets of Just Kiddie Rides,
               Inc., a subsidiary of Childrobics, Inc. (CHLD) for $1.3 million.
               White River Partners, Inc., will market and manufacture licensed
               kiddie rides through its new operating company, Just Kiddie Rides
               Enterprises, Inc., a Delaware corporation. White River Partners
               is a wholly-owned subsidiary of White River Corporation(WHRC).
               (Form 8-K filed November 21, 1997).

               Effective October 14, 1997, White River Corporation (White
               River") received a $26.3 million distribution on its investment
               in the Richard C. Blum & Associates - NWA Partners LP ("NWA
               Partners"), which holds equity securities in Northwest Airlines
               Corporation ("NWA Corp."). The distribution represented White
               River's share of proceeds arising primarily from the redemption
               of NWA Partners' investment in preferred stock of NWA Corp., but
               also in part due to the sale of 0.7 million shares of NWA Corp.
               common stock subject to a call option. White River owns a 21.3%
               interest in NWA Partners, which in turn continues to own
               approximately 4.7 million shares of NWA Corp. common stock. (Form
               8-K filed October 17, 1997).

                                       36
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


          (C)  EXHIBITS


          *2.1      Purchase Agreement, dated as of April 15, 1994, among White
                    River Ventures, Inc. and Teachers Insurance and Annuity
                    Association of America, The Mutual Life Insurance Company of
                    New York, TCW Special Placements Fund II, TCW Capital and
                    BankAmerica Capital Investments (Current Report on Form 8-K
                    dated April 15, 1994, File No. 0-22604 -- Exhibit 2.1).

          *2.(a)    Index of Omitted Schedules; Agreement to Furnish Upon
                    Request (Current Report on Form 8-K dated April 15, 1994,
                    File No. 0-22604 -- Exhibit 2.1(a)).

          *2.2      Reorganization Agreement, dated as of June 16, 1994, between
                    InfoVest Corporation and White River Ventures, Inc. (Current
                    Report on Form 8-K dated June 16, 1994, File No. 0-22604 --
                    Exhibit 2.1).

          *2.(a)    Index of Omitted Schedules; Agreement to Furnish Upon
                    Request (Current Report on Form 8-K dated June 16, 1994,
                    File No. 0-22604 -- Exhibit 2.1(a)).

          *2.3      Stock and Asset Purchase Agreement, dated as of August 25,
                    1994, by and among InfoVest Corporation and Credit Card
                    Service Corporation and Faneuil, Inc., New Service, Inc. and
                    Faneuil ISG, Inc. (Current Report on Form 8-K dated August
                    25, 1994, File No. 0-22604 -- Exhibit 2.1).

          *2.(a)    Index of Omitted Exhibits and Schedules; Agreement to
                    Furnish Upon Request (Current Report on Form 8-K dated
                    August 25, 1994, File No. 0-22604 -- Exhibit 2.1(a)).

          *3.1      Restated Certificate of Incorporation of the Registrant as
                    filed with the Secretary of State of the State of Delaware
                    (Form 10, File No. 0-22604 -- Exhibit 3.1).

          *3.2      By-Laws of the Registrant (Form 10, File No. 0-22604 --
                    Exhibit 3.2).

          *4.1      Rights Agreement between the Registrant and First Chicago
                    Trust Company of New York, as Rights Agent (Form 8-A, File
                    No. 0-22604 -- Exhibit 1).

          *4.2      Certificate of Designations of Series A, Non-Participating
                    Cumulative Preferred Stock (Form 10, File No. 0-22604 --
                    Exhibit 4.2).

          *4.3      Certificate of Designations of Series B, Participating
                    Cumulative Preferred Stock (Form 10- K for the year ended
                    December 31, 1993, File No. 0-22604 -- Exhibit 4.3).

          *4.4      White River Common Stock Certificate (Form 10-K for the year
                    ended December 31, 1993, File No. 0-22604 -- Exhibit 4.4).

          *10.1     1993 Incentive Compensation Plan of the Registrant adopted
                    on September 24, 1993 (Form 10, File No. 0-22604 -- Exhibit
                    10.1).

          *10.2     Voluntary Deferred Compensation Plan of the Registrant
                    adopted on September 24, 1993 (Form 10, File No. 0-22604 --
                    Exhibit 10.2).

          *10.3     Deferred Benefit Plan of the Registrant adopted on September
                    24, 1993 (Form 10, File No. 0-22604 -- Exhibit 10.3).

                                       37
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES



          *10.4     Letter Agreement Evidencing Award of Performance Units
                    between the Registrant and Andrew Delaney (Form 10-K for the
                    year ended December 31, 1993, File No. 0-22604 --Exhibit
                    10.4).

          *10.5     Letter Agreement Evidencing Award of Performance Units
                    between the Registrant and Gordon S. Macklin (Form 10-K for
                    the year ended December 31, 1993, File No. 0-22604 --Exhibit
                    10.5).

          *10.6     Credit Agreement dated as of December 13, 1993, between the
                    Registrant and Fund American Enterprises Holdings, Inc.
                    (Form 10-K for the year ended December 31, 1993, File No. 0-
                    22604 -- Exhibit 10.6).

          *10.7     Intercompany Services and Expense Sharing Agreement dated as
                    of September 24, 1993, between the Registrant and Fund
                    American Enterprises Holdings, Inc. (Form 10, File No. 0-
                    22604 -- Exhibit 10.8).

          *10.8     First Amendment to the Deferred Benefit Plan of the
                    Registrant dated as of December 17, 1993 (Form 10-K for the
                    year ended December 31, 1993, File No. 0-22604 -- Exhibit
                    10.10).

          *10.9     Stockholders' Agreement, dated as of June 16, 1994, by and
                    among CCC, White River Ventures, Inc. and the Inside
                    Stockholders of CCC identified on Exhibit A thereto (Current
                    Report on Form 8-K dated June 16, 1994, File No. 0-22604 --
                    Exhibit 10.1).

          *10.10    Regulatory Contingency Agreement, dated as of June 16, 1994,
                    between CCC and White River Ventures, Inc. (Current Report
                    on Form 8-K dated June 16, 1994, File No. 0-22604 --Exhibit
                    10.2).

          *10.11    Registration Rights Agreement, dated as of May 23, 1995,
                    between the Registrant and the Selling Stockholders referred
                    to therein (incorporated by reference to Exhibit 10.1 to the
                    Registrant's Registration Statement on Form S-3 (File No.
                    33-93544).

          *21       Subsidiaries of the Registrant

          23.1      Consent of Ernst & Young LLP

          23.2      Consent of Price Waterhouse LLP

          24        Powers of Attorney

          27.1      Current Financial Data Schedule for fiscal year end December
                    31, 1997.

          27.2      Restated Financial Data Schedule for quarter ended September
                    30, 1997.

          27.3      Restated Financial Data Schedule for quarter ended June 30,
                    1997.

          27.4      Restated Financial Data Schedule for quarter ended March 31,
                    1997.

          27.5      Restated Financial Data Schedule for year ended December 31,
                    1996.

          27.6      Restated Financial Data Schedule for quarter ended September
                    30, 1996.

          27.7      Restated Financial Data Schedule for quarter ended June 30,
                    1996.

          27.8      Restated Financial Data Schedule for quarter ended March 31,
                    1996.

                    * Previously filed as indicated and incorporated herein by
                    reference.
                    

                                       38
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

                                  SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                              White River Corporation

                                              By: *
                                                  ----------------------     
                                                  Gordon S. Macklin
                                                  President and
                                                   Chief Executive Officer

                                              Date: April 13, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

   Signature                              Title                      Date
-----------------                      ------------               -----------
                                                             
*
------------------------                                     
Gordon S. Macklin                Chairman of the Board,          April 13, 1998
                                 President & Chief Executive
                                 Officer                     
                                                            
*
------------------------
Robert T. Marto                  Director                        April 13, 1998
                                                            
*                                                           
-----------------                                           
Andrew Delaney                   Director                        April 13, 1998
                                                            
*                                                           
-----------------                                           
Patrick M. Byrne                 Director                        April 13, 1998
                                                            
*                                                           
-----------------
Bonnie B. Stewart                Director                        April 13, 1998
                                                            
                                                            
/s/ Michael E.B. Spicer                                     
------------------------                                    
Michael E.B. Spicer              Chief Financial Officer,   
                                (Principal Accounting Officer)
                                 Treasurer & Corporate      
                                 Secretary                       April 13, 1998 
                                               

*By: /s/ Michael E.B. Spicer
     ------------------------  
     [_], Attorney-in-Fact

                                       39
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES




                                    ANNEX I










                       CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


                       CONSOLIDATED FINANCIAL STATEMENTS



CONSOLIDATED FINANCIAL STATEMENTS

  Consolidated Statements of Financial Condition.......................  F-1  
                                                                             
  Consolidated Statements of Operations................................  F-2 
                                                                             
  Consolidated Statements of Stockholders' Equity......................  F-3 
                                                                             
  Consolidated Statements of Cash Flows................................  F-4 
                                                                             
  Notes to Consolidated Financial Statements...........................  F-5 
                                                                             
  Report on Management's Responsibilities..............................  F-32
                                                                             
  Report of Ernst & Young LLP..........................................  F-33
                                                                             
  Report of Price Waterhouse LLP.......................................  F-34 

All financial statement schedules are omitted as they are not applicable or the
information required is included in the consolidated financial statements or
notes thereto.
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
Dollars in thousands,                                                                          December 31,
                                                                                       ----------------------------
  except per share amounts                                                                   1997              1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>               <C> 
ASSETS
Cash and cash equivalents                                                             $   190,515       $   188,365
Investment securities, at market value (adjusted cost: $63,940 and $42,892)               122,688            72,699
Accounts receivable, less allowances of $2,661 and $1,942                                  19,617            10,661
Other current assets                                                                        7,091             4,545
                                                                                       ----------        ----------
  Total current assets                                                                    339,911           276,270
Investment securities, at market value (adjusted cost: $14,855)                            41,434                --
Other investments, at adjusted cost (fair value: $276 and $39,813)                            276            26,420
Goodwill, less accumulated amortization of $20,051 and $14,675                             18,754            23,730
Purchased software and equipment, net                                                      18,431            20,478
Deferred income tax asset                                                                   7,264             6,410
Other assets                                                                                1,063             1,204
                                                                                       ----------        ----------
  Total assets                                                                        $   427,133       $   354,512
===================================================================================================================
LIABILITIES
Accounts payable and accrued expenses                                                 $    24,134       $    21,334
Deferred revenues                                                                           5,824             5,709
Current portion of contract funding                                                            --               123
Current portion of notes payable and other debt                                               111               120
Redeemable preferred stock                                                                  7,000                --
                                                                                       ----------        ----------
  Total current liabilities                                                                37,069            27,286
Deferred income tax liability                                                              44,676            21,867
Notes payable and other debt                                                                   --               111
Other liabilities                                                                          10,765            22,591
                                                                                       ----------        ----------
  Total liabilities                                                                        92,510            71,855
                                                                                       ----------        ----------
Redeemable preferred stock                                                                    189             7,175
                                                                                       ----------        ----------
Minority interest                                                                          33,687            18,950
                                                                                       ----------        ----------
Stockholders' equity
Series B, Participating Cumulative Preferred Stock - par value $1.00
  per share; 50,000 shares designated; none issued                                             --                --
Common stock - par value $0.01 per share;
  62,500,000 shares authorized; 6,370,000 shares issued                                        64                64
Common paid-in surplus                                                                    250,942           249,546
Retained earnings                                                                          43,166            36,438
Net unrealized investment gains, net of tax                                                55,449            19,358
Common stock in treasury, at cost (1,495,244 shares)                                      (48,874)          (48,874)
                                                                                       ----------        ----------
  Total stockholders' equity                                                              300,747           256,532
                                                                                       ----------        ----------
Total liabilities, redeemable preferred stock,
  minority interest and stockholders' equity                                          $   427,133       $   354,512
===================================================================================================================
</TABLE> 
          
The accompanying notes are an integral part of these consolidated financial
statements.

                                      F-1
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
In thousands,                                                                   Year Ended December 31,
                                                                      ---------------------------------------------

  except per share amounts                                                 1997              1996              1995
-------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>              <C>               <C> 
REVENUES
Insurance-related services                                           $   159,106      $   130,977       $   115,519
Investment income                                                         11,362            8,984             8,276
Other revenues                                                             9,442            5,437                --
                                                                      ----------       ----------        ----------
  Total revenues                                                         179,910          145,398           123,795
                                                                      ----------       ----------        ----------

OPERATING EXPENSES
Compensation and benefits                                                 82,028           63,725            51,781
Other operating expenses                                                  92,327           74,834            75,429
                                                                      ----------       ----------        ----------
  Total operating expenses                                               174,355          138,559           127,210
                                                                      ----------       ----------        ----------
  Operating income (loss)                                                  5,555            6,839           (3,415)
                                                                      ----------       ----------        ----------

NET INVESTMENT GAINS
Net realized investment gains                                             27,492           16,150            25,037
Change in net unrealized investment gains and losses                          --               --            11,218
                                                                      ----------       ----------        ----------
Net investment gains                                                      27,492           16,150            36,255
                                                                      ----------       ----------        ----------
OTHER EXPENSE
Interest expense                                                             171            2,562             8,936
Minority interest                                                         10,065              971                --
                                                                      ----------       ----------        ----------
  Total other expense                                                     10,236            3,533             8,936
                                                                      ----------       ----------        ----------

PRETAX INCOME                                                             22,811           19,456            23,904
Income tax expense                                                        15,610           14,306             7,909
                                                                      ----------       ----------        ----------
Income before extraordinary item                                           7,201            5,150            15,995
Extraordinary loss on early retirement of debt, net of tax of $437            --              678                --
                                                                      ----------       ----------        ----------
Net income                                                                 7,201            4,472            15,995
Dividends and accretion on redeemable preferred stock                        473              727               585
                                                                      ----------       ----------        ----------
Net income applicable to common shares                               $     6,728      $     3,745       $    15,410
                                                                      ==========       ==========        ==========

EARNINGS PER COMMON SHARE:
BASIC:
   Income before extraordinary items                                 $      1.38      $      0.91       $      2.94
   Net income                                                        $      1.38      $      0.77       $      2.94
Diluted:
   Income before extraordinary items                                 $      1.31      $      0.85       $      2.84
   Net income                                                        $      1.31      $      0.73       $      2.84
===================================================================================================================
</TABLE> 

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

                                      F-2
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
                                                                                                     Net
                                                                        Common                unrealized     Common
                                                            Common     paid-in    Retained    investment   stock in
Dollars In thousands                              Total      stock     surplus    earnings         gains   treasury
-------------------------------------------------------------------------------------------------------------------
<S>                                          <C>           <C>       <C>         <C>         <C>         <C> 
Balances as of December 31, 1994             $  195,226    $    64   $ 199,936   $  17,283   $       --  $ (22,057)
  Net income                                     15,995                             15,995
  Dividends and accretion on
    redeemable preferred stock                     (585)                              (585)
  Adoption of SFAS No. 115, effective
    September 30, 1995, net of tax                2,484                                           2,484
  Change in unrealized investment gains
    and losses, net of tax                        5,835                                           5,835
  Repurchases of 762,410 shares of
   Common Stock                                 (25,694)                                                   (25,694)
                                         --------------------------------------------------------------------------
Balances as of December 31, 1995                193,261         64     199,936      32,693        8,319    (47,751)
  Net income                                      4,472                              4,472
  Dividends and accretion on
    redeemable preferred stock                     (727)                              (727)
  Change in unrealized investment gains
    and losses, net of tax                       11,039                                          11,039
  Repurchases of 28,165 shares of
   Common Stock                                  (1,123)                                                    (1,123)
  Effects of initial public offering of CCC
   Common Stock, net of tax                      49,506                 49,506
  Other, net                                        104                    104
                                         --------------------------------------------------------------------------
Balances as of December 31, 1996             $  256,532    $    64   $ 249,546   $  36,438   $   19,358  $ (48,874)
                                         --------------------------------------------------------------------------
  Net income                                      7,201                              7,201
  Dividends and accretion on
    redeemable preferred stock                     (473)                              (473)
  Change in unrealized investment gains
    and losses, net of tax                       36,091                                          36,091
  Other, net                                      1,396                  1,396
                                         --------------------------------------------------------------------------
Balances as of December 31, 1997             $  300,747    $    64   $ 250,942   $  43,166   $   55,449  $ (48,874)
===================================================================================================================
</TABLE> 

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

                                      F-3
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
                                                                                     Year Ended December 31,
                                                                           ----------------------------------------
In thousands                                                                     1997           1996           1995
-------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>             <C>            <C> 
Net income                                                                 $    7,201      $   4,472      $  15,995
Adjustments to reconcile  net income to net cash and cash  equivalents  
provided from (used for) operations:
     Net investment gains                                                     (27,492)       (16,150)       (36,255)
     Amortization and depreciation                                             11,823         12,213         14,170
     Repayment of contract funding balances                                      (123)        (3,340)       (10,249)
     Deferred income tax expense (benefit)                                      2,520         (3,358)         9,002
     Amortization of goodwill                                                   5,376          5,186          6,194
     Minority interest                                                         10,065            971             --
     Extraordinary loss on early retirement of debt, net of tax                    --            678             --
Changes in:
     Other current assets and accounts receivable                             (11,502)          (724)            --
      Accounts payable and accrued expenses                                     2,800            137          6,030
      Other liabilities                                                        (7,154)         9,935          1,990
      Deferred revenues                                                           115            646             --
     Other, net                                                                  (490)         1,105          3,117
                                                                            ---------       --------       --------
Net cash and cash equivalents provided from (used for) operations              (6,861)        11,771          9,994
                                                                            ---------       --------       --------
Cash flows provided from investing activities:
     Proceeds from sales of investments                                        93,148         21,106         29,921
     Purchases of investments                                                 (75,164)       (11,005)            --
     Purchases of software and equipment                                       (9,776)        (5,568)        (3,003)
     Proceeds from Faneuil Sale, net of expenses                                   --             --            500
     Other, net                                                                    --            (97)            48
                                                                            ---------       --------       --------
Net cash and cash equivalents provided from investing activities                8,208          4,436         27,466
                                                                            ---------       --------       --------
Cash flows provided from (used for) financing activities:
     Net proceeds from issuance of subsidiary stock                             1,396         73,795             --
     Proceeds from notes payable and other debt                                    --         10,750         44,000
     Payment of equity and debt issue costs                                        --         (2,053)            --
     Repurchases of Common Stock                                                   --         (1,188)       (25,652)
     Redemption of redeemable preferred stock, including accrued dividends         --         (1,354)             --
     Principal payments on notes payable and other debt                          (120)       (46,740)       (11,101)
     Dividends paid on redeemable preferred stock                                (473)          (473)          (473)
     Other, net                                                                    --            176             26
                                                                            ---------       --------       --------
Net cash and cash equivalents provided from financing activities                  803         32,913          6,800
                                                                            ---------       --------       --------
Net increase in cash and cash equivalents during period                         2,150         49,120         44,260
Cash and cash equivalents balance at beginning of period                      188,365        139,245         94,985
                                                                            ---------       --------       --------
Cash and cash equivalents balance at end of period                         $  190,515      $ 188,365      $ 139,245
===================================================================================================================
Supplemental information:
     Income taxes paid (refunded)                                          $   10,219      $  12,690      $    (943)
     Interest paid                                                         $      130      $   2,573      $   7,324
     Non-cash equipment financing                                          $       --      $   1,341      $     888
     Exchanges of investments in settlement of notes payable and other debt$       --      $      --      $  90,000
===================================================================================================================
</TABLE> 

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

                                      F-4
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.    ORGANIZATION

White River Corporation (together with its wholly-owned subsidiaries, unless the
context requires otherwise, "White River" or, together with all of its
subsidiaries, the "Company") commenced operations in its present form on
September 24, 1993, concurrent with the purchase and other transfer of selected
assets and the assumption of certain liabilities (collectively, the
"Capitalization") from its former parent company, Fund American Enterprises
Holdings, Inc. and certain of its subsidiaries (together, "Fund American").
Prior to the Capitalization, White River served as the holding company for Fund
American's investment management subsidiaries, and essentially inactive
insurance subsidiaries. On December 22, 1993 (the "Distribution Date"), Fund
American distributed (the "Distribution") approximately 75% of the outstanding
shares of White River common stock, par value $0.01 per share (the "Common
Stock"), to all holders of Fund American common stock.

During June 1994, White River completed its acquisition of a majority of the
total outstanding common stock, par value $0.10 per share (the "CCC Common
Stock"), of CCC Information Services Group Inc., formerly InfoVest Corporation,
(together with its subsidiaries, unless the context requires otherwise, "CCC").
CCC, through CCC Information Services Inc. and certain other subsidiaries, is a
supplier of automobile claims information and processing, claims management
software and communication services. As of December 31, 1997, White River held
approximately 35% of the total outstanding shares of CCC Common Stock and shares
of CCC preferred stock that in the aggregate continue to provide White River
with a majority of the voting power associated with CCC's total outstanding
voting stock.

Based upon the composition of its assets at the time of the Capitalization,
White River met the definition of an investment company (an "Investment
Company") under the Investment Company Act of 1940 (the "Investment Company
Act"). In anticipation of the Distribution, White River submitted an application
to the Securities and Exchange Commission (the "Commission") seeking exemptive
relief from various provisions of the Investment Company Act. During December
1993, White River received from the Commission a temporary exemption (the
"Exemptive Order") from registering as an Investment Company. As such, White
River was exempted from some, but not all, of the provisions of the Investment
Company Act for a period of up to two years from the date of such Exemptive
Order. From September 30, 1993 until October 1995, White River was an Investment
Company as defined in section 3(a)(3) of the 1940 Act. The 1993 exemptive order
granted by the Commission did not change its status, and therefore it was
appropriate to use investment company accounting for White River during this
time. During October 1995, White River filed a report with the Commission which
concluded, effective September 30, 1995, that White River no longer met the
definition of an Investment Company, at which time White River commenced the
preparation of its financial statements in accordance with GAAP for operating
companies. Accordingly, White River no longer needs to rely upon the relief
provided by the Exemptive Order. Since the filing of such report, White River
has conducted and intends to continue to conduct its business operations so as
to avoid having to register as an Investment Company under the Investment
Company Act.

On December 11, 1997, White River announced the signing of a merger agreement
under which an affiliate

                                      F-5
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

of Harvard Private Capital Group, Inc. ("Harvard Private Capital") would acquire
White River for approximately $400 million in cash. Under the Merger Agreement,
among other things, WRC MergerCorp. ("MergerCo") would be merged with and into
White River (the "Merger"), and each share of Common Stock, par value $0.01 per
share (the "White River Common Stock") (other than treasury shares held by White
River or Dissenting Shares), outstanding at the Effective Time would be
converted into the right to receive approximately $82.02 in cash, without
interest and subject to adjustment under certain circumstances as described
further in the Merger Agreement. The transaction would be fully financed and
would not be subject to a financing condition. The merger price would be subject
to adjustment under certain circumstances, and, therefore, the price per share
actually received upon consummation of the merger could be greater or less than
$82.02. Holders of White River's Series A Preferred Stock would receive the
stated value of $1,000 per share plus any accrued and unpaid dividends.

In connection with the transaction, White River amended its shareholders' rights
plan to provide, among other things, that the exercisability of rights will not
be triggered by the merger agreement and that the rights will expire immediately
prior to the consummation of the merger. Accordingly, the rights will not be
redeemed and no payment will be made to stockholders in respect of their rights.

On March 10, 1998, Fund American made a proposal to White River to negotiate the
acquisition of all of the outstanding shares of common stock of White River not
owned by Fund American for a total consideration of up to $85.00 per share in
cash, subject to satisfactory completion of due diligence and to successful
negotiation, Fund American Board approval and signing of a definitive agreement.

On March 23, 1998, Harvard Private Capital proposed an amendment to the Merger
Agreement which would modify the Merger Agreement by: 1) increasing the merger
consideration to approximately $434 million ($89.00 per share), subject to
certain adjustments; and 2) requiring White River to pay a "break up" fee of
$13.5 million in the event that the merger is not successfully concluded by June
30, 1998 for reasons other than a breach of the Merger Agreement by Harvard
Private Capital.

On March 30, 1998, Fund American increased its proposal to purchase all shares 
of White River not owned by Fund American to $90 cash per share, contingent, 
among other things, on White River Board acceptance by Monday, April 6, 1998, 
and execution of a mutually satisfactory definitive agreement, and certain other
contingencies.

On April 2, 1998, Harvard Private Capital proposed another amendment to 
the Merger Agreement. The proposed amendment would modify the Merger Agreement 
by, among other things: 1) increasing the merger consideration to approximately
$442 million ($90.67 per share), subject to certain adjustments; and 2)
requiring White River to pay a "break up" fee of $13.5 million in the event that
the merger is not successfully concluded by June 30, 1998 for reasons other than
a breach of the Merger Agreement by Harvard Private Capital.

On April 3, 1998, Fund American reaffirmed its proposal to purchase all shares 
of White River not owned by Fund American for $90 cash per share, and removed
certain contingencies.

On April 6, 1998, after further discussions with Harvard Private Capital and
Fund American, the White River Board evaluated the two proposals based on its
fiduciary duty to maximize shareholder value and decided to accept the Harvard
Private Capital proposal. Under the terms of the amended agreement, Harvard
Private Capital, among other things, will pay White River shareholders $90.67
per share in cash, subject to adjustment which could result in a higher or lower
price at closing. In addition, White River agreed to pay Harvard Private Capital
a termination fee of $15 million, plus up to $1.5 million in reimbursable
expenses, in the event that the merger agreement is terminated under certain
circumstances.

Consummation of the merger is subject to customary conditions, including the   
approval of White River's stockholders and the absence of any material adverse 
change. The merger agreement may be terminated by any of the parties in the    
event that the Board of Directors of White River withdraws its recommendation of
the transaction to stockholders or recommends an alternative transaction. The
parties expect the merger to occur during the second quarter of 1998.

                                      F-6
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of White
River and its subsidiaries, including those of CCC from the effective date of
the acquisition of CCC by White River. The consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
("GAAP"). All significant intercompany balances have been eliminated in
consolidation. Certain prior period balances have been reclassified to conform
to current financial statement presentation.

The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amount of
assets and liabilities as well as the disclosure of contingent assets and
liabilities as of the date of the financial statements. Such estimates also have
a pervasive affect upon the reported amounts of revenues and expenses reflected
in the consolidated statements of operations. Actual results could differ from
these estimates.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of three
months or less to be cash equivalents.

Substantially all of the Company's cash and cash equivalents as of December 31,
1997 and 1996 are in interest-bearing deposits with maturities of six days or
less. The majority of such deposits are held by major banking institutions.

INVESTMENTS

White River considers its investment securities to be available for sale. 

Based on the composition of its assets at the time of the Capitalization, White
River met the definition of an Investment Company under the Investment Company
Act. Accordingly, White River's accounting policies regarding the carrying value
of investments, as well as the treatment of changes in net unrealized gains and
losses relating to investments held, conformed to GAAP for Investment Companies
until such time as White River ceased to meet the definition of an Investment
Company. As discussed in Note 1, effective September 30, 1995, White River no
longer meets the definition of an Investment Company. Accordingly, White River
adopted the provisions of Statement of Financial Accounting Standards ("SFAS")
No. 115, "Accounting for Certain Investments in Debt and Equity Securities" as
of such date. As a result of the adoption of SFAS No. 115, investments
classified by White River as investment securities continue to be carried at
market value; however, changes in net unrealized gains and losses are reported
net of tax as a separate component of stockholders' equity. Securities
classified by White River as other investments, which had been carried at market
value under GAAP for Investment Companies, are carried at adjusted cost, which
reflects such securities' carrying value immediately preceding the adoption of
SFAS No. 115. 

As a result of the adoption of SFAS No. 115, the carrying value of White River's
interest in Cross Timbers Oil Company ("Cross Timbers")

                                      F-7
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

common stock increased by $3.8 million to reflect the undiscounted market value
of such interest as of September 30, 1995. Such increase totalled $2.5 million
net of tax and was recorded directly as a separate component of stockholders'
equity.

Investments classified by White River as investment securities include certain
common shares, trust units, limited partnership interests and debt securities
that are not restricted by contract or governmental statute or regulation as to
resale and which have established fair market values. Investment securities as
of December 31, 1997, include White River's interest in Cross Timbers common
stock due to White River's demand registration rights relating to such
securities, and White River's interest in NWA Partners, due to the lapsing of
restrictions on the investments held by such partnership (prior to the lapsing
of such restrictions, the investment was recorded in "other investments"). Prior
to September 30, 1995, investment securities were carried at market value and
changes in net unrealized gains and losses were included in net income.
Effective September 30, 1995, investment securities continue to be carried at
market value, however, changes in net unrealized gains and losses are reported
net of tax as a separate component of stockholders' equity. During 1997, the 
restrictions on the sale of the underlying assets (marketable equity securities)
in NWA Partners lapsed. Accordingly, at December 31, 1997, the Company has 
classified its investment in NWA Partners as an available for sale security and 
has recorded such investment at fair value ($41.4 million), resulting in an 
unrealized gain (net of tax) of $17.3 million. Prior to June 1997 (lapsing of 
restrictions), such investment was carried at adjusted cost (see Note 4).


Prior to September 30, 1995, investments classified by White River as other
investments included certain securities and partnership interests having no
established market value and carried at internally appraised values, certain
convertible securities having no established market value and carried at
internally appraised values based upon their conversion features, and certain
securities which, due to restrictions regarding resale, were carried at a
discount to the quoted market value for similar unrestricted securities. Upon
the adoption of SFAS No. 115, securities which continue to be classified by
White River as other investments are carried at adjusted cost, which reflects
such securities' carrying value immediately preceding the adoption of SFAS No.
115. White River's internal valuation techniques are intended to provide good
faith estimates of the fair values of the underlying securities for which
objective market valuations are unavailable. The actual amounts realized on
disposition of these other investments may differ significantly from such good
faith estimates due to changes in facts and circumstances which occur or become
quantifiable subsequent to the time that such estimates are made, particularly
because changes in estimated fair value of these securities that occur
subsequent to September 30, 1995, will not be reflected in such securities'
carrying values unless the change represents a decline in value which is deemed
to be other than temporary in nature. Prior to September 30, 1995, changes in
net unrealized gains and losses relating to other investments were included as a
component of net income.

Purchases and sales of investments are recorded as of the trade date. Realized
gains and losses resulting from sales of investments are accounted for using the
specific identification method. Interest income on debt securities and interest-
bearing cash and cash equivalents is recognized when earned and dividends on
investments are recognized as of the ex-dividend date.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

The following is a summary of activity in the allowance for doubtful accounts ($
in millions):

<TABLE> 
               <S>                    <C>  
               January 1, 1995        $ 0.9
               Write-offs              (1.7)
               Provision                2.3
                                      -----
               December 31, 1995        1.5
               Write-offs              (3.4)
               Provisions               3.8
                                      -----
               December 31, 1996        1.9
               Write-offs              (2.7)
               Provisions               3.5
                                      -----
               December 31, 1997      $ 2.7 
                                      =====
</TABLE> 

                                      F-8
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

GOODWILL

Goodwill represents the excess of the acquisition cost of CCC, including
liabilities assumed, over the fair value of the net assets acquired. Goodwill is
amortized on a straight-line basis over its expected economic life of seven
years. The original goodwill recorded in connection with the acquisition of CCC
by White River has been adjusted to reflect subsequent changes in the cost of
acquiring CCC and to reflect the reversal of certain deferred tax asset
valuation allowances relating to CCC.

The carrying value of goodwill is periodically reviewed by management and a
write-down for permanent impairment would be recognized if and when the expected
cash flows relating to these assets indicate that such carrying value is not
recoverable.

PURCHASED SOFTWARE AND EQUIPMENT

Purchased software is stated at cost, net of accumulated amortization.
Amortization is provided on a straight-line basis over estimated useful lives
ranging from two to five years. Equipment is stated at cost, net of accumulated
depreciation. Depreciation is provided on a straight-line basis over estimated
useful lives ranging from two to 15 years.

The carrying value of purchased software and equipment is periodically reviewed
by management and a write-down for permanent impairment would be recognized if
and when the expected cash flows derived from these assets indicate that such
carrying value is not recoverable.

CONTRACT FUNDING

The right to receive future revenue streams under certain end-user collision
estimating contracts (the "Contracts") have been discounted and sold to various
investors ("Contract Funding"). Cash proceeds from a sold Contract equals the
Contract's future revenue stream, discounted at a rate of approximately 14% per
annum, less, for certain Contracts, investor reserves for customer
nonperformance under the Contracts. Sales proceeds and related interest expense
are recognized as revenue and interest expense, respectively, over the life of
the Contract. CCC no longer utilizes Contract Funding as a source of financing.

REVENUE RECOGNITION

Insurance-related services revenue, including vehicle valuation, claims
management and other service revenues, are recognized as services are provided.
During the years ended December 31, 1997 and 1996, and 1995, 66%, 69% and 70%,
respectively, of total insurance-related services revenue were attributable to
the insurance industry.

                                      F-9
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

INCENTIVE COMPENSATION

White River ratably recognizes expense relating to its long-term incentive and
director compensation plans over the applicable service periods based upon
projected future payments under these plans. For this purpose, such projected
future payments are determined using the current end-of-period market price of
the Common Stock.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs incurred by CCC, principally in connection with
the design and development of software products, are expensed as incurred. Such
expenses incurred by CCC of $5.5 million, $4.3 million and $3.5 million are
reflected in the accompanying consolidated statements of operations for the
years ended December 31, 1997, 1996, and 1995, respectively.

Software development costs, if material, are capitalized when sufficient
evidence exists that technological feasibility has been established.
Technological feasibility is considered to be established upon completion of a
working model. The time period during which costs would be capitalized, from the
point of attaining technological feasibility until the time of general product
release, is very short and, consequently, the amounts that could be capitalized
are not material to the Company's consolidated financial position or results of
operations.

INCOME TAXES

White River and its qualifying subsidiaries file a consolidated Federal income
tax return, and CCC and its qualifying subsidiaries file their own consolidated
Federal income tax return. The consolidated income tax provision for book
purposes is computed by combining the separate tax provisions of White River and
CCC.

The Company provides for deferred income taxes which reflect the tax effects of
temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes. In
this context, the tax effect is measured using the statutory tax rate expected
to apply to taxable income in the periods in which the deferred tax liability or
asset is expected to be settled or realized. Furthermore, deferred tax assets
are recorded net of a valuation allowance if it is more likely than not that
some portion or all of the deferred tax assets will not be realized. White
River's and CCC's deferred tax assets and liabilities are not netted for
financial reporting purposes.

ISSUANCE OF SUBSIDIARY STOCK

White River records the gain or loss associated with issuances of subsidiary
stock as a component of consolidated stockholders' equity within the caption
Common Paid-in Surplus.

                                      F-10
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

EARNINGS PER SHARE

In December 1997, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 128 "Earnings Per Share," and restated prior periods. Under
this statement, primary and fully diluted EPS were replaced with basic and
diluted EPS, respectively. In computing basic EPS, the dilutive effect of stock
options and warrants are excluded.

The following table presents the computation of basic and diluted earnings per
share:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
                                                                    1997                1996               1995
-------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                 <C>               <C> 
Numerator:
  Net earnings available to common shareholders                $   6,728,000       $   3,745,000         15,410,000
Denominator:
  Denominator for basic earnings per share -
      weighted-average shares                                      4,874,756           4,881,190          5,237,348
Dilutive effect of performance-based
        compensation                                                 248,353             298,517            191,348
-------------------------------------------------------------------------------------------------------------------
    Denominator for diluted earnings per share                     5,123,109           5,179,707          5,428,696
-------------------------------------------------------------------------------------------------------------------
Basic earnings per share                                       $        1.38       $        0.77     $         2.94
-------------------------------------------------------------------------------------------------------------------
Diluted earnings per share                                     $        1.31       $        0.73     $         2.84
===================================================================================================================
</TABLE> 

ADOPTION OF ACCOUNTING STANDARDS

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income". In
addition to net income, comprehensive income includes items recorded directly to
stockholders' equity, such as unrealized gains and losses on certain investments
in equity, preferred stock accretion, preferred stock dividends and the income
tax benefit related to the exercise of certain stock options. This statement
establishes new standards for reporting and displaying comprehensive income and
its components in a full set of general-purpose financial statements. This
statement is effective for fiscal years beginning after December 15, 1997.
Adoption of this standard will require an additional financial statement
disclosure detailing the Company's comprehensive income.

In June 1997, the FASB also issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information". SFAS No. 131 establishes new standards
for reporting information about operating segments in interim and annual
financial statements. This statement is also effective for fiscal years
beginning after December 15, 1997. The Company is currently evaluating the
impact this statement will have on the consolidated financial statements.

                                      F-11
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

NOTE 3.   CCC

CCC IPO

During August 1996, CCC completed its IPO resulting in net proceeds of $72.1
million. Proceeds from the CCC IPO were used to repay certain bank debt and, as
required by the terms of the CCC Preferred Stock, CCC used 50% of the net
proceeds to redeem 87.4% of the outstanding shares of CCC Preferred Stock at
stated value of $34.1 million, plus accrued dividends of $2.0 million. White
River received principal of $32.8 million and dividends totaling $2.0 million as
a result of the redemption of the CCC Preferred Stock.

As of December 31, 1997, White River held approximately 35% of the total
outstanding shares of CCC Common Stock, all 630 shares of Series C Preferred
Stock with an aggregate stated value of $0.6 million, 3,601 of the 3,785 shares
of Series D Preferred Stock with an aggregate stated value of $3.8 million and
all 500 shares of Series E Preferred Stock with an aggregate stated value of
$0.5 million, which together with the shares of CCC Common Stock held by White
River, continue to provide White River with a majority of the voting power
associated with CCC's total outstanding voting stock. Since White River retained
in excess of 50% of the voting rights of CCC, and in view of White River's
representation on the CCC Board, White River continues to consolidate the
accounts of CCC.

In connection with the execution of the 1994 CCC Reorganization Agreement, White
River, CCC and certain identified stockholders of CCC executed a stockholders'
agreement dated as of June 16, 1994 (the "CCC Stockholders' Agreement"), which,
among other things, addresses the corporate governance of CCC and certain other
matters relating to the conduct of its business. The CCC Stockholders' Agreement
provides that CCC's board of directors (the "CCC Board") will consist of seven
members, two of whom will be designated by White River until such time as all of
the shares of CCC Preferred Stock have been redeemed and two of whom will be
nominated by White River, subject to CCC's approval (which will not be
unreasonably withheld), until the earlier of: (i) an initial public offering of
CCC Common Stock, or (ii) redemption of all of the shares of the CCC Preferred
Stock. After the CCC IPO, White River's designees to the CCC Board continue to
be the Chairman of the board of directors of White River (the "White River
Board") and an additional director of White River, and White River continues to
provide two additional nominees.

White River and CCC executed an agreement dated as of June 16, 1994, pursuant to
which CCC agreed to issue to White River 500 shares of CCC Series E Cumulative
Redeemable Preferred Stock, stated value $1,000 per share (the "Series E
Preferred Stock"), in exchange for 500 shares of Series D Preferred Stock. The
issuance of the Series E Preferred Stock would occur only in the event that the
number of shares of CCC Common Stock owned by White River represented less than
a majority of the total issued and outstanding shares of CCC Common Stock. When
issued, the Series E Preferred Stock would represent up to a maximum of 51% of
the voting power of CCC when combined with the total shares of CCC Common Stock
already owned by White River. Immediately following the CCC IPO, White River
exchanged 500 shares of Series D Preferred Stock for the Series E Preferred
Stock.


The CCC Preferred Stock is subject to mandatory redemption by CCC five years
from the date of issuance (June 16, 1994) and is subject to earlier redemption,
in full or in part, upon the occurrence of certain events, including a sale of
CCC or public offerings of CCC Common Stock. During August 1996, CCC completed
the initial public offering of 6.9 million newly issued shares of CCC Common
Stock, representing approximately 29% of the resulting total outstanding CCC
Common Stock (the "CCC IPO"). The CCC Preferred Stock accrued cumulative
dividends at a rate of 2.75% per annum through the CCC IPO. Upon the CCC IPO,
CCC made the required redemption in accordance with the terms of the CCC
Preferred Stock, and, in accordance with such terms, dividends from the date of
the CCC IPO through June 1998 are eliminated. Thereafter, dividends will accrue
at the rate of 8% per annum and will be paid quarterly until such time as the
CCC Preferred Stock is redeemed. 

                                     F-13
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

The Series E Preferred Stock will be redeemed by CCC in proportion to any
redemption of the CCC Preferred Stock, and is also subject to the same mandatory
redemption date of June 16, 1999. In accordance with the terms of the Series E
Preferred Stock, dividends through June 1998 are eliminated. Thereafter,
dividends will accrue at the rate of 8% per annum and will be paid quarterly
until such time as the Series E Preferred Stock is redeemed.

Pursuant to the terms of the Certificate of Designations for Series E Preferred
Stock, the voting power of the outstanding shares of Series E Preferred Stock is
reduced according to a formula to the extent that outstanding shares of Series E
Preferred Stock are either redeemed by CCC or no longer owned by White River and
its affiliates. If White River and its affiliates were to continue to hold 35.0%
of the outstanding shares of CCC's Common Stock, the Series E Preferred Stock
voting power combined with the voting power of the CCC Common Stock held by
White River would be less than a majority when 353 (or 70.6%) of the 500 shares
of Series E Preferred Stock had been so redeemed or are no longer so owned. The
outstanding shares of Series E Preferred Stock are redeemable pro rata with the
outstanding shares of Series C and Series D Preferred Stock and other parity
stock, if any.



CCC STOCK OPTION PLAN

CCC sponsors a nonqualified stock option plan (the "CCC Stock Option Plan")
pursuant to which the compensation committee (the "CCC Committee") of the CCC
Board may grant options with an exercise price not less than the greater of
$1.375 or the fair market value of the CCC Common Stock at the date of grant
(the "CCC Stock Options"). CCC Stock Options will generally be exercisable
within 5 years from the date of grant, subject to vesting schedules determined
at the discretion of the CCC Committee. In general, the outstanding CCC Stock
Options vest over 4 years. In accordance with the CCC Reorganization Agreement,
the total number of CCC Stock Options issuable under the CCC Stock Option Plan
were limited to 2,956,040. CCC's Board of Directors has approved a new stock
option plan that provides for the granting to employees of up to 675,800 new
options to purchase CCC common stock. The proforma effects upon reported net
income assuming CCC had adopted the fair value based model of accounting for
stock options were insignificant.

                                      F-14
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


As of December 31, 1997, 1,935,603 CCC Stock Options remained outstanding at a
weighted average exercise price of $7.11 per option, and a weighted average
remaining contractual life of 3.18 years. Based upon the number of shares of CCC
Common Stock held by White River as of December 31, 1997, if all of the
outstanding CCC Stock Options were exercised, White River would own
approximately 32% of the then total outstanding shares of CCC Common Stock on a
pro forma basis. However, as long as all of the shares of the Series E Preferred
Stock are outstanding, White River would continue to have 51% of the vote
associated with the total CCC voting stock outstanding.

NOTE 4. INVESTMENTS

Investment securities as of December 31, 1997 and 1996, consisted of the
following:

<TABLE> 
<CAPTION> 
---------------------------------------------------------------------------------------------------------------------
                                                                           1997                        1996
                                                                 -----------------------      ---------------------
                                                                   Adjusted     Carrying       Adjusted    Carrying
In thousands                                                           Cost        Value           Cost       Value
-------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>            <C>            <C>         <C> 
Cross Timbers Oil Company; common stock                         $    30,780    $  89,777      $  31,037   $  60,803
United States Treasury Bills                                         30,363       30,363          9,058       9,058
Other                                                                 2,797        2,548          2,797       2,838
                                                                ------------------------      ---------------------
  Total investment securities - current                              63,940      122,688         42,892      72,699
                                                                ------------------------      ---------------------
Richard C. Blum & Associates - NWA
  Partners, L.P.; limited partnership interest                       14,855       41,434           -           -
                                                                ------------------------      ---------------------
  Total investment securities - noncurrent                           14,855       41,434           -           -
                                                                ------------------------      ---------------------
  Total investment securities                                   $    78,795    $ 164,122      $  42,892   $  72,699 
===================================================================================================================
</TABLE> 

Other investments as of December 31, 1997 and 1996, consisted of the following:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
                                                                           1997                        1996
                                                                  ----------------------      ---------------------
                                                                   Adjusted     Carrying       Adjusted    Carrying
In thousands                                                           Cost        Value           Cost       Value
-------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>           <C>           <C>         <C> 
Richard C. Blum & Associates - NWA Partners, L.P.;
   limited partnership interest                                   $      --     $     --      $  21,848   $  21,848

McFarland Energy, Inc.; common stock                                     --           --          4,295       4,295
Other                                                                   276          276            277         277
                                                                  ----------------------      ---------------------
   Total other investments                                        $     276     $    276      $  26,420   $  26,420
===================================================================================================================
</TABLE> 

See Note 2 for a discussion of the investment in Richard C. Blum and Associates 
- NWA Partners, L.P.

                                     F-15
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


Investment income for the years ended December 31, 1997, 1996 and 1995,
consisted of the following:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
                                                                             Year Ended December 31,
                                                             ------------------------------------------------------
In thousands                                                      1997                   1996                  1995
-------------------------------------------------------------------------------------------------------------------
<S>                                                          <CAPTION>               <C>                   <C> 
Interest income                                              $  10,570               $  8,160              $  6,814
Dividend, royalty trust and equity income                          792                    824                 1,462
                                                             ---------               --------              --------
  Total investment income                                    $  11,362               $  8,984              $  8,276
===================================================================================================================
</TABLE> 

The investment securities contained unrealized gains of $85.3 million and $29.8
million at December 31, 1997 and 1996, respectively. At December 31, 1995, the 
components of net unrealized gains and losses in the investment securities 
portfolio consisted of unrealized gains of $12.9 million and unrealized  losses 
of $0.1 million.

Pretax net realized investment gains relating to the investment securities
portfolio were $27.5 million and $16.2 million during 1997 and 1996,
respectively. During the period September 30, 1995, through December 31,
1995, pretax net realized investment losses relating to the investment
securities portfolio of $0.1 million consisted of realized gains of $0.8 million
and realized losses of $0.9 million.

During 1995, certain securities with an aggregate carrying value of $90.0
million were transferred to Fund American as repayment of the outstanding
principal balance due under White River's credit agreement with Fund American
(the "Credit Agreement"). See Note 7 for further discussion.

NOTE 5. PURCHASED SOFTWARE AND EQUIPMENT

Purchased software and equipment as of December 31, 1997 and 1996, consisted of
the following:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
In thousands                                                                     1997                          1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>                           <C> 
Purchased software, licenses and databases                                $    31,052                   $    29,585
Computer equipment                                                             27,934                        22,866
Furniture and other equipment                                                   5,720                         2,889
Leasehold improvements                                                            620                           219
                                                                          -----------                   -----------
  Total cost                                                                   65,326                        55,559
Less accumulated depreciation and amortization                               (46,895)                      (35,081)
                                                                          -----------                   -----------
  Total purchased software and equipment, net                             $    18,431                   $    20,478
===================================================================================================================
</TABLE> 

Purchased software, licenses and databases includes software with an original
cost of $31.9 million acquired by White River through the acquisition of CCC, as
well as software purchased from third-parties and used during development of
software products or for other internal operational activities. Accumulated
amortization

                                     F-16
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


of purchased software, licenses and databases totalled $24.0 million and $17.9
million as of December 31, 1997 and 1996, respectively.

Computer equipment, net of accumulated depreciation, on lease to customers under
operating leases of $2.4 million and $3.6 million, is included in purchased
software and equipment as of December 31, 1997 and 1996, respectively. Future
minimum lease payments under noncancellable customer leases aggregate
approximately $1.0 million in 1998.

Furniture and other equipment includes equipment under capital leases as
follows:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
                                                                                         December 31,
                                                                           ----------------------------------------
In thousands                                                                     1997                          1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>                           <C> 
Capital leases                                                            $       574                   $       574
Less accumulated depreciation                                                    (474)                         (357)
                                                                           ----------                    ----------
  Total, net                                                              $       100                   $       217
===================================================================================================================
</TABLE> 

                                     F-17
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

NOTE 6.    ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses as of December 31, 1997 and 1996,
consisted of the following:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
In thousands                                                                     1997                          1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>                           <C> 
Accounts payable                                                            $   7,434                     $   6,760
Accrued compensation                                                            7,479                         5,092
Income taxes payable                                                            2,712                         4,097
Accrued professional fees                                                       2,725                         1,484
Accrued sales tax                                                               1,237                         1,283
Accrued commissions                                                             1,521                         1,162
Other                                                                           1,026                         1,456
                                                                             --------                      --------
Total accounts payable and accrued expenses                                 $  24,134                     $  21,334
===================================================================================================================
</TABLE> 

NOTE 7.    NOTES PAYABLE AND OTHER DEBT

Notes payable and other debt as of December 31, 1997 and 1996, consisted of the
following:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
In thousands                                                                     1997                          1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>                           <C> 
CCC:
   Equipment financing and capital lease obligations                        $     111                     $     231
   CCC term loan                                                                   --                            --
   CCC revolving credit facility                                                   --                            --
                                                                             --------                      --------
     Total                                                                        111                           231
Less current portion of notes payable and other debt                             (111)                         (120)
                                                                             --------                      --------
Total notes payable and other debt                                          $      --                     $     111
===================================================================================================================
</TABLE> 

                                     F-18
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


WHITE RIVER

During December 1993, White River and Fund American entered into the Credit
Agreement which provided White River with a $50.0 million term loan which was
due and payable in March 1996 (the "Term Loan"), and a $40.0 million revolving
credit facility which expired in March 1995 (the "Revolver"). During 1995, White
River drew down $40.0 million under the Revolver prior to its expiration. The
Term Loan accrued interest at 6% per annum. Amounts borrowed under the Revolver
accrued interest at 2% per annum over the prime rate of interest specified by
the Credit Agreement. The interest rate in effect for advances under the
Revolver during 1995 was 11.0% per annum.

During 1995, and in accordance with the terms of the Credit Agreement, White
River repaid the principal balance of both the Term Loan and the Revolver, and
received an additional $14 million in cash from Fund American, by transferring
certain securities to Fund American with a carrying value of $93 million and a
fair value of $104 million. Accordingly, management accounted for the
transaction as retirement of debt with no corresponding gain or loss, and the
remaining $11 million was recognized as realized investment gains. Interest
expense relating to balances due under the Credit Agreement totalled $3.1
million for the year ended December 31, 1995.

CCC

In August 1996, CCC negotiated a credit facility with a commercial bank to
replace its prior bank credit facility. The current bank facility provides CCC
with the ability to borrow up to $20 million under a revolving line of credit
for general corporate purposes. The interest rate under the current bank
facility is the London Interbank Offering Rate plus 1.5% per annum or the prime
rate in effect from time to time, as selected by CCC. When borrowings are
outstanding, interest payments are made monthly. There were no borrowings under
the current bank credit facility during 1997. CCC pays a commitment fee of 0.25%
per annum on any unused portion of the current bank credit facility. The current
bank credit facility terminates on October 1, 2001.

Under the current bank credit facility, CCC is, with certain exceptions,
prohibited from making certain sales or transfers of assets, incurring
nonpermitted indebtedness or encumbrances, and redeeming or repurchasing its
capital stock, among other restrictions. In addition, the current bank facility
requires CCC to maintain certain levels of operating cash flow and debt
coverage, and limits CCC's ability to make capital expenditures and investments
and declare dividends.

CCC's prior bank facility consisted of a term loan and revolving credit
facility. The annual average interest rate in effect during the years ended
December 31, 1996 and 1995, for the term loan and revolving credit facility was
8.7% and 8.7%, and 9.2% and 9.0%, respectively.

White River has not made any formal or informal commitment to make additional
investments in or advances to CCC and is not a direct or indirect guarantor of
any CCC indebtedness.

                                     F-19
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

NOTE 8.    INCOME TAXES

White River and CCC file separate consolidated Federal income tax returns. The
components of the Company's income tax expense (benefit) for the years ended
December 31, 1997, 1996 and 1995, follow:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
In thousands                                                        1997                  1996                 1995
-------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>                  <C>                  <C> 
Current:
  Federal                                                    $    10,919          $     16,629         $       (948)
  State                                                            2,202                 1,034                 (121)
  International                                                      (31)                    1                  (24)
                                                              ----------           -----------          -----------
    Total current income tax expense (benefit)                    13,090                17,664               (1,093)
                                                              ----------           -----------          -----------

Deferred:
  Federal                                                          2,641                (2,895)               9,011
  State                                                             (121)                 (463)                  (9)
                                                              ----------           -----------          -----------
    Total deferred income tax expense (benefit)                    2,520                (3,358)               9,002
                                                              ----------           -----------          -----------

    Total income tax expense                                 $    15,610          $     14,306         $      7,909
===================================================================================================================
</TABLE> 

During the years ended December 31, 1997 and 1996, the following deferred income
tax provisions were recorded directly to stockholders' equity:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
In thousands                                                                              1997                 1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>                   <C> 
Change in net unrealized investment gains                                         $     19,434          $     5,944
Effects of the CCC IPO                                                            $         --          $     4,869
===================================================================================================================
</TABLE> 

                                     F-20
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


A reconciliation of the income tax expense for the years ended December 31,
1997, 1996 and 1995, calculated using the Federal statutory tax rate, to the
Company's income tax expense for such periods follows:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
                                                                         Year Ended December 31,
                                                      -------------------------------------------------------------
In thousands                                                1997                 1996                  1995
-------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>         <C>      <C>        <C>       <C>         <C> 
Income tax expense at statutory rate                 $   7,984   35.0%    $   6,810  35.0%     $    8,366  35.0  %
Differences in income taxes resulting from:
  Net earnings relating to CCC                           5,539   24.3         4,855  25.0           1,140   4.8
  State taxes, net of Federal benefit and before
    valuation reserve                                    1,352    5.9         2,426  12.5             105   0.4
  Amortization of goodwill                               1,845    8.1         1,815   9.3           2,168   9.1
  Dividends received deduction                            (292)  (1.3)         (202) (1.0)           (358) (1.5)
  Adjustment to tax basis in certain investments            --     --            --    --          (2,450)(10.3)
  Prior year taxes                                        (804)  (3.5)           --    --              --    --
  Other, net                                               (23)  (0.1)         (390) (2.0)            198   0.8
  Change in valuation allowance                              9     --        (1,008) (5.2)         (1,260) (5.2)
                                                      ---------------      --------------       ---------------
Income tax expense (benefit)                         $  15,610   68.4%    $  14,306  73.6%     $    7,909  33.1  %
==================================================================================================================
</TABLE> 

                                     F-21
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


Significant components of the Company's deferred income tax assets and
liabilities as of December 31, 1997 and 1996, measured using the Federal
statutory tax rate, are as follows:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
In thousands                                                                         1997                      1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>                      <C> 
White River:
Deferred income tax assets related to:
  Employee and director compensation accruals                                  $    2,099               $     6,023
  Other                                                                               179                       140
                                                                                ---------                ----------
     Deferred income tax asset                                                      2,278                     6,163
                                                                                ---------                ----------
Deferred income tax liabilities related to:
  Certain investments                                                             (34,121)                  (17,442)
  Unrealized gains and undistributed earnings relating to CCC                     (10,201)                   (6,128)
  Purchased software                                                               (2,420)                   (4,248)
  Investment in CCC Preferred Stock                                                  (212)                     (212)
                                                                                ---------                ----------
     Deferred income tax liability                                                (46,954)                  (28,030)
                                                                                ---------                ----------
       Net deferred income tax liability                                       $  (44,676)              $   (21,867)
===================================================================================================================
Deferred income tax assets related to:
CCC:
  Deferred revenue                                                             $    1,993               $     1,893
  Rent                                                                              1,474                     1,363
  Depreciation and amortization                                                     1,330                       997
  Bad debt expense                                                                  1,064                       759
  Capital loss carry forward                                                          293                       284
  Compensation accruals                                                               281                       247
  Long-term receivable                                                                143                       145
  Lease termination                                                                    --                        48
  Net operating loss carry forwards                                                    --                        18
  Other, net                                                                          952                       940
  Valuation allowance                                                                (293)                     (284)
                                                                                ---------                ----------
     Net deferred income tax asset                                             $    7,237               $     6,410

Other                                                                                  27                         --
                                                                                ---------                ----------
Net deferred income tax asset                                                  $    7,264               $     6,410
===================================================================================================================
</TABLE> 

                                     F-22
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

NOTE 9.   RETIREMENT PLANS

White River has established two non-qualified plans under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), for the purpose of
providing deferred compensation benefits for certain management employees. The
White River Voluntary Deferred Compensation Plan (the "Deferred Compensation
Plan") and the White River Deferred Benefit Plan (together with the Deferred
Compensation Plan, the "Retirement Plans") both became effective on December 31,
1993. The Retirement Plans are unfunded and the employees' right to receive
future payments thereunder represent an unsecured claim against the general
assets of White River. No assets of White River shall in any way be held in
trust for, or be subject to, any claim by a participant or his beneficiary under
the Retirement Plans. In the event that a change in control, as defined by the
Retirement Plans, occurs, the provisions of these plans require the White River
Board to cause the creation and funding by White River of a trust with cash
payments, shares of Common Stock, or a combination thereof sufficient to cover
the value of existing plan balances. The assets of such trust shall at all times
be subject to the claims of the general creditors of White River. The recorded
liabilities related to the Retirement Plans totalled $0.8 million and $12.5
million as of December 31, 1997 and 1996, respectively. The Retirement Plans
were terminated effective as of December 30, 1997, pursuant to the Merger
Agreement. In connection with the termination of the Retirement Plans, White
River made certain payments to plan participants in 1997 totalling $24.7
million, using the available cash resources of White River. Benefit payments
under such plans were nominal in 1996.

NOTE 10.  INCENTIVE COMPENSATION PLANS

The White River 1993 Incentive Compensation Plan (the "Incentive Plan") is a 
non-qualified plan under ERISA and provides for granting to officers and key
employees of White River and its participating subsidiaries various types of
incentive awards including non-qualified and incentive stock options ("Stock
Options"), stock appreciation rights ("SARs"), and performance units
("Performance Units"). The Compensation Committee is responsible for the general
administration of the Incentive Plan. As of December 31, 1997, no Stock Options
or SARs have been awarded pursuant to the Incentive Plan.

Performance Units are conditional grants of a specified maximum number of shares
of Common Stock or equivalent amount of cash, payable at the end of a specified
period, subject to the achievement of specific financial goals and measures of
individual performance, as determined by the Compensation Committee. The
financial goal for full payment of Performance Units is a 15% average annual
return on stockholders' equity ("ROE") measured as the change in book value per
common and common equivalent share (as adjusted for dividends paid, stock splits
and other adjustments necessary to reflect true economic value) over the
applicable performance period (the "Performance Target"). At an average ROE of
15% or above, Performance Units will become fully payable. At an average ROE of
less than 15%, the percentage of Performance Units paid will be determined by
the Compensation Committee and may result in no payout at all.

                                      F-23
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

A summary of Performance Unit award activity follows:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
                                                                                                          Number of
                                                                                                  Performance Units
-------------------------------------------------------------------------------------------------------------------
<S>                                                                                               <C> 
Outstanding as of December 31, 1994                                                                         259,526
  Canceled                                                                                                 (16,532)
                                                                                                        -----------
Outstanding as of December 31, 1995                                                                         242,994
  Paid                                                                                                    (242,994)
  Awarded                                                                                                    94,500
                                                                                                        -----------
Outstanding as of December 31, 1996                                                                          94,500
  Canceled                                                                                                 (14,000)
  Awarded                                                                                                     7,500
                                                                                                        -----------
Outstanding as of December 31, 1997                                                                          88,000
===================================================================================================================
</TABLE> 

Upon the third anniversary of the Capitalization and based upon the attainment
of the Performance Target, the White River Board declared all outstanding
Performance Units payable during September 1996. Of the total outstanding
Performance Units, approximately 196,000 were deferred by participants in the
Deferred Compensation Plan and approximately 46,400 were paid in cash. The
resulting cash payment amount totalled $2.8 million.

All Performance Units outstanding as of December 31, 1997 expire on September
23, 1999. Compensation and benefits expense for the years ended December 31,
1997, 1996, and 1995, includes $2.5 million, $8.6 million, and $3.5 million,
respectively, relating to outstanding Performance Units.

As of December 31, 1997, approximately 9,000 shares of Common Stock remained
available for future awards under the Incentive Plan.

NOTE 11.  COMPENSATION OF DIRECTORS

Effective upon the Distribution, White River provided non-employee directors
(the "Eligible Directors") with an aggregate grant of 64,865 performance units
(the "Director Performance Units") in lieu of an annual retainer and meeting
attendance fees. Effective December 31, 1996, all units under such plan were
earned.

                                     F-24
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

During September 1996, The White River Board granted a new award of Director
Performance Units to Eligible Directors totaling 35,000 units. This new grant of
Director Performance Units will become vested on September 23, 1999, contingent
upon the attainment of the Performance Target during the three-year period then
ended. Other operating expenses for the years ended December 31, 1997, 1996, and
1995, includes $1.0 million, $2.0 million, and $1.0 million, respectively,
relating to the Director Performance Units.

Effective August 8, 1996, the White River Board adopted the White River
Directors' Deferred Compensation Plan (the "Directors Plan"). The Directors Plan
allows Eligible Directors to defer receipt of Directors' compensation. Effective
June 30, 1997, the 64,865 Director Performance Units were transferred by the
recipients into the Directors Plan. The Directors Plan will be unfunded and the
directors' right to receive future benefits thereunder will represent an
unsecured claim against the general assets of White River. The Directors'
Deferred Compensation Plan was terminated effective as of December 30, 1997,
pursuant to the Merger Agreement. In connection with the termination of the
Directors' Plan at year end 1997, White River made certain payments to Plan
Participants in 1997 totalling $5.2 million.

NOTE 12.  REDEEMABLE PREFERRED STOCK

WHITE RIVER

White River has authorized the issuance of 5,000,000 shares of preferred stock,
par value $1.00 per share.

In connection with the Capitalization, White River issued 7,000 shares of Series
A, Non-Participating Cumulative Preferred Stock (the "Redeemable Preferred
Stock"), to Fund American. Pursuant to the terms of the Redeemable Preferred
Stock, under certain circumstances following a merger or consolidation of White
River or following a sale by White River of all or substantially all of its
assets, or in the event of liquidation, White River must redeem the Redeemable
Preferred Stock at a price of $1,000 per share plus accrued and unpaid dividends
thereon. In any event, the Redeemable Preferred Stock must be redeemed on
September 24, 1998, at a price of $1,000 per share, plus any accrued and unpaid
dividends. Each share of Redeemable Preferred Stock is non-voting and is
entitled to a preferential quarterly dividend payment of $16.875. Holders of the
Redeemable Preferred Stock will have the right to elect two additional directors
to the White River Board if the equivalent of six full quarterly dividends
payable on the Redeemable Preferred Stock are in default. Concurrent with the
Distribution, Fund American sold the Redeemable Preferred Stock to two
unaffiliated institutional investors.

As more fully discussed in Note 13, the White River Board has designated and
authorized for issuance 50,000 shares of Series B, Participating Cumulative
Preferred Stock (the "Participating Preferred Stock").

                                      F-25
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


NOTE 13.  SHAREHOLDERS' RIGHTS PLAN

On December 14, 1993, the White River Board adopted a shareholders' rights plan
(the "Rights Plan") under which rights to purchase Participating Preferred Stock
(the "Rights") were issued and attached to shares of Common Stock at the rate of
one Right for each share of Common Stock outstanding. Each Right entitles the
registered holder under certain circumstances to purchase from White River one
one-thousandth (1/1000) of a share of Participating Preferred Stock at a price
of $90, subject to adjustment to prevent dilution. Each share of Participating
Preferred Stock is non-redeemable and will be entitled to a minimum preferential
quarterly dividend payment of $50 per share, and will be entitled to an
aggregate dividend equal to 1,000 times the dividend declared, if any, per share
of Common Stock. In addition, holders of Participating Preferred Stock will have
the right to elect two additional directors to the White River Board if the
equivalent of six full quarterly dividends payable on the Participating
Preferred Stock are in default. The terms of the Participating Preferred Stock
will be such that each one one-thousandth (1/1000) of a share would be entitled
to vote on an equivalent basis with one whole share of Common Stock. The Rights
are non-voting and do not participate in dividends.

The Rights will be exercisable only if an unrelated person or group (an
"Acquiring Person") acquires 25% or more or a tender offer or exchange offer is
commenced for 25% or more of the outstanding shares of Common Stock (a
"Triggering Event"). For this purpose, an Acquiring Person excludes, among
others, subsidiaries of White River, Fund American and Fund American's Chairman,
President and Chief Executive Officer ("Fund American's Chairman"). The Rights
will enable the holder to acquire additional equity in either White River or the
Acquiring Person.

Once a Triggering Event has occurred, the Rights would trade separately from
shares of Common Stock and separate certificates representing the Rights would
be issued. The Rights will expire ten years after their issuance and will be
redeemable earlier by White River at a price of $0.01 per Right at any time
until White River learns of the existence of an Acquiring Person. Under certain
circumstances, the White River Board will be able to redeem the Rights if a
majority of the "disinterested directors", as defined by the Rights Plan, agrees
that the redemption is in the best interests of White River and its
stockholders. White River will reserve 50,000 of its authorized preferred shares
as Participating Preferred Stock for issuance under the terms of the Rights
Plan.

In connection with the pending merger, White River amended its shareholders'
rights plan to provide, among other things, that the exercisability of rights
would not be triggered by the merger agreement and that the rights would expire
immediately prior to the consummation of the merger. Accordingly, if the merger
is consummated, the rights will not be redeemed and no payment will be made to
stockholders in respect of their rights.

                                      F-26
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

NOTE 14.  FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair values of the Company's financial instruments as of December
31, 1997 and 1996, were as follows:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
                                                                         1997                         1996
                                                                ----------------------       ----------------------
                                                                 Carrying         Fair       Carrying          Fair
In thousands                                                        Value        Value          Value         Value
-------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>          <C>             <C>          <C> 
Financial assets:
  Cash and cash equivalents                                    $  190,515   $  190,515      $ 188,365    $  188,365
  Investment securities -- current                                122,688      122,688         72,699        72,699
  Accounts receivable, net                                         19,617       19,617         10,661        10,661
  Investment securities - noncurrent                               41,434       41,434             --            -- 
  Other investments                                                   276          276         26,420        39,813
  Other financial assets                                              457          457            403           403
-------------------------------------------------------------------------------------------------------------------
Financial liabilities:
  Total notes payable and other debt                           $      111   $      111      $     234    $      234
  Total contract funding                                               --           --            123           123
  Other financial liabilities                                      23,979       23,979         20,513        20,513
  Redeemable preferred stock                                        7,189        6,943          7,175         6,948
===================================================================================================================
</TABLE> 

The following methods and assumptions were used by White River to estimate the
fair value of each class of financial instruments for which it is practicable to
estimate such value:

Cash and Cash Equivalents and Accounts Receivable. The carrying amount of these
assets approximates or equals their fair value.

Investment Securities and Other Investments. Fair values of investment
securities are based on quoted market prices which equal carrying value, and
fair values of other investments have been derived from quoted market values for
similar unrestricted securities or determined using internal appraisal
techniques and policies.

Other Financial Assets. This caption includes investment income receivable,
receivables on sales of securities, and certain trade receivables. The carrying
amount of these assets approximates their fair value.

Contract Funding, Notes Payable and Other Debt, and Redeemable Preferred Stock.
Fair value is estimated by discounting future cash flows using estimated
incremental rates for similar types of arrangements.

Other Financial Liabilities. This caption includes accrued interest payable,
payables on purchases of securities, and certain other payables. The carrying
amount of these liabilities approximates their fair value.

                                     F-27
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

NOTE 15.  CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

As of December 31, 1997, Fund American held 1.0 million shares, or 20.8% of the
total outstanding shares of Common Stock. Also, as of December 31, 1997, Fund
American's Chairman claimed beneficial ownership of 0.8 million shares, or 17.1%
of the total outstanding shares of Common Stock. During 1995, White River
repurchased 100,000 shares of Common Stock from Fund American's Chairman at an
aggregate purchase price of $3.4 million. The Chairman of the White River Board
is also a director of Fund American.

As more fully discussed in Note 7, White River executed the Credit Agreement
with Fund American, and during 1995 repaid balances totaling $90.0 million by
transferring certain securities to Fund American, resulting in pretax net
investment gains of $11.0 million. Interest expense relating to balances due
under the Credit Agreement totalled $3.1 million for the year ended December 31,
1995.

NOTE 16.  COMMITMENTS AND CONTINGENCIES

The Company leases facilities, computers, telecommunications and office
equipment under the terms of noncancellable operating lease agreements which
expire at various dates through 2008. At December 31, 1997, future minimum lease
payments were as follows:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
                                                                                                     Future Minimum
In thousands                                                                                         Lease Payments
-------------------------------------------------------------------------------------------------------------------
<S>                                                                                                  <C> 
Payments due in:
  1998                                                                                                   $    4,330
  1999                                                                                                        4,704
  2000                                                                                                        3,304
  2001                                                                                                        2,249
  2002                                                                                                        2,182
  Thereafter                                                                                                 14,428
                                                                                                          ---------
    Total                                                                                                $   31,197
===================================================================================================================
</TABLE> 

Operating lease expense was $3.9 million, $3.4 million, $3.1 million for the
years ended December 31, 1997, 1996 and 1995, respectively.

CCC entered into a contract with Faneuil, a former subsidiary, under which
Faneuil is to provide certain computer services to CCC through June 1999. The
contract provides that CCC make minimum payments to Faneuil through June 1997,
and contains an option under which CCC can elect to extend the contract for
certain services through June 1999. For the years ended December 31, 1997 and
1996 and 1995, charges from Faneuil to CCC for computer services have totalled
$3.1 million, $3.6 million and $3.2 million, respectively.

                                      F-28
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

NOTE 17.  LEGAL PROCEEDINGS

During March 1991, CCC sought a declaratory judgment in the U.S. District Court
for the District of Connecticut (the "District Court") against MacLean Hunter
Market Reports, Inc. ("MacLean Hunter"), an independent corporate publisher of
used car valuation books, that would render certain of such publisher's
copyright claims invalid or unenforceable. MacLean Hunter, in turn, filed a
counterclaim against CCC for copyright infringement. During June 1993, the
District Court granted CCC's request for summary judgment on the copyright
issue. MacLean Hunter filed a notice of appeal with the U.S. Court of Appeals
for the Second Circuit which, during December 1994, reversed the decision of the
District Court and remanded the case to the District Court for a determination
of damages and injunctive relief. In a related matter, CCC received claims from
another licensee of the MacLean Hunter data alleging copyright infringement,
unfair competition arising under the Trademark Act of 1946 and common law unfair
competition. During December 1995, substantive settlement discussions were held.
As a result of such discussions, CCC and all parties in these matters
conditionally agreed to a settlement structure that would resolve all
outstanding disputes. All conditions precedent to such settlement agreement were
satisfied in 1996. As a result, all issues arising out of the litigation between
the parties have been fully and completely settled and each civil action had
been dismissed with prejudice. The settlement amount approximated the settlement
charge of $4.5 million recorded during 1995 in connection with such matter. In
conjunction with the settlement agreement, CCC received a three-year license to
MacLean Hunter's used car valuation book data at market rates.

The Company is a party to various other legal proceedings in the ordinary course
of its business. The Company's management believes that the ultimate resolution
of these matters will not have a material effect on the Company's consolidated
financial position.

NOTE 18.  SUBSEQUENT EVENTS

On February 10, 1998, CCC signed an agreement with InsurQuote Systems, Inc.
("Insur-Quote") and invested $20 million to acquire 333,750 shares of common
stock (Or 19.9% of the common stock), an $8.9 million subordinated note, and
shares of Series C redeemable convertible preferred stock, and Series D
convertible preferred stock. The subordinated note, which bears interest at
7.5%, carries warrants to acquire additional shares of common stock and is
exercisable by CCC through February 10, 2008, subject to potential early
termination provisions. The Series C stock is redeemable in full at the end of
five years, or earlier under certain conditions, if not converted prior to that
time. Each share of Series C and D preferred stock is initially convertible into
one share of common stock at the option of CCC.

InsurQuote is a provider of insurance rating information and the software tools
used to manage that information. Its range of products is primarily focused
towards insurance companies, insurance agents, and the related consumer market.

Under the terms of the investment agreement and at InsurQuote's request, CCC has
the opportunity to purchase additional shares of Series C Preferred Stock after
January 1, 1999. Furthermore, the investment agreement provides that at any time
after July 1, 2000 and until as late as July 1, 2010, under certain conditions,
CCC has the option to purchase sufficient shares of InsurQuote's common stock at
the

                                      F-29
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


then fair market value to increase CCC's voting interest to at least 51%. This
right may be terminated or be converted to a fixed number of shares subject to a
warrant with a strike price equal to 120% of a public offering price, if not
exercised earlier in connection with a sale of InsurQuote or on an initial
public offering of InsurQuote's common stock. If this right is exercised, Series
E Preferred Stock carrying super voting rights will be issued to the Company.
The transaction has an "earn out" component measured on June 30, 2000, that may
have the effect of decreasing the percentage ownership of the Company or
requiring an increasing in the investment by the Company.

NOTE 19.      INFORMATION ON BUSINESS SEGMENTS

Information on business segments as of and for the years ended December 31,
1997, 1996 and 1995, follows:

<TABLE> 
<CAPTION> 
---------------------------------------------------------------------------------      --------------------------------------      
                                                              1997                                        1996              
                                              -----------------------------------      --------------------------------------       
                                             Insurance-                                Insurance-                 
                                                related  Investment                       related   Investment     
                                               Services  Operations  Consolidated        Services   Operations   Consolidated
-----------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>       <C>         <C>                 <C>        <C>          <C> 
Statement of Operations Data:                                                                    
Revenues                                       $159,106    $ 20,804      $179,910         130,977       14,421        145,398
Operating expenses:                                                                              
  Compensation and benefits and                                                                  
    other operating expenses                    124,114      33,042       157,156         102,942       18,218        121,160  
  Depreciation and amortization (a)              16,932         267        17,199          17,370           29         17,399  
                                                -------     -------       -------         -------      -------       -------- 
      Total operating expenses                 $141,046      33,309       174,355         120,312       18,247        138,559
                                                -------     -------       -------         -------      -------       -------- 
      Operating income (loss)                   $18,060    $(12,505)     $  5,555          10,665       (3,826)         6,839
                                                =======     =======       =======         =======      =======       ========
                                                                                                 
Statement of Financial Condition Data:                                                           
Identifiable assets (b)                        $ 98,972    $301,582      $400,554          82,895      271,617        354,512
Capital expenditures                           $  8,051    $  1,725      $  9,776           6,909           --          6,909
=============================================================================================================================

<CAPTION> 
                                                        ---------------------------------------         
                                                                           1995                        
                                                        ---------------------------------------         
                                                        Insurance-                                    
                                                           related   Investment                                   
                                                          Services    Operation   Consolidated        
----------------------------------------------------------------------------------------------                            
<S>                                                     <C>          <C>          <C> 
Statement of Operations Data:                            
Revenues                                                 $ 115,519     $  8,276      $ 123,795                  
Operating expenses:                                       
  Compensation and benefits and                           
   other operating expenses                                99,215         7,631        106,846                  
  Depreciation and amortization                            20,336            28         20,364                  
                                                          -------       -------       --------                  
    Total operating expenses (a)                          119,551         7,659        127,210                  
                                                          -------       -------       --------                  
    Operating income (loss)                              $ (4,032)     $    617      $  (3,415)                    
                                                          =======       =======       ========                    
                                                                               
Statement of Financial Condition Data:                                         
Identifiable assets (b)                                  $ 84,973      $211,782      $ 296,755                        
Capital expenditures                                     $  3,891 $          --      $   3,891                          
==============================================================================================
</TABLE> 
                                   
(a)  Insurance-related services' depreciation and amortization expense includes
     amortization of goodwill and purchased software relating to the acquisition
     of CCC by White River of $10.5 million, $12.1 million and $14.8 million for
     the years ended December 31, 1997, 1996 and 1995, respectively.

(b)  Insurance-related services' identifiable assets include goodwill of $18.5
     million, $23.7 million and $34.8 million and purchased software of $6.9
     million, $12.1 million and $19.0 million relating to the acquisition of CCC
     by White River as of December 31, 1997, 1996 and 1995, respectively.

                                     F-30
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES


NOTE 20.      SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Selected quarterly financial data for 1997 and 1996 is shown in the following
table. Such data includes, in the opinion of management, all recurring
adjustments necessary for a fair presentation of the results of operations for
such interim periods.

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
                                                   1997                                      1996
                                 ----------------------------------------   ---------------------------------------
In thousands,                       First    Second      Third    Fourth      First    Second      Third     Fourth
  except per share amounts        Quarter   Quarter    Quarter   Quarter    Quarter   Quarter    Quarter    Quarter
-------------------------------------------------------------------------------------------------------------------
<S>                             <C>       <C>        <C>        <C>       <C>       <C>        <C>        <C> 
Revenues                        $  40,898 $  42,799  $  45,852  $  50,361 $  33,338 $  33,892  $  38,115  $ 40,053
Operating expenses                 40,675    38,769     38,518     56,393    31,070    33,765     40,337    33,387
                                 ----------------------------------------  ---------------------------------------
    Operating income (loss)           223     4,030      7,334     (6,032)    2,268       127     (2,222)    6,666
                                 ----------------------------------------  ---------------------------------------
Net investment gains                  669       505      6,966     19,352        --       996     15,148         6
Interest expense                       37        35         34         65     1,032       950        526        54
Minority interest                   2,111     2,443      2,532      2,979                           (335)    1,306
                                 ---------------------------------------------------------------------------------
Pretax income (loss)               (1,256)    2,057     11,734     10,276     1,236       173     12,735     5,312
Income tax expense                  1,248     2,353      6,179      5,830     2,744     2,869      7,866       827
                                 ----------------------------------------  ---------------------------------------
Income (loss) before
   extraordinary item              (2,504)     (296)     5,555      4,446    (1,508)   (2,696)     4,869     4,485
Extraordinary loss on early
  retirement of debt, net of
  income taxes                         --        --         --         --        --        --        678        --
                                 ----------------------------------------  ---------------------------------------
Net income (loss)                  (2,504)     (296)     5,555      4,446    (1,508)   (2,696)     4,191     4,485
Dividend and accretion on
 redeemable preferred stock           118       118        118        119       149       147        309       122
                                 ----------------------------------------  ---------------------------------------
Net income (loss) applicable
  to common stock               $  (2,622)$    (414) $   5,437  $   4,327 $  (1,657)$  (2,843) $   3,882  $  4,363

Earnings (loss) per common share:
Basic:
 Income(loss) before
  extraordinary item            $   (0.54)$   (0.08) $    1.12  $    0.89 $   (0.34)$   (0.58) $    0.94  $   0.90
  Net income (loss)             $   (0.54)$   (0.08) $    1.12  $    0.89 $   (0.34)$   (0.58) $    0.80  $   0.90

Diluted:
  Income (loss) before
    extraordinary items         $   (0.54)$   (0.08) $    1.05  $    0.88 $   (0.34)$   (0.58) $    0.88  $   0.84
  Net income (loss)             $   (0.54)$   (0.08) $    1.05  $    0.88 $   (0.34)$   (0.58) $    0.75  $   0.84
==================================================================================================================
</TABLE> 

                                     F-31
<PAGE>
 
                   WHITE RIVER CORPORATION AND SUBSIDIARIES

                    REPORT ON MANAGEMENT'S RESPONSIBILITIES

The financial data included in this Annual Report to Stockholders and Form 10-K
(the "Annual Report"), including the consolidated financial statements, has been
prepared by the management of White River Corporation ("White River" or the
"Company"). The consolidated financial statements have been prepared in
accordance with generally accepted accounting principles and, where necessary,
include amounts based on informed estimates and judgments. In those instances
where there is no single specified accounting principle or standard, management
makes a choice from reasonable, accepted alternatives which are believed to be
most appropriate under the circumstances. Financial data presented elsewhere in
this Annual Report is consistent with that shown in the consolidated financial
statements.

The Company maintains internal financial and accounting controls ("Internal
Controls") designed to provide reasonable and cost effective assurance that
assets are safeguarded from loss or unauthorized use, that transactions are
recorded in accordance with management's policies and that financial records are
reliable. The Company's business ethics policies require adherence to the
highest ethical standards in the conduct of its business. Compliance with these
Internal Controls, policies and procedures is continuously maintained and
monitored by management.

Our independent auditors provide an objective, independent review and evaluation
of the structure of Internal Controls to the extent they consider necessary in
their audit of the Company's consolidated financial statements. Management
reviews all recommendations of the independent auditors concerning the structure
and implementation of Internal Controls and responds to such recommendations
with corrective actions, as deemed appropriate.

The Audit Committee of the White River board of directors (the "Audit
Committee") is comprised of all non-management directors and has general
responsibility for the oversight and surveillance of the accounting, reporting
and financial control practices of White River. The Audit Committee annually
reviews the effectiveness of management and the independent auditors with
respect to the financial reporting process and the adequacy of Internal
Controls. The independent auditors have at all times free access to the Audit
Committee, without members of management present, to discuss the results of
their audits, the adequacy of Internal Controls and any other matter that they
believe should be brought to the attention of the Audit Committee.


Gordon S. Macklin                          Michael E.B. Spicer
President and Chief Executive Officer      Chief Financial Officer, 
                                           Treasurer and Corporate Secretary

                                      F-32
<PAGE>
 
                        REPORT OF INDEPENDENT AUDITORS


To the Board of Directors and Stockholders of
White River Corporation


We have audited the accompanying consolidated statements of financial condition
of White River Corporation and subsidiaries as of December 31, 1997 and 1996,
and the related consolidated statements of income, stockholders' equity, and
cash flows for each of the three years in the period ended December 31, 1997.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits. We did not audit the financial statements of CCC Information
Services Group Inc., a subsidiary, as of December 31, 1997 and 1996 and for each
of the three years in the period ended December 31, 1997. The financial
statements of CCC Information Services Group Inc. reflect approximately 23% and
13% of total assets as of December 31, 1997 and 1996, respectively. Those
statements were audited by other auditors whose report has been furnished to us,
and our opinion, insofar as it relates to data included for CCC Information
Services Group Inc., is based solely on the report of the other auditors.

We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by 
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits and the report of other auditors provide a reasonable
basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the 
financial statements referred to above present fairly, in all material respects,
the consolidated financial position of White River Corporation and subsidiaries 
at December 31, 1997 and 1996, and the consolidated results of their operations 
and their cash flows for each of the three years in the period ended December 
31, 1997, in conformity with generally accepted accounting principles.



                                          /S/ ERNST & YOUNG LLP



Stamford, Connecticut
April 6, 1998

                                     F-33
<PAGE>
 
                        REPORT OF PRICE WATERHOUSE LLP

To the Board of Directors and 
Stockholders of CCC Information Services Group Inc.

We have audited the consolidated balance sheet of CCC Information Services Group
Inc. (a subsidiary of White River Corporation) and its subsidiaries as of
December 31, 1997 and 1996, and the related consolidated statements of
operations, of stockholders' equity and of cash flows for each of the three
years in the period ended December 31, 1997 (not presented separately herein).
These consolidated financial statements are the responsibility of CCC
Information Services Group Inc's. management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements audited by us present
fairly, in all material respects, the financial position of CCC Information
Services Group Inc. and its subsidiaries as of December 31, 1997 and 1996, and
the results of their operations and their cash flow for each of the three years
in the period ended December 31, 1997, in conformity with generally accepted
accounting principles.


Price Waterhouse LLP
Chicago, Illinois
January 21, 1998
Except as to Note 15 which 
is as of February 10, 1998

                                     F-34