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

                                   FORM 10-K
(Mark One)
     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED
                                OR
x    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from  July 1, 1996 to December 28, 1996
                                ------------    -----------------

Commission File No. 1-5064

                                 JOSTENS INC.
                                 ------------
            (Exact name of Registrant as specified in its charter)

          Minnesota                                           41-0343440
-------------------------------                          --------------------
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                            Identification No.)

5501 Norman Center Drive, Minneapolis, Minnesota                  55437
------------------------------------------------                ----------
   (Address of principal executive offices)                     (Zip Code)
 
                                (612) 830-3300
             ---------------------------------------------------- 
             (Registrant's telephone number, including area code)

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

Title of Each Class                    Name of Each Exchange on Which Registered
-------------------                    -----------------------------------------
Common Shares, $.33 1/3 par value      New York Stock Exchange, Inc.
Common Share Purchase Rights           New York Stock Exchange, Inc.

Securities registered pursuant to Section 12(g) of the Act:  None
Documents incorporated by reference:  None
 
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes [X]    No [ ]
                                        
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

The aggregate market value of voting stock held by nonaffiliates of the
Registrant on March 17, 1997, was $856,838,614. The number of shares outstanding
of Registrant's only class of common stock on March 17, 1997, was 38,727,169.

                                       1
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                               TABLE OF CONTENTS
 
                                                                         PAGE(S)
                                                                         -------
PART I
     Item 1   Business                                                    5-11 
     Item 2   Properties                                                  12-13
     Item 3   Legal Proceedings                                           13
     Item 4   Submission of Matters to a Vote of Security Holders         13
                                                                               
PART II                                                                        
     Item 5   Market for Registrant's Common Stock                        14
     Item 6   Selected Financial Data                                     15
     Item 7   Management's Discussion and Analysis of                          
                Financial Condition and Results of Operations             16-25
     Item 8   Financial Statements and Supplementary Data                 26-52
     Item 9   Changes in and Disagreements with Accountants                    
                on Accounting and Financial Disclosure                    53
                                                                               
PART III                                                                       
     Item 10  Directors and Executive Officers of the Registrant          54-56
     Item 11  Executive Compensation                                      57-61
     Item 12  Security Ownership of Certain Beneficial Owners                  
                and Management                                            61-62
     Item 13  Certain Relationships and Related Transactions              63

SIGNATURES

PART IV                                                                         
     Item 14  Exhibits, Financial Statement Schedule and Reports 
              on Form 8-K                                                   
     (a) 1.   Financial Statements: The Consolidated Financial 
              Statements of Jostens Inc. are included under 
              Item 8 of this Form 10-K.                                   -

         2.   Financial Statement Schedule: 
              Schedule II - Valuation and Qualifying Accounts. 
              All other schedules for which provision is made 
              in the applicable accounting regulations of the 
              Securities and Exchange Commission have been 
              omitted as not required or applicable or the            
              information required to be shown is included 
              in the financial statements and related notes 
              under Item 8.                                               -

     (b)      Reports on Form 8-K:  A report on Form 8-K, 
              dated October 24, 1996, was filed during the 
              six-month period ending December 28, 1996. 
              The filing was made under Item 8 to recognize 
              the Board of Directors' authorization to change 
              the Company's fiscal year end.                              -
         
     (c)      Exhibits
       2. a.  Stock Purchase Agreement by and between JLC 
              Holdings, Inc. Software Systems Corp. and JLC 
              Acquisitions, Inc. and Jostens Inc. (incorporated 
              by reference to Exhibit 2.1 contained in the
              Current Report on Form 8-K filed on July 14, 1995)          -
 

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       3. a.  Articles of Incorporation and Bylaws (Incorporated 
              by reference to Exhibit 3(a) contained in the Annual
              Report on Form 10-K for the year ended June 30, 1993).      -

       4. a.  Rights Agreement dated August 9, 1988 between the
              Company and Norwest Bank Minnesota, N.A. (incorporated
              by reference to the Company's Form 8-A dated 
              August 17, 1988, File No. 1-5064).                          -

          b.  Form of Indenture, dated as of May 1, 1991,
              between Jostens Inc. and Norwest Bank Minnesota, N.A.,
              as Trustee (incorporated by reference to Exhibit 4.1
              contained in the Company's Form S-3, File No. 33-40233).    -

      10. a.  Company's 1984 Stock Option Plan (incorporated
              by reference to the Company's Registration 
              Statement on Form S-8, File No. 2-95076).                   -
 
          b.  Company's 1987 Stock Option Plan (incorporated by 
              reference to the Company's Registration Statement
              on Form S-8, File No. 33-19308).                            - 
 
          c.  Company's 1992 Stock Incentive Plan (incorporated 
              by reference to Exhibit 10(d) contained in the
              Annual Report on Form 10-K for the year ended 
              June 30, 1992).                                             -
 
          d.  Form of Contract entered into with respect to 
              Executive Supplemental Retirement Plan (incorporated
              by reference to the Company's Form 8 dated May 2, 1991).    -
 
          e.  Written description of the Company's Retired 
              Director Consulting Plan (incorporated by reference 
              to the Company's Form 8 dated May 2, 1991).                 -

          f.  Form of Performance Share Agreement entered into 
              with respect to the Special Equity Performance 
              Plan (incorporated by reference to Exhibit 10(g) 
              contained in the Annual Report on Form 10-K for 
              year ended June 30, 1995).                                  -

          g.  Executive Supplemental Retirement Agreement with 
              John L. Jones (incorporated by reference to 
              Exhibit 10(h) contained in the Annual Report on
              Form 10-K for year ended June 30, 1995).                    -
 
          h.  Deferred Compensation Plan (incorporated by 
              reference to Exhibit 10(h) contained in the 
              Annual Report on Form 10-K for the year ended
              June 30, 1996.                                              -

          i.  Employment and Separation Agreement dated 
              November 11, 1996 with John L. Jones.                       -

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          j.  Employment and Separation Agreement dated 
              February 3, 1997 with Charles W. Schmid.                    -
 
       11.    Computation of earnings per share.                          -
 
       21.    List of Company's subsidiaries.                             -
 
       23.    Consent of Independent Auditors.                            -
 
       27.    Financial Data Schedule.                                    -
 


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                                PART I


Item 1.  BUSINESS

 (a) The Company is a Minnesota corporation, incorporated in 1906.  The Company
     provides products and services that help people celebrate achievement,
     reward performance, recognize service and commemorate experiences
     throughout their lives. Products and services include: yearbooks, class
     rings, graduation products, student photography packages, customized
     business performance and service awards, sports awards and customized
     affinity products.

     In October 1996, a joint venture agreement was formed to begin selling the
     Company's products in Chile beginning in 1997.  The Company's commitment to
     provide financing to the joint venture is insignificant.

     In November 1996, the Company announced plans to perform a test project by
     shifting a small percentage of its lustrium ring finishing volume from
     facilities in Attleboro, Massachusetts, and Denton, Texas, to Nuevo Laredo,
     Mexico.  Jostens oversees the Mexican facility which is being operated
     under a contract manufacturing agreement.  Based on the successful results
     of the test project, the Company announced in February 1997 that virtually
     all lustrium ring finishing would be transferred to the facility in Mexico
     in 1997.

     In July 1996, the Company closed its Winnipeg, Manitoba, jewelry
     manufacturing facility and transferred production to the Denton, Texas
     plant.  Additionally, a photography plant in Lachine, Quebec was closed in
     November 1996 with processing volume transferred to the Winnipeg facility.

     In September 1995, the Company repurchased 7,011,108 shares of its common
     stock, the maximum number of shares allowable for purchase, for $169.3
     million through a Modified Dutch Auction tender offer.  The repurchase was
     funded from the Company's cash and short-term investment balance, as well
     as short-term borrowings.

     In June 1995, Jostens sold its JLC curriculum software subsidiary to a
     group led by Bain Capital, Inc. for $50 million in cash; a $36 million
     unsecured, subordinated note maturing in eight years with a stated interest
     rate of 11 percent; and a separate $4 million note with a stated interest
     rate of 8.3 percent convertible into 19 percent of the equity of Jostens
     Learning, subject to dilution in certain events.  The notes were recorded
     at fair value, using an estimated 20 percent discount rate on the $36
     million note resulting in a discount of $9.9 million.

     As part of the JLC sale, Jostens also agreed to pay $13 million over two
     years to fund certain JLC existing liabilities; $12.4 million has been paid
     through December 28, 1996.  The remaining $600,000 has been accrued as part
     of other accrued liabilities.

     In October 1995, the Company sold its Wicat Systems business to Wicat
     Acquisition Corp., a private investment group.  Wicat Systems was the
     small, computer-based aviation training subsidiary of JLC that was retained
     in the sale of JLC, but held for sale.  The Company received $1.5 million
     in cash plus a promissory note for approximately $150,000 from the sale.
     The Company treated Wicat Systems as a discontinued operation in June 1995,
     pending the sale of the business.

     A transaction gain of $11.1 million ($5.8 million after tax) was originally
     recorded at the time of the JLC sale and deferred in accordance with the
     Securities and Exchange Commission Staff Accounting Bulletin No. 81, Gain
     Recognition on the Sale of a Business or Operating 

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     Assets to a Highly Leveraged Entity. In the second quarter of fiscal 1996,
     the deferred gain increased to $17.2 million ($9.7 million after tax) as a
     result of the sale of Wicat ($5.3 million) and some accrual settlements
     ($800,000).

     In conjunction with JLC's efforts to raise additional equity capital for
     ongoing cash requirements, JLC requested that the Company restructure its
     interests in JLC.  On November 8, 1996, the Company restructured terms of
     its $36 million, unsecured, subordinated note from JLC in conjunction with
     a third party equity infusion into JLC.  Terms of the restructuring
     resulted in the exchange of the $36 million unsecured, subordinated note
     and accrued interest for a new $57.2 million unsecured, subordinated note
     maturing on June 29, 2003, with a stated interest rate of 6 percent and
     rights to early redemption discounts.  The early redemption discounts,
     exercisable only in whole at JLC's option, adjust periodically and ranged
     from a 70 percent discount on the face value if redeemed by December 28,
     1996, to 40 percent if redeemed by March 31, 2003.  The new note was
     recorded at fair value using an estimated 20 percent discount rate on the
     $57.2 million note resulting in a discount of $35.1 million.  The
     restructuring had no impact on the net carrying value of Jostens'
     investment in JLC as the $4 million reduction in the note receivable's
     carrying value was offset by a corresponding reduction in the deferred gain
     to $13.2 million ($7.3 million after tax) at December 28, 1996.

     The adjusted $13.2 million gain and interest on the notes receivable will
     be deferred until cash flows from the operating activities of JLC are
     sufficient to fund debt service, dividend or any other covenant
     requirements.  The deferred gain is presented in the condensed consolidated
     balance sheet as an offset to notes receivable.  The notes receivable
     balance represents amounts owed by JLC related to the sale of JLC net of a
     $35.1 million discount and the deferred gain. Despite the equity infusion
     and restructuring of Jostens interests in JLC, there is no guarantee that
     JLC will be able to repay the note. JLC has incurred losses in both 1996
     and 1995, however, the Company believes that such carrying value is not
     impaired based on current facts and circumstances.

     In the fourth quarter of fiscal 1994, the Company recorded an $8.5 million
     restructuring charge ($5.1 million after tax, or 12 cents per share)
     related to continuing operations, covering headcount reductions in the
     general and administrative functions.  Jostens also recorded a
     restructuring charge of $60.9 million ($40.2 million after tax, or 88 cents
     per share) related to JLC, which has been reclassified as part of
     discontinued operations.  The restructuring charge relating to JLC included
     $39.1 million to focus its product development, $7.3 million to exit both
     direct and indirect investments in three ancillary lines of business, $4.1
     million to exit the hardware sales and service business, and $10.4 million
     for work-force reductions.

     In the third quarter of fiscal 1994, the U.S. Photography business closed
     leased facilities in Clinton, Mississippi, and Lake Forest, California, and
     transferred production to owned facilities in Webster, New York, and
     Winnipeg, Manitoba.  In the third quarter of fiscal 1995, the U.S.
     Photography business also closed its Jackson Mississippi facility,
     transferring production to Webster, New York, and Winnipeg, Manitoba.

     In January 1994, Jostens sold its Sportswear business to a subsidiary of
     Fruit of the Loom for $46.7 million in cash. Jostens recognized an $18.5
     million gain ($11 million after tax) on the sale, primarily because the
     Sportswear business had been written down by $15 million to its then
     estimated net realizable value.

     In October 1996, the Company elected to change its fiscal year 
     end from June 30 to the Saturday closest to December 31, effective 
     December 29, 1996, to enable better planning 

                                       6
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     and internal management of its businesses. There have been no material
     changes in the mode in which the Company has conducted its business during
     the July 1, 1996 to December 28, 1996 period (the "1996 Transition
     Period").

 (b) The Company's operations are classified into two business segments: school-
     based recognition products and services (School Products) and longevity and
     performance recognition products and services for businesses (Recognition).
     Business segment financial information is in the financial statement
     footnote "Business Segment Information" included on pages 46 through 48 of
     this Form 10-K.

(c)  The Company's two business segments sell their products in elementary
     schools, high schools, colleges and businesses in the 50 United States and
     some foreign countries through a sales force of approximately 1,080
     independent representatives.  In fiscal 1995, the Company had a
     discontinued operation (JLC) which produced educational software for
     students in kindergarten through grade 12.  The JLC discontinued operation
     included JLC's Wicat subsidiary which was subsequently sold in fiscal 1996.
     In fiscal 1994, the Company had a discontinued operation (Sportswear),
     which manufactured and marketed decorated sportswear to retail outlets and
     schools.

     SCHOOL PRODUCTS SEGMENT

     School Products recognizes individual and group achievement and affiliation
     primarily in the academic market. School Products comprises five
     businesses: Printing & Publishing, Jewelry, Graduation Products, U.S.
     Photography and Jostens Canada. The School Products segment's sales of $236
     million in the 1996 Transition Period included these five lines of business
     and $3.5 million in other sales.

     Because of the seasonal nature of the Company's business, the results of
     operations for the six month period ended December 28, 1996, are not
     necessarily indicative of the results for the previous fiscal years ended
     June 30, 1996, 1995 and 1994. No major change in business mix was
     experienced during the 1996 Transition Period when compared to the
     comparable prior year period.
 
     Printing & Publishing: Jostens manufactures and sells student-created
     yearbooks in elementary schools, junior high schools, high schools and
     colleges. Independent sales representatives and their associates work
     closely with each school's yearbook staff (both students and a faculty
     adviser), assisting with the planning, editing, layout and printing
     scheduling until the book is completed. Jostens' sales representatives work
     with the faculty advisers to renew yearbook contracts each year. This
     business also provides commercial printing of annual reports, brochures,
     and promotional books and materials. Printing & Publishing contributed
     approximately 30% of sales volume to this segment in the 1996 Transition
     Period and 37%, 36% and 35% in fiscal years 1996, 1995 and 1994,
     respectively.

     Jewelry: Jostens manufactures and sells rings representing a graduating
     class primarily to high school and college students. This product line
     contributed approximately 38% of the sales volume of this segment in the
     1996 Transition Period and 28%, 27% and 27% in fiscal years 1996, 1995 and
     1994, respectively. Many schools have only one supplier to its students
     each year. Rings may be sold through bookstores, other campus stores,
     retail jewelry stores as well as within the school through temporary order-
     taking booths. Jostens, through its independent sales representatives,
     manages the entire process of interacting with the student through ring
     design, promotion, ordering and presentation to relieve school officials of
     any administrative burden connected with students purchasing this symbol of
     achievement.

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<PAGE>
 
     Graduation Products: Jostens manufactures and sells graduation
     announcements, diplomas and caps and gowns to students and administrators
     in high schools and colleges. This product group contributed approximately
     12% of sales volume to this segment in the 1996 Transition Period and 23%,
     24% and 23% of sales to this segment in fiscal years 1996, 1995 and 1994,
     respectively. Jostens independent sales representatives make calls on
     schools and sales are taken through temporary order-taking booths.

     Photography: Jostens U.S. Photography provides student pictures and senior
     portraits to elementary, junior high and high school students through its
     sales force and dealer network, which arrange the sittings/shootings at
     individual schools or in their own studios. This business contributed
     approximately 8% of sales volume to this segment in the 1996 Transition
     Period and 4%, 4% and 5% in fiscal years 1996, 1995 and 1994, respectively.
     Jostens processes the photos at its plants in the U.S. and Canada.

     Jostens Canada: Jostens is the leader in school photography, yearbooks and
     class rings in Canada. Appproximately 72% of the 1996 Transition Period
     sales volume within Canada was attributable to school photography. This
     product group contributed approximately 10% of sales to this segment in the
     1996 Transition Period and 7% in fiscal 1996 and 1995 and 8% in fiscal
     1994.

     MARKETS: School Products serves elementary schools, middle schools, high
     schools, colleges, alumni associations and other organizations in the
     United States and Canada through approximately 990 independent sales
     representatives. Jostens also maintains an international sales force
     covering about 50 countries servicing primarily American schools and
     military installations.

     PRODUCTS: School products include elementary through college yearbooks,
     commercial printing, desktop publishing curriculum kits, class rings,
     graduation caps and gowns, graduation announcements and accessories,
     diplomas, alumni products, individual and group school pictures, group
     photographs for youth camps and organizations, and senior graduation
     portraits.

     SALES FORCE: The School Products segment markets its products primarily
     through independent sales representatives. Approximately 450 persons are
     dedicated to selling class rings and graduation products, 340 to yearbooks
     and 200 to photography.

     During fiscal 1996, the Company was approached by a group of sales
     representatives seeking changes in their agreements with Jostens.  All of
     the Company's sales representatives have similar contractual arrangements,
     and the Company does not anticipate substantial changes to that
     relationship with the majority of sales representatives.

     For approximately 50 representatives who serve the college market, the
     Company decided to change their contract status from independent sales
     representatives to Company employees effective July 1, 1997.  This change
     in the role and activities of the sales representatives is being made to
     better enable the Company to address market needs and over time strengthen
     its position in the market.  These representatives' current contracts call
     for a transition commission, which historically has been paid by the new
     sales representatives who assumed responsibility for the accounts of the
     outgoing representative, with the Company acting as a collection agent.
     Those representatives who agree to become employees of the Company will
     forgo their right to the transition commission in exchange for
     participation in a newly created severance plan as well as other employee
     benefit programs.  The Company will record this severance liability ratably
     over their estimated service period as employees.  Those representatives 
     who elect not to become employees will receive future transition payments 
     from the Company in exchange for signing an agreement not to compete.  
     These payments will be provided over the non compete period.  Payments in 
     future years relating to the severance plan and transition commissions are
     estimated to

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     aggregate approximately $9 million which management expects to be partially
     offset by reduced operating costs. Management believes that this contract
     change will have positive business results and the associated liabilities
     will not have a material negative impact during future reporting periods.

     SEASONALITY: This product segment experiences a strong seasonality
     concurrent with the school year with 40-50 percent of full-year sales and
     65-70 percent of full-year profits occurring in the period from April to
     June. The business generally requires short-term financing during the
     course of the year.

     COMPETITION:  The business of the School Products segment is highly
     competitive, primarily in the pricing, product development and 
     marketing areas.

     Printing & Publishing competition is primarily made up of two national
     firms (Herff Jones and Taylor Publishing) and one smaller regional firm
     (Walsworth Publishing).  All compete on price, print quality, product
     offerings and service.  Technological offerings in the way of computer
     based curricula are becoming a more significant market differentiator.
 
     In the class ring business, the Company has two primary national
     competitors: Herff Jones and Commemorative Brands, Inc. (CBI) (recent
     merger of Balfour and Artcarved), each with distinct distribution methods.
     Herff Jones distributes its product in schools, in a manner similar to the
     Company, while CBI distributes its product through multiple distribution
     channels including schools, independent jewelers and mass merchandisers 
     like Wal-Mart.  Gold Lance is another competitor that markets through the 
     retail channel, primarily independent jewelers.

     In the Graduation Products business, several national and numerous local 
     and regional competitors offer products similar to those of the Company.

     In the Photography area, the Company competes with Lifetough, Olan Mills,
     Herff-Jones, and a variety of regional and locally owned and operated
     photographers that process product in small batches in the U.S. In Canada,
     the Company competes with Lifetouch and a variety of regional and locally
     owned and operated photographers.

     The Company's strategy for competing with these companies is based on its
     service and quality.
 
     RECOGNITION SEGMENT
 
     The Recognition segment helps companies promote and recognize achievement
     in people's careers. It designs, communicates and administers programs to
     help customers improve performance and employee service. Jostens provides
     products and services that reflect achievements in service, sales, quality,
     productivity, attendance, safety and retirements. It also produces awards
     for championship team accomplishments and affinity products for
     associations.

     This business manufactures and markets a wide variety of products sold
     primarily to corporations and businesses in the United States and Canada.
     The products manufactured by Recognition include customized and
     personalized jewelry, rings, watches and engraved certificates. In
     addition, this business also remarkets items manufactured by others for
     incorporation into programs sold to Recognition customers. These products
     include items supplied by Lenox, Hartmann, Waterman, Kirk Stieff and
     Oneida.

     MARKETS: Recognition serves customers from small and mid-size companies to
     global corporations, professional and amateur sports teams and special
     interest associations.

                                       9
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     PRODUCTS: Recognition offers a wide assortment of products and services
     tailored to the needs of the organization it is serving. For global
     companies, Jostens customizes programs to meet specific customer needs.

     Standardized programs, such as Symphony/TM/ and Cresendo/TM/, provide small
     and mid-size companies the same product and service features without
     complex customization. Recognition enjoys exclusive product and
     personalization distributor arrangements offering such products as Hartmann
     luggage and Lenox china for the service award marketplace.

     SALES FORCE: Recognition sells its products through approximately 90
     independent sales representatives who develop programs incorporating
     Recognition products.

     COMPETITION: The Recognition business competes primarily with O.C. Tanner
     and the Robbins Company on a national basis as well as several regional
     recognition companies. Recognition focuses on service and product offerings
     in competing with these companies.

     JOSTENS INC. -- INFORMATION REGARDING ALL BUSINESSES

     BACKORDERS: Because of the nature of the Company's business, generally all
     orders are filled within a few months from the time of placement. However,
     the School Products Segment obtains student yearbook contracts in one year
     for a significant portion of the yearbooks to be delivered in the next
     year. Often the prices of the yearbooks are not established at the time of
     the order because the content of the books may not have been finalized.
     Subject to the foregoing qualifications, the Company estimates that as of
     December 28, 1996, the backlog of orders related to continuing operations
     was approximately $294.1 million compared with $283.6 million at 
     December 31, 1995, primarily related to student yearbooks and graduation
     products. The Company expects most of the backlog orders to be confirmed
     and filled during 1997.

     ENVIRONMENTAL: As part of its continuing environmental management program,
     Jostens is involved in various environmental improvement activities. As
     sites are identified and assessed in this program, the Company determines
     potential environmental liability. Factors considered in assessing this
     liability include, among others, the following: whether the Company has
     been designated as a potentially responsible party, the number of other
     potentially responsible parties designated at the site, the stage of the
     proceedings, and available environmental technology. As of December 28,
     1996, the Company has identified four sites which require further
     investigation. However, the Company has not been designated as a
     potentially responsible party at any site.

     During the six month period ended December 28, 1996, Jostens adopted the
     provisions of Statement of Position (SOP) 96-1, Environmental Remediation
     Liabilities. The provisions of SOP 96-1 do not differ substantially from
     the accounting treatment previously followed by the Company. Under SOP 
     96-1, the Company is required to assess the likelihood that an
     environmental liability has been incurred and accrue for the best estimate
     of any loss where the likelihood of incurrence is assessed as probable and
     the amount can be reasonably estimated. Management has assessed the
     likelihood that a loss has been incurred at its sites as probable and,
     based on findings included in a preliminary remediation report received in
     January 1997, estimates the potential loss to range from $1.7 million to
     $9.7 million. Based on a review of the remediation alternatives outlined in
     the report, management believes that the best estimate of the loss is $6.6
     million. The Company recorded a charge to operations of $6 million during
     the six months ended December 28, 1996, to increase the liability for
     environmental costs to the revised best estimate amount contained in the
     preliminary remediation report.

                                       10
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     The Company does not believe that compliance with federal, state, and local
     provisions protecting the environment will have a material affect upon its
     future capital expenditures, earnings or competitive position.

     RAW MATERIALS: All of the raw materials used by the Company are available
     from several sources. Gold is an important raw material and accounted for
     approximately 11% of the Company's cost of products sold for the six months
     ended December 28, 1996. For the fiscal years ended June 30, 1996, 1995 and
     1994, raw material accounted for approximately 10%, 10%, and 9%,
     respectively, of the Company's cost of products sold.

     INTELLECTUAL PROPERTY: The Company has no patents, licenses, franchises or
     concessions that are material to the Company as a whole, but does have a
     number of proprietary trade secrets, trademarks and copyrights that it
     considers important. In addition, licenses are an important part of certain
     aspects of the Company's businesses; however, the loss of any license would
     not have a material affect on the Company's operations.

     SIGNIFICANT CUSTOMERS: No material part of any business of the Company
     depends upon a single customer or very few customers.

     FEDERAL GOVERNMENT CONTRACTS: No material portion of the Company's business
     is subject to renegotiation of profits or the termination of contracts or
     subcontracts at the election of the United States Government.

     EMPLOYEES: At December 28, 1996, the total number of employees of the
     Company was approximately 6,300 (not including independent sales
     representatives). Because of seasonal fluctuations and the nature of the
     business, the number of employees tends to vary.

 (d) The Company's foreign sales are derived primarily from operations in Canada
     and the United Kingdom.  The accounts and operations of the Company's
     foreign businesses are not material.  Local taxation, import duties,
     fluctuation in currency exchange rates and restrictions on exportation of
     currencies are among risks attendant to foreign operations, but these risks
     are not considered material with respect to the Company's business.  The
     profit margin on foreign sales is approximately the same as the profit
     margin on domestic sales.

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Item 2.   PROPERTIES
 
          The principal plants, which are owned by the Company unless otherwise
          noted, are as follows:



                                                                   Approximate
                                                                     Area in
Location                           Principal Products              Square Feet
--------                           ------------------              -----------
                                                                             
Attleboro, Massachusetts           Class Rings                        52,000  
Denton, Texas                      Class Rings                        57,000  
Laurens, South Carolina            Caps and Gowns                     98,000  
Laurens, South Carolina*           Caps and Gowns                    105,000  
Porterville, California            Graduation Products                92,000  
Red Wing, Minnesota                Graduation Products               132,000  
Shelbyville, Tennessee             Graduation Products                87,000  
Burnsville, Minnesota *            Scholastic Support                 44,000  
Edina, Minnesota *                 Scholastic Support                 15,000  
Owatonna, Minnesota  **            Scholastic Support                154,000  
Owatonna, Minnesota *              Scholastic Support                 24,000  
Memphis, Tennessee                 Recognition Awards                 67,000  
Princeton, Illinois                Recognition Awards                 65,000  
Sherbrooke, Quebec***              Recognition Awards                 15,000  
Clarksville, Tennessee             Yearbooks                         105,000  
State College, Pennsylvania        Yearbooks                          66,000  
Topeka, Kansas                     Yearbooks                         236,000  
Visalia, California                Yearbooks                          96,000  
Winston-Salem, North Carolina      Yearbooks/Commercial Printing     132,000  
Anaheim, California*               Photography Retail                 11,500  
Montreal, Quebec*                  Photography Products                7,000  
Webster, New York                  Photography Products               60,000  
Webster, New York  *               Photography Products               10,000  
Winnipeg, Manitoba                 Photography and Yearbooks          69,000  
Winnipeg, Manitoba *               Class Rings                        11,000  

Executive offices are located in a general offices building owned by the
Company, which has approximately 116,000 square feet and is located in a
Minneapolis, Minnesota suburb.  A portion of this facility has been financed
through the issuance of revenue bonds.

                                       12
<PAGE>
 
Item 2.   PROPERTIES  (continued)
          
*  Represents leased properties with the following expiration dates.  The
Company expects to renew those leases expiring in 1997 with the exception of the
Montreal facility and Winnipeg Ring Plant.
 
                     Anaheim                1998         
                     Burnsville             1997         
                     Edina                  1999         
                     Laurens                1997         
                     Montreal               1997         
                     Owatonna               2001         
                     Webster                1997         
                     Winnipeg:                           
                      Ring Plant            1997   (Announced closing in 
                                                    July 1996; lease expired
                                                    February 28, 1997)
                      Extension of
                       Photo Plant          1997
                      General
                       Offices              1998
 
**   Several locations.

***  A written letter of intent was signed during the Transition 
     Period to enter into a sale-leaseback arrangement for the 
     Sherbrooke, Quebec property.

Item 3.  LEGAL PROCEEDINGS

          There are no material pending or threatened legal, governmental,
          administrative or other proceedings to which the Company or any
          subsidiary as a defendant or plaintiff is subject.

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

          None.

                                       13
<PAGE>
 
                                PART II

Item 5.   MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
          SECURITY HOLDER MATTERS

Jostens common stock is traded on the New York Stock Exchange (symbol: JOS).
There were approximately 7,900 shareholders of record as of March 17, 1996.  See
additional information in Item 8 under "Unaudited Quarterly Financial Data".

                                       14
<PAGE>
 
Item 6.   SELECTED FINANCIAL DATA

The following table sets forth selected financial data for the Company and its
subsidiaries for the six months ended December 28, 1996, the six months ended
December 31, 1995 (unaudited) and the fiscal years ended June 30, 1996, 1995,
1994, 1993, 1992 and 1991.
Financial Summary--Jostens Inc. and Subsidiaries

<TABLE> 
<CAPTION> 
                                         AS OF AND FOR THE
                                         SIX MONTHS ENDED
                                    ----------------------------
                                                    DECEMBER 31,               AS OF AND FOR THE YEARS ENDED JUNE 30,
 (Dollars in millions,               DECEMBER 28,       1995       --------------------------------------------------------------
 except per-share data)                  1996        (UNAUDITED)        1996        1995      1994      1993      1992      1991
---------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>            <C>             <C>         <C>        <C>       <C>       <C>       <C> 
Statement of Operations 
Net Sales                            $    277.1     $    263.5      $  695.1    $  665.1   $ 649.9   $ 634.8   $ 639.2   $ 632.1
Cost of Products Sold                     141.5          119.6         332.2       313.7     313.8     310.4     314.0     311.3
Net Interest Expense                        4.1            2.5           7.3         0.7       5.0       5.7       8.7      10.2
Income Taxes                                0.8           10.1          35.9        38.0      20.5      10.7      29.8      27.5
Income (Loss)-Continuing Operations        (0.8)          14.5          51.6        55.9      28.0       8.5      45.2      45.0
Return on Sales-Continuing Operations      (0.3%)          5.5%          7.4%        8.4%      4.3%      1.3%      7.1%      7.1%
Net Income (Loss)                          (0.8)          14.5          51.6        50.4     (16.2)    (12.7)     59.2      61.6
Return on Investment                       (0.7%)          7.6%         26.3%       19.1%     (5.7%)    (3.7%)    16.9%     19.6%
---------------------------------------------------------------------------------------------------------------------------------
Balance Sheet Data
Current Assets                       $    247.8     $    265.2      $  251.3    $  402.4   $  396.1  $ 401.6   $ 436.3   $ 389.4
Working Capital                             4.7          (15.7)          8.9       206.3      172.7    185.3     232.2     167.7 
Current Ratio                               1.0            0.9           1.0         2.1        1.8      1.9       2.2       1.8
Property and Equipment                    210.9          201.4         188.3       184.6      207.6    218.9     207.4     192.3
Total Assets                              381.2          412.5         384.0       548.0      569.8    613.5     643.3     596.4
Notes Payable                              97.7           92.3          27.6           -          -        -         -      35.2
Long-term debt, including 
 current maturities                         3.9            3.9          53.9        54.3       54.8     55.3      79.4      53.4
Shareholders' investment                  112.6          110.0         121.8       270.6      256.6    315.7     364.7     333.6
---------------------------------------------------------------------------------------------------------------------------------
Common Share Data
EPS-Continuing Operations            $   (0.02)     $     0.35      $   1.28    $   1.23   $   0.61  $   0.19  $   1.00  $  1.01
EPS-Net Income (Loss)                    (0.02)           0.35          1.28        1.11      (0.36)    (0.28)     1.32     1.38
Cash Dividends Declared(1)                0.22            0.44          0.88        0.88       0.88      0.88      0.84     0.80
Book Value                                2.91            2.85          3.15        5.95       5.64      6.95      8.10     7.46
Common Shares Outstanding                 38.7            38.6          38.7        45.5       45.5      45.4      45.0     44.7
Stock Price High                        22 1/4          25 1/8        25 1/8      21 5/8     20 7/8    31 1/4    37 3/8   37 5/8
Stock Price Low                         17 1/4          20 7/8        19 1/2      15 3/4     15 1/8    16 1/2    24 1/8   23 1/2
---------------------------------------------------------------------------------------------------------------------------------
</TABLE> 
(1) No cash dividend was declared due to the timing of the declarations. The
first quarter dividend of $.22 per share was declared in the second quarter of
the six month period ended December 28, 1996. The second quarter dividend of
$.22 per share was declared in January 1997.

The financial information above reflects JLC, Wicat Systems and Sportswear as
discontinued operations. Restructuring charges totaling $8.5 million and $40.2
million were recorded in continuing operations and $60.9 million and $25.4
million in discontinued operations in the fourth quarters of fiscal 1994 and
1993, respectively. In fiscal 1994, $16.9 million was recorded for provisions
related to revised estimates of reserves for inventories, receivables and
overdrafts. Net income for fiscal 1993 reflects the cumulative effect of
adopting SFAS No. 106 of $6.7 million ($4.2 million after tax, or 9 cents per
share). Net income for fiscal 1995 reflects the cumulative effect of adopting
SFAS No. 112 of $1.1 million ($600,000 after tax or one cent per share). Net
loss for the 1996 Transition Period ended December 28, 1996, includes an
additional $16.9 million (26 cents per share) in cost of products sold related
to the implementation of the new inventory cost accounting system as well as $6
million (9 cents per share) in environmental charges to cover continued
environmental investigation and clean-up.

                                       15
<PAGE>
 
Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION
 
In October 1996, the Company elected to change its fiscal year end from June 30
to the Saturday closest to December 31, effective December 29, 1996, to enable
better planning and internal management of its businesses. The Company's
Consolidated Financial Statements and Notes thereto include the Company's
results of operations and cash flows for the six-month period from July 1, 1996
through December 28, 1996 as well as the results of operations and cash flows
based on the Company's previous fiscal years ended June 30, 1996, 1995 and 1994.

This discussion summarizes significant factors that affected the consolidated
operating results, financial condition and liquidity of Jostens Inc. in the 1996
Transition Period and the three fiscal years ended June 30, 1996.  Material in
this section reflects the October 1995 sale of the Wicat Systems business,  the
June 1995 sale of the Company's Jostens Learning Corporation (JLC) subsidiary
and the January 1994 sale of the Sportswear business, all of which are treated
as discontinued operations in the statements of consolidated operations
presented in this report.


RESULTS OF OPERATIONS
 
SIX MONTHS ENDED DECEMBER 28, 1996 COMPARED WITH THE SIX MONTHS ENDED
DECEMBER 31, 1995

Sales in the 1996 Transition Period increased 5 percent to $277.1 million from
$263.5 million in the comparable prior year period. The 1996 Transition Period
sales increase was fueled by continued gains in the Company's three primary
business lines - Printing and Publishing, Jewelry and Graduation Products.
Price increases during the 1996 Transition Period varied by business and ranged
from 0 to 4 percent, reflecting the Company's continued efforts to minimize
price increases.  Gross margins in the 1996 Transition Period were 48.9 percent
compared with 54.6 percent in the year earlier period.  The 5.7 percent decline
primarily reflects the July 1996 implementation of a new inventory cost
accounting system which provides more precise, detailed performance information
by product within each line.  The new system results in a more accurate
valuation of inventories and recording of cost of products sold during the
individual quarters, consistent with the manner used to value inventory at
previous June year ends.  The use of this more precise information will have no
effect on annual results.  However, cost of products sold reported during the
six months ended December 28, 1996 was higher than that which would have been
reported using the prior method, with an equivalent positive effect expected in
the six months ending June 30, 1997.  The new inventory cost accounting system
contributed to an estimated $16.9 million increase in cost of products sold and
an estimated $.26 decline in earnings per share for the six months ended
December 28, 1996.

Selling and administrative expenses increased to $131.5 million from $116.9
million in the year-earlier period.  The increase primarily relates to the
recognition of an additional $6 million in reserves to cover continued
environmental investigation and clean-up (see additional discussion in the
commitments and contingencies section) along with increased commission expense
associated with higher sales.  As a percentage of sales, these expenses were
47.4 percent in the 1996 Transition Period compared with 44.3 percent for the
period ended December 31, 1995.

The Company's strong cash position at June 30, 1995, eliminated the need for
short-term borrowing until the Company repurchased 7 million shares of its
common stock for $169.3 million through a 

                                       16
<PAGE>
 
Modified Dutch Auction tender offer in September 1995. The repurchase was funded
from the Company's cash and short-term investments balance, as well as short-
term borrowings. As a result of the repurchase and subsequent reduction in cash
and short-term investment balances, 1996 Transition Period interest income
decreased $1.7 million from the comparable prior year period.

The seasonality of the Company's school products segment combined with the
effect of changing the fiscal year end caused the Company's effective tax rate
for the entire 1996 Transition Period to increase substantially from the 41%
rate used in the previous fiscal year.  The effective income tax rate for the
twelve-month period beginning December 29, 1996, is expected to return to a rate
comparable with historical twelve-month periods.  As a result of the JLC
restructuring, the Company generated a net operating loss (NOL) for tax purposes
of approximately $16.7 million for the six month period ended December 28,
1996, which will expire in the year 2011.  As a condition to granting Jostens
permission to change its accounting period to a calendar year, the IRS requires
this NOL to be carried forward to offset taxable income in equal amounts in each
of the six succeeding taxable years.  Based on historical profitability levels
as well as projected income levels in future years, management expects the
benefit of this NOL to be realized prior to its expiration.

The 1996 Transition Period net loss was $.8 million ($.02 per share) compared
with net income in the year-earlier period of $14.5 million ($.35 per share).

SCHOOL PRODUCTS SEGMENT
Sales in this segment increased 5.6 percent to $236 million in the 1996
Transition Period, compared with $223.6 million in the comparable prior year
period.  The sales increase was primarily driven by gains in the Printing and
Publishing, Jewelry and Graduation Products businesses which recorded 1996
Transition Period sales of $71.6, $90 and $28.7 million, respectively.

Printing and Publishing currently has about half of the yearbook pages for the
1997 spring deliveries in-plant and is tracking school submissions and plant
cycle times to maximize production efficiencies and ensure smooth deliveries.

In Jewelry, overall rings sold increased approximately 4 percent with a slightly
higher percentage increase for high school rings.  Unit gains continue to result
from the prior year's repositioned ring program along with initial, positive
reception to the Company's millennium collection of rings customized for the
high school classes of 1999, 2000 and 2001.  Results through December 1996 put
the Company on track for a third straight year of unit-volume improvement after
a 12-year decline.

In Graduation Products, the average sales dollars per customer and the number of
customers who purchase products are up from the previous fiscal year end,
however, these amounts are expected to decline by June 1997 to levels slightly
below those of the previous fiscal year end.

In the Photography business, sales increased 5.6 percent to $18.7 million
compared with $17.7 million for the comparable prior year period.  Sales growth
was fueled by the addition of several new retail sites along with year-over-year
sales increases at existing retail locations.  Despite the sales increase,
profitability slipped back due to start-up problems associated with
manufacturing a new borderless print product.

Jostens Canada sales were $23.5 million, compared with $24.1 million in the
year-earlier period.  The decline primarily resulted from fewer graduation
portrait and jewelry orders.  Currency exchange rate fluctuations partially
offset the sales decline.  In July 1996, the Company closed its ring
manufacturing plant in Winnipeg, Manitoba, and shifted production to a facility
in Denton, Texas.  In addition, a photography facility in Montreal, Quebec, was
closed in January 1997 with production shifting to the Winnipeg facility.

                                       17
<PAGE>
 
RECOGNITION SEGMENT
Recognition sales increased 2.8 percent to $41.1 million compared with sales in
the year-earlier period of $40 million.


FISCAL 1996 COMPARED WITH FISCAL 1995

Jostens' sales from continuing operations increased 5 percent in fiscal 1996, to
$695.1 million from $665.1 million in fiscal 1995. The 1996 sales increase was
driven by gains in the Company's three largest business lines -- Printing &
Publishing, Jewelry and Graduation Products. There were minimal price increases
in 1996, reflecting a continued effort to reduce price increases. Gross margins
in 1996 were 52.2 percent, compared with 52.8 percent in 1995. The margin
decline in 1996 resulted from higher than expected manufacturing costs incurred
to handle record page volume and meet yearbook delivery commitments as sales
volumes shifted to the fourth quarter.

Selling and administrative expenses increased to $268.1 million in 1996 from
$256.8 million in 1995. The 1996 increase in selling and administrative expenses
was primarily due to planned investments in the businesses, including marketing
materials, business development and pilot projects for new business as well as
increased commission rates for class rings and graduation products.  As a
percentage of sales, these expenses remained consistent at 38.6 percent in 1996
and 1995.

In September 1995, the Company repurchased 7 million shares of its common stock
for $169.3 million through a Modified Dutch Auction tender offer.  The
repurchase was funded from the Company's cash and short-term investment balance,
as well as short-term borrowings.  The result was an increase in 1996 interest
expense of $4 million. In addition, interest income decreased $2.6 million from
1995 as the Company maintained lower cash balances following the share
repurchase.

Net income for 1996 was $51.6 million, compared with $50.4 million in 1995.
Earnings per share were $1.28 in 1996, compared with $1.11 in 1995. Earnings per
share from continuing operations prior to the change in accounting principle,
discontinued operations and restructuring charges were $1.28 in 1996 compared
with a $1.23 in 1995.

SCHOOL PRODUCTS SEGMENT.
Sales in this segment increased 5.3 percent to $594.9 million in fiscal 1996,
compared with $565 million in 1995.  Record sales were recorded in the Printing
& Publishing ($217.2 million), Jewelry ($166.4 million) and Graduation Products
($138.5 million) businesses in fiscal 1996.

Printing & Publishing produced a record number of yearbook pages in 1996,
reflecting success at retaining current accounts and winning new accounts.  This
business also successfully positioned itself as the preferred yearbook supplier
in the industry, based on customer surveys.

In Jewelry, nearly 10 percent more high school rings were sold in 1996 than
1995, and the number of rings sold overall increased nearly 12 percent in 1996.
Much of the unit gain resulted from newly repositioned ring programs, including
a high school program introduced nationwide in 1996, the second straight year of
unit-volume improvement after a 12-year decline.

In Graduation Products, sales growth was driven by an increase in the number of
customers who purchased products and by an increase in the average sales dollars
per customer.

The Photography business solidified its return to profitability in 1996.  Sales
were $23.4 million, a 3 percent decline from 1995, due to the loss of a large
wholesale dealer and about 50 school accounts. However, initial efforts to build
closer ties between Photography and Printing & Publishing resulted in about $1
million in new photography sales in 1996.

                                       18
<PAGE>
 
Jostens Canada sales were $40.6 million, compared with $41.7 million in 1995.
The decline resulted from fewer graduation portrait orders and from a slightly
lower percentage of students buying school photo packages.  Currency exchange
rate fluctuations partially offset the sales decline.

The School Products segment 1996 operating profit was $107.6 million,
essentially flat with 1995 levels, despite record sales volumes in its main
business lines.  Increased selling, general and administrative expenses offset
sales increases as the Company invested in marketing materials, business
development and pilot projects for new business as well as increased commission
rates for class rings and graduation products.  Operating profit in 1996 was
also impacted by lower gross margins associated with sales volumes shifting to
the fourth quarter.
 
RECOGNITION SEGMENT.
Sales were $100.2 million compared with $100.1 million in 1995.
 
Operating profit increased 102 percent to $9.5 million in 1996, compared with
$4.7 million in 1995.  The 1996 operating profit increase reflected successful
efforts to simplify work processes, reduce costs and lower the costs associated
with carrying slow-moving and excess inventories.  Additionally, 1995 operating
profit was impacted by charges to establish an environmental reserve and abandon
a unique computer system.


FISCAL 1995 COMPARED WITH FISCAL 1994

Sales in fiscal 1995 increased 2 percent from $649.9 million in fiscal 1994.
Sales increases in 1995 were fueled by gains in the Company's three largest
business lines-- Printing & Publishing, Jewelry and Graduation Products.  Prices
for the Company's products increased 1 percent from 1994 to 1995, reflecting a
continued effort to minimize price increases. Gross margins in 1995 were 52.8
percent up from 51.7 percent in fiscal 1994.  The margin improvement resulted
from manufacturing efficiencies and cycle-time gains in the School Products
segment.

Selling and administrative expenses decreased to $256.8 million from $274.1
million in 1994.  As a percentage of sales, selling and administrative expenses
were 38.6 percent in 1995 compared with 42.2 percent in 1994.  The 1995 decrease
was primarily due to cost improvements realized through the Company's
reengineering efforts.
 
The Company's strong cash position at June 30, 1995, eliminated the need for
short-term borrowing to meet operational needs.  The result was a decrease in
interest expense of $1.4 million from fiscal 1994.  In addition, interest income
increased $2.9 million over fiscal 1994 as the Company maintained higher cash
balances and benefited from higher short-term interest rates in fiscal 1995.

Net income for fiscal 1995 was $50.4 million, compared with a loss of $16.2
million in the prior year. Net income in 1995 included an after-tax charge of
$.6 million associated with the adoption of SFAS No. 112, Employer's Accounting
for Postemployment Benefits, and a net after-tax loss on discontinued operations
of $4.9 million.  Net income in 1994 included an after-tax restructuring charge
of $5.1 million and a net after-tax loss on discontinued operations of $44.1
million.

Earnings per share were $1.11 in 1995, compared with a loss per share of $.36 in
1994.  Earnings per share from continuing operations prior to the change in
accounting principle, discontinued operations and restructuring charges were
$1.23 and $.73 in 1995 and 1994, respectively.  The earnings improvement in 1995
reflected the success of efforts to refocus on core businesses, streamline
operations and position the Company for future growth.

                                       19
<PAGE>
 
School Products Segment.
Sales in this segment increased 3 percent to $565 million in fiscal 1995,
compared with $546.2 million in fiscal 1994.  Record sales were recorded in the
Printing and Publishing ($203.1 million) and Graduation Products ($133 million)
businesses.

Growth in Printing & Publishing stemmed from successful market research and
programs targeted to win new accounts, primarily in high school yearbooks.  In
Graduation Products, the percentage of students per school who purchased product
(buy rates) improved, and the average dollar amount of products purchased by
each student increased.  In Jewelry, new marketing and pricing initiatives led
to increased sales of high school and college class rings.

Photography sales declined to $24.2 million from $27.7 million in 1994.  The
planned reduction was part of the 1993 restructuring program that included
eliminating underperforming dealers and unprofitable accounts, as well as
consolidating processing operations from five plants to two.

Jostens Canada sales declined slightly to $41.7 million from $42.3 million in
1994.  Canadian dollar sales volume was essentially flat with 1994 levels, with
currency exchange rate fluctuations accounting for most of the decline.  The
business remained steady despite organizational changes and increases in photo
processing volume, resulting from the plant consolidation program in the
photography business.

The School Products Segment generated stronger operating profit in 1995 through
a combination of sales growth and cost improvements.  Operating profit was 
$107.1 million, up 45.7 percent from $73.5 million in 1994, which included
charges for changes in estimates of $16.4 million related to inventory, accounts
receivable and overdraft reserves.
 
Recognition Segment.
Sales declined 3 percent to $100.1 million from record 1994 levels due primarily
to smaller orders per account.

Operating profit was $4.7 million in 1995 compared to $9.5 million in 1994. The
1995 decrease in operating profit resulted from some erosion in product mix and
margins, as well as charges to establish an environmental reserve ($.6 million)
and to abandon a unique computer information system ($1.1 million).


LIQUIDITY AND CAPITAL RESOURCES

Cash generated from operating activities, short-term borrowings and, in fiscal
years 1995 and 1994, net proceeds from the sale of discontinued operations, have
been Jostens principal sources of liquidity. Cash generated from these
activities has been used primarily for dividends, capital expenditures,
repayment of the $50 million medium-term notes in August 1996 and the $169.3
million share repurchase in the first quarter of fiscal 1996.

Operating activities used cash of $6.7 million in the 1996 Transition Period
primarily due to increases in inventories ($19.5 million) and other receivables
($12.7 million) combined with decreases in payables for salaries, wages and
commissions ($21.8 million) and income taxes ($20.4 million). Offsetting the
cash uses was a $38.4 million increase in customer deposits.  With the exception
of income taxes, the uses of cash reflect the seasonality of the business,
evident when comparing the June and December month-end balances.  The reduction
in income taxes payable results from timing differences on tax payments.

                                       20
<PAGE>
 
In comparison to the prior year period ended December 31, 1995, the Company used
$64 million less cash from operating activities in the 1996 Transition Period.
This reduction relates primarily to other liabilities, inventories and customer
deposits.  Other liabilities declined approximately $31.3 million more in 1995
primarily due to restructuring payments made in 1995 as result of the JLC sale.
Seasonal inventory buildups also declined between the 1996 Transition Period and
the comparable prior year period by $25.7 million, $16.9 million of which
related to the implementation of the new inventory cost accounting system with
the remaining $8.8 million tied to improved inventory management.  Customer
deposits increased $18.2 million more than the prior year period as the Printing
and Publishing business successfully accelerated the collection of yearbook
deposits.

The decrease in cash provided from operating activities in fiscal 1996 over
fiscal 1995 was primarily attributable to decreases in restructuring reserves
and retained liabilities related to discontinued operations ($21.5 million) and
the pension liability ($8.1 million), along with increases in the levels of
accounts receivable ($10.4 million) and inventory ($8.2 million) balances.  The
accounts receivable increase was driven by sales volumes shifting to the fourth
quarter as manufacturing efficiencies enabled the Company to produce products
closer to customer-selected delivery dates.  The increase in inventory was
primarily related to additional raw materials in the cap and gown business in
anticipation of a new product offering in fiscal 1997.

The decrease in cash provided from operating activities in fiscal year 1995 over
fiscal 1994 was primarily due to decreases in deferred revenues associated with
the disposition of JLC ($14.8 million), the pension liability ($5.5 million),
restructuring reserves established in prior years ($6.4 million), inventories
($2.4 million) and an increase in accounts receivable ($1.3 million). In
addition, 1994 operating cash flows benefited from significant reductions in
both accounts receivable ($37 million) and inventories ($26.3 million).

While operating cash flows were sufficient to fund capital expenditures and cash
dividends in fiscal years 1995 and 1994, the  Company returned to its typical
need for seasonal short-term borrowings in fiscal 1996 and the 1996 Transition
Period. Because most of the Company's sales volume occurs in quarters ending in
December and June, Jostens usually requires interim financing of inventories and
receivables.  Effective December 20, 1995, the Company terminated its unsecured
lines of credit and replaced them with a $150 million, five-year bank credit
agreement.  Credit available under this bank credit agreement is reduced by
commercial paper outstanding.  At December 28, 1996, $52.3 million was available
under the bank credit agreement as a result of $97.7 million in outstanding
borrowings. In addition, the Company had available unsecured demand facilities
with three banks totaling $84.7 million at December 28, 1996.  These demand
facilities are renegotiated periodically based on the anticipated seasonal needs
for short-term financing.

Average short-term borrowing was $109 million in the 1996 Transition Period and
$54.6 million in the comparable prior year period, $68.4 million in fiscal 1996,
zero in fiscal 1995 and $28.6 million in fiscal 1994 with highs of $164 million
in the 1996 Transition Period, $127 million in fiscal 1996 and $87 million in
fiscal 1994. In fiscal 1995, the Company's strong cash position, which resulted
primarily from the net proceeds from the sale of discontinued operations,
eliminated the need for short-term borrowing. As planned, short-term financing
resumed in fiscal 1996 as the Company returned $169.3 million to shareholders
through the September 1995 share repurchase. Long-term debt, including current
maturities, as a percentage of total capitalization was 1.8 percent and 21
percent at December 28, 1996 and December 31, 1995, respectively, and 26.5
percent and 16.7 percent at June 30, 1996 and 1995, respectively.

Management believes that cash generated from operating activities together with
credit available under the bank credit agreement and demand facilities, will be
sufficient to fund planned capital expenditures, dividends and seasonal build-
ups of inventories and accounts receivable in 1997.

                                       21
<PAGE>
 
CAPITAL EXPENDITURES AND PRODUCT DEVELOPMENT
 
The Company invested $9.9 million in capital expenditures in the 1996 Transition
Period, compared with $8.4 million in the comparable prior year period. The
largest investments in the 1996 Transition Period were made in the School
Products segment to upgrade processes and yearbook printing technology and to
enhance certain management information and communication systems. Capital
expenditures in fiscal 1996 were $15.4 million compared with $19.1 million in
fiscal 1995 and $15.2 million in fiscal 1994.  About $25.9 million in capital
projects are planned for 1997, including additional investments to upgrade
printing and photography technology and replace School Products, Recognition and
Corporate management information systems.  The projects are expected to be
funded internally.


DIVIDENDS
 
The Company paid $17 million to shareholders in the 1996 Transition Period
compared with $18.5 million in the six month period ended December 31, 1995.  In
fiscal 1996, $35.5 million in cash dividends were paid to shareholders.
Dividends declared in the six months ended December 28, 1996 were $.22 per share
down from $.44 per share in the comparable prior year period.  The decrease
during the 1996 Transition Period was due to the timing of declarations.  The
first quarter dividend of $.22 per share was declared in the second quarter of
the six month period ended December 28, 1996 while the second quarter dividend
of $.22 per share was declared in January 1997.

The annual dividend was 88 cents per share in fiscal 1996, 1995 and 1994.


COMMITMENTS AND CONTINGENCIES

Environmental.  As part of its continuing environmental management program,
Jostens is involved in various environmental improvement activities.  As sites
are identified and assessed in this program, the Company determines potential
environmental liability. Factors considered in assessing this liability include,
among others, the following:  whether the Company has been designated as a
potentially responsible party, the number of other potentially responsible
parties designated at the site, the stage of the proceedings, and available
environmental technology. As of December 28, 1996, the Company has identified
four sites which require further investigation.  However, the Company has not
been designated as a potentially responsible party at any site.

During the six month period ended December 28, 1996, Jostens adopted the
provisions of Statement of Position (SOP) 96-1, Environmental Remediation
Liabilities.  The provisions of SOP 96-1 do not differ substantially from the
accounting treatment previously followed by the Company.  Under SOP 96-1, the
Company is required to assess the likelihood that an environmental liability has
been incurred and accrue for the best estimate of any loss where the likelihood
of incurrence is assessed as probable and the amount can be reasonably
estimated.  Management has assessed the likelihood that a loss has been incurred
at its sites as probable and, based on findings included in a preliminary
remediation report received in January 1997, estimates the potential loss to
range from $1.7 million to $9.7 million.  Based on a review of the remediation
alternatives outlined in the report, management believes that the best estimate
of the loss is $6.6 million.  The Company recorded a charge to operations of $6
million during the six months ended December 28, 1996, to increase the
liability for environmental costs to the revised best estimate amount contained
in the preliminary remediation report.

                                       22
<PAGE>
 
While Jostens may have a right of contribution or reimbursement under insurance
policies, amounts that may be recoverable from other entities by the Company
with respect to a particular site are not considered until recoveries are deemed
to be probable.  No assets for potential recoveries have been established as of
December 28, 1996.

Sales Force. During fiscal 1996, the Company was approached by a group of sales
representatives seeking changes in their agreements with Jostens.  All of the
Company's sales representatives have similar contractual arrangements, and the
Company does not anticipate substantial changes to that relationship with the
majority of sales representatives.

For approximately 50 representatives who serve the college market, the Company
decided to change their contract status from independent sales representatives
to Company employees effective July 1, 1997.  This change is being made to
better enable the Company to address market needs and over time strengthen its
position in the market.  These representatives' current contracts call for a
transition commission, which historically has been paid by the new sales
representatives who assumed responsibility for the accounts of the outgoing
representative, with the Company acting as a collection agent.  Those
representatives who agree to become employees of the Company will forgo their
right to the transition commission in exchange for participation in a newly
created severance plan as well as other employee benefit programs.  The Company
will record this severance liability ratably over their estimated service period
as employees.  Those representatives who elect not to become employees will
receive future transition payments from the Company in exchange for signing an
agreement not to compete.  These payments will be provided over the non compete
period.  Payments in future years relating to the severance plan and transition
commissions are estimated to aggregate approximately $9 million which management
expects to be partially offset by reduced operating costs.  Management believes
that this contract change will have positive business results and the associated
liabilities will not have a material negative impact during future reporting
periods.


DISCONTINUED OPERATIONS

The statements of consolidated operations are presented to reflect the Company's
JLC, Wicat Systems and Sportswear businesses as discontinued operations.

In June 1995, Jostens sold its JLC curriculum software subsidiary to a group led
by Bain Capital, Inc. for $50 million in cash; a $36 million unsecured,
subordinated note maturing in eight years with a stated interest rate of 11
percent; and a separate $4 million note with a stated interest rate of 8.3
percent convertible into 19 percent of the equity of Jostens Learning, subject
to dilution in certain events.  The notes were recorded at fair value, using an
estimated 20 percent discount rate on the $36 million note resulting in a
discount of $9.9 million.

As part of the JLC sale, Jostens also agreed to pay $13 million over two years
to fund certain JLC existing liabilities; $12.4 million has been paid through
December 28, 1996.  The remaining $600,000 has been accrued as part of other
accrued liabilities.

In October 1995, the Company sold its Wicat Systems business to Wicat
Acquisition Corp., a private investment group.  Wicat Systems was the small,
computer-based aviation training subsidiary of JLC that was retained in the sale
of JLC, but held for sale.  The Company received $1.5 million in cash plus a
promissory note for approximately $150,000 from the sale. The Company treated
Wicat Systems as a discontinued operation in June 1995, pending the sale of the
business.

A transaction gain of $11.1 million ($5.8 million after tax) was originally
recorded at the time of the JLC sale and deferred in accordance with the
Securities and Exchange Commission Staff Accounting 

                                       23
<PAGE>
 
Bulletin No. 81, Gain Recognition on the Sale of a Business or Operating Assets
to a Highly Leveraged Entity. In the second quarter of fiscal 1996, the deferred
gain increased to $17.2 million ($9.7 million after tax) as a result of the sale
of Wicat ($5.3 million) and some accrual settlements ($800,000).

In conjunction with JLC's efforts to raise additional equity capital for ongoing
cash requirements, JLC requested that the Company restructure its interests in
JLC.  On November 8, 1996, the Company restructured terms of its $36 million,
unsecured, subordinated note from JLC in conjunction with a third party equity
infusion into JLC.  Terms of the restructuring resulted in the exchange of the
$36 million unsecured, subordinated note and accrued interest for a new $57.2
million unsecured, subordinated note maturing on June 29, 2003, with a stated
interest rate of 6 percent and rights to early redemption discounts.  The early
redemption discounts, exercisable only in whole at JLC's option, adjust
periodically and ranged from a 70 percent discount on the face value if redeemed
by December 28, 1996, to 40 percent if redeemed by March 31, 2003.  The new note
was recorded at fair value using an estimated 20 percent discount rate on the
$57.2 million note resulting in a discount of $35.1 million.  The restructuring
had no impact on the net carrying value of Jostens' investment in JLC as the $4
million reduction in the note receivable's carrying value was offset by a
corresponding reduction in the deferred gain to $13.2 million ($7.3 million
after tax) at December 28, 1996.

The adjusted $13.2 million gain and interest on the notes receivable will be
deferred until cash flows from the operating activities of JLC are sufficient to
fund debt service, dividend or any other covenant requirements.  The deferred
gain is presented in the condensed consolidated balance sheet as an offset to
notes receivable.  The notes receivable balance represents amounts owed by JLC
related to the sale of JLC net of a $35.1 million discount and the deferred
gain. Despite the equity infusion and restructuring of Jostens interests in JLC,
there is no guarantee that JLC will be able to repay the note. JLC has incurred
losses in both 1996 and 1995, however, the Company believes that such carrying
value is not impaired based on current facts and circumstances.

In fiscal 1994, Jostens also recorded a restructuring charge of $60.9 million
($40.2 million after tax, or 88 cents per share) related to JLC, which has been
reclassified as part of discontinued operations. The restructuring charge
relating to JLC included $39.1 million to focus its product development, $7.3
million to exit both direct and indirect investments in three ancillary lines of
business, $4.1 million to exit the hardware sales and service business, and
$10.4 million for work-force reductions.

In January 1994, Jostens sold its Sportswear business to a subsidiary of Fruit
of the Loom for $46.7 million in cash.  Jostens recognized an $18.5 million gain
($11 million after tax) on the sale, primarily because the Sportswear business
had previously been written down by $15 million to its estimated net realizable
value.

                                       24
<PAGE>
 
RESTRUCTURINGS
 
The Company recorded an $8.5 million restructuring charge ($5.1 million after
tax, or 12 cents per share) related to continuing operations in the fourth
quarter of fiscal 1994, covering headcount reductions in the general and
administrative functions. The Company also recorded a $40.2 million ($25.3
million after tax, or 56 cents per share) charge to continuing operations in
1993 to restructure the Photography business, reduce headcount and write off
abandoned receivables. In fiscal 1995, restructuring reserves decreased by $13.4
million to $5.5 million at June 30, 1995, due to payments of $11.1 million and
noncash items of $2.3 million. In fiscal 1996, restructuring reserves decreased
by $2.8 million to $2.7 million at June 30, 1996, due to payments of $2.4
million and noncash items of $400,000 Restructuring reserves decreased by $1.4
million during the six months ended December 28, 1996, to $1.3 million due to
payments of $1 million and noncash items of $400,000.


CHANGES IN ACCOUNTING ESTIMATES

As a result of certain changes in business conditions, the Company conducted a
review that concluded at the end of the third quarter of fiscal 1994.  That
review led the Company to increase reserves for inventories, receivables and
overdrafts from independent sales representatives to reflect amounts estimated
not to be recoverable, based upon current facts and circumstances.  The revised
estimates reduced pre-tax income for fiscal 1994 by $16.9 million ($10.1 million
after tax, or 22 cents per share).


SUBSEQUENT EVENT

In March 1997, the Company announced the closing of its Porterville, California
graduation announcement facility with all operations transferring to the
Company's plant in Shelbyville, Tennessee.  As a result, the Company will record
a pre-tax charge to operations of approximately $3 million during the first
quarter of 1997 primarily to accrue for severance and other employee-related
costs.

                                      25
<PAGE>
 
Item 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF MANAGEMENT

The management of Jostens is responsible for the integrity and objectivity of
the financial information presented in this report. The financial statements
have been prepared in accordance with generally accepted accounting principles
and include certain amounts based on management's best estimates and judgment.

Management is also responsible for establishing and maintaining the Company's
accounting systems and related internal controls, which are designed to provide
reasonable assurance that assets are safeguarded and transactions are properly
recorded. These systems and controls are reviewed by the internal auditors. In
addition, the Company's code of conduct states that its affairs are to be
conducted under the highest ethical standards.

The independent auditors provide an independent review of the financial
statements and the fairness of the information presented therein.  The Audit
Committee of the Board of Directors, comprised solely of outside directors,
meets regularly with management, the Company's internal auditors and its'
independent auditors to review audit activities, internal controls and other
accounting, reporting and financial matters. Both the independent auditors and
internal auditors have unrestricted access to the Audit Committee.

/s/Trudy A. Rautio                               /s/Robert C. Buhrmaster
Senior Vice President and                        President and Chief  
Chief Financial Officer                          Executive Officer

Minneapolis, Minnesota
January 28, 1997

                                       26
<PAGE>
 
REPORT OF INDEPENDENT AUDITORS

TO THE STOCKHOLDERS OF JOSTENS INC.:

We have audited the accompanying consolidated balance sheets of Jostens Inc. and
subsidiaries as of December 28, 1996, and June 30, 1996 and 1995, and the
related consolidated statements of operations, changes in shareholders'
investment and cash flows for the six month period ended December 28, 1996 and
each of the three years in the period ended June 30, 1996.  Our audits also
included the financial statement schedule listed in the index at Item 14(a).
These financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Jostens
Inc. and subsidiaries as of December 28, 1996 and June 30, 1996 and 1995, and
the consolidated results of its operations and its cash flows for the six month
period ended December 28, 1996 and each of the three years in the period ended
June 30, 1996, in conformity with generally accepted accounting principles.
Also, in our opinion, the related financial statement schedule, when considered
in relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.

As discussed in the notes to the financial statements, the Company changed its
method of accounting for postemployment benefits in 1995.

/s/Ernst & Young LLP

Minneapolis, Minnesota
January 28, 1997

                                       27
<PAGE>
 
Statement of Consolidated Operations -- Jostens Inc. and Subsidiaries

<TABLE> 
<CAPTION> 
                                                           Six Months Ended                                                        
                                                     ------------------------------                                            
                                                                      December 31,                 Years Ended June 30,          
                                                      December 28,       1995          ----------------------------------------- 
(Dollars in thousands, except per-share data)             1996         (Unaudited)       1996             1995            1994    
---------------------------------------------        ---------------  -------------    --------        ----------        -------
<S>                                                  <C>              <C>              <C>             <C>               <C> 
Net sales                                            $277,118         $263,533         $695,149        $665,099          $649,869
Cost of products sold                                 141,493          119,639          332,212         313,659           313,755
                                                     --------         --------         --------        --------          --------
                                                      135,625          143,894          362,937         351,440           336,114
Selling and administrative expenses                   131,473          116,866          268,135         256,822           274,140
Restructuring charges                                       -                -                -               -             8,500
                                                     --------         --------         --------        --------          --------
Operating income                                        4,152           27,028           94,802          94,618            53,474
Interest income                                           204            1,914            2,080           4,727             1,823
Interest expense                                       (4,330)          (4,390)          (9,403)         (5,452)           (6,803)
                                                     --------         --------         --------        --------          --------
Income from continuing operations before
  income taxes                                             26           24,552           87,479          93,893            48,494
Income taxes                                              829           10,066           35,854          38,027            20,540
                                                     --------         --------         --------        --------          --------
Income (loss) from continuing operations                 (803)          14,486           51,625          55,866            27,954
Discontinued operations
Loss from operations, net of tax                            -                -                -          (4,864)          (55,110)
Gain on sale, net of tax                                    -                -                -               -            10,987
Cumulative effect of changes in accounting
 principle, net of tax                                      -                -                -            (634)                -
                                                     --------         --------         --------        --------          --------
Net income (loss)                                    $   (803)        $ 14,486         $ 51,625        $ 50,368          $(16,169)
                                                     ========         ========         ========        ========          ========
Earnings (loss) per share
Continuing operations                                $  (0.02)        $   0.35         $   1.28        $   1.23          $   0.61
Loss from discontinued operations                           -                -                -           (0.11)            (1.21)
Gain on sale of discontinued operations                     -                -                -               -              0.24
Cumulative effect of changes in accounting
  principle                                                 -                -                -           (0.01)                -
                                                     --------         --------         --------        --------          --------
Net income (loss)                                    $  (0.02)        $   0.35         $   1.28        $   1.11          $  (0.36)
                                                     ========         ========         ========        ========          ========
Weighted average number of shares outstanding          38,660           41,542           40,207          45,494            45,455
                                                     ========         ========         ========        ========          ========
</TABLE> 

See notes to consolidated financial statements.

                                      28
<PAGE>
 
Consolidated Balance Sheets - Jostens Inc. and Subsidiaries

<TABLE> 
<CAPTION> 
                                                                                                          
                                                                                             DECEMBER 31,         JUNE 30
                                                                               DECEMBER 28,      1995     --------------------------
(Dollars in thousands, except per-share data)                                     1996       (UNAUDITED)     1996        1995
------------------------------------------------------------------------------------------------------------------------------------

<S>                                                                              <C>         <C>         <C>        <C> 
 
ASSETS
 
Current assets
 
Cash and short-term investments                                                  $       -   $     422   $  13,307    $ 173,469
                                                                                                                   
Accounts receivable, net of allowance of $6,884, $9,020, $5,966 and                                                
 $9,049, respectively                                                              107,314     100,905     130,159      124,392
                                                                                                                   
Inventories   Finished products                                                     34,111      28,369      20,147       17,079
              Work-in-process                                                       17,688      51,773      29,175       26,928
              Materials and supplies                                                46,694      36,454      29,646       27,387
------------------------------------------------------------------------------------------------------------------------------------

                                                                                    98,493     116,596      78,968       71,394
                                                                                                                   
Deferred income taxes                                                               14,928      17,845      14,832       17,845
                                                                                                                   
Prepaid expenses                                                                     2,189       3,192       1,833        2,869
                                                                                                                   
Other receivables, net of allowance of $7,344, $7,133, $6,545 and                                                  
 $6,176, respectively                                                               24,893      26,204      12,241       12,399
------------------------------------------------------------------------------------------------------------------------------------

Total current assets                                                               247,817     265,164     251,339      402,368
------------------------------------------------------------------------------------------------------------------------------------

Other assets                                                                                                       
                                                                                                                   
Intangibles, net                                                                    27,264      30,141      28,332       30,915
                                                                                                                   
Note receivable, net of $35,044, $9,900, $9,900 and $9,900 discount and                                            
$13,181, $17,175, $17,175 and $11,131 deferred gain, respectively                   12,925      12,925      12,925       18,969 
                                                                                                                   
                                                                                                                   
Noncurrent deferred income taxes                                                    11,393      15,590      11,374       15,590
                                                                                                                   
Other                                                                               14,166      16,139      12,967       12,301
------------------------------------------------------------------------------------------------------------------------------------

Total other assets                                                                  65,748      74,795      65,597       77,775
------------------------------------------------------------------------------------------------------------------------------------

Property and equipment                                                                                             
                                                                                                                   
Land                                                                                 5,104       5,260       5,260        5,260
                                                                                                                   
Buildings                                                                           36,868      38,671      38,026       38,253
                                                                                                                   
Machinery and equipment                                                            168,953     157,496     144,965      141,043
------------------------------------------------------------------------------------------------------------------------------------

                                                                                   210,925     201,427     188,251      184,556
                                                                                                                   
Accumulated depreciation and amortization                                         (143,282)   (128,901)   (121,214)    (116,731)
------------------------------------------------------------------------------------------------------------------------------------

Total property and equipment, net                                                   67,643      72,526      67,037       67,825
------------------------------------------------------------------------------------------------------------------------------------

Total assets                                                                     $ 381,208   $ 412,485   $ 383,974    $ 547,968
------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

See notes to consolidated financial statements
 

                                       29
<PAGE>
 
Consolidated Balance Sheets - Jostens Inc. and Subsidiaries


<TABLE> 
<CAPTION> 
                                                                                                              
                                                                                                 December 31,       June 30,
                                                                                   December 28,     1995       ---------------------
                                                                                       1996      (Unaudited)      1996       1995
------------------------------------------------------------------------------------------------------------------------------------

<S>                                                                                <C>           <C>          <C>       <C>
                                                                              
Liabilities and shareholders' investment                                      
                                                                              
Current liabilities                                                           
                                                                              
Notes payable                                                                           $ 97,707     $ 92,332 $ 27,587     $   -
                                                                              
Current maturities on long-term debt                                                           -       50,000   50,025       355
                                                                              
Accounts payable                                                                          14,913       11,897   16,276    17,624
                                                                              
Salaries, wages and commissions                                                           32,583       29,615   54,303    52,544
                                                                              
Customer deposits                                                                         76,034       56,574   37,608    36,367
                                                                              
Income taxes                                                                               6,938       16,968   27,322    35,372
                                                                              
Dividends payable                                                                              -            -    8,505    10,005
                                                                              
Other accrued liabilities                                                                 14,933       23,442   20,837    43,820
------------------------------------------------------------------------------------------------------------------------------------

Total current liabilities                                                                243,108      280,828  242,463   196,087
                                                                              
Long-term debt - less current maturities                                                   3,881        3,899    3,874    53,899
                                                                              
Accrued pension costs                                                                      3,825        5,808    4,621    12,578
                                                                              
Other non-current liabilities                                                             17,781       11,933   11,215    14,791
------------------------------------------------------------------------------------------------------------------------------------

Total liabilities                                                                        268,595      302,468  262,173   277,355
                                                                              
Commitments and contingencies                                                                  -            -        -         -
                                                                              
Shareholders' investment                                                                                                       
                                                                              
Preferred shares, $1.00 par value: authorized 4,000 shares, none issued                        -            -        -         -
                                                                              
Common shares, $.33 1/3 par value: authorized 100,000 shares,                 
       Issued December 28, 1996 - 38,665;  December 31, 1995 - 38,593;        
       June 30, 1996 - 38,653; June 30, 1995 - 45,482                                     12,888       12,864   12,884    15,160
                                                                              
Capital surplus                                                                            1,480          879    1,316   154,410
                                                                              
Retained earnings                                                                        101,567       99,365  110,872   105,213
                                                                              
Foreign currency translation adjustment                                                   (3,322)      (3,091)  (3,271)   (4,170)
------------------------------------------------------------------------------------------------------------------------------------

Total shareholders' investment                                                           112,613      110,017  121,801   270,613
------------------------------------------------------------------------------------------------------------------------------------

                                                                                        $381,208     $412,485 $383,974  $547,968
====================================================================================================================================


</TABLE>

See notes to consolidated financial statements

                                       30
<PAGE>
 
Statements of Consolidated Cash Flows - Jostens Inc. and Subsidiaries

<TABLE>
<CAPTION>
 
 
(Dollars in thousands)                                                                          
                                                                       Six Months Ended         
                                                                ----------------------------    
Operating activities                                                           December 31,                Years Ended June 30,
                                                                December 28,      1995                 -----------------------------
                                                                   1996        (Unaudited)               1996      1995      1994
------------------------------------------------------------------------------------------------------------------------------------

<S>                                                          <C>               <C>                   <C>        <C>       <C>
Net income (loss)                                                 $    (803)    $  14,486            $  51,625  $ 50,368  $(16,169)
                                                                                                
Depreciation                                                          8,992         8,032               14,999    18,357    19,157
                                                                                                
Amortization                                                            942           774                1,558     9,982    19,770
                                                                                                
Noncash restructuring charges                                             -             -                    -         -    27,333
                                                                                                
Deferred income taxes                                                  (115)            -                7,229       607   (21,254)
                                                                                                
Gain on sale of discontinued operations                                   -             -                    -         -   (10,987)
                                                                                                
Changes in assets and liabilities, net of effects from 
 sale of discontinued operations:                                                                      
                                                                                                
          Accounts receivable                                        22,845        23,487              (10,401)   (1,303)   37,000
                                                                                                
          Inventories                                               (19,525)      (45,202)              (8,157)    2,436    26,333
                                                                                                
          Prepaid expenses                                             (356)         (323)                 993       434     4,577
                                                                                                
          Accounts payable                                           (1,363)       (5,727)                 460   (11,009)  (19,396)
                                                                                                
          Other                                                     (17,284)      (66,176)             (29,431)   11,070    58,747
------------------------------------------------------------------------------------------------------------------------------------

                                                                     (6,668)      (70,649)              28,875    80,942   125,111
------------------------------------------------------------------------------------------------------------------------------------

Investing activities                                                                            
                                                                                                
Capital expenditures                                                 (9,898)       (8,406)             (15,371)  (19,142)  (15,202)
                                                                                                
Software development costs                                                -             -                    -    (9,560)  (19,437)
                                                                                                
Other                                                                     -             -                    -     4,074      (144)
                                                                                                
Net proceeds from sale of discontinued operations                         -             -                1,813    49,471    43,808
------------------------------------------------------------------------------------------------------------------------------------

                                                                     (9,898)       (8,406)             (13,558)   24,843     9,025
------------------------------------------------------------------------------------------------------------------------------------

Financing activities                                                                            
                                                                                                
Cash dividends                                                      (17,011)      (18,512)             (35,515)  (40,000)  (39,999)
                                                                                                
Exercise of stock options                                               168         1,520                2,136       225       702
                                                                                                
Increase in notes payable                                            70,120        92,332               27,587         -         -
                                                                                                
Reduction in long-term debt                                         (50,018)            -                 (355)     (368)     (576)
                                                                                                
Share repurchase                                                          -      (169,332)            (169,332)        -         -
------------------------------------------------------------------------------------------------------------------------------------

                                                                      3,259       (93,992)            (175,479)  (40,143)  (39,873)
------------------------------------------------------------------------------------------------------------------------------------

Change in cash and short-term investments                           (13,307)     (173,047)            (160,162)   65,642    94,263
                                                                                                
Cash and short-term investments, beginning of period                 13,307       173,469              173,469   107,827    13,564
------------------------------------------------------------------------------------------------------------------------------------

Cash and short-term investments, end of period                    $       -     $     422            $  13,307  $173,469  $107,827
====================================================================================================================================

</TABLE>


See notes to consolidated financial statements

                                       31
<PAGE>

<TABLE> 
<CAPTION> 

Statements of Consolidated Changes in Shareholders' Investment -- Jostens Inc. and Subsidiaries
 
                                                                                                     Foreign
                                                       Common Shares                                 Currency
                                                 ------------------------      Capital   Retained   Translation
(Dollars in thousands, except per-share data)        Number     Amount         Surplus   Earnings    Adjustment
---------------------------------------------------------------------------------------------------------------
<S>                                               <C>         <C>           <C>         <C>           <C> 
Balance - June 30, 1993                           $  45,425   $  15,142     $  152,312  $ 151,013     $ (2,749)
 
Stock options and restricted stock - net                 57          18            684
 
Net loss                                                                                  (16,169)
 
Cash dividends declared of $.88 per share                                                 (39,999)
 
Change in cumulative translation adjustment                                                             (1,681)
 
Adjustment in minimum pension liability                                                    (1,990)
---------------------------------------------------------------------------------------------------------------
Balance - June 30, 1994                              45,482      15,160        152,996     92,855       (4,430)
 
Stock options and restricted stock - net                                         1,414
 
Net income                                                                                 50,368
 
Cash dividends declared of $.88 per share                                                 (40,000)
 
Change in cumulative translation adjustment                                                                260
 
Adjustment in minimum pension liability                                                     1,990
---------------------------------------------------------------------------------------------------------------
Balance - June 30, 1995                              45,482      15,160        154,410    105,213       (4,170)
 
Stock options and restricted stock - net                182          61          1,903
 
Share repurchase                                     (7,011)     (2,337)      (155,168)   (11,827)
 
Net income                                                                                 51,625
 
Cash dividends declared of $.88 per share                                                 (34,015)
 
Tax benefit of stock options                                                       171
 
Change in cumulative translation adjustment                                                                899
 
Adjustment in minimum pension liability                                                      (124)
--------------------------------------------------------------------------------------------------------------- 
Balance - June 30, 1996                              38,653      12,884          1,316    110,872       (3,271)
 
Stock options and restricted stock - net                 12           4            164
 
Net loss                                                                                     (803)
 
Cash dividends declared of $.22 per share                                                  (8,506)
 
Change in cumulative translation adjustment                                                                (51)
 
Adjustment in minimum pension liability                                                         4
--------------------------------------------------------------------------------------------------------------- 
Balance - December 28, 1996                      $   38,665   $  12,888     $    1,480  $ 101,567     $ (3,322)
===============================================================================================================
</TABLE>

                                      32

See notes to consolidated financial statements
<PAGE>
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Jostens Inc. and Subsidiaries

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Overview.  Jostens Inc. is a provider of products and services that
help people recognize achievement and affiliation throughout their lives.  The
Company's products include yearbooks, class rings, graduation products, school
photography and service and achievement awards for businesses.

Fiscal Year.  In October 1996, the Company elected to change its fiscal year end
from June 30 to the Saturday closest to December 31 effective December 29, 1996,
to enable better planning and internal management of its businesses.  The
Company's Consolidated Financial Statements and Notes thereto include the
Company's results of operations and cash flows for the six month periods from
July 1 through December 28, 1996 and July 1, 1995 through December 31, 1995, as
well as the results of operations and cash flows based on the Company's previous
fiscal years ended June 30, 1996, 1995 and 1994.  All information related to the
six month period from July 1, 1995 through December 31, 1995 is unaudited.

Principles of Consolidation. The consolidated financial statements include the
accounts of the Company and its subsidiaries. All material intercompany accounts
and transactions have been eliminated.

Use of Estimates.  The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes.  Actual results could differ from those estimates.  The most
significant areas which require the use of management's estimates relate to the
allowance for uncollectible receivables, inventory reserves, sales returns,
warranty costs, environmental reserves and deferred income tax valuations.

Cash, Short-term Investments and Cash Flows. For purposes of reporting cash
flows, cash and short-term investments include cash on hand, time deposits and
commercial paper.  Short-term investments have an original maturity of three
months or less and are considered cash equivalents.  All investments in debt
securities have an original maturity of three months or less and are considered
to be held to maturity.  The short-term securities are carried at amortized
cost, which approximates fair value, and totaled $2.6 million and $161.1 million
at June 30, 1996 and 1995, respectively.  Total cash payments for income taxes
were $22.1 million in the six months ended December 28, 1996 and $34.3, $15.1
and $8.9 million in fiscal years 1996, 1995 and 1994, respectively.  Total
payments for interest were $3.2 million in the six months ended December 28,
1996, and $8.7 million, $4.2 million and $5.9 million in fiscal years 1996, 1995
and 1994, respectively.

Inventories and Cost of Products Sold. The Company implemented a new inventory
cost accounting system in July 1996 which provides more precise, detailed
performance information by product within each line.  The new system results in
a more accurate valuation of inventories and recording of cost of products sold
during the individual quarters, consistent with the manner used to value
inventory at previous June year ends.  The use of this more precise information
will have no effect on annual results.  However, cost of products sold reported
during the six months ended December 28, 1996 was higher than that which would
have been reported using the prior method, with an equivalent positive effect
expected in the six months ending June 30, 1997.  The new inventory cost
accounting system contributed to an estimated $16.9 million increase in cost of
products sold and an estimated $.26 decline in earnings per share for the six
months ended December 28, 1996.

                                       33
<PAGE>
 
Gold and certain other inventories aggregating $3.8, $2.7 and $2.6 million at
December 28, 1996 and June 30, 1996 and 1995, respectively, are stated at the
lower of last-in, first-out (LIFO) cost or market, and are $15, $14.7 and $14.8
million lower in the respective periods than such inventories determined under
the lower of first-in, first-out (FIFO) cost or market. All other inventories
are stated at the lower of FIFO cost or market.

Inventory Obsolescence. The Company's policy is to employ a systematic
methodology that includes quarterly evaluations of inventory, based upon
business trends, to specifically identify obsolete, slow-moving and nonsalable
inventory. Inventory reserves are evaluated periodically to ensure they
continually reflect current business strategies and trends.

Intangibles. Intangibles primarily represent the excess of the purchase price
over the fair value of the net tangible assets of acquired businesses and are
amortized over various periods of up to 40 years.  Accumulated amortization at
December 28, 1996 and June 30, 1996 and 1995, was $17, $16.1 and $14.5
million, respectively.  The carrying value of intangible assets is assessed
periodically or more often when factors indicating an impairment are present.
The Company employs an undiscounted cash flow method of assessment for these
assets. The intangible balance also includes the intangible asset related to
additional minimum pension liability of $1.6, $1.7 and $2.7 million at 
December 28, 1996 and June 30, 1996 and 1995, respectively.

Property and Equipment. Property and equipment are carried at cost.
Depreciation and amortization on buildings, machinery and equipment and
purchased software, including software implementation costs, is provided
principally on the straight-line method for financial reporting purposes over
their estimated useful lives: buildings, 15 to 40 years; machinery and
equipment, three to 10 years; purchased software, two to five years.
Depreciation and amortization expense charged to continuing operations was $9.9
million and $8.8 million in the six month periods ended December 28, 1996 and
December 31, 1995, respectively and $15 million, $13.6 million and $13.3 million
in fiscal years 1996, 1995 and 1994, respectively. The carrying value of
property, equipment and purchased software is assessed when circumstances
indicate that their carrying value may be impaired or not recoverable. The
Company determines such impairment by measuring undiscounted future cash flows.
If an impairment is present, the assets are reported at the lower of carrying
value or fair value.

Beginning in fiscal 1996, the Company capitalized certain software
implementation costs.  Prior to fiscal 1996, such costs were not significant.
Implementation costs are expensed until the Company has determined that the
software will result in probable future economic benefits and management has
committed to funding the project.  Thereafter, all direct implementation costs
and purchased software costs are capitalized and amortized using the straight-
line method over the remaining estimated useful lives, not exceeding five years.

Income Taxes. The Company records income taxes in accordance with Statement of
Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes. This
statement requires the use of the asset and liability method of accounting for
income taxes. Deferred taxes are recognized for the estimated taxes ultimately
payable or recoverable based on enacted tax law. Changes in enacted tax rates
are reflected in the tax provision as they occur.

Sales, Sales Returns and Warranty Costs. Sales are recognized at the date of
product shipment.  Provisions for sales returns and warranty costs are recorded
at the time of sale based on historical information adjusted for current trends.

Foreign Currency.  The Company enters into foreign currency forward contracts to
hedge purchases of inventory in foreign currency.  The purpose of these hedging
activities is to protect the Company from the risk that inventory purchases
denominated in foreign currency will be adversely affected by changes in foreign
currency rates.  All contracts the Company had at December 28, 1996 mature

                                       34
<PAGE>
 
within one year and are held for purposes other than trading.  The amount of
contracts outstanding at December 28, 1996 and June 30, 1996 and 1995, were $4,
$9.1 and $0.1 million, respectively.  The Company is exposed to credit loss in
the event of nonperformance by counterparties on foreign exchange forward
contracts.  Jostens does not anticipate nonperformance by any of these
counterparties.  The amount of this credit exposure is generally limited to
unrealized gains on the contracts.  At December 28, 1996 and June 30, 1996 and
1995, there were no material unrealized gains or losses on outstanding foreign
currency forward contracts.

Assets and liabilities denominated in foreign currency are translated at the
current exchange rate as of the balance sheet date, and income statement amounts
are translated at the average monthly exchange rate.  Translation adjustments
resulting from fluctuations in exchange rates are recorded in a separate
component of shareholders' investment.  Realized and unrealized gains and losses
on foreign currency forward contracts used to purchase inventory with no firm
purchase commitments are recognized currently in net income because they do not
qualify as hedges for accounting purposes.  Realized and unrealized gains and
losses on forward contracts used to purchase inventory for which the Company has
firm purchase commitments qualify as accounting hedges and are therefore
deferred and recognized in income when the inventory is sold.

Earnings (Loss) Per Common Share. Earnings (loss) per share have been computed
by dividing net income by the average number of common shares outstanding. The
impact of any additional shares issuable upon the exercise of dilutive stock
options is not material. In February 1997, the Financial Accounting Standards 
Board issued Statement of Financial Accounting Standards (SFAS) No. 128, 
Earnings Per Share.  The Company will adopt SFAS No. 128 in the fourth quarter 
of 1997 as required by the pronouncement.  Management does not expect the 
adoption of SFAS No. 128 will have a material impact on its' future computations
of earnings per share.

Postemployment Benefits. In the first quarter of fiscal 1995, the Company
adopted SFAS No. 112, Employers' Accounting for Postemployment Benefits.
Adopting this statement resulted in a $1.1 million ($600,000 after tax) charge
to operations.

Reclassification. Certain December 1995 and fiscal 1996 and 1995 balances have
been reclassified to conform to the December 1996 presentation.

LONG-TERM DEBT AND OTHER BORROWINGS
Long-term debt consisted of the following:


                                                                 JUNE 30,
                                          DECEMBER 28,        ----------------
(Dollars in thousands)                       1996             1996        1995
------------------------------------------------------------------------------
Medium-term notes, repaid in August 1996 
 with proceeds from commercial paper 
 borrowings, plus interest at 8.02%         $      -    $   50,000   $  50,000
6.75% revenue bonds, covering general 
offices, due in January 2004                   3,600         3,600       3,600
Other                                            281           299         654
------------------------------------------------------------------------------
                                               3,881        53,899      54,254
Less current maturities                            -        50,025         355
------------------------------------------------------------------------------
                                            $  3,881    $    3,874   $  53,899
==============================================================================

Annual maturities on long-term debt are zero in 1998 to 2001 and $3.8 million
thereafter.  The fair value of long-term debt at December 28, 1996 and June 30,
1996 and 1995, approximated the carrying value and is estimated based on the
quoted market prices for comparable instruments.

Effective December 20, 1995, the Company terminated its unsecured lines of
credit and replaced them with a $150 million, five-year bank credit agreement.
Annual fees and interest on borrowings are based on the Company's long-term debt
rating or the commercial paper rating, if the Company ceases, at any time, to
have a long-term debt rating.  Annual fees range from 0.075 percent to 0.15

                                       35
<PAGE>
 
percent of the commitment.  Under the restrictive covenants of the agreement,
the Company must maintain a minimum interest coverage ratio and net worth (as
defined in the agreement).  Credit available under the Company's $150 million
bank credit agreement, which expires in December 2000, is reduced by commercial
paper outstanding.  At December 28, 1996, $52.3 million was available under the
bank credit agreement.

Amounts related to the Company's commercial paper program are summarized as
follows:

                                               SIX MONTHS            YEAR
                                                 ENDED               ENDED
                                              DECEMBER 28,          JUNE 30,
(Dollars in millions)                             1996               1996 
------------------------------------------------------------------------------
Balance at end of period                      $     97.7            $    27.6
Weighted average interest rate                      6.0%                 5.6%
Maximum outstanding during the period         $    164.0            $   127.0
Average borrowing level during the period     $    109.0            $    68.4
==============================================================================

Commercial paper outstanding is due within 90 days and is included in notes
payable in the consolidated balance sheets.  There were no short-term borrowings
in fiscal year 1995.

In addition, the Company had available at December 28, 1996, unsecured demand
facilities with three banks totaling $84.7 million. Such credit arrangements are
renegotiated periodically based on the anticipated seasonal needs for short-term
financing.

In April of 1996, the Company entered into a one-year interest rate swap which
commenced on July 8, 1996. Under terms of the agreement, the Company pays
interest at a rate of 5.962 percent and receives interest weekly at a floating
rate equal to the seven-day U.S. commercial paper rate. The interest rate swap
agreement effectively converts variable rate obligations to a fixed rate basis
in order to reduce the impact of interest rate changes on the Company's debt.
The agreement involves the exchange of fixed or floating rate interest payments
without the exchange of the underlying notional amount. The notional amount of
the agreement changes on a weekly basis based on the Company's planned borrowing
needs and ranges from $4 million to $146.5 million. The notional amount is used
to measure the interest to be paid or received and does not represent the amount
of exposure to loss. There were no material deferred gains or losses outstanding
on the contract as of December 28, 1996.

                                       36
<PAGE>
 
INCOME TAXES

Income (loss) from continuing operations before taxes, discontinued operations
and changes in accounting principle are as follows:


 
                                           
                              SIX MONTHS   
                                ENDED                  YEARS ENDED JUNE 30,
                              DECEMBER 28,          ----------------------------
(Dollars in thousands)           1996                 1996     1995     1994
--------------------------------------------------------------------------------
Domestic                       $(3,585)              $82,818  $87,009  $42,095
Foreign                          3,611                 4,661    6,884    6,399
--------------------------------------------------------------------------------
                              $     26               $87,479  $93,893  $48,494
================================================================================


The components of the provision for income taxes attributable to earnings from 
continuing operations are as follows:

                          
                          SIX MONTHS  
                            ENDED                   YEARS ENDED JUNE 30,
                          DECEMBER 28,      ------------------------------------
(Dollars in thousands)        1996            1996          1995       1994
--------------------------------------------------------------------------------

Federal                      $   -         $ 21,425       $ 23,272  $ 18,710
State                            -            5,385          5,198     3,883
Foreign                        948            2,041          3,518     2,603
--------------------------------------------------------------------------------

                               948           28,851         31,988    25,196
Deferred                      (119)           7,003          6,039    (4,656)
--------------------------------------------------------------------------------

                             $ 829         $ 35,854       $ 38,027  $ 20,540
================================================================================

                                       37
<PAGE>
 
The following summarizes the differences between income taxes computed at the
U.S. statutory rate and income tax expense from continuing operations for
financial reporting purposes:
 
<TABLE>
<CAPTION>
                                  SIX MONTHS
                                    ENDED                    YEARS ENDED JUNE 30,
                                  DECEMBER 28,            ---------------------------
(Dollars in thousands)               1996                  1996      1995      1994
--------------------------------------------------------------------------------------
<S>                                <C>                  <C>        <C>        <C> 
Tax at U.S. statutory rate         $      9             $ 30,618   $ 32,862   $ 16,973
 
State income taxes,
net of federal income
tax benefit                             (84)               4,012      3,682      2,455
 
All other, net                          904                1,224      1,483      1,112
--------------------------------------------------------------------------------------  
                                   $    829             $ 35,854   $ 38,027   $ 20,540
====================================================================================== 
</TABLE>

Deferred income taxes reflect the net 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.  Significant components 
of the deferred income tax liabilities and assets as of December 28, 1996 and 
June 30, 1996 and 1995, were as follows:

<TABLE> 
<CAPTION> 
                                                                                                                 JUNE 30,
                                                                                        DECEMBER 28,     -------------------------
(Dollars in thousands)                                                                     1996           1996            1995
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                     <C>             <C>          <C> 
DEFERRED TAX LIABILITIES                                                               
Tax over book depreciation                                                              $  (4,507)     $  (4,595)     $  (4,119) 
Discount on note receivable                                                                (1,920)             -              -
Other, net                                                                                 (4,381)        (4,175)        (3,694) 
----------------------------------------------------------------------------------------------------------------------------------
DEFERRED TAX LIABILITIES                                                                  (10,808)        (8,770)        (7,813) 
----------------------------------------------------------------------------------------------------------------------------------
DEFERRED TAX ASSETS
Restructuring charges                                                                       2,718          2,524          3,694
Net operating loss and tax credit carryforwards of acquired companies                       3,992          3,992          6,412
Other operating loss carryforwards                                                          7,044              -              -
Foreign tax credit carryforwards                                                            3,803          3,803              -   
Allowance for doubtful accounts                                                             3,155          3,016          4,657
Sales representatives' overdraft reserve                                                    2,256          2,165          2,389
Sales returns and allowances                                                                2,347          3,040          2,929
Postretirement benefits                                                                     3,177          3,115          3,200     
Pension plans                                                                                 634            677          3,228 
Deferred gain on sale of Jostens Learning                                                   5,908          7,486          5,330 
Discount on note receivable                                                                     -          3,950          3,950
Reserves for discontinued operations                                                            -              -          2,156 
Other, net                                                                                  8,015          7,128          5,420
----------------------------------------------------------------------------------------------------------------------------------
                                                                                           43,049         40,896         43,365     

Valuation allowance                                                                        (5,920)        (5,920)        (2,117)    

----------------------------------------------------------------------------------------------------------------------------------
Deferred tax assets                                                                        37,129         34,976         41,248
----------------------------------------------------------------------------------------------------------------------------------
Net deferred tax asset                                                                  $  26,321      $  26,206      $  33,435
==================================================================================================================================
</TABLE> 

                                       38
<PAGE>
 
At December 28, 1996 the Company had net operating loss (NOL) carryforwards from
business acquisitions of $8.2 million for Federal income tax purposes that
expire in the years 1998 through 2002.  A majority of the deferred tax asset
related to these NOL's is reserved for in the Company's valuation allowance at
December 28, 1996.  The Company also had a net operating loss of approximately
$16.7 million for the six month period ending December 28, 1996, which will
expire in the year 2011.  As a condition to granting Jostens permission to
change its accounting period, the IRS requires that any NOL incurred in the
period of change be deducted ratably over the six succeeding taxable years.
Based on historical profitability levels as well as projected income levels in
future years, management expects the benefit of this NOL to be realized prior to
its expiration.  The Company also had investment, research and experimentation,
and foreign tax credit carryforwards of $4.9 million that expire in the years
1997 to 2000.  The investment and research and experimentation credits of $.1
million will expire in 1997.  Foreign tax credits of $3.8 million at 
December 28, 1996, and June 30, 1996, have been fully reserved.

BENEFIT PLANS

The Company's noncontributory pension plans cover substantially all employees.
The defined benefits provided under the plans are based on years of service
and/or compensation levels. Annually, the Company funds the actuarially
determined costs of these plans, including the amortization of prior service
costs over 30 years. Service cost represents the present value of the increase
in future benefits resulting from the current year's service. The projected
benefit obligation is the present value of benefits, assuming future
compensation levels, for services rendered to date.

The components of pension cost and the funded status are as follows:

                                     SIX MONTHS
                                       ENDED           YEARS ENDED JUNE 30,    
                                     DECEMBER 28,   --------------------------- 
(Dollars in thousands)                  1996         1996      1995       1994
-------------------------------------------------------------------------------
Service cost                         $   1,899   $  3,459  $  3,366   $  3,254
Interest on projected benefit
 obligation                              4,061      7,737     7,447      6,925
Return on assets:
 Actual loss (gain)                     (5,910)   (28,589)   (7,556)       326
 Deferred                                  479     18,830      (262)    (6,978)
Amortization                                28        137       243       (359)
-------------------------------------------------------------------------------
Pension Cost                         $     557   $  1,574  $  3,238   $  3,168
===============================================================================

                                       39
<PAGE>
 
The funded status of the Company's pension plans based on valuations as of 
March 31 for fiscal 1996 and 1995, and September 30 for the period ended
December 28, 1996 are as follows:

<TABLE> 
<CAPTION> 
                                                                                        December 28, 1996
--------------------------------------------------------------------------------------------------------------------------------
                                                                           Plans whose assets           Plans whose accrued
                                                                        exceed accrued benefits        benefits exceed assets
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                          <C> 
Vested benefit obligation                                               $            81,833           $         15,710
Accumulated benefit obligation                                                       85,537                     16,435
Projected benefit obligation                                                         93,270                     17,430
Fair value of plan assets                                                           125,857                          -

Plan assets in excess of (less than) projected benefit obligation                    32,587                    (17,430)   
Unrecognized net (gain) loss                                                        (22,966)                     1,019     
Unrecognized prior service cost                                                       9,132                      1,568         
Unrecognized net (asset) obligation at transition                                    (6,078)                       110   
Adjustment required to recognize minimum liability                                        -                     (1,767)
--------------------------------------------------------------------------------------------------------------------------------
Net Pension Asset (Liability) in Consolidated Balance Sheets            $            12,675           $        (16,500)  
================================================================================================================================   
                                                                                            June 30, 1996      
--------------------------------------------------------------------------------------------------------------------------------
                                                                           Plans whose assets           Plans whose accrued
                                                                        exceed accrued benefits        benefits exceed assets
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                          <C> 
Vested benefit obligation                                               $            79,242           $         15,570 
Accumulated benefit obligation                                                       82,838                     16,288
Projected benefit obligation                                                         90,331                     17,274
Fair value of plan assets                                                           121,560                          -

Plan assets in excess of (less than) projected benefit obligation                    31,229                    (17,274)   
Unrecognized net (gain) loss                                                        (22,810)                     1,022     
Unrecognized prior service cost                                                       9,835                      1,660         
Unrecognized net (asset) obligation at transition                                    (6,532)                       118   
Adjustment required to recognize minimum liability                                        -                     (1,869)
--------------------------------------------------------------------------------------------------------------------------------
Net Pension Asset (Liability) in Consolidated Balance Sheets            $            11,722           $        (16,343)  
================================================================================================================================   
                                                                                            June 30, 1995      
--------------------------------------------------------------------------------------------------------------------------------
                                                                           Plans whose assets           Plans whose accrued
                                                                        exceed accrued benefits        benefits exceed assets
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                          <C> 
Vested benefit obligation                                               $            64,047           $         24,661
Accumulated benefit obligation                                                       67,818                     25,869
Projected benefit obligation                                                         75,285                     27,425
Fair value of plan assets                                                            81,635                      9,777

Plan assets in excess of (less than) projected benefit obligation                     6,350                    (17,648)   
Unrecognized net (gain) loss                                                         (5,460)                     1,339     
Unrecognized prior service cost                                                       9,486                      3,348         
Unrecognized net (asset) at transition                                               (6,796)                      (513)  
Adjustment required to recognize minimum liability                                        -                     (2,684)
--------------------------------------------------------------------------------------------------------------------------------
Net Pension Asset (Liability) in Consolidated Balance Sheets            $             3,580           $        (16,158)  
================================================================================================================================   
</TABLE> 

                                       40
<PAGE>
 
Plan assets consist primarily of corporate equity as well as corporate and U.S.
government debt, and real estate.  Corporate equity investments include the fair
value of the Company's common stock of $4.5 million at December 28, 1996 and
$4.2 million at June 30, 1996 and 1995, respectively.

The assumptions used in determining the components of pension cost and the
funded status were as follows:

                                    SIX MONTHS
                                      ENDED          YEARS ENDED JUNE 30,
                                   DECEMBER 28,   -----------------------------
                                       1996       1996       1995       1994
-------------------------------------------------------------------------------
Weighted average discount rates        7.75%      7.75%      8.00%      7.50%
Rates of increase in compensation      5.00%      5.00%      5.00%      5.00%
Expected rate of return on assets     10.00%     10.00%      8.75%      8.00%
-------------------------------------------------------------------------------

In conjunction with the 1994 divestiture of Sportswear, accrued benefits under
the applicable defined-benefit pension plans were frozen and active participants
became fully vested. The plans' trustee will continue to maintain and invest
plan assets and will administer benefit payments. In accordance with SFAS No.
88, Employers' Accounting for Settlements and Curtailments of Defined Benefit
Pension Plans, a curtailment loss of $700,000 was included in the gain on the
sale of Sportswear.

The Company's retirement savings plan, which covers substantially all nonunion
employees, provides for a matching contribution by the Company on amounts,
limited to 6 percent of compensation, contributed by employees. The Company's
contribution, in the form of Jostens common shares purchased in the open market,
was $1.1 million for the six month period ended December 28, 1996 and $2.4
million for each of the three fiscal years ended June 30, 1996, 1995 and 1994,
representing 50 percent of eligible employee contributions.

POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

Jostens provides medical insurance benefits for substantially all retirees.
Employees who retired prior to June 30, 1993, pay medical contributions at an
amount either frozen at retirement or at a fixed percentage of the plan costs
prior to age 65. Employees retiring after that date receive only a fixed dollar
contribution toward coverage prior to age 65. The fixed dollar contribution is
based on vested service at retirement and is not projected to increase in the
future.

                                       41
<PAGE>
 
Postretirement benefit cost included the following components:

                                       SIX MONTHS
                                         ENDED          YEARS ENDED JUNE 30,
                                      DECEMBER 28,   --------------------------
(Dollars in thousands)                    1996       1996       1995       1994
-------------------------------------------------------------------------------
Service cost of benefits earned         $    30    $   72     $   75     $   77
Interest cost of benefit obligation         185       450        463        466
Amortization of net (gain) from 
 earlier periods                            (57)      (34)      (471)         0
Amortization of unrecognized prior
 service cost                                (4)       (7)        (7)        (7)
--------------------------------------------------------------------------------
Postretirement Benefit Cost             $   154    $  481     $   60     $  536
================================================================================

The status of the Company's postretirement benefit plans based on valuations as
of March 31 for fiscal 1996 and 1995, and September 30 for the period ended
December 28, 1996 are as follows:

                                                                JUNE 30,
                                           DECEMBER 28,   --------------------
(Dollars in thousands)                        1996         1996        1995
------------------------------------------------------------------------------
Retirees                                   $   4,021    $  3,957    $  5,009
Fully eligible active participants                86          85          82
Other active participants                        957         942         959
------------------------------------------------------------------------------
                                               5,064       4,984        6,050
Unrecognized prior service cost                   73          76           84
Unrecognized net gain                          1,914       1,971          884
------------------------------------------------------------------------------
Accumulated Postretirement Benefit 
 Obligations                               $   7,051    $  7,031    $   7,018
==============================================================================

The assumptions used in determining the benefit obligation in the six month
period ended December 28, 1996 included a medical plan cost trend rate of 10
percent, declining to 6 percent in the year 2002, and weighted average discount
rate of 7.75 percent. Fiscal 1996 assumptions included a medical plan cost trend
rate of 12 percent, declining to 6 percent in the year 2002, and weighted
average discount rate of 7.75 percent. Fiscal 1995 assumptions included a
medical plan cost trend rate of 13.4 percent, declining to 7.9 percent in the
year 2000, and a weighted average discount rate of 8 percent. Fiscal 1994
assumptions included a medical plan cost trend rate of 14.5 percent declining to
7.9 percent in the year 2000, and weighted average discount rate of 7.5 percent.
A one-percentage-point increase in the assumed health care cost trend rates for
each future year increases the accumulated postretirement benefit obligation for
health care benefits by approximately $300,000 with minimal impact on interest
cost and no impact on service cost, since benefits for future retirees are
defined-dollar benefits unrelated to health care benefits. Unrecognized net
gains or losses in excess of 10 percent of the accumulated postretirement
benefit obligation are amortized over the average remaining service period of
active plan participants.

                                       42
<PAGE>
 
COMMITMENTS AND CONTINGENCIES

The Company's noncancelable minimum rental commitments for facilities and
equipment are $4.6 million in 1997, $2.1 million in 1998, $1.1 million in 1999,
$600,000 in 2000, $200,000 in 2001 and $100,000 thereafter.  Operating lease
rental expenses were $3.2 million in the six month period ended December 28,
1996, $6.3 million in fiscal 1996, $6.3 million in fiscal 1995 and $6 million in
fiscal 1994.

Jostens has forward contracts of $19.9 million for commitments to purchase
49,283 ounces of gold that mature at various times in 1997 with prices ranging
from $372 to $414 per ounce. Jostens is a party to litigation arising in the
normal course of business. Management regularly analyzes current information
and, as necessary, provides accruals for probable liabilities on the eventual
disposition of these matters. Management believes that the effect on the
Company's results of operations and financial position, if any, for the
disposition of these matters will not be material.

As part of its continuing environmental management program, Jostens is involved
in various environmental improvement activities.  As sites are identified and
assessed in this program, the Company determines potential environmental
liability. Factors considered in assessing this liability include, among others,
the following:  whether the Company has been designated as a potentially
responsible party, the number of other potentially responsible parties
designated at the site, the stage of the proceedings, and available
environmental technology. As of December 28, 1996, the Company has identified
four sites which require further investigation.  However, the Company has not
been designated as a potentially responsible party at any site.

During the six month period ended December 28, 1996, Jostens adopted the
provisions of Statement of Position (SOP) 96-1, Environmental Remediation
Liabilities.  The provisions of SOP 96-1 do not differ substantially from the
accounting treatment previously followed by the Company.  Under SOP 96-1, the
Company is required to assess the likelihood that an environmental liability has
been incurred and accrue for the best estimate of any loss where the likelihood
of incurrence is assessed as probable and the amount can be reasonably
estimated.  Management has assessed the likelihood that a loss has been incurred
at its sites as probable and, based on findings included in a preliminary
remediation report received in January 1997, estimates the potential loss to
range from $1.7 million to $9.7 million.  Based on a review of the remediation
alternatives outlined in the report, management believes that the best estimate
of the loss is $6.6 million.  The Company recorded a charge to operations of $6
million during the six months ended December 28, 1996, to increase the
liability for environmental costs to the revised best estimate amount contained
in the preliminary remediation report.  The current portion of this liability
($600,000) is included with "other accrued liabilities" on the consolidated
balance sheet while the long-term portion ($6 million) is included with "other
noncurrent liabilities".

While Jostens may have a right of contribution or reimbursement under insurance
policies, amounts that may be recoverable from other entities by the Company
with respect to a particular site are not considered until recoveries are deemed
to be probable.  No assets for potential recoveries have been established as of
December 28, 1996.

During fiscal 1996, the Company was approached by a group of sales
representatives seeking changes in their agreements with Jostens.  All of the
Company's sales representatives have similar contractual arrangements, and the
Company does not anticipate substantial changes to that relationship with the
majority of sales representatives.

For approximately 50 representatives who serve the college market, the Company
decided to change their contract status from independent sales representatives
to Company employees effective July 1, 1997.  These representatives' current
contracts call for a transition commission, which historically has 

                                       43
<PAGE>
been paid by the new sales representatives who assumed responsibility for the
accounts of the outgoing representative, with the Company acting as a collection
agent. Those representatives who agree to become employees of the Company will
forgo their right to the transition commission in exchange for participation in
a newly created severance plan as well as other employee benefit programs. The
Company will record this severance liability ratably over the estimated service
period as employees. Those representatives who elect not to become employees
will receive future transition payments from the Company in exchange for signing
an agreement not to compete. These payments will be provided over the non
compete period. Payments in future years relating to the severance plan and
transition commissions are estimated to aggregate approximately $9 million.

SHAREHOLDERS' INVESTMENT

Share Repurchase.  In September 1995, the Company repurchased 7,011,108 shares
of its common stock, the maximum number of shares allowable for purchase for
$169.3 million, through a Modified Dutch Auction tender offer. The repurchase
was funded from the Company's cash and short-term investment balance, as well as
short-term borrowings.

Stock Options and Restricted Stock. Under stock option plans, the Company has
granted options to key employees to purchase common shares of the Company at 100
percent of the market price on the dates the options are granted.  One plan also
provides for increases in the number of shares available for future grants
equal to one percent of the outstanding common shares on July 1 of each year
through July 1, 2002.  The Company applies Accounting Principles Board Opinion
No. 25, Accounting for Stock Issued to Employees (APB 25), and related
interpretations in accounting for its employee stock options and long-term
management incentive plans, which are described below.  Accordingly, no
compensation cost has been recognized for these plans.  Had compensation cost
for the Company's stock option and long-term management incentive plans been
determined based on fair value at the grant dates for awards under those plans
consistent with the method of Financial Accounting Standards Board SFAS No. 123,
Accounting for Stock-Based Compensation, the Company's net income and earnings
per share would have been reduced to the pro-forma amounts indicated below:

                                      SIX MONTHS
                                   ENDED DECEMBER 28,     YEAR ENDED JUNE 30,
(Dollars in thousands)                   1996                    1996
-------------------------------------------------------------------------------
Net income          As reported       $   (803)               $  51,625
                    Pro forma         $   (905)               $  51,500

Earnings per share  As reported       $  (0.02)               $    1.28
                    Pro forma         $  (0.02)               $    1.28
===============================================================================

                                       44
<PAGE>
 
The pro-forma amounts indicated above reflect the amortization to expense of the
estimated fair value of the stock awards over the awards' vesting period.  The
effects of applying the fair value method of measuring compensation expense for
the six months ended December 28, 1996 and fiscal 1996 are not likely to be
representative of the effects for future years in part because the fair value
method was applied only to stock options granted after June 30, 1995.

The weighted average fair values of options granted during the six month period
ended December 28, 1996 and fiscal 1996 are $3.01 and $4.18 per option,
respectively. The Company used the following weighted average assumptions in the
Black-Scholes option pricing model in estimating the fair value of stock options
at the date of grant:

                                         SIX MONTHS              YEAR
                                            ENDED                ENDED
                                      DECEMBER 28, 1996      JUNE 30, 1996
------------------------------------------------------------------------------
Risk-free interest rate                      6.2%                 6.2%
Dividend yield                               4.7%                 3.9%
Volatility factor of the expected
 market price of the Company's
 common stock                                 20%                  20%
Expected life of the award (years)           5.2                  5.2
------------------------------------------------------------------------------

Following is a summary of stock option activity:

<TABLE> 
<CAPTION>     
                                 SIX MONTHS ENDED             YEAR ENDED                  YEAR ENDED                 YEAR ENDED 
                                DECEMBER 28, 1996            JUNE 30, 1996               JUNE 30, 1995              JUNE 30, 1994
                               ---------------------      ---------------------      ---------------------      --------------------

                                           Weighted-                  Weighted-                  Weighted-                 Weighted-
                                            Average                    Average                    Average                   Average
                                           Exercise                   Exercise                   Exercise                  Exercise
(In thousands)                 Number       Price         Number       Price         Number       Price         Number      Price
-----------------------------------------------------------------------------------------------------------------------------------
<S>                            <C>         <C>            <C>         <C>            <C>         <C>            <C>        <C> 
Outstanding-beginning 
 of year                        2,751      $  22.38       2,971       $  22.39        2,400      $  24.96        2,446     $  23.19
Granted                           192      $  18.66         278       $  22.61          822      $  18.28          463     $  17.93
Exercised                         (26)     $  19.32        (163)      $  17.53          (28)     $  11.78          (26)    $  12.88
Forfeited                         (35)     $  24.95        (335)      $  25.04         (223)     $  23.94         (483)    $  25.68
------------------------------------------------------------------------------------------------------------------------------------
Outstanding-end of year         2,882      $  22.13       2,751       $  22.38        2,971      $  22.39        2,400     $  24.96

Exercisable at end of year      1,573      $  24.73       1,491       $  24.87        1,576      $  24.77        1,335     $  24.51

Reserved for issuance           4,448                      4,098                      3,849                      3,505
Available for future grants     1,511                      1,292                        775                      1,240

</TABLE> 

At December 28, 1996, the exercise price on outstanding options ranged from
$17.19 to $34.19 per share.  The weighted average remaining contractual life was
6 years on outstanding options and 4.3 years on exercisable options as of
December 28, 1996.

During fiscal 1995, certain members of the Jostens senior management team were
granted performance share units, as part of Jostens' long-term management
incentive plan.  Performance share units are tied directly to attaining specific
financial performance targets.  If all or a portion of the performance units are
awarded, the units are converted into a restricted stock award, which is subject
to transfer and vesting restrictions based upon continuous employment of the
recipient.  In addition, holders of restricted shares have voting, liquidation
and other rights with respect to these shares and receive dividends paid on
common stock.  A portion of these performance share units were to be converted
into restricted shares in each of fiscal years 1995 and 1996 and calendar year
1997, contingent upon achieving the financial performance targets established
under the plan.  No shares were available during the six months ended 
December 28, 1996. Performance share unit and restricted share activity under
this plan are summarized as follows:

                                       45
<PAGE>
 
(In thousands)                       PERFORMANCE              RESTRICTED
                                     SHARE UNITS                SHARES
--------------------------------------------------------------------------------
BALANCES, JUNE 30, 1994                        -                       -
--------------------------------------------------------------------------------
Granted                                  171,573                       -
Converted                                (53,290)                 53,290
--------------------------------------------------------------------------------
BALANCES, JUNE 30, 1995                  118,283                  53,290
--------------------------------------------------------------------------------
Granted                                   13,807                       -
Canceled                                 (77,144)                      -
Redeemed                                       -                  (5,141)
--------------------------------------------------------------------------------
BALANCES, JUNE 30, 1996                   54,946                  48,149
--------------------------------------------------------------------------------
Canceled                                  (5,333)                      -
--------------------------------------------------------------------------------
BALANCES, DECEMBER 28, 1996               49,613                  48,149
================================================================================

In fiscal 1995, restricted shares were awarded under this plan as a result of
achieving 1995 performance share unit targets resulting in $1.2 million in
expense in 1995.  The Company did not achieve the financial targets in fiscal
1996 which resulted in the cancellation of a portion of the outstanding
performance share units.  In addition, certain participating employees
terminated their employment with the Company which resulted in the cancellation
of additional performance share units and the redemption of previously issued
restricted shares.

Shareholder Rights Plan.  In August 1988, the Board of Directors declared a
distribution to shareholders of one common share purchase right for each
outstanding common share. Each right entitles the holder to purchase one common
share at an exercise price of $60. The rights become exercisable if a person
acquires 20 percent or more, or announces a tender offer for 25 percent or more,
of the Company's common shares. If a person acquires at least 25 percent of the
Company's outstanding shares, each right will entitle the holder to purchase the
Company's common shares having a market value of twice the exercise price of the
right. If the Company is acquired in a merger or other business combination,
each right will entitle the holder to purchase common stock of the acquiring
Company at a similar 50 percent discount. The rights, which expire in August
1998, may be redeemed by the Company at a price of 1 cent per right at any time
prior to the 30th day after a person has acquired at least 20 percent of the
Company's outstanding shares.

BUSINESS SEGMENT INFORMATION

The Company's operations are classified into two business segments: school-based
recognition products and services (School Products) and longevity and
performance recognition products and services for businesses (Recognition).

The School Products segment manufactures and sells products and services
including yearbooks, class rings, graduation products and student photography
packages, as well as customized products for university alumni and other
affinity groups.

                                       46
<PAGE>
 
Operations within the Recognition segment include the manufacture and sale of
customized sales, service and business achievement awards.

Operating income from continuing operations by business segment is defined as
sales less operating costs and expenses. Income and expense not allocated to
business segments include investment income, interest expense and corporate
administrative costs.

Identifiable assets are assets used exclusively in the operations of each
business segment and are reflected after eliminating intercompany balances.
Corporate assets principally comprise cash, short-term investments, deferred
income tax assets, notes receivable and certain property and equipment.

Financial information by reportable business segment is included in the
following summary:

                                  SIX MONTHS       
                                    ENDED             YEARS ENDED JUNE 30,
                                  DECEMBER 28,     ----------------------------
(Dollars in thousands)               1996           1996       1995       1994
-------------------------------------------------------------------------------
NET SALES
School Products                   $ 236,042    $ 594,941  $ 565,033  $ 546,191
Recognition                          41,076      100,208    100,066    103,678
-------------------------------------------------------------------------------
Consolidated                      $ 277,118    $ 695,149  $ 665,099  $ 649,869
===============================================================================
INCOME FROM CONTINUING
 OPERATIONS
School Products                   $  20,632    $ 107,648  $ 107,071  $  73,463
Recognition                          (4,403)       9,468      4,727      9,489
Corporate items and eliminations    (12,077)     (22,314)   (17,180)   (29,478)
-------------------------------------------------------------------------------
Consolidated                          4,152       94,802     94,618     53,474
Net interest expense                 (4,126)      (7,323)      (725)    (4,980)
-------------------------------------------------------------------------------
Income from Continuing Operations
 Before Income Taxes              $      26    $  87,479   $  93,893 $  48,494
===============================================================================

                                       47
<PAGE>
 
                                                        YEARS ENDED JUNE 30,
                                     DECEMBER 28,  -----------------------------
(Dollars in thousands)                  1996         1996       1995       1994
--------------------------------------------------------------------------------
IDENTIFIABLE ASSETS
School Products                      $ 265,970  $ 253,736  $ 236,424  $ 225,249
Recognition                             42,905     46,960     45,177     47,315
Discontinued operations                      -          -      6,165    119,999
Corporate items and eliminations        72,333     83,278    260,202    177,268
--------------------------------------------------------------------------------
Consolidated                         $ 381,208  $ 383,974  $ 547,968  $ 569,831 
================================================================================
DEPRECIATION AND AMORTIZATION
School Products                      $   7,085  $  11,395  $  10,951  $  11,700
Recognition                              1,409      2,056      2,111      1,775
Discontinued operations                      -          -     13,179     24,013
Corporate items                          1,440      3,106      2,098      1,439
-------------------------------------------------------------------------------
Consolidated                         $   9,934  $  16,557  $  28,339  $  38,927
================================================================================
CAPITAL EXPENDITURES
School Products                      $   7,691  $  12,948  $   8,540  $   6,252
Recognition                              1,434        463      1,369      1,054
Discontinued operations                      -          -      2,559      3,994
Corporate items                            773      1,960      6,674      3,902
-------------------------------------------------------------------------------
Consolidated                         $   9,898  $  15,371  $  19,142  $  15,202
================================================================================


Corporate recorded a restructuring charge of $8.5 million in 1994.  Income from
continuing operations for School Products in 1994 included $16.4 million of
provisions for revised estimates of inventories, receivables and overdrafts.
Income from continuing operations for Recognition in fiscal 1994 included
$500,000 for revised inventory estimates.  Loss from continuing operations for
the six month period ended December 28, 1996 includes an additional $16.9
million (26 cents per share) in cost of products sold for School Products
related to the new inventory cost accounting system as well as $6 million (9
cents per share) in environmental charges to cover continued environmental
investigation and clean-up in Recognition.

                                       48
<PAGE>
 
DISCONTINUED OPERATIONS

The statements of consolidated operations are presented to reflect the Company's
Jostens Learning Corporation (JLC), Wicat Systems and Sportswear businesses as
discontinued operations.

In June 1995, Jostens sold its JLC curriculum software subsidiary to a group led
by Bain Capital, Inc. for $50 million in cash; a $36 million unsecured,
subordinated note maturing in eight years with a stated interest rate of 11
percent; and a separate $4 million note with a stated interest rate of 8.3
percent convertible into 19 percent of the equity of Jostens Learning, subject
to dilution in certain events.  The notes were recorded at fair value, using an
estimated 20 percent discount rate on the $36 million note resulting in a
discount of $9.9 million.

As part of the JLC sale, Jostens also agreed to pay $13 million over two years
to fund certain JLC existing liabilities; $12.4 million has been paid through
December 28, 1996.  The remaining $600,000 has been accrued as part of other
accrued liabilities.

In October 1995, the Company sold its Wicat Systems business to Wicat
Acquisition Corp., a private investment group.  Wicat Systems was the small,
computer-based aviation training subsidiary of JLC that was retained in the sale
of JLC, but held for sale.  The Company received $1.5 million in cash plus a
promissory note for approximately $150,000 from the sale. The Company treated
Wicat Systems as a discontinued operation in June 1995, pending the sale of the
business.

A transaction gain of $11.1 million ($5.8 million after tax) was originally
recorded at the time of the JLC sale and deferred in accordance with the
Securities and Exchange Commission Staff Accounting Bulletin No. 81, Gain
Recognition on the Sale of a Business or Operating Assets to a Highly Leveraged
Entity.  In the second quarter of fiscal 1996, the deferred gain increased to
$17.2 million ($9.7 million after tax) as a result of the sale of Wicat ($5.3
million) and some accrual settlements ($800,000).

In conjunction with JLC's efforts to raise additional equity capital for ongoing
cash requirements, JLC requested that the Company restructure its interests in
JLC.  On November 8, 1996, the Company restructured terms of its $36 million,
unsecured, subordinated note from JLC in conjunction with a third party equity
infusion into JLC.  Terms of the restructuring resulted in the exchange of the
$36 million unsecured, subordinated note and accrued interest for a new $57.2
million unsecured, subordinated note maturing on June 29, 2003, with a stated
interest rate of 6 percent and rights to early redemption discounts.  The early
redemption discounts, exercisable only in whole at JLC's option, adjust
periodically and ranged from a 70 percent discount on the face value if redeemed
by December 28, 1996, to 40 percent if redeemed by March 31, 2003.  The new note
was recorded at fair value using an estimated 20 percent discount rate on the
$57.2 million note resulting in a discount of $35.1 million.  The restructuring
had no impact on the net carrying value of Jostens' investment in JLC as the $4
million reduction in the note receivable's carrying value was offset by a
corresponding reduction in the deferred gain to $13.2 million ($7.3 million
after tax) at December 28, 1996.

The adjusted $13.2 million gain and interest on the notes receivable will be
deferred until cash flows from the operating activities of JLC are sufficient to
fund debt service, dividend or any other covenant requirements.  The deferred
gain is presented in the condensed consolidated balance sheet as an offset to
notes receivable.  The notes receivable balance represents amounts owed by JLC
related to the sale of JLC net of a $35.1 million discount and the deferred
gain. Despite the equity infusion and restructuring of Jostens interests in JLC,
there is no guarantee that JLC will be able to repay the note. JLC has incurred
losses in both 1996 and 1995, however, the Company believes that such carrying
value is not impaired based on current facts and circumstances.

                                       49
<PAGE>
 
In 1994, Jostens also recorded a restructuring charge of $60.9 million ($40.2
million after tax, or 88 cents per share) related to JLC, which has been
reclassified as part of discontinued operations. The restructuring charge
relating to JLC included $39.1 million to focus its product development, $7.3
million to exit both direct and indirect investments in three ancillary lines of
business, $4.1 million to exit the hardware sales and service business, and
$10.4 million for work-force reductions.

Significant accounting policies relevant to discontinued operations included
those related to capitalization of software development costs and software
revenue recognition.  JLC capitalized software development costs when the
project reached technological feasibility and ceased capitalization when the
product was ready for release.  Research and development costs related to
software development that had not reached technological feasibility were
expensed as incurred.  Software development costs were amortized on the
straight-line method over a maximum of five years or the expected life of the
product, whichever was less.  JLC recognized revenue for hardware and software
upon shipment of the product, provided that no significant vendor or post-
contract obligations remained outstanding and collection of the resulting
receivable was deemed probable.  Revenue generated from service contracts and
post-contract customer support on software was recognized ratably over the
period of the contract.  The revenue recognition for instruction and user
training was part of the service contract recognized ratably over the life of
the contract.  For insignificant vendor and post-contract obligations remaining
at the time of shipment, the company's policy was to accrue all such
obligations.

In January 1994, Jostens sold its Sportswear business to a subsidiary of Fruit
of the Loom for $46.7 million in cash.  Jostens recognized an $18.5 million gain
($11 million after tax) on the sale, primarily because the Sportswear business
had previously been written down by $15 million to its estimated net realizable
value.

Revenue and income data related to discontinued operations is as follows:

JLC/WICAT SYSTEMS                
(Dollars in thousands)                          1995             1994
-------------------------------------------------------------------------------
Revenue                                     $  108.6         $  177.5
Restructuring charges                              -             60.9
Income tax benefit                               2.5             28.0
Loss from operations                         $   4.9         $   54.3


SPORTSWEAR                                                       1994
--------------------------------------------------------------------------------
Revenue                                                      $   52.1
Income tax benefit                                                0.5
Loss from operations                                              0.8
Gain on sale, net of tax                                     $   11.0


RESTRUCTURINGS

The Company recorded an $8.5 million restructuring charge ($5.1 million after
tax, or 12 cents per share) related to continuing operations in the fourth
quarter of fiscal 1994, covering headcount reductions in the general and
administrative functions.  The Company also recorded a $40.2 million ($25.3
million after tax, or 56 cents per share) charge to continuing operations in
1993 to restructure the Photography business, reduce headcount and write off
abandoned receivables.  In fiscal 1995, 

                                       50
<PAGE>
 
restructuring reserves decreased by $13.4 million to $5.5 million at June 30,
1995, due to payments of $11.1 million and noncash items of $2.3 million. In
fiscal 1996, restructuring reserves decreased by $2.8 million to $2.7 million at
June 30, 1996, due to payments of $2.4 million and noncash items of $400,000.
Restructuring reserves decreased by $1.4 million during the six month period
ended December 28, 1996, to $1.3 million due to payments of $1 million and
noncash items of $400,000.

CHANGES IN ACCOUNTING ESTIMATES

As a result of certain changes in business conditions, the Company conducted a
review that concluded at the end of the third quarter of fiscal 1994.  That
review led the Company to increase reserves for inventories, receivables and
overdrafts from independent sales representatives to reflect amounts estimated
not to be recoverable, based upon current facts and circumstances.  The revised
estimates, reduced pretax income for 1994 by $16.9 million ($10.1 million after
tax, or 22 cents per share).

                                       51
<PAGE>
 
Unaudited Quarterly Financial Data
Jostens Inc. and Subsidiaries

<TABLE> 
<CAPTION> 
                                                                             Total for
1996 Transition Period for the Six Months Ended  December 28, 1996        the Six Months
(Dollars in thousands, except per-share data)     (3)           (3)             Ended
                                                  First        Second    December 28, 1996
------------------------------------------------------------------------------------------
<S>                                           <C>            <C>              <C>               <C>                  <C> 
Net sales                                     $   105,399    $  171,719       $   277,118
 
Gross margin                                  $    44,552    $   91,073       $   135,625
 
Income (loss) from  continuing operations     $    (5,027)   $    4,224       $      (803) 
 
Net income (loss)                             $    (5,027)   $    4,224       $      (803)
 
Earnings per share                            $     (0.13)   $     0.11       $     (0.02)
 
Stock Price:  high                            $    20 7/8    $   22 1/4       $    22 1/4
              low                             $    17 1/4    $   19 5/8       $    17 1/4
 
Dividends declared per share (2)              $      0.00    $     0.22       $      0.22
----------------------------------------------------------------------------------------- 
Fiscal 1996
(Dollars in thousands, except per-share data)
                                               First           Second             Third           Fourth            Total Year
------------------------------------------------------------------------------------------------------------------------------------

Net sales                                     $ 97,754       $  165,779       $   141,863      $   289,753          $   695,149
 
Gross margin                                  $ 51,954       $   91,812       $    81,347      $   137,824          $   362,937
 
Income from continuing operations             $  2,513       $   11,973       $     6,773      $    30,366          $    51,625
 
Net income                                    $  2,513       $   11,973       $     6,773      $    30,366          $    51,625
 
Earnings (1) per share                        $   0.06       $     0.31       $      0.18      $      0.79          $      1.28
 
Stock Price:  high                            $ 24 1/2       $   25 1/8       $    24 3/8      $    22 7/8          $    25 1/8
              low                             $ 20 7/8       $   22 1/4       $    21 1/8      $    19 1/2          $    19 1/2
 
Dividends declared per share                  $   0.22       $     0.22       $      0.22      $      0.22          $      0.88
------------------------------------------------------------------------------------------------------------------------------------

Fiscal 1995
(Dollars in thousands, except per-share data)
                                               First           Second             Third           Fourth            Total Year
------------------------------------------------------------------------------------------------------------------------------------

Net sales                                     $ 98,023       $  157,623       $   139,038      $   270,415          $   665,099
 
Gross margin                                  $ 53,135       $   84,675       $    77,925      $   135,705          $   351,440
 
Income from continuing operations             $  3,589       $   12,367       $     9,437      $    30,473          $    55,866
 
Net income                                    $  1,316       $   11,707       $     8,511      $    28,834          $    50,368
 
Earnings per share: continuing  operations    $   0.08       $     0.27       $      0.21      $      0.67          $      1.23
                    net income                $   0.03       $     0.26       $      0.18      $      0.64          $      1.11
 
Stock Price:  high                            $ 18 3/4       $   19 3/8       $   21 1/4       $    21 5/8          $    21 5/8
              low                             $ 15 3/4       $   16 7/8       $   17 3/4       $    18 7/8          $    15 3/4
 
Dividends declared per share                  $   0.22       $     0.22       $     0.22       $      0.22          $      0.88
------------------------------------------------------------------------------------------------------------------------------------

</TABLE> 
(1)  Earnings per share by quarter in fiscal 1996 do not add up to the annual
earnings per share amount because each quarter and the year are
calculated separately based on weighted average outstanding shares and common
share equivalents during the period.
 
(2) No cash dividend was declared in the first quarter due to the timing of the
declarations.  The first quarter dividend of $.22 per share
was declared in the second quarter of the six month period ended December 28,
1996.  The second quarter dividend of $.22 per share was declared
in January 1997.
 
(3)  The implementation of the new inventory cost accounting system had the
effect of increasing cost of products sold $16.9 million
for the six month period ended December 28, 1996.
 
The quarterly financial data above include the effects of reclassifying Jostens
Learning Corporation and Wicat Systems as discontinued
operations.

                                       52
<PAGE>
 
Item 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTING AND FINANCIAL DISCLOSURE

          None.

                                       53
<PAGE>
 
                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors of the Registrant are as follows.  Each director's term expires at the
next subsequent annual meeting after the end of the year shown below each
director's name.


<TABLE>
<CAPTION>
 
Name                                       Director Since      Age     Title and Business Experience
----                                       --------------      ---     -----------------------------              
<S>                                       <C>                  <C>     <C>
Lilyan H. Affinito                         1987                 65     Director
(1999)                                                                 Until 1991, Ms. Affinito served as Vice Chairman of the
                                                                       Board of Maxxam Group, Inc., a forest products, real
                                                                       estate management and development and integrated
                                                                       aluminum production company.  She previously served as
                                                                       President and Chief Operations Officer of Maxxam Group.
                                                                       She is a director of Kmart Corporation; Caterpillar,
                                                                       Inc.; Chrysler Corporation; New York Telephone Company
                                                                       and New England Telephone and Telegraph Company (NYNEX
                                                                       telephone subsidiaries); Tambrands, Inc.; and Lillian
                                                                       Vernon Corp.
                                                                      
Robert C. Buhrmaster                       1993                 49     Director
(1998)                                                                 Mr. Buhrmaster joined the company in December 1992 as
                                                                       Executive Vice President and Chief Staff Officer. He
                                                                       was named President and Chief Operating Officer in June
                                                                       1993 and was named President and CEO in March 1994.
                                                                       Prior to joining the company, Mr. Buhrmaster was with
                                                                       Corning, Inc. for 18 years, most recently as Senior
                                                                       Vice President of Strategy and Business Development.
                                                                       He is a director of The Toro Company.
                                                                      
Jack W. Eugster                            1995                 51     Director
(1998)                                                                 Mr. Eugster is Chairman, President and Chief Executive
                                                                       Officer of Musicland Stores Corp.  He has been with
                                                                       Musicland Stores Corp. since June 1980.  He is also a
                                                                       director of Damark, Inc.; Donaldson Company, Inc.;
                                                                       MidAmerican Energy Company; and ShopKo Stores.
                                                                      
Mannie L. Jackson                          1994                 57     Director
(1997)                                                                 Mr. Jackson is majority owner and Chairman of Harlem
                                                                       Globetrotters, Inc., a sports and entertainment
                                                                       company.  Until December 1, 1994, he was Senior Vice
                                                                       President-Corporate Marketing and Administration of
                                                                       Honeywell Inc., a manufacturer of control systems.  He
                                                                       was with Honeywell since 1968, serving in a variety of
                                                                       executive capacities.  He is a director of Stanley
                                                                       Products; Ashland Oil Corporation; Martech Controls
                                                                       South Africa; and Reebok Corporation.
                                                                      
</TABLE> 

                                       54
<PAGE>
 
<TABLE> 
<CAPTION> 
                                                              
                                                                      
<S>                                        <C>                  <C>    <C> 
Robert P. Jensen                           1980                 71     Director
(1997)                                                                 Mr. Jensen is a private investor.  He previously served
                                                                       as Chairman and Chief Executive Officer of G.K.
                                                                       Technologies, Inc.; Tiger International, Inc.; and E.F.
                                                                       Hutton LBO, Inc.
                                                                      
Kendrick B. Melrose                        1996                 56     Director
(1999)                                                                 Mr. Melrose is Chairman and Chief Executive Officer of
                                                                       The Toro Company, a manufacturer of outdoor
                                                                       beautification equipment.  He has been with The Toro
                                                                       Company since 1970.  He is a director of The Valspar
                                                                       Corporation and Donaldson Company, Inc.
                                                                      
Richard A. Zona                            1996                 52     Director
(1999)                                                                 Mr. Zona is Vice Chairman-Finance of First Bank System,
                                                                       Inc., a regional bank holding company.  He has been
                                                                       with First Bank System, Inc. since September 1989.

Executive officers of the Registrant are as follows:
 
                                           Years of Service 
Name                                       with the Company    Age     Title and Business Experience
----                                       -----------------   ---     -----------------------------                           
                                                                       
Robert C. Buhrmaster                        4                   49     President and Chief Executive Officer
                                                                       Mr. Buhrmaster joined the company in December 1992 as
                                                                       Executive Vice President and Chief Staff Officer. He
                                                                       was named President and Chief Operating Officer in June
                                                                       1993 and was named to his current position in March
                                                                       1994.  Prior to joining the company, Mr. Buhrmaster was
                                                                       with Corning, Inc. for 18 years, most recently as
                                                                       Senior Vice President of Strategy and Business
                                                                       Development.  He is a director of The Toro Company.

Charles W. Schmid                           3                   54     Executive Vice President
                                                                       Mr. Schmid joined the company in April 1994 as Senior
                                                                       Vice President and Chief Marketing Officer, and was
                                                                       appointed to his current position in August 1995.
                                                                       Prior to joining the company he was President and Chief
                                                                       Operating Officer for Carlson Companies, Inc.  From
                                                                       1979 through 1991, Mr. Schmid served in various
                                                                       executive capacities for Philip Morris Companies, Inc.,
                                                                       from 1988 through 1991 as Senior Vice President of
                                                                       Marketing for its Miller Brewing Company.

Orville E. Fisher Jr.                      21                   52     Senior Vice President - Administration and Secretary
                                                                       Mr. Fisher joined the company in 1975 as General
                                                                       Counsel, was named Vice President, General Counsel and
                                                                       Assistant Secretary in 1977, and was named Senior Vice
                                                                       President, General Counsel & Secretary in 1988.  He
                                                                       assumed his present position in 1996.
                                                                       
</TABLE> 

                                       55
<PAGE>
 
<TABLE> 
<CAPTION> 

<S>                                         <C>                 <C>    <C> 
Trudy A. Rautio                             4                   44     Senior Vice President and Chief Financial Officer
                                                                       Ms. Rautio joined the company in June 1993 as Vice
                                                                       President of Finance and Administration for the School
                                                                       Products Group.  She was named Vice President and
                                                                       Controller in August 1993 and was appointed to her
                                                                       current position in August 1995. Prior to joining the
                                                                       company, she worked for the Pillsbury Company for 12
                                                                       years, most recently as Vice President, Finance
                                                                       International and Strategic Brand Development and
                                                                       earlier as Vice President, Finance for Green Giant.

Jack Thornton                              18                   43     Senior Vice President - Imaging
                                                                       Mr. Thornton has held several management positions with
                                                                       the company since starting as a personnel manager in
                                                                       1978.  He was promoted to Operations Manager of the
                                                                       Printing and Publishing Division in 1989 and Vice
                                                                       President of Operations of the School Products Group
                                                                       one year later.  He was named a Vice President of the
                                                                       company in February 1991.  He was appointed a Senior
                                                                       Vice President of the School Products Group in October
                                                                       1992.  He was appointed General Manager of the Printing
                                                                       and Publishing business in April 1993.  He assumed his
                                                                       current position in August 1995.

Gregory S. Lea                              3                   44     Vice President - College and University
                                                                       Mr. Lea joined the company in November 1993 as Vice
                                                                       President - Total Quality Management.  He was named to
                                                                       his current position in June 1995.  Prior to joining
                                                                       the company, Mr. Lea spent 19 years with International
                                                                       Business Machines Corp. in various financial,
                                                                       operations and quality positions, most recently as
                                                                       director of market driven quality for IBM's AS/400
                                                                       Division.

Lee U. McGrath                              2                   40     Vice President and Treasurer
                                                                       Lee U. McGrath joined the company in May 1995. Prior to
                                                                       joining the company he worked for six years for H.B.
                                                                       Fuller Company in various positions, most recently as
                                                                       Assistant Treasurer.

</TABLE> 

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

     Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the company's directors, executive officers, and all
persons who beneficially own more than 10% of the outstanding shares of the
company's common stock to file with the Securities Exchange Commission and the
New York Stock Exchange initial reports of ownership and reports of changes in
ownership of the company's common stock and other equity securities of the
company.  Executive officers, directors and greater than 10% beneficial owners
are also required to furnish the company with copies of all Section 16(a) forms
they file.  To the company's knowledge, based solely on a review of the copies
of the reports furnished to the company during the six month period ended
December 28, 1996, none of the directors, executive officers or beneficial
owners of greater than 10% of the company's common stock failed to file on a
timely basis the forms required by Section 16 of the Exchange Act.

                                       56
<PAGE>
 
ITEM 11.  EXECUTIVE COMPENSATION

EXECUTIVE OFFICER COMPENSATION

     The following table sets forth the cash and non-cash compensation during
the six month transition period ended December 28, 1996 and during the fiscal
years ended June 30, 1996, 1995 and 1994 awarded to or earned by (i) the Chief
Executive Officer and each of the four most highly compensated executive
officers of the company.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>

                                                 ANNUAL COMPENSATION                       LONG TERM COMPENSATION
                                        ------------------------------------        -----------------------------------  
                                                                                                                 LONG
                                                                                                                 TERM
                                                                      OTHER                                    INCENTIVE
                                                                      ANNUAL        SECURITIES   RESTRICTED      PLAN     ALL OTHER 
    NAME AND                                         BONUS/(1)/      COMPENSA-      UNDERLYING     STOCK        PAYOUTS   COMPENSA-
PRINCIPAL POSITION           YEAR      SALARY ($)        ($)       TION/(2)/($)     OPTIONS(#)   AWARDS/(3)/($)   ($)     TION ($)
------------------------------------------------------------------------------------------------------------------------------------

<S>                          <C>        <C>         <C>              <C>          <C>           <C>               <C>    <C>   
 Robert C.                   6mos       217,692            0          10,988            0             0            0           0
 Buhrmaster,                 1996       495,833      126,800          22,967            0             0            0           0
 President and Chief         1995       470,833      237,500          80,104      216,000       341,488            0           0
 Executive Officer           1994       363,726      100,000          25,109      150,000             0            0           0 
                                                                                                              
 Charles W. Schmid,          6mos       130,223            0           8,508            0             0            0           0
 Executive Vice              1996       290,035       70,407          21,690        8,000             0            0           0
 President/(4)/              1995       254,340      114,844          16,653       72,000       113,815            0           0
                             1994        58,814        8,750           2,700       20,000             0            0           0
                                                                                                              
 John L. Jones,              6mos       110,105            0           7,714            0             0            0           0
 Senior Vice                 1996       236,957       52,839          25,236            0             0            0           0
 President                   1995       227,474      101,787          25,570       72,000       113,815            0           0
 -International/(5)/         1994       217,897       30,819          17,962       15,500             0            0           0
                                                                                                              
 Orville E. Fisher Jr.,      6mos       101,931            0           7,403            0             0            0      11,196
 Senior Vice President       1996       230,806       53,060          20,128            0             0            0      11,196
 -Administration and         1995       220,696      100,107          20,261       72,000       113,815            0      11,196
 Secretary/(6)/              1994       209,057       37,077          14,855       19,500             0            0      11,196
                                                                                                              
 Trudy A. Rautio,            6mos        96,412            0           6,148            0             0            0           0
 Senior Vice                 1996       216,667       49,718          15,974            0             0            0           0
 President and Chief         1995       189,708       90,000          10,826       72,000       113,815            0           0
 Financial Officer           1994       161,545       49,500          11,554       10,000             0            0           0
                                  
</TABLE>


    (1)  Includes bonuses paid in August of each year for the prior fiscal year.

    (2)  Includes the amounts indicated after each officer's name for the
         following items (a) automobile, (b) financial planning, (c) club dues
         and (d) medical reimbursement for the six month period ending December
         28, 1996: Mr. Buhrmaster: $7,136, $0, $3,852 and $0; Mr Schmid: $4,565,
         $0, $2,646 and $1,297; Mr. Jones: $4,982, $0, $2,732 and $0; Mr.
         Fisher: $5,337, $0, $2,039 and $28; and Ms. Rautio: $5,161, $550, $0
         and $437. Includes the amounts indicated after each officer's name for
         the following items (a) automobile, (b) financial planning, (c) club
         dues and (d) medical reimbursement for fiscal year 1996: Mr.
         Buhrmaster: $12,798, $0, $7,704 and $2,465; Mr Schmid: $8,585, $5,800,
         $5,613 and $1,691; Mr. Jones: $9,864, $5,290, $5,547 and $4,435; Mr.
         Fisher: $9,729, $2,500, $4,639 and $3,260; and Ms. Rautio: $8,093,
         $2,600, $1,060 and $4,221. Includes the amounts indicated after each
         officer's name for the following items (a) automobile, (b) financial
         planning, and (c) club dues for fiscal year 1995: Mr. Buhrmaster:
         $10,777, $10,000 and $56,401; Mr Schmid: $10,881, $0 and $5,606; Mr.
         Jones $10,075, $7,500 and $5,287; Mr. Fisher: $11,348, $1,365 and
         $4,243; and Ms. Rautio: $8,075, $787 and $1,442. Includes the amounts
         indicated after each officer's name for the following items (a)
         automobile, (b) financial planning, and (c) club dues for fiscal year
         1994: Mr. Buhrmaster: $11,100, $10,000 and $0; Mr Schmid: $0, $0 and
         $0; Mr. Jones: $8,908, $0 and $7,616; Mr. Fisher: $7,750, $850 and
         $4,676; and Ms. Rautio: $8,369, $2,575 and $0.
          
    (3)  Fiscal year 1995 amounts reflect conversion of performance shares into
         restricted stock pursuant to the Special Equity Performance Plan. No
         restricted stock was earned during fiscal year 1996 under this Plan and
         all related performance shares for fiscal year 1996 were forfeited. 
 

                                       57
<PAGE>
 
     (4) Mr. Schmid joined the company in April 1994 as Senior Vice President
         and Chief Marketing Officer. He was named Executive Vice President in
         August 1995. Mr. Schmid will resign from the company effective April
         15, 1997. See the Employment and Separation Agreement section below for
         a description of the terms of the employment and separation agreement
         between the company and Mr. Schmid.
          
 
 
     (5) Mr. Jones' term as Senior Vice President - International ended on
         October 24, 1996. Mr. Jones acted in an employment consulting capacity
         to Jostens through December 31, 1996 under the terms of an employment
         and separation agreement dated November 11, 1996. See the Employment
         and Separation Agreement section below for a description of the terms
         of the employment separation agreement between the company and Mr.
         Jones.
          
     (6) All Other Compensation includes annual life insurance premiums on the
         life of Mr. Fisher paid by the company in the period indicated for the
         Executive Supplemental Retirement Plan. The Executive Supplemental
         Retirement Plan was established in 1986 and is partially funded through
         life insurance policies purchased on individuals. The insurance
         proceeds are assigned to the company to reimburse it for the cost of
         the premiums paid. There is no substantial net cost to the company for
         this plan.
             
 
EMPLOYMENT AND SEPARATION AGREEMENTS

          In November 1996, the company entered into an employment separation
agreement with John L. Jones, a Senior Vice President of the company. Pursuant
to this agreement, the company agreed to provide Mr. Jones with certain payments
and benefits, including (i) a bonus equal to two months' base salary in lieu of
participation in any management bonus program; (ii) continuation of his base
salary for the 12 month period (the "Continuation Period") following December
31, 1996, the date his active employment ended; (iii) payment for unused
vacation time and for certain employee assistance and relocation costs and
services; (iv) continued employee status through the end of the Continuation
Period for purposes of vesting and exercise of stock options and restricted
stock awards; and (v) continuation of most of his existing benefits and
perquisites through the end of the Continuation Period. In the agreement, Mr.
Jones agreed not to disclose any confidential information of the company or,
prior to December 31, 1998, solicit any current employees or sales
representatives of the company or compete with the company.

          In February 1997, the company entered into an employment separation
agreement with Charles W. Schmid, an Executive Vice President of the company.
Pursuant to this agreement, the company agreed to provide Mr. Schmid with
certain payments and benefits, including (i) a bonus (if any is earned based on
a full years' target objectives) under the company's annual management bonus
program prorated for the first three months of 1997; (ii) the equivalent of 12
months' base salary payable over the 24 month period (the "Continuation Period")
that commences on April 15, 1997, the date his active employment ends; (iii)
payment for unused vacation time and for certain employee assistance costs and
services; (iv) continued employee status through the end of the Continuation
Period for purposes of vesting and exercise of stock options and restricted
stock awards; and (v) continuation of most of his existing benefits and
perquisites through the end of the Continuation Period. In the agreement, Mr.
Schmid agreed not to disclose any confidential information of the company or,
prior to April 30, 1999, solicit any current employees or sales representatives
of the company or compete with the company.


STOCK OPTION GRANTS DURING TRANSITION PERIOD ENDED DECEMBER 28, 1996

          There were no grants of stock options to the Chief Executive Officer
or the executive officers reflected in the Summary Compensation Table.

                                       58
<PAGE>
 
AGGREGATE STOCK OPTION EXERCISES DURING TRANSITION PERIOD ENDED DECEMBER 28,
1996 AND   STOCK OPTION VALUES AS OF DECEMBER 28, 1996

          The following table sets forth information with respect to the Chief
Executive Officer and the executive officers reflected in the Summary
Compensation Table concerning the exercise of options during the transition
period ended December 28, 1996 and unexercised options held as of December 28,
1996.

         AGGREGATED OPTION EXERCISES JULY 1, 1996 TO DECEMBER 28, 1996
                      AND DECEMBER 28, 1996 OPTION VALUES
<TABLE>
<CAPTION>

                                                         NUMBER OF UNEXERCISED OPTIONS AT          VALUE OF UNEXERCISED IN-THE-MC
                                                                 FISCAL YEAR END                   OPTIONS AT FISCAL YEAR END/(1)/
                                                        ----------------------------------       ----------------------------------
                                  SHARES
                               ACQUIRED ON     VALUE  
       NAME                     EXERCISE     REALIZED       EXERCISABLE    UNEXERCISABLE/(2)/      EXERCISABLE        UNEXERCISABLE
       ----                   -------------  --------       -----------    ------------------      -----------        -------------
<S>                                 <C>          <C>         <C>                <C>                  <C>              <C> 
Robert C.   Buhrmaster              0            0           101,250            299,750              $290,375         $1,032,767
                                                                                                              
Charles W. Schmid                   0            0            10,000             90,000                50,650            298,114
                                                                                                              
John L. Jones                       0            0            46,750             79,750                29,024            276,488
                                                                                                              
Orville E. Fisher Jr.               0            0            88,750             81,750               112,582            283,978
                                                                                                              
Trudy A. Rautio                     0            0             6,875             75,125                13,119            296,718
 
</TABLE>


(1)  Based on a closing price of $21.625 on December 27, 1996.

(2)  Options not yet exercisable generally become exercisable upon a change in
control of the company. A change of control as defined in the 1992 Stock
Incentive Plan occurs upon the sale of substantially all of the assets of the
company or other change of control event that would require disclosure under
federal securities laws.

JOSTENS RETIREMENT PLANS

          The company maintains a non-contributory pension plan, Pension Plan D
(Plan D), that provides benefits for substantially all salaried employees.
Retirement income benefits are based upon a participant's highest average annual
cash compensation (base salary plus annual bonus, if any) during any five
consecutive calendar years, years of credited service (to a maximum of 35 years)
and the Social Security covered compensation table in effect at termination.

          The company also maintains an unfunded supplemental retirement plan
that gives additional credit under Plan D for years of service as a company
sales representative to those salespersons who were hired as employees of the
company prior to October 1, 1991. In addition, benefits specified in Plan D may
exceed the level of benefits that may be paid from a tax-qualified plan under
the Internal Revenue Code of 1986, as amended. The benefits up to IRS limits are
paid from Plan D and benefits in excess, to the extent they could have been
earned in Plan D, are paid from the unfunded supplemental plan.

                                       59
<PAGE>
 
          The following table illustrates a reasonable estimate of the annual
benefits under Pension Plan D and the supplemental plan payable to employees,
including officers, under these plans. The table does not take into account
transition rule provisions of the plan for employees who were participants on
June 30, 1988.


<TABLE> 
<CAPTION> 

                                                                PROJECTED ANNUAL BENEFIT AT 
                                                              NORMAL RETIREMENT AT AGE 65 /(1)/
                                                   -----------------------------------------------------
                    
       FINAL ANNUAL                                         YEARS OF SERVICE AT RETIREMENT /(2)/
         AVERAGE                                   -----------------------------------------------------
       COMPENSATION                                  15          20         25         30         35
       ------------                                --------   --------   --------   --------   --------
       <S>                                         <C>        <C>        <C>        <C>        <C>   
       $ 150,000                                   $ 28,200   $ 37,600   $ 47,000   $ 56,400   $ 65,800
         200,000                                     39,400     52,600     65,700     78,900     92,000
         300,000                                     61,900     82,600    103,200    123,900    144,500
         400,000                                     84,700    112,600    140,700    168,900    197,000
         500,000                                    106,900    142,600    178,200    213,900    249,500
         600,000                                    129,400    172,600    215,700    258,900    302,000
         700,000                                    151,900    202,600    253,200    303,900    354,500
         800,000                                    174,400    232,600    290,700    348,900    407,000
         900,000                                    196,900    262,600    328,200    393,900    459,500
         950,000                                    208,200    277,600    347,000    416,400    485,800
</TABLE>
------------------------
(1) The projected benefits shown in the table are payable in a monthly benefit
    for life upon retirement at age 65.

(2) The following individuals named in the Summary Compensation Table have the
    respective number of years of service under Plan D: Mr. Buhrmaster, 4 years;
    Mr. Schmid, 2.75 years; Mr. Jones, 5 years; Mr. Fisher, 21.25 years; and Ms.
    Rautio, 3.5 years.

The company also maintains a non-contributory supplemental pension plan for
corporate vice presidents. Under the plan, vice presidents who retire after age
55 with at least seven years of service as a corporate vice president are
eligible for a benefit equal to 1 percent of final salary for each year of
service, up to a maximum of 30 percent. Only service after age 30 is recognized
in the plan. The calculation of benefits is frozen at the levels reached at age
60. For purposes of this plan, Mr. Jones will be eligible to receive benefits
under this plan if he has five years of service at age 60, but the maximum
benefit he may receive is limited to 5 percent of his salary at age 60. Mr.
Schmid will be eligible for benefits under this plan if he has at least five
years of service at retirement. Mr. Fisher is also eligible for benefits under
the old vesting rules in effect prior to 1995, which required attainment of age
50, 15 years of service and eight years of service as a corporate vice
president. If they continue in their current positions at their current levels
of compensation and retire at age 60, the estimated total annual pension amounts
from this plan for Messrs. Buhrmaster, Schmid, Jones, and Fisher and Ms. Rautio
would be $73,689, $25,012, $12,044, $65,736 and $42,729, respectively.


DIRECTOR COMPENSATION

          Directors' Fees. An annual retainer of $22,000 is paid to those
members of the Board of Directors who are not present or past employees of the
company. In addition, non-employee directors receive $1,000 for each Board or
Committee meeting attended and $500 for each telephone meeting. The Chair of
each Board committee is entitled to an additional $2,000 per year. Pursuant to
the company's 1992 Stock Incentive Plan, each non-employee director
automatically is granted, as of the date of each annual meeting of shareholders,
a non-qualified option to purchase 2,200 shares of the company's common stock at
the then current market value and an annual grant of restricted stock units
equal to 50 percent of the value of the then annual retainer. Such share units
receive dividend credits and are restricted until the director terminates
service as a director, at which time the share units are paid to the director in
company common stock.

                                       60
<PAGE>
 
<TABLE>
<CAPTION>

      Under the Jostens, Inc. Deferred Compensation Plan, a non-employee
director may elect to receive his or her fees currently in the form of either
cash or company stock or to defer such fees in an interest-bearing account
and/or a company share equivalent account. The interest-bearing account accrues
interest at a rate equivalent to the seven-year U.S. Treasury Note rate plus one
percentage point. Deferred compensation in the share equivalent account is
treated as though it were invested in company stock with such account credited
for dividend equivalents and adjusted to reflect share ownership changes
resulting from events such as a stock split or recapitalization. Participants
will have no voting rights with respect to the share equivalent account until
shares are distributed. Upon termination of service as a director, a participant
may elect to receive the balance in his or her account (in the form of cash or
shares, as the case may be) either in a lump sum or in installments. Upon a
change in control of the company, participants will receive the balance in their
accounts in a lump sum.


 
     Director Jensen serves as Chairman of the Board of Directors and of the
Executive Committee of the Board. Since these positions require Mr. Jensen to be
the key interface between the Board of Directors and the company's management,
the Board of Directors has entered into a consulting arrangement with Mr. Jensen
to pay him an additional fee of $25,000 per month. For the six month transition
period ended December 28, 1996 and each of the fiscal years ended June 30, 1996,
1995 and 1994, respectively, Mr. Jensen was due to receive or received aggregate
cash compensation as follows: $ 167,500 $335,000, $326,000, and $358,000.
Compensation paid is attributable to Mr. Jensen's service as Chairman along with
the standard compensation for services as a Board member. In addition, pursuant
to the company's stock option plan (as part of the standard compensation for all
non-employee directors), Mr. Jensen has received a grant on the date of the
annual meeting of shareholders of an option to purchase shares of the company's
common stock, vesting at the rate of 25 percent per year and expiring 10 years
after the date of grant in the following amounts and at the following exercise
prices during the transition period ended December 28, 1996 and fiscal years
ended June 30, 1996, 1995, and 1994, respectively: 2,200 shares at $21.9375;
1,000 shares at $22.94; 1,000 shares at $17.188; and 1,000 shares at $19.00.

 
     Directors Retirement Program. Each of the directors who has served as a
director prior to 1996 received the present value of the benefit, accrued in
accordance with the previous retirement policy, credited into his or her
Deferred Compensation Plan account. A discount rate of 10 percent was used in
the calculation of the present value and it was assumed that current non-
employee directors accrued benefit would commence at the earlier of mandatory
retirement age 5 years. The benefits will be paid out after termination of
service as a director in accordance with payout election made under the Deferred
Compensation Plan.

ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information with respect to
beneficial ownership of the company's common stock as of March 17, 1997 by (i)
each person who is known by the company to beneficially own more than 5% of the
company's common stock, (ii) each of the company's directors, (iii) each of the
executive officers reflected in the Summary Compensation Table and (iv) all
directors and executive officers as a group.
 
 
                            
                            
                                           Common Shares Owned                                                   
Name                                       Beneficially as of /(1)(2)/             Percent of Class  
----                                       ---------------------------             ----------------
<S>                                        <C>                                     <C> 
FMR Corporation                            5,238,744/(3)/                          13.55%     
82 Devonshire Street                                                                          
Boston, MA 02109                                                                              
                                                                                              
The Capital Group Companies, Inc.          3,911,850/(4)/                           10.1%     
333 South Hope Street                                                                         
Los Angeles, CA 90071                                                                         
                                                                                              
Principal Mutual Life Ins. Co.             2,128,605/(5)/                           5.52%     
711 High Street                                                                               
Des Moines, IA 50392                                                                          
                                                                                              
Lilyan H. Affinito/(6)/                       18,602                                *         
                                                                                              
Robert C. Buhrmaster                         185,515                                *         
                                                                                              
Jack W. Eugster/(6)/                           3,325                                *         
                                                                                              
Orville E. Fisher Jr.                        110,978                                *         

</TABLE> 

                                       61
<PAGE>
 
<TABLE> 
<CAPTION> 
                                                                                              
<S>                                          <C>                                  <C>   
Mannie L. Jackson/(6)/                       6,156                                  *          

Robert P. Jensen/(6)/                       10,483                                  *

John L. Jones                               60,914                                  *

Kendrick B. Melrose/(6)/                     2,819                                  *

Trudy A. Rautio/(6)/                        15,190                                  *

Charles W. Schmid                           22,811                                  *

Richard A. Zona/(6)/                         4,965                                  *

All directors and executive                430,533                                  1.1%
  officers as a group (13 members)         ______________________

*  reflects less than 1% of the outstanding shares

</TABLE>

(1) Unless otherwise noted, each person and group identified possesses sole
    voting and investment power with respect to the shares shown opposite such
    person's or group's name. Shares not outstanding but deemed beneficially
    owned by virtue of the right of an individual to acquire them within 60 days
    are treated as outstanding only when determining the amount and percent
    owned by such individual or group.

(2) Includes the following number of shares which may be acquired by the named
    persons or group within 60 days upon the exercise of options: Ms. Affinito,
    6,500 shares; Mr. Buhrmaster, 147,500 shares; Mr. Eugster, 250 shares; Mr.
    Fisher, 85,625 shares; Mr. Jackson, 750 shares; Mr. Jensen, 5,500 shares;
    Mr. Jones, 50,625 shares; Ms. Rautio, 7,500 shares; Mr. Schmid, 15,000
    shares; and all directors and executive officers as a group, 307,875 shares.
    Also includes the following number of restricted shares held subject to
    forfeiture: Mr. Buhrmaster, 16,070 shares; Mr. Fisher, 5,356 shares; Mr.
    Jones, 5,356 shares; Ms. Rautio, 5,356 shares; and Mr. Schmid, 5,356 shares;
    and all directors and executive officers as a group, 47,794 shares.

(3) According to the Schedule 13G filed with the Securities Exchange Commission
    as of February 11, 1997, this entity had sole dispositive power over all of
    the shares set forth above opposite its name.

(4) According to the Schedule 13G filed with the Securities Exchange Commission
    as of February 12, 1997, this entity had sole dispositive power over all of
    the shares set forth above opposite its name. The Capital Group Companies,
    Inc., is the parent holding company of a group of investment management
    companies that hold investment power and, in some cases, voting power over
    the securities reported. The investment management companies, which include
    a "bank" as defined in Section 3(a)6 of the Securities Exchange Act of 1934
    (the "Act") and several investment advisers registered under Section 203 of
    the Investment Advisers Act of 1940, provide investment advisory and
    management services for their respective clients which include registered
    investment companies and institutional accounts. The Capital Group
    Companies, Inc., does not have investment power or voting power over any of
    the securities reported herein; however, The Capital Group Companies, Inc.
    may be deemed to "beneficially own" such securities by virtue of Rule 13d-3
    under the Act.

(5) According to the Schedule 13G filed with the Securities Exchange Commission
    as of February 13, 1997, this entity had shared power to vote or direct the
    vote over all of the shares set forth above opposite its name. The number of
    shares includes 2,096,905 shares, representing 5.44% of the company's stock,
    held by Invista Capital Management, Inc., an investment advisor registered
    under Section 203 of the Investment Advisers Act of 1940. Principal Mutual
    Life Ins. Co. is a parent holding company with reporting obligation over the
    shares held by Invista.

(6) Includes the following number of shares held for the account of the named
    person participating in the Jostens, Inc. Deferred Compensation Plan: Ms.
    Affinito, 11,302 shares; Mr. Eugster, 2,075 shares; Mr. Jackson, 5,406
    shares; Mr. Jensen, 515 shares; Mr. Melrose, 819 shares; Ms. Rautio, 670
    shares; and Mr. Zona, 515 shares.

                                       62
<PAGE>
 
                                PART III
Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          None.

                                       63
<PAGE>
 
                                  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.

                                        JOSTENS INC.
Date: March 26, 1997

                                         By   /s/ Robert C. Buhrmaster
                                         -------------------------------------
                                         Robert C. Buhrmaster
                                         President and Chief Executive Officer

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 registrants in
the capacities and on the dates indicated.
 
/s/ Robert C. Buhrmaster                         March 26, 1997
----------------------------------------
Robert C. Buhrmaster 
(Principal Executive Officer)
President and Chief Executive 
Officer and Director
 
/s/ Trudy A. Rautio                              March 26, 1997
----------------------------------------         
Trudy A. Rautio (Principal Financial 
and Accounting Officer) Senior Vice 
President and Chief Financial Officer
 
/s/ Robert P. Jensen                             March 26, 1997
----------------------------------------
Robert P. Jensen
Chairman of the Board and Director
 
/s/ Lilyan H. Affinito                           March 26, 1997
----------------------------------------
Lilyan H. Affinito
Director
 
/s/ Mannie L. Jackson                            March 26, 1997
----------------------------------------
Mannie L. Jackson
Director
 
/s/ Jack W. Eugster                              March 26, 1997
----------------------------------------
Jack W. Eugster
Director
 
/s/ Richard A. Zona                              March 26, 1997
----------------------------------------
Richard A. Zona
Director
 
/s/ Kendrick B. Melrose                          March 26, 1997
----------------------------------------
Kendrick B. Melrose
Director
<PAGE>
 
                                    PART IV

    Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K
             --------------------------------------------------------------
             (a) 2.      
                
                         JOSTENS INC. AND SUBSIDIARIES
               SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                                (In Thousands)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------- 

            COL A.                             COL. B      COL. C                             COL. D              COL. E
----------------------------------------------------------------------------------------------------------------------------------- 

<S>                                           <C>           <C>                 <C>           <C>               <C>         
                                                                        Additions
                                                              ----------------------------
                                                                                Charged to
                                              Balance at    Charged to             Other                          Balance at
                                              Beginning      Costs and           Accounts -    Deductions -        End of
          Description                         of Period       Expenses            Describe      Describe           Period
----------------------------------------------------------------------------------------------------------------------------------- 

Reserves and allowances deducted from asset accounts:
----------------------------------------------------------------------------------------------------------------------------------- 

Allowances for uncollectible accounts:
 Six months ended December 28, 1996          $   5,966      $   1,202           $         -        $      284  (1)      $    6,884
 Year ended June 30, 1996                    $   9,049      $   2,195           $         -        $    5,278  (1)      $    5,966
 Year ended June 30, 1995                    $  13,749      $   3,552           $         -        $    8,252  (2)      $    9,049
 Year ended June 30, 1994                    $   6,869      $  10,576 (9)       $         -        $    3,696  (1)      $   13,749
----------------------------------------------------------------------------------------------------------------------------------- 

Allowances for sales returns:
 Six months ended December 28, 1996          $   6,518      $   6,308           $         -        $    8,039  (3)      $    4,787
 Year ended June 30, 1996                    $   7,509      $  12,951           $         -        $   13,942  (3)      $    6,518
 Year ended June 30, 1995                    $   6,719      $  12,763           $         -        $   11,973  (3)      $    7,509
 Year ended June 30, 1994                    $   8,733      $  10,843           $         -        $   12,857  (3)      $    6,719
----------------------------------------------------------------------------------------------------------------------------------- 

SFAS No. 109 valuation allowance:
 Six months ended December 28, 1996          $   5,920      $       -           $         -        $        -           $    5,920
 Year ended June 30, 1996                    $   2,117      $   3,803 (4)       $         -        $        -           $    5,920
 Year ended June 30, 1995                    $   3,642      $       -           $         -        $    1,525  (5)      $    2,117
 Year ended June 30, 1994                    $   3,547      $      95           $         -        $        -           $    3,642
----------------------------------------------------------------------------------------------------------------------------------- 

Overdraft reserves:
 Six months ended December 28, 1996          $   6,545      $   1,740           $        -         $      941           $    7,344
 Year ended June 30, 1996                    $   6,157      $   2,838           $        -         $    2,450  (1)      $    6,545
 Year ended June 30, 1995                    $   7,796      $   1,943           $        -         $    3,582  (1)      $    6,157
 Year ended June 30, 1994                    $   3,243      $   4,553 (9)       $        -         $        -           $    7,796
----------------------------------------------------------------------------------------------------------------------------------- 

Reserves and allowances added to liability accounts:
----------------------------------------------------------------------------------------------------------------------------------- 

Restructuring charges:
   Six months ended December 28, 1996        $   2,700      $       -           $        -         $    1,400  (10)     $    1,300
   Year ended June 30, 1996                  $   8,636      $       -           $        -         $    5,936  (6)      $    2,700
   Year ended June 30, 1995                  $  39,821      $       -           $        -         $   31,185  (7)      $    8,636
   Year ended June 30, 1994                  $  38,203      $  28,668           $        -         $   27,050  (8)      $   39,821
----------------------------------------------------------------------------------------------------------------------------------- 

Note (1)  --  Uncollectible accounts written off - net of recoveries.
Note (2)  --  Uncollectible amounts written off - net of recoveries ($5,796) plus disposition of Jostens Learning ($2,456).
Note (3)  --  Returns processed against reserve.
Note (4)  --  Increased due to the increase in foreign tax credits not likely to be utilized.
Note (5)  --  Reduced for utilization of Jostens Learning NOL.
Note (6)  --  Payments ($2,400), Noncash items ($400), and disposition of Wicat ($3,136).
Note (7)  --  Payments ($21,090), Noncash items ($3,523) and disposition of Jostens Learning ($6,572).
Note (8)  --  Payments ($12,050) and disposition of Sportswear business ($15,000).
Note (9)  --  Includes change in estimate.
Note (10) --  Payments ($1,000), Noncash items ($400)
Note (11) --  Because of the seasonality of the Company's business, the reserves and allowances as of December 28, 1996,
are not necessarily indicative of the balances at the previous fiscal years ended June 30.

</TABLE> 

<PAGE>
 
All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission have been omitted as not
required or not applicable or the information required to be shown thereon is
included in the financial statements and related notes.